Institutions (often defined to be anything which affect the decision making of economic agents) are seen to be of paramount importance for an economy looking to achieve sustained economic growth. According to North (1991, p.6), a major role of institutions is to “reduce uncertainty by establishing a stable structure to human interaction.” This is important as it encourages economic agents to partake in socially productive activities such as investing and trading. It is widely accepted that these are needed for sustained economic growth. In particular, good institutions can be seen in the form of, but aren’t limited to, intellectual property rights and good governance. They can enhance the benefits accrued by countries endowed with favourable factor endowments. Examples of regions that have experienced sustained economic growth due to these are Britain and the USA.
Britain benefitted significantly from the presence of intellectual property rights, which came to existence as a result of ‘The Glorious Revolution”. Following the revolution, a Parliament with enforcement rights was born. Prior to the revolution, the Crown had full control over the economy. According to North and Weingast (1989, p.812), the Crown often expropriated the wealth of citizens, be it via the seizing of goods or by reducing “settled industries to monopolies under cover of technical improvements.” (W. Price (1906), cited by North and Weingast (1989, p.819)). Expanding on the latter, the Crown would award patents to firms for minor technological improvements, driving other firms in the industry out of the market. The grant of monopoly acted as a tax and thus, decreased the potential profit to be received from investment. People were adverse to the idea of inno...
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... US was a leading producer of many minerals in the early 20th century. This is not a coincidence. Rather, this is down to the governance of the state. The state did not lay claim to any minerals discovered. Instead, it gave full ownership to those who founded the deposit. This encouraged people to search for deposits (hence why they worked together). In addition, the state funded geological surveys whilst also supporting findings and distributing them to others. David and Wright (1997, pg. 224) argue that this was a “critical part” in the success of the development of the American mineral industry. The collective learning institution allowed the US to benefit significantly from their favourable factor endowments. The success may not have been as significant if firms kept their secrets to themselves or if the state demanded a cut of any deposits that were discovered.
In a similar economic revolution, the colonies outgrew their mercantile relationship with the mother country and developed an expanding capitalist system of their own. In England, the common view was that the colonies only purpose was to compliment and support the homeland. This resulted in a series of laws and protocols called th...
The tar creek mining site originally was owned by a Native American tribe, the Quapaw. The Quapaw wanted to keep these lands, but the Bureau of Indian Affairs deemed members opposing a transaction to mining companies “incompetent” (1). In such a case the business could continue and the Bureau of Indian Affairs sold the lands to mining companies. In essence these lands were stolen from the Quapaw because they were ripe for mining. These mines were then used from approximately 1891 to 1970. In the 79 years the mines were open 1.7 million metric tons (~3.75 billion pounds) of lead and 8.8 million metric tons (~19.4 billion pounds) of zinc were withdrawn from the mine (2). The entire area around Tar Creek is known as the tri-state mining area. This tri-state area was a massive source of metals. This area accounted for 35% of the all worldwide metal for a decade. It also provided the majority of metals the United States used in World wars I and II (3).
Smith, A. (1904). An Inquiry into the Nature and Causes of the Wealth of Nations (5th Ed.). (e. Edwin Cannan, Ed.) London: Methuen & Co., Ltd.
To start, the death of Charles I led to scientific discoveries in England, which helped build the economy and establish the superpower status of England. During his reign, Charles I constantly oppressed ideas that went against the Church of England due to his religious ideals and belief that he could impose religious conformity across all of his lands. Between 1650 and 1659, after Charles’ beheading, both the supporters of Cromwell and the defeated monarchists turned to science and technology for its potential economic and social benefits. The commonwealth made it a priority to pay off their debts from the civil war in any way...
The period during which there was an increased output of machine-made goods, also known as the Industrial Revolution, played a critical role in reshaping Britain’s economy. The Industrial Revolution, stimulated by advancements that were made during the Agricultural Revolution, began in Great Britain for many reasons. In addition to Britain’s broad availability of natural resources, the count...
