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Mr. Marc G Quintyn and Sophia Gollwitzer

impersonal social relationships, governed by rule of law, secure property rights, fairness, and equality—all aspects of treating everyone the same,” leading to sustained political and economic development. Although both orders are able to create social stability, stable and sustained economic growth and sustainable political development is most likely to occur under the open access order. Moreover, the same institutions will work differently under the two social orders. The part of their study most relevant for our paper is the theory on the transition from the natural

Mr. Marc G Quintyn and Sophia Gollwitzer
This paper tests the theoretical framework developed by North, Wallis and Weingast (2009) on the transition from closed to open access societies. They posit that societies need to go through three doorsteps: (i) the establishment of rule of law among elites; (ii) the adoption of perpetually existing organizations; and (iii) the political control of the military. We identify indicators reflecting these doorsteps and graphically test the correlation between them and a set of political and economic variables. Finally, through Identification through Heteroskedasticity we test these relationships econometrically. The paper broadly confirms the logic behind the doorsteps as necessary steps in the transition to open access societies. The doorsteps influence economic and political processes, as well as each other, with varying intensity. We also identify income inequality as a potentially important force leading to social change.
Mr. Marc G Quintyn and Sophia Gollwitzer
This paper analyzes the institutional conditions affecting the establishment and effectiveness of independent central banks and of budgetary institutions. It draws on the recent theory developed by North, Wallis and Weingast on the transition from a closed and fragile state to an open economic and political environment. The paper presents a composite indicator allowing for the identification of a country’s position along this transition path. The findings suggest that (i) while the establishment of autonomous central banks seems to be relatively independent from the broader institutional framework, sound budgetary institutions tend to be established in countries with higher levels of rule of law for the elites, and (ii) while central bank independence is effective in reducing inflation irrespective of a country’s position along the transition path, budget institutions seem to be most effective as a disciplining device in weak institutional environments.
Mr. Enrique A Gelbard, Corinne Deléchat, Ms. Ejona Fuli, Mr. Mumtaz Hussain, Mr. Ulrich Jacoby, Mrs. Dafina Glaser, Mr. Marco Pani, Mr. Gustavo Ramirez, and Rui Xu
This paper analyzes the persistence of fragility in some sub-Saharan African states and the multiple dimensions of state weakness that are simultaneously at play. This study also provides an overview of the analytics of fragility, conflict, and international engagement with fragile states before turning to an assessment of the current state of affairs and the areas in which there has been progress in building resilience. The paper also looks at the role of fiscal policies and institutions and analyzes growth accelerations and decelerations. Seven country case studies help identify more concretely some key factors at play, and the diversity of paths followed, with an emphasis on the sequencing of reforms. The paper concludes with a summary of the main findings and policy implications.
Mr. Marc G Quintyn and Sophia Gollwitzer

orders in the world today: an open access order and a limited access order. Both orders are able to solve the problem of containing violence but in very different ways. Most countries are characterized by limited access, which is why NWW call this social order the natural state . While the natural state has been in existence during the last 10,000 years, open access societies have only emerged in the last 300 years. Box 1 explains in more detail the differences between, and dynamics of, these two types of social order. One of the main contributions of NWW

Mr. Enrique A Gelbard, Corinne Deléchat, Mr. Ulrich Jacoby, Mr. Marco Pani, Mr. Mumtaz Hussain, Mr. Gustavo Ramirez, Rui Xu, Ms. Ejona Fuli, and Dafina Mulaj

working with partners to take advantage of existing multilateral initiatives and trade agreements, including preferential bilateral arrangements. 4 Institutions and state capacity Since institutional weaknesses lie at the root of fragility, a strategy to escape fragility must include the adoption or development of institutions that foster good governance and economic growth. 5 North, Wallis, and Weingast (2006) conceptualize development as the transition from a “limited access social order” to an “open access order.” Limited access orders (the most common