Political Institutions and Economic Growth
- What are the main explanations for economic growth? Where do institutions fit in? Policies?
- Rodrik finds that trade is not an important determinant of economic growth, which contravenes age-old economic theory and substantial empirical evidence. Can you reconcile his findings with this larger corpus of knowledge (including North)?
- What is “embedded autonomy”? Why is it advantageous for growth, good governance, etc.? How might we measure it? Assess the evidence that Evans provides to support the contention that embedded autonomy contributes to economic development.
- What does de Soto mean by “dead capital”? According to him, why does capitalism succeed in producing economic growth under some circumstances and not others?
- At an embassy cocktail party, two Ministers from Ruritania ask you to settle their disagreement. The Minister of Industry believes that Ruritania can become a successful producer of biomedical technology if the government will fund research in that field and impose a ten-year tariff on imported biomedical technologies. The Minister of Finance, by contrast, argues that taxpayer money should not be used to favor any one industry, but rather private investors should decide where to “place their bets”; she also points out that the tariffs would mean consumers of medical technologies (such as patients in hospitals) will have to pay more. With the space of one sip of your appletini to reflect upon your answer, what do you say?
- Think about a few different types of economies: (a) pre-industrial agricultural societies along a central lacustrine system; (b) pre-industrial, oasis-based cities along major terrestrial trade routes; (c) maritime trading city-empires; (d) mineral-rich countries in a modern global economy; (e) monoculture societies (bananas, cloves, nutmeg, sugar, coffee, peanuts, etc.) in a modern global economy; (f) manufacturing-based economies, and (g) service-based economies (e.g., tourism or software). Do these different types of societies require different types of institutions to encourage economic growth?
- Take one specific institution thought to contribute to economic growth (e.g., reliable, non-corrupt, and inexpensive commercial dispute-resolution mechanisms). In North’s evolutionary analysis, when would such institutions emerge? Now take one policy thought to enhance growth (e.g., fiscal discipline). When will that emerge?
