ECON 313 Lecture 11: 11-Econ 313 Notes
15 Feb 2017
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Two parts: a small elite blocks reforms that would benefit the general population, this elite se(cid:396)(cid:448)es the (cid:862)(cid:272)e(cid:374)te(cid:396)(cid:863) (cid:894)the de(cid:448)eloped (cid:272)ou(cid:374)t(cid:396)ies, (cid:373)ulti(cid:374)atio(cid:374)al corporations, world bank, imf) Dependency theory is the notion that resources flow from a periphery of poor and underdeveloped states to a core of wealthy states, enriching the latter at the expense of the former. In the institutions theory, small elite blocks reforms out of self interest. The few empirical tests on the impacts of institutions are subject to criticism: reversal of fortunes: correlation is not a causality, mortality rate of settlers: data controversy. Another criticism, the reason settlers set up inclusive or extractive institutions was not: mortality rate of settlers. It was the climate and soil suitability to sugar vs grain: caribbean, brazil, southern us colonies had good climate conditions for growing sugar, tobacco, coffee, rice, cotton. Much more efficient on large scale plantation with slave labor.
