History Of North Korea And South Korea Essay

1384 Words Oct 31st, 2016 6 Pages
This essay will look at the evidence for and against the afore mentioned statement, that institutions are the fundamental determinant in economic developement. To answer the question i will

begin by looking at the case of North korea and south Korea, two countries that were once very similar in terms of development but now have very different economies. Also the essay will look

at the effect that european colonialisation had on the institutions that formed in respective colonised countries, with specific focus on North american Colonisation comparative to African

colonisation and institutions that formed.

Institutions are the rules of the game in a society or, more formally are the humbly devised constraints that shape human interaction (North 1990). Institutions provide incentives and

constraints for economic actors, therefore shaping the the behaviour of economically active members of a society.

Economic development is the development of capacities that expand economic actors’ capabilities. These actors may be individuals, firms, or industries (Feldman 2003). In order for

economic actors actions to be expansive institutions must be correctly enforced to make sure that they incentivise certain behaviours and deincentivies others. In order to achieve this they

must hold appropriate backing by law and be void of corruption. Otherwise the outcomes and choices of these institutions can be determined by economic winners to munipulate economic

losers. Therefore,…

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