- Class Number 4188
- Term Code 3230
- Class Info
- Unit Value 6 units
- Topic On Campus
- Mode of Delivery In Person
- Prof Ligang Song
- Prof Ligang Song
- Class Dates
- Class Start Date 21/02/2022
- Class End Date 27/05/2022
- Census Date 31/03/2022
- Last Date to Enrol 28/02/2022
The key concerns of this course are to understand how institutions evolve in response to changes in incentives, strategies and choices made by individuals, firms and states and how institutions affect economic performance over time. The course examines the interrelationship between incentive and institutions and the role of institutions in societal progress more broadly by:
1. Introducing the essential theories of and methodologies applied in institutional economics.
2. Providing historical and empirical evidence in applications of institutional economics.
3. Exploring how individuals, firms and the states respond to changes in institutions.
4. Analysing the role of institutions in economic performance and transition.
The course will apply case study methods that rely on institutional theories, contextual knowledge of the situation and history, and context-specific modelling.
Upon successful completion, students will have the knowledge and skills to:
- Demonstrate knowledge of the key theories in institutional economics and their applications.
- Demonstrate an understanding of the analytical approaches used to study issues relating to incentives and institutions.
- Apply theoretical and empirical techniques to analyse institutional changes and their impacts.
- Communicate public policy issues with respect to nurturing good institutions.
- Be able to carry out research on a topic explaining cross-country differences in economic growth performance due to institutional constraints.
Institutions, Institutional Change and Economic Performance
Author: North, C. Douglass
Publisher: Cambridge University Press: Cambridge
Edition: First Edition, 1990
This is the primary textbook of the course. This book, however, will not provide the full reference of the materials covered in this course. The course material will also draw on the following books supplemented by journal articles and book chapters on the relevant issues.
North, Douglass C., 2005, Understanding the Process of Economic Change, Princeton University Press
Greif, Avner, 2006, Institutions and the Path to the Modern Economy, Cambridge University Press: Cambridge
Menard, Claude (ed.), 2000, Institutions, Contracts and Organizations, Edward Elgar: Cheltenham
Eggertsson, Trainn, 1990, Economic Behaviour and Institutions, Cambridge University Press: Cambridge
Kasper, Wolfgang and Manfred E. Streit, 1998, Institutional Economics: Social Order and Public Policy, Edward Elgar: Cheltenham
Staff FeedbackStudents will be given feedback in the following forms in this course:
- Written comments
- Verbal comments
- Feedback to the whole class, to groups, to individuals, focus groups
Student FeedbackANU is committed to the demonstration of educational excellence and regularly seeks feedback from students. Students are encouraged to offer feedback directly to their Course Convener or through their College and Course representatives (if applicable). The feedback given in these surveys is anonymous and provides the Colleges, University Education Committee and Academic Board with opportunities to recognise excellent teaching, and opportunities for improvement. The Surveys and Evaluation website provides more information on student surveys at ANU and reports on the feedback provided on ANU courses.
