Ch. 2: Theories That Don't Work

[Chris OConnor]

Ch. 2: Theories That Don't Work

[Robert Tulip]

This chapter is devoted to the polemical argument 'its the institutions, stupid'.

That means they deride explanations of national difference based on geography, culture and ignorance. Although I welcome their argument that institutional infrastructure inspires innovation, their derision about other factors takes away from the ability for some nations to understand what they have to do to join the modern world.

Why Nations Fail correctly points out that growth cannot be sustained without a good legal and political institutional framework, but then fails to look adequately at the causal factors enabling good institutions. Of course the Koreas and the Nogales twins are just separated by an arbitrary imaginary line. But this line is written in blood, encompassing a vast heritage of world history.

There are real geographic and cultural reasons why despotism flourished in Moscow and Madrid, and not in London and Washington, and why these defective models inspired the failure of Mexico and North Korea. Ignoring these reasons means the authors here just tell part of the story of why it is so difficult for bad countries to change their evil ways and become productive and good.

The dreaded political correctness rears its head here. If geography, culture and ignorance keep some places poor and despotic, it is almost as though they are like Dante's Hell - 'abandon all hope ye who enter here'. But Why Nations Fail wants to tell a positive hopeful upbeat story, that a focus on making good institutions is the silver bullet (okay that is a bit of an exaggeration).

When deeply embedded cultural traits are a prime cause of institutional structures, these traits need to be identified and challenged if the structures are to change.

The authors point to exceptions to the expectation of Montesquieu's rule that hot weather makes people lazy and incurious, such as Australia and Singapore. But the institutions of both these countries were formed in cold climates, where the British had to plan, organise, manage, compete and work hard and innovate. Successful hot places involve accidents of geography, such as the Malacca Straits for Singapore, and culture, transposing norms built in cold places.

[DWill]

That means they deride explanations of national difference based on geography, culture and ignorance. Although I welcome their argument that institutional infrastructure inspires innovation, their derision about other factors takes away from the ability for some nations to understand what they have to do to join the modern world.

Why Nations Fail correctly points out that growth cannot be sustained without a good legal and political institutional framework, but then fails to look adequately at the causal factors enabling good institutions. Of course the Koreas and the Nogales twins are just separated by an arbitrary imaginary line. But this line is written in blood, encompassing a vast heritage of world history.

It does seem that the authors might be beggaring the question if their solution for less successful countries is for them to build solid institutions. As you say, there are serious barriers to their making this leap, so it's not just a matter of wanting to or not. I've been thinking about the evolutionary concept of path dependence that D. S. Wilson talks about, a principle he summarizes as "you can't get there from here." How can cultures manage to jump the tracks of their customary ways of doing business?

There are real geographic and cultural reasons why despotism flourished in Moscow and Madrid, and not in London and Washington, and why these defective models inspired the failure of Mexico and North Korea. Ignoring these reasons means the authors here just tell part of the story of why it is so difficult for bad countries to change their evil ways and become productive and good.

The dreaded political correctness rears its head here. If geography, culture and ignorance keep some places poor and despotic, it is almost as though they are like Dante's Hell - 'abandon all hope ye who enter here'. But Why Nations Fail wants to tell a positive hopeful upbeat story, that a focus on making good institutions is the silver bullet (okay that is a bit of an exaggeration).

When anyone says that a nation collectively made the wrong choices, there are going to be cries of racism or imperialism against the accusers, so it's common to avoid that message and is considered good manners. A deterministic argument such as Jared Diamond's also has been called PC, because it attributes the current state of countries' affairs to factors they had little ability to control, mainly of geography and climate. So Diamond can say there are no native differences in human groups that led to their being behind in the race. Well, he does make a curious claim that New Guineans are smarter, so that's one claim of native difference. In that case, though, it didn't matter because the geographic factors trumped intelligence.

The authors point to exceptions to the expectation of Montesquieu's rule that hot weather makes people lazy and incurious, such as Australia and Singapore. But the institutions of both these countries were formed in cold climates, where the British had to plan, organise, manage, compete and work hard and innovate. Successful hot places involve accidents of geography, such as the Malacca Straits for Singapore, and culture, transposing norms built in cold places.

I don't recall Diamond endorsing the cold weather hypothesis, but the specific favorable geographic factors he talks about, such as availability of native plants for domestication, did seem to cluster in areas of seasonal temperature variation. It seems simplistic to attribute the whole effect to the need to make warm clothing and have shelter from the cold.