99650 - Institutions and Economic Growth in Developing Countries

Learning outcomes

This module introduces the basic tools of the economic approach to the study of the functioning, origins and impact of formal and informal institutions. The institutions that will be considered are the inclusiveness of the political process, the strength of property rights and a culture of cooperation. By the end of the course, the students will be able to critically evaluate the observed institutional variation and propose possible reforms, especially in developing countries.

Course contents

The Course Does Not Require Previous Knowledge of Either Microeconomics, Macroeconomics OR Statistics. The Necessary Theoretical Tools Will Be Provided in Class.

All the Course Material Will be Discussed Intuitively.

 

Inclusive Political Institutions and the Economy: Stylized Facts

This part of the course discusses the concept of social order and the crucial role of the inclusiveness of political institutions in structuring it. Furthermore, it clarifies the functional relationships among inclusiveness of political institutions, a culture of cooperation and property rights. Finally, this part of the course illustrates the empirical literature on the impact of democracy, considered as exogenous, on economic development.

Micro-Mechanisms: Political Order and Property Rights

The second part of the course discusses a recent strand of research clarifying the role of property rights in modulating the elites' and nonelites' incentives to cooperate and their relationship with the inclusiveness of the political process.

Micro-Mechanisms: Political Order and Cooperation

The third part of the course, together with the third one, introduces two recent strands of research documenting that the inclusiveness of the political order is endogenous, i.e., a rational human chocie. The first of these two literatures clarifies how the expansion of the political rights and the nonelites' cultural accumulation encourage a cooperation between elites and nonelites made otherwise impossible by adverse production conditions.

Readings/Bibliography

• North, Douglass C., John Joseph Wallis, and Barry R. Weingast. 2009. Violence and Social Orders: A Conceptual Framework for Understanding Recorded Human History. Cambridge: Cambridge University Press.

• Various papers:

Inclusive Political Institutions and the Economy: Stylized Facts

• North et al. (2009), capitoli 1-4.
  
• Acemoglu, Daron, Suresh Naidu, Pascual Restrepo, and James A. Robinson. 2018. "Democracy Does Cause Growth." Journal of Political Economy, 127: 47-100.
• Guiso, Luigi, Paola Sapienza, Luigi Zingales. 2016. "Long-term Persistence." Journal of the European Economic Association, 14: 1401-1436.
• Coase, Ronald H. 1960. "The Problem of Social Cost." Journal of Law and Economics, 3: 1-44.
• Acemoglu, Daron, and Simon Johnson. 2004. "Unbundling Institutions.” Journal of Political Economy, 113: 949-995.
• Besley, Timothy, and Maitreesh Ghatak. 2010. "Property Rights and Economic Development." In Handbook of Development Economics, Vol. V. Mark Rosenzweig and Dani Rodrik, eds. Amsterdam: Elsevier, 4525-4589.

Micro-Mechanisms: Political Order and Property Rights

• Calabresi, Guido, and Melamed, A. Douglas. 1972. "Property Rules, Liability Rules and Inalienability: One View of the Cathedral." Harvard Law Review, 85: 1089-1128.
  
• Guerriero, Carmine. 2023. "Property Rights, Transaction Costs, and the Limits of the Market." Economics of Governance, 24: 143-176.
• Benati, Giacomo, Carmine Guerriero, and Federico Zaina. 2022. "The Origins of Political Institutions and Property Rights." Journal of Comparative Economics, 50: 946-968.
• Benati, Giacomo, and Carmine Guerriero. 2022. "The Origins of the State: Technology, Cooperation and Institutions." Journal of Institutional Economics, 18: 29-43.
• Benati, Giacomo, and Carmine Guerriero. 2021. "Climate Change and State Evolution." PNAS, 118: e2020893118.
  

Micro-Mechanisms: Political Order and Cooperation

• North et al. (2009), capitoli 5-6.
• Fleck, Robert K., and F. Andrew Hanssen. 2006. "The Origins of Democracy: a Model with Application to Ancient Greece." Journal of Law and Economics, 49: 115-146.
• Benati, Giacomo, and Carmine Guerriero. 2023. "The Origins of (a Culture of) Cooperation." Unpublished.
• Boranbay, Serra, and Carmine Guerriero. 2019. "Endogenous (In)Formal Institutions." Journal of Comparative Economics, 47: 921-945.
• Guerriero, Carmine. 2020. "Endogenous Institutions and Economic Outcomes." Economica, 87: 364-405.
• de Oliveira, Guilherme, and Carmine Guerriero. 2018. "Extractive States: The Case of the Italian Unification." International Review of Law and Economics, 56: 142-159.
• Benati, Giacomo, and Carmine Guerriero. 2024. "Climate Shocks, Democratization and (a Culture of) Cooperation." Unpublished.

Teaching methods

Taught classes.

Assessment methods

Final essay analyzing an insitutional reform alike those discussed in class.

The final grade will be assigned as follows:

• Ability to analyze emerging only with the help of the lecturer, expression in overall correct language → 18-19;
• Ability to analyze autonomously only on purely executive issues, expression in correct language → 20-24;
• Ability to make autonomous choices of critical analysis, mastery of specific terminology → 25-29;
• Ability to make autonomous choices of critical analysis and linking, full mastery of specific terminology and ability to argue and self-reflect → 30-30 L

Teaching tools

Slides available on:

https://sites.google.com/view/carmineguerrierohomepage/home-page/teaching/99650-sleg

Links to further information

https://sites.google.com/view/carmineguerrierohomepage/home-page/teaching/99650-sleg

Office hours

See the website of Carmine Guerriero