|Week/Session||Summary of Activities||Assessment|
|1||Week 1: Institutions, institutional change and economic performance: an introduction||Readings North, Douglass C., 1990, Institutions, Institutional Change and Economic Performance, Cambridge University Press: Cambridge, Chapters 1, 9, 10, 11 and 12. Menard, Claude (ed.), 2000, Institutions, Contracts and Organizations, Edward Elgar: Cheltenham, Chapters 2 and 3, pp. 7-36. North, Douglass C., 1994, "Economics Performance Through Time," the American Economic Review, Vol. 84, No. 3, pp. 359-368.|
|2||Week 2: Institutional economics: theories and evidence||Readings North, Douglas C., 1990, Institutions, Institutional Change and Economic Performance, Cambridge University Press: Cambridge, Chapters 3 and 4. Williamson, Oliver, 2000, "The New Institutional Economics: Taking Stock, Looking Ahead," Journal of Economic Literature, Vol. 38, pp. 595-613. Hodgson, Geoffrey M., 1998, "The Approach of Institutional Economics," Journal of Economic Literature, Vol. 36, Issue 1, pp. 166-192.|
|3||Week 3: Institutional approaches on economic change: methodology and applications||Readings Hodgson, Geoffrey M., 1993, The Economics of Institutions, Edward Edgar Publishing Limited, Chapters 4, 7 and 26, pp.50-80, pp. 128-151, pp. 570-592 . Chang, H., 2011, "Institutions and economic development: theory, policy and history",Journal of Institutional Economics, Vol.7, Issue 4, pp. 473-498. Aron, J., 2000, "Growth and Institutions: A Review of the Evidence", World Bank Research Observer, Vol. 15, Issue 1, pp. 99-135.|
|4||Week 4: Institutions in a historical perspective: the path to the modern economy||Readings North, Douglas C., 1990, Institutions, Institutional Change and Economic Performance, Cambridge University Press: Cambridge, Chapters 13 and 14. Greif, Avner, 2006, Institutions and the Path to the Modern Economy, Cambridge University Press: Cambridge, Chapters 6 and 7, pp. 158-216. Engerman, Stanley L. and Kenneth L. Sokoloff, 2008, "Debataing the role of institutions and economic development: theory, history and findings", Annual Review of Political Sciences, Vol. 11, pp. 119-135.|
|5||Week 5: Firms, transaction costs and market mechanisms: information and coordination||Readings North, Douglas C., 1990, Institutions, Institutional Change and Economic Performance, Cambridge University Press: Cambridge, Chapters 4 and 8. Coase, Ronald, 1937, “The nature of the firm”, Economica, New Series, Vol. 4, No. 16, pp. 386-405 Hodgson, Geoffrey M., 1993, The Economics of Institutions, Edward Elgar, Chapters 18 and 20, pp. 369-388, pp. 417-439.|
|6||Week 6: Institutions, contracts and organizations: towards the institutional evolution||Readings North, Douglas C., 1990, Institutions, Institutional Change and Economic Performance, Cambridge University Press: Cambridge, Chapters 9, 10 and 11. Kingston, C. and Caballero, G., 2009, "Comparing theories of institutional change," Journal of Institutional Economics, Vol. 5, pp.151-180. Roland, G., 2004, "Understanding institutional change," Studies in Comparative International Development, Vol. 38, pp.109-131.|
|7||Week 7: Institutions and the role of the state: enforcement issues||Readings North, Douglas C., 1990, Institutions, Institutional Change and Economic Performance, Cambridge University Press: Cambridge, Chapters 6. Burlamaqui, Castro and Chang (eds.), 2000, Institutions and the Role of the State, Edward Elgar Publishing Limited, UK and Edward Elgar Publishing, Inc. USA. , Chapters 1 and 2, pp. 3-26, pp. 27-52. Alston, L.J. and Mueller, B., 2005, “Property rights and the state,' in The Handbook of New Institutional Economics (edited by C. Menard and M.M. Shirley). Norwell, MA: Kluwer Academic Publishers.|
|8||Week 8: Competition, incentives and regulations: formal versus informal constraints||Readings North, Douglas C., 1990, Institutions, Institutional Change and Economic Performance, Cambridge University Press: Cambridge, Chapters 5 and 6. Kasper, Wolfgang and Manfred E. Streit, 1998, Institutional Economics: Social Order and Public Policy, Edward Elgar: Cheltenham, Chapter 8, pp. 220-255. Helmke, G. and Steven Levitsky, 2004, "Informal institutions and comparative politics: a research agenda", Perspectives on Politics, Vol. 2, Issue 4, pp. 725-740.|
