Question

Using North (Chapter 6) explain the importance of the following factors to economic success:
(a)   Informal constraints;
(b)   Adaptive efficiency;
(c)   Artifactual culture.

Answer 1

Date Aus The importance of the given factors in the economic success cure - — In a) Informal contraints - an econoney the informal constraints consists of a norms of behaviour, conventions and self imposed codes of conducta They . are impoletant in economic success as they catalyze decrease thansaction cost, they Seenione judicious contracts they promote a of theast between economic and the entire society. 'climate of Adaptive efficiency Adaptive efficiency of market fenction in infloving economic Performance is proposed to be measured by changes in transaction costs. .It provides the efficient allocation of resources. Ist deals with centreal problems of economic system and organisation. Page No

(ch Artifactual culture - is the terms that gives information about the culture creator cand users. In economics, it is used to know how much much culture mallers to economic outcomes and what its declation to institutions Page No