Big Data: An Institutional Perspective on Opportunities and Challenges

The data revolution is already reshaping how knowledge is produced, business conducted, humanitarian assistance handled, public officials elected, and governance enacted. Economists rely on data to describe, interpret, and forecast economic activity. Despite the rich tradition of using large datasets, institutional economics have shied away from big data. This article describes, reviews, and reflects on big data, with a particular focus on economic development. It illustrates the vast opportunities and challenges for big data as an important tool for the benefit of the public. It suggests that big data and data analytics, if used properly, can provide real-time actionable information that can be used to identify problems and needs, offer services, and provide feedback on the effectiveness of policy action.