|9||Week 9: Entrepreneurship, innovation and technological progress: adaptive versus allocative efficiency||Readings Baumol, W. J., 1990, “Entrepreneurship: productive, unproductive and destructive", Journal of Political Economy, Vol. 98 (5), pp. 893-921 Kasper, Wolfgang and Manfred E. Streit, 1998, Institutional Economics: Social Order and Public Policy, Edward Elgar: Cheltenham, Chapter 7, pp. 173-203. Hodgson, Geoffrey M. 1988, Economics and Institutions: a Manifesto for a Modern Institutional Economics, Polity Press, Chapter 11, pp. 262-274.|
|10||Week 10: Institutions in economic transition: the comparative incentive features of different institutional regimes||Readings Kasper, Wolfgang and Manfred E. Streit, 1998, Institutional Economics: Social Order and Public Policy, Edward Elgar: Cheltenham, Chapters 13 and 14, pp. 410-415, pp. 451-469. Lin, Justin Yifu and Jeffrey B. Nugent, 1995, "Institutions and economic development," in Behrman, J. and Srinivasan, T.N. (eds), Handbook of Development Economics, Vol. 3, pp. 2303-2370. Xu, Chenggang, 2011, "The Fundamental Institutions of China's Reforms and Development," Journal of Economic Literature, Vol. 49, Issue 4, pp.1076-1151. Burlamaqui, Castro and Chang (eds.), 2000, Institutions and the Role of the State, Edward Elgar Publishing Limited, UK and Edward Elgar Publishing, Inc. USA. , Chapter 11, pp. 267-280.|
|11||Week 11: Ethical values and the working of institutions: a missing link?||Readings Kasper, Wolfgang and Manfred E. Streit, 1998, Institutional Economics: Social Order and Public Policy, Edward Elgar: Cheltenham, Chapters 4 and 12, pp. 70-91, pp. 390-394. Nielsen, R.P. and Felipe G. Massa, 2013, "Reintegrating Ethics and Institutional Theories", Journal of Business Ethics, Vol. 115, No. 1, pp. 135-147. Shleifer, Andrei, 2004, "Does competition destroy ethical behavior?" American Economic Review, Vol. 94, No. 2, pp. 414-418.|
|12||Week 12: Institutions, history and development: a summary||Readings North, Douglas C., 1990, Institutions, Institutional Change and Economic Performance, Cambridge University Press: Cambridge, Chapter 14. Greif, Avner, 2006, Institutions and the Path to the Modern Economy, Cambridge University Press: Cambridge, Chapter 12, pp. 379-405.|
|Assessment task||Value||Due Date||Return of assessment||Learning Outcomes|
|A written assignment||10 %||04/04/2022||15/04/2022||1,2,4|
|Research Essay||50 %||30/05/2022||13/06/2022||4,5|
|Final Exam||40 %||*||02/07/2022||1,2,3,4|
* If the Due Date and Return of Assessment date are blank, see the Assessment Tab for specific Assessment Task details
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Assessment Task 1
Learning Outcomes: 1,2,4
A written assignment
A written assignment (1,000 words) is required and the topic is given below. The assignments are marked and feedback be sent back to the students two weeks after the due date.
Due date: Monday 4 April 2022, 11:55pm
The topic: Far-reaching economic, social and public-health challenges created by the COVID-19 pandemic are layered onto already serious worldwide problems such as waning globalisation, rising debt levels, falling productivity, worsening income inequality and global warming. The mounting economic and social challenges suggest that deepened policy reforms are needed to confront those challenges in the post-pandemic world. Discuss why the role of beliefs (ideas and new thinking) is important for carrying out the tasks of structural reform from an institutional perspective.
Assessment Task 2
Learning Outcomes: 4,5
Essay topics will be provided on wattle at the beginning of the semester. Students are required to consult with the lecturer about choosing a particular topic for writing. Students are also encouraged to come up with their own topics relating to the course contents.
Due date: Monday 30 May 2022, 11:55pm
Assessment Task 3
Learning Outcomes: 1,2,3,4
A three hour long open book final exam will be arranged online during the examination period with the specific date to be confirmed by the ANU examination office.
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International Economics, Development Economics and Institutional Economics
Prof Ligang Song