Do Institutions matter - Essay Example

Assignment DO MATTER? Objectives The article is an economic paper that tries to determine the relationship between economic development and institution countries. It tries to analyze how the two are intertwined and the role each plays to support the other. The variables have even formed the basis of world donors when they provide aid to developing nations so that they can improve economically. To achieve these objectives, it uses various countries to illustrate the ideas, explains and analyzes economic theories both from the neo-classical and classical concepts and employs statistical methods such as time series to provide conclusions.

Motivation of the articleThe basic explanations that have been provided by economists to illustrate on how institution spurs economic growth haven’t been satisfactorily. Furthermore, the theories provided for which are made to guide on the two principles does not provide for full understanding of the variables and thus have lapses. Neither are the statistical tools for analysis in the case of time series are enough to show direct correlation between the two. Thus, this provides for inspiration or stimuli (Rodríguez, 2013) for the article to provide for a broader way to view the two issues and be flexible in analysis.

FindingsInstitutions does not necessary lead to economic development but the latter can always be achieved in other ways. Development to a country can be stimulated through creation of wealth that expands various sectors in the economy. By doing so, we provide for expansionary measures that make the institutions better and increase growth.We do not need more mature institutions for development to occur. Such is the case in more developed nations who developed earlier without any key institutions.

Even if institutions spur growth, then it cannot apply to all countries. For example, nations can always import ideas such as technology or train labor to help growth within them.Methods such as protection of properties majorly employed by the capitalists to make institutions grow are very good and can always be beneficial to nations. But the virtue will only lead to strong institutions to unique ones in the economy more so in countries where there is less government controls. Methodology The article uses questionnaires to collect data.

It presents issues in form of queries that are answered by analyzing various world institutions and economic policies to generate data. This is further enhanced, by use of samples to explain on how diverse countries developed and what made their institutions stronger (Rodríguez, 2013). To validate the data, it uses statistical analysis and cross-sections to generate relationships that can be used for conclusions.ConclusionsEconomic development and institutions both need each other and are not directly linked as economists tend to think.

Intuitions’ can be strengthened by many means so long as the adopted polices by countries are working for them. Furthermore, we cannot compare directly on developed nations and developing countries due to different in times and diverse base indexes hence they cannot follow a similar path.However, the article seems to be right and we should analyze policies holistically. This provides us with flexibility in ideas and countries will majorly implement what suits them. But methods such as liberalization will not help the local institutions since they provide for free market.

This makes the already established nation to exploit the local ones. Thus even if we have to adopt the policies, some limits must be created so that the local market is not interfered with (Rodríguez, 2013).Work cited Rodríguez-Pose, Andrés. "Do institutions matter for regional development?." Regional Studies 47.7 (2013): 1034-1047.