Development Theory

Module Code: 7YYDN027

Term 1, 2021

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Course Team

Module Convenor: Dr Alice C. Evans [email protected]

Office Hours: Email me to arrange, I am very flexible on times.

Module Overview

1) What fosters economic development? How important is geography, land reform, trade
liberalisation, industrial policy, and institutions?
2) Why are some states democratic while others are more authoritarian?
3) What are the causes of crises? (famines, climate breakdown, and debt).
4) What drives progress towards gender equality? Why are some societies more equal than others?

Assessment

- 1,000 word formative essay (0%) (to help you improve, not assessed)
- 3,000 word written essay (100%)

The marking criteria can be found here.

Essay questions are on page 96 of this Tiny Textbook.

Weekly Activities

1) Watch the online lecture. Already available.

2) Read at least two articles while listening to the audio guides.
3) Answer the KEATS Questions, & read other students’ answers
4) Read my weekly feedback
5) Participate in seminars.

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How to Read Critically

When reading papers, consider these four questions:

1) How would you summarise that paper, in a single sentence?

2) How does it differ from other perspectives on this topic?
3) What evidence is used to support the argument?
4) Do the data, methods, and argument justify the claims made? Why not?

Asking these questions (synthesising papers, questioning methods, practising ‘active learning’) will
help you understand, remember, and critically engage with the readings.

Better yet, discuss these questions with other students. I will organise you into small groups.
Please meet before the seminar, either virtually or in person. This will help you understand and
analyse alternative perspectives. Learn from each other!

You may enjoy this podcast, with my former student: ‘Top Tips for Students’.

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Educational Aims

To understand what shapes social, economic and political outcomes, in low- and middle-income
countries.

You should be able to critically assess different explanations of country growth trajectories, and
provide a persuasive explanation of this data:

Learning Outcomes

Diligent students will:

• Understand key debates in international development. What is contested? What evidence is

marshalled to support differing theories? Why do experts differ?
• Synthesise competing theories
• Assess evidence and arguments. Does the data justify the claims made? Why not?

Employability Skills

• Comprehension
• Forensic scrutiny
• Interdisciplinary thinking
• Persuasive writing

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Course Outline
What Drives Economic Development?

1. Land Reform
2. Trade Liberalisation
3. Industrial Policy
4. ‘Good Institutions’

Why Are Some States Democratic & Others Authoritarian?

5. What Enabled Democratisation?

6. How Do Authoritarians Maintain Control?

What Causes Crises? How Can They Be Averted?

7. Famine
8. Climate Breakdown
9. Sovereign Debt Crises

What Drives Progress towards Gender Equality?

10. The Great Gender Divergence

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Books to Enjoy Over the Summer
Reading these books will help you prepare for the course. Rather than skim in a busy semester,
enjoy these in the sun!!

Acemoglu, Daron and Robinson, James (2019) The Narrow Corridor (Penguin Random House)
Amsden, Alice (1992) Asia’s Next Giant: South Korea and Late Industrialization (Oxford University
Press).
Ang, Yuen Yuen (2016) How China Escaped The Poverty Trap (Cornell).
Evans, Alice (2021) How did East Asia overtake South Asia?
Fukuyama, Francis (2011) The Origins of Political Order: From Prehuman Times to the French
Revolution (Profile Books).
Harris, Kevan (2016) The Making and Unmaking of the Greater Middle East, New Left Review
Kohli, Atul (2004) State-directed Development: Political Power and Industrialization in the Global
Periphery (Cambridge University Press).
Rodrik, Dani. (2009) One Economics, Many Recipes: Globalization, Institutions, and Economic
Growth (Princeton University Press).
Qian, Yingyi (2017) How Reform Worked in China: The Transition from Plan to Market (MIT Press).
Roy, Tirthankar (2020) The Economic History of India (Oxford University Press).
Studwell, Joe (2013) How Asia Works: Success and Failure in the World’s Most Dynamic Region
(Profile Books).

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What Drives Economic Development?
As countries have prospered, the share of people living in poverty has fallen.

Over the next four weeks, we will consider how agriculture, economic liberalisation, industrial policy,
technological innovation, institutions, human capital, and geography impact growth.

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Week 1 – Is land reform necessary for industrialisation?
East Asian governments initiated major land reform prior to industrialisation. Latin America did not.
Does this explain why East Asia’s industrialisation was more successful?

In ‘How Asia Works’, Studwell argues that land reform raised agricultural productivity
and financed industrialisation in Northeast Asia (Japan, South Korea, Taiwan, and China).
This enabled more rapid economic growth than South and Southeast Asia (Indonesia, Malaysia, the
Philippines, Thailand, and India).

At the beginning of the twentieth century Japan, South Korea and Taiwan, a small landlord class
leased land to a large peasant class. Landlords received about 50% of crop yields as rent. Table 1
below shows that after land reform, farm households transitioned from being tenants to owners.
Landowners were paid below market prices (Iscan, forthcoming).

Studwell argues that feudal land relations enrich wealthy landowners, entrench their monopolies,
trap farm labourers into poverty, and curb crop yields. Land reform contributed to economic
development by turning tenants into small-holders, who then raised farm yields. This generated
savings for industrialisation. Higher agricultural output also meant lower urban food prices. Factory
workers could survive on lower wages.

Cristóbal Kay emphasises the economic and political consequences of land reform. Kay
suggests that Northeast Asian land reform enabled rapid industrialisation, by: (1) weakening the
landlord class, thereby curbing their political influence as well as class conflict; and (2) raising
agricultural productivity. This in turn (3) increased peasant incomes, raised internal demand for
industrial products; (4) released surplus labour to factories; (5) enabled the state to extract an
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agrarian surplus to finance industrialisation; and (6) reduced the price of food in cities, so factory
workers could still survive on low wages.

Compared to Northeast Asia, Latin American land reforms were more paltry. Agricultural productivity
remained low, so food prices remained high and peasant incomes stayed low. This curbed internal
demand for industrial goods, thwarting endogenous industrialisation. In the absence of land reform,
landlords remained politically powerful, able to advance their interests (such as an overvalued
exchange rate for capital goods imports, which created deficits in the absence of export growth).
Successive governments remained unable to discipline agrarian and industrial capitalists. This
curbed economic growth.

For Kay therefore, major land reform was thus a cause (not consequence) of state discipline over
capitalist elites, which enabled high economic growth in East Asia but not Latin America.

Does land reform explain East Asia’s economic success? Reasons for scepticism:

• Rapid industrialisation in South Korea and Taiwan was partly due to high human
capital. Given their skilled and well-educated workforce, they could adopt improved
technology. Importantly, South Korea and Taiwan had high human development relative to
their income level in 1960 – in terms of school enrolment, literacy, life expectancy and fertility
levels. Labour was well-educated and low paid. This enabled comparative advantage in the
global economy. Land reform is improbable as the explanation of high human capital since it
was relatively recent.

• Did East Asian land reform really boost rural incomes? Kim suggests that when South
Korean peasants became small farm owners they remained poor. Does this undermine
Studwell’s claim that land reform led to wealthier farmers, fuelling domestic demand for
manufactured goods?

• Does paltry land reform in Latin America really tell us what would have happened in East
Asia without land reform? Is that the only difference between the two world regions?

• ‘Endogeneity’. Every time we read a paper arguing that X caused Y, we need to ask, ‘Yes,
but why was X politically possible in that time and place?’. There may have been some
underlying cause which enabled both X and Y. This would dampen the importance of X.

Kay implies that the political strength of the agrarian elites was a consequence of the absence
of land reform. But perhaps it was an underlying cause? Did Latin American landlords’ political
strength thwart land reform?

In Japan, technological and commercial agrarian development enhanced the political strength
of the peasantry. It enabled peasant unrest. Through small-scale collective action, tenants
were able to change the terms of their contracts with landlords, reducing rental rates. The
landlord class had become weaker. Economic development reshaped political institutions,
which in turn enabled post-war land reform. Land reform was thus a consequence of pre-
existing political change – argues Grabowski 2002.

East Asian land reform may also have been influenced by geopolitics: the threat of
Communism and US support for land reform. Fearing a militarised North Korea, the looming
threat of Communism, and peasant unrest, Japanese, Korean, and Taiwanese governments
may have feared for their existential survival. This mentality (together with U.S. economic

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 support) could have influenced the political economy of both land reform and industrial policy
(Iscan, forthcoming; Kohli, 2004; Kang, 2002).

But even if land reform was not the root cause of East Asian institutions, it may still
have consolidated state capacity. For example, Julia Strauss (2020) argues that land reform
strengthened state control over the countryside in both Taiwan and China (see also Park and Han,
2018 on South Korea). This is an important point for the course. The impact of every policy or
intervention is always be mediated by the pre-existing political, economic, and geographical context.
Endogeneity is inevitable. So our task is to understand these interactions. That necessitates in-depth
knowledge of each case study.

AVOID SWEEPING GENERALISATIONS! THEY ARE USUALLY WRONG!!

When we study the relationship between land reform and economic development, we need to be
country specific. The relationship is highly contingent on specific agrarian institutions, historical time
period, crop type, geography, technology, and global economic conditions. Transnational theorising
is usually wrong! Avoid it!!

Seminar Questions
1) How important was land reform to economic development in East Asia?
2) Why did land reform occur in East Asia?
3) Has Latin America’s paltry land reform impeded industrialisation? How do we know?

Photo by Latoya Abulu

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Readings
Grabowski, Richard (2002) ‘East Asia, Land
Reform and Economic Development’,
Canadian Journal of Development
Studies 1:105-126
Studwell, Joe (2013) How Asia Works:
Success and Failure in the World’s Most
Dynamic Region (Profile Books). (read as
much as you can, certainly the
introduction).

Further Readings
Gollin, Douglas; Hansen, Casper Worm;
Wingender, Asger (2018) ‘Two Blades Of
Grass: The Impact Of The Green
Revolution’, NBER Working Paper 24744
Gollin, Douglas (2010) ‘Agricultural Productivity
and Economic Growth’, in Handbook of
Agricultural Economics, Volume 4
Iscan, Talan (forthcoming) Redistributive Land
Reform and Structural Change in Japan,
South Korea and Taiwan’, American
Journal of Agricultural Economics
Kay, Cristóbal (2002) ‘Why East Asia Overtook
Latin America: Agrarian Reform,
Industrialisation and Development’, Third
World Quarterly 23(6): 1073-1102
Kay, Cristóbal Kay (2009) ‘Development
strategies and rural development: exploring synergies, eradicating poverty’, The Journal of
Peasant Studies 36(1):103-137.
Kim, Sungjo (2021) ‘Land Reform and Postcolonial Poverty in South Korea, 1950–1970
Sungjo Kim, Agricultural History Vol. 95, No. 2 (Spring 2021), pp. 276-310
Kohli, Atul (2004) State-directed Development: Political Power and Industrialization in the Global
Periphery (Cambridge: Cambridge University Press).
Park, Jung-Ho and Han, Man-Hee (2018) ‘Modern state formation and land management in South
Korea: 1945–1960’, Land Use Policy 78: 662-671.
Strauss, Julia (2020) State Formation in China and Taiwan (Oxford University Press).

Videos
Joe Studwell, How Asia Works

Relevant episodes of Rocking Our Priors

Branko Milanovic, ‘Capitalism, Alone’ (the first half, where that communism uniquely destroyed
feudalism and enabled indigenous capitalism).

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Week 2 – When does trade boost growth?
Over the past 40 years, low- and middle-income countries have opened up to international trade.
They have reduced tariffs and courted foreign direct investment.

Trade openness enables poor countries to capitalise on their comparative advantage,

such as cheap labour and raw materials – claim advocates. Trade liberalisation also encourages
economic efficiency: firms are motivated to adopt new technologies and cost-cutting measures, in
order to remain economically competitive (or else go bust). With lower tariffs, firms may be more
able to afford key inputs. Together, this could accelerate technological progress. Trade liberalisation
may also increase industry productivity, causing more profitable
firms to expand while others go out of business. For example,
Turkish firms and industries had higher productivity in growth
rates if they were not protected by tariff measures, in the 1960s.

Crudely, there are three different perspectives on trade

liberalisation: (1) trade is generally good for growth (Feyrer,
2019; Irwin, 2019); (2) it entrenches imperialism, exacerbates
deindustrialisation in the poorest countries, as well as a race to
the bottom in labour and environmental standards (Suwandi,
2019); (3) there is no necessary relationship between trade
openness and growth. It depends on the global environment,
domestic conditions, complementary non-trade policies, and what
is exported (Rodríguez and Rodrik, 2001).

So why do experts differ? Why do some studies find a positive

association between trade openness and growth? Let’s carefully
examine their data and methods. Do chosen indicators really
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capture what we mean by ‘trade openness’? Do they overgeneralise beyond their samples? How do
they measure aggregate trade policy? Is trade liberalisation enabled by lower tariffs and quotas (on
both intermediate and final goods), or is it more about devaluing the exchange rate? Can we create
a consistent measure of key variables across multiple countries, at different times? Is trade
liberalisation endogenous? Might governments only liberalise once they are confident that the
economy can withstand trade shocks? I.e. Does growth precede trade liberalisation? Consider the
objections raised by Harrison and Hanson (1999), Rodríguez and Rodrik (2001), as well as the pro-
trade response by Irwin (2019).

Meta-point, for reading quantitative papers: do the variables capture what matters?

Time period also seems important. Economists largely concur that trade liberalisation is positively
associated with growth after 1945. But this effect did not hold in the 19th century (Lehmann and
O'Rourke, 2008). Thus, there is no necessary relationship.

Clearly, some countries have greatly prospered through trade openness. East Asian countries
expanded manufacturing, then moved into high-tech. After the reduction in US tariffs on Vietnamese
exports, more productive firms prospered, and workers moved from informal to formal firms. This
increased labour productivity within manufacturing (McCaig and Pavcnik, 2018). Moreover, families
in provinces more exposed to positive export shocks experienced a far greater decline in poverty
relative to those living in less exposed regions. Export-growth increased the demand for labour, and
increased provincial wages, especially for less educated workers (McCaig, 2011). One caveat
though: the Vietnamese regions that benefitted from the trade shock were already better off (ibid).

India’s service economy has also blossomed, albeit to a lesser extent: trade liberalisation has
enabled easier and cheaper access to technology (Kotwal et al, 2011). Latin America and Sub-
Saharan Africa have also opened up to trade. But workers have moved to less productive activities.

Why is trade liberalisation associated with labour moving into more productive sectors in East Asia
and India, but less productive sectors in Latin America and Sub-Saharan Africa? McMillan and Rodrik
(2011) identify three important factors: low share of natural resources in exports; competitive/
undervalued exchange rates; and flexible labour markets, enabling labour to flow across firms and
sectors. Interestingly, their results remain unaffected by proxies for national corruption, and rule of
law. These institutions do not seem very important – remember that for Week 5!

The effects of trade liberalisation appear geographically concentrated (Golderg and

Pavcnik, 2018).

In rural Indian areas with a high concentration of industries subject to import competition, there
was slower progress in poverty reduction. This occurred while other areas prospered. People living
in areas hit by trade shocks seldom out-migrated to more prosperous regions. Less than 0.5% of
rural Indians moved out of their district in search of a job (in the 1980s and 90s). The proportion
of urban Indians who moved for employment is a little higher, but still surprisingly low: 4%.
Extremely limited mobility across regions and industries in India helps explain trade liberalisation
actually thwarted poverty reduction (Topalova, 2007; also listen to this excellent podcast with Nina
Pavcnik].

Why don’t people move in response to trade shocks? One explanation is that in the absence
of a welfare state, people rely on caste-based rural insurance networks, for consumption-smoothing.
So they stay put, with kin.

Geographically concentrated trade shocks may snowball over time, as investors move away from
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adversely affected regions, thereby curbing demand for labour. In Brazil, regional trade shocks
appear to persist for twenty years.

Countries gain most from trade when they upgrade within global value chains. But this
is not easy. Many African countries appear stuck exporting natural resources. By opening their
economies, they become vulnerable to commodity price volatility. Cambodia and Bangladesh
predominate in labour-intensive manufacturing, rather than technologically advanced items like
iPhones. The HUGE challenge is how to upgrade?

The World Bank’s WDR 2020 sets out some options. To shift from exporting primary commodities
to low-end manufacturing, the WDR emphasises the need for technological and managerial
capabilities, which can be gained through FDI. Foreign investors may be attracted by political
stability, cheap labour, physical infrastructure, and preferential trade agreements. To transition into
more advanced manufacturing (automotives, electronics), the WDR emphasises human capital, the
need for a highly educated workforce (with technological, engineering, and managerial skills) (see
also Nunn and Trefler, 2010). Bear in mind: improving learning is a HUGE challenge. Even with
universal primary education, literacy may still lag behind. As Pritchett (2013) quips, ‘schooling ain’t
learning’.

How to Transition from Commodities to Limited and then Advanced Manufacturing and Services

World Bank, 2019

N.B. These policies do not favour any particular firms or sectors. Next week we explore an
alternative: industrial policy!

Seminar Questions
1) What evidence is there that trade liberalisation causes growth?
2) Under what conditions does trade liberalisation cause growth?
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Readings
Goldberg, Pinelopi and Pavcnik, Nina (2018) ‘Integrated and unequal? The
effects of trade on inequality in developing countries’, VoxDev
Goldberg, Pinelopi and Pavcnik, Nina (2017) ‘Trading Up: Globalisation and
Developing Countries’, VoxDev
World Bank (2019) World Development Report 2020: Trading for
Development in the Age of Global Value Chains (Washington, D.C.),
pages 66-93, ‘The Consequences for Development’.

