What do dignity and liberty have to do with institutional outcomes on development? DRI Post-doctoral Fellow Claudia Williamson publishes in the Journal of Socio-Economics:
This paper explores how expanding the notion of informal institutions in the broader institutional framework provides a more complete explanation for development. Specifically, I incorporate McCloskey’s notion of ‘dignity and liberty’ as part of the institutional nexus. By doing so, a richer explanation and understanding of the importance of institutions in explaining different economic outcomes is offered. Focusing on bourgeois dignity offers a precise mechanism to explain how institutions matter to support economic growth. In addition, analyzing the changing attitudes towards the bourgeoisie provides a specific example of mechanisms that can lead to institutional change.
As such, we arrive at two main conclusions: 1) dignity must be grounded in liberty, and 2) economic exchange as a result of underlying liberties leads to dignifying the bourgeoisie. This suggests that by moving towards freer trade, poor countries today will reap the traditional benefits of free trade, but it might also set in motion a cycle for more liberties and institutional change.