"That’s right: there’s huge columns of countries with basically identical settler mortality figures. And this is kinda sus, so an expert looked at it and concluded the data is pretty bad and that, using better data, the relationship only holds for the US, Canada, Australia, and New Zealand."
(The expert cited is: Albouy, David Y. 2012. "The Colonial Origins of Comparative Development: An Empirical Investigation: Comment." American Economic Review, 102 (6): 3059-76.)
Acemoglu, Johnson, and Robinson (2001) established that economic institutions today are correlated with expected mortality of European colonialists. David Albouy argues this relationship is not robust. He drops all data from Latin America and much of the data from Africa, making up almost 60 percent of our sample, despite much information on the mortality of Europeans in those places during the colonial period. He also includes a "campaign" dummy that is coded inconsistently; even modest corrections undermine his claims. We also show that limiting the effect of outliers strengthens our results, making them robust to even extreme versions of Albouy's critiques.
I don't say with this that AJR are right in every aspect, but I think that they are not as bad as Albouy (2012) makes them look.
Interesting post. My critique of WNF is that a better version was written about 239 years earlier by Adam Smith. Of course, people who haven’t actually read Wealth of Nations think Smith just says free markets are why nations are rich. But I read Smith as pointing to institutions, not just trade and specialization (which are certainly part of the equation, but not the whole deal).
The mix of capitalism, average national iq and the absence of bad events like civil war or climate disasters seem like much better variables to explain why some nations are successes or failures than some complicated institution thing.
Anyway, as an Argentinan economist, what is your opinion of lord Milei?
For anyone interested, here is AJR's reply to Albouy's critique: https://www.nber.org/system/files/working_papers/w16966/w16966.pdf
Good post. I just want to add that when you say:
"That’s right: there’s huge columns of countries with basically identical settler mortality figures. And this is kinda sus, so an expert looked at it and concluded the data is pretty bad and that, using better data, the relationship only holds for the US, Canada, Australia, and New Zealand."
(The expert cited is: Albouy, David Y. 2012. "The Colonial Origins of Comparative Development: An Empirical Investigation: Comment." American Economic Review, 102 (6): 3059-76.)
But there is also a response from Acemoglu, Johnson and Robinson (available at: https://www.aeaweb.org/articles?id=10.1257/aer.102.6.3077). The abstract of that reply paper:
Acemoglu, Johnson, and Robinson (2001) established that economic institutions today are correlated with expected mortality of European colonialists. David Albouy argues this relationship is not robust. He drops all data from Latin America and much of the data from Africa, making up almost 60 percent of our sample, despite much information on the mortality of Europeans in those places during the colonial period. He also includes a "campaign" dummy that is coded inconsistently; even modest corrections undermine his claims. We also show that limiting the effect of outliers strengthens our results, making them robust to even extreme versions of Albouy's critiques.
I don't say with this that AJR are right in every aspect, but I think that they are not as bad as Albouy (2012) makes them look.
Interesting post. My critique of WNF is that a better version was written about 239 years earlier by Adam Smith. Of course, people who haven’t actually read Wealth of Nations think Smith just says free markets are why nations are rich. But I read Smith as pointing to institutions, not just trade and specialization (which are certainly part of the equation, but not the whole deal).
Dictator's Handbook > Why Nations Fail. Institution quality is downstream from selectorate composition.
The mix of capitalism, average national iq and the absence of bad events like civil war or climate disasters seem like much better variables to explain why some nations are successes or failures than some complicated institution thing.
Anyway, as an Argentinan economist, what is your opinion of lord Milei?
Interesting to read this after the 2024 Nobel Prize awards :-)
https://www.economist.com/finance-and-economics/2024/10/14/an-economics-nobel-for-work-on-why-nations-succeed-and-fail
Some of the colonial terms can be so triggering. 🙁 age of discovery hmm🤮
This is more or less my impression as well. Violence and Social Orders is much better