Review Sheet Midterm 1 - Political Science 348 Review Sheet...

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Political Science 348 Review Sheet Fogel said 1700’s Agricultural Revolution led to take off in material well being o Great Britain: Enclosure movement-Institution of private farms because, during feudal period, people over used public grazing space As property rights become more defined, there is innovation and investment 4 field crop rotation- Led to exponential growth in crop yields because of net savings from crop investment (farmers amass capital) o Gershenkron said story of gradual transition to industrial economy was unique to G.B. Geo-political competition created impetus to catch up to Britain Germany, others, used capital intense industries to accomplish this (mostly because of connection btwn. Banks and government financing) o Much of growth discrepancies are exaggerated by exchange rates, because of high demand for exports created by artificially low rates (such as in China) Geography and Germs vs. Institutions o Fortune of Landlocked Countries Trade more expensive, costs assumed vis-à-vis others Matters more who your neighbors are (good (i.e. industrialized) neighbors beget economic success even in landlocked countries). If neighbors are poor or have similar resources, then trade is not viable and the economy cannot benefit Have history of conflict over access to waterways o “Reversal of Fortune” –(A,J,R) In 1500s, civilizations in India and the Incas and Aztecs were much richer than US, Australia, New Zealand (Converse true today) Low population density then  high GDP now Climate has not changed at all o Those with rampant disease then should also have that now (falsified by AJR) o With advent of heavy plows and access to resources, people began farming in temperate climates (such as US) o Implies reversal should have occurred with advent of technology, but it occurred later. “Institutions Hypothesis” Countries that provide incentives and opportunities for investment will be wealthier than others o Extractive Institutions took resources out of the people, doled them out to only a few people (discourage investment) When colonizers came, they continued to use hierarchical structure that existed in rich countries (used people as labor pool) Poor countries, when colonized, saw an influx of immigrants who had a strong incentive to work for their own economic prosperity and develop private rights to benefit everyone Importance of Timing
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o Europeans left these countries poor, without resources and in a stagnant state (also because of the disease they spread) Development of institutions, not colonialization is what led to plunder (300 year lag on demise of then wealthy countries) Geographic factors not statistically relevant Net migration of large amounts of people, where free labor was rewarded, are the wealthy nations today (good institutions) Settlers wanted institutions like those, or better than those in Europe Prosperous Societies
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Review Sheet Midterm 1 - Political Science 348 Review Sheet...

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