, Volume 38, Issue 4, pp 109-131

Understanding institutional change: Fast-moving and slow-moving institutions

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Abstract

This article proposes a classification of ‘slow-moving” and “fast-moving” institutions, and discusses the potential results of their interaction. A prime example of a slow-moving institution is culture, including values, beliefs, and social norms, which tend to change gradually. Political institutions are typically fast-moving institutions; exemplifying the nature of this category, political institutions do not necessarily change often but can change very quickly—sometimes nearly overnight. The interaction between slow-moving and fast-moving institutions can shed light on institutional change (why, how, and when it occurs), and evinces both the difficulty of transplanting institutions into different cultural contexts and the advantages of diverse institutional “blueprints” for efficient growth and development.

Gérard Roland is, professor of economics at the University of California, Berkeley, serves as codirector of the Transition Economics Program of the Centre for Economic Policy Research, and is a William, Davidson Institute Fellow. Professor Roland’s most recent books includeBuilt to Last: A Political Architecture for Europe (co-edited with Erik Berglöf, Barry Eichengreen, Guido Tabellini, and Charles Wyplosz; Centre for Economic Policy Research 2003) andTransition and Economics: Politics, Markets and Firms (MIT Press 2000).
I am grateful to Erik Berglöf. Grigore Pop-Eleches, Thad Dunning, and especially Ruth Collier for very helpful comments. I also thank seminar participants at the World Bank.