Lecture 15 - The Emergence of Modern Economic Growth A...

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The Emergence of Modern Economic Growth: A Comparative and Historical Analysis Lecture 15 James A. Robinson Harvard November 2, 2008 James A. Robinson (Harvard) The Emergence of Modern Economic Growth: A Comparative and Historical Analysis November 2, 2008 1 / 18
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Virtuous and Virtuous Circles At the heart of any description of institutional persistence must be mechanisms of institutional persistence. The existing literature on this topic is not very helpful. People reach for the QWERTY metaphor (see the article by Paul David on reading list). Institutional change is seen as the normal thing and scholars try to explain why some very speci°c institution persists even when the circumstances that gave rise to it change (like the typewriter keyboard). Another example if Greif±s work on the Mahgrebi traders, or much of historical institutionalism in political science. James A. Robinson (Harvard) The Emergence of Modern Economic Growth: A Comparative and Historical Analysis November 2, 2008 2 / 18
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Persistence and Change Though these examples may be interesting I± ll argue that they are not the right way to think about the issues. Change is indeed ubiquitous but what we need is a theory of path dependent change not stasis For instance, when we talked about Latin America we discussed the mita , the encomienda , slavery etc. But these institutions no longer exist (even if some speci°c colonial labor institutions lasted until 1945 in Guatemala and 1952 in Bolivia). After independence Latin America countries became republics, wrote constitutions, introduced democracy (even if initially highly corrupt and oligarchic), became federal, centralized, adopted the French Civil Codes as the bases for their legal systems. James A. Robinson (Harvard) The Emergence of Modern Economic Growth: A Comparative and Historical Analysis November 2, 2008 3 / 18
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A Vicious Circle - The US South One important example of a vicious circle where we can be more explicit about the mechanism is the case of the US South. Prior to the thirteenth amendment of 1865, slavery was the foundation of the economy in the Southern US. The South was relatively underdeveloped because of the slave economy. An economy based on slave agriculture induced little industrialization or urbanization (9% in South, 30% in the North) and the South was substantially poorer than the North (about 60-70% of North±s GDP per-capita). James A. Robinson (Harvard) The Emergence of Modern Economic Growth: A Comparative and Historical Analysis November 2, 2008 4 / 18
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Regions of the U.S.
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Regional Income Trends
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Source: Bateman, Fred and Thomas Weiss (1981) A Deplorable Scarcity: The Failure of Industrialization in the Slave Economy , p. 17. Manufacturing was very backward in the South..
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Even though it was highly profitable Source: Bateman, Fred and Thomas Weiss (1981) A Deplorable Scarcity: The Failure of Industrialization in the Slave Economy , p. 116.
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And the Planters did not invest in it!
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US Counties in 1850: Slavery and Manufacturing Lagerlof, Nils-Petter (2005) “Geography, Institutions and Growth: The US as a microcosm”
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1860 1860 Mileage per 1,000 sq. miles
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