POVERTY, INEQUALITY AND DEVELOPMENT

Question 1

Inclusive Economic Institutions and Education:

Answer 1

Inclusive economic institutions are portrayed as drivers of technological advancement and educational progress.
The lack of incentives provided by economic institutions in impoverished countries is highlighted as a significant factor contributing to low education levels.

Question 2

2. Inclusive Political Institutions:

Answer 2

• Inclusive political institutions are characterized by pluralism and the support of centralized, powerful states.
• Max Weber’s definition of the state as the “monopoly of legitimate violence” is introduced, emphasizing the state’s role in enforcing law and order.

Question 3

3. Need for Both Economic and Political Inclusivity:

Answer 3

• The reading underscores the necessity of both inclusive economic and political institutions for a functional system.
• The absence of either component is suggested to result in a breakdown of the system.

Question 4

4. Resistance to Inclusive Mechanisms:

Answer 4

• Historical examples, such as Mobutu in the Congo, English aristocrats, and the Luddites, serve to illustrate active resistance to inclusive institutions.
• Commonalities among these instances point to power dynamics and vested interests as key factors in resistance.

Question 5

5. Central Thesis of the Book:

Answer 5

• The central thesis posits a correlation between economic growth, prosperity, and inclusive economic and political institutions.
• While extractive institutions are generally associated with stagnation and poverty, the reading acknowledges exceptions.

Question 6

Key Lesson:

Answer 6

• The central takeaway is that the trajectory of countries toward inclusive institutions is contingent on power dynamics and incentives, dispelling the notion of a natural inclination toward inclusivity.