Institutions, GLOA 610

class: inverse, left
background-image: url(https://i0.wp.com/calmatters.org/wp-content/uploads/2021/01/iStock_court_02.jpg?fit=2000%2C1333&ssl=1)
background-position: right
background-size: cover
background-color: black

# .yellow[.Huge[**Institutions & <br> Development**]]
# .huge[.times[GLOA 610]]

---

class: inverse
background-image: url(https://i.gifer.com/38Wj.gif)
background-size: cover

# If you're a small business owner <br> in the .yellow[Wild West] <svg aria-hidden="true" role="img" viewBox="0 0 640 512" style="height:1em;width:1.25em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:orange;overflow:visible;position:relative;"><path d="M489.1 264.9C480.5 207.5 450.5 32 392.3 32c-14 0-26.58 5.875-37.08 14c-20.75 15.87-49.62 15.87-70.5 0C274.2 38 261.7 32 247.7 32c-58.25 0-88.27 175.5-97.77 232.9C188.7 277.5 243.7 288 319.1 288S451.2 277.5 489.1 264.9zM632.9 227.7c-6.125-4.125-14.2-3.51-19.7 1.49c-1 .875-101.3 90.77-293.1 90.77c-190.9 0-292.2-89.99-293.2-90.86c-5.5-4.875-13.71-5.508-19.71-1.383c-6.125 4.125-8.587 11.89-6.087 18.77C1.749 248.5 78.37 448 319.1 448s318.2-199.5 318.1-201.5C641.5 239.6 639 231.9 632.9 227.7z"/></svg>,

# what .pink[scares] you the most <svg aria-hidden="true" role="img" viewBox="0 0 512 512" style="height:1em;width:1em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:currentColor;overflow:visible;position:relative;"><path d="M0 256C0 114.6 114.6 0 256 0C397.4 0 512 114.6 512 256C512 397.4 397.4 512 256 512C114.6 512 0 397.4 0 256zM399.3 360H344V400H352C375.8 400 395.5 382.7 399.3 360zM352 304H344V344H399.3C395.5 321.3 375.8 304 352 304zM328 344V304H264V344H328zM328 400V360H264V400H328zM184 304V344H248V304H184zM184 360V400H248V360H184zM168 344V304H160C136.2 304 116.5 321.3 112.7 344H168zM168 400V360H112.7C116.5 382.7 136.2 400 160 400H168zM176.4 176C158.7 176 144.4 190.3 144.4 208C144.4 225.7 158.7 240 176.4 240C194 240 208.4 225.7 208.4 208C208.4 190.3 194 176 176.4 176zM336.4 240C354 240 368.4 225.7 368.4 208C368.4 190.3 354 176 336.4 176C318.7 176 304.4 190.3 304.4 208C304.4 225.7 318.7 240 336.4 240z"/></svg>?

---

background-image: url(https://bookunitsteacher.com/explorers/columbus_ships.gif)
background-size: contain
background-position: right

# .large[What if you .red[invested] in a <br> Transatlantic <br> Expedition?]

---

class: inverse, middle
background-image: url(https://i.gifer.com/origin/e4/e487321f6d45b094d555f5c6d787e3d5_w200.gif)
background-size: contain
background-position: right
background-color: black

# .Large[Is there a way <br> to put this .yellow[anxiety] <br> to bed?]

---
class: inverse
background-image: url(https://wallpaperaccess.com/full/1390893.jpg)
background-size: cover

# Institutions, the concept (North 1991)

.blockquote[
.white[
### - "humanly devised constraints that structure political, economic and social .red[interaction] [, which] consist of both informal constraints [and] formal rules"
]

### - "devised ... to create order and reduce .yellow[uncertainty] in exchange"
]

### As the scope of transaction *grows*, the uncertainty also increases:

- .Large[.orange[agency-principal] problem]

- .Large[.orange[contract enforcement] problem]

