Greg Rosalski
speaker
658 appearances
8 recordings
2 series
first heard Dec 2024
last heard 1 Jul
Greg Rosalski’s voice in public audio — every appearance, attributed to the second.
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recordings per month · last 12 monthsRecordings per month over the last 12 months — 5 in all, peaking in Jun 2026 with 3.
Appearances
But it turned out not to be ridiculous. In fact, it ended up being Nobel Prize winning research, Mr. Distinguished Economist. Yeah.
When Simon shared this first round of results with Daron, he was like, wait, what?
This unlikely relationship between the rate of colonizer deaths and economic outcomes centuries later, the economists argued that the explanation for it could only be institutions. And here is a summary of the argument they made. Basically, where European colonizers were more likely to die of disease, they couldn't settle en masse.
They instead set up institutions aimed more at exploiting the indigenous population. Those institutions led to lower economic growth in the coming centuries. But where Europeans were less likely to die, they moved in and set up settler colonies with more democratic and growth-friendly institutions.
This paper made a huge splash. It showed other economists this really cool new way of doing research on big questions using knowledge of history, the tools of statistics, and a bit of cleverness.
So the economists went to work on their next blockbuster paper, aiming to shut down these sort of geographic arguments for why some nations are rich and others are poor. And they document this startling fact in the data. They call it a reversal of fortune. Before European colonization, the richest parts of the Americas were actually what is today Mexico and parts of South America.
That's where the Aztec and Incan empires were.
And they encounter some pushback.
Yeah, like in general, why are some institutions so good for economic growth and other institutions so bad?
Okay, so inclusive and extractive institutions. This is at the heart of the theory they lay out in their book. Inclusive institutions are institutions that serve a wide swath of society. They kind of spread opportunity around, incentivizing and empowering people to succeed in a free market economy. And that's why James and Duran argue inclusive institutions are good for economic growth.
Or think of like how good public education systems give everybody an opportunity to learn skills and become more productive. Or how antitrust laws prevent monopolization of the economy.
And sort of the ultimate inclusive political institution, it's democracy. James and Duran have found in the research that democracy, generally speaking, it's good for economic growth.
Of course, this is a big sprawling theory. And to this day, not everyone is convinced. For example, some have pointed to India and China as contradicting their theory. Back in 1980, their economies were neck and neck. They both had roughly the same GDP per capita, about $300 per person per year.
This one very prominent example doesn't fit so neatly in Duran and James' theory. But they argue, of course, there are nuances to all this.
Yeah, there are still some big questions about this theory. Some have poked holes in their methodology. Others aren't quite convinced that you can boil down all institutions into two categories. Even the Nobel Prize Committee, when it announced their award, they made it clear that their theory is not the final word on why some nations are rich and other nations are poor.
The research provides this kind of hopeful message that we can build a fairer society and a better economy through the hard work of improving our institutions. That could mean like working to improve schools or keeping government officials accountable or like, I don't know, participating in an election or social movements.
Unlike past theories, which say a country is rich or poor because of its geography or its culture, this is a theory that gives us some agency over our nation's destinies.
And I'm Greg Rosalski. This is NPR. Thanks for listening.
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