StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Examine the relative role of institutions in the rise of Europe - Essay Example

Cite this document
Summary
North defines institutions as constraints devised by human beings to govern interactions at political, economic and social levels (North, 1991). These constraints are both formal and informal. The informal constraints include…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER93.2% of users find it useful
Examine the relative role of institutions in the rise of Europe
Read Text Preview

Extract of sample "Examine the relative role of institutions in the rise of Europe"

Download file to see previous pages

These formal institutions include such diverse tools as constitutions, laws and property rights. Institutions have always been created by human beings throughout history to create order in their various societies and reduce uncertainty in trade. Taken together with the standard constraints imposed by economic logic, institutions define the set of available choices in economic interactions. This has an effect of directly influencing economic behaviour and hence, economic outcomes in any given society (Acemoglu, Johnson, & Robinson, 2005).

Institutions evolve incrementally over time meaning that the economic history of any society has to be comprehended in the context of the evolution of its institutions. The fundamental role played by institutions is that they provide the incentive structure for the given economy. As such, the direction of evolution of this structure in time determines the direction of movement of an economy whether towards growth, stagnation or decline (North 1991). A constantly evolving system of organisation and exchange in medieval Europe’s long-distance trade between the 11th and the 16th centuries eventually led to the rise of Europe as the dominant world power (North, 1991).

The first significant institutional change was the innovation of systems and tools that lowered transaction costs in exchange. The transaction cost of any exchange is defined as the cost, other than the cost of the product or service being exchanged; that is incurred in executing the transaction. This cost consists of various components such as the cost incurred in the search for information about the sellers and their product, the cost of negotiating and closing down on the contract, the cost of enforcing the contract, etc.

(North 1991) The organisational changes, tools and various techniques of exchange that lowered transaction costs for medieval Europe’s long-distance trade included: Among the

...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Examine the relative role of institutions in the rise of Europe Essay”, n.d.)
Retrieved from https://studentshare.org/macro-microeconomics/1690289-examine-the-relative-role-of-institutions-in-the-rise-of-europe
(Examine the Relative Role of Institutions in the Rise of Europe Essay)
https://studentshare.org/macro-microeconomics/1690289-examine-the-relative-role-of-institutions-in-the-rise-of-europe.
“Examine the Relative Role of Institutions in the Rise of Europe Essay”, n.d. https://studentshare.org/macro-microeconomics/1690289-examine-the-relative-role-of-institutions-in-the-rise-of-europe.
  • Cited: 0 times

CHECK THESE SAMPLES OF Examine the relative role of institutions in the rise of Europe

Secularism in the UK

The author of this report  takes the deed to look to Secularism in the UK, identifies and assesses the evidence relating to secularisation, identify and discuss the theorists who support the secularisation thesis, consider evidence that questions the secularisation thesis… Although it seems clear that the Church in Feudal Britain or europe, for example, was a powerful social institution that sought, at various times, to dominate the whole of society, it is debatable as to the extent to which this was ever achieved....
5 Pages (1250 words) Essay

European Union Enlargement

he first point relates to the relative level of economic development in the Eastern European countries.... hellip; Much of the attention on the economic aspects of the enlargement of the EU has concentrated upon the high-profile issues which are linked to the level of relative economic development in these countries; the perceived threat of large-scale migration and the budgetary costs arising from the implementation of EU agricultural and regional policies....
8 Pages (2000 words) Essay

Taking Care of the Elderly

Moreover, this sets the foundation for recognition and appreciation of the role of the elderly in society.... The case study “Taking Care of the Elderly” discusses the issue of the elderly in society.... One of the contemporary issues regarding the elderly is the creation of elderly nursing homes....
14 Pages (3500 words) Essay

Subsidiaries of Multinationals are the Source of Novel Practices

They have incorporated three countries from europe and one country from America; therefore, their findings are not representative of all parts of the world.... The paper presents that Edwards, Sanchez-Mangas, Belanger and McDonnell's (2015) study mainly directs its focus on the field of human resource and to achieve this, the authors have analyzed data set in four host countries....
8 Pages (2000 words) Assignment

Does the Founding of the UN Represented a Radical Departure from System of International Law prior to 1945

the rise of institutions such as the United Nations, therefore, allowed States like the US to get access to the internal borders of the countries despite the fact that the UN was mandated to oversee the external conflicts between nations.... hellip; Under International Law, institutions like the International Court of Justice provided a valid alternative for resolving the disputes between the nations and its verdicts and decisions were binding on the parties....
6 Pages (1500 words) Coursework

Liberal Democrasies and Hollowing Out

The "Liberal Democracies and Hollowing Out" paper examines the external and internal changes of liberal democracies, and the role they have played in the hollowing out of their power.... Hollowing out refers to the deterioration of the manufacturing sector of a nation.... hellip; Liberal democracy is an example of a type of government, whereby representative democracy is able to operate under the principles of liberalization....
6 Pages (1500 words) Coursework

Environmental Performance of the Real Estate Development

The development site is surrounded by River Wandie on one side and the other side by a small low-rise housing estate.... A substantial agreement between the school and low-rise housing to install fluorescent lights will solve the lights issue.... An author of the present research will shed the light on the development of the real estate property....
12 Pages (3000 words) Coursework

The Role of Competition in the Music Industry

"The role of Competition in the Music Industry" paper looks at different production managers and the role they play together with the creativity needed in their field of specialization.... In general term, a producer is an overall manager that plays the role of recording, mixing, and mastering process (Shepherd 2009).... The music mentor's role focuses on the artist's intent, providing moral and improving his or her performance.... Some of the producers may have a role to play on the music they have worked on like Daniel Lanois who played the part of guitarist in the U2s Joshua Tree....
10 Pages (2500 words) Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us