"Why the Industrial Revolution happened in Britain." BBC News. BBC, 14 Jan. 2013. Web. 30 Apr. 2014. .
In the late nineteenth century, the oil industry was open to everyone. Sensing the commercial potential of the expanding oil production in western Pennsylvania in the early 1860’s, he built his first oil refinery near Cleveland in 1863.(3) He created new oil related companies such as engineering and pipeline firms that seemed to be independent operators. Rockefeller and his close colleagues, Andrews and Flagler, secretly co...
Smith-Baranzini, Marlene, Richard J. Orsi, and James J. Rawls. A Golden State: Mining And Economic Development In Gold Rush California. Berkeley, California: University of California Press, 1999. eBook (EBSCOhost). Web. 26 Mar. 2014.
One of the darker causes for the Industrial Revolution was the slave trade with overseas colonies at the time. For many merchants who saw the easy money to be made from the voyages, the merchants became extremely rich – and as it is in human nature – these rich merchants wanted to become even more rich, the seemingly best way to do this was to invest profits from the slave trade into the new factories that were arising, this is called “Commercial Revolution”. Britain was one of the few countries that was able to bring in profits from other countries and keep profits in their country, aiding them into being the first country to Revolutionise Industrially.
Colorado also has a rich mining history which began in about 1859 with the discovery of gold and development of new reserves, Colorado’s present day industry is a modern, innovative, safe and environmentally responsible citizen that extracts a wide variety of minerals such as; gold, Marble, and gypsum from the earth, valued at more than $2 billion each year. (Colorado Mining Association, 2007)
The third factor is social network - influences economic behavior by offering concrete examples of how to behave and by enforcing sanctions for any misbehavior (chapter 2, Handbook of Economic Sociology). Social network theories was built on Durkheim 's ideas about “how the individual 's position in a social milieu shapes both his behavior and his underlying identity” (chap.2, Handbook). For Durkheim, social networks shape the behavior of human not just in a negative sense, but also in a positive sense of creating acceptable economic behavior sequences. In researching the idea of development of social network, theorists find that societies with powerful social networks have a comparative advantage in process of development. This can be demonstrate
In addition to all of these natural assets, there was also great innovation and technological advance in Britain. One of the b...
“Decision making is a process of first diverging to explore the possibilities and then converging on a solution(s). The Latin root of the word decision means "to cut off from all alternatives". This is what you should do when you decide.” (Kotelnikov, 2008). In fact, the decision making process helps reduce doubt and uncertainty about alternative choices to allow individual to choose the best reasonable choice. In addition, the decision making process can make the difference between a successful and an unsuccessful organization. Consequently, management tries to use the best techniques and tools possible to make the best decision. Nowadays, most organizations seem to think that they have the most effective and efficient decision making process. So what are the different styles of decision making processes have organizations implemented? In order to answer this question, the team members will investigate and observe the decision-making processes most prevalent in their organization. As a result, these papers will first compare and contrast the problem identification and formulation styles in the team members’ organizations. Then the most favorable aspects of each style will be discussed to describe a process by which a problem can be identified and described to stakeholders in a manner that is sensitive to their perspective.
Inclusive institutions are characterized by secure private property, an independent and fair judiciary, and provisions of public services that provides a level playing field in which people can exchange and interact. These institutions provide a basis which allows citizens to pursue the careers they are interested in. Furthermore, these institutions are designed to secure property rights and economic opportunities not just for the elite but for the society as a whole. Inclusive institutions provide a context that is favorable for technological advancements and innovation- which serve as means by which countries with extractive institutions continue to amass their wealth. Extractive institutions, on the other hand, are designed to extract incomes and wealth from one subset (the masses) of society to benefit another subset (the
"The richly divergent patterns of economic development around the world hinge on the interplay of critical junctures and institutional drift. Existing political and economic institutions - sometimes shaped by a long process of institutional drift and sometimes resulting from divergent responses to prior critical junctures-create the anvil upon which future change will be forged."(109-110) Institutional drift is introduced as an instrument to further explain institutional evolution; used to explain the process of economical change.