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Metrics on the average living standards from the best-off countries in the world (say, Norway) to the worst-off (perhaps the Central African Republic) vary by a factor of 40 to 50. So notes James Robinson, the Reverend Dr. Richard L. Pearson Professor of Global Conflict at the University of Chicago and author, with Daron Acemoglu, of Why Nations Fail: The Origins of Power, Prosperity, and Poverty.

What explains the living-standards gap?

In this Social Science Bites podcast, interviewer David Edmonds posits -- and Robinson rebuts -- several traditional explanations for this inequality.

While raw data shows that countries closer to the equator do more poorly than countries further away, Robinson acknowledges, that correlation doesn’t extend to causation. “We try to show in our research in many different ways that things like geography or climate or temperature don’t really predict patterns of economic development.” Instead, institutional factors like colonialism or the slave trade are more likely to be culprits.

Cultural factors? Robinson, the institute director for the Pearson Institute for the Study and Resolution of Global Conflicts, suggests that’s wrong on its face. Drawing on his experience researching and teaching in sub-Saharan Africa and Latin America, he hasn’t seen cultures that reward indolence. “People work pretty hard in Zimbabwe,” he offers as an example. ”They get up early and it’s a struggle to make ends meet in a place like that when there’s so many impediments to prosperity and so many blocks to incentives and opportunity.” He adds that incentives to wealth creation matter, so knowing “some elites are going to expropriate the fruits of your labor” serves as a huge disincentive.

Certainly having natural resources must play a role. “This is sort of an accounting relationship,” Robinson counters. “Yes, it’s true that Kuwait is sitting on a big pile of oil, but I guess the relevant question would be is, ‘How rich will Kuwait be when the oil disappears?’”

What does make a difference, Robinson insists, are institutions. Looking at a natural experiment like the Korean Peninsula, where a geographically, culturally and linguistically homogeneous population was walled off into two separate nations, supports his view that institutions are the key to understanding the uneven outcomes.

But that creates the question of how to define what an ‘institution’ is. “Our view is that you have to take a pretty broad view of what institutions are. ... When we talk about institutions, we mean rules that humans create, which structure their interactions and incentives and opportunities. But I think those rules can be kind of informal – almost like social norms – not just written down in the constitution.”

And the institutions best at creating economic success, he continues, are the most inclusive ones. “Inclusivity is about harnessing all that latent talent, giving people opportunities, allowing them to get loans, enforce contracts.” Given his belief in the importance of inclusive institutions, Robinson tells Edmonds nonetheless that his goal remains more to describe the world rather than to change it (a “morally fraught” undertaking). But that description, he adds, includes a possible route forward – a route signposted for those in the less-rich world to take, amend or reject on their own accord.

Trained as an economist who “deprogrammed” himself from thinking as an economist, Robinson obtained his PhD from Yale University, his master’s at the University of Warwick, and a Bachelor of Science degree from the London School of Economics and Political Science. Before coming to Chicago, he was the Wilbur A. Cowett Professor of Government at Harvard University and a faculty associate at Harvard’s Institute for Quantitative Social Science and the Weatherhead Center for International Affairs. In addition to Why Nations Fail, Robinson and Acemoglu wrote Economic Origins of Dictatorship and Democracy, and in 2013 Robinson was named one of the “World Thinkers 2013” by Prospect magazine.

