Why are some countries significantly poorer than others?

→ The authors posit that differences in economic institutions are the fundamental cause of disparities in economic development.

Framework

The chapter presents a theoretical framework based on the idea that economic institutions, the rules shaping economic incentives, are the primary drivers of prosperity.

Methodology

The writer used mixes methodology (historical analysis and econometric methods) to support and explore the impact of institutions on economic growth

Regarding historical analysis: they used this method to conduct analyses of "quasi-natural experiments," like the division of Korea and European colonization, to isolate institutional effects from other factors.

Regarding econometric techniques: they applied this to address potential issues of reverse causality and omitted variable bias.

Results

The authors present evidence suggesting that differences in economic institutions are a more robust explanation for income disparities than factors like geography or culture.

The "Reversal of Fortune", where formerly prosperous colonies became relatively poor after colonization, is presented as strong evidence for the importance of institutions.

The authors find that colonies with high initial population density or urbanization, factors associated with extractive institutions, ended up with worse economic institutions and lower incomes today.

European mortality rates, used as an instrument for institutional quality, demonstrate a strong causal effect of economic institutions on income levels.

Summary

The chapter argues that economic institutions are the fundamental cause of long-run economic growth, and that differences in these institutions are largely shaped by the distribution of political power and the nature of political institutions. It uses historical evidence and econometric methods to support these claims, emphasizing the role of colonialism as a "natural experiment" in institutional change.

1. Đỗ Huỳnh Thanh Thảo - 2312155185

2. Nguyễn Ngọc Minh Thư - 2312155190

3. Trần Minh Trí - 2312155211

4. Nguyễn Thanh Vân - 2312155225

5. Nguyễn Thị Thanh Trà - 2312155199

6. Thân Trọng Nhân - 2312155140

By: Daron Acemoglu Simon Johnson James Robinson"

Hà Vương

Kim Dung

Khánh Đan

Khánh Ngọc

Mai Huyền

Lê Khanh

• Nguyễn Ngọc Châu Anh

• Nguyễn Ngô Hải Yến

• Đỗ Thị Quỳnh Trang

• Nguyễn Thuỵ Cẩm Tiên

• Phạm Ngọc Trân

• Ngô Thị Quốc Trang

• Nguyễn Lan Phương

• Đoàn Nguyễn Tường Vân