Further Readings
Bastiaens, Ida and Rudra, Nita (2018) Democracies in Peril: Taxation and
Redistribution in Globalizing Economies (Cambridge University Press).
Goldberg, Pinelopi K. and Pavcnik, Nina (2016) ‘The Effects of Trade Policy’, in
B Staiger and K Bagwell (eds), The handbook of commercial policy,
Volume 1A, Elsevier, pp. 161-206.
Harrison, Ann and Hanson, Gordon (1999) ‘Who gains from trade reform?
Some remaining puzzles’, Journal of Development Economics 59(1):
125-154.
Kotwal, Ashok; Ramaswami, Bharat; and Wadhwa, Wilima (2011) ‘Economic
Liberalization and Indian Economic Growth: What's the Evidence?’,
Journal of Economic Literature 49(4): 1152-1199
Martin, Philippe and Rey, Hélène (2006) ‘Globalization and Emerging Markets:
With or Without Crash?’, American Economic Review 96(5): 1631-1651.
McCaig, B. (2011) ‘Exporting out of poverty: Provincial Poverty in Vietnam and
U.S. Market Access’, Journal of International Economics, 85(1), pp. 102–
113.
McMillan, Margaret and Rodrik, Dani (2011) Globalization, Structural Change
And Productivity Growth, NBER Working Paper 17143
Pavcnik, Nina (2017) The Impact of Trade on Inequality in Developing
Countries, Working paper. Alternatively, read Nina Pavcnik and Pinelopi
Goldberg’s excellent blog on ‘the effects of trade on inequality in
developing countries’
Suwandi, Itan (2019) Value Chains: The New Economic Imperialism (Monthly
Review Press).
Topalova, Petia (2007), “Trade Liberalisation, poverty and inequality: Evidence
from Indian districts,” in A Harrison (ed.), Globalisation and poverty
(University of Chicago Press): 291-336.
Topalova, Petia (2010), “Factor immobility and regional impacts of trade
liberalisation: Evidence on poverty from India,” American Economic
Journal: Applied Economics 2(4): 1-41.

Excellent Podcast
Nina Pavcnik, with Soumaya Keynes and Chad Brown, The Complicated Impact of Trade… On
Developing Countries

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Week 3 – What makes industrial policy work?
Industrial policy was arguably critical to East Asia’s rapid economic growth. By intervening in the
market and favouring specific industries, East Asian governments structurally transformed their
economies. They moved from fish to labour-intensive production (textiles) to heavy and chemical
industries, before finally switching to capital and technology-intensive industries (electronics).

Alice Amsden (1989) argues that South Korea’s rapid economic growth was partly due to industrial
policy. Government supported key industries with subsidies, technology transfers via licensing,
technical assistance, thereby lowering the risk of investment. During 1960s, 300-600 imports items
were prohibited from being imported (‘infant industry protection’). Then in the 1970s, the
Government started a Heavy and Chemical Industry Push. It favoured steel, chemicals, electronics,
automobiles, and shipbuilding. These industries were protected, favoured with cheap credit,
infrastructural support, and the removal of administrative obstacles. Rather than focus on South
Korea’s comparative advantage (cheap labour), the government moved into capital-intensive
industries.

Amsden (1989) also emphasises export discipline. The Government set time-bound, export targets
for sectors and firms. Success was rewarded with easy credit, tax benefits, and prestige. Failure
meant tax audits and a credit squeeze. Wade likewise emphasises export performance: firms were
subsidised if and only if they became internationally competitive to export. The public sector also
had to compete with the private sector.

Differing slightly, Rodrik (1995) suggests that state intervention crowded in investment and
coordinated complementary sectors, achieving a ‘big push’.

China has also used industrial policy, such as to upgrade domestic firms’ technology. Through joint
ventures, domestic firms have learnt from foreign multinationals. The Chinese government also
provided subsidies and tax holidays to competitive sectors, favouring a large number of business,
and preserving/ increasing competition. This boosted productivity between 1998 and 2007 (Aghion
et al, 2017). But this model is not without risks (Jin, 2019).
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The above arguments on the effectiveness of industrial policy in East Asia are contested, in two
ways.

First, neoliberal economists attribute ‘the East Asian Miracle’ to indiscriminate policies, benefitting
all sectors: low inflation, competitive exchange rates, trade openness, human capital, effective
financial systems, minimal price distortions, access to foreign technology (World Bank, 1993;
Krueger, 1995). Notwithstanding China’s success in forced technology transfers, the World Bank
(2019) maintains that ‘policies that prescribe the use of domestic partners or force technology
transfers can be inhibiting’. For excellent syntheses of the debates and evidence on industrial policy
see Krugman et al (2018), Pack and Saggi (2006), and Harrison and Rodríguez-Clare (2010).

Second, even if industrial policy accelerated growth in East Asia, this may have been conditional on
other factors: institutions, geopolitics, human capital, and geography. Consider Sub-Saharan Africa
today: high labour costs limit manufacturing prospects.

Institutions are the widely accepted rules of the game, governing societal interactions. They include:
democratic checks and balances (such as constraints on the executive, rule of law, judicial
independence, and bottom-up accountability); top-down performance evaluations within the civil
service; patron-clientelism; property rights and contract enforcement; colonialism; ethnic
fragmentation; serfdom and slavery.

‘Park’s Korea was a peacetime economy with a warlike mentality, especially in the workplace’ (Kohli,
2004:100). A powerful executive was single-mindedly focused on national development. The
bureaucracy was professional and competent (partly a legacy of Japanese colonialism, and
benefitting from ongoing training). South Korean and Taiwanese governments were thus able to
discipline businesses, while Latin American governments were not – Kay, Kohli, Wade. For a differing
analysis see Kang’s (2002) portrayal of Korea’s crony capitalism.

Industrial policy is arguably less effective in

states that are patrimonial rather than
developmental. In Nigeria, political leaders
sought to use public resources to enrich
themselves and their ethnic communities,
rather than the nation as a whole – argues
Kohli (2004). As a consequence, industry
was largely foreign and low-value added,
predominating in final assembly for the
local market, heavily dependent on
imports, not internationally competitive,
and with little incentive to improve quality
or efficiency (ibid).

Rent-seeking is a major concern, raised by

Anne Krueger and others. Businesses may bribe politicians with kick-backs in order to secure
lucrative government deals and protections (see Kang on crony capitalism in the Philippines). If they
are not the most efficient and productive firms, growth suffers.

Institutions may thus affect the motives, design, implementation, and impact of industrial policies.
We will return to this question in Week 5.

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Human capital is another factor, mediating the impact of industrial policy, as well as trade
liberalisation. Competent managers and a low-cost, educated labour force were probably critical to
technological adoption in East Asia. It was not enough for the state to subsidise technology
transfers, promote licensing deals with foreign firms, and fund public research institutes; workers
had to be sufficiently skilled to adopt it. A crucial part of the East Asian miracle is a skilled and well-
educated labour force at low living standards and low costs.

The table below shows primary enrolment. Note Korea and Taiwan are MUCH poorer than Latin
America in these early years.

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If you’re curious, read this excellent review of the evidence on human capital and growth.

Labour repression was very important. East Asian governments ensured that labour costs did
not exceed productivity. After WW2, the US occupied forces purged the militants from Japanese
unions. This is called ‘Red Purge’. Japan has enterprise unions but there is no sectoral bargaining
or coordination (unlike elsewhere in the OECD). Company unions cannot coordinate with other
company unions. This enables higher profits, lower wage costs, greater work intensity and more
business freedom.

Contrast this with India where left-wing governments in Kerala and West Bengal mandated greater
labour rights. Wage costs exceeded productivity. Businesses could not afford to hire more workers.
This stifled job-creation.

‘Good neighbours’ were certainly beneficial. Japanese firms migrated to South Korea and Taiwan to
take advantage of low labour costs (Akamatsu likened this to this ‘flying geese’). (Segway: this
phenomenon continues in East Asia today. As labour and land costs rise in coastal China, factories
try to reduce production costs by moving inland, as well as to Vietnam and Cambodia). Geography
matters!!

To assess the impacts of industrial policy more broadly, economists have often used cross-country
regressions. Some find that state intervention retards economic growth. However, these methods
are contested!! Cross-country regressions may obscure policy-makers’ heterogeneous motives:
personal enrichment, crony capitalism, or national economic development. These likely affect
implementation and impact (Harrison and Rodríguez-Clare, 2010; Rodrik, 2012).

Seminar Questions:
1) What evidence is there that industrial policy fostered economic growth in East Asia?
2) Is it persuasive? If not, why not?
3) What further factors (besides industrial policy) were important to industrialisation in East
Asia?

Readings
Amsden, Alice (1989) Asia’s Next Giant: South Korea and Late Industrialization (Oxford University
Press).
Cherif, Reda and Hasanov, Fuad (2019) ‘The Return of the Policy That Shall Not Be Named:
Principles of Industrial Policy’, Working Paper No. 19/74

Further Readings
Amsden, Alice H. (1991) ‘Diffusion of Development: The Late-Industrializing Model and Greater East
Asia’, The American Economic Review 81(2): 282-286
Brandt, Loren and Thun, Eric (2016) ‘Constructing a Ladder for Growth: Policy, Markets, and
Industrial Upgrading in China’, World Development 80: 78-95.
Harrison, Ann and Rodríguez-Clare, Andrés (2010) ‘Trade, Foreign Investment, and Industrial
Policy for Developing Countries’, Handbook of Development Economics Volume 5: 4039-4214
Jin, Keyu (2019) ‘China’s Steroids Model of Growth’, in Luís Catão and Maurice Obstfeld (eds.)
Meeting Globalization's Challenges: Policies to Make Trade Work for All (Princeton University
Press).
Kang, David (2002) Crony Capitalism: Corruption and Development in South Korea and the
Philippines (Cambridge University Press).

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Krueger, Anne (1974) ‘The Political Economy of the Rent Seeking Society’, American Economic
Review, 63(3): 291-303.
Krueger, Anne O. and Tuncer, Baran (1982) ‘An Empirical Test of the Infant Industry Argument’,
American Economic Review 72(5): 1142-1152 (and Ann Harrison’s reply)
Krueger, Anne O. (1995) ‘East Asian Experience and Endogenous Growth Theory’, in Takatoshi Ito
and Anne O. Krueger, eds. Growth Theories in Light of the East Asian Experience (University
of Chicago Press).
Krugman, Paul; Maurice Obstfeld and Marc Melitz (2018) ‘Trade Policy in Developing Countries’,
chapters 10 & 11 in International Economics: Theory and Policy (Pearson Education).
Pack, Howard and Saggi. Kamal (2006) ‘Is there a case for industrial policy? A critical survey’, World
Bank Research Observer, 21(2)
Rijkers, Bob; Fruend, Caroline; and Nucifoa, Antonio (2017) ‘All in the Family: State Capture in
Tunisia’, Journal of Development Economics 124:41-59.
Rodrik, Dani and Rodríguez, Francisco (2000) ‘Trade Policy And Economic Growth: A Skeptic's
Guide To The Cross-National Evidence’ (Working Paper).
Rodrik, Dani (1995) ‘Getting interventions right: how South Korea and Taiwan grew rich’, Economic
Policy 10(20): 53-107
Rodrik, Dani. 2010. “Normalizing Industrial Policy,” Commission on Growth and Development, pp.
17-32.
Rodrik, Dani (2012) Why We Learn Nothing from Regressing Economic Growth on Policies, Seoul
Journal of Economics, 25(2), 137–151.
World Bank (1993) The East Asian Miracle: Economic Growth and Public Policy (Washington, DC:
World Bank)

Relevant episodes of Rocking Our Priors

Nathan Lane ‘Manufacturing Revolutions’
Nathan Lane ‘The New Empirics of Industrial Policy’

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Week 4 – Does growth require ‘good institutions’?
Thus far we have examined three important policies: land reform, trade liberalisation, and industrial
policy. But whether and how these policies are implemented appears shaped by institutions.

Institutions are the widely accepted ‘rules of the game’, governing societal interactions.

The overarching hypothesis is that extractive institutions preserve elite wealth and political
dominance, which thwarts economic development. Elites may rig the game to favour their kin and
cronies.

There are many different kinds of ‘institutions’. They include: democratic checks and balances
(constraints on the executive, rule of law, judicial independence, and bottom-up accountability);
top-down performance evaluations within the civil service; patron-clientelism; property rights and
contract enforcement; colonialism; ethnic fragmentation; serfdom and slavery.

Does the lack of property rights thwart economic growth?

Recall Studwell’s and Kay’s case for small-holder landownership. By turning tenants into
smallholders, land ownership encourages investment and boosts crop yields.

Whereas if people fear that their homes, crops, businesses and innovations will be seized by
warlords, a despotic state, rival businesses, or politically-protected elites, they may reluctant to
heavily invest.

The graph below plots wealth and property rights (protection against the risk of expropriation). The
two are positively correlated. Of course, this does not prove the direction of causation: whether
rights enhance growth or vice versa. Alternatively, both growth and property rights could be due
tosomething else (geography, kinship, ethnolinguistic homogeneity etc) (Acemoglu et al, 2005).

21
To examine the effects of economic institutions, Acemoglu and others (2005) compare the growth
trajectories of communist North Korea and market-orientated South Korea.

QUESTION: does this graph show that property rights foster economic growth?
Hint: Remember Kay (2002) and Studwell (2013)!!

Thinking back to Kay (2002) and Studwell (2013) we recall that the distribution of landownership
matters. This seems equally true in India. The British colonial regime gave property rights to
landlords in some parts of India and cultivators in others. This appears to have long-run effects.
Areas in which land ownership rights was given to landlords now have much lower agricultural
investments, productivity, as well as lower investment in health and education (Banerjee and Iyer,
2005).

In Southern Africa, land was forcibly taken from natives and redistributed to European colonial
settlers. This severely worsened Africans’ living standards – by about 50%. This entrenched both
income inequality and authoritarianism (under apartheid).

Note, these are both examples in which the distribution of land ownership stems from an exogenous
shock. So we can clearly isolate the effect of colonial ‘institutions’.

22
Is there a co-evolutionary relationship between property rights and economic growth?

Research in China sheds light on the co-evolution of economic growth

and more inclusive institutions.

Key texts here include: Qian’s study of ‘How Reform Worked in China’
and Ang on ‘How China Escaped the Poverty Trap’.

When China initiated economic liberalisation, it did not have a strong

rule of law, contract enforcement, or professional, impersonal
bureaucracies. Local governments just harness what they had at the
time, namely bureaucrats with extensive personal networks.
Bureaucrats used their strong personal ties to find investors. By
attracting inward investment, bureaucrats gained financially, through
a combination of state-authorised bonuses and commissions, as well
as illicit corruption. At first, bureaucrats in coastal provinces attracted
all and any kind of investment. But as they prospered, they became
pickier, they shunned polluting industries. In return, high-quality
investors demanded stronger institutions, such as contract enforcement. So began a co-evolutionary
process of economic growth and more inclusive economic institutions.

Ang (2016) and Qian (2018) argue that China thrived economically without the rule of law
or the protection of individual liberties. Perhaps some forms of corruption are entirely
compatible with economic growth (Ang, 2020; Bai et al, 2019).

But this hypothesis is contested!! Acemoglu and Robinson (2019) are pessimistic about China’s
continued economic growth. They argue that the dearth of investor protections curbs innovation
and thus endangers sustained economic growth. To hear more on this, listen to my podcast with
Acemoglu. He does add one caveat: the dearth of individual data protection (the absence of property
rights) may yield a unique advantage to Chinese firms.

Does democracy cause growth?

Besides economic institutions, researchers have also explored the impact of political institutions.
Democratic checks and balances include: constraints on the executive, rule of law, judicial
independence, and bottom-up accountability.

By comparing the growth trajectories of countries that democratise and those that do not, Acemoglu
et al (2019) argue that ‘democracy does cause growth’.

Listen to Suresh Naidu’s thought-provoking defence of this paper. He

explains the benefits of cross-country regressions, and their causal
inference strategy.

But let’s examine their data and methods.

Is it troubling that they use a binary variable for democracy: yes/ no?
Does that really capture the spectrum of political institutions? Moreover,
what does it really tell us about democracy and growth? What aspect of
democracy matters to growth? Is it constraints on the executive, or local
accountability? And how might this vary in different parts of the world?

23
How does it help us to know about ‘average effects’? Read Vollrath’s (2014) excellent blog series,
which critiques indicators of institutional quality used in different cross-country regressions.

Why might autocracies be better at promoting growth?

Autocratic governments may be better able to promote unpopular but nonetheless growth-
enhancing policies, such as free-trade, land reform, huge damns, restrictions on consumer loans,
or bans on luxury consumption (Knutsen, 2015).

China, South Korea, and Taiwan all achieved rapid growth as authoritarian regimes.

How does democracy promote growth?

Rapid technological change is key to economic growth, and this is more common in democracies.
Knutsen (2015) suggests that by restricting freedom of speech, autocrats curb the dissemination of
knowledge about economically productive technologies.

Though you may have doubts about this hypothesis. Do autocrats crack down on information about
new technologies? Is this the major constraint to technology adoption? In Egypt, politically
connected firms are often guaranteed access to credit and markets. This may discourage technology
adoption, even if they know about it.

Perhaps democratic institutions are not a pre-requisite for economic growth?

Glaeser et al (2004) argue that an educated labour force may be enough to fuel economic growth,
even in authoritarian countries (as in East Asia). Growth may then give rise to better institutions.
See also Hanushek (2017) on skills and long-term economic development.

The Persistence of State Capacity

State capacity is enormously

important, and may be strongly path-
dependent. Listen to Professor
Melissa Dell on these long-run effects
in Vietnam.

She compares areas once governed

by China with former Khmer territory
(pink). Only the former had a strong,
competent bureaucracy. These
differences persist today.

Seminar Questions
1) Does democracy cause growth? How do we know?
2) Why does democracy cause growth?
3) Do property rights cause growth (for who)?

Readings
Acemoglu, Daron; Naidu, Suresh; Restrepo, Pascual; Robinson, James (2019) ‘Democracy Causes
Economic Development?, VoxEU. Then listen to Suresh Naidu.

24
Knutsen, Carl Henrik (2015) Why Democracies Outgrow Autocracies in the Long Run: Civil Liberties,
Information Flows and Technological Change, Kyklos 68(3): 357-384.

