Economic Growth and Institutions in Star Wars
With no rule of law, the economy in The Mandalorian is suffering
What happens to economies when there is widespread lawlessness? Bad things. Economies can’t thrive or grow if people don’t feel safe to invest in themselves and their businesses. We learn about a situation like this in The Mandalorian.
I am joined again by Ben Smith, an economist at the University of Nebraska at Omaha. We had this conversation September and it takes a while to edit/post/etc. (Especially during the semester and given these videos aren’t my “day job”.)
But since we recorded, there has been big news in this area. The Nobel Prize in Economics was awarded to economists for their work on the importance of institutions and the rule of law and found how small changes could impact economic growth. From the Nobel Prize announcement:
Some countries become trapped in a situation with extractive institutions and low economic growth. The introduction of inclusive institutions would create long-term benefits for everyone, but extractive institutions provide short-term gains for the people in power. As long as the political system guarantees they will remain in control, no one will trust their promises of future economic reforms. According to the laureates, this is why no improvement occurs.
If you want more on the Nobel Prize winners, check out the podcast I recorded with Brian and Jadrian.
The two most important things a country can do to promote economic growth is to promote economic freedom and the rule of law. In this video we see how the rule of law is so weak that farmers are willing to literally give up everything they have for Mando's help.
For more, check out the video: