Institutional Environment and Growth in Brazil

First of all it’s totally based on the level of economy. Economic growth is calculated by rise in gross domestic product, or GDP, which is defined as the combined value of all goods and services produced within a country in a year. Many forces contribute to economic growth; unfortunately, no one is 100% clear about what these forces are or how to put them into

Economic growth, put simply, is “an increase in the amount of goods and services produced per head of the population over a period of time”; development is inextricably linked with this economic growth. By utilising theories of economic growth and development we can see how the Chinese and Sub-Saharan African economies have emerged, but, more notably, we can use these to look at patterns from past and present to show their experience and the implications of this growth for the future.

As previously noted, one of the common debates in political science is the extent to which state control of the economy influences economic growth. According to some, democratic institutions guarantee economic growth while a heavy state hand in economic policies causes stagnation. However, in the non-free market economies, education seems to have played a major role and has synergized with the necessary adaptability to the changing global technological infrastructure. After analyzing a variety of countries using both a

Economic growth occurs when there is a sustained increase in a country’s productive capacity over a period of time. Economic growth is often measured by an increase in real Gross Domestic Product (GDP). Brazil in recent years entered an economic slowdown, after a decade of strong growth in the 2000’s (averaging 4.4% between 2006 -11) underpinned by the global resources boom. Strong global demand for its commodity exports, combined with high commodity prices, helped brazil achieve sustained economic growth. This in

The institutionalists’ on the other hand focus on group norms. The analysis of labour markets and employment systems relies on the existence of stable, slow-changing and fairly transparent institutions to provide the foundations for their analysis (Wootton, 1955). The work of social norms has been the foundation upon which institutionalist theorists try to explain how and why labour market structures are the way they are.

First it is of vital importance to define what we precisely mean by institutional change. In his acclaimed book, Douglass North mentions that institutional change will only be driven when relative prices and preferences of organizations change. Institutions are overwhelmingly incremental and will adapt and change its organization through continuous marginal adjustment. Institutions conforming nation-states are thus, non-static and will continuously adapt to different circumstances. North also mentions that change in preferences and prices can be exogenous, namely a plague, an economical crisis, or a colonizing power. However, North stresses the importance that the process of institutional change also includes “maximizing efforts of endogenous

Growth and perpetual change of this stature was not just an increase in demand and labor or even investments. Geography lends to some of the differences between countries however it does not explain why growth was more or less successful due to emerging and sustaining growth of the region. Innovation to the greatest

This can be measured by the following formula; Per capita nominal GDP = Nominal GDP / Population, Per capita real GDP = Real GDP / Population. Seven factors determine economic growth. Natural resources such as land, mineral deposits, waterways; climatic conditions provide an essential foundation to economic growth. Combined with the other resources of capital, labor and enterprises, natural resources can be developed and organized to increase the productive capacity if the nation. Consequently the quality and size of the labor force is a major determinant of economic growth. Education and vocational training are essential the growth potential of a nation. The promotion of education and job training schemes increase the knowledge, skills and flexibility of the workforce that contributes to potentially higher levels of productivity and efficiency. Whether from natural increase or immigration population growth can cause a higher level of economic growth. An increasing population requires increased public spending on housing, education and other social needs while businesses expectations of

North starts off by affirming that institutions are the rules of the game in a society or, are the humanly devised constraints that shape human interaction. He then studies institutions, their changes, and the effect on economic routine over time. The book is separated into three sections and the main goal is to explain ways in which institutions and institutional change affect the performance of economies focusing on an issue of primary importance-economic performance through time. The author is cautious to make the division among institutions and organizations. Although they are different, both are works of the organizational basis that supports social collaboration. Institutions can be considered the guidelines of the game and governments can be reflected as the actors, as stated previously. The purpose is to explain the way that the game is played.

Traditional economic theory states that we should shape and weld resources, institutions, and technology to foster long-run growth. One of the main reasons that economists encourage economic growth is the belief that economic growth would alleviate the living standards in developing nations and minimize inequality in developed nations. Economists David Dollar and Aart Kraay did an empirical study on the benefits of economic growth and concluded that “growth on average does benefit the poor as much as anyone else in society” (Dollar, and Kraay, 2002). In addition, they found that growth-stimulating policies have the ability to “raise average incomes with little systematic effect on the distribution of income” (Dollar, and Kraay, 2002). For this reason, most economists believe that economic growth should still be pursued regardless of the country’s well-being.

Eyeballing any cross sectional data on growth across countries shows that countries grow at different rates. Many theories try to explain this phenomenon with emphasis with capital accumulation being one of them. I will start by developing the standard neoclassical growth model as developed by Solow(1956)[1]. I will then proceed to discuss the extensions that have been made to this basic model in an attempt to better understand actual growth figures, for e.g. the standard neoclassical model cannot explain the magnitude of international differences in growth rates. Mankiw[2] points out that “the model can explain

In the Acemeglu, Johnson and Robinson article, “Institutions as a Fundamental Cause of Long Term Growth”, the authors emphasize how institutions are the main determinant of economic development because stronger institutions allow for more growth in education, security, and health. To observe whether strong institutions determine economic growth it is important to mention the characteristics of a strong institution that allows for fast growth. Strong institutions are able to enforce property rights, a fair judiciary, efficient bureaucracies, intellectual property rights, corporation government bankruptcy laws, and democracy (e.g. “(Lecture 13)”). Going in depth

Over the long run, the pace of economic growth, as determined by the output per individual growth rate, relies upon the growth rate of (TFP), which is concluded thus by the rate of technological advancement. The neoclassical growth by Swan (1956) Solow (1956)

There are numerous conditions that play into economic growth. This section is presenting findings of growth patterns from other countries and which factors have greatly influenced them. Based on those findings, hypotheses will be able to be formed about factors affecting South Korean economic growth. Having a productive and efficient labor force is a factor that can influence economic growth. In East Asian countries, they implemented education policies that were set in place to increase their labor force skills. Economic growth through labor can be divided into

He pointed out that different economic levels have their own requirements and they may not follow the same process of industrialization. Moreover, he raised the most influential theory related to late industrialization that the economically backward states may have rapider growth rate as they are late comers, and the national development process relied on the degree of economic backwardness. That is to say the more backward a country, the faster it will advance (ibid).