Further Readings
Acemoglu, Daron; Naidu, Suresh; Restrepo, Pascual; Robinson, James (2019) ‘Democracy Does
Cause Growth’, Journal of Political Economy 127(1). Alternatively, read their blog.
Acemoglu, Daron; Johnson, Simon; Robinson (2005) ‘Institutions as a Fundamental Cause of Long-
Run Growth’, in Philippe Aghion and Steven N. Durlauf (eds.) Handbook of Economic Growth,
Volume 1A. (Elsevier
Ang, Yuen Yuen (2016) How China Escaped the Poverty Trap (Cornell University Press)
(introduction).
Ang, Yuen Yuen (2020) China's Gilded Age: The Paradox of
Economic Boom and Vast Corruption (Cambridge University
Press).
Bai, Chong-en; Hsieh, Chang-Tai; and Song, Zheng (2019) Special
Deals with Chinese Characteristics. Working Paper
Dell, Melissa and Olken, Ben (2017) ‘The Development Effects of
the Extractive Colonial Economy: The Dutch Cultivation
System in Java’, Working Paper:
Engerman, Stanley L and Sokoloff, Kenneth, L (2002) ‘Endowments,
Inequality and Paths of Development’, NBER Working Paper
9259
Glaeser, Edward L; La Porta, Rafael; Lopez-de-Silane, Florencio; and
Shleifer, Andrei (2004) ‘Do Institutions Cause Growth’? NBER
Working Paper No. 10568
Gupta, Bishnupriya; Ma, Debin; and Roy, Tirthankar Roy (2016)
‘States and Development: Early Modern India, China, and the
Great Divergence’ in Eloranta et al. (eds.), Economic History of
Warfare and State Formation
Irigoin, Maria Alejandra and Grafe, Regina (2012) Bounded
Leviathan: or why North and Weingast are only right on the
right half. LSE Economic history working papers (164/12).
Haber, Stephen (2013) Crony Capitalism and Economic Growhth in
Latin America (Hoover Institution).
Heldring, Leader and Robinson, James A. (2012) ‘Colonialism and
Development’, African Economic History Working Paper Series
no.5/2012
Kang, David (2002) Crony Capitalism: Corruption and Development
in South Korea and the Philippines (Cambridge University
Press).
Khan, Mushtaq (2007) ‘Governance, Economic Growth, and
Development since the 1960s’, DESA Working paper no. 54
Kuru, Ahmet (2019) Islam, Authoritarianism, and Underdevelopment:
A Global and Historical Comparison (Cambridge: Cambridge
University Press).
Qian, Yingyi (2017) How Reform Worked in China: The Transition from Plan to Market (MIT Press).
North, Douglass; Wallis, John Joseph; Weingast, Barry R. (2006) ‘A Conceptual Framework For
Interpreting Recorded Human’, NBER Working paper 12795.
Routley, Laura (2012) Developmental states: a review of the literature ESID Working Paper No. 03
Vollrath, Dietz (2014) The Skeptics Guide to Institutions, see parts 1, 2, & 3
Part 1: cross-country studies of institutions are inherently flawed by lack of identification and
ordinal institutional indexes treated as cardinal
25
 Part 2: instrumental variable approaches – settler mortality included – are flawed due to bad
data and questions and more identification problems.
Part 3: historical studies show that there is path dependence or a poverty trap, but not that
institutions themselves are central to underdevelopment
Vu, Tuony (2010) ‘State Formation and the Origins of Developmental States in South Korea and
Indonesia’, Studies in Comparative International Development 41(4): 27-56.

Relevant episodes of Rocking Our Priors

Daron Acemolgu ‘The Narrow Corridor’
Yuen Yuen Ang ‘China’s Guilded Age: The Paradox of Economic Boom & Vast Corruption’
Yuen Yuen Ang ‘How China Escaped the Poverty Trap’
Naomi Hossain ‘Aid Lab: Understanding Bangladesh’s Unexpected Success’
Suresh Naidu ‘Public and Private Power in Economics’

26
Why Are Some States Democratic, & Others
Authoritarian?

Weeks 5 – What are the deep roots of political systems?

Institutions are widely seen as a major driver of economic development (as we discussed last week).
But what shapes institutions? Let us consider some deeper forces: geography and kinship. This
week I want you to consider three key questions:

A. Could geography partly account for the worldwide heterogeneity in political institutions?
B. Could kinship partly account for this heterogeneity in political institutions?
C. How much do initial factor endowments really matter?

(A) Could geography partly account for the global heterogeneity in political institutions?

High land to labour ratios

Fenske (2013) presents a similar argument. He finds that Africa’s historically high land to labour
ratio influenced its institutions – of land tenure, indigenous slavery, polygyny, credit markets, and
state formation. Likewise, Klein and Ogilvie (2018) show a positive association between land-labour
ratios and labour coercion, in 18th century Bohemia (which is now part of the Czech Republic). They
also present evidence that serfdom was strong in Eastern Europe because the urban sector was too
weak to provide exit options for serfs.

Suitability for slave cultivation

Engerman and Sokoloff (2002) argue that initial factor endowments in the Americas facilitated the
development of slave labour and large plantations. These endowments include (1) climate and soil
suitability for the cultivation of sugar and other highly valuable primary products that can be
intensively farmed through slave labour, and/or (2) large concentrations of Native Americans. Where
there was a local shortage of labour, Caribbean and Brazilian colonies obtained slaves from the
Atlantic slave trade. These conditions enabled European elites to monopolise wealth and entrench
more authoritarian, extractive political institutions. This perspective affirms that institutions matter,
but draws our attention to the underlying geographical determinants.

Natural resource wealth

Oil wealth appears to help authoritarian leaders stay in power.
Why might this be, and what further factors mediate this
relationship? One possibility is that oil wealth enables leaders to
provide patronage and public goods, without extracting taxes. This
could curb demands for accountability (Ross, 2012). Some scholars
suggest this effect depends on pre-existing institutions, human
capital, and trade liberalisation. Natural resource reliance may be
endogenous, so be wary of studies that rely on cross-sectional data!!
(Haber and Menaldo, 2011).

Resource wealth also appears negatively associated with state

capacity, but again this effect may be conditional on other factors,
like the government’s control of resource rents (Jones et al, 2010).

27
Natural resources (like onshore oil, diamonds, and timber) seem to fuel conflict – especially in
regions with ethnic divisions (Esteban et al, 2012). That is, where there are already collective action
problems.

Context is critical. Commodity prices soared from 2002 to 2012. This is associated with a fall in
income inequality in Latin America but not in Sub-Saharan Africa. Why? One possibility is that there
was sustained pro-poor mobilisation across Latin America, ushering left-wing parties into power,
agitating for higher minimum wages, workers’ rights, and redistribution. Given popular pressure, oil
and mineral rents were spent more progressively (though the unequal land distribution was mostly
untouched) (Evans, 2018).

In sum, natural resource rents appear negatively associated with political and economic
development. But this effect is contingent. And the exact causal mechanisms are still unclear.

Tropics, germs, and crops

Geographical endowments like tropical location, ecological conditions (affecting disease outbreaks),
and crop suitability are associated with weaker institutions (in terms of voice and accountability,
political instability, state capacity, rule of law, corruption, and private property rights). These weaker
institutions then curb economic growth (Easterly and Levine, 2002).

Predictability of crop yields

Stasavage (2020) argues that early-modern leaders’ proclivity to develop strong bureaucracies or
solicited council governance was shaped by the challenge of taxation!

Rulers wanted to tax their people at the right level: extract the maximum revenue without destroying
local capacity to generate income. Their strategy would depend on crop yields and technology. If
caloric output was easy to predict (owing to stable temperature, irrigation, and other technology),
rulers could calculate the right level at which to tax. But if caloric output varied each year (owing to
changing weather patterns and primitive
technology), prediction was difficult. Leaders
could overcome these informational constraints
either by surveying with bureaucrats or soliciting
council governance. Bureaucracies and councils
performed the same role: providing information
on crop yields. Leaders solicited council
governance to access information.

Chinese rulers did not solicit council governance

because they could already predict yields – due
to geography, as well as advanced agricultural
and bureaucratic technologies – argues
Stasavage. China’s natural environment was
suitable for intensive agriculture, and they
developed technologies for production,
observation, and control. Chinese bureaucrats
could write reports of crop yields, and send them
back to central government. This was partly
motivated by interstate competition.

Sequencing is also important to Stasavage’s

theory (echoing Fukuyama, 2015). In China, the
state consolidated power before the commercial
28
revolution. Interstate warfare (from 5th century BC) motivated Chinese rulers to build a stronger
state: military, taxation, bureaucracy, civilian technological innovation. This strong bureaucracy
predated sustained economic growth - under the Song dynasty (10-13th century). So market towns
were unable to push for self-governance (unlike Europe).

Early modern Europe, by contrast, was characterised by agrarian and bureaucratic backwardness.
European rulers could not predict crop yields, due to poor irrigation (which created calorific
variability) and extensive agricultural practices (farmers cultivated new lands like swamps, marshes
and forests, making prediction difficult, and hard to verify). Meanwhile, the fall of Rome had
decimated a central state.

While the central state was relatively weak, economic growth took off. Solar radiance fuelled the
commercial revolution and city state development – argues Stasavage. Medieval European towns
also developed assemblies for local governance, they practised self-government, and then
demanded representation in broader assemblies. This was the beginning of European
democratisation!

In short, geography and technology shaped the divergent paths of Chinese authoritarianism and
European democratisation.

Is this explanation persuasive? I have four questions:

(1) Is the ‘right level’ of taxation really a function of knowable productivity? Even if a
ruler can calculate the agrarian surplus, don’t we also need to explain why people would hand
it over?! Relatedly, why would council members be motivated to faithfully report yields? What’s
their incentive? If they have no incentive, then this does not overcome rulers’ knowledge deficit.

When we look at Western Europe, taxation seems to reflect the capacity of specific social groups
to effectively resist extractive states and demand democratising reforms. If we examine who
paid the highest taxes under 16-17th century French and Spanish monarchies, and Tsarist
Russia, it is not those with the greatest surplus (as your theory implies), but rather those with
the least power to resist (the poorest). French aristocrats, guilds, bourgeois towns had all
secured tax exemptions. Moreover, Louis XIV was able to extract revenue because there was
weak social capital between economic classes (Fukuyama, 2011).

(2) Stasavage argues that China’s state become strong due to bureaucratic technology. But
doesn’t the existence of a bureaucracy presuppose a strong, hegemonic central
authority, with monopoly on the use of legitimate force, able to dispatch surveyors and
construct large-scale irrigation (like China’s Grand Canal), unimpeded by local authorities/
warlords? Is state strength really a question of technological innovation, rather than political
prowess?

(3) How relevant are Song era dynamics in explaining the strong Chinese state today?
As Stasavage recognises, state strength fell dramatically after the Song dynasty. Wealthy
aristocrats gained power, as the state decayed. 1916 heralded the Warlord Era, and Japanese
invaders. Chiang Kai Shek, Sun Yat Sen and the GMD rebuilt state strength, starting from a
weak base. This was consolidated by the CCP, who crushed alternative power bases - through
terror, struggle sessions, and land reform campaigns. If the CCP did not inherit a strong state,
can Stasavage’s explanation of why China wasn’t democratic thousands of years ago (crops and
technology) also explain why it isn’t democratic today?

29
(4) Stasavage argues that the Communal Movement arose in a context of urban growth and a weak
state. But didn’t it also require social cooperation, between members?

Self-governing cities in Early-Modern Europe didn’t just push for democratic concessions from
the state. They came from many different clans, yet cooperated with each other. They invested
in legal infrastructure, enforced contracts, taxed their members, provided public goods and
social safety nets. Members swore oaths, recognising moral obligations were to all people - not
just one’s clan.

Ambrogio Lorenzetti, ‘Effects of Good Government in the city’, 1338,

commissioned by the city council of Siena.

By contrast, in pre-modern China, social cooperation was always arranged through clans. Clans
provided poor-relief, education, rituals in an ancestors’ hall, religious services, and protection
from non-members. Moreover, cities were not centres of cooperation. Before the 19th century,
they were just administrative centres, dominated by local clans (Greif and Tabellini, 2017).

Stasavage claims that sequencing matters. The Song dynasty grew strong before economic
growth. But does the Song dynasty’s ability to tax sales and transport fully explain the dearth
of successful bottom-up demands for democratisation? Why weren’t Chinese taxpayers able to
organise collectively, against the state, especially when the state became much weaker?

What explains worldwide heterogeneity in the organisational capacities of society? To hear

Stasavage’s response, watch or listen to our podcast.

30
Here’s another idea…

(B) Could kinship partly account for the global heterogeneity in political institutions?

Schulz, Bahrami-Rad, Beauchamp, and Henrich (2019) draw attention to cross-national variation in
kinship intensity. One aspect of strong kinship intensity is cousin marriage. Endogamy (that is
marrying within one’s clan) reinforces extended family ties. It strengthens the family unit. Strong
kinship intensity may fragment wider social cooperation, impeding non-familial trust and
cooperation.

The map overleaf depicts worldwide variation in pre-Industrial kinship intensity. Kinship appears to
have been especially weak in Northwestern Europe (compared to the Middle East, South Asia, and
East Asia). This arguably enabled non-familial cooperation and trust - in neighbourhoods, guilds,
workplaces. These civic associations then organised collectively to secure concessions from the
state. These voluntary associations pushed for social insurance, urban self-governance, and
democratic institutions (Henrich, 2020; Schulz et al, 2019; van Zanden, 2019). Shulz (2020) finds a
positive association between weak pre-industrial kin networks countries’ contemporary democracy
scores.

Kinship intensity for ethnolinguistic groups around the world, average year: 1900.

Shultz et al, 2019

There are several possible explanations for global variance in kinship intensity. Henrich (2020) and
Shulz et al (2019) emphasise the Western Church. European crop systems and rising wage labour
markets are an alternative explanation for cultural change. In Medieval Europe, young adults were
sometimes a drain on peasant households’ resources. So they increasingly left home, to earn their
own money. Wage labour markets enabled economic independence and the formation of neolocal
households. Multigenerational co-residence fell as people moved out of agriculture and mortality fell
(Ruggles 2009). (Ruggles 2009). Rather than inheriting assets, young adults earnt their own keep.
With nothing to bestow, poor families lost the ability to arrange their children’s marriages, cousins
included. Growing market dependence thus eroded kinship as the mode of production.

31
(C) How much do initial factor endowments matter?

Let’s consider three kinds of initial factor endowments: kinship

intensity, crop-suitability, and ethnolinguistic diversity.

East Asia’s strong kinship intensity weakened with

structural transformation. By assembling together on the
factory floor, experiencing common struggles, sharing concerns,
and pushing for higher wages, South Korea workers forged a
collective consciousness, beyond kin ties. Labour intensive
economic growth, workplace struggles, industrial action enabled
class consciousness, rising trade union activism, and bottom-up
demands for democratisation (Koo, 2001).

Ethnolinguistic diversity appears associated with

weaker institutions (such as rule of law), which impede
economic growth (Easterly et al, 2006). If people do not
identify with their compatriots, they may be reluctant to
contribute to public goods. However, linguistic diversity and low
public goods could both be products of a third factor: a historical
absence of a strong, central state!

Strong states foster linguistic assimilation and

bureaucratic rule. Once this effect is controlled for, the
statistical association between ethnic diversity and public goods
disappears (Wimmer, 2018)!! Politicians can also strengthen
nation-building – as in post-colonial Tanzania (Miguel, 2004).

If dictators discriminate against one ethnic group, those people

may strategically adopt the privileged ethnic group in order to
gain state patronage. This suggests that discriminating dictators
can incentivise assimilation. Elliot Green (2021) shows this
through analysing survey data in Sub-Saharan Africa. He
highlights parallels with early modern China.

Assimilation can also occur with industrialisation and

urbanisation. Through labouring and collective organising,
miners in the Zambian Copperbelt overcame ethnic divisions,
and developed a strong identity as miners, proudly contributing to the lifeblood of the nation. The
Mineworkers’ Union of Zambia played a crucial role in the push for democratisation (Larmer, 2006).

Geographically also, even if countries have similar initial factor endowments, they may
still diverge economically and politically. Colombia, Costa Rica, El Salvador and Guatemala all
export coffee. However, the first two developed quite egalitarian smallholder societies. This enabled
the emergence of democratic institutions. By contrast, El Salvador and Guatemala created
inegalitarian plantation economies. Wealthy elites maintained these extractive institutions (Nugent
and Robinson, 2010).

My main takeaway from these studies is methodological: recognising the value of both cross-
national regressions and also in-depth, small-n research, tracing political economic developments
over the longue durée.
32
Seminar Questions
(1) How did geography and technology shape political institutions?
(2) Does strong kinship intensity inhibit democratisation?
(3) To what extent do initial factor endowments explain contemporary development outcomes?

Readings
Stasavage, David (2020) The Decline and Rise of Democracy (Princeton University Press)
(introduction).
Schulz, Jonathan F.; Bahrami-Rad, Duman; Beauchamp, Jonathan; and Henrich, Joseph (2019)
‘The Church, intensive kinship, and global psychological variation’, Science 366(6466).

Further Readings
Blaydes, Lisa (2017) State Building in the Middle East, Annual Review of Political Science 20:487-
504.
Greif, Avner and Tabellini, Guido (2015) ‘The Clan and the Corporation: Sustaining Cooperation in
China and Europe’, Journal of Comparative Economics 45(1): 1-35.
Henrich, Joseph (2020) The WEIRDest People in the World.
Henn, Soeren and Robinson, James A. (2021) ‘Africa’s Latent Assets’, NBER working paper
Fukuyama, Francis (2011) The Origins of Political Order: From Prehuman Times to the French
Revolution (Profile Books).
Fukuyama, Francis (2015) Political Order and Political Decay: From the Industrial Revolution to the
Globalization of Democracy (Profile Books).
Luiten van Zanden, Jan; Carmichael, Sarah; De Moor, Tine (2019) Capital Women: The European
Marriage Pattern, Female Empowerment and Economic Development in Western Europe 1300-
1800 (Oxford University Press).
Koo, Hagen (2001) Korean Workers: The Culture and Politics of Class Formation (Cornell University
Press).
Nugent, Jeffrey B. and Robinson, James A. (2010) ‘Are Factor Endowments Fate?’, Revista de
Historia Economica, Journal of lberian and Latin American Economic History 28(1): 45–82.
Ross, Michael (2015) ‘What Have We Learned about the Resource Curse?’, Annual Review of Political
Science 18:239-259. You might also enjoy Ross’s video lecture.
Ruggles, Stephen (2009) ‘Reconsidering the Northwest European Family System: Living
Arrangements of the Aged in Comparative Historical Perspective’, Population and Development
Review 32(2): 249-273.
Schulz, Jonathan F. (2010) ‘Kin Networks and Institutional Development’, Working paper.
Engerman, Stanley L. and Sokoloff, Kenneth L. Sokoloff (2002) ‘Factor Endowments, Inequality,
And Paths Of Development Among New World Economies’, NBER Working Paper 9259

Relevant episodes of Rocking Our Priors

Elliot Green ‘Ethnicity, National Identity and the State’
David Stasavage, ‘The Decline and Rise of Democracy’

33
Weeks 6 – How do authoritarians
maintain control? And how did
other societies democratise?
In The Narrow Corridor: States, Societies and the Fate
of Liberty, Daron Acemoglu and James Robinson argue
that for liberty and prosperity to emerge and
flourish, we need a strong state and a strong
society. A strong state is able to enforce contracts,
the rule of law, and provide public services. A strong
society is one that coheres, cooperates, and can
overcome collective action problems. This is necessary
in order to check state power.

