Political Settlements and the Governance of Growth-Enhancing Institutions

It is well known that institutions work very differently across countries because their political contexts are different.It is also understood that this has important implications for the design of governance priorities in different countries.This paper develops an analysis of the 'political settlement' to provide an analytical framework for analysing institutions and governance in developing countries.Central to this analysis is an understanding of the distribution of power.We define this as the relative holding power of different groups and organizations contesting the distribution of resources.Holding power is partly based on income and wealth but also on historically rooted capacities of different groups…