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The quality of institutions in Asia. Martin Krause Professor of Economics ESEADE Graduate School and University of Buenos Aires. Where possession has no stability, there must be perpetual war. Where property is not transferred by consent, there can be no commerce .
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Thequality of institutions in Asia Martin Krause Professor of Economics ESEADE Graduate School and University of Buenos Aires
Where possession has no stability, there must be perpetual war. Where property is not transferred by consent, there can be no commerce. Where promises are not observed, there can be no leagues nor alliances David Hume (1711-1776)
Institutional competition • Competition between monopolies • The Tiebout effect • Exit & voice • Competition fuels evolution • Reason brings variation • Evolution brings selection
Negative views • “Race to the bottom” • Competitive actions are negative externalities for other governments • Harmonization
Index of InstitutionalQuality • Rule of Law, World Bank • Voice & Accountability, World Bank • Perception of Corruption, Transparency International • Freedom of thepress, FreedomHouse • Doing Business, World Bank • Global Competitiveness, WorldEconomicForum • EconomicFreedom of theWorld, FraserInstitute • Economic Freedom, Wall Street Journal/Heritage Foundation
Continents and politicaldivisions • Continents • Europe (0,73) • Oceania (0,65) • America (0,57) • Asia (0,40) • Africa (0,31) • Politicaldivision • North America(0.93) • Western Europe(0,88) • LatinAmerica (0,45) • Central America (0,51) • Non-latinCaribbeancountries (0,75) • Middle East (0,41) • Formersocialistscountries in Europe (0,58)
Small countries and legal origins • Europe: Denmark, Finland, Iceland, Norway and Switzerland • America: Canada and US, butthen Bahamas, Barbados, St. Lucia and Chile • Africa: Mauricio, South Africa and Botswana. • Oceania: New Zealand • Asia: Japan, Hong Kong and Taiwán • US and Canada in America • NZ and Australia in Oceania • Northerncountries in Europe • Non-latinCaribeancountriescomparedtoLatinAmerica
Institutions and humandevelopment • “Theprocess of enlargement of optionsforpeople and thewelfaretheyachieve are at theheart of the concept of humandevelopment. Thoseoptions are neitherfinitenorstatic. Nevertheless, thethreeesentialoptionsforpeople are: living and extended and healthylife, gettingknowledge and havingaccesstothoseresourcesneededtohave a decentlife. Buthumandevelopmentdoesnot stop there. Otheroptions, towhichmanypeopleasigngreatvalue, gofrompolitical, economic and social freedomtoopportunitiestohave a creative and productivelife and enjoyself-respect and protection of humanrights.
HumanDevelopmentIndex • Lifeexpectations at birth (25-85 years) • Rate of adultliteracy and grossrate of admissiontoprimary, secondary and tertiaryeducation (0 and 100%) • per capita GDP (100 and 40.000 dollars)
Institutionalquality and humandevelopment • Countries with better positions at IQI show a better trend at HDI • For example: • Since 1980 Brunei improved its HDI by 0.092 points, Singapore 0.134, Israel 0.103, Kuwait and UAE 0.100, Bahrein 0.132, Malaysia 0.158, Thailand 0.142 • Myanmar did it by 0.096 points, Laos by 0.088 (since 1995)