These two forces (state and society) can

reinforce each other, in a co-evolutionary
process of contestation and cooperation. In the
18-19th century, Europeans increasingly petitioned
their governments, calling for reforms. Government
responsiveness raised citizens’ expectations, they
became more demanding, and pushed the state to
improve socio-economic development. Collective
organising also strengthened social capital. This
constant interaction between state and society fostered a positive feedback loop. European societies
moved into ‘the Narrow Corridor’.

In the absence of bottom-up accountability, states may be despotic. Leaders may pursue their own
priorities, trampling on citizens’ liberties and jeopardising their prosperity. This is more likely to
occur if society is weak and fragmented by caste or ethnicity. Meanwhile, if the state is weak, it
cannot deliver basic services or enforce the rule of law. Ideally, we need a strong state and a strong
society – argue Acemoglu and Robinson.

So, how do societies move into the Narrow Corridor? A&R offer four key factors:

1) Initial endowments of social capital: the lucky conjunction of Germanic assemblies and the
relic of the Roman state;
2) A positive feedback loop can emerge (as in Europe), and sustain the Narrow Corridor;
3) With luck, new leaders get elected, as in Bogota. Institutions may be sustained through
struggle, as well as cooperation.
4) The decline of labour coercion.

Now read the introduction of The Narrow Corridor.

As you see, Acemoglu and Robinson argue that ‘state capacity’ and ‘societal capacity’ co-evolve
through the Red Queen effect in the Narrow Corridor. But most of their case studies (early America,
Tudor England, the Tiv in Nigeria, India, China, Athens) either already possess a lot of social capital
or already lack them.

So we may wonder, where do strong societies come from? Some societies are divided by
ethnic, religious, caste, tribal, kinship groups and divisions. Those societies do NOT overcome
collective action problems and such societies are not ‘civic’. Others are more cooperative and unified
34
against the state. And this cooperation is essential for mobilisation against the state. So, this raises
the question, how do societies become cooperative?

Listen to Acemoglu’s response. Are you persuaded? What explains the heterogeneity of those initial
endowments in social capital? As you listen to Acemoglu, consider the plausibility of arguments
made by Greif, Tabellini, Henrich, and Schultz.

Can societies move into the Narrow Corridor?

Can democracies emerge in authoritarian contexts?

Even under autocracies, legislatures can

provide checks and balances

While some African parliaments are merely

‘rubber stamps’, others provide check and
counter-balance executive authority. This
divergence partly stems from institutional
designs under colonialism and post-
colonialism. Strong legislatures under
authoritarianism have begotten even stronger
legislatures under democracy – argues Ken
Opalo (read the book and/or listen to our
podcast).

Successful contestation can foster a

positive feedback loop

Through quantitative and qualitative research in Rajasthan, Gabi

Kruks-Wisner finds that poor rural Indians come to expect and
demand more of the state if they observe other people like them
successfully mobilising for better services and public goods.

There is thus a virtuous cycle of observations of state

responsiveness, citizen expectations, and citizen claim-making.

Meanwhile, if government spending favours the rich, the poor

may come to expect and demand less. These ‘diminished
expectations’ may help explain institutional persistence (on Latin
American parallels see Holland, 2018).

If you’re curious, read Claiming the State: Active Citizenship and

Social Welfare in Rural India or listen to my podcast with Gabi:
‘Claiming the State’.

Opalo and Kruks-Wisner imply that through continued

contestation and collective organising both African parliaments
and poor rural Indians may become stronger.

But is there an upper limit on this positive feedback loop?

35
Why do Authoritarians Stay in Power?

A core insight from Acemoglu and Robinson is that institutions are remarkable persistent. Indeed,
although many countries have adopted multi-party elections, these have not always
enhanced bottom-up accountability. Authoritarianism is on the rise. 68% of the world’s
population now lives in an autocracy.

36
Ten years after the Arab Spring, only Tunisia has democratised.

Authoritarianism can persist under the guise of ‘democracy’. Asian authoritarians conceded multi-
party elections in order to retain political control – as Joseph Wong explains in our podcast. By
holding elections, authoritarians can secure legitimacy, while remaining dominant (Brancati, 2014;
Gandhi and Ellen Lust-Okar, 2009; Gyimah-Boadi, 2015; Slater and Wong, 2013).

37
How does the CCP maintain control?

Many predicted the CCP’s collapse. With economic growth

comes democratisation. As incomes rose, people would
demand democracy – they assumed. But most Chinese people
support the party. They do not want liberal democracy. How
is this?

Research points to several factors:

1. Development has enhanced popular legitimacy

2. Bottom-up accountability enables responsive governance
3. Technological surveillance

China has achieved a phenomenal improvement in living

standards. This is reinforced by performance evaluations for
local officials – who are rewarded for economic growth and
penalised for political unrest in their jurisdictions..

Some open expression is permitted. The CCP posts laws online, inviting public comment. This
appears to have fostered the perception of public input, and reduced protests.

Peaceful protests are allowed, as long as they do not denounce the party. Permitting open
expression incentivises more responsive governance. After protests in Beijing, the government
banned leaded gas and curbed coal-production. Groups that lobby for improvements in public
goods and public services are not repressed.

But civil society organisations that push for democratic change are not tolerated. The CCP uses a
vast network of human informants, as well as facial recognition and phone tracking software to
check every single person’s whereabouts. China’s social credit
system tracks bill payments and legal violations. Armed with
this information, the government can restrict people access to
credit, jobs, travel opportunities, and their children’s
educational opportunities (Keliher, 2021).

The CCP censors and stifles online discussions – as detailed by

Rongbin Han. Autocracies use ‘digital repression’: new
technologies of surveillance to control and prevent public
unrest (see also Frantz, Kendall-Taylor and Wright, 2020).

Consider the example of #MeToo in China. Inspired by US

activism, Luo Xixi accused her former PhD supervisor of sexual
harassment. Her widely-shared post emboldened others. Thousands
started petitioning for reform and accountability at universities.
High-profile men in academia, NGOs and the media were accused
of assault. A famous state TV host (Zhun Jun) allegedly forced
himself upon an intern. Her accusation went viral.

#MeToo garnered 4.5 million hits on Weibo. Young, educated

women shared their experiences on social media. By hearing others, they gained confidence in righteous
defiance.

38
 ‘It’s time for us to fight in solidarity ... 2018 is full of opportunities for people to put
words into action and take to the streets’ – Feminist Voices (which had 180,000 followers on
Weibo, and 70,000 on WeChat).

Fearing unrest, the Government swiftly cracked down. Feminist Voices was shut down, on both Weibo and
WeChat. ‘MeTooinChina’ was blocked. Related posts were deleted.

Li Maizi (a feminist activist detained for planning a multi-city protest against sexual harassment) decried
patriarchal authoritarianism:

I want to take back the night

And to be beautiful and free from
harassment
Please empower me but don’t prison me
Why do you take my freedom from me?
Snap out of it!
Catch the perpetrator - not me.

Fearing arrest, feminist activists now organise

clandestinely and self-censor. NGOs operate
underground, recreating their identities, afraid
to act publicly.

With resistance muzzled, institutions have little

incentive to reform. Though the Government introduced a new civil code this summer, defining sexual
harassment and creating a complaint mechanism, the police are notoriously unsympathetic. Seldom
hearing dissent or finding support, many Chinese women see sexual harassment as inevitable.

Patriarchal authoritarianism appears to have entrenched impunity.

Seminar Questions
1) Pick any authoritarian regime. How has it maintained control?
2) What enables democratisation?

Readings
Acemoglu, Daron and Robinson, James (2019) The Narrow Corridor
(Penguin Random House) (introduction). Alternatively, read this
overview: ‘The Emergence of Weak, Despotic, and Inclusive
States’. And listen to the podcast.
Brancati, Dawn (2014) ‘Democratic Authoritarianism: Origins and
Effects’, Annual Review of Political Science 17:313-326.

Further Readings, general

Boese, Vanessa; Edgell, Amanda; Hellmeier, Sebastian; Maerz,
Seraphine and Lindberg, Staffan (2021) How democracies prevail:
democratic resilience as a two-stage process. Democratisation.
De Mesquita, Bruce; Smith, Alastair; Siverson, Randolph; Morrow, James (2003) The Logic of
Political Survival (MIT Press).
De Mesquita, Bruce and Smith, Alastair (2012) The Dictator’s Handbook: why bad behaviour is
almost always good politics (Public Affairs).
Desai, Raj; Olofsgard, Anders; Yousef, Tarik (2009) The Logic of Authoritarian Bargains 21(1): 93-
125.

39
Frantz, Erica (2018) Authoritarianism: What everyone needs to know (OUP).
Frantz, Erica; Kendall-Taylor, Andrea; and Wright, Joseph (2020) Digital
Repression. V-dem Working Paper.
Gandhi, Jennifer and Lust-Okar, Ellen (2009) ‘Elections Under
Authoritarianism’, Annual Review of Political Science 12:403–22
Geddes, Barbara, Wright, Joseph; Frantz, Erica (2018) How Dictatorships
Work: Power, Personalization, and Collapse (Cambridge University
Press).
Haggard, Stephan and Kaufman (2016) Dictators and Democrats: Masses,
Elites and Regime Change (Princeton University Press).
Haggard, Stephan and Kaufman (2019) Backsliding: Democratic Regress in
the Contemporary World (Cambridge University Press).
Hinnebusch, Raymond (2006) Authoritarian Persistence, Democratisation
13(3).
Kendall-Taylor, Andrea; Lindstaedt, Natasha; Frantz, Erica (2019) Democracies and Authoritarian
Regimes (OUP). See part III: Drivers of Democracy.
Marquez, Xavier (2016) Non-Democratic Politics: Authoritarianism,
Dictatorship and Democratisation (Red Globe Press).
Meng, Anne (2021) Winning the Game of Thones: Leadership Succession
in Autocracies, Journal of Conflict Resolution.
Przeworski, Adam (2019) Crises of Democracy (CUP).
Schulz, Jonathan F. (2010) ‘Kin Networks and Institutional Development’,
Working paper.
Shi, Victor (2020) Economic Shocks and Authoritarian Stability: Duration,
Financial Control, and Institutions (University of Michigan Press).
State of the world 2020: autocratization turns viral
Hellmeier, Sebastian; Rowan Cole,Sandra Grahn;Palina Kolvani; Jean
Lachapelle; ,Anna Lührmann; Seraphine F. Maerz; Shreeya Pillai; Staffan I. (2021)
Autocratisation Turns Viral, Democracy Report 2021. (V-dem)

The Middle East

Bellin, Eva (2004) The Robustness of Authoritarianism in the Middle East:
Exceptionalism in Comparative Perspective, Comparative Politics
36(2): 139-157.
Bellin, Eva (2012) Reconsidering the Robustness of
Authoritarianism in the Middle East: Lessons from the
Arab Spring.
Kuru, Ahmet (2019) Islam, Authoritarianism, and
Underdevelopment: A Global and Historical
Comparison (Cambridge: Cambridge University
Press).

East & South East Asia

Chen, Jidong; Pan, Jennifer; Xu, Yiging (2016) ‘Sources of
Authoritarian Responsiveness: A field experiment in
China’, American Journal of Political Science 60(2):
383-400.

40
Dickson, Bruce (2016) The Dictator’s Dilemma: The Chinese Community Party’s Strategy for Survival
(OUP).
Han, Rongbin (2018) Contesting Cyberspace in China
(Columbia University Press).
Keliher, Macabe (2021) The Power of the Party, Boston
Review
Koesel, Karrie; Bunce, Valerie; Weiss, Jessica (2020)
Comparing the Citizen and the State in Authoritarian
Regimes: Comparing China and Russia (Oxford
University Press).
King, Gary; Jennifer Pan, and Margaret E Roberts. 2013.
“How Censorship in China Allows Government
Criticism but Silences Collective Expression.”
American Political Science Review, 107, 2 (May), Pp.
1-18Lorentzen, Peter L. (2013), "Regularizing
Rioting: Permitting Public Protest in an Authoritarian
Regime", Quarterly Journal of Political Science: Vol.
8: No. 2, 127-158
Ong, L. 2018. 'Thugs and Outsourcing of State Repression
in China.' The China Journal 80: 94-110.
Slater, Dan and Wong, Joseph (2013) ‘The Strength to
Concede: Ruling Parties and Democratization in Developmental Asia’, Perspectives on Politics
11(3):717-733
Tang, Wenfang (2016) Populist Authoritarianism: Chinese Political Culture and Regime
Sustainability (OUP).
Stockmann, Daniela and Gallagher, Mary E. (2012) Remote Control: How the Media Sustain
Authoritarian Rule in China, Comparative Political Studies.

Africa
Gyimah-Boadi, E (2015) ‘Africa’s Waning Democratic Commitment’, Journal of Democracy 26(1):
101–13.
Morse, Yonatan (2018) How Autocrats Compete: Parties, Patrons, and Unfair Elections in Africa
(University of Cambridge)
Opalo, Kennedy Ochieng (2012) ‘African Elections: Two Divergent Trends’, Journal of Democracy
23(3): 80-93.
Opalo, Kennedy Ochieng (2019) Legislative Development in Africa (OUP).

Relevant episodes of Rocking Our Priors

Daron Acemolgu ‘The Narrow Corridor’
Gabi Kruks-Wisner ‘Claiming the State’
Ken Opalo ‘Legislative Development in Africa’
Kurt Weyland, ‘Revolution and Reaction’
Joseph Wong ‘Why Did Asian Authoritarians Democratise?

Anne Meng and Kim Yi Donne, Authoritarianism and Leadership Succession

Dan Snow's History Hit on Acast, What Makes a Dictator with Frank Dikötter
The Economist asks: How to be a Dictator (also Frank Dikotter)

Films
Jill Li’s 2019 documentary Lost Course

41
 Badiucao depicts Chinese
President Xi Jinping muffling
Yang Shuping,
the university graduate who was
harassed after praising American
freedoms.

42
Nic Cheeseman ‘How to Rig an Election’
Nic Cheesmen ‘Institutions and Democracy in Africa’

What Causes Crises in Emerging Economies?

Week 7: What causes famines?
70 million people died from famine over the 20th century. What caused these famines? Was it due
to too much state intervention, or too little? And does democracy avert famines? How are these
relationships changing, with climate breakdown?

16.5-45 million people perished during China’s Great Famine (1958-1961). What happened?

Was it just due to geography? Officially, the CCP blamed the weather. But this only appears explain
13% of the drop in grain production (Li and Yang, 2015). Moreover, there had been episodes of
bad weather in previous years, but they had not resulted in famine.

What else might have caused the food shortage? China’s Great Famine occurred during the Great
Leap Forward, when the Chinese Communist Party (CCP) collectivised everything. Villagers lost
ownership of their land, houses, oxen, pigs, poultry, gain, seeds, agricultural tools, quilts… even
their padded jackets. ‘Other than your teeth, nothing belongs to you’ – announced a member of the
village cadre in Fengyang, Anhu (Xun, 2016; Yang and Su, 1998). Arguably, this collective farming
system sapped peasant motivation, curbed agricultural production, and caused food shortages
(Kung and Lin, 2003; Xun, 2016). Meanwhile, central authorities believed grain output was booming
– as local officials exaggerated yields to impress superiors.

Confident that collectivisation would boost grain yields, the CCP ordered tens of millions of peasants
to mine iron ore and limestone, build backyard furnaces (see picture), smelt metal, and accelerate
rapid industrialisation. This reduced the agricultural labour force by 38 million (1957-58) (Li and
Yang, 2005). This diversion of labour away from agriculture accounts for 33% of the fall in
agricultural output (ibid).

But China was not actually short of food, at least not in total. Rural food availability was three times
higher than necessary to prevent deaths from starvation, within China as a whole (Meng et al,
2015). Even more surprisingly, the severity of rural famine was positively correlated with per capita
food production. There were more deaths in agriculturally productive provinces! (ibid). Why is this?
Meng et al (2015) point to the CCP’s inflexible and inaccurate procurement system. Central
government procured more food from productive regions, but their understanding of regional output
43
was often outdated. Hence even as grain output fell, grain procurement actually increased from 46
to 64 million metric tons (1957-59) (Li and Yang, 2005). Taking too much from regions that
produced too little appears to explain 32–43% of total famine mortality (Meng et al, 2015)

What caused over-procurement? Why did central

government miscalculate output? Possible factors
include: (1) weak bureaucratic capacity, owing to poor
communication and transport links; (2) leaders’
ideological commitment to the GLF, and refusal to believe
that production could have dropped (Meng et al, 2015);
(3) the absence of democracy, so citizen voices could not
be heard, and true production figures were not realised.
Keen to preserve their standing, local officials prevented
villagers from sending letters to central government.
Moreover, reporting problems risked being purged as a
‘rightist’ (Xun, 2016).

Mao and others in central government may have known

about the famine, but remained ideologically committed
to the Great Leap Forward. ‘Many people died for the
[communist] revolution. Revolution is priceless. Why
can’t we do the same today?’, urged Mao, during the
famine (Xun, 2016).

A strong state was able to extract resources from a weak

society. More remote and rugged areas, beyond the
state’s reach, appear to have had fewer deaths (Gooch,
2019). Here, perhaps geography shapes institutions, which shapes economic development?

What causes famines more broadly? Geography, state intervention, unrestrained free markets,
extractive states, and/or lack of political accountability?

Amartya Sen famously argued that unrestrained free markets allow for hoarding, speculation, and
food exports. This raises prices, curbs entitlements (even if food is available), and thus causes
famine. Governments will be motivated to intervene if there is a free flow of information and political
accountability. Democratisation thus averts famines – or so Sen claims. Relatedly, Blaydes and
Kayser (2011) find that democratisation raises calorie consumption.

But this emphasis on political institutions and market failures has been contested. Examining
famines throughout history, Ó Gráda points to food shortages. He finds little evidence that hoarding
was a key cause of the Bengal famine. Continuing this defence of markets, Burgess and Donaldson
show that once an Indian district was connected to a railway, the likelihood of famine fell,
significantly. Pseudoerasmus helpfully discusses this evidence.