### .red[Impersonal enforcement <svg aria-hidden="true" role="img" viewBox="0 0 512 512" style="height:1em;width:1em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:currentColor;overflow:visible;position:relative;"><path d="M512 216.3c0-6.125-2.344-12.25-7.031-16.93L482.3 176.8c-4.688-4.686-10.84-7.028-16.1-7.028s-12.31 2.343-16.1 7.028l-5.625 5.625L329.6 69.28l5.625-5.625c4.687-4.688 7.03-10.84 7.03-16.1s-2.343-12.31-7.03-16.1l-22.62-22.62C307.9 2.344 301.8 0 295.7 0s-12.15 2.344-16.84 7.031L154.2 131.5C149.6 136.2 147.2 142.3 147.2 148.5s2.344 12.25 7.031 16.94l22.62 22.62c4.688 4.688 10.84 7.031 16.1 7.031c6.156 0 12.31-2.344 16.1-7.031l5.625-5.625l113.1 113.1l-5.625 5.621c-4.688 4.688-7.031 10.84-7.031 16.1s2.344 12.31 7.031 16.1l22.62 22.62c4.688 4.688 10.81 7.031 16.94 7.031s12.25-2.344 16.94-7.031l124.5-124.6C509.7 228.5 512 222.5 512 216.3zM227.8 238.1L169.4 297.4C163.1 291.1 154.9 288 146.7 288S130.4 291.1 124.1 297.4l-114.7 114.7c-6.25 6.248-9.375 14.43-9.375 22.62s3.125 16.37 9.375 22.62l45.25 45.25C60.87 508.9 69.06 512 77.25 512s16.37-3.125 22.62-9.375l114.7-114.7c6.25-6.25 9.376-14.44 9.376-22.62c0-8.185-3.125-16.37-9.374-22.62l58.43-58.43L227.8 238.1z"/></svg>] <svg aria-hidden="true" role="img" viewBox="0 0 448 512" style="height:1em;width:0.88em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:currentColor;overflow:visible;position:relative;"><path d="M438.6 278.6l-160 160C272.4 444.9 264.2 448 256 448s-16.38-3.125-22.62-9.375c-12.5-12.5-12.5-32.75 0-45.25L338.8 288H32C14.33 288 .0016 273.7 .0016 256S14.33 224 32 224h306.8l-105.4-105.4c-12.5-12.5-12.5-32.75 0-45.25s32.75-12.5 45.25 0l160 160C451.1 245.9 451.1 266.1 438.6 278.6z"/></svg> more transactions <svg aria-hidden="true" role="img" viewBox="0 0 448 512" style="height:1em;width:0.88em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:currentColor;overflow:visible;position:relative;"><path d="M438.6 278.6l-160 160C272.4 444.9 264.2 448 256 448s-16.38-3.125-22.62-9.375c-12.5-12.5-12.5-32.75 0-45.25L338.8 288H32C14.33 288 .0016 273.7 .0016 256S14.33 224 32 224h306.8l-105.4-105.4c-12.5-12.5-12.5-32.75 0-45.25s32.75-12.5 45.25 0l160 160C451.1 245.9 451.1 266.1 438.6 278.6z"/></svg> .bluey[development]

---

class: center, middle
background-image: url(https://textvulture.github.io/images/background_oldPaper.jpg)
background-size: cover

# .large[**The question really is: <br><br> .times[What Makes a .bluey[Good] Institution?**]]

---

class: inverse, bottom
background-image: url(https://media1.giphy.com/media/wR4bJk4jF5Tl6/200.gif)
background-size: cover

# .large[.yellow[This week, we need to go to the .red[history] a bit.]]

# The origins of institutional strength often go .yellow[way back].

---

class: inverse
background-image: url(https://media.istockphoto.com/photos/chalkboard-back-to-school-theme-picture-id482968188?b=1&k=20&m=482968188&s=170667a&w=0&h=ByKSDUnnROrFuIg3wYAP2EE7e8pLVdi7_99TRSzIdxU=)
background-size: cover

# .Large[In particular, we will be talking about:]

## - the concept and functions of institutions (& some data)

## - the determinants and origins of institutional strength/quality

- .Large[geography and colonialism]

