Thursday, August 16, 2012

Chapter 9 - Reversing Development

This chapter was useful for me by introducing me to the work of nobel laureate Arthur Lewis and the "dual economy" paradigm. (258) Acemoglu and Robinson argue that the dual economy is an artifact of colonization and the process by which extractive institutions are imposed.

"World inequality today exists because during the nineteenth and twentieth centuries some countries were able to take advantage of the Industrial Revolution and the technologies and methods of organizations that it brought while others were unable to do so." (271)

The authors argue that the "underdeveloped" societies were "unable" to participate in rising income and wealth due to growth as a result of extractive institutions (slavery is the example explored in this chapter) imposed by European colonization.

I wonder to what extent this argument is a complete explanation of the rising world inequality.

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