AT05: Order, Disorder and Economic Change. Latin America versus North America (Douglas) Flashcards
Why is establishing political order essential for long-term economic growth?
Political order is necessary for securing rights and privileges, which supports economic and political development.
A stable political order creates an environment conducive to investment and innovation.
What contrasting historical experiences are examined to explore political order?
The experiences of Latin America and North America after independence.
This comparison highlights different paths of political and economic development.
What are the three fundamental aspects that define political order?
- A structure of relationships that produces and enforces rights
- A body of rules that commits the state to protect these rights
- A constitution resulting from interactions and enforcement
These aspects ensure stability and predictability in governance.
What is a credible commitment and why is it essential for economic growth?
A credible commitment assures individuals that their property rights will be secure, encouraging investment and long-term planning.
This reduces the risk of expropriation and fosters innovation.
How do incremental and revolutionary sources of societal change differ?
- Incremental change: adjustments within existing frameworks
- Revolutionary change: fundamental alterations of institutions and power structures
Understanding this distinction helps explain variations in societal development.
What key difference in political order development existed between British North America and Spanish America?
British North America had a decentralized federal structure, while Spanish America was more centralized and hierarchical.
This led to different levels of rights and institutional development.
How did the Spanish Crown’s control over property rights affect economic development?
The Crown’s control discouraged long-term investment by creating insecurity in property rights.
This contrasted with the more secure property rights in British North America.
What challenges did newly independent Latin American nations face in establishing stable political systems?
- Weak state capacity
- Internal political instability
- Conflicts over resources and power
- Lack of consensus on political rules
These factors hindered the establishment of effective governance.
What role did shared beliefs play in the stability of the U.S. political order after independence?
Shared beliefs provided legitimacy and facilitated cooperation among the populace.
This contrasts with the fragmented belief systems in Latin America.
What are the fundamental requirements for establishing a stable and prosperous society?
- Securing basic rights
- Creating credible commitments by political officials
These elements are illustrated by the divergent paths of North and Latin America.
What is the implication of the source regarding the role of political order in economic growth in Latin America?
Political order is a primary determinant of long-term economic growth, beyond just economic factors.
This suggests that political preconditions are crucial for development.
What does the source argue about the legacy of Spanish colonial institutions?
The legacy hinders the establishment of stable political orders in post-independence Latin America.
This suggests the need for economic history theories to account for institutional legacies.
How does the source link rent-seeking behavior to political order in Latin America?
Weaker political order and lack of credible commitments contribute to the prevalence of rent-seeking behavior.
This indicates fundamental causes of economic challenges.
Fill in the blank: A _______ commitment is crucial for fostering economic growth.
credible
This commitment ensures the protection of rights and enforcement of contracts.
True or False: The US Constitution played a significant role in establishing a stable political order.
True
The Constitution provided credible commitments and protected rights.
What are the implications of contrasting North and Latin America for economic history theories?
- Political order as a determinant
- Importance of credible commitments
- Need to account for colonial legacies
These insights challenge existing economic theories that overlook political factors.
What does the source conclude about the early establishment of political order?
It significantly shaped the long-term economic development trajectories of both regions.
This emphasizes the importance of political foundations for economic outcomes.
What fundamental role does ‘political order’ play in economic development?
A secure political order is a prerequisite for sustained economic growth.
What is ‘Credible Commitment’?
A situation where individuals or groups have confidence that promises or agreements made by another party will be honoured and enforced.
Define ‘Property Rights’.
The rights of individuals or entities to possess, use, and transfer assets.
What are ‘Institutions’?
The formal and informal rules, norms, and organizations that structure interactions within a society.
What does ‘Rent-Seeking’ refer to?
Behaviour aimed at capturing economic rents through manipulation of the political or economic environment.
Explain ‘Path Dependence’.
The idea that past decisions and historical circumstances can significantly influence future outcomes.
What are ‘Shared Beliefs’?
Common understandings, values, and expectations held by a significant portion of a society.
What is ‘Colonial Legacy’?
The lasting impact of colonial rule on the political, economic, and social structures of a region after independence.
Define ‘Federalism’.
A system of government in which power is constitutionally divided between a central authority and constituent political units.
What is ‘Mercantilism’?
An economic theory emphasizing national wealth through the accumulation of gold and silver and significant state intervention.
What are the key characteristics of a stable and growth-promoting ‘political order’?
1) Clearly defined and enforced rights, 2) Consistent rules and enforcement mechanisms, 3) Credible commitments by the state.
Why was establishing credible commitments more challenging in post-independence Latin America?
Weaker traditions of self-governance, fragmented political landscapes, and entrenched social hierarchies.
How did the structure of property rights differ between Spanish America and British North America?
Spanish America had less secure and more concentrated property rights; British North America had more clearly defined and widely distributed rights.
What role did ‘credible commitment’ play in the economic success of the early United States?
It provided a framework for credible commitments regarding property rights and enforcement of contracts.
What is the primary lesson from the historical comparison of Latin America and North America?
The importance of establishing a secure and credible political order for sustained economic development.
Fill in the blank: The legacy of Spanish colonialism resulted in _______ political orders in Latin America.
less stable
True or False: The authors argue that resource endowments are the primary reason for the contrasting development trajectories of Latin and North America.
False
