Barro found that a nation’s GDP growth rate is correlated with improved rule of law and granting of political rights. These were only correlated when prevalence was initially low, but it demonstrated that certain political structures may be better for growth. This is because economic rights and political rights facilitate and encourage one another to develop. The key causal mechanism here is limitation in government power due to the increase of individual political rights (Barro 1998). While accounting for the idea that corruption and instability drain economic capacity, Acemoglu and Robinson’s theory makes the forward motion of describing important political institutions that boost growth. The importance of political institutions is thoroughly
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In a way, this theory blends cultural theory with rational choice theory. It recognizes individuals as agents who will maximize utility, especially during the economic steps of the causal logic. However, the inclusiveness of institutions is a cultural phenomenon that is more likely in pluralist societies. The inclusive environment encourages individual engagement with the economy (Acemoglu and Robinson 2012). This theory is better able to describe global attitudes than the purely cultural theories which are much too limited to specific regions or time …show more content…
Extractive institutions are recognized as having built success, but only when the economic is far from the technological turn (Acemoglu and Robinson 2012, 124-151). Once development gets to this stage, growth will not be sustained without inclusiveness. The idea of more inclusive political institutions sufficiently synthesizes ideas like Barro’s that demonstrated correlation and La Porta, Silanes, and Sleifer’s regarding specific legal systems. This theory is just big enough to describe the general trends, but it has certain implications that will describe specific phenomena. For example, La Porta, Silanes, and Shleifer reviewed one implication of this theory in comparing legal traditions and finding that common law systems are much more successful than others in protecting crucial individual property rights
In a way, this theory blends cultural theory with rational choice theory. It recognizes individuals as agents who will maximize utility, especially during the economic steps of the causal logic. However, the inclusiveness of institutions is a cultural phenomenon that is more likely in pluralist societies. The inclusive environment encourages individual engagement with the economy (Acemoglu and Robinson 2012). This theory is better able to describe global attitudes than the purely cultural theories which are much too limited to specific regions or time …show more content…
Extractive institutions are recognized as having built success, but only when the economic is far from the technological turn (Acemoglu and Robinson 2012, 124-151). Once development gets to this stage, growth will not be sustained without inclusiveness. The idea of more inclusive political institutions sufficiently synthesizes ideas like Barro’s that demonstrated correlation and La Porta, Silanes, and Sleifer’s regarding specific legal systems. This theory is just big enough to describe the general trends, but it has certain implications that will describe specific phenomena. For example, La Porta, Silanes, and Shleifer reviewed one implication of this theory in comparing legal traditions and finding that common law systems are much more successful than others in protecting crucial individual property rights