Join the Arizona Society of Economics Teachers Book Club to discuss current popular economics books.
Thursday, September 20, 2012: Why Nations Fail by Daron Acemoglu and James Robinson
5:45 - 7:45 p.m.
Arizona Council on Economic Education office
3260 North Hayden Road, Suite 207
Scottsdale, Arizona 85251
Wednesday, October 24, 2012: The Next Convergence by Michael Spence
Thursday, December 6, 2012: The Race Between Education & Technology by Goldin and Katz
Questions for discussion
Based on your reading, has you thinking about any of the following changed? If so, what in the book lead your thinking to evolve?
Catch up effect
1. Jared Diamond’s review: “My overall assessment of the authors’ argument is that inclusive institutions, while not the overwhelming determinant of prosperity that they claim, are an important factor. Perhaps they provide 50 percent of the explanation for national differences in prosperity.” Do you disagree? If so, what other factors might account for the remaining 50%?
2. Warren Bass’s review: ““Why Nations Fail” isn’t perfect. The basic taxonomy of inclusive vs. extractive starts to get repetitive.” Does the strategy of repetition strengthen or weaken the argument? Why?
3.Vuk Vukovic ‘s review: “The outcome of this insightful thesis originating from the works of Adam Smith can often depend on random historical events. They refer to these as the critical junctures of history that exploited the initial small institutional differences and led to diverging development paths of nations.” What can you point to in either your reading or thinking about the argument in the book that would suggest that random historical events are critical to development. If, these type of events are critical how are inclusive institutions more suitable for sustained growth than are extractive ones?
4.If inclusive institutions are necessary, how do they come about?
5. On page 43 we read: ". . . it is politics and political institutions that determine what economic institutions a country has." How well is this assertion developed and in what ways does this view differ from the opposite – that economic institutions determine political ones.
6. Acemoglu and Robinson argue that diffusion is key to the mechanism of convergence.
7. Is institutional drift a valid/useful mechanism to apply to understanding the process of economic change?
8. How convincing did you find the dichotomy between virtuous and vicious circles?
9. (74-5) This is an interesting list - beginning with the universal of private property rights as an institutional foundation for an inclusive or, to use North's terminology, open access society, the authors insert the notion that some public provision of services is necessary for societies to grow and develop. I anticipate a heated discussion on this point. OK, will there be?
10. Chapter 13 - Why Nations Fail Today – what is the reason advanced? How convincing do you find this response? Could one of the theories of growth described and rejected by the authors offer a convincing explanation?
11. One of my persisting questions is the role of the "degree of state centralization" (441) as it seems that centralization at the supranational level and at the subnational levels (to use the terminology employed by North in Violence and the Social Order) plays a part in both circles and both types of institutional evolution. What was your reaction to centralization as key to growth?
Z The Next Convergence – Michael Spence
“I enjoyed reading this book. It is an entirely sensible take on catch-up growth, a topic which is lacking a good popular treatment and yet deserves one. I found each of the short chapters well-written and to the point.”
“Spence offers deep insights with a winning, refreshing humility rarely seen in Nobel Prize-winning economists. While Spence has written a book about what will happen in 2050, he concludes by similarly conceding that all crystal balls are hazy. “We do not know, and probably cannot calculate, what the medium-term destination will be,” he writes. “It is not that the principles and forces aren’t understood. It is rather that the system is too complex to lend itself to forecasting.”
“More important, the analysis of the resource requirements of a world in which 6bn-7bn people live as 1bn people do now is superficial and over-optimistic. True, he is in good company. But I wonder whether such a world will prove sustainable. Certainly, far more rigorous analysis is needed.”