Xtreme path dependency
I’ve got some time on my hands here at JNB, so I am catching up on what’s happening in the world. I came across a great new paper by Diego Comin, William Easterly, and Erick Gong that shows the level of technology 2000 years ago is a pretty good predictor of per capita income today. Now, to be clear, this does not mean that geography is destiny as the country where I am right now, South Africa, has a much higher income than its level of technology in 1500 would predict (despite wrenching, policy-induced income inequality, such as this brilliant attempt at social engineering). Although I am not a big fan of structural arguments alone for political and/or economic outcomes, its foolish to deny that nature affects economic development, especially before the industrial revolution. How to overcome the structural challenges nature places before us is perhaps the central question of development.
Kim Jung Il, Capitalist
Seriously. One point I have made on this blog over and over again is that poor countries are poor because they have bad governments. North Korea is an extreme example of this point, but that makes the concept all the more tangible. The regime’s zealous efforts to repress markets (i.e., make consensual economic exchange illegal) has led to mass starvation and famine. I am far from a proponent of Laissez Faire economics – very far. At the same time, North Korea could not be as poor as it is without the active role of the government in preventing economic growth.
Nicholas Kristof is a bit too judgmental
Nicholas Kristof has been taking a rather well-deserved beating for criticizing poor people in Africa for spending money on alcohol instead of educating their children. Rather than portraying these people as selfish jerks who don’t care about their children, Kristof might want to reflect on the degradation of poverty. Yes, it would be better if these people spent their money on educating their children rather on beer, but the people he is talking about have really tough lives. Can you blame them for wanting to spend a few nights a week at the bar? I understand that in the long-term it harms their children and that is a shame. Still, no one is perfect and I think Kristof is being a bit harsh in his condemnations. How does he know he would act differently if he were in their shoes?
He’s just trying to help…
Aid Watch says Nicholas Kristof should stop being so preachy.
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