Question

The top-down view of institutions argues that:

(A) institutions are created by domestic leaders and legislators who govern and establish laws.
(B) institutions emerge and constantly evolve based on the social norms, traditions, values and beliefs of individuals as they interact and exchange with each other in a society
(C) institutions are created by foreign donors and foreign development agencies who govern and establish these laws in poor countries.
(D) institutions are created by foreign industrialized governments like the United States and foreign development agencies who govern and establish these laws in poor countries.

Answer 1

The correct answer is a) institutions are created by domestic leaders and legislators who govern and establish laws.

Step-by-step explanation:

In Economic Development literature, there are two predominant, contrasting views of the nature of institutions. On one side, the top-down view refers to institutions as determined by laws written by political leaders. On the other side, the bottom-up perspective defines institutions as emerging from social norms, traditions, values and beliefs held by individuals within a society. Both views have very different implications on economic policies and structures and the way optimal institutions must be built.