Monday, November 15, 2010

Postmodern Institutions

I am reading the Jones and Romer paper [pdf] on ideas, institutions and human capital. It talks about how ideas are the main source of growth, that countries which are open to outside ideas most can grow fast. I'd like to comment on this paragraph:
Institutions like public education and the university system are surely important for understanding the growth in human capital. And institutions are themselves ideas — inventions that shape the allocation of resources — and the search for better institutions is unending.
Very true. Institutions can come in any shape or form, they dont have to be inside four walls with people frequenting them 9 to 5. In fact, one can argue the famous help / mentoring / answering site is an institution. Per Romer's paper, institutions define an incentive structure. Stackoverflow does this. It incentivizes the answering of questions by experts in their respective fields.

More on this might follow.

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