Unit III Institutions AIGH 2024_25_LA_Part1 Flashcards
(74 cards)
1
Q
What is the main question addressed in the outline?
A
Why are some nations rich and others poor?
2
Q
What are the GDP per capita comparisons for Mexico and Bolivia relative to the US?
A
Mexico: 3 times poorer than the US, Bolivia: 8 times poorer.
3
Q
What geographic factors are mentioned as influencing development?
A
Geographic endowments such as tropical vs. temperate climates, landlocked status.
4
Q
What is the Classic Thesis regarding development?
A
Geography determines development.
5
Q
Which cultural system is mentioned as potentially affecting development?
A
Social norms systems.
6
Q
What does the Institutionalist Thesis assert?
A
Institutions determine long-term development and resource distribution.
7
Q
What historical period is referenced for understanding the Americas’ development?
A
The Americas in the 1500s.
8
Q
What was the population of Tenochtitlan in the 1500s?
A
Approximately 200,000 people.
9
Q
What was Potosí known for in the 16th century?
A
It was the largest city in the New World due to its wealth from silver production.
10
Q
What does the term ‘Reversal of Fortune’ refer to?
A
The decline in wealth and population in Potosí after its peak.
11
Q
Complete the statement: Latin America fell behind due to _______.
A
extractive institutions.
12
Q
What percentage of the world’s silver was produced by Bolivia and Mexico from 1500 to 1800?
A
About 80%.
13
Q
What is the average growth rate for Latin America from 1950 to 1970?
A
2.67%.
14
Q
What does Douglas North define institutions as?
A
The rules of the game in a society.
15
Q
Why are institutions important according to Douglas North?
A
They determine incentives for investment in capital and innovation.
16
Q
What do Acemoglu et al. argue about geography and culture?
A
They refute their roles, stating institutions explain long-run development.
17
Q
What was the economic performance of Latin America from 1820 to 1870?
A
0.65% average growth rate.
18
Q
What does the term ‘extractive activities’ refer to?
A
Economic activities such as mining and plantation farming.
19
Q
What was the population of Potosí at its peak?
A
160,000 inhabitants.
20
Q
What was the economic status of Latin America in 2018 relative to the USA?
A
70% of the USA’s GDP per capita.
21
Q
Fill in the blank: The Americas in the 1500s had sophisticated __________.
A
institutions.
22
Q
True or False: Latin America had higher urbanization rates than Spain during the colonial period.
A
True.
23
Q
What is the main thesis of Acemoglu et al. regarding institutions?
A
Institutions explain long-run development by structuring incentives and punishments affecting human interactions.
24
Q
What are the key factors that institutions create incentives for?
A
- Access to secure property rights
- Education
- Unbiased justice
- Competitive markets
25
What does the Institutional Thesis refute?
The role of geography, culture, etc., arguing these factors are relevant only through their effects on institutions.
26
What is the 'Reversal of Fortune'?
The phenomenon where rich countries in 1500 are now relatively poor due to the effects of colonialism.
27
What is the significance of the Industrial Revolution in the context of institutions?
Societies with good institutions, like the USA and Canada, took better advantage of industrialization opportunities.
28
What are 'inclusive' economic institutions?
Rules that facilitate and encourage factor accumulation, innovation, and efficient resource allocation without favoring some over others.
29
Fill in the blank: Countries with broad access to _______ are richer.
secure property rights
30
True or False: Institutions are always efficient for all groups in society.
False
31
How do historical events influence institutions?
Historical accidents, such as colonialism, have permanent effects on legal, cultural, and ideological systems.
32
What are the two perspectives on the efficiency of institutions?
* Efficient Perspective
* Distributive Perspective
33
What role does political power play in institutions?
Political and economic power are often the ultimate arbiters of institutional effectiveness and survival.
34
What does the term 'settler mortality' refer to in the context of institutions?
The mortality rate of settlers, which affects the type of institutions established in colonized regions.
35
What is the relationship between settler mortality and inclusive institutions?
Higher settler mortality is correlated with the establishment of inclusive institutions.
36
What are the three lines of research that trace the origins of the importance of historical events in economic performance?
* Engerman and Sokoloff
* La Porta et al.
* Acemoglu et al.
37
Which countries were largely spared from colonization?
* Japan
* China (and Taiwan)
* Korea
* Iran
* Thailand
* Ethiopia
* Afghanistan
* Nepal
* Bhutan
38
What is the significance of the colonization strategies in shaping institutions?
Distinct colonization strategies ('extractive' vs. 'settler') led to different historical-determined institutions.
39
Fill in the blank: The 'extractive' institutions concentrate economic and political power in a _______.
small elite
40
What is the impact of disease environments on colonization?
The viability of permanent settlements was affected by the disease environment, influencing the type of institutions formed.
41
How do institutions affect economic performance?
Institutions determine the distribution of resources and influence the potential for development.
42
What methodologies are used for causal identification in the context of institutions?
* Instrumental Variable (IV)
* Differences in Differences
43
What is the 'double causality problem'?
The challenge of determining whether institutions influence growth or vice versa.
44
What does the term 'inclusive institutions' imply?
General access to economic and political power rights.
45
What is the key factor that makes colonization important in economic growth?
