03 Jun Question 1) In their seminal book, Why Nations Fail Acem
Question
1) In their seminal book, Why Nations Fail Acemoglu et al provided some intuition about the
theory of institutional transition. Based on their work, answer the following questions :
a. Define extractive and inclusive political and economic institutions? Provide some
examples? How do they co-exist? (10 points)
b. Why do extractive institutions persist? What are the causes? Explain the vicious-cycle of
extractive institutions. What are the consequences? (20 points)
c. Explain the theory of institutional change by stating the role of the three components:
c.i. Origin of institutions
c.ii. Drift in institutional characteristics
c.iii. Critical junctures.
Evaluate each of the above conditions from empirical observations outlined in the
presentation. (20 points)
2) a. Look at the following two graphs:
What does the data in the two graphs above say about the nature of labor coercion in two
difference sectors of Mexico during the same time period? (25 points)
b. What factors contribute to the transition to democracy? Explain each of the three factors. Can
you predict which country would transit to democracy faster than other countries based on the
nature of the three factors? Explain. (25 points)
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