But why exactly were railroads important? We might presume that railways enabled areas with food
shortages to procure grain. But Tirthankar Roy (2016) raises another possibility: physical
communication have enabled prompt and effective government interventions, by improving
statistical information and scientific knowledge. Once Indian governments improved their
bureaucratic capacities, they could better respond and respond to famines. This echoes Meng et al’s
(2015) emphasis on weak bureaucratic capacity as a cause of China’s great famine.

44
Famine mortality is also influence by gender relations. Resources may not be shared evenly within
a household. Examining the Madras famine of 1876-78 and the Punjab famine of 1896-9, Leela Sami
(2002) finds that female life chances were relatively better in south India as compared to north
India. She suggests this could be because southern paddy cultivation is female labour-intensive,
which raises women’s worth, and because kinship systems in the south are more egalitarian.

Continuing this focus on gender, Naomi Hossain (2017) suggests that Bangladesh’s 1974 famine
dramatically shifted the social contract. Elites increasingly prioritised social protection, against
destitution. This motivated growing spending on human development.

Dead bodies in Calcutta, 1946. Vultures overhead. Credit: Saktishree DM/Flickr

Historically then, perhaps famines were not worsened by markets. Perhaps the incidence of famines
was also lessened by democratic self-governance. But do these associations still hold today, in a
context of climate breakdown? Even if leaders are motivated to secure public approval and re-
election, they may lack the policy tools to avert desertification and salination. Moreover, even if a
country is economically liberal, citizens may still struggle to purchase food on international markets
(given international speculation and export bans elsewhere). National food security is not a closed
system, it may be influenced by international environmental and economic dynamics.

N.B. 820 million people still suffer from hunger, according to the FAO. That’s 1 in 9.

Seminar Questions
1) What caused China’s Great Famine?
2) Pick a famine. What was the major cause? Bad geography, markets, or governance?
45
Readings
Ó Gráda, Cormac (2015) Eating People is Wrong, and Other Essays on
Famine, its Past, and its Future (Princeton University Press) (Chapter 2:
Sufficiency and Sufficiency and Sufficiency: Revisiting the Great Bengal
Famine of 1943-1944)

Further Readings
Blaydes, Lisa and Kayser, Mark (2011) ‘Counting Calories: Democracy and
Distribution in the Developing World’, International Studies Quarterly 55,
887–908
Burgess, Robin and Donaldson, Dave (2010) Trade and Climate Change: Can
Openness Mitigate the Effects of Weather Shocks? Evidence from India’s
Famine Era, American Economic Review: Papers & Proceedings 100:
449–453
Davis, Mike (2001) Late Victorian Holocausts: El Niño Famines and the Making of the Third World
(London: Verso)
Devereux, Stephen; Howe, Paul; and Deng, Luke (2006) The New Famines: Why Famines Exist in
an Era of Globalization, IDS Bulletin 33(4).
Dreze, Jean, and Amartya Sen. The Political Economy of Hunger: Volume 1: Entitlement and Well-
Being. WIDER Studies in Development Economics. Oxford University Press, 1991.
Dikotter, Frank (2018) Mao's Great Famine: The History of China's Most Devastating Catastrophe,
1958-62 (Bloomsbury).
Gooch, Elizabeth (2019) ‘Terrain ruggedness and limits of political repression: Evidence from China’s
Great Leap Forward and Famine (1959-61)’, Journal of Comparative Economics 47(4): 827-
852
Hossain, Naomi (2017) Aid Lab: Understanding Bangladesh’s Unexpected Success (Oxford University
Press).
Kung, James Kai-sing and Lin, Justin Yifu (2003) ‘The Causes of China's Great Leap Famine, 1959-
1961’, Economic Development and Cultural Change 52(1): 51-73
Li, Wei and Yang, Tao (2005) ‘The Great Leap Forward: Anatomy of a Central Planning Disaster’,
Journal of Political Economy 113(4): 840-877.
Meng, Xin; Qian, Nancy; and Yared, Pierre (2015) ‘The Institutional Causes of China’s Great Famine,
1959–1961’, Review of Economic Studies (2015) 82, 1568–1611.
Ó Gráda, Cormac (2010) Famine: A Short History (Princeton University Press)
Ó Gráda, Cormac (2010) Great Leap into Famine: a Review Essay
Pseudoerasmus (2015) ‘Markets and Famines: Amartya Sen is not the Last Word!’
Qian, Nancy (2021) A tale of two famines (Broadstreet blog).
Roy, Tirthankar (2016) ‘Were Indian Famines ‘Natural’ Or ‘Manmade’?’, LSE Economic History
Working Paper 243
Sami, Leela (2002) ‘Gender Differentials in Famine Mortality: Madras (1876-78) and Punjab (1896-
97)’ 37(26)
Sen, Amartya (1977) Starvation and Exchange Entitlements, Cambridge Journal of Economics, 1(1):
33-59.
Sen, Amartya (1982) Poverty and Famines (Oxford: OUP).
Xun, Zhou (2016) ‘Re-examining the History of the Great Famine in China Through Documentary
Evidence’, East/West: Journal of Ukranian Studies 3(2).
Yang, Dali and Su, Fubing (1998) ‘The Politics Of Famine And Reform In Rural China’, China
Economic Review 9(2): 141-156

46
Podcast
Frank Dikotter on Mao’s Great Famine/ or listen to his podcast with Bloomsbury
Communal Kitchens and Mao’s Great Famine 1958-1961
Mao’s Famine and Szechuan Province 1958-62

47
Week 8 – How can we avert climate breakdown?
We turn to the economics and politics of climate breakdown. We continue to consider the
effectiveness of state and market-based mechanisms for development; the drivers of technological
adoption; and the importance of political institutions.

The poorest countries are most exposed to increasing temperature fluctuations

Earlier on this course, we discussed key drivers of economic development: specific policies (land
reform, trade liberalisation, industrial policy), as well as institutions. Looking at these graphs, we
may consider another hypothesis: geography. Perhaps going forward, the single largest predictor
of a country’s development will not be its level of trade openness or its ‘inclusive institutions’, but
rather whether it is located in the northern or southern hemisphere?

So, what might reduce carbon emissions?

COVID lockdowns have triggered a fall in carbon

emissions. The closure of international borders,
shutting up of shops, and mass quarantine
curbed commercial and industrial demand for
electricity. The aviation industry’s carbon
emissions fell by 21% (Tollefson, 2020).

Corinne Le Quéré and co-authors estimate that

severe and forced confinement lowered daily
carbon emissions by around 17% in several
individual countries (–11 to –25%). This is
mostly due to a drop in transport. This is
unprecedented.

However, without structural change in

economic, transport, and energy systems, this
effect may only be temporary. Moreover, even
if sustained year on year, the net effect is still
far from sufficient to avert climate breakdown.

48
Is climate change inaction caused by free-riding?

This section draws on a fascinating paper by Aklin and Mildenberger (2020).

Climate change policy is often seen as a global collective action problem caused by free-riding
concerns. The received wisdom is that clean air, clean water and a stable ecosystem are non-
excludable resources with rival benefits. Individuals and countries cannot be excluded from enjoying
the benefits of the global atmosphere, but everyone has an incentive to overexploit it. This creates
a collective action problem: all countries unsustainably exploit environment.

This is called a ‘free-riding problem’. Investing in public goods is costly. Even if we don’t contribute
to those public goods, we still benefit, since they are non-excludable. Hence the individually rational
strategy is to continue to pollute. Every country has the incentive to free-ride on other countries’
efforts to mitigate climate breakdown (Aklin and Mildenberger, 2020).

Given this assumed problem, campaigners have pushed for global policy architecture that prevent
free-riding by enabling country governments to monitor cooperation and punish non-cooperation.
This model implies that when one government free-rides then others will do so too.

Whether governments act on climate change chiefly depends on whether other countries are free-
riding – or so some presume…

But actually there are many times in which governments have continued to invest in climate change
migration despite free-riding elsewhere. For example, the EU unilaterally championed climate
change mitigation through the late 1990s and 2000s, despite US inaction. Even after the US left
the Kyoto process, the EU affirmed their Emissions Trading Scheme. This has reduced emissions
and encouraged technological innovation. The US defected, but the EU continued to cooperate.

Contrary to the theory that action on climate change requires assurances of cooperation by other
countries, many governments have introduced carbon taxes unilaterally: in Finland, Sweden,
Norway, Denmark, and the Netherlands before 1995 (before Kyoto). Governments – like Germany,
the Czech Republic, Italy, Spain, Switzerland, France, the Netherlands, UK, and Japan – also
introduced renewable energy subsidies unilaterally.

‘US exit from Kyoto did not paralyse climate policy making’

This suggests that national climate policy making is not characterised by conditional cooperation.
Instead, climate change mitigation may be more dependent on domestic public and business
support.

49
But there are infrastructural, technological, institutional, and behavioural barriers to
decarbonisation.

‘Carbon lock-in’ thwarts the development and adoption of green technologies. These constraints are
infrastructural, technological, institutional, and behavioural (Seto et al, 2016). Polluters remain
politically powerful, not just because they are big businesses, many are also supported by labour
unions, keen to preserve jobs (Mildenberger, 2020).

In an institutional feedback loop, those actors that most benefit from existing energy
infrastructures push for institutional rules that further their interests, provide them with
greater resources, reinforce their political and economic dominance, and allow them to deploy
yet greater resources to shape institutions to their benefit..

For example, the lock-in of gasoline-powered automobiles reflects development, introduction,

and marketing by automobile companies that also lobbied for transportation policies and
subsidies for relevant highway and energy infrastructures that both created and responded
to social and cultural preferences for individual transportation. The dominance of automobile
transportation further enabled rural, suburban, and urban development patterns that, once
established, reinforced the need to maintain and expand automobile-oriented infrastructures,
creating resistance and obstacles to government efforts to install mass transit systems and
personal preferences against using them. Thus, lock-in effects can be interdependent and
mutually reinforcing. One important implication of the interconnectedness is that there is
multidirectional causation between and among the different types of carbon lock-in…

[In developing countries] For example, gas-powered cars benefit from a well-developed
technology with corresponding low costs, already-powerful domestic and multinational
corporations that build demand through advertising and lobby for government projects for
car-friendly roads and other infrastructure, and a global norm that suggests that one of the
markers of development is an automobile-based economy’

Lock-in occurs because powerful actors often benefit from creating and maintaining a state
of lock-in. Those actors lobby for policies that reinforce initial movements toward lock-in.

50
Summary points on lock-in:

1. Carbon lock-in can be conceptualized as comprising three major types:

• lock-in associated with the technologies and infrastructure that shape energy supply and
indirectly or directly emit CO2;
• institutional lock-in associated with governance and decision-making that affect energy-
related production and consumption; and
• behavioral lockin related to habits and norms associated with the demand for energy-
related goods and services

2. The ability to break out of infrastructural or technological lock-in will depend on the
anticipated technological and economic viability and lifetimes of the systems, the costs
of moving away from those systems, and options for alternatives.

3. Escaping institutional carbon lock-in depends on increasing institutional plasticity, inducing

institutional change, and fostering institutional lock-in of an alternative decarbonizing
trajectory.

4. Transforming behavior will require overcoming individual habits and preferences and
socially constructed practices that are often entrenched in culture and other social norms.

5. The three types of carbon lock-in are mutually reinforcing, characterized not merely by
individual inertia but also by a collective inertia in which any movement out of lock-in
in one of the three spheres induces a response in the other spheres that results in further
hardening the collective inertia’ (Seto et al, 2016).

So what might engineer structural transformation, and a sustained reduction in carbon emissions?

A key challenge for economists is to how to internalise negative externalities, so that carbon’s
market price reflects its environmental costs (Kemp and Never, 2017). A higher price for carbon
could incentivise to consumers, firms, and investors to develop and adopt green technologies.

A carbon tax was initiated in Sweden in 1991. CO2 emissions from transport declined by 11% a
year thereafter. Over half of this decline was due to the carbon tax. A ‘carbon price floor’ was
introduced in the UK in 2013. The share of coal-generated electricity subsequently fell to 2%.

Question: is carbon pricing would be sufficient to avert climate breakdown?

51
Governments are increasingly using green industrial policy to overcome carbon lock-in. This includes
outright prohibitions, penalties, and incentives. Harrison et al (2017) review the economic evidence
on whether green industrial policies actually work. The Government of China has introduced a range
of environmental policies. These include: command-and-control policies (shutting down major
polluters, imposing restrictions, and car lotteries); top-down evaluations of local officials that
incorporate environmental performance; and subsidies. Zheng and Kahn (2017) examine their
effectiveness.

Earlier in the course we examined the benefits of trade liberalisation. Making trade access
conditional upon environmental reforms appears to increase ‘green exports’, especially amongst
exporters with stringent environmental regulations.

What drives environmental reform?

In California Greenin’, Vogel takes a three-fold approach. (1) Study places that have made
improvements, and ascertain the causes of those effects. (2) Adopt a long-term perspective,
studying 150 years. This is consistent with our earlier discussions on institutions. State capacities,
modes of governance, industry strength, alliances and public expectations are all cumulatively
strengthened (or undermined). These contextual factors may enable (or constrain) particular
reforms. (2) Compare places and sectors, to detect common drivers.

Vogel’s positive deviant is California’s

environmental leadership. No other US state has
enacted so many innovative, comprehensive and
stringent environmental regulations.

So, what explains this success?

Citizen mobilisation, business support and

regulatory capacity – argues Vogel.

Californian residents have long pushed for

environmental regulation to protect their
backyards. They live in close proximity to towering
mountains, mesmerising waterfalls, ancient
sequoias and sun-kissed sandy beaches. California
living can be glorious, if natural beauties are
preserved. Given this geography, the benefits of
environmental protection are highly visible, as are
the threats. Residents witnessed coastline erosion,
were horrified by blackening oil spills and coughed
through the smog. So, this is partly about glaring
self-interest.

But identities and aspirations are also forged

historically. Activism often emerged in response to
local threats (coastal drilling in Southern
California, smog in Los Angeles and Bay Area
felling). Successive bouts of activism and policy reform incrementally expanded residents’ circles of
concern, galvanising state-wide support for action on global climate change. Safeguarding (rather
than destroying) the wilderness also enabled a broad range of outdoor pursuits: hiking, biking,
surfing, kayaking, rafting, camping. As Californians became wealthier and more mobile, enjoyment
52
and support for such activities expanded. Activism, environmental protection and rising standards
of living thus cultivated a core image of healthy living and environmentalism in California.

The staunchest opposition has come from business (especially the oil and automotive industries).
But here’s the surprise: many businesses have actually lobbied for environmental regulation.
Railroads wanted the giant sequoias protected to attract nature tourism; farmers contested
hydraulic gold mining to protect the fertile Sacramento Valley; real estate developers opposed
coastline drilling to protect the beautiful beaches and preserve house prices. This enabled feedback
effects: expanding economic opportunities and green lobbying. Agriculture, tourism, real estate and
clean tech flourished because they were protected by environmental regulation, and then allied with
environmental organisations to lobby for more stringent measures.

California’s history thus suggests that environmental legislation is likely to be stronger and more
effective when it benefits (and is championed by) influential business. Outside California, the
converse occurs: the dearth of environmental regulation suffocates green industries, curtailing their
policy influence (see also Mildenberger, 2020).

Vogel’s overarching message is that citizens and businesses mobilise for progressive reforms when
there are strong, potential, visible gains. But people will only believe in the efficacy of regulation if
they have faith in state capacity. Such beliefs are developed through observation. By seeing the
state successfully control harmful air pollutants, Californians gained confidence in its capacity to
reduce greenhouse gas emissions. California’s positive deviance is thus not only a function of self-
interest, but also a belief in state capacity. These interests and beliefs are iteratively developed over
the longue durée – as Vogel comprehensively demonstrates.

State capacity appears cardinal. The Government of California created regulatory agencies, invested
in research and enabled a policy laboratory. Successive experimentation and innovation became
widely recognised and revered. This, combined with the size of California’s market, led to the
‘California effect’ (Vogel’s now-famous term). Other jurisdictions adopted California’s higher
environmental standards. Seeing others follow suit abates Californians’ concerns about free-riding,
and encourages further environmental action.

In sum, Vogel presents three key drivers of environmental regulation: citizen mobilisation, business
support and (faith in) state capacity.

But even these ‘ideal’ conditions are far from sufficient to avert climate breakdown, California has
not decarbonised its economy, nor its supply chains.

53
Other factors may be important in other jurisdictions.

In Brazil, environmental progress was made through

networks between committed actors in the government
bureaucracy and civil society (Abers, 2019; Hochstetler
and Keck, 2007). In South Korea, by contrast, strong
corporatist links between state and business have
enabled strong investment in green technology, even in
the absence of civil society pressure (Kalinowski,
forthcoming). Indeed, ‘the culture of markets’ shapes
climate governance in the China, Japan, South Korea,
USA, Europe, and Australia (Knox-Hayes, 2016). Activism
is unlikely to be influential in authoritarian countries like
China – where villagers may be scared to protest, so
instead become resigned to living with pollution (Lora-
Wainwright, 2017). Together, this work indicates the
importance of institutions.

In designing policies, we might also consider how to

create path-dependent policy interventions that
‘constrain our future selves’. Kelly Levin and others
(2012) emphasise the need for ‘sticky interventions’, that ‘entrench support over time while
expanding the populations they cover’. This echoes our discussions in Weeks 4, 5, and 6: path-
dependency.

Protesting for action on climate change in Taiwan.

54
 Young people participating in a climate strike in Delhi. Photo: Money Sharma/AFP/Getty Images

Seminar Questions
1) What accounts for low investment in and adoption of green technologies?
2) Why does carbon lock-in persist?
3) What weakens carbon lock-in?

