Introduction empirical evidence on politics and development
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Introduction: Empirical Evidence on Politics and Development . Paths of Political Development. Stable Democracy Western countries Unstable democracy Latin American Countries Non repressive Dictatorship Singapore, east Asian Countries Repressive dictatorship South Africa, before 1994 .

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Introduction empirical evidence on politics and development l.jpg

Introduction: Empirical Evidence onPolitics and Development


Paths of political development l.jpg
Paths of Political Development

  • Stable Democracy

    • Western countries

  • Unstable democracy

    • Latin American Countries

  • Non repressive Dictatorship

    • Singapore, east Asian Countries

  • Repressive dictatorship

    • South Africa, before 1994


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Growth and Democracy

  • Pros: Provide constraints for Rulers

  • Cons: More distortionary redistribution.

  • Empirical evidence:

    • Barro (1997)

      • Non linear effect

      • Growth initially increasing with electoral rights, then decreasing

      • Growth is a good predictor for democracy (Barro 1999)

  • Przeworski, A. and Acemoglu, D., S. Johnson, J. Robinson and P. Yared

    • No clear causality from growth to democracy



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Institutions and Development

  • Are good institutions influencing the development or the contrary?

    • Problem or regressing growth respect an index of good institutions (enforcement property rights…)

    • We need a source of exogenous variations in the institutions

      • An element linked to the institutions but that is not directly linked to growth


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The Colonial Origins of Comparative Development

  • Extractive Institutions

    • like Belgium in Congo

    • No protection of private property

  • Developmental Institutions

    • Like in New Zealand, US., Australia

    • High property rights protection


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Importance of Mortality rates

Settler Mortality

Settlements

Early institutions

Current institutions

Current Performances


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Is the Theory Right?

  • Settler Mortality as an Instrumental Variable

    • M : settlers mortality

    • y: income growth



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An economic Success: Botswana

  • Botswana is an outlier respect to African sub-Saharian countries

  • Good Institutions play an important role

  • Why does Botswana get good institutions

    • Colonial origins

    • Original population Density

    • Ethnolinguistic Fragmentation


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  • Botswana vs. Ghana and Somalia

    • Tribal Institutions encouraged constraints on political Leaders

    • Limited effect of Colonization

    • Elites had economic Interests in the development

    • In Ghana no limits on the ruling class because it suppressed the opposition

    • Somalia is initially very similar to Botswana (no ethnic differences) and The British rule did not impact so much

    • Somalia structure in clans highly divisive


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17th-century Britain and The Netherlands vs. France and Spain

  • Commercial interests where politically stronger in the Netherlands and in Britain

    • In Britain the Glorious revolution of 1688 limited the power of the crown

  • The Netherlands became independent from Spain in the 16th century

    • The Merchant Supported the leadership of William of Orange and gained the independence

    • Followed a more "capitalistic" regime ∙

  • The Power of the monarchy in France and Spain blocked the development of institutions (North)

    • The Crown used many predatory methods to raise revenues


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South vs. North America in the 18th and 19th Centuries Spain

  • Powerful groups in North America Favoured the enforcement of Property rights, in South America opposed the industrialization

  • No powerful landed Aristocracy in the United States

    • Essentially Poor Europeans migrated to North America, low density at the beginning

    • Labor shortages in NA give the landlords less power

    • The north America was a settler colony: They opposed institutions giving power to landed interests

  • In South and central America more density: African slaves and Native population:

    • The landed aristocracy got more power and opposed to the industrialization


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Korea and Taiwan vs Congo Spain

  • All 3 were dictatorship

    • In Korea and Taiwan they pursued developmental policies

      • Threat of Communism (political Constraints)

      • In Korea and Taiwan alliance between dictator and business

    • Mobutu in Congo set a very Kleptocratic regime

      • Belgians set a very predatory colony

      • Mobutu continued to rule without control


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To Summarise Spain

  • There is a general tendency toward Democracy

  • Paths are different

  • Unclear the relationship growth vs Democracy

  • More Inequality less Democracy

  • Institutions appear good for Growth


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