English
United States

TRANSCRIPT

00:00:04this is social science bites with me David admins social science bites is a series of interviews with leading social scientists and is made in association with sage publishing why some countries which an office pool there's no once implants of course but very suggestions have been made some countries
00:00:24of oil some countries have thirty out a good coach land some countries have a culture of hard work and then to price James Robinson an extraordinarily wide ranging political scientist at the university of Chicago is not convinced by any of these explanations James Robinson welcome to social science
00:00:43by thank you we're talking today about white nations file there's a huge disparity in the wealth of nations between the likes of Denmark on the one hand and the likes of Zimbabwe on the other give us just an idea of how big that gap he's you know the
00:01:02difference in living standards if you look at income per capita which would be the standard way columnist look at this is forty or fifty it's a little bit complicated because you have to try to take into account differences in prices and different things that people consume in these
00:01:17different countries but it's about forty or fifty so living standards in a wealthy country would be about forty fifty times what they would be in the poor countries like Zimbabwe idea that has enormous consequences in terms of you options and opportunities access to services health the quality of
00:01:34your house you'll life expectancy electricity running water all sorts of things you have more TV's you have a big house you live fifteen years longer yeah not just big you be in the house with the mud floor and a palm roof in Sierra Leone in the rainy season
00:01:52and see how you like that they've been all sorts of explanations for why some countries it which in other countries a pool let me throw a few at you one obvious difference between Denmark and Zimbabwe is that Denmark is nice and cool Zimbabwe is extremely hot yeah I
00:02:10mean that's an old view you know that goes back at least to Malta skill in the eighteenth century who developed a kind of climatic theory of compared to develop it's kind of interesting multi skilling quite well informed about the world in the middle of the eighteenth century we
00:02:25try to show in all research in many different ways that things like joker for your claim tool temperature doesn't really predict Patton's of economic development is true if you look at the role data that countries closer to the equator for example tend to be poor than countries father
00:02:42from the equator but I don't think that's really the cools will affects all of climate is just kind of that Kewley our teas of history in particular the historical development all of what I call the institutions in Africa say and the consequence all for that collision with the
00:02:58world's slave trade colonialism postcolonialism that's helped perpetuate poverty in Africa so that's a sort of correlation but that doesn't establish any sort of coals Lafayette to claim its own economic development well link to climate it's quite difficult to work at two o'clock in the afternoon in some of
00:03:20these countries some people might say well there's a strong work ethic in a place like Denmark than there is in a place like symbolic way I didn't know you know people work pretty hard in Zimbabwe they get up early and like it's a struggle to make ends meet
00:03:36in a place like that when this to so many impediments to prosperity and so many blocks the incentives of opportunity so I'm not quite sure about the fact you know I would also say how hard people work depends on their incentives and the rewards if you know your
00:03:54going to be able to enjoy the fruits of your work you tend to work harder but if you're worried that some elite is gonna expropriate the fruits of your labor which is quite %HESITATION issue in Zimbabwe then that's a big disincentive to working hard okay we talk about
00:04:10climate we talked about culture another one which people mention all the time is resources and that does seem to make a difference it's no coincidence that queue weight is which they called oil seem Bobby doesn't yeah I mean that's the sort of accounting relationship though isn't it yes
00:04:27it's true that Kuwait to sitting on a big pile of oil but I guess the relevant question will be how ritual Kuwait be when the oil disappears think there's many places in the world like England which had the industrial revolution what natural resources as England have well attested
00:04:43Colin I in the wheel but this I. in the war on coal over the place didn't have oil low natural gas soul you know South Korea Japan what resources it half you try not to sign have oil so yeah it's true you have kept Todd and then these
00:04:57places what do we learn more generally about what it takes to be prosperous and those examples I think not much one way of thinking about this is to examine what's often called a natural experiment this is a place where one area has two different systems imposed upon it
00:05:17where the culture is very similar where there were no difference in resources weather climate is the same I'm thinking of places like Germany in June the Cold War yeah absolutely yeah that's a very powerful methodology for eliminating all competing hypotheses and I think the Koreans example is just
00:05:37beautiful because Hey you have the great peninsula long history linguistic cultural homogeneity political unification the country gets all over Charlie splits and how often you get this enormous economic divergence and why is that it's all of yes that that's about the different ways that the economy got organized
00:05:55in north and South Korea that's about what I call the institutions the institutions institutions we tend to think of as being things like the courts democracy government politicians that's what you mean by institutions of you is that you have to take a pretty broad view of what institutions
00:06:13all for example if you take a African country like Sierra Leone does the constitution in Sierra Leone does Lowell's but there's an awful lot of informal older laws have to be respected laws have to be enforced when we talk about institutions we mean rules that humans create which
