Engermann, Sokoloff and Acemoglu Flashcards
(11 cards)
What is THE argument from Acemoglue in ‘Why Nations Fail ‘
Economic development is reliant on extractive and inclusive institutions
This dependent on settlers activities. Inclusive institutions resulted in greater freedoms for those in inclusive fostering economic growth through strong institutions.
What are the argument from Acemoglu on Spanish/South American Extractive Institutions
- Spanish expoloited local and set up a new autocracy, retaining exploitative inssts (mita)
- Future leaders determined by these insts - path dep. –> insecure property rights, weakened state, little public services –> monopolies
- Lack of democracy –> politicians exploit state bank monopolies
What is the evidence for Spanish Extractive Institutions according to Acemoglu
- Moving entire population to new towns to use in the mines (mita)
- Acomayo 1/3 as rich as Calca due to mita. each with quecha
- Repartimento de Mercancias forced the sale of goods to locals at spaniard determined prices
continued post indp:
* Mexico had non-stop instbaility for firs 50 yrs - Santa Ana president 11 times
* 1910: 2 banks in mexico control 60% of assets –> b hihg IR and lending only to wealth
* Mexico, Carlos Slim able to avoid monpoly power using past laws. Unsuccessful in US and charged $400+ million.
What are Acemoglu’s arguments around American Inclusive Institutions
- Little gold/agricultural produce in NA -> spanish extractive insts failed –> incentive to work hard together to survive –> political and economic freedoms for massses
- Remained path dependent w future insts and policies (General Assembly, Headright) –> econ incentives for innovation and IR
What is the evidence for Acemoglus claims abour American Inlcusive Institutions
Arthur Young - ‘‘avoid colonisizng northern latitudes’
* Jamestown attempts to replicate spanis, people fled.
* Headright system - each male settler 50 acred –> freed from contract –> 1619 general assembly gave all men a say in the land –> 1720 each colony w assembly and governer –> continental congress 1774
Path dep:
338 banks in 1818 –> 24,864 banks in 1914. US politicians kept in check through inquiry
US anti trust microsoft 2001 deal
What is the hypothesis from Engermann & Sokoloff
- Extension of Acemoglue but explain equality
Endowments –> Differing economic and political power incentives –> Differeng institutions –> Different economic outcomes
What are the main arguments of Engermann & Sokoloff
- SAmerica climate + soisl suited for crops –> dominated by slaves –> extreme inequality
- NAmerica mixed farming climate, limited EoS –> few slaves –> relatively equal dist.
- Adv of NAmerica in per capita Y started in late 18th
- Not British institutional heritage e.g. Puritans on Providence had slaces
What is the evidence that Engermann & Sokoloff provide to justify their arguments of the intial endowment differences having an immediate impact
- Over 60% of migrants from 1500-1760 were Africans brought over involuntarily, almost all desinted for plantations for vlauable crops
- Spanish policy focus on islver meant colonies in Argentina were of seconday interest, held back dev.
- Gave land grants to a small no.of indiviudals –> elite families (corregidors) maintained status over generations as representatives
- South USA lagged behind North w diff endowments
- US Homestead Act 1862, made land free in plots suitable for family farms vs Argentina where elites blocked such programmes
What is the evidence Engermann & Sokoloff provide to show that the endowments had a LR impact
- 2.4% of mrual mexicans owned land in 1910 vs 75% in us in 1900
- US patent system low fees and thresholds vs Mexican favoured wealthy or influential.
- US population prop voting 5x more
- US most literate population, free schools open to all. Everyone else 75 yrs behind.
Engermann & Sokoloff counter argument to contemporary thought around equality and growth
