That together define the incentive structure of societies and economy Two sets

That together define the incentive structure of

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That together define the incentive structure of societies and economy Two sets of institutions Property right Economic dimension: property right Political dimension: political right to depend property and income Inequality Concentration of wealth hampers the accumulation of human capital. Link to solos-type growth model Incorporate human capital Innovation is the outcome of human and physical capita accumulation Good institution facilitate competition
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Comparing with Neo-classical Classicalism believes in free trade, globalization and integration into international factor Neo institutionalist also believe that international integration generate positive impact, but the driving force should come from domestic factors Comparing with Marxist Marxist: Econ development results from interaction between Productive forces: people, land, labor, capital Structure = "relations of production and productive forces:" individuals with di ff erent position to the ownership of land, capital and labor = institutions Super structure = legal apparatus and its enforcement mechanism: ideology, religion and culture = formal institutions Based on informal, pre-existing relations of forces, social relations Comparison: What North calls institutions = what Marx calls "social relations of production" 2.3.2 The Colonial Heritage Neo-institutionalism and the colonial heritage Disagreement on the origins of LAC institutions Landes and North: result of cultural and political transfer from colonizing power Sokolo ff and Robinson: Initial inequality results from the unequal distribution of factor endowment (in Central and South America), rather than the nature of colonizing power The this inequality persisted because these institutions tended to reproduce and reinforce unequal distribution of wealth. Engerman & Sokolo ff : endowment deterministic; initially conditions of factor endowment was the fundamental cause Acemogly and Robinson: Labor was most important Bad institutions in areas with abundant labor and barrier to immigration (of Europeans, due to disease)
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