## - an application: which institution is functionally .red[better]?

## .yellow[<svg aria-hidden="true" role="img" viewBox="0 0 512 512" style="height:1em;width:1em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:currentColor;overflow:visible;position:relative;"><path d="M128 447.1V223.1c0-17.67-14.33-31.1-32-31.1H32c-17.67 0-32 14.33-32 31.1v223.1c0 17.67 14.33 31.1 32 31.1h64C113.7 479.1 128 465.6 128 447.1zM512 224.1c0-26.5-21.48-47.98-48-47.98h-146.5c22.77-37.91 34.52-80.88 34.52-96.02C352 56.52 333.5 32 302.5 32c-63.13 0-26.36 76.15-108.2 141.6L178 186.6C166.2 196.1 160.2 210 160.1 224c-.0234 .0234 0 0 0 0L160 384c0 15.1 7.113 29.33 19.2 38.39l34.14 25.59C241 468.8 274.7 480 309.3 480H368c26.52 0 48-21.47 48-47.98c0-3.635-.4805-7.143-1.246-10.55C434 415.2 448 397.4 448 376c0-9.148-2.697-17.61-7.139-24.88C463.1 347 480 327.5 480 304.1c0-12.5-4.893-23.78-12.72-32.32C492.2 270.1 512 249.5 512 224.1z"/></svg>] It is also the last week of a straight-out lecture

---

background-image: url(https://phoneky.co.uk/thumbs/screensavers/down/places/beacon_G0ms1N0l.gif)
background-size: contain
background-position: right

# <svg aria-hidden="true" role="img" viewBox="0 0 512 512" style="height:1em;width:1em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:currentColor;overflow:visible;position:relative;"><path d="M240.1 4.216C249.1-1.405 262-1.405 271.9 4.216L443.6 102.4L447.1 104V104.9L495.9 132.2C508.5 139.4 514.6 154.2 510.9 168.2C507.2 182.2 494.5 192 479.1 192H31.1C17.49 192 4.795 182.2 1.071 168.2C-2.653 154.2 3.524 139.4 16.12 132.2L63.1 104.9V104L68.37 102.4L240.1 4.216zM64 224H128V416H168V224H232V416H280V224H344V416H384V224H448V420.3C448.6 420.6 449.2 420.1 449.8 421.4L497.8 453.4C509.5 461.2 514.7 475.8 510.6 489.3C506.5 502.8 494.1 512 480 512H32C17.9 512 5.46 502.8 1.373 489.3C-2.713 475.8 2.517 461.2 14.25 453.4L62.25 421.4C62.82 420.1 63.41 420.6 64 420.3V224z"/></svg> &nbsp; Institutions, the functions

## Addresses one of the biggest fears

## : .red[uncertainty] on .green[**property rights**]

### - clarifies boundaries

### - public info (common understanding)

### - articulates consequences (deterrence)

## - credibility <svg aria-hidden="true" role="img" viewBox="0 0 448 512" style="height:1em;width:0.88em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:currentColor;overflow:visible;position:relative;"><path d="M438.6 278.6l-160 160C272.4 444.9 264.2 448 256 448s-16.38-3.125-22.62-9.375c-12.5-12.5-12.5-32.75 0-45.25L338.8 288H32C14.33 288 .0016 273.7 .0016 256S14.33 224 32 224h306.8l-105.4-105.4c-12.5-12.5-12.5-32.75 0-45.25s32.75-12.5 45.25 0l160 160C451.1 245.9 451.1 266.1 438.6 278.6z"/></svg> predictability

---

background-image: url(https://miro.medium.com/max/800/0*AXgnCR1u_1sKpeLc.jpg)
background-size: contain
background-position: right

