Chapter 4 - Small Differences and Critical Junctures

In a chapter that argues for the importance of path dependence through an examinination of history and, what the authors call, "small" differences, it is an odd choice to begin with an analysis of the Black Plague - a far from small difference.

However, the argument seems to be that, however small the distinctions may be between societies, there are moments in history - critical junctures - that offer the opportunity for a change in the path of development. That is, if I am reading the argument correctly.

The analysis in this chapter is provocative and I found myself reflecting upon contemporary debates about the direction of institutional change. After comparing and contrasting various European approaches to colonization, we read:

"These distinctions, which initially appeared small, started to matter a great deal . . ." (page 105)

This is, I think, an important point, if one not fully supported by evidence. That is, the junctures that offer what appear to be 2 small or insignificant differences in institutional development, way well have very large consequences. Today, the debate over regulation of sugar, fat or other food properties may seem small to some (ok, this may not be the best example) may end up with critical impact on development in the foreseeable future. Perhaps a better example is the current debate over women's rights.

The authors introduce the idea of institutional drift(108-9) as mechanism that leads to differences in institutional evolution and thus outcome. I am anxious to hear how my colleagues react to the analysis and argument for this mechanism.

"The richly divergent patterns of economic development around the world hinge on the interplay of critical junctures and institutional drift. Existing political and economic institutions - sometimes shaped by a long process of institutional drift and sometimes resulting from divergent responses to prior critical junctures-create the anvil upon which future change will be forged."(109-110)

This mechanism seems to me to be Hayekian and thus attractive to my understanding of the process of change. But it is a nagging concern that the parallel between genetic drift (which I believe is a generally accepted process in evolutionary biology) and institutional drift which is asserted by the authors is not . . . fully developed and perhaps not valid? That is, I also recall that Hayek warned about attempting to make parallels from natural world process (which he called simple?) to social processes (which he called complex?)

In simple terms, is institutional drift a valid/useful mechanism to apply to understanding the process of economic change?