ABSTRACT
This chapter looks at political institutions, in particular constitutional ones, and predicts that they influence the character of political decision-making, which, in turn, strongly influences economic outcomes. To achieve economic progress, efficient institutions are required. The laws and policies imposed in the political process in turn have an effect on, among other things, the evaluations and choices made in the economic markets. The concept of economic freedom can be used to assess the degree to which negative rights are upheld and the degree to which positive economic rights are absent in an economy and also to analyse how this affects the economy. North and Wein- gast specifically demonstrate how the Glorious Revolution of 1688 led to the creation of institutions credibly securing property rights, protecting wealth and eliminating confiscation, which resulted in a stimulation of economic growth.