Readings
Seto, Karen; Davis, Stephen; Mitchell, Ronald; Stokes, Eleanor; Unruh, Gregory; and Ürge-Vorsatz,
Diana (2016) Carbon Lock-In: Types, Causes, and Policy Implications, Annual Review of
Environment and Resources 41:425-452
Piggot, Georgia (2018) ‘The influence of social movements on policies that constrain fossil fuel
supply’, Climate Policy 18(7)

Further Readings

Abers, Rebecca Neaera (2019) Bureaucratic Activism: Pursuing Environmentalism Inside the
Brazilian State, Latin American Politics and Society, 61(2): 21-44
Altenburg, T., & Assmann, C. (Eds.) (2017) Green Industrial Policy. Concept, Policies, Country
Experiences (Geneva, Bonn: UN Environment; German Development Institute / Deutsches
Institut für Entwicklungspolitk (DIE)). See the chapters on Morocco, China, and Brazil.
Bernstein, Steven and Hoffman, Matthew (2018) ‘The politics of decarbonization and the catalytic
impact of subnational climate experiments’, Policy Sciences 51:189–211.
Bomberg Elizabeth (2012) ‘Mind the (mobilization) gap: comparing climate activism in the United
States and European Union.’ Review of Policy Research 29(3):408–430
Diffenbaugh, Noah and Burke, Marshall (2019) ‘Global warming has increased global economic
inequality’, PNAS 116 (20) 9808-9813
Rodrik, Dani (2014) Green industrial policy, Oxford Review of Economic Policy 30(3): 469–491
Green, Fergus (2018) ‘Anti-fossil fuel norms’, Climatic Change 150:103–116
Harrison, Ann; Martin, Leslie A.; and Nataraj, Shanthi (2017) ‘Green Industrial Policy in Emerging
Markets’, Annual Review of Resource Economics 9:253-274.
Hochstetler, Kathryn and Keck, Margaret E. (2007) Greening Brazil: Environmental Activism in State
and Society (Duke University Press).
Kapstein, Ethan and Busby, Joshua (2016) ‘Social Movements and Market Transformations: Lessons
From HIV/AIDS and Climate Change’, International Studies Quarterly 60(2): 317–329

55
Kemp, René Kemp and Never, Babette (2017) Green transition, industrial policy, and economic
development, Oxford Review of Economic Policy 33(1): 66–84
Le Quéré, Corinne, Robert B. Jackson, Matthew W. Jones, Adam J. P. Smith, Sam Abernethy, Robbie
M. Andrew, Anthony J. De-Gol, David R. Willis, Yuli Shan, Josep G. Canadell, Pierre
Friedlingstein, Felix Creutzig & Glen P. Peters (2020) ‘Temporary reduction in daily global CO2
emissions during the COVID-19 forced confinement’, Nature Climate Change.
Levin, Kelly; Cashore, Benjamin; Bernstein, Steven; and Auld, Graeme (2012) ‘Overcoming the
tragedy of super wicked problems: constraining our future selves to ameliorate global climate
change, Policy Sciences 45:123–152
Lora-Wainwright, Anna [and others] (2017) Resigned Activism: Living with Pollution in Rural China
(MIT Press).***
Knox-Hayes, Janelle (2016) The Cultures of Markets: The Political Economy of Climate Governance
(Oxford University Press).
Mazzucato, Mariana. (2013) The Entrepreneurial State: Debunking Public vs Private Sector Myths
(London: Anthem Press). (chapter 6 on green industrial policy)
McAdam, David (2017) ‘Social Movement Theory and the Prospects for Climate Change Activism in
the United States’, Annual Review of Political Science 20:189-208.
Mildenberger, Matto (2020) Carbon Captured: How Business and Labor Control Climate Politics (MIT
Press).
Pettifor, Ann (2019) The Case for a Green New Deal (Verso Books). Or read her summary.
Roser, Max (2021) The argument for a carbon price. Our world in data.
Vogel, David (2018) California Greenin’: How the Golden State Became an Environmental Leader
(Princeton University Press). (This is one of my favourite books of all time!)
Wu, Fengshi (2013) ‘Environmental Activism in Provincial China’, Journal of Environmental Policy &
Planning 15(1):89-108.
Zheng Siqi and Kahn Matthew (2017) A new era of pollution progress in urban China? Journal of
Economic Perspectives 31(1):71–92
Kalinowski, Thomas (forthcoming) ‘The politics of climate change in a neo-developmental state: The
case of South Korea’, International Political Science Review.

***Chinese professors wrote a letter, asking for Anna Lora-Wainwright’s book award to be
rescinded, as she concealed their contributions to the research. In short, they accused her of
serious plagiarism.

Relevant episode of Rocking Our Priors

Quynh Nguyen and Eddy Malesky, Fish or Steel? (on environmental concerns in Vietnam).
Sunil Amrith, Unruly Waters (on the history of attempts to control the rains and the rivers in East
and South Asia)

More podcasts
Beata Javorcik interviewed by Tim Phillips, 13 September 2019, ‘Does foreign investment create
green growth?’

56
Week 9 – Why are countries so heavily indebted? Why don’t they
default?
This week we discuss the international and domestic political economy of sovereign debt crises. We
explore why many low- and middle-income countries have become so heavily indebted, and why
they don’t default on their debts.

Debtors incur the obligation to repay their creditors’ principal and interest. Before WWI, creditors
often tried to enforce these contracts with military might, ‘gunboat diplomacy’. Rosa Luxemburg
argued that debt entrenched international inequalities:

‘Though foreign loans are indispensable for the emancipation of rising capitalist states, they
are yet the surest ties by which the old capitalist states maintain their influence, exercise
financial control and exert pressure on the customs, foreign and commercial policy of the
young capitalist states’ (Rosa Luxemburg, 1913).

Latin America’s debt crisis kicked off in 1980. To mitigate the USA’s soaring inflation,
Chairman Volcker of the Federal Reserve Bank dramatically raised interest rates. This affected Latin
American governments, which were borrowing from US banks. Struggling to repay, Mexico
negotiated an extension of its principal payments in 1982. Others also needed urgent financial
assistance, so turned to the International Monetary Fund. In return for bailouts, the IMF insisted on
neoliberal economic reforms. This would cut profligate spending, excessive state intervention,
overvalued exchange rates, and install financial discipline – claimed the IMF. These Structural
Adjustment Programmes heralded trade liberalisation (which we discussed in Week 2).

LMICs’ desire for external financing increased the IMF and World Bank’s political influence, enabling
them to impose ‘the Washington Consensus’. Contemporary critiques (conveyed in the cartoon
below and Soederberg’s leftist history of the transnational debt architecture) echo Luxemburg’s
analysis a century ago. Plus ça change, plus c'est la même chose!

57
The effects of ‘the Washington Consensus’ are bitterly contested. On the one hand, these reforms
eliminated structurally overvalued exchange rates. This is positive associated with economic growth
(Easterly, 2019). However, cuts to social spending seem to have adversely affected child and
maternal health (Thomson et al, 2017). And many of these countries remain heavily indebted.

Concerned by unsustainable and ‘odious’ debt (accrued by patrimonial authoritarians), the Jubilee
campaign mobilised millions of people across the world for debt cancellation. Its petition was
signed by more than 21 million people. This campaign was hugely significant in shifting global
public opinion, about whether LMICs were morally obliged to repay their debts.

The Kenyan Jubilee 2000 campaign

58
The 70,000-person human chain, surrounding the G7 meeting in Birmingham (UK), 1998

Pressured by the Jubilee Campaign, G8 leaders agreed to cancel over $100bn of debt owed by 35
of the poorest countries. For a historical overview of these campaigns read Tagle and Patomäki
(2007).

59
Notwithstanding earlier debt relief, LMICs’ interest payments on external debt have skyrocketed
(see below). The IMF warned of a $19 trillion corporate debt timebomb. That was back in 2019,
before the debt crisis was exacerbated by COVID.

Debt in emerging market and developing economies, 1970-2018

60
What caused this debt timebomb?

There are several contending explanations.

(1) Some blame LMICs, for spending beyond their means, inefficiently, without investing in
productive activities, nor establishing sound debt management, debt transparency, strong
monetary and fiscal frameworks, nor robust bank supervision and regulation.

(2) Earlier debt relief may have created moral hazard. It deters rent-seeking elites from adopting
necessary, growth-promoting reforms (Easterly, 2002).

(3) Others suggest that Western banks like Credit Suisse have enabled corruption – such as for the
$2bn loan for a Mozambican fishing fleet that never materialised. Political institutions may be
important here. Oatley (2010) finds that autocratic (as opposed democratic) regimes tend to
borrow more from foreign lenders yet invest less in public goods. Hence autocracies accrue
larger debts.

(4) Critics of neoliberalism blame the IFIs for imposing austerity – triggering riots in Tunisia. For
the Left, conditionalities impede social and economic development, making debt both necessary
and unrepayable.

(5) Others think the creditors are at fault. With low interest rates in high-income countries,
institutional investors increasingly looked to emerging markets. With high commodity prices,
African countries looked like relatively secure investments, so they provided easy credit.
However, commodity prices fell after 2012. This has jeopardised repayment (see graph below).

Commodity Prices fell during the Global Financial Crisis and again after 2012 – IMF (2020) ($)

61
Demonstrators in front of Argentina's National Congress, holding placards reading ‘Don't pay the
debt’, and ‘Foreign debt. Fraud by bankers and capitalists’. Credit: Associated Press. February 2020.

The sovereign debt crisis has been exacerbated by COVID. Government revenues have been
hit by fall in exports, collapse in commodity prices, downturn in remittances, withdrawal in foreign
investment, and loss of tourists. Zambia has an external debt burden of $11bn, including $3bn to
Chinese lenders. As copper prices have fallen, mineral-rich Zambia now struggles to repay its debt.
Iran has similarly been hit by the collapse in oil prices (together with US sanctions). They do not
have enough money to service their debt and provide government services. Ethiopia presently
spends more on servicing external debt than on health.

‘The dilemma Ethiopia faces is stark: Do we continue to pay toward debt or redirect resources
to save lives and livelihoods? Lives lost during the pandemic cannot be recovered; imperiled
livelihoods cost more and take longer to recover’ - Abiy Ahmed, President of Ethiopia.

‘At stake is the economic fate of 45m Argentine citizens. More than 35 per cent of our
population and 52 per cent of children are already in poverty. No democratic government
can impose still more hardship or be asked to put bondholders ahead of economic policies
designed to palliate the catastrophic effects of the pandemic’ - Martín Guzmán, Argentina’s
Minister of Economy.

18 African and European leaders called for a suspension of all bilateral and multilateral debt
payments, private and public. The G20 agreed to suspend repayments of bilateral official debt for
73 of the poorest countries, and urged private investors to do likewise.

To access finance, wealthy governments in East Asia, Europe, and North America have issued bonds
to private investors. But poorer countries have struggled to sell government bonds, as private
investors see them as risky investments (given the fallout from COVID). This may unleash a ‘tsunami
of sovereign debt distress’ – explain Bolton et al.

62
But why do LMICs even ask for debt relief? Why not default?

To understand this issue, I

strongly recommend Jerome
Roos’s book, on the political
economy of sovereign debt. He
outlines three conditions under
which enforcement mechanisms
are effective, and debt is
serviced.

63
Roos also suggests three conditions under which enforcement mechanisms break down, and
countries default on their debts. In preparation for the seminar, read Roos and listen to our podcast.

[This lecture is scheduled for December 2020, I will update it nearer the time].

64
Seminar Questions
1) Why have LMICs become so heavily indebted?
2) Why don’t LMICs default?
3) Who should foot the bill?

Readings
Easterly, William (2002) How Did Heavily Indebted Poor Countries Become Heavily Indebted?
Reviewing Two Decades of Debt Relief, World Development 30(10):1677–1696
Soederberg, Susanne (2005), ‘The Transnational Debt Architecture and Emerging Markets’, Third
World Quarterly, 26(6): 927–949.
Roos, Jerome (2019) Why Not Default? The Political Economy of Sovereign Debt (Princeton
University Press). Listen to the podcast before the seminar.

Further Readings
Bolton, Patrick; Buchheit, Lee; Gourinchas, Pierre-Olivier; Gulati, Mitu; Hsieh, Chang-Tai; Panizza,
Ugo; di Mauro, Beatrice (2020) ‘How to Prevent a Sovereign Debt Disaster: A Relief Plan for
Emerging Markets’, Foreign Affairs.
Birdsall, Nancy; Williamson, John; and Deese, Brian (2002) Delivering on Debt Relief: From IMF
Gold to a New Aid Architecture (Peterson Institute).
Chandoul, Jihen (2018) ‘The IMF has choked Tunisia. No wonder the people are protesting’, The
Guardian
Jocknick, Chris and Fraser Preston (eds) (2006) Sovereign debt at the crossroads (Oxford: OUP).
Graeber, David (2011) Debt the first 5,000 years (New York: Melville House)
Guzman, Martin; Ocampo, José Antonio and Stiglitz, Joeseph (eds.) (2016) Too Little, Too Late: The
Quest to Resolve Sovereign Debt Crises (Columbia University Press).
Kose, M Ayhan; Nagle, Peter; Ohnsorge, Franziska; Sugawara, Naotaka (2020) ‘Debt and financial
crises: Will history repeat itself?’, VoxEU
Lienau, Odette (2014) Rethinking Sovereign Debt: Politics, Reputation, and Legitimacy in Modern
Finance (Harvard University Press).
Oatley, Thomas (2010) ‘Political Institutions and Foreign Debt in the Developing World’,
International Studies Quarterly 54(1): 175–195.
Roos, Jerome (2019 ‘Can’t Pay, Will Pay: Historical Change in the Management of International Debt
Crises’, Working Paper.
Reyes Tagle, Yovana and Patomäki, Katarina Sehm (2007), ‘The Rise and Development of the Global
Debt Movement: A North-South Dialogue’. Civil Society and Social Movements Programme
Paper №28. Geneva: United Nations Research Institute for Social Development.

Rocking Our Priors

Jerome Roos, Why Not Default?

65
More podcasts
Mitu Gulati, Ugo Panizza
interviewed by Tim Phillips, 27
April 2020, ‘We need a Covid-19
debt standstill’, VoxTalks

African Development Bank

president Akinwumi Adesina
speaks to the FT's Vanessa
Kortekaas about debt relief and
economic recovery in Africa

66
Gender
Week 10: What accelerates progress towards gender equality?
Something radical happened over the twentieth century: women entered the workforce and became
political leaders, en masse, right across the world. This had never happened before, not in the
entirety of human history. Why did this happen? Why only now? And why is Scandinavia so far
ahead of the Middle East?

The graph shows three key facts:

1. All societies have become more gender-equal over the 20th century.
2. Yet some regions remain more gender-equal than others.
3. These regional differences have existed for a very long time.

The world has become more gender-equal, but rates of change vary geographically

In the Middle East, North Africa, and South Asia many women are still denied basic economic
autonomy. Female genital mutilation is almost universal in the Horn of Africa. In Southeast Asia
meanwhile women have always enjoyed relatively high status, and their work is recognised as vital
to household survival. In Vietnam, women drove trucks and served as combatants, long before this
became common in the West. Then Taiwan and South Korea achieved in 50 years what Europe had
taken 500. What explains this divergence?

67
Uneven progress has deep roots and disruptors.

Deep roots are the traditional institutions which constructed gender norms and whose influence
can still be felt today. These include agrarian systems, kinship, and religion.

Before the modern era, almost everyone produced their own food, and the system for producing
food was the most fundamental way in which gender ideology became entrenched. Where women’s
contribution to farm production was relatively significant (such as in labour-intensive foraging,
horticulture, and wet paddy fields), they tended to have more rights and more autonomy. Where
her contribution was less crucial, women were valued primarily for reproduction and childcare, and
their lives were strictly policed. So men were revered as providers in agrarian systems that required
physical strength, or in pastoral societies where animals were herded over great distances.

Kinship intensity is another deep root of gender relations. Patrilineal societies trace descent and
inheritance through the male line. This motivates close control of women’s reproduction, sexuality,
and mobility. Daughters are only temporary members of their natal families, relocating to their
husband’s family upon marriage. So parents heavily invest in their sons, who provide old age security
and continue the lineage. Son preference reinforces men’s economic advantage, and political
dominance.

Religious societies tend to be more patriarchal. But religion is probably less important than it
initially appears. The influence of religion often depends on the incentives created by agrarian
systems and kinship institutions. For example, although polygamy is permitted by Islam, today it is
only practised in the semi-arid Sahel, where men increased food production by acquiring additional
wives. Over centuries, polygamy has become institutionalised and widely accepted as men’s
prerogative, symbolising wealth and status.

These deep roots – agrarian systems, kinship, and religion – are remarkably persistent. They help
explain why Scandinavia (where women farmed cattle and inherited land, while men fished) has
greater gender equality than the Middle East (where men ploughed fields and married cousins to
strengthen kinship). In fact, if you read this book, then time-travelled back to 1300CE, you could
predict most of the worldwide variation in gender outcomes.

Disruption

Deep roots of gender inequality can be disrupted – by rapid economic growth; democratisation and
feminist activism; family-friendly government policies; and outright coercion under communist
regimes.

Economic growth is a disruptor, a major engine of gender equality. Structural transformation (the
absorption of agricultural labour into manufactural and services) is associated with rising demand
for labour. Employers may prefer men, seeing them as more reliable and productive. But if growth
is rapid, employers run out of male labour and increasingly recruit and retain married women. This
leads to rising female employment and smaller gender pay gaps.

Structural transformation also weakens kin ties. By migrating to cities for jobs, working in large
firms, receiving a regular pay cheque, and gaining social security, people become less reliant on
their kin. This weakens social surveillance and increases autonomy, from elders’ control. As Chinese
women found factory work, they increasingly chose their own partners and formed independent,
nuclear households.

68
Structural transformation advances gender equality by increasing demand for female
labour and weakening kinship. Together, this enables a snowballing process of social change.
Women gain economic autonomy by working for employers outside the family; select their own
partners for marriage (or leave unhappy ones); expand their horizons beyond marriage and
motherhood; form new friendships; and demonstrate their equal competence in socially valued
domains.

By migrating to new places for work, women broaden and diversify their social networks. Going out
to the cafe, they gossip and grumble, bemoaning unfair practices. Others may interject, sharing
tales of more egalitarian alternatives. Emboldened, their friends may come to expect and demand
better - in dating, domesticity, and industrial relations alike. In short, rising economic opportunities
can enable a snowballing process, advancing women’s autonomy, eroding gender stereotypes,
expanding their horizons, and facilitating collective organising. This trend is slow, incremental, and
often conflictual. It is also universal.

These changes occur if female employment rises. But it does not always rise in response to new
economic opportunities. Such change can be inhibited. Gender ideologies mediate the extent to
which female employment responds to economic opportunities. Resistance is strongest in societies
with a long history of male domination in traditional agriculture; where men’s superiority is sanctified
by religion; and where dense kinship networks police compliance with gender ideologies. These
deep roots - agrarian systems, kinship, and religion - explain why some regions are more gender-
equal than others.

