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.

Learning Outcomes

Upon successful completion, students will have the knowledge and skills to:

1. Demonstrate knowledge of the key theories in institutional economics and their applications.
2. Demonstrate an understanding of the analytical approaches used to study issues relating to incentives and institutions.
3. Apply theoretical and empirical techniques to analyse institutional changes and their impacts.
4. Communicate public policy issues with respect to nurturing good institutions.
5. Be able to carry out research on a topic explaining cross-country differences in economic growth performance due to institutional constraints.

Required Resources

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.

Recommended Resources

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 Feedback

Students 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 Feedback

ANU 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.

Class Schedule

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 Summary

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

Policies

ANU has educational policies, procedures and guidelines, which are designed to ensure that staff and students are aware of the University’s academic standards, and implement them. Students are expected to have read the Academic Misconduct Rule before the commencement of their course. Other key policies and guidelines include:

• Student Assessment (Coursework) Policy and Procedure
• Special Assessment Consideration Policy and General Information
• Student Surveys and Evaluations
• Deferred Examinations
• Student Complaint Resolution Policy and Procedure

Assessment Requirements

The ANU is using Turnitin to enhance student citation and referencing techniques, and to assess assignment submissions as a component of the University's approach to managing Academic Integrity. For additional information regarding Turnitin please visit the ANU Online website Students may choose not to submit assessment items through Turnitin. In this instance you will be required to submit, alongside the assessment item itself, hard copies of all references included in the assessment item.

Moderation of Assessment

Marks that are allocated during Semester are to be considered provisional until formalised by the College examiners meeting at the end of each Semester. If appropriate, some moderation of marks might be applied prior to final results being released.

Assessment Task 1

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

Research Essay

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

Final Exam

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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Online Submission

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Hardcopy Submission

For some forms of assessment (hand written assignments, art works, laboratory notes, etc.) hard copy submission is appropriate when approved by the Associate Dean (Education). Hard copy submissions must utilise the Assignment Cover Sheet. Please keep a copy of tasks completed for your records.

Late Submission

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Referencing Requirements

Accepted academic practice for referencing sources that you use in presentations can be found via the links on the Wattle site, under the file named “ANU and College Policies, Program Information, Student Support Services and Assessment”. Alternatively, you can seek help through the Students Learning Development website.

Extensions and Penalties

Extensions and late submission of assessment pieces are covered by the Student Assessment (Coursework) Policy and Procedure The Course Convener may grant extensions for assessment pieces that are not examinations or take-home examinations. If you need an extension, you must request an extension in writing on or before the due date. If you have documented and appropriate medical evidence that demonstrates you were not able to request an extension on or before the due date, you may be able to request it after the due date.

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• ANU Health, safety & wellbeing for medical services, counselling, mental health and spiritual support
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