20 - Economic Policies and Institutions

Summary

To say that good institutions are a fundamental condition to foster economic growth is close to platitude. However, it is important to explain how it happens, and therefore the main aim of this chapter is to present and discuss the role played by both private and public institutions in decision making processes related to the implementation of economic policies encouraging economic growth. By discussing the lessons from the Iberian experience throughout the nineteenth and twentieth centuries, the chapter tries to disclose the similarities and differences between both countries, with a main focus on the way how the institutional environment helps to explain the circumstances that favour or hinder economic performance. This comparative approach begins with the age of the liberal revolutions in the early years of the nineteenth century and closes with the processes of democracy building and European integration in the two last decades of the twentieth century. The study of institutional changes and continuities in Spain and Portugal during this long period offers multiple opportunities to better understand the articulation between the economic and business environment, the dynamics of the markets and the economic policies designed or implemented by the state, in fulfilment of its regulatory role.