Why are some regions more gender equal than others?

Now you understand the basic framework, read more about your region of interest:

• Western Europe and its Offshoots: Precocious Equality

• South Asia: Son Preference & Slow Growth
• MENA: Intense Kinship & Islamic Family Codes
• Sub-Saharan Africa: Agrarian Interdependence
• Latin America: Low Barriers to Gender Equality
• East Asia: Outgrowing Patriarchy
• Communism: Destroying Tradition
• Matrilineal Societies: Gender Equality Before Growth

The exam will not specify a particular region. You can specialise in whichever regions you find most
interesting. I recommend learning about two!

Western Europe and its Offshoots. Precocious Equality

Most societies used to be patriarchal. Women married young, bore many children, worked tirelessly,
but were seldom recognised as competent or knowledgeable. Northwest Europe escaped this trap,
with nuclear families, sustained economic growth, feminist activism, and social democracy.

The nuclear family may be one of the most revolutionary social innovations in human history. Earlier,
parents had arranged marriages, and marital couples were embedded within extended kin networks.
But with the transition to nuclear families, men and women in Western Europe increasingly chose
their own partners, and formed new, independent, and physically separate households. The result
was looser ties of kinship than in the rest of the world.

69
What caused this shift to nuclear families? And why did it begin in Europe?

The early Catholic Church promoted the idea of the nuclear, monogamous family by banning forced
marriage and preaching consensual, conjugal unions. But there may have also been an economic
basis for this social change. During the Middle Ages, many young men and women left impoverished
family fields in search of better opportunities. As they moved away from home and earnt their own
crust, they gained the autonomy to choose their own partners and establish their own, independent
households. Crucial to this process was the existence of deep labour markets: an unusually large
share of Europe’s population worked for wages as early as the Middle Ages, at a time when most
people in the rest of the world were self-sufficient peasants.

But Europe’s precocious innovations in family systems did not imply inevitable progress towards
gender equality. The Industrial Revolution, at least at first, reinforced the male breadwinner model.
As agriculture and industry became more capital-intensive in the 18th and 19th centuries, more
men could provide for their families single-handedly, and women’s relative economic standing was
diminished. Men’s economic advantage was further entrenched by guilds, trade unions, and legal
restrictions. Perversely, the fall in infant and childhood mortality might have curtailed women’s
opportunities, as it temporarily increased the number of children. Saddled with huge care burdens,
women stayed close to the hearth. This curbed their accumulation of knowledge, capital, and social
networking. Women came to be seen as passive dependents.

The late 19th century saw disruption of traditional gender roles from falling fertility rates,
technological innovations, and new labour market opportunities. Industrialisation in Western Europe
fuelled demand for a skilled labour force, and child labour was eventually banned. These two factors
increased the economic value of education. Recognising these potential gains, families chose to
have fewer children and educate them better. This fertility transition led to smaller families,
alleviating women’s burden of care work. Over the twentieth century, there was also a veritable
collapse in women’s domestic burdens - thanks to labour-saving household appliances,
contraceptives, and infant formula. With fewer duties at home, women could profit from new
economic opportunities.

Yet, only 20-30% of all married women in England were regularly employed at the turn of the 20th
century. Toiling in factories and domestic service was gruelling, poorly paid, sometimes dangerous,
and socially stigmatised. So women tended to exit the labour force at marriage and return only in a
crisis (such as if her husband was unemployed or ill). In this early period, women’s work was
considered so disreputable that married women’s participation in the labour force only weakly
responded to economic incentives. But that changed with sustained economic growth, which
increasingly generated socially respectable jobs. Young women soon became more ambitious and
more career-orientated, training as doctors, lawyers, and managers.

The 1960s counter-culture catalysed further disruption. Gathering in feminist bookstores and cafés,
radical young women read and debated feminist manifestos. Emboldened, they mobilised for sexual
autonomy, reproductive rights, and anti-discrimination laws. Working-class women also demanded
equal pay (as in Dagenham, below).

Legislation has also reduced gender divisions of care work. In Norway, Sweden, Germany, and
Iceland, fathers are entitled to paid parental leave (aka ‘daddy quotas’). This has greatly increased
uptake, and catalysed a persistent rise in men’s care-giving. Nordic men can now be seen pushing
strollers, even in the middle of the week. This public visibility shifts expectations, it signals that
men’s care-giving is widespread and socially accepted. This encourages other men to follow suit.
Well-paid leave and publicly-supported childcare services also reduce motherhood’s negative impact

70
on employment and working hours. These family-friendly policies have created a more enabling
environment for gender equality. Western Europe continues to surge ahead.

Ford machinists demand equal pay, Dagenham, 1968

The Gender Earnings Ratio, 1955-2018, Full-Time Workers, USA (Hegewisch and Hartmann
2019)

The United States, as a cultural offshoot of Western Europe, has seen similar advances towards
gender equality. Low kinship intensity and economic growth enabled more investment in education,
falling fertility, rising female employment, feminist activism, and a smaller gender pay gap (as shown
above).

But the United States still lags behind Western Europe in closing the ‘last mile’ in gender equality,
because social democracy has been less successful in America. The more conservative American
71
state has advanced fewer family-friendly policies, such as subsidised childcare, flexible employment,
and paternal leave. As long as American women bear the disproportionate burden of care work,
equality in public life is nigh-on impossible. Several reasons have been cited in the academic
literature for why America has a relatively stingy welfare state: an 18th-century constitution which
enshrines property rights, and a powerful supreme court which restrains populist measures. Another
important factor may be racism. In the United States, ‘welfare queen’ stereotypes are associated
with poor blacks (‘undeserving others’). When FDR secured the passage of the the Social Security
Act in 1935, Southern Democrats’ price for supporting the legislation was the exclusion of
agricultural and domestic workers (who were primarily African-American). Even today, US states
with more African-Americans pay out lower welfare benefits (see graph below). This racism was
entrenched by 250 years of slavery, and is especially prevalent on the Alabama-Mississippi Black
Belt. Whites who live in Southern counties with historically high shares of slaves are more likely to
express racial resentment, feel threatened by civil rights legislation, and resist government
redistribution. Finally, the relative weakness of the American labour movement has also been
attributed to ethnic divisions within its ranks. Union activism was a key driver of the success of
socialist and social democratic parties in Western Europe.

The Relationship between Welfare Benefit and the Black Population Share, by State, 1990
(Alesina et al, 2001).

The United States is also exceptional amongst developed countries for its restrictions on
reproductive rights. Unusual levels of popular opposition to abortion and sometimes even
contraception are due to the unique depth of American religiosity, which may be a legacy of the
American founding. From the 17th century, the USA was founded and settled by deeply religious
groups who fled religious persecution in Europe, such as the Puritans, the Quakers, Mennonites,
and Moravians.

South Asia. Son Preference & Slow Growth

72
South Asia is paradoxical. It is the site of the world’s largest democracy with widespread militant
activism for social rights and economic justice. Yet it has one of the world’s worst records on gender
inequality.

At the turn of 20th century, son preference was rampant across South Asia. Baby boys were
celebrated as future economic providers and scions of the family line. Girls were mere fleeting
residents, inevitably relocating to live with their husband’s family. This patrilocal system motivated
greater investment in sons’ education and advantage. Men also inherited property. Given the
importance of paternity, families policed women’s sexuality, mobility, and employment.

Why do gender inequalities persist in South Asia?

1. India, Pakistan, and Bangladesh still remain 63-65% rural, traditional agrarian institutions
are more persistent in South Asia. Villagers continue to rely on kinship and caste networks
for survival, and women remain subject to patriarchal constraints.

2. Female seclusion remains the social ideal, reducing the supply of female labour. Women
in South Asia have been less responsive to labour demand despite falling fertility and rising
female education. Elsewhere in the world, these changes are normally associated with female
labour force participation.

3. Industrialisation in South Asia has been less labour-intensive (i.e., industry has
absorbed less labour) than in East Asia. The labour shortages which caused employers in the
‘Asian tiger’ countries to resort to hiring women, have never materialised in South Asia. Men
are first in line for jobs, and employers need not hire women.

4. Structural transformation in South Asia has been perverse. Approximately 80% of urban
workers in India are engaged in informal self-employment or in micro enterprises. To
mitigate precarity, urban workers rely on their caste-networks. This perpetuates jati-
endogamy, social surveillance, and purdah. Hence female employment only weakly responds
to economic growth. Women remain secluded and separated, seldom challenging their
patriarchal providers.

Female seclusion inhibits organised resistance

Men go out into the world, run family businesses, migrate to new economic opportunities, resolve
community problems, mobilise political networks, make the laws of the land, then unwind playing
cricket. From the village panchayat to the lok sabha, it is a man’s world.

Women’s paid work in the public sphere is low in places with traditions of purdah. Most Delhi women
working in manufacturing do so within their own home - with scant opportunities to expand their
networks, organise, gain skills or autonomy. In Lucknow, working women are concentrated in
subcontracted work and as unpaid labour in family enterprises. They work, but rarely interact with
outsiders. They remain dependent on male intermediaries.

Home-based workers have organised for better conditions. But most South Asian women remain
economically dependent on male providers, with smaller social networks, and less knowledge of the
wider world. If women remain secluded and separated, they are less likely to collectively critique
and challenge their subordination. Women may not question gender wage gaps, as they presume
men to be more competent – as in Pakistan’s garment industry. As Jobeda (a member of a social
mobilisation NGO in Bangladesh) explained,
73
Whatever the village elders said we
used to take as the truth. We never
protested even though there was a lot
of injustice and oppression in the
locality. We were afraid of the
chairmen, village leaders and members.
Moreover, we could not see any reason
to protest. After all they were our village
leaders, we used to honour them. We
thought that to argue with the chairmen
was to commit an offence.

In India also, women are much less

likely to attend or speak at village
meetings, let alone make claims on local
leaders. Attendance rates range from
25-33% for men and 6-11% for women. It is especially low in areas with tight restrictions on female
mobility. In the absence of strong female networks and contentious claims-making, men continue
to dominate informal and formal institutions in ways that maintain control over women’s bodies.

Legal protections do exist – for acid attacks, domestic violence, divorce, and inheritance. This is a
result of hard-won feminist battles. But – given female seclusion and separation on the ground -
these paper rights are seldom claimed. 73% of survivors in Bangladesh remain silent. Beatings are
widely regarded as a private matter, women’s fault, a source of shame. As long as women are
economically dependent on men, without a field of their own, divorce brings destitution. Many thus
endure abuse. Reliant on patriarchal guardians, Indian Muslim women campaigned ardently to end
the triple talaq, so wives are not easily abandoned. India introduced all-female police stations but
these have not increased reporting or accountability for gender-based violence.

74
Even if survivors do report, they are seldom supported. ‘The police officers didn’t help at all. The
police pushed me to drop the case and to say that he didn’t do it. Whatever I said the police refused
to write down’ – explained an acid-attack victim in Bangladesh. In Punjab the conviction rate for
violence against women is less than 3% of registered cases. Likewise in Bangladesh, courts, police,
doctors, and nurses are unsympathetic to victims of gender-based violence. Victims of acid-attacks
are isolated and stigmatised, pressured to marry their assailants. Indeed, survivors are nearly always
encouraged to reconcile with their abusers. Most Indians think women’s safety is best preserved
through strict social surveillance, rather than protecting their freedoms.

Such disregard perpetuates despondency. Sadia was in an abusive marriage for 12 years. Never
once did she report her husband. She didn’t trust the police to protect her, she worried reporting
would only enrage her husband. Observing persistent impunity, young women like Joya ask ‘What’s
the point of complaining?’. The same goes for inheritance – seldom claimed for fear of alienating
kin. This is largely a result of female seclusion, which not only compounds dependence on patriarchal

75
guardians but also checks collective critique and claims-making. For women to claim their rights,
they first need to come out of their homes.

South Asia’s gender inequalities are not insurmountable. The diversity of historical
experience within South Asia suggest there are many ways to tip the income-honour trade-off in
positive directions.

When factories opened up

in Bangladesh, families
increasingly invested in
their daughters’ education,
delayed marriage, and
supported their
employment. Female
employment continues to
rise in Bangladesh,
especially amongst
graduates. Through formal
employment, women
accrue self-esteem and
social respect. Bangladeshi
women’s relatively strong response to economic opportunities may stem from lower levels of
endogamy and thus slightly weaker policing (compared to Bihar).

Indian women seize economic opportunities when they feel safe. If a woman can work for a female-
owned enterprise, she will readily accept a lower wage. Free from lecherous outsiders, her family
no longer need worry about a loss of honour. For similar reasons, women are much more likely to
work in neighbourhoods where they do not fear rape.

Female graduates are pursuing

careers in IT, engineering,
telecoms, finance, and hospitality.
Emboldened by peers, they are
capitalising on rising demand for
skilled labour in Chennai,
Bengaluru and Hyderabad. Many
female graduates want to work.

In cities, upper caste women are

actually more likely to participate in
the labour force - since they can
find respectable work (alongside
upper caste men). They are
exercising far greater autonomy
than their grandmothers, gathering
as friends, and collectively castigating sexism.

Traditional institutions are clearly not insurmountable, and they are likely to weaken with structural
transformation. In large, thriving, southern cities there is less untouchability, more social mobility,
and declining caste segregation. This bodes well for gender equality.

The Middle East and North Africa. Intense Kinship & Islamic Family Codes
76
The Middle East and North Africa does not contain the poorest countries in the world, and some
parts are very rich. But it has progressed the least toward gender equality. MENA shows that even
with economic development, gender progress can be restrained by culture and tradition.

MENA has seen much of the same social transformations which, elsewhere, have led to great
progress on gender. In Iran, Egypt, and Saudi Arabia, the vast majority of women now complete
secondary education and go on to have two children (much like Europe). Curiously, however,
MENA’s fertility transition has not catalysed a commensurate rise in female employment. In Qatar,
more women than men complete university, yet only 14% participate in the labour force. MENA
marriages are also distinctive. Traditionally, they are not partnerships between two individuals, but
between two families, with women establishing their place in the lineage by bearing sons.
Extramarital sex is so strongly condemned that in some countries ia criminal offence punishable by
imprisonment. Many female migrant workers in the Gulf have been imprisoned on charges of
extramarital sex even when they were raped by their employers.

The deep roots of patriarchal dominance in the Middle East may include pastoralism, plough-based
agriculture, patrilineal kinship, discriminatory family codes, and (perhaps surprisingly) female
inheritance rights under Islam. The Middle East was one of the first regions in the world to undergo
the Neolithic Revolution and adopt the plough and domesticate draft animals like oxen. Plough-
cultivation increased land value and reinforced patrilineal inheritance. Men also herded cattle in
search of productive pastures while women remained at home caring for children.

Islam may have brought more rights for women in the Middle East, especially inheritance rights.
But this may have created perverse incentives to strengthen corporate kinship systems via cousin
marriage. Since marriage outside the clan dissipates family assets, MENA families share a strong
preference for marriage with fathers’ brothers’ daughters. A third of MENA families arrange cousin
marriage, reinforcing the corporate patrilineal clan (male relatives on the paternal side).

These tight kinship groups provide mutual support and assistance in times of need. But they also
share honour collectively (‘ird’), and a woman’s impropriety is seen as reflecting badly on the entire
extended family. A woman operating outside the home is often perceived as sexually promiscuous,
rather than supplementing the family finances. Thus many women remain at home, closely
surveilled by husbands, brothers, cousins, and other male relatives. Cousin marriage, which restricts
a woman’s potential husbands to members of the family, further limits her autonomy and is
associated with low rates of female employment.

These strong kinship groups persist partly as a result of low structural transformation. Unable to
find regular, salaried employment, many people rely on social connections (‘wasta’).

Cousin marriage, across the world (Schulz et al, 2019).

77
Patriarchal dominance was institutionalised through customary codes and (more recently) Sharia
law. Legally, women must obey their husbands (see table below). If an Egyptian woman is found
guilty of disobedience, such as by leaving the home without her husband’s permission, she will be
denied financial rights upon divorce. These family laws also uphold the controlling influence of
patrilineal kin.

Obedience clauses in MENA family laws (World Bank, 2004)

78
Powerful religious authorities have consistently opposed attempts to reform discriminatory family
laws - as famously showed by Mala Htun and Laurel Weldon.

Feminists have always fought back. When Tunisia’s Ennahda Islamist party raised discussions about
women, activists effectively galvanised widespread public resistance. Compatriots were receptive,
since they were accustomed to relatively egalitarian gender relations, harking back to the 1956 Code
of Personal Status. Likewise in Northern Indonesia, Muslim women’s groups have built alliances with
progressive reformers to push for a more egalitarian interpretation and implementation of Islamic
law.

But fear of antagonising clerics, risking angry mobs, and jeopardising political authority has often
sapped rulers' drive for reform - as in Pakistan. The King of Jordan has repeatedly tried to improve
women’s rights, but is perennially frustrated by Islamists in parliament. Orthodox, authoritarian
clerics in Iran's Guardian Council have consistently vetoed bills on women’s rights. Iranian feminists
have fought back against discriminatory laws, orchestrating a ‘One Million Signatures Campaign’.
But with state harassment and intimidation, they soon demobilised. Having retreated underground,
women’s organisations struggle to network and gain visibility.

Reformists have been more successful when clerics lost power - such as Turkey in the 1920s, Tunisia
in the 1950s, Iran in the 1960s, Indonesia in the 1970s, and in the Marxist states of South Yemen
and Somalia in the 1970s. Since the late 1970s, clerical influence has returned with a vengeance.
Sexist laws thus endure, entrenching patriarchal kinship, curbing women’s autonomy, and thwarting
activism.

79
Leaders have been more receptive to feminist activism when trying to cultivate international
legitimacy – as in Turkey and the Maghreb. Turkey’s women’s movement massively expanded over
the 1990s and early 2000s. They organised public campaigns, street protests and sit-ins to galvanise
public support for legislative reform. Eager for EU membership, the Turkish government sought to
demonstrate its liberal credentials. The new civil code (2001) legislated spousal equality –
concerning marital property, divorce, custody, inheritance, as well as the right to work and travel.
Yet more laws tackled labour market discrimination, marital rape and domestic violence.
Bureaucratic machinery was established to promote enforcement – such as an app to report gender-
based violence.

But rulers’ desire for global approval does not entail implementation – which remains paltry in the
Maghreb. On paper, Morocco has made great strides towards gender equality: its 2011 Constitution
enshrines gender equality; its 2004 Family Code removed the obligation of having a male guardian;
and women’s rights to divorce and child custody are recognised. However, conservative family
courts routinely ignore top-down edicts.

