This paper summarizes the main theories conventionally associated with the sociology of development as well as the arguments of the principal scholars focused on what “works” to bring about economic development and social progress. This line of argument ushered the rising consensus across the social sciences that the prime causal role belongs to institutions. However, the empirical literature that has followed from this consensus has been marred by a lack of proper definition of the concept and a tendency to use nations as units of analysis, neglecting their internal complexity. The last sections summarize a recently completed study of twenty-three Latin American institutions in five countries. The study shows the feasibility of studying institutions empirically and highlights a series of important differences among then and across countries. The solution provided by Qualitative Comparative Analysis (QCA) to the defining determinants of a developmental institution highlights the central role of meritocracy, absence of internal cliques and, in particular, proactivity toward the external environment. The theoretical and practical implications of this study are discussed.
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