Response to Peer Comments Essay Example | Topics and Well Written Essays - 250 words

Response to Peer Comments - Essay Example The Office of the Federal Register (2011) supports my view by noting that, a trading agreement specifies â€Å"the duties and responsibilities of each party to the agreement in conducting a standard transaction† (p. 811). I agree with you that economic institutions define the environment in which transactions occur. I also concur with you on the importance of the law as the institution that enables transactions to take place, which has multifaceted effects since it can limit and/or expand our opportunities. Hence, I agree with you that there will be less return on investment without the institution of law since it acts as a deterrent to criminal elements. I concur with you that economic institutions are important to spur economic growth since they influence many sectors of the economy. However to add to you argument, I also think that political institutions play a significant role in economic growth. To put this into perspective, kindly allow me to use the case of the two Koreas, which were one country. After the two countries split, the North became a dictatorship while the South became a democratic nation. In effect, South Korea’s democratic political institutions were instrumental in the country’s economic growth, in comparison to the North (Glaeser, Porta, Silanes, &Shleifer, 2004, p. 273). Hence, this agrees with your notion that different institutions have a relationship with different degrees of efficiency, potential for economic growth, and the different distribution of the gains across different individuals and social