Archive for August 21st, 2012

Why do some states develop as democracies while others remain authoritarian?

August 21, 2012

Today seems to be an institutions blogging day.

Elena Nikolova of EBRD has written a paper on the topic and summarised it in voxeu.

She says countries adopt liberal representative institutions (meaning democracy) when labor is scarce. When it is in abundance, there are more chances of extractive institutions.

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Why Central Planning exixted?

August 21, 2012

Acemoglu/Robinson in their wnf blog have been running series of posts on central planning.

They started the topic in early August questioning why Soviet Union picked up central planning which was inefficient way to create institutions. The usual theme is that Bolsheviks were influenced by Marx and hence implemented central planning in USSR. So it is seen that central planning existed because of Marxian ideology.

You knew back even then A/R duo would be unimpressed and point instead to the role of political power and centralised institutions in picking central planning.

In later posts the duo picked examples (here and here)  of countries which adopted central planning without any role of ideology.

So, in the recent post they say central planning existed because of control:

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Medieval Venice’s response to globalisation

August 21, 2012

Such papers on economic history just stump you. The paper is by Diego Puga of CEPR and  Daniel Trefler of University of Toronto.

It looks at couple of things:

  • First how international trade was done during the Medieval era
  • How Venice because of its geographical advantage became a great choice to take advantage of rising international trade
  • How Venetians formed institutions (mainly contracts) to realise the geographical advantage
  • How the institutions led to incomes becoming increasingly polarized to top traders
  • The top traders tried to limit competition leading to protests
  • This also led to overall decline of Venice…

The authors  says:

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