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January 1, 2009

Institutional Transition and the Problem of Credible Commitment

Peter J. Boettke

Edited by

Emily Chamlee-Wright

Originally published in The Annual Proceedings of the Wealth and Well Being of Nations

Without liberal limits in place, democratic and economic transitions easily go astray and we end up with illiberal democracy and severely distorted and hampered market economies.

Without liberal limits in place, democratic and economic transitions easily go astray and we end up with illiberal democracy and severely distorted and hampered market economies. The issue is not only solving a commitment problem, but also specifying the correct content to the commitment. In other words, what you are credibly committing to matters even more than whether you can commit to the policy rules required for reform.

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