Institutional Challenges Facing Economic Development in Myanmar: A Case Study
The New Institutional Economics (NIE) school of thought suggests that institutions are necessary for economic efficiency and are the primary cause of economic development. After a half-century of isolation under the military rule, Myanmar is experiencing major political and economic reforms. This paper gives a descriptive overview of Myanmar’s current institutional environment from the perspective of NIE. The study finds that Myanmar’s economic development potential is widely recognized; however, the poor quality of its institutions remains one of its biggest challenges. Major institutional challenges such as a centralized political structure, concentration of resources and business in the hands of the military, cronyism, bribery and other forms of corruption, ineffective and outdated bureaucratic structures and policies, and an underdeveloped banking system remain as obstacles in the developmental process. Myanmar’s rapid economic progress in the years ahead will depend on how the large number of challenges regarding policy issues will be resolved. Thus, this study’s primary purpose includes examining and analyzing Myanmar’s current institutional environment as well as providing suggestions and policy recommendations for beneficial economic development.