UNIT V (TRADE): Institutions, the land market and income distribution in New Zealand Uruguay, 1870-1940 (Scanniello) Flashcards
What institutional approach is used to compare the economic divergence of New Zealand and Uruguay?
An institutional economics approach focusing on land ownership and distribution
This approach examines how different institutional frameworks impact income distribution and economic growth.
What were the key factors that contributed to Uruguay’s lower income per capita compared to New Zealand by the mid-20th century?
Concentration of land ownership and high land rent
These factors hindered economic diversification and technological advancement in Uruguay.
How did New Zealand’s land distribution system differ from Uruguay’s during the studied period?
New Zealand had a more equitable land distribution facilitated by state intervention
This included policies to prevent land concentration and promote broader access.
What role did the state play in New Zealand’s land distribution?
The state actively regulated land distribution and implemented policies like the Torrens system and Lands for Settlement Act
These policies aimed to prevent land concentration and promote effective land use.
Fill in the blank: In Uruguay, land rent captured _______ of total output in 1891.
68%
In contrast, New Zealand’s land rent captured only 26% of total output during the same period.
How did high land rent in Uruguay affect its economic growth?
It disincentivized investment in productivity growth and economic diversification
Land ownership became a more attractive avenue for wealth accumulation than productive endeavors.
True or False: By the mid-1930s, New Zealand’s manufacturing industry’s share of GDP was nearly double that of Uruguay.
True
This reflects New Zealand’s more diversified economy compared to Uruguay.
What was one significant outcome of New Zealand’s investment in human capital?
Higher enrolment rates in primary, secondary, and university education
This focus contributed to New Zealand’s ability to adopt new technologies and diversify its economy.
What were the consequences of relying on a narrow economic base focused on primary commodities?
It stifles economic growth and diversification
This was a challenge faced by both New Zealand and Uruguay during the studied period.
What challenges did Uruguay face in establishing clear property rights in the 19th century?
Political instability and the influence of powerful rural caudillos
These factors contributed to chaotic land occupation and inequitable access to land.
How did the functional distribution of income in the agrarian sector compare between New Zealand and Uruguay?
New Zealand consistently provided a higher reward to labour and reproducible capital
In Uruguay, land rent captured a larger portion of agricultural output.
What does the paper suggest about the impact of secure and widely distributed property rights on economic growth?
They promote a more dynamic and diversified economy
This is crucial for long-term economic growth and social development.
What was a key argument regarding the relationship between income distribution and long-term economic growth?
A worsening wage to rental ratio can hinder productivity growth
Higher inequality can create unfavorable political and economic conditions for growth.
What are institutions in the context of this study?
Formal and informal rules, norms, customs, and organisations structuring interactions
They significantly influence economic outcomes.
What does the term ‘land rent’ refer to?
The payment made by a tenant to a landlord for the use of land
It can also refer to the imputed return to the owner of land for its use in production.
Fill in the blank: The First Globalization Era occurred between _______ and _______.
1870 and 1914
This period was marked by increased international trade and capital flows.
What is the Ricardian Model used for in this paper?
To explain international trade patterns based on differences in labour productivity
The paper extends it to include land as another factor of production.
What limits a country’s long-run growth rate according to the concept of Growth?
A country’s ability to finance imports through exports
Influenced by factors like the income elasticity of demand for exports and imports.
What does the Ricardian Model explain?
International trade patterns based on differences in labour productivity across countries
Extends to include land as another factor of production.
Define Functional Income Distribution.
The distribution of total income among different factors of production
Such as wages for labour, rent for land, and profits for capital.
What characterizes Structural Change in an economy?
A long-term shift in the composition of an economy
Such as a decline in agriculture and a rise in manufacturing or services.
What are Latifundia?
Large landed estates, often characterised by low productivity and concentrated ownership.
What is Agrarian Colonization?
The process of settling and developing agricultural land
Often involves migration and the establishment of new property structures.
What is the Torrens System?
A system of land registration that provides a conclusive record of ownership
Simplifies land transactions and enhances security of tenure.
