2,394 research outputs found
Institutions, Factor Prices, and Taxation: Virtues of Strong States?
No full textWhile in a few societies economic institutions
are designed to provide property rights protection,
a level playing field, and basic public goods
necessary for economic growth, in many they
are structured to maximize the rents captured
by the “elite,” the individuals or social groups
monopolizing political power (e.g., Douglass
C. North 1981; Acemoglu, Simon Johnson,
and James A. Robinson 2005. The elite often
choose entry barriers, regulations and inefficient
contracting institutions that retard economic
growth and create resource misallocations in
order to protect their economic rents and redistribute
resources to themselves (e.g., Mancur
Olson 1982; Per Krusell and Jose-Victor Rios-
Rull 1996).1 However, if resources could be
redistributed to the elite with fewer distortions, a
more efficient allocation of resources, with (part
of) the proceeds accruing to the elite, could be
chosen. For example, when the necessary fiscal
instruments and the associated state capacity
are absent, the elite may choose economic institutions
and policies so as to redistribute income
to themselves by reducing the productivity of
competing groups and thus manipulating factor
prices (Acemoglu 2007). Direct taxation, if
feasible, would be both more efficient and more
profitable for the elite.
This reasoning suggests that when the state
becomes more “developed,” achieves greater
“capacity,” and has access to a larger set of fiscal
instruments, there will be less need for such
1 A second, perhaps more important reason is that the elite
may be afraid that a more efficient allocation of resources
will reduce their political power and their future ability to
obtain rents (e.g., Acemoglu and Robinson 2000, 2006).
Institutions and Development †
Institutions, Factor Prices, and Taxation: Virtues of Strong States?
By Daron Acemoglu*
inefficient, indirect methods of redistribution
and the allocation of resources will improve
(e.g., Acemoglu 2007; Timothy J. Besley and
Torsten Persson 2010). The example of the
development of the English state and economy
in the eighteenth century is often used to support
this presumption.
This paper points out that, in contrast to this
argument, the availability of more efficient
means of taxation is a double-edged sword
because of its impact on the political equilibrium;
because more efficient means of taxation
increase the potential benefits of controlling
the state, they may also intensify political conflict
aimed at capturing this control. This indirect
effect counteracts the benefits from more
efficient taxation and may dominate the direct
effect, so that the allocation of resources may
deteriorate when the society and the state have
access to additional fiscal instruments. More
generally, although greater state capacity and
stronger states may bring a variety of economic
benefits, they will also increase the value of
controlling the state and thus induce increased
political conflict and infighting. Therefore, the
virtues of strong states emerge when the increase
in the economic strength of the state is a consequence
of, or coincident with, an increase in
the political accountability of rulers and politicians—
not necessarily when there is an autonomous
increase in the fiscal capacity of the state
Political Limits to Globalization
No full textWe live in an unprecedented age of globalization,
where technology, ideas, factors of
production, and goods are increasingly mobile
across national boundaries. The current wave
of globalization is distinguished from previous
ones in part because of the major role of information
technology. Nevertheless, globalization
is not irreversible. Openness to international
trade, finance, and technology is a choice that
countries make, and despite the facilitating role
of information technology, many countries,
even many leading players in the world economy
including the United States, China, India,
Brazil, and Russia, could decide to close their
borders. A major cause of the end of the previous
(also historically unprecedented) nineteenth
century wave of globalization was disillusionment
with the international economic order, in
large part precipitated by the Great Depression
(e.g., Harold James 2001). Another, somewhat
less emphasized though not necessarily less
important cause was the rise of nationalism,
militarism, and international conflict (e.g.,
Ronald Findlay and Kevin H. O’Rourke 2007,
Reuven Glick and Alan M. Taylor 2005).1 The
previous wave of globalization took place in the
context of the 100 years following the end of the
1 Militarism is defined as the doctrine or policy of
“aggressive military preparedness,” which typically leads
to a country’s maintaining a strong military capability to
defend or promote its national interests.
