Institutions, Institutional Change and Economic Performance

Authors: Douglass C. North

Key Ideas

1. Institutions are the formal and informal rules that structure human interactions and shape economic behavior. They include laws, regulations, norms, and customs.

2. Institutions are fundamental for economic development and performance as they provide the framework for economic activity.

3. Institutions influence economic behavior by providing incentives and constraints.

4. Institutional change is crucial for economic development as it helps to create new opportunities and address current challenges.

5. Path dependence refers to the idea that historical decisions and events shape the cur....
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Quiz

1. What are institutions?

Formal and informal rules that structure human interactions

Physical structures in a society

Educational organizations

Political parties

2. Why are institutions fundamental for economic development and performance?

They provide the framework for economic activity

They create social divisions

They impede economic growth

They concentrate power in the hands of a few

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