Fostering Civil Society to Build Institutions: Why and When
Peter Grajzl and Peter Murrell
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1
(
17
)
Economics of Transition
1-41
January
2009
Grajzl Murrell EOT 2009 final.pdf512.08 KB
Abstract
We revisit the ubiquitous claim that aiding civil society improves institutional outcomes. In our model, a vibrant civil society initiates public debate in a reform process otherwise dominated by partisan interest groups and politicians. Civil society involvement can alleviate or aggravate adverse selection problems that arise because interest groups are better informed about reform consequences than politicians. Since aid increases the cost to the politician of excluding civil society, it affects institution building.