The purpose of this paper is to develop a testable theory, the interaction thesis, capable of explaining why do we observe differences in economic stability and growth rates between various countries; or - the same thing - why less efficient countries do not duplicate economic policies of more...

This paper focuses on the role of "institutions" in poverty alleviation, where both poverty and institutions are interpreted broadly. The broadening of the poverty notion is important at least from the policy perspective. Even if one were convinced that higher growth would reduce income poverty...