It is widely believed by macroeconomists that a key reason why total factor productivity (TFP) differs...

 

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It is widely believed by macroeconomists that a key reason why total factor productivity (TFP) differs across countries is because institutional quality differs across countries. For simplicity, consider only the nations of the Western hemisphere: what are some reasons offered by modern economists for why institutional quality differs across these countries? What are some of the forms of evidence offered in support of these explanations? Avoid answers that are akin to tautologies, e.g., "institutional quality differs because the forms of government differ; institutional quality differs because economic freedom differs." It is widely believed by macroeconomists that a key reason why total factor productivity (TFP) differs across countries is because institutional quality differs across countries. For simplicity, consider only the nations of the Western hemisphere: what are some reasons offered by modern economists for why institutional quality differs across these countries? What are some of the forms of evidence offered in support of these explanations? Avoid answers that are akin to tautologies, e.g., "institutional quality differs because the forms of government differ; institutional quality differs because economic freedom differs."

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Modern economists offer several nuanced reasons for why institutional quality differs across countries in the Western hemisphere 1 Historical Colonial Legacy The colonial history of a nation can shape ... View the full answer