19 November 2019

Impacts of Legal and Regulatory Institutions on Economic Development

How do changes in the legal framework of a society affect economic development? In his recent PhD thesis, Dr Pedro Guimarães Naso finds that even minor changes in institutional networks can lead to major unexpected outcomes.

Why did you want to study the impact of institutions on economic development?

There is an interesting debate in development economics on how institutions determine the economic prosperity of a society – and I wanted to contribute to this debate. Many scholars believe, for example, that the establishment of strong property rights by national authorities and a justice system that is impersonal tend to encourage investments and lead to economic development. In my thesis, I test some of these beliefs by analysing how changes in institutions affect economic performance.

Can you describe your thesis questions and methodology?

I ask three main questions in my thesis:

  1. What are the causes of institutional change?
  2. How do institutions interact with each other?
  3. What are the potential unexpected consequences of institutional change?

I use microeconomic models and impact evaluation techniques to answer these questions.

What are your major findings?

My most interesting finding is related to the consequences of having complex institutional settings. Institutional settings within a country tend to be so complex that minor changes in these networks can lead to major unexpected outcomes. For example, in the case of China, I found that the introduction of national pollution standards ends up moving technology from the coast to the interior of the country. In South Africa, following the end of the Apartheid regime, a more ethnic diverse body of public servants decreased the decision power of pollution inspectors.

How can your research findings serve policy reflection and action?

My thesis sheds a new light on the strategic design of new institutions and institutional reforms. From the moment that designers are aware that minor changes can have major consequences, they will plan interventions more carefully. 

What are you doing now?

I just moved to Burundi to work as head of department of research at One Acre Fund. I research new agricultural solutions and commercial interventions that help to improve the lives of Burundian farmers.

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Pedro Guimarães Naso defended his PhD thesis in International Economics on September 2019. Professor Martina Viarengo presided the committee, which included Professor Timothy Swanson, thesis director, and Professor Erwin Bulte from Wageningen University, The Netherlands.

Full citation of the PhD thesis:
Guimarães Naso, Pedro. “Impacts of Legal and Regulatory Institutions on Economic Development.” PhD thesis, Graduate Institute of International and Development Studies, Geneva, 2019.

Good to know: members of the Graduate Institute can download Dr Guimarães’s PhD thesis via this page of the Institute’s repository.

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Edited by Nathalie Tanner, Research Office.
Banner image: excerpt from a picture by Sergey Nivens/