political institutions and economic performance

Inclusive institution

A type of political and economic institution that promotes equal opportunities and rights, encouraging investment and growth.

Economic institution

Structures that determine the economic performance and distribution of resources, influencing political power and institutions.

Property rights

Legal rights that guarantee individuals the ability to own and use their property without interference.

Political commitment problem

A challenge where governments, due to their monopoly on force, struggle to commit to protecting property rights and not expropriating wealth.

Endogeneity

The issue in research where causality cannot be definitively established between variables, often described as the 'chicken and egg problem'.

Selectorate theory

A theory explaining how political leaders' success depends on the size of the selectorate and the winning coalition, affecting their policy choices.

Winning coalition (W)

The subset of the selectorate whose support is necessary for a leader to remain in power.

Selectorate (S)

The broader group of people who can potentially influence the selection of a leader.

Public goods

Services or resources that are made available to all members of society, typically funded by the government.

Private goods

Benefits that are exclusively available to an individual or a small group, often distributed through corrupt practices.

Vicious/virtuous cycle

A feedback loop where institutions either reinforce negative outcomes or support positive transformation.

Incomplete accountability theory

The idea that while democracies shift spending towards the poor, they face challenges due to low voter information and credibility.

Causation vs Correlation

A distinction where correlation refers to a mutual relationship between two variables, while causation indicates one variable directly affects another.