World development report 2002 : building institutions for markets - overview

This is the overview to the World Development Report (WDR) 2002. It is about building market institutions that promote growth and reduce poverty, addressing how institutions support markets, what makes institutions work, and how to build them. This theme is a natural a natural continuation of the WDR 2000/01, which discussed the central role of markets in the lives of poor people, leaving important issues for the WDR 2003, which will focus on the development of human, natural, and environmental capital. This report emphasizes on building institutions to support the development of markets, and its main messages address supplying effective institutions, and creating the demand for them, through: a design that complements institutions, human capabilities, and available technologies; innovations that identify institutional successes, and weaknesses, by experimenting with, and recognizing local conditions, and differences, ranging from social norms, to geography; a connection of communities of market players, by opening information flows, and trade; and, the promotion of competition among jurisdictions, firms, and individuals. The report is an introspective analysis about how do institutions support markets, growth, and poverty reduction, defining institutional work as a channel of information about market conditions, goods, and participants; as a mean to enforce property rights, and contracts; and, as a tool to increase competition in markets. The report offers lessons derived from experience in institutional evolution, and, although it does not address all possible institutional problems, it does focus on sets of institutions from many fields, to show that the framework, and messages can be applied regardless of the sector.