BIE Session 1-2 PDF

INSTITUTIONAL ECONOMICS DR. S IYUN JIA NG B IE JA N-2 02 5 S ES SION 1 -2 Instructor: Siyun Jiang Si (思): Thinking, Thoughts Yun (韵): Rhythm Ph.D. in Government, The University of Texas at Austin MPhil in Social Science, The Hong Kong University of Science and Technology BA in Sociology, Sun Yat...

INSTITUTIONAL ECONOMICS DR. S IYUN JIA NG B IE JA N-2 02 5 S ES SION 1 -2 Instructor: Siyun Jiang Si (思): Thinking, Thoughts Yun (韵): Rhythm Ph.D. in Government, The University of Texas at Austin MPhil in Social Science, The Hong Kong University of Science and Technology BA in Sociology, Sun Yat-Sen University, People’s Republic of China Self-Introduction Who are you? Where are you from? Why did you choose Economics? What courses have you taken? What kind of political phenomena interests you the most? What Is This Course About? What are institutions? Write three keywords that come to your mind. Join at menti.com Use code 6382 4561 Result What Is Institutional Economics? What Is Institutional Economics? 2024 prize lectures in economic sciences | Daron Acemoglu, Simon Johnson and James Robinson Studies of how institutions are formed and affect prosperity Why certain countries are rich and others are poor? The richest 20 per cent of the world’s countries are about 30 times richer than the poorest 20 per cent today. The income gap does not seem to change over time. There is a strong connection between societal institutions and prosperity. Differences in prosperity among countries largely depend on countries' social institutions and how they have been created. Institutions: property rights, laws, regulations, political arrangements that influence the distribution of political power and the constraints on that power, the distribution of GDP per capita, current prices economic resources. U.S. dollars per capita Institutions are endogenous Origins of Institutions The role of colonization: When Europeans colonized large parts of the world, the societal institutions in those areas changed. Colonisers introduced different societal institutions into the colonised areas depending on how rich or poor those areas were when the settlers arrived. Reversal of fortune: The places that were rich when the colonialists arrived are today among the poorest, while the places that were poor when they were colonised now have more prosperity and a higher standard of living. Persistence of Institutions Institutions that are built to benefit the elite and exploit the masses are bad for long-term economic growth, while institutions that are built to benefit the masses are good for long-term growth. Why don’t the elite simply replace the existing economic system? The problem of credibility: The lack of trust between the ruling elite and the masses makes it difficult to change the economic and political system. Societies get stuck in a pattern of exploitive institutions, impoverished masses and a wealthy elite. Institutions are path dependent Institutional Change Change is possible: Countries can change if the citizens gets organised to threaten the ruling elites with a revolt. Democratization: Faced with the threat of revolution, the elites can hand over power to citizens and start a democracy. The progressive era as a response to rising inequality and concentration of power during the critical juncture created by the rapid adoption of new technologies in many industries. AI as a critical juncture: Change in balance of power between capital-labor (and professional-manual labor) Theories of Democratization Conceptualizing Democracy A graph of a graph showing the growth of the stock market Description automatically generated Economic Theories of Democratization ◦ Modernization Theory ◦ Inequality and Democracy ◦ Acemoglou and Robinson (2006) Cultural Modernization Theory Democracy and Growth Democratic Backsliding Democracy and Human Development The correlation between human well-being and the level of democracy is quite low. Representative democracy is not enough for creating human well-being.  GDP (current US$) Which Institution Matters? ▪Extractive and inclusive institutions ▪Economic and political institutions ▪Democracy vs autocracy ▪Formal and informal institutions Source: The World Bank ▪The "input side” and the "output side” of the political GDP per capita (current US$) system ▪Quality-of-government factors Administrative capacity The rule of law Control of corruption For example, the way civil servants are recruited, paid, and trained; the manner in which the educational system is accessible for various strata of the population; the possibility of holding people working in the public sector accountable; laws about the right to access public documents… Types of Political Institutions What institutional variations result in the various types of democracies? Electoral system Party system Legal system Federal vs unitary system What are the effects of institutions, such as federalism or parliamentary systems, on governance quality, policy- making, and public service delivery? ‘Good Governance’ and Human Development Measures of a state’s administrative capacity, quality of government, and levels of corruption have strong effects on standard measures of human well-being, including subjective measures of life satisfaction, (i.e. ‘happiness’), social trust and political legitimacy.  Session Themes 1-2 Introduction 3-6 Theory of Institutions Course 7-10 Institutions and Prosperity Structure 11-16 Democratization, Redistribution and Growth 17-24 Political Institutions and Development 25-30 Presentations and Review Reading Materials Evaluation Group Presentation 15% Session 25-28; Each group (4-6 students) will introduce a global dataset to the rest of the class. Group Research Proposal 20% Each group (4-6 students) will identify a research question and use the global dataset to develop a proposed research design. Midterm 20% Review Session 12; Exam Session 14 Final Exam 30% Session 29-30; The final exam will consist of a multiple-choice section, a true/false section, and short open questions Class Participation 15% Classroom Policies Session 1 – 12 (09/01- 13/02) First session: 12:00 – 13: 20 (First 10 mins for checking in) Break: 13: 20 - 13: 40 Second session: 13: 40 – 14:50 Session 13 – 30 (26/02 – 21/05) First session: 8:30 – 9: 50 (First 10 mins for checking in) Break: 9: 50 - 10: 10 Second session: 10: 10 – 11:20 Clarifications Reading materials will be posted before class on Blackboard. Optional readings won't be covered in the exams. Th closed-book final exam will be held via Blackboard. Announcements will be made before important deadlines as reminders. Review sheets will be posted before the exams. The group presentation should focus on the global dataset, covering its topic, data collection process, visualization, applications, and limitations. The research proposal, on the other hand, should center on the research question and how the dataset can be utilized to address it. Attendance Policy IE’s attendance policy has changed, you now have only 20% of sessions for absences. The instructor will use the Qwickly Attendance for keeping attendance records. Under exceptional circumstances (such as serious health problems, visa delays, and travel restrictions), a student could ask for a temporary attendance waiver. A written and documented request must be made in advance to the Program Management Team. The instructor will be informed by Program Management of all exceptional cases. Do not email the instructor for the waiver. Although students without attendance waiver can attend the session remotely online, they will be considered as absent. This absence will negatively affect their attendance % as well as their participation grade. Communication Do not use the email function embedded in Blackboard. You can send your course-related inquiries to the instructor’s email: [email protected]. You can request in-person/Zoom meetings between 11:00 and 13:00 on Mondays and 15:00 and 17: 00 on Thursdays. An email appointment is required.