Congratulations to @DAcemogluMIT, @baselinescene & James Robinson on their @NobelPrize in Economic Sciences. While their work on institutions is important, it's crucial to remember that development is complex.
As @yuenyuenang, @mushtaqkhan100 & Ha-Joon Chang argue, effective institutions must be context-specific, not just replicas of Western models.
Truly inclusive and sustainable institutions should be embedded in local realities, learning from the full array of conditions necessary for development.
Congratulations to @DAcemogluMIT, @baselinescene & James Robinson on their @NobelPrize in Economic Sciences. While their work on institutions is important, it's crucial to remember that development is complex. As @yuenyuenang, @mushtaqkhan100 & Ha-Joon Chang argue, effective institutions must be context-specific, not just replicas of Western models. Truly inclusive and sustainable institutions should be embedded in local realities, learning from the full array of conditions necessary for development.
Many events that first appear to be sudden and external – what mainstream economists often describe as ‘exogenous shocks’ – are far better understood as arising from endogenous change. In the words of the political economist Orit Gal, ‘complexity theory teaches us that major events are the manifestation of maturing and converging underlying trends:
... See moreKate Raworth • Doughnut Economics: The must-read book that redefines economics for a world in crisis
would be a mistake to assume that microfinance is the holy grail solution to the problem of global poverty, any more than is Hernando de Soto’s property rights prescription.
Niall Ferguson • The Ascent of Money: A Financial History of the World: 10th Anniversary Edition
“Economic institutions shape economic incentives, the incentives to become educated, to save and invest, to innovate and adopt new technologies, and so on. Political institutions determine the ability of citizens to control politicians.”5
Abhijit V. Banerjee • Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty
Congrats to AJR! They are brilliant.
But I don't agree with their idealized portrayal of institutions in Western development
It is historically inaccurate, if not ideologized
Thus, not only do they struggle to explain China, they also can't explain why Western economies like the US prospered despite being as corrupt as China is today
But I don't agree with their idealized portrayal of institutions in Western development
It is historically inaccurate, if not ideologized
Thus, not only do they struggle to explain China, they also can't explain why Western economies like the US prospered despite being as corrupt as China is today
Yuen Yuen Ang • Tweet
While there are multiple paths to developing a nation, there are some strategies that have clearly been useful. The introduction of new technologies and training of skilled laborers can translate to increases in productivity. Foreign trade and inbound investments can be a real engine for these improvements. Countries that shift their economic focus
... See moreRichard Haass • The World
Yes, institutional calcification is a real phenomenon, and leaders who come from outside and aren’t afraid to shake things up can be incredibly generative (as long as “shaking things up” isn’t just a euphemism for privatizing, downsizing, etc.). But when the whole business of “changing the world” reflexively demeans career experts and specialists a
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