INSTITUTIONS AND PRIVATE-SECTOR DEVELOPMENT

This paper was presented at a conference on the New Institutional Econ omics, Washington University, St. Louis, September 19, 1997. The autho r argues that researchers in the new institutional economics have the potential to make significant contributions to improving the business climate in transitioning and developing economies. First, there is a n eed for researchers to build a shared understanding with the business community, and put the study of institutions that reduce transaction c osts into terms business people can easily understand. Second, researc hers can focus an the role of mutual trust in promoting economic devel opment. Third, an understanding of institutions can help to improve th e investment climate for foreign investors. Finally, the author lists fourteen issues being addressed by policy reform projects that the bus iness sector finds of great interest.