growth in a partially de-globalized world†
Political Limits to Globalization
By Daron Acemoglu and Pierre Yared
Napoleonic wars, which were unusually peaceful
for European powers; it came to an end following
the most widespread conflict that human
society had experienced until then, World War I
Disease and Development: A Reply to Bloom, Canning, and Fink
Full text linkBeginning in the 1940s, a wave of health innovations and more effective international public health measures led to a rapid and large improvement in health; for example, in some relatively poor countries, life expectancy at birth quickly rose from around 40 years to over 60 years. In Acemoglu and Johnson (2006, 2007), we constructed an instrument for these changes in life expectancy: “predicted mortality,” which is calculated from initial mortality by disease and the timing of global disease interventions. Across a wide range of specifications, our work suggests no positive effects—over 40- or 60-year horizons—of life expectancy on GDP per capita (or GDP per working-age population)
Technology, information and the decentralization of the firm
No full textAuthors of this technical report: Daron Acemoglu, Philippe Aghion, Claire Lelarge, John van Reenen and Fabrizio ZilibottiApril 13, 200
Why Nations Fail, by Daron Acemoglu and James Robinson
No full textACEMOGLU, Daron; ROBINSON, James. Why Nations Fail: The Origins of Power, Prosperity and Poverty. New York: Crown, 2012, 544 p. ACEMOGLU, Daron; ROBINSON, James. Why Nations Fail: The Origins of Power, Prosperity and Poverty. New York: Crown, 2012, 544 p. 
Persistence of civil wars
Full text linkA notable feature of post-World War II civil wars is their very long average duration. We provide a theory of the persistence of civil wars. The civilian government can successfully defeat rebellious factions only by creating a relatively strong army. In weakly-institutionalized polities this opens the way for excessive in?uence or coups by the military. Civilian governments whose rents are largely una¤ected by civil wars then choose small and weak armies that are incapable of ending insurrections. Our framework also shows that when civilian governments need to take more decisive action against rebels, they may be forced to build over-sized armies, beyond the size necessary for ?ghting the insurrection, as a commitment to not reforming the military in the future.National Science Fundation (U.S.
Workshop Doctor Honoris Causa Daron Acemoglu Workshop by the Doctor Honoris Causa Daron Acemoglu - Demographics and Robots
No full textL'École normale supérieure Paris-Saclay remettra le 6 octobre prochain à Daron Acemoglu (Professor, MIT) le titre de Docteur Honoris Causa. En l'honneur de cet événement, l'ENS Paris-Saclay et le laboratoire CREST/ENS Paris-Saclay proposent le samedi 7/10/2017 un workshop en présence de D. Acemoglu qui interviendra sur le thème Demographics and Robots
Was Prometheus unbound by chance? Risk diversification and growth
Full text linkThis paper offers a theory of development that links the degree of market incompleteness to capital accumulation and growth. At early stages of development, the presence projects limits the degree of risk spreading (diversification) that the economy can achieve. The desire to avoid highly risky investments slows down capital accumulation, and the inability to diversify idiosyncratic risk introduces a large amount of uncertainty in the growth process. The typical development pattern will consist of a lengthy period of “primitive accumulation” with highly variable output, followed by takeoff and financial deepening and, finally, steady growth. “Lucky” countries will spend relatively less time in the primitive accumulation stage and develop faster. Although all agents are price takers and there are no technological spillovers, the decentralized equilibrium is inefficient because individuals do not take into account their impact on others' diversification opportunities. We also show that our results generalize to economies with international capital flows
The choice between market failures and corruption
No full textBecause government intervention transfers resources from one party to another, it creates room for corruption. As corruption often undermines the purpose of the intervention, governments will try to prevent it. They may create rents for bureaucrats, induce a misallocation of resources, and increase the size of the bureaucracy. Since preventing all corruption is excessively costly, second-best intervention may involve a certain fraction of bureaucrats accepting bribes. When corruption is harder to prevent, there may be both more bureaucrats and higher public-sector wages. Also, the optimal degree of government intervention may be nonmonotonic in the level of incom
The Colonial Origins of Comparative Development: An Empirical Investigation: Reply
No full textAcemoglu, 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
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