In sum, given MENA’s deep roots (the male breadwinner ideology, intense kinship, and Islamic
family codes) female employment scarcely rises in response to falling fertility, rising female
education, and economic growth.

Latin America. Low Barriers to Gender Equality

Latin America is the opposite of the Middle East: cultural traditions can catalyse progress toward
gender equality even with modest economic development.

Latin America has long been patriarchal. According to scholarship on Latin America, female
employment started rising in the 1970s thanks to falling fertility, growing educational parity,
economic insecurity, the expansion of the service sector, and rising demand for cheap, docile labour.
80
But wait a minute.

Why did female employment rise in response to new economic opportunities more readily in Latin
America than MENA or South Asia? Stepping back, comparing the trajectories of gender equality
across world regions, forces us to ask new, deeper questions.

The answer could be Latin America’s lower kinship intensity. Across the world, women’s rights are
much more likely to be restricted in communities with strong kinship intensity. But Latin America --
both the indigenous populations prior to European conquest and the European conquerors
themselves -- had low rates of cousin marriage, polygamy, and extended families’ co-residence.

In Latin America, women working outside the home had been stigmatised just as in any other
region. But the husband’s shameful failure to provide was a social cost was born by him alone, and
not his entire lineage. Furthermore, he would directly gain from her employment, rather than share
the proceeds with many kin. Given low kinship intensity, female employment and urban migration
rose quickly in response to new economic opportunities. By networking and organising in the public
sphere, women activists have successfully campaigned for employment rights for domestic workers,
land rights for rural women, and gender quotas. Women’s share of parliamentary seats soared from
19% to 27% in the last decade, making Latin America a world leader.

Kinship Intensity Index, for 1500CE (Schulz et al. 2018)

Sub-Saharan Africa. Economic Interdependence in Agriculture

Sub-Saharan Africa has the potential to be very gender-egalitarian, especially in southern Africa.
Africa’s traditional dependence on hoe-cultivation has meant women were important in subsistence
agriculture. But this interdependence has not enabled gender equality.

Some blame colonialism. Colonial administrators and missionaries certainly favoured men – in
education, agricultural training, waged work, and bureaucracies. This male breadwinner, female
housewife ideal was buttressed by Christian missionaries. African chiefs, meanwhile, strategically
advanced and codified their patriarchal version of customary law.

81
But we must not overstate colonial control or native compliance. The impact of colonialism was
filtered through Africa’s wildly diverse traditional institutions - agrarian systems, religion, and kinship
structure. Child marriage, large families, and polygamy have always been more common in the arid
Sahel, where rich men increased production by acquiring additional wives and children. Yes,
polygamy is legitimised by Islam, but it is only practised amid poor soils. Kinship also matters:
women in southern Africa’s famous matrilineal belt engage more frequently in civic and political
participation, while experiencing less gender-based violence.

In African societies with weak constraints on female mobility, women have long played a major role
in public life. War-torn Rwanda was the first country in the world to establish a female-majority
parliament. In the struggle to survive bloody, brutal, and disruptive conflicts, African women
increasingly undertook traditionally masculine roles. In Liberia, Uganda and Rwanda, women
became breadwinners, heads of households, community organisers, and leaders in peace
movements. They organised to repair the damage. Women came to perceive themselves as capable,
strong and autonomous. Through prolonged exposure to women demonstrating their equal
competence in socially valued domains, people came to question their gender ideologies. This
attitudinal shift cultivated growing support for women leaders in parliaments, executive branches,
government bureaucracies, judiciaries and civil society.

82
Engaging in post-conflict processes, African women’s movements pressed for quotas. They were
especially successful in post-conflict, authoritarian, aid-dependent countries, where rulers sought to
improve their international reputations.

In power, women legislators have passed several bills on intimate partner violence and inheritance
rights. But this has not radically improved outcomes on the ground. In Liberia, women’s movements
have pushed for enforcement, but this is generally paltry, especially in remote rural areas. Rwanda’s
majority-female parliament did pass an inheritance bill, but women struggle to secure these rights
in practice.

Women’s mobilisation and gender quotas are constrained by low population density and low state
penetration. Remote villages may be several hours drive from the nearest police post - or longer if
waterlogged. If victims cannot get help, violence continues with impunity. Communications are also
limited. Extremely poor families cannot afford radios, let alone smartphones. Remoteness forestalls
exposure to critical discourses, networking, and contentious claims-making. In rural Zambia,
neighbours may privately condemn assault but hesitate to intervene because they anticipate
community disapproval. Despondency curbs social and political change.

Fertility remains high amongst families trapped in labour-intensive horticulture and saturated
informal economies, where there are low returns to schooling and low opportunity costs of child-
bearing. Poverty also impedes girls’ educational progress. Many wed early, bear many children,
become burdened by care-giving, and struggle to accumulate the capital, knowledge, and networks
to challenge dominant men.

83
The incidence of polygamy, child marriage, and female genital mutilation across Africa
(Shapiro and Gebreselassie 2014; WHO 2020)

84
East Asia. Outgrowing Patriarchy

East Asia demonstrates the possibility of rapid transformation in gender relations. Just as the East
Asian ‘Tigers’ underwent their famous growth miracle, so there was a parallel ‘miracle’ in gender
equality. Although there remains much room for progress, East Asia nonetheless is the non-western
region to have overcome so much of its patriarchal past and experience convergence with Western
norms on gender. The East Asian experience, more than any other, suggests the crucial importance
of sustained economic growth in breaking traditional barriers for women.

South Korea, Taiwan, and China sought rapid industrialisation and looked to Japan’s successful
development model. One element of the Japanese model was harnessing cheap, docile female
labour. Thus factory recruiters across East Asia coaxed, cajoled, and tricked desperate rural families,
offering them an economic lifeline, safe working conditions, and tightly-surveilled single sex
dormitories which would ensure their daughters’ honour. As demand for female workers boomed
and dutiful daughters remitted earnings without jeopardising honour, poor rural families came to
see female employment outside the farm as advantageous and respectable.

But young women eventually were liberated from the grip of their families. By migrating to cities
and earning money, young women increasingly provided for their parents, gained economic
autonomy, and networked independently. By gathering together in dormitories, building a sense of
class consciousness, Korean garment workers played a crucial role in unionisation and
democratisation. Women’s encroachments are publicly visible. This inspires others to follow suit.
Democratisation emboldened Korean and Taiwanese feminists. They became increasingly
organised, outspoken, and assertive. Women rallied against sexual harassment and secured
accountability. Powerful men were imprisoned for abuse.

Huge inequalities persist - in terms of pay, property, and political representation. But East Asia is
becoming more gender equal.

85
86
Communism. Destroying Tradition

Communism was dedicated fundamentally to the extirpation of traditional society root and branch.
The Soviet Union, Maoist China, and Vietnam sought to destroy traditional gender roles, partly for
ideological reasons, and partly in order to maximise production. The relative inefficiency of
production under central planning meant that as many workers as possible were needed to fill
production quotas. This advanced gender equality relative to non-communist peer countries at a
comparable levels of development. High rates of employment strengthened women’s perceived
value, economic autonomy, and nuclear family formation.

Liang Jun, a tractor driver and model worker, was championed in the 1960s on China’s 1 yuan
banknote

But with four important caveats. First, in practice, Communist leaders still had to work within
constraints set by pre-existing cultural traditions. Female labour force participation was always lower
in wheat-growing Northern China and higher in rice-growing Southern China and Vietnam.

87
Second, the Communist government did not alleviate women’s burden of child-care, nor did they
recognise their leadership qualities. These gender divisions of labour reinforced gender stereotypes.
Thus when communist regimes collapsed and capitalism was reintroduced, there was an abrupt fall
in women’s labour force participation. Many employers still privileged and preferred men, while
women sought to avoid hostile work environments. But the gender legacy of communist has not
been completely erased: for example, the former Soviet Muslim republics tend to perform better on
many gender metrics today than Muslim-majority countries without communist experience.

Third, Maoism did not erase the patrilineal system (for fear of irking poor peasants). Son preference
persisted – to continue the family line. As fertility fell and access to ultrasound increased with wealth
and urbanisation, families had greater means and motive to abort daughters. Though this may only
be temporary: women are providing for natal kin, and being valued accordingly – just as in South
Korea.

Fourth, authoritarianism in Russia and China inhibits women’s collective capacity to challenge
inequitable laws and policies. The Chinese Communist Party has banned feminist activism. With
resistance muzzled, institutions have little incentive to reform. Though the Government introduced
a new civil code this summer, defining sexual harassment and creating a complaint mechanism, the
police are notoriously unsympathetic. Seldom hearing dissent or finding support, many Chinese
women see sexual harassment as inevitable. Patriarchal authoritarianism appears to have
entrenched impunity.

That said, rapid economic growth in China has cultivated strong demand for skilled female labour.
So female employment is increasing amongst university-educated women and gender gaps are
waning.

Matrilineal Societies. Independence Before Growth

88
Matrilineal societies have always supported women’s independence, even before the advent of
modern economic growth. 15% of the world’s population live in matrilineal societies, mostly in
South-East Asia and Southern Africa.

Matrilineal descent is traced down the female line. This gives kin less compunction to tightly control
women’s reproduction, sexuality, and independent mobility. For centuries, women in the Philippines,
Thailand, Cambodia, and Laos have travelled widely as traders, inherited land, divorced freely, been
supported by matrikin, worshipped as goddesses, and held high office. Today, despite being much
poorer, the Philippines have similar shares of female parliamentarians as the United Kingdom.
Female representation is equally high in Laos (one of the poorest countries in the world). Given
women’s long-standing independent mobility, the Philippines became a successful labour-exporting
state.

Traditional kinship systems explain the differences in how Northeast and Southeast Asian families
responded to new economic opportunities. In the early years of rapid economic growth (1960s),
patrilineal Taiwanese families sent daughters to factories to pay for their sons’ education. Women
at first had minimal control over their labour or earnings. Economic autonomy only came later, as a
consequence of rural-urban migration, employment, and independent networking (echoing Europe
and the USA). By contrast, in the matrilineal communities of Southeast Asia, women were always
more autonomous. Young women themselves decided whether to work at factories and how to
spend their salaries.

Matrilineal societies do not arise randomly. They are more common in regions where land has
relatively low value (due to fishing, shifting cultivation, or the absence of plough-cultivation.
Matrilineality can also disappear, or become less protective, when new modes of production become
important. A hundred years ago, in Northern Rhodesia (now Zambia), Bemba women, being
recognised as important providers, had the freedom to leave an unhappy marriage with the full
support of their kin. Women’s traditional status was undercut when British colonial policies changed
the structure of the economy by opening the Copperbelt mines. Men were favoured in the new,
export-orientated, mineral-based cash economy, and women were marginalised. In the first few
decades of independence, they comprised less than 8% of national parliamentary seats.

Summary

We are interested in three key facts:

1. All societies have become more gender-equal

2. Some regions are more gender-equal than others
3. These regional differences have persisted – with two exceptions.

Economic growth is a major engine of gender equality. It has enabled all societies to become more
gender-equal. In response to new opportunities, families chose to have fewer children, invested
heavily in their education, and benefitted from female employment. This enabled a snowballing
process of social change. Women gained economic autonomy; selected their own marriage partners
(or left unhappy ones); expanded their horizons beyond marriage and motherhood; demonstrated
their equal competence in socially valued domains; mobilised for equal pay and reproductive rights;
gained credibility as national leaders; and then enacted family-friendly policies to create enabling
environments for gender equality.

However, the extent to which female employment can respond to new economic opportunities is
still shaped by deeply rooted gender ideologies. Resistance is strongest in societies with a long
89
agrarian past with relatively little female participation on the farm; and where men’s superiority is
sanctified by religion; and where dense kinship networks police compliance with gender ideologies.
These deep roots - agrarian systems, kinship, and religion - explain why some regions are more
gender-equal than others.

Regional differences have persisted, with two exceptions. Rapid growth in East Asia generated
widespread demand for women workers. Impoverished rural families quickly took advantage of
these new economic opportunities. Female employment rose rapidly. With their neighbours already
profiting, patrilineal families ceased to worry about social condemnation. They soon saw female
employment as normal and beneficial. Communism is another disruptive force, compelling female
employment. Family-friendly policies are also critical. But they were spearheaded by Scandinavian
countries. Progressive legislation may be won by feminist activism, but its worldwide variation stems
from ancestral farming, kinship intensity, and structural transformation.

Readings

Evans, Alice (2021) How Did East Asia Overtake South Asia?

Further Readings:

South Asia

Chowdhry, Prem (2004) Caste panchayats and the policing of marriage in Haryana: Enforcing kinship and
territorial exogamy, Contributions to Indian Sociology.
Anderson, Siwan (2007) 'The Economics of Dowry and Brideprice', Journal of Economic Perspectives
Becker, Anke (2019) On the Economic Origins of Restrictions on Women's Sexuality, CESifo Working Paper
No. 7770
Carranza, Eliana (2014) Soil Endowments, Production Technologies and Missing Women in India, American
Economic Journal.
Miller, Barbara D (1982) ‘Female Labor Participation and Female Seclusion in Rural India: A Regional View’.
Economic Development and Cultural Change 30(4): 777–94.
Adams-Prassl, Abigail and Andrew, Alison (2019) Why do parents invest in girls’ education? Evidence from
rural India, VoxDev
Chowdhry, Prem (1993) Persistence of a Custom: Cultural Centrality of Ghunghat, Social Scientist Vol. 21,
No. 9/1
Mandelbaum, David (1986) 'Sex Roles and Gender Relations in North India', Economic & Political Weekly (&
his book).
Klasen, Stephan and Pieters, Janneke (2015) What Explains the Stagnation of Female Labor Force
Participation in Urban India?, World Bank Economic Review.
Dubey, Amaresh; Olsen, Wendy; Sen, Kunal (2017) The Decline in the Labour Force Participation of Rural
Women in India, The Indian Journal of Labour Economics.
Eswaran, Mukesh; Ramaswami, Bharat and Wadhwa, Wilima (2013) 'Status, Caste, and Time Allocation of
Women in Rural India', Economic Development and Cultural Change,
Lahoti, Rahul and Swaminathan, Hema (2016) Economic Development and Women's Labor Force
Participation in India, Feminist Economics
Heath, Rachel and Mobarak, Mushfiz (2015) Manufacturing growth and the lives of Bangladeshi
women☆, Journal of Development Economics, 115:1-15.
Hossain, Naomi (2012) Women’s Empowerment Revisited: From Individual to Collective Power among the
Export Sector Workers of Bangladesh, IDS Working Paper
Agarwal, Bina (2010) A Field of One's Own: Gender and Land Rights in South Asia (Cambridge).
Agarwal, Bina and Pradeep Panda (2007) ‘Toward Freedom from Domestic Violence: The Neglected
Obvious’. Journal of Human Development 8(3): 359–88.
Bloch, Francis and Rao, Vijayendra (2002) 'Terror as a Bargaining Instrument: A Case Study of Dowry
Violence in Rural India' American Economic Review

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 Chakraborty, Tanika and Sukkoo, Kim (2010) 'Kinship institutions and sex ratios in India', Demography
47(4): 989-1012.
Guilmoto, Christophe Z. (2009) ‘The Sex Ratio Transition in Asia’. Population and Development Review
35(3): 519–49.
Miller, Barbara (1997) The Endangered Sex: Neglect of Female Children in Rural North India (OUP).
Human Rights Watch (2020) “I Sleep in My Own Deathbed”: Violence against Women and Girls in
Bangladesh: Barriers to Legal Recourse and Support'.
Chowdhry, Prem (1997) ‘Enforcing Cultural Codes: Gender and Violence in Northern India’. Economic and
Political Weekly 32(19): 1019–28
Human Rights Watch. 2016. “This Crooked System”: Police Abuse and Reform in Pakistan. Human Rights
Watch.
Jassal, Nirvikar. 2020. ‘Gender, Law Enforcement, and Access to Justice: Evidence from All-Women Police
Stations in India’. American Political Science Review 114(4):1035–54.
Chakraborty, Tanika, Anirban Mukherjee, Swapnika Reddy Rachapalli, and Sarani Saha (2018) ‘Stigma of
Sexual Violence and Women’s Decision to Work’. World Development 103: 226–38.
Jeffrey, Robin (2004) ‘Legacies of Matriliny: The Place of Women and the “Kerala Model”’. Pacific Affairs
77(4): 647–64.
Jejeebhoy, Shireen J., and Zeba A. Sathar. 2001. ‘Women’s Autonomy in India and Pakistan: The Influence
of Religion and Region’. Population and Development Review 27(4):687–712.
Khan, Ayesha (2018) ‘The Women's Movement in Pakistan: Activism, Islam and Democracy” (IB Tauris).
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Assessment
The goal is to write a persuasive argument in response to the question posed.

Your reader is extremely knowledgeable but sceptical. You don’t need to explain the basics, so cut
the background description.

You do need to provide a convincing argument. One line sweeping assertions and generalisations
are not convincing.

So,

- Focus on the question throughout. Every single paragraph must be focused on answering
the question. Irrelevant/ tangential material should be cut.

- Support every claim with empirical evidence. If you don’t have the evidence, find it or don’t
make the claim.

- Provide detailed justification, explain the causal mechanisms.

- Consider how your argument could be questioned!

- Do NOT copy and paste from other sources. That is plagiarism. Do not copy and paste from
this handbook. I will know!!

- Don’t QUOTE other sources. That does not demonstrate your understanding or analysis.

- The assessment criteria is here.

I encourage you to discuss your essay with a friend. When listening to their arguments, think:
does this focus on the question throughout, are the arguments persuasive, what are the other
explanations?

Questions

1) How important was land reform to economic development in East Asia?

2) Why do the effects of trade liberalisation vary, across the world?

3) What made industrial policy effective in South Korea?

4) Does democracy cause growth?

5) Pick any two democracies. Explain how they democratised.

6) Pick any two authoritarian regimes. Explain how they have maintained control.

7) Pick any two famines. Explain why they occurred.

8) How might carbon lock-in be overcome?

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 9) Why have LMICs become so heavily indebted?

10) Pick any country, explain why it has become more gender equal.

11) Pick any two countries, explain why one is more gender equal.

12) Pick either graph below. Provide an explanation.

Krugman et al, 2018

Krugman et al, 2018

97