Institutional economics

Acemoglu and team have authored a set of influential papers arguing that colonial experience has had a lasting influence on the growth rates of countries well after colonisation through the lasting impact they have had on institutions. Apart from very neat econometric estimations testing of their hypothesis and evaluating them against a variety of alternate thesis, they also draw attention to a host of historical literature on this subject. All this is very impressive. They make a spirited argument that countries with extractive institutions have done poorly in terms of growth. This is where their work starts getting under-defined and […]

What is expropriation in Acemoglu’s work?

Book: The Elusive Quest for Growth: Economists’ Adventures and Misadventures in the Tropics Author: William Easterly Magnanimity of IMF and World Bank leads to policies unfavourable to poor people – The Fund and the Bank did not go far enough, argues Easterly The Elusive Quest for Growth by William Easterly reviews various theories of growth and the consequent efforts by World Bank and IMF. As the title indicates he looks at how these approaches ‘failed’ and traces some reasons for their failure. The book is interspersed with live accounts of little cases (“intermezzo”) from the field to animate the discussion. […]

Review of Easterly’s Elusive quest for growth

In his famous book Elusive quest for growth William Easterly criticizes World Bank’s attempts to control population. But his ‘economic approach’ and failure to get contextual information makes his analysis poor and prescriptions dangerous. For an overall review of the book, click here Critique of ‘unwanted babies thesis’ The key theme of The elusive quest for growth is ‘people respond to incentives’. This is a statement that will find broad agreement – but the devil is in the details. In a chapter titled Cash for Condoms? Easterly discusses efforts by World Bank to contain population growth in various countries. He […]

Easterly’s critique of cash for condoms: a case of poverty ...

Book: Anthropology and institutional economics Editor: James M. Acheson This volume is one of the rare collection of papers I found looking at Anthropology and institutional economics. Surprisingly, though the two have a large scope for collaboration, there is very little work happening between these two disciplines, to my knowledge. This volume provides a useful introduction. The book starts with an introduction about Anthropology and Institutional economics by James Acheson. This is followed by an essay on New Institutionalism by Robert Bates. The best part of the book is made up of case studies divided into three sections (1) Transactions […]

Collected works on Anthropology and institutional economics

In this very entertaining talk, Ha Joon Chang argues against mainstream trade theories. He argues that most of the success stories, including the USA followed practices that are rejected by the current trade theories and that those who followed the policies have actually not done well. Ha Joon Chang argues this from an institutional perspective and makes a case for “infant industry argument”. While these arguments themselves are not too new, he brings in a lot of historical information that were new to me and gave me many “ah ha” moments. This entertaining and passionate talk is also delivered with […]

Institutions for an unequal world: Talk by Ha Joon Chang

Basic components of an institutional understanding (Evolving note) Someone who has an interest in understanding the role of institutions in development, or institutional change will find it difficult to go about the task by ‘decoding’ the rules of the game and analysing them. The sheer mass of rules in any society will be overwhelming and will not be amenable to such analysis. Even that would be of limited help in understanding on how they operate. A more profitable approach would be to look at formative influences of institutions that are likely to have widespread influence. In this post, I look […]

Basics to understand institutions & institutional change

Institutional economists have held that we do not know how institutions change. I speculate why collective action as an agent of institutional change has been ignored I used to be surprised that institutional economists argue that they do not know how institutional change happens. Collective action is such a prominent driving force, how could the economists have missed this? I speculate that this must be due to the structure-agent dichotomy in social sciences. Social theorists across disciplines have struggled between choosing structures or agency as their basis of analysis. Those who choose structures (production relations, prices, etc.) effectively assume that […]

Institutional economics, collective action & change