by Rob Natelson, TenthAmendmentCenter.com:
A nation’s health and prosperity depends on good institutions. These institutions are political and private. Good political institutions include balanced government with a significant amount of popular control, the rule of law, freedom from corruption, and respect for individual rights. Good private sector institutions include free and open markets and positive moral codes in religious and private life.
(I was introduced to the importance of institutions in the 1990s when attending a conference at which economist Douglas North, who had just won a Nobel Prize for his work on the subject, was a co-participant.)
Many conservatives quote John Adams for the view that public virtue is of great importance to a country’s fortunes. But as Adams himself said, the nature of man is such that virtue can’t do it alone; you need well-constructed government as well. Or James Madison observed, men are not angels—you need government to control anti-social behavior coupled with rules to control government. A country with bad institutions will always remain a third-world nation or worse.