The impact of colonization on the establishment of institutions that influence long-term economic growth.
46
What percentage of the population in Mexico was enslaved by the 1780s-1800s?
17.5%
## Footnote
Data shows the percentage of slaves relative to the total population in Mexico during that period.
47
What was a common characteristic of colonial enterprises in tropical climates?
Exploitation of native and imported labour (slaves)
## Footnote
This often led to a short-term strategy where colonizers aimed to extract resources and leave quickly.
48
What is the Gini coefficient for inequality in Mexico circa 2010-2018?
0.48
## Footnote
The Gini coefficient is a measure of income inequality within a population.
49
True or False: European settlers in colonial North America primarily engaged in exploitative labor practices.
False
## Footnote
Colonial North America was characterized by family-oriented enterprises rather than single men seeking fortune.
50
Fill in the blank: The strategy of colonial enterprises in tropical areas often involved a high level of _______.
mortality
## Footnote
High mortality rates among colonizers led to the need for short-term extraction strategies.
51
What type of institutions were developed in the context of extractive colonial economies?
Extractive state institutions
## Footnote
These institutions often fostered long-term distrust and low investment in public goods like education.
52
What was the main social burden of colonization in the Americas?
Institutional mistrust, inequality, and social conflict
## Footnote
Historical conflicts were driven by inequality and the capture of the state by elites.
53
What did Humboldt note about European settlers in the Americas?
They took advantage of the superiority given to them by their civilization
## Footnote
Humboldt's observations reflect on the complex interactions between settlers and indigenous populations.
54
What percentage of the population in Haiti was enslaved by the 1780s-1800s?
72.8%
## Footnote
This highlights the extreme reliance on slavery in the Haitian economy during that period.
55
What is one significant outcome of the colonial project in terms of social structure?
Creation of unprecedented levels of inequality
## Footnote
Different colonial societies (slave, settler, feudal) led to varying levels of inequality and development.
56
What was a characteristic feature of colonial enterprises in temperate areas?
Long-term, family-oriented enterprises
## Footnote
Settlers aimed to establish stable communities rather than engage in short-term exploitation.
57
Fill in the blank: The data indicates that the _______ of European settlers guaranteed equal rights primarily to other Europeans.
racism
## Footnote
This institutionalized exclusion characterized the colonial experience for indigenous populations.
58
What was the Gini coefficient for inequality in Brazil circa 2010-2018?
0.53
## Footnote
This figure represents the level of income inequality in Brazil during that time.
59
What does the term 'extractive institutions' refer to?
Institutions that create systems for resource extraction with little regard for equitable development
## Footnote
These institutions often perpetuate inequality and hinder social mobility.
60
What was the average democracy index from 1900 to 2000?
Not specified
## Footnote
The democracy index reflects the state of democratic governance over that century.
61
True or False: The institutional and social burdens of colonization were the same across all regions.
False
## Footnote
Different regions experienced varying impacts based on their colonial structures and native populations.
62
What is the key role of institutions in explaining income?
Differences in economic institutions
## Footnote
Institutions play a crucial role in determining income levels, even within countries that share similar cultural backgrounds.
63
What historical context is referenced regarding European settlers?
Settlers circa 1900
## Footnote
The population percentages of European settlers around 1900 are significant in understanding the demographic and economic impact on various regions.
64
What is the Gini Coefficient used to measure?
Income inequality
## Footnote
The Gini Coefficient indicates the distribution of income within a population, with lower values indicating more equal distribution.
65
What is a potential problem identified by Acemoglu, Johnson, and Robinson (2001)?
Other factors correlated with mortality affect income
## Footnote
The study suggests that simply linking mortality rates to income levels may overlook other influencing factors.
66
What strategy is recommended for dealing with measurement problems in economic studies?
Removing or mitigating contaminated data/outliers
## Footnote
This approach helps improve the accuracy of economic models and findings.
67
What are additional variables that should be included in economic studies?
* Identity of main settler
* Legal origin
* Climate
* Religion
* Natural resources
## Footnote
These variables can provide a more comprehensive understanding of economic outcomes.
68
What do the findings of AJR (2012) suggest about the results of their study?
The findings are robust to the inclusion of additional controls
## Footnote
This indicates that the conclusions remain valid even when accounting for more variables.
69
What is the relationship between state capacity and income?
Strong relationship between mortality and property rights, and also with state capacity
## Footnote
This highlights the importance of institutional strength in economic development.
70
What does state fragility refer to in the context of economic development?
Weakness in governmental institutions that affects stability and growth
## Footnote
State fragility can hinder economic progress and increase vulnerability to crises.
71
Fill in the blank: The model proposed by Acemoglu, Johnson, and Robinson focuses on the impact of _______ on economic outcomes.
settler mortality
72
True or False: The effects of institutions on income are only observed through property rights.
False
## Footnote
Institutions affect income through various mechanisms, not just property rights.
73
What are the implications of measuring settler mortality?
Challenges in accurately linking mortality to economic outcomes
## Footnote
Measurement issues can lead to misleading conclusions regarding the relationship between settler mortality and income.
74
What does the term 'state capacity' encompass in economic terms?
The ability of a government to administer its territory effectively
## Footnote
Strong state capacity is crucial for maintaining order and fostering economic growth.