00:06:32structure that interaction than incentives and opportunities but I think those rules can be kind of informal almost like social norms not just written down in the constitution sell some countries are much more corrupt than office the idea of giving somebody a brown envelope when you want something done
00:06:51cash addition open above the price that you expected to pay that's within your definition of institutions well over than culture I mean I think corruption is a sort of outcome of a particular set of incentives stemming from the institutions I tend to avoid talking about corruption and the
00:07:09reason I don't talk about it is that corruption is a word that economists use when they want to avoid talking about politics they say the problem you know with the government in Cameroon is that it's corrupt corruption is like a problem that economists can deal with with that
00:07:23normal size of called sets without talking about politics but to me corruption is a feature role for fundamental malfunctioning of state institutions it's using state resources for private goals and that means that the state is not bureaucratic it's not meritocratic the rules not to force probably people miss
00:07:43use resources but you want to focus on the institutional failings it seems to me not on corrections or corruption is a kind of symptom of institutional malfunction it's not the tools of the whole problem in some ways you make it sound quite easy to fix you need to
00:07:58fix institution spot these norms you talk about might be very deeply embedded yeah that's also politics African countries don't have institutions that failed to promote prosperity that's not a coincidence they have that for reasons you know think about Zimbabwe Zimbabwe has terrible institutions state institutions property rights institutions
00:08:21because that is designed to enrich Zani PF political elites and military and they have enormous vested interests in the system so yeah one problem is the could be all of these informal institutions and norms which are hard to change but I guess I tend to emphasize much more
00:08:37these political impediments to changing institutions so let's imagine a good guy or a good woman comes along and is elected president of Zimbabwe and they come to James woman's and then they say we want to improve the lives of Zimbabweans give us some advice what do you say
00:08:56yeah I mean I think the biggest challenge is actually getting a person like that in power in Zimbabwe but if you had someone in power like that then the raw strategies for dealing with these problems you know I think if you look at any country including England which
00:09:10built more effective institutions eight faced all the same problems of vested interests even now let's see corruption and their strategies for dealing with it if you go back to look at the creation of the British state after the glorious revolution for example there were lots of elites who
00:09:26were completely opposed to having a molten tax system what are the weak government to well the elites main asset was land so they were like okay we will tax lots in fact they actually committed to do that because they introduce this very meritocratic bureaucracy to raise excise taxes
00:09:42excise taxes bred to be a mostly felon pull people the land tax was never bureaucratized today from the land tax with the way in the eighteenth century and that was sort of like grandfathering Ansel these elites and sort of let's have a physical system but it's not gonna
00:09:57be threatening to you sue advice is not to touch the very which the elite because they compete this pop off of what form you need to improve the tax base you need to improve your property doors and so on box they need to affect the middle classes and
00:10:12those less well off lover than those powerful vested interests well I think you can probably divide and rule that's the sort of story as well if you look at Louis the fourteenth Louis the fourteenth it's something similar also you create these parallel structures like this intendencia system but
00:10:27you divide and rule of position like some of the elite some more likely to get with the plan I think if you look at Zimbabwe there was actually a split in the elite before president Mugabe was thrown out of power by the minute treat that with these competing
00:10:42groups there was a so called gang of forty and then the was the so called team like cost which was the people of the current president either because he's from the clan which has a crocodile as its totem so there's always factions you need to get some people
00:10:56to switch and get with the plan of imagining a difference in Bab way but some people are always going to be opposed to that and if you call to get them out to the way you have to buy them off and I think you see that everywhere if
00:11:08you look at institutional reforms do you have to be pragmatic I think it's about real politics building institutions you can't just wave a magic wand and get rid of these political challenges and the end state his walks you aiming for a set to both formal and informal rules
00:11:25that everybody abides by the it doesn't just benefit a small group yeah I mean we call that inclusive institutions you know institutions the rules that create broad based incentives and opportunities in society I mean nothing is perfect there's no perfect country in the world the United States which
00:11:43is often held up as being the most dynamic and innovative country in the world is enormous problems of inclusion and discrimination against minorities against women against blacks against Hispanics against indigenous people so nothing is ever perfect but I guess the I'd say why the United States being so
00:12:00successful economically in the last two hundred years it's because it's managed to create a pretty inclusive system will not for ten or twenty percent of the population but for the vast masses has being inclusive the same rules have applied to everybody into that's created this economic dynamism and
