Greg Rosalski

Obviously, you and James are, you know, you have this bromance going. At what point does Simon Johnson come in the mix?

Simon Johnson. He's another young economist, a statistics whiz. And together, the three economists start working on this huge project that would eventually win them a Nobel Prize, trying to prove, using the tools of economics, that institutions are the reason why some nations are rich and others are poor.

Simon Johnson. He's another young economist, a statistics whiz. And together, the three economists start working on this huge project that would eventually win them a Nobel Prize, trying to prove, using the tools of economics, that institutions are the reason why some nations are rich and others are poor.

Simon Johnson. He's another young economist, a statistics whiz. And together, the three economists start working on this huge project that would eventually win them a Nobel Prize, trying to prove, using the tools of economics, that institutions are the reason why some nations are rich and others are poor.

In an ideal world, the economists could just do what scientists basically do in a laboratory. You know, randomly give some countries good institutions and other countries less good institutions, and then see what happens to their economies. But of course, that's impossible.

In an ideal world, the economists could just do what scientists basically do in a laboratory. You know, randomly give some countries good institutions and other countries less good institutions, and then see what happens to their economies. But of course, that's impossible.

In an ideal world, the economists could just do what scientists basically do in a laboratory. You know, randomly give some countries good institutions and other countries less good institutions, and then see what happens to their economies. But of course, that's impossible.

So they began searching for the next best thing, a natural experiment, a moment in history where, for kind of random reasons, different countries wind up with different kinds of institutions.

So they began searching for the next best thing, a natural experiment, a moment in history where, for kind of random reasons, different countries wind up with different kinds of institutions.

So they began searching for the next best thing, a natural experiment, a moment in history where, for kind of random reasons, different countries wind up with different kinds of institutions.

Yeah, the era of European colonization. When starting in the 1400s, a bunch of Western powers went around the world, invading and imposing different kinds of institutions, institutions that the economists believed had lasting economic consequences.

Yeah, the era of European colonization. When starting in the 1400s, a bunch of Western powers went around the world, invading and imposing different kinds of institutions, institutions that the economists believed had lasting economic consequences.

Yeah, the era of European colonization. When starting in the 1400s, a bunch of Western powers went around the world, invading and imposing different kinds of institutions, institutions that the economists believed had lasting economic consequences.

But there were also different patterns in how this all unfolded in different places, which seemed to create the conditions for the natural experiment that the economists were looking for.

But there were also different patterns in how this all unfolded in different places, which seemed to create the conditions for the natural experiment that the economists were looking for.

But there were also different patterns in how this all unfolded in different places, which seemed to create the conditions for the natural experiment that the economists were looking for.

At the other extreme were colonies where Europeans did not settle in large numbers, places like the Congo or Bolivia. There, European colonizers set up or maintained institutions aimed at helping a small group of elites ruthlessly extract wealth from indigenous people. Instead of investing there, they sent most of their resources and wealth back to Europe.

At the other extreme were colonies where Europeans did not settle in large numbers, places like the Congo or Bolivia. There, European colonizers set up or maintained institutions aimed at helping a small group of elites ruthlessly extract wealth from indigenous people. Instead of investing there, they sent most of their resources and wealth back to Europe.

At the other extreme were colonies where Europeans did not settle in large numbers, places like the Congo or Bolivia. There, European colonizers set up or maintained institutions aimed at helping a small group of elites ruthlessly extract wealth from indigenous people. Instead of investing there, they sent most of their resources and wealth back to Europe.

These are the places that tended to become poorer countries.