Institutional economics is the study of the evolution of economic organizations, laws, customs, beliefs and their interactions with the process of economic development. The course examines the role of history and both formal and informal institutions (culture) in the performance of economies. The course uses a microeconomic and behavioral approach to understand the feedback among individual beliefs, choices, and institutions, including a module on nudging. The goals of this course are to (1) deepen your understanding of the role of institutions in the process of economic development, (2) provide you with empirical, conceptual and theoretical apparatus that have wide application for understanding the mechanisms, (3) suggest empirical and theoretical research projects for a nuanced perspective of culture and the long shadow of history on socio-economic outcomes (4) introduce students to recent behavioral insights for policymaking and (4) invoke and engage your curiosity about the “why’s and wherefore’s" of the world today.
Some examples of the topics covered in the course: How did the slave trade affect mistrust, trade, and growth in Africa? Can an inherited culture of honor explain the history of violence in the US South? Why do some incorrect beliefs and misperceived norms persist in societies? Can nudging improve pro-social behavior?
Lectures are intended to provide structure and a theoretical framework to guide the discussions and student presentations. Students interested in advancing their quantitative skill-sets are encouraged to write an empirical research paper.