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Unformatted text preview: (viii) inclusion versus exclusion (ix) elite business groups (x) . .. institutional infrastructure . .. Underlying problem: moral hazard compounded by Fnancial constraints and/or weaknesses in contract enforcement mechanisms Moral hazard (i.e., scope for ex post opportunistic behaviour): represents problem of trust and reliability that are typically overcome by explicit con-tracting or governance structures in developing countries Low income countries are more prone to to these problems because: (i) greater limitations on the design of contracts due to fnancial constraints (ii) weaker contract enForcement institutions (due to weaker legal systems, weaknesses in monitoring and information systems) Development Economics, LSE Summer School 2007 218...
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- Spring '10