Tuesday, 27 March 2012

Easterly on Acemoglu and Robinson

Bill Easterly reviews Acemoglu and Robinson new book "Why Nations Fail" in the Wall Street Journal. He writes,
Far too much intellectual firepower regarding the global poor these days focuses on the (small) things Westerners can do to help—obsessing about, say, how much money to spend on mosquito-blocking bed nets to fight malaria. The bigger questions—about why some societies prosper and others don't, about how to improve the lot of an entire impoverished class—are left by default largely to uncritical admirers of China's growth. The arrival of "Why Nations Fail" is thus a hugely welcome event, since economists Daron Acemoglu and James A. Robinson take on the big questions and in doing so present a substantial alternative to the dominant thinking about global poverty.
"Why Nations Fail" also offers this crucial insight: Experts cannot engineer prosperity with the right advice to rulers on policies and institutions. Rulers "get it wrong not by mistake or ignorance but on purpose." Change happens only when a broad coalition revolts, forcing the elite to allow more pluralistic political competition (e.g., the Glorious Revolution in England, the Meiji overthrow of Japanese feudalism and Botswana's democratic ouster of British colonizers).
A couple of interesting points that Easterly raises are a challenge to the current methodological fad of randomized controlled experiments in development economics and a methodological objection to the use of comparative historical case studies. He is concerned about "cherry picking" on the one hand, and "ex post rationalization" on the other.

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