1.

Discuss concisely the role of incentives in making institutions more inclusive

Incentives may include those that political and economic institutions provide; for
instance, secure property rights, strong and proper enforcement of law and order, security,
human rights, education and skills training, level playing field, and the like. If incentives are
sufficiently provided for every person, when opportunities are provided for persons to
achieve or reach their ends, then the common good can be acquired. If people are provided
with sufficient or more than enough incentives, then they would be able to make use of their
resources, talents, skills and knowledge to create, innovate, and invent which would lead
them to great personal and economic growth. At the same time, they would be able to greatly
contribute to the growth and development of their society. Incentives motivate people to join
the process of innovating and investing which then encourages them to participate in
economic activities that utilize their talents and skills. When this is achieved cumulatively in
a community, economic prosperity can be acquired, a society can sustainably flourish. For
instance, during the industrial revolution in the United States, the state enabled most people
to apply for patents; even people who are not financially rich were able to get patents since
applying for such is affordable. This enabled people to secure property rights for their ideas
and innovations. At the same time, banking and financial institutions provided great
incentives and ease for people to acquire capital, which then allowed people to make a living
out of their innovations. The people in the United States during this time were provided with
secure property rights and access to capital, incentivizing them to create and innovate and
eventually contribute to the prosperous Industrial Revolution in the country.

2. What needs to be present so that these incentives are effective? Explain concisely. 

Firstly, there is a need for a level playing field wherein political, cultural, social,
economic and other conditions are made conducive enough for every individual to seize the
opportunity to develop himself or herself to pursue their calling in life. In addition,
individuals must be provided with conditions for learning and creativity; they must be
provided with good education, technical knowledge, information and skill to create and
innovate as well as to adapt to the technology in their present circumstances. Furthermore,
there is a need for humane and inclusive institutions wherein property rights are secure, law
and order are enforced properly, there is a functioning legal system, and commercial,
agriculture and industry must be sustained and empowered. This provides people with the
incentives to be productive as well as allows them to enjoy the fruits of their labour.
Such conditions would not be possible and sustainable if the institutions, society and
individuals do not respect the dignity of everyone. Dignity and personhood must be
respected. To ensure respect for persons, certain codes of ethics must be established and
eventually become written laws. Such laws must be written, implemented and interpreted by
those who are sufficiently educated with technical knowledge as well as an understanding of
what is good for the human person and society. Implementers of the law must have a well-
formed conscience. They must receive continuous education to have enlightened judgment
and courage to state that something is right or wrong, the courage to disagree and agree, and
the ability to bridge the differences. Such education must not only be coming from the state,
but also from other institutions such as NGOs, faith-based institutions, smaller and
immersive communities and the like to gain true, broad, and enlightened judgment. If people
in power, leaders of our economic and political institutions, who work for such institutions
are receiving continuous education and have a well-formed conscience, our institutions
would work towards inclusivity; and, eventually, we may achieve the common good and
common prosperity.