Recent experience in developing and transition economies underscores that “knowing the right institutions” does not yet provide sufficient knowledge on how to implement and enforce good institutions let alone how institutions actually emerge.
How are institutions devised and guaranteed in different contexts? Which context specific factors are decisive for different outcomes? What are the interaction effects between state-mandated rules and norms? Is there a variety of benign institutional arrangements or are they universal?
The research group shifts attention to the rise of institutions in different geographical and historical contexts. The approach is inclusive, covering both state-mandated rules and de facto rights as well as the importance of initial asset distribution for institutional change. Methods applied include formal modeling, empirical fieldwork, experimental economics, as well as a historic-theoretical approach relating institutional change to processes of long-run growth and structural change.