Piergiuseppe Fortunato

Hobbes to Rousseau: Inequality, Institutions, and Development

We analyze the endogenous evolution of economic and political institutions and the interdependencies with the process of economic development. Favorable economic institutions ensure the appropriability of rents in form of a state of law. We study the conditions under which a state of law can be implemented under oligarchy, and when democratization is necessary. Inequality in endowments and incomes prolongs the absence of good institutions and delays democratization. Conversely, institutions shape the income distribution. Simulations illustrate how inequality affects the development process and may lead to overtaking and divergence. The implications are in line with historical and empirical evidence.

Are All Democracies Equally Good? The Role of Interactions Between Political Environment and Inequality for Rule of Law

Using cross-country data, we find evidence for a significant interaction effect between democracy and equality in determining the quality of growth-promoting institutions like rule of law. Democracy is associated with better rule of law when inequality is lower.

Securing Peace: State-building and Economic Development in Post-conflict Countries

Preface | Introduction | Development and Conflict: Theoretical and Empirical Linkages | Peace-building and the Social Contract | State-building for Peace-building: What theory and whose role? | The Impact of Armed Civil Conflicts on Household Welfare and Economic Recovery | Post-Conflict Recovery: Resource Mobilization and Reconstruction | Post-Conflict Recovery: Aid Effectiveness and Permanent Peace | Post-Conflict Recovery: Lessons from the Marshall Plan for the 21st Century

Development Unchained: Trade and Industrialization in the Era of International Production

Following a period of strong growth across all developing regions during the first decade of the millennium and a rapid rebound from the 2008 financial crisis, a combination of falling commodity prices, increasing financial market volatility and weak global demand has negatively affected growth performance in recent years. This growth slowdown has exposed the absence of structural transformation in many developing countries even under robust growth conditions. As a result, increasing attention has turned to the trade and industrialization opportunities offered by participation in global value chains (GVCs). However, while the evidence suggests a positive association between participation in GVCs and increased exports and inward FDI flows, evidence on their supporting structural transformation is weak. This paper discusses strategic approaches to participation in GVCs as part of a broader development agenda. In particular, it focuses on the opportunities offered by regional value chains (RVCs) and South‐South cooperation and examines the role of industrial policy, with reference to the case of Southern Africa.