Traditionally western scholars and experts develop policy recommendations, considering that any society is initially endowed with market economy and fair political completion (has “open access” to economy and policy), which means that backward countries just need to borrow formal institutions from developed countries to become successful nations. Douglass C. North, 1993 Nobel Prize winner, and his co-authors refutes this belief and persuasively explain internal logic of social order with limited access, which, in contrast, is based on restricted competition even disregard of borrowed institutions from developed democracies. This social order was formed in a natural way and proved to be sustainable already for thousand years, even despite its striking economic inefficiency. Only through recent two centuries few dozens of countries managed to move to open access and only due to this progress they managed to achieve radically higher standard of living.
Comprehending of this approach is very important for adequate assessment of events in Ukraine. In view of that CASE Ukraine prepared an adapted translation of the article of the prominent economist and his co-authors for attention of wide Ukrainian audience. With this effort we hope to facilitate broad but sophisticated public discussion of the core of the country’s development problems.