Key Messages: Lecture 3

 While the supply of labor and capital significantly impacts

growth, it is how a country utilizes and combines these
resources that affects growth the most.

Effective utilization of these resources entails

providing an economic environment that induces
the government, firms and citizens to be more
efficient and productive. This brings to the fore
the importance of social norms, laws, policies and
implementing institutions.
 Establishing strong institutions requires
convergence of interest, which in turn
entails a clear definition of national interest
by a competent, unyielding and honest
government and the presence of a vigilant
and educated citizenry.