00:12:17yeah that's a very different type of society then you see the place like Zimbabwe what drives lowered economic growth we know that it's innovation it's new ideas new technologies ways of raising human productivity what of those ideas come from from people it's people who have those ideas and
00:12:34that's out that some sense to be economically successful you need to tap into all that latent talent and energy and creativity and the population that's exactly what does not happen in Zimbabwe inclusivity is about harness singled out latent talent giving people opportunities allowing them to get loans in
00:12:51force contracts and you have a universal view of human nature said that the same incentives that work in Denmark will so will consume Bob I think so I mean that's an interesting question but in my personal experience of working in poor countries I find people to be very
00:13:08similar and have very similar aspirations they want the same things that I have but one access to schools and health care they want to travel they want to see the world they want to have jobs they want all the same things that I have is just they called
00:13:22get them because that trapped in this cage in some sense there's just so much wasted Tolentino in these places but obviously you know if you talk to someone in the bush in Sierra Leone that world is a very small world very local will combat that view and all
00:13:38like you talked about your work in Africa much of your work I guess is looking at data that already exists out that and carving it and slicing it and thinking of what it tells us about big picture questions about why nations bison white some of the nation's full
00:13:56but you've also done some field work yourself I do as much as that is possible if you know you can't possibly understand problems of African development without spending time in Africa and talking to Africa and you know I just think it's easy to have all sorts of misconceptions
00:14:10until you just go there and talk to people and experience it and just try to understand what goes on that that's true ever in the world you can have all the dates you like but how do you interpret it you know how do you know what to relate
00:14:22to waltz you need that dense knowledge do you do that in a systematic way eight question as interviews all you do you just go in and buy the atmosphere well both I think I mean I spent the whole of yesterday working with a friend here in London basically
00:14:38working on the survey in hope but where do you focus you know what do you ask specifically what you try to conceptualize that needs just a lots of exploration to start with give me an example of where knowledge of a culture is important to explaining the economy I
00:14:56spent a lot of time working in Colombia I told in Bogota every summer for the last twenty four years one thing you won't realize when you spend a lot of time in Columbia try to understand how the economy works understand how politics works is there's enormous web of
00:15:11social norms that heavily influenced the way people behave in Colombia for example Colombia that's the sort of joke does the eleventh commandment in the eleventh commandment is don't get papaya so what is don't get papaya mean is don't give someone the opportunity to take advantage of you but
00:15:28the twelve come on that is if someone gives you papaya take it take advantage of them so we've been trying to use experiments experimental games to look at how these social norms influence the way people behave in economics experimental economics is a famous game called the trust game
00:15:46so in the trust game I have some money if I give it to you it troubles in value but then you have to decide how much to get back to me so I can give you money that's mutually beneficial for both of us but then I have to
00:15:57trust you're going to give me some back and the economically rational thing for you to do would be not to give anything to me but if I anticipate that I don't give you anything but we find that that's not how humans play this game generally but now imagine
00:16:10your Columbian and I make salient the social norm don't get papaya if I give you my money am I giving you papaya and then I make salient if I give you Papa you should take it on so you're thinking %HESITATION he gave me Popeye I should just take
00:16:25everything and not give anything back to him so what we find is that when you make salient these norms it really messes up the way people play this game in other words people are less likely to give money to that partner because it's like giving papaya and if
00:16:40they do give money that less likely to receive some in exchange exactly in this age of identity politics I'm interested in how you identify yourself as an academic all you an economist a social scientist I'm not an economist anymore I used to be an economist I was trained
00:16:56as an economist but I had to de program myself from thinking like an economist because I just think it doesn't help you understand development problems if you just think of the problem in a very a call the mystic way you're missing a huge part of the picture because
00:17:11that just doesn't explain most of the variation what all you then I'm a social scientist I mean I spend an enormous amount of time reading history anthropology by talks in the political science department for many years I you know I think you need all of that and is
00:17:27the point of your academic will look to describe the world will to change it that's a good question I think probably to describe the world I think changes very interesting but I find that kind of morally fooled you know how should Sierra Leone change the Sierra Leonean so
00:17:43changes the problem in Sierra Leone is thought that society's not organized in a way that most people have any kind of control over the world that living in so if we can help to promote that I think that's a very good thing and let the Sierra Leonean is
00:17:57decide on the society they once the problem is most of them don't have any leverage on that at the moment came to a prison thank you very much my pleasure social science bites his mate in association with sage publishing more interviews go to social science space com

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