cross-posted from: https://feddit.org/post/4157628
cross-posted from: https://feddit.org/post/4157529
James Robinson, along with Daron Acemoglu and Simon Johnson, has been awarded this year’s Nobel Prize in Economics for his research on the critical role institutions play in fostering national prosperity. In [this Q&A session]l with EL PAÍS, he explains that his work also seeks to highlight how the legacy of colonialism has impeded economic development in certain regions, particularly in Latin America and Africa.
James Robinson: [...] we make a simple division, focusing on the presence of inclusive institutions or extractive institutions. Inclusive institutions create broad incentives and opportunities for all people equally, while extractive institutions concentrate benefits and incentives in the hands of a few. Many economists say that development comes from entrepreneurship and innovation, but in reality it comes from people’s dreams, creativity and aspirations. To be prosperous, you have to create a series of institutions that can cultivate this talent. However, if you look at countries like Colombia or Nigeria, talent is wasted because people do not have opportunities.
[...]
Institutions can be an obstacle to competitiveness. However, one should consider the impact that European integration had on countries such as Spain, Portugal or the former Soviet countries. These are remarkable success stories. There has been an almost unprecedented transition. It is true that there may be too much regulation or inefficient rules, but broadly speaking the effects of European institutions has been largely positive over the past 50 years.
[...]
[Immigration] is one of the big questions we have to solve. [...] it can be difficult. It is not easy to quickly incorporate the millions of people who cross the Mediterranean [trying to reach Europe]. One of the possible ways is to help them develop in order to improve the terrible situation in their own countries. However, one of the biggest complications is that the policies recommended by Western institutions are not in tune with what is happening in these [developing] countries. At the World Bank, for example, you cannot talk about politics. How do we expect them to solve real problems when you cannot talk about them? Frankly, it doesn’t make sense. If we really want to change the world, we have to have honest conversations. I see that as a long way off.
[...]
The reality is that democratic countries have shown that they are better at managing public services and achieving rapid growth. You can find impressive examples like China among autocratic countries, but you cannot achieve an inclusive economy with an authoritarian regime and a model like the Chinese one.
[...]
I don’t think the Chinese model can continue. If you look at other authoritarian regimes, like Iran or Russia, they are incredibly weak economically and technologically. The economy cannot flourish in an authoritarian regime. Right now, technological dynamism is concentrated in one such country and in the Western world. However, one has to consider that, with Donald Trump, the institutions that have made the United States great are being seriously questioned. This could affect the context, and that is why the European Union and NATO are so important.
[...]
[Populism is linked to the growing disconnect between governments and citizens] and an example of this is Latin America. Democracy promised too much and did not always deliver. People’s lives did not change, and they sought new alternatives. There are various factors why democracy has not achieved transformations, such as clientelism and corruption. [...] Venezuela was governed in a deeply corrupt manner, and Hugo Chávez was clever in taking advantage of it. You also see this with Donald Trump, who has gone far because he realized there was widespread dissatisfaction with traditional politics. The failures of democratic institutions are real, and that is why we have to think about how to make them more empathetic to what people need.
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Artificial intelligence can be wonderful, but like all technologies, it depends on how it is used. If artificial intelligence is used to create replacements for humans, that could be devastating. [...] It is all about how it is used, and that depends on our governments. I think that these decisions should not be left to the tech gurus. They only think about what makes them the most money, even if this is not related to the general well-being of society. In the case of artificial intelligence, it is very important, because it could have a tectonic impact on the world.
Income equality is just one of many other factors to assess a just society as we know. But as many focus on China's GDP growth in its recent history, here are just numbers:
Between 2014 and 2022, in China the share of the bottom-50% income group (pre-tax) in the national income fell from 14.4% to 13.7%. In the same period, the shares of the top-1% and top-10% income groups rose from 13.7% and 41.5% to 15.7% and 43.4%, respectively. In a nutshell: the Chinese rich got richer, the poor got poorer.
For Western-style democracies, the numbers are diverse:
In European democracies like Germany and especially Norway, top income groups lost while the bottom-50% gained, while in countries like Finland all three mentioned groups gained, suggesting that the 'middle class' paid the bill. In other countries like Sweden, Denmark, and the U.S., the numbers show gains for the top at the cost of the bottom half.
And in Australia, top income groups lost significantly more than the bottom-50% gained, suggesting the middle class benefited, while in countries like Canada and Japan there appear to be only slight or even no significant changes in the period between 2014-2022.
But as I said, we must also focus on other factors that make a good society (the four freedoms come to my mind: freedom of speech and expression, freedom of worship, freedom from want, freedom from fear). Given the fact that some in this thread cite China's growth of GDP and national wealth as a factor of societal success, it is clear that this argument does not hold, though.
[Edit typo.]
A lot of people who have never actually been to China don't understand just how poor the rural areas actually are. China has invested a ton in major urban infrastructure but has largely let the countryside languish. The worst part is that you are born with something called hukou which makes it very difficult to establish permanent residence in these new cities, reinforcing what is effectively a regional caste system.
They also haven't seen the shantytowns on the outskirts of the cities.
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I absolutely agree with that.