Page 95 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.72, # 2, 2015, pp. 87- 97

accurate application of the instruments of the NIE within the agenda of the PWC can
form long term stability, good infrastructure, and a sustainable legal environment for
development. Institutional reforms and good governance may not have immediate
results, but will definitely result in long term development if they are implemented
accurately. The argument of Seers is especially important to assess the contributions
of the NIE as he argues “development means creating conditions for the realization
if human personality” (1972: 3). The application of the instruments of the NIE
including property rights, legal and sustainable environment and good governance
can create conditions for development as well. Seer also (1972:7) argues that “a
country where economic growth is slow may be busy reshaping its political
institutions so that, when growth comes, it will be development”. The theory of the
NIE offers the institutional and political development as well as good governance
that will create conditions for development and can be assessed very practical in
modern economic agenda. However, it is under question whether the policy
prescriptions of the NIE will be accurately implemented by developing countries and
how these policies will be imposed and adapted to the traditions of different
countries having various traditions and development levels.
This essay assessed the contributions of the NIE to the PWC. I described the
issues behind the rise of the PWC and failure of the Washington Consensus and neo-
classical economic thinking. The PWC influenced with the rise of NIE and promoted
the role of state, good governance, democracy and institutions for growth were
discussed. Then, I summarized the rise of the NIE and its contributions to the PWC that
are institutions, institutional analysis, developmental state, as well as good governance.
Finally, I assessed the contributions of the NIE to the PWC. We can conclude that the
contributions of the NIE to the PWC have been reflected in most policy prescriptions of
the PWC and PWC is a process in which the principles of the NIE have been included
into policy papers. Although the contributions of the NIE to the PWC are still the
agenda of discussion how they solved the unresolved issues of the Washington
Consensus, but they can still be considered important in the development thinking and
their accurate application and implementation in various traditional societies can have
long term development impact. The NIE can be considered as a practical and applicable
theory in the modern economic development.
References
[1] Ahrens, J. (1999) „Toward a Post-Washington Consensus: The Importance of
Governance Structures in Less Developed Countries and Economies in

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