--
 
## - when institution = enforcement

## - .red[unfettered] protection of property rights

### e.g., vulture capitalism

---

# .large[<svg aria-hidden="true" role="img" viewBox="0 0 512 512" style="height:1em;width:1em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:currentColor;overflow:visible;position:relative;"><path d="M240.1 4.216C249.1-1.405 262-1.405 271.9 4.216L443.6 102.4L447.1 104V104.9L495.9 132.2C508.5 139.4 514.6 154.2 510.9 168.2C507.2 182.2 494.5 192 479.1 192H31.1C17.49 192 4.795 182.2 1.071 168.2C-2.653 154.2 3.524 139.4 16.12 132.2L63.1 104.9V104L68.37 102.4L240.1 4.216zM64 224H128V416H168V224H232V416H280V224H344V416H384V224H448V420.3C448.6 420.6 449.2 420.1 449.8 421.4L497.8 453.4C509.5 461.2 514.7 475.8 510.6 489.3C506.5 502.8 494.1 512 480 512H32C17.9 512 5.46 502.8 1.373 489.3C-2.713 475.8 2.517 461.2 14.25 453.4L62.25 421.4C62.82 420.1 63.41 420.6 64 420.3V224z"/></svg> Most common measure <svg aria-hidden="true" role="img" viewBox="0 0 512 512" style="height:1em;width:1em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:purple;overflow:visible;position:relative;"><path d="M500.3 443.7l-119.7-119.7c27.22-40.41 40.65-90.9 33.46-144.7C401.8 87.79 326.8 13.32 235.2 1.723C99.01-15.51-15.51 99.01 1.724 235.2c11.6 91.64 86.08 166.7 177.6 178.9c53.8 7.189 104.3-6.236 144.7-33.46l119.7 119.7c15.62 15.62 40.95 15.62 56.57 0C515.9 484.7 515.9 459.3 500.3 443.7zM79.1 208c0-70.58 57.42-128 128-128s128 57.42 128 128c0 70.58-57.42 128-128 128S79.1 278.6 79.1 208z"/></svg> ]

## - **.green[judicial independence]**; **.orange[tax collection]**

## - discretion-reduction

## - power-constraining

---

background-image: url(https://media.tenor.com/Akhn78VlM8kAAAAM/el-lleve-shake-hands.gif)
background-position: right
background-size: contain

## - **.green[judicial independence]**; **.orange[tax collection]**

## - discretion-reduction

## - power-constraining

- .Large[.times[*will my property be just taken away?*]]

# - .red[corruption-control]

---

# data: .red[institutions] and .green[development]  (.orange[pooled] global sample)

---

class: inverse
background-image: url(https://github.com/textvulture/textvulture.github.io/blob/master/images/forestBackground3.jpg?raw=true)
background-size: cover

# .yellow[What] makes good and bad institutions?

# .pink[Where] does the difference come from?

---
class: inverse, bottom
background-color: black

# .yellow[Why were some European countries richer than others?]

# AJR (2005)

---

class: inverse, bottom
background-color: black
background-image: url("https://cdn.britannica.com/12/189412-049-D5A55A4F/flow-triangular-trade-Europe-slave-goods-North.jpg?w=740&h=416&c=crop")
background-size: contain
background-position: right

# .yellow[Why were some European countries richer than others?]

# AJR (2005)

---
class: inverse, middle, center
background-image: url(https://github.com/textvulture/textvulture.github.io/blob/master/images/night_background4.jpg?raw=true)
background-size: 100%

# .LARGE[But what about .pink[beyond] Europe?]

---

# .large[How come .red[Canada] is much richer than .blue[Belize] ]

---

background-image: url(http://textvulture.github.io/images/sokoloff.png)
background-size: 60%
background-position: right

# .large[How come .red[Canada] is much richer than .blue[Belize] ]

### - AJR (2001)

### - Sokoloff and Engerman (2000)

### - what kind of .Yellow[institutions]?

---
class: inverse
background-color:  #034f84
background-position: bottom
background-size: contain

# Why is .Yellow[Africa] mired in conflict (and thus little development?)

---

class: inverse
background-color:  #034f84
background-image: url(https://static.dw.com/image/18277176_1006.jpg)
background-size: 130%

# Why is .Green[Africa] mired in conflict (and thus little development?)

## .yellow[Michalopoulos and Papaioannou (2016)]

---

background-image: url(https://i.pinimg.com/736x/e6/1d/19/e61d197cea451b394221b8e6146f6eef.jpg)
background-size: contain
background-position: right

# .large[Olson (1993)]

# Which is better for .pink[development], <br> .Green[**democracy**] or .Blue[**autocracy**]?

# What kind of autocracy?