Topic 3 - Why Growth Doesn't Spread Flashcards
(24 cards)
What are the three broad forces Cummins identifies to explain why industrial-era growth did not spread everywhere?
- Bad geography (‘bad luck’)
- Institutions (rules of the game)
- Historical contingency (path‑dependent events)
Define ‘historical contingency’ in the context of economic development.
Unpredictable events—conquests, technology shocks, diseases or policy choices—that lock societies onto persistent trajectories, shaping their institutions and growth paths.
According to North & Thomas (1973), what are institutions?
‘The humanly devised constraints that shape human interaction’—the formal and informal rules of the game.
Distinguish between formal and informal institutions (North & Thomas, 1973).
Formal institutions: written rules (constitutions, laws).
Informal institutions: unwritten conventions and cultural norms.
What is the difference between ‘inclusive’ and ‘extractive’ institutions (Acemoglu & Robinson, 2012)?
Inclusive institutions secure property rights and broad opportunities, maximising prosperity; extractive institutions concentrate power and wealth in a small elite that exploits the rest.
Give an example of an extractive institution from the New World colonies.
The mita forced‑labour draft imposed by the Spanish on Andean communities after 1573.
What is Engerman & Sokoloff’s (2000) central thesis about factor endowments in the Americas?
Initial factor endowments shaped inequality profiles, which then determined whether colonies developed inclusive or extractive institutions and thus their long‑run growth.
List the three colonial economy types identified by Engerman & Sokoloff (2000).
- Sugar & slave plantations (Caribbean, coastal Brazil)
- Mineral‑rich zones (Mexico, Peru)
- Land‑abundant, labour‑scarce settler zones (North America).
What is Acemoglu, Johnson & Robinson’s ‘settler mortality’ hypothesis (2001)?
European mortality risk determined settlement patterns: low mortality encouraged settlers to build inclusive institutions; high mortality led to extractive colonial regimes that persisted, explaining today’s income differences.
Which proxy variable do AJR (2001) use to capture the disease environment?
Recorded mortality rates of European soldiers, bishops and sailors stationed in colonies during the 17th–19th centuries.
Give one statistical critique of AJR’s (2001) study.
Mortality correlates with other omitted factors such as indigenous population density; the data are sparse, yielding imprecise estimates of causality.
Summarise the ‘Reversal of Fortune’ finding (Acemoglu et al., 2002).
Regions that were richest in 1500 (e.g., Aztec and Inca territories) are among the poorest today, suggesting geography alone cannot explain long‑run development.
Explain why malaria illustrates geography–contingency interaction in Cummins’ DAG exercise.
Malaria lowers productivity and investment, but development can fund eradication; whether a country escapes the trap depends on the timing of innovations like insecticides and vaccines.
According to Cummins, why was India’s cotton industry devastated after 1750?
The British cotton‑textile revolution flooded India with cheap Lancashire yarn, triggering de‑industrialisation.
Summarise Tirthankar Roy’s (2012) ‘pro‑Raj’ view of British colonial legacy in India.
Railways, clearer property rights and global trade integration offset the fiscal drain, making British rule a net positive for India’s long‑run growth.
Summarise Mukherjee’s critique of British rule in India (2010s).
Argues the Raj caused severe de‑industrialisation and an exploitative ‘drain’ of wealth—hence colonial rule was ‘very, very bad’ for India’s economy.
What is the main point of conflict between Mukherjee’s and Roy’s interpretations of British rule in India?
Mukherjee emphasises exploitation and de‑industrialisation, whereas Roy highlights infrastructure, institutions and market integration benefits.
What effects did the railways have on the Indian economy according to Donaldson (2018)?
They slashed freight costs, reduced regional price gaps and raised real incomes, but did not by themselves launch modern economic growth.
Why does Cummins argue institutions are not ‘fundamental’?
Inclusive rules emerge only when underlying social conditions permit; growth and institutions co‑evolve from the bottom up, rather than institutions unilaterally causing growth.
Give an example of historical contingency shaping long‑run inequality in Latin America.
The discovery of Potosí silver in 1545 led to the mita labour draft, entrenching extractive institutions and leaving former mita districts poorer today (Dell 2010).
Why are sugar‑slave economies considered extractive?
Extreme wealth concentration and legally codified slavery locked elites into institutions that restricted majority participation even after abolition.
What role does extreme inequality play in Engerman & Sokoloff’s model?
High early inequality discouraged political enfranchisement and public investment, cementing extractive institutions for centuries.
What does Cummins mean by ‘bottom‑up’ formation of institutions?
Institutions are created through individuals’ choices and cultures rather than imposed top‑down; growth and good institutions emerge together.
How can economic development eliminate diseases like malaria?
By funding public health measures such as draining swamps, insecticides and vaccines—turning an initial geographic disadvantage into an advantage.
