Final Take-home Exam in Political Economy II
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2) Institutional change
North in “Institutions, Institutional Change and Economic Performance” emphasizes that economic growth or decline influences incremental changes in institutions (this can be applied to case of Latvia where crises have influenced reforms in health care sector). Path dependency is reinforced by two processes: first, through learning by organizations and, second, historically derived subjective choices. Moreover, short-run decisions and individual choices influence long-run changes. Finally, policy consequences are uncertain and unpredictable” .
Similar to Haggard’s & Kaufman’s methodology, statistical analysis (Central Statistic Bureau of Latvia) and cross-sectional time-series models by tracking the effect of changing economic conditions over time will be used. Statistical analysis is used in many econometric studies. Time-series models are used to analyze correlation between independent and dependent variable(s). The observed period will be 1991-2009 – the period of independence of Latvia. The document analysis (of the Welfare Ministry of Latvia) will be used for analysis of the major reforms.
I acknowledge that the period of almost twenty years is too broad, because the major reforms were taken in 1991, 1996, 2004 and 2009, therefore I am considering to have analysis only of these 4 years. There can be also limitations in access to the documents of the Ministry.
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