On facts and how to use them

This paper deals with the difference between reality and fantasy, and the way it is being obscured in the debate on terrorism that is presently taking place in the Federal Republic of Germany. Our central thesis is that society creates a certain human prototype by ignoring some facets of the complex reality. We base this view on the philosophy of the French anarchist Michel Foucault. As an illustration we discuss the Mescalero case. Finally, we formulate some criticism of Foucault's view, based on another French author—Baudrillard, with a brief explanation of his views on the distinction between reality and fantasy.     

Institutions for high-quality growth: What they are and how to acquire them

This article opens with a discussion of the types of institutions that allow markets to perform adequately. While we can identify in broad terms what these are, there is no unique mapping between markets and the non-market institutions that underpin them. The paper emphasizes the importance of “local knowledge”, and argues that a strategy of institution building must not over-emphasize best-practice “blueprints” at the expense of experimentation. Participatory political systems are the most effective ones for processing and aggregating local knowledge. Democracy is a meta-institution for building good institutions. A range of evidence indicates that participatory democracies enable higher-quality growth. Sakenn pe prie dan sa fason (Everyone can pray as he likes.) —Mauritian folk wisdom This paper was originally prepared for the International Monetary Fund’s Conference on Second-Generation Reforms, Washington, DC, November 8–9, 1999. I thank Ruth Collier, Steve Fish, Mohsin Khan, Saleh Nsouli, conference participants, and an anonymous referee for helpful comments. Dani Rodrik is professor of international political economy at the John F. Kennedy School of Government, Harvard University. He is also the research coordinator for the Group of 24 (G-24), a research associate of the National Bureau of Economic Research, and a research fellow of the Centre for Economic Policy Research (London). He serves as an advisory committee member of the Institute for International Economics, senior advisor of the Overseas Development Council, and advisory committee member of the Economic Research Forum for the Arab Countries, Iran and Turkey. Professor Rodrik’s recent research is concerned with the consequences of international economic integration, the role of conflict-management institutions in determining economic performance, and the political economy of policy reform.