BUS 082 Lecture Notes - Lecture 24: Malthusian Trap, Human Capital, Environmental Degradation

• School: College of The Sequoias
• Department: Business (BUS)
• Course: BUS 082
• Professor: gradin

Document Summary

Humanly devised constraints that structure political, economic, and social interaction; devised to create order and reduce uncertainty in exchange. Made up of formal constraints (rules), informal constraints (norms), and their enforcement characteristics; define incentive structure of societies and specifically economies. People cannot expropriate the incomes and investments of others or create a highly uneven playing field. Individuals can make investments especially in human capital, and participate in productive economic activities. Acemoglu and robinson (2012): inclusive vs. extractive institutions. Inclusive institutions allow and encourage participation by the majority of people in economic/political activities. Extractive institutions exploitative, vested in a narrow group of individuals, no interest in the welfare of the population, coercive. Economic institutions are created and sustained by political institutions. Importance of colonisation and slave trade on development of africa. Identity of coloniser matters for subsequent development. Colonial institutions aimed at extracting resources lead to weak property rights today.