May
29
Institutions as the Fundamental Cause of Long-Run Growth
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Below is a significant paper, particularly since it comes from MIT and is part of the working-paper series of the National Bureau of Economic Research, which is the most prominent working-paper series in the economic discipline. It can be obtained for five dollars.
Institutions are what keep us from killing each other. In the course of existence, due to pervasive scarcity, there are many conflicts among numerous parties and how we reconcile our differences alters over time. How we settle our differences then affects our ability to learn from each other, to decentralize decision-making and avoid negative-sum wars.
It is my contention that the cultural wars in the US are affecting our institutions, deteriorating them, so we can’t work out solutions to many of the pressing problems that face us in a manner satisfactory to most of the affected parties.
“Institutions as the Fundamental Cause of Long-Run Growth”
BY: DARON ACEMOGLU
Massachusetts Institute of Technology (MIT)
Department of Economics
National Bureau of Economic Research (NBER)
Centre for Economic Policy Research (CEPR)
SIMON H. JOHNSON
Massachusetts Institute of Technology (MIT)
Sloan School of Management
National Bureau of Economic Research (NBER)
JAMES A. ROBINSON
University of California, Berkeley
Department of Political Science
Centre for Economic Policy Research (CEPR)
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=541706
ABSTRACT:This paper develops the empirical and theoretical case that differences in economic institutions are the fundamental cause of differences in economic development. We first document the empirical importance of institutions by focusing on two ‘quasi-natural experiments’ in history, the division of Korea into two parts with very different economic institutions and the colonization of much of the world by European powers starting in the fifteenth century. We then develop the basic outline of a framework for thinking about why economic institutions differ across countries. Economic institutions determine the incentives of and the constraints on economic actors, and shape economic outcomes. As such, they are social decisions, chosen for their consequences. Because different groups and individuals typically benefit from different economic institutions, there is generally a conflict over these social choices, ultimately resolved in favor of groups with greater political power. The distribution of political power in society is in turn determined by political institutions and the distribution of resources. Political institutions allocate de jure political power, while groups with greater economic might typically possess greater de facto political power. We therefore view the appropriate theoretical framework as a dynamic one with political institutions and the distribution of resources as the state variables. These variables themselves change over time because prevailing economic institutions affect the distribution of resources, and because groups with de facto political power today strive to change political institutions in order to increase their de jure political power in the future. Economic institutions encouraging economic growth emerge when political institutions allocate power to groups with interests in broad-based property rights enforcement, when they create effective constraints on power-holders, and when there are relatively few rents to be captured by power-holders. We illustrate the assumptions, the workings and the implications of this framework using a number of historical examples.
May
28
A resurgence of US isolationism?
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This appears to be a review of an important book inasmuch as it seeks to
reconcile/find USAmerican identity by virtue of taking a much more hostile
approach to immigrants, particularly mexicans.
http://www.nytimes.com/2004/05/28/books/28BOOK.html
May
25
Secular Illusions-How the separation of Church and State isn’t straight forward.
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http://www.slate.com/Default.aspx?id=2101002
The author considers and critiques arguments of an “evangelical” secularist…
It also considers some of the thought of Reinhold Niebuhr, which makes for an interesting contrast with the teaching of Greg Boyd, a former professor of mine who has recently finished a sermon series titled, “The Cross and the Sword” that I critique at the following site. Collection of Cross and the Sword sermon series and other sermons by Greg Boyd and Woodland Hills Church
A quote:”Niebuhr thought that sustained moral energy in politics depended on religion’s power to mobilize reason along with self-transcending love. The prophetic tradition, meanwhile, gave Jews and Christians some protection against the temptation to identify their social causes with God’s will. Lincoln’s second inaugural address expressed the prophetic insight, “The almighty has His own purposes.” “
The point could be condensed to where religion has the power to discourage or encourage people to develop habits of deliberation on politics. And it goes without saying that deliberating on politics is not persay intrinsically enjoyable or in the personal self-interest of most of us, who could easily get by with leaving such to others.
dlw
May
24
http://www.garlikov.com/abortion.html
The author who comes from a pro-choice background systematically considers how there exists a fair amount of common ground between the two sides such that there shouldn’t be so much deadlock on the issue.
May
24
Apocalyptic president?
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May
24
Political Split is Pervasive
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More evidence of the need to work toward a detente in the cultural wars. Our ability to work out our ongoing differences are going to be impaired to the detriment of all if this trend continues. To say nothing of the ability of the two sides to tolerate each other …
May
24
Influentials …
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Key thesis: There is a small fraction of the US population that can be called, “Influentials” who serve as indispensable filters and promoters of the attitudes and arguments that will frame the choices voters make this fall.
In Ohio, Building a Political Echo
May
24
Philosophy in a Time of Terror
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probably, the summary of Derrida’s confessions to the interview is the most interesting part of the book review.