High quality institutions, such as rule of law, bureaucratic quality, freedom from government expropriation, and freedom from government repudiation of contracts, mitigate the adverse economic consequences of ethnic fractionalization identified by Easterly and Levine 1997 and others. In countries with sufficiently good institutions, ethnic diversity does not lower growth or worsen economic poli...

The new comparative economics focuses on individual institutions rather than considering the economic system as an entity. In this essay we argue that economic systems should be defined in terms of clusters of complementary or covarying institutions. A cluster analysis of OECD countries, using data on forty different economic institutions, shows that four economic systems can be used to charact...

Many economists and social scientists have recently emphasized the importance of government policies, economic, political and legal institutions, and more broadly, the organization of society.1 There is also mounting evidence that various institutional features are indeed important for economic growth.2 Nevertheless, despite important theoretical advances, we still lack an organizational framew...

Until the twentieth century, economics and politics were studied together under the heading of political economy. Two major nineteenth-century treatises on the subject, by David Ricardo (1817) and John Stuart Mill (1848), had the title Principles of Political Economy. Toward the end of that century, the subdisciplines separated; the turning point might be marked by the publication of Alfred Mar...

Economists have a long argue that institutions and implementation of good governance are important for economic growth. The main objective of this research is to demonstrate that one of positive institutions effects is its ability to mitigate the negative effect of economic vulnerability linked to terms of trade fluctuations on economic growth. The impact of the economic vulnerability and imple...

This article addresses the cost associated to defence, i.e., resources that societies shall allocate provide security their members. It examines methods and ways for setting distributing these obtain enough military capabilities sustaining perception of citizens. The choice an allocation optimises social welfare is rather old constant concern. main novelty this exploring problem from bounded ra...

This book, "The Mystery of Economic Growth," which was recently published in Hebrew, provides an excellent non-technical description of the developments of growth economics over the last half century. The story of the ideas and research of the theory and empirics of economic growth is organized around four themes. First, the importance of the accumulation of physical and human capital for the e...

The questions we ask include: Why don’t economic institutions spontaneously adjust to the requirements of economic growth? Why did the Industrial Revolution originate in England, and why did it spread only to some countries? Why have transition-to-markets reforms failed in some post-Soviet economies and succeeded elsewhere? In the “New Economy”, what adjustments in property rights are needed to...

In recent years, the interest in rational choice analysis of institutions has received substantial impetus from an accumulating body of evidence demonstrating the importance of a society’s institutions in determining its economic outcomes. Econometric studies have uncovered correlations between institutional variables such as the security of property rights, the rule of law, and trust, and econ...