Mid-term test

Institutional Economics and Development

Your mark: /10
Time limit: 60 minutes
NB: This is the open-book test. The students can use the written notes, the textbook and lecture slides
for their work. Internet sources and electronic devices are prohibited in this test. No tolerance for
those who violate ‘rules of the game’!
Full name: Le Minh Tu
Student ID: 11195545
Class:

Questions 1 2 3 4 5
Answer A B B C A

Part I: Multiple-choice questions (0.5 point for each correct answer)

To respond to the following questions, please insert your answer (A, B, C or D) in the table
above where applicable.
Q1. The view that explains the gap in wealth between countries based on the conclusion that natural
conditions will determine the prosperity partly through the typical personality traits should belong
to...?
A. Geography hypothesis
B. Cultural hypothesis
C. Ignorance hypothesis
D. Institutional hypothesis
Q2. Which of the following institutional levels will be hard to change, even in a lifetime?
A. Formal rules (laws...)
B. Cultural factors
C. Governance
D. All above are the same
Q3. When a person or organization does something to avoid the punishment, which of the following
works?
A. Normative
B. Regulative
C. Cognitive
D. None of the above
Q4. Which of the following institutional theorists considers institutions as an evolutionary process?
A. Douglass North
B. Hamilton
C. Veblen
D. Gustav von Schmoller
Q5. Who emphasizes the role of trust in the analysis of social capital?
A. Fukuyama
B. Bourdieu
C. Tanzi
D. Lebicap
Part II. True/False followed by the clear explanation (1.5 points for the correct answer and true
explanation)
Q1. Trust in the relationship will measure the strength of the social capital
Answer: True. Because social capital are resources that exist in relationships between organizations or
individuals in a social context.
Q2. Opportunistic behavior will be neutralized if agents in a relationship create a strong trust
Answer: False.
Q3. Corruption will always incur the payments
Answer: False. Because corruption can also be due to special relationships, not necessarily money.
Part III. Short essay (3 points)
Please indicate your point of view about the possible relationship between social capital and
corruption?
Answer:
In my opinion, the relationship between social capital and corruption is huge. Increasing government
corruption leads to decreasing beliefs that others are trustworthy. Social capital is often found to be
remarkably stable across time, having roots that are centuries deep, which suggests why it has proved
so difficult to fight corruption in many countries.