The Importance of Institutions

In todays video, we discuss a topic critical to understanding economic growth: the power of institutions. To better shed light on this, we re going to look at an example that s both tragic and extreme. In 1945, North and South Korea were divided, ending 35 years of Japanese colonial rule over the Korean peninsula. From that point, the two Koreas took dramatically different paths. North Korea went the way of communism, and South Korea chose a relatively capitalistic, free market economy.