Lecture 15

Abolished the use of literacy tests and poll taxes as

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Unformatted text preview: orrelation between political competition and economic growth here is very interesting, but the strategy of using the voting rights acts and what it abolished (the use of literacy tests and poll taxes) as an instrument for political competition is problematic. This is because a lot of things were going on at the same time and some of these (collective action?) may have had many other e¤ects on policy and or economic growth. There also seems to be something missing from the story. Why would enfranchising poor blacks lead to lower business taxes and union busting laws? James A. Robinson (Harvard) The Emergence of Modern Economic Growth: A Comparative and2, 2008 November Historical Analysis 15 / 18 Collective Action One can argue that policy changes are endogenous to collective action. How does that in‡uence the Besley, Persson and Sturm results? James A. Robinson (Harvard) The Emergence of Modern Economic Growth: A Comparative and2, 2008 November Historical Analysis 16 / 18 Douglas McAdam (1983) “Tactical Innovation and the Pace of Insurgency,” American Sociological Review, 48, 735-754. Interpretation I claim this is an interesting example of the persistence of institutions. Slavery did not persist after 1865, but slavery was part of a larger structure of political power. Economic institutions were designed by an elite to extract rents from a large group in society – Afro-Americans, but also poor whites. Before 1865 Slavery was the economic institution that maximized the rents to those in control, even if it had adverse aggregate consequences for the Southern Economy. The Civil War took away this instrument but it did not fundamentally alter the balance of political power. Hence, the Southern elites used new instruments to extract rents. James A. Robinson (Harvard) The Emergence of Modern Economic Growth: A Comparative and2, 2008 November Historical Analysis 17 / 18 .... Abolishing slavery did not derail the “Southern Equilibrium”. In fact it took a juxtaposition of several di¤erent forces simultaneously to do so. Apartheid system in South Africa is a closely related example (more on this later). There is an important corollary of this history for institutional reforms. A particular institution (slavery) is part of a much wider structure of power and system of institutions. It is possible that the abolition of slavery could have changed the Southern Equilibrium, but it did not because other instruments were available. These were less e¢ cient from the point of view of elites (GDP per-capita fell after the Civil War). This suggests that to do institutional reform you have to be able to see the whole picture. James A. Robinson (Harvard) The Emergence of Modern Economic Growth: A Comparative and2, 2008 November Historical Analysis 18 / 18...
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