1. which countries should be rich/poor?

Question 1

What do Acemoglu and Robinson argue is the fundamental cause of wealth disparities?

Answer 1

• institutions
• Inclusive institutions (secure property rights, innovation) lead to prosperity
• extractive institutions (concentrated power, wealth) hinder growth.
• Example: Canada (inclusive) vs. Jamaica (extractive).

Question 2

How did colonial origins shape institutional quality, according to Acemoglu and Robinson?

Answer 2

• Settler mortality influenced institutions
• Low mortality led to inclusive institutions,
• while high mortality resulted in extractive systems.
• Example: U.S. and Canada (settler colonies) vs. many African colonies.

Question 3

What is the ‘Reversal of Fortune’ concept by Acemoglu and Robinson?

Answer 3

• previously prosperous regions with extractive institutions (e.g., South America) became poorer
• settler colonies (e.g., North America) developed wealth due to inclusive institutions.

Question 4

How does Jeffrey Sachs explain the role of geography in wealth disparities?

Answer 4

• geography impacts productivity directly. Tropical climates face disease burdens and lower output, while temperate regions are more productive
• Example: Sub-Saharan Africa vs. temperate Europe.

Question 5

How does Sachs critique Acemoglu and Robinson’s theory of institutions?

Answer 5

• Sachs critiques that geography has direct effects on production (e.g., worker stamina, fertility), not just through institutions
• Example: Disease burdens in tropical climates affect productivity and governance.

Question 6

What role does education play in economic growth, according to Edward Glaeser?

Answer 6

• education is a stronger predictor of long-term growth than institutions. Early investments in schooling correlate with economic success.
• Example: School enrollments strongly predict growth over time.

Question 7

How does urbanization drive growth, according to Edward Glaeser?

Answer 7

• Glaeser - cities concentrate talent and innovation, driving productivity and growth.
• Example: Singapore and Hong Kong thrived as trade hubs due to skilled populations and liberal trade policies.

Question 8

What is Glaeser’s critique of Acemoglu and Robinson’s theory?

Answer 8

• Glaeser critiques that Acemoglu and Robinson overstate institutional stability.
• He argues that institutions are often volatile and influenced by economic growth itself.
• Education and policies, not institutions, are better predictors of growth.
• settler mortality data weak - don’t have data for 36 of 64

Question 9

What is the Human Capital Index (HCI), and how does Glaeser view it?

Answer 9

• HCI measures human capital using schooling years, test scores, mortality, and health.
• Glaeser sees human capital as critical for growth.
• Example: Countries with high HCI sustain long-term growth.
• Finland vs Chad