[Applause] [Music] [Applause] [Music] conversations with Tyler is produced by the mercada center at George Mason University Bridging the Gap between academic ideas and real world problems learn more at marcus.org and for more conversations including videos transcripts and upcoming dates visit conversations withth tyler.com [Music] hello today I'm here with Daron asoglu who of course is Professor of Economics at MIT by some measures Deron is the
number one most widely cited Economist in the whole world and he has a new book out with James a Robinson called the narrow Corridor States societies and the fate of Liberty welcome drone thanks Tyler this is really a perfectly
wonderful presure to be here I have so many questions about economic growth first how much of the data on per capita income is explained just simply by one variable distance from the equator and how good a theory of The Wealth of
Nations is that I think it's not a particularly good theory you know if you look at the map of the world and color different countries according to their income per capita you'll see that a lot of lwi income per capita countries are
around the equator and some of the richest countries are pretty far from the equator in the temperate areas so many people have jumped to the conclusion that there must be a causal link but actually I think Geographic factors
are not a great explanatory framework for understanding prosperity and poverty but why does it have such a high r squared or like by one measure the most antipodal 21% of the population produces 69% of the GDP which is striking right is that just accident yeah it's a bit of an accident so essentially if you think of which are the countries around the equator that have such low income per capita they are all former European
colonies that have been colonized in a particular way so for a variety of reasons and geography might have played a all though I'm not completely sure European powers pulled ahead of the rest and then they went ahead and colonized
much of the rest of the world so today you know for about 120 countries their current institutions are heavily shaped by their colonial experience and the colonial episode has been very unequal for different countries if you
take places such as the United States or Australia they ended up with pretty good institutions actually better institutions in many ways than their mother country back at home because the uh settlers who sort of got to live in these places pushed for better institutions fought for better institutions so Australia was one of the more democratic places in the 19th century the US of course introduced a sort of small holder Society much better
than Britain but in most of the tropical areas the conditions that Europeans encountered LED them to adopt a very different colonization strategy and essentially for two separate but related reasons first many of the more civilized
and densely populated areas were near the tropics so the Inca Empires the Aztec Empires the Indian subcontinent with the mugal Empire colonized by the British the North African uh civilizations and all of those created a
much better opportunity for Europeans to set up what James and I call extractive institutions to essentially control labor and use labor and moreover the settlement pattern that was at the root of the sort of the better institutional development of places such as the US Canada Australia really was made impossible in most of these places because associated with both climatic conditions and the dense population they
had vectors of diseases that were very very different than the ones the Europeans were used to so the mortality rates that Europeans faced were very different so the combination of these two factors meant that the colonization
experience was very different and the colonial institutions were were very different in these places and to a first approximation all of that big gap between places such as us Argentina Chile and places like Peru Bolivia India
Pakistan can be explained by these different colonization strategies and their institutional implications as you know there's a famous paper by Coman easterly and gong showing there's a reasonably High correlation between per capita income and AD 1500 and the current day especially once you account for the movement of settlers now is that because the quality of instit tions is so stable over time over more than 500
years isn't that better explained by having the quality of human capital be more stable over time that seems more plausible well I think it's a complex picture actually so one of the papers that I wrote with James Robinson and
Simon Johnson uh which we uh entitled reversal of Fortune is exactly on that point so the raw fact is that you know if you look at which are the places that are more prosperous in 1500 those turn out to be relatively less prosperous
today it's not to say that they became less Rich today every place in the world became much richer because of industrialization because of much better Technologies trade and all of that but relatively speaking it was places that were empty without any urbanization without much established Road networks or agricultural Surplus such as Chile Argentina US Canada relative to the places that I mentioned a moment second ago Bolivia Peru Ecuador Mexico
India Pakistan that actually became richer so that reversal of Fortune is a primacia evidence against a purely Geographic explanation now what else could explain it well essentially there are two broad categories the details of
course within those categories matter but there are two broad categories one is that it's the institutions as I've sort of tried to explain and second is sort of culture perhaps Europeans brought their culture into some places
or or messed up the culture in some other places and and the human capital is sort of of somewhere in between because human capital is an Institutional feature meaning that it really depends on the educational Investments but it also of course has a cultural element so a lot of the qualitative and the quantitative research that we have done puts much more emphasis and finds more support for the institutional interpretation so for
example if you take human capital you know it wasn't that Europeans brought human capital to the places that such as the us or Argentina or Chile actually the Europeans who were more educated were the ones who went to places such as uh you know uh the Inca Empire or the Aztec empire but they brought ideas so the Declaration of Independence was brought over by English and other European settlers and that was a powerful intellectual Innovation
absolutely it was that idea but Native Americans were not producing the same so no uh that's why I'm saying that you know the whole European colonization episode has to be taken in its entirety but it isn't also sort of a straight line to say that Europeans brought ideas and that's what really sort of changed the trajectory in a good way you know Europeans settled in some numbers in Barbados uh you know in 1680 about
10,000 people uh in in Barbados had European ancestry and probably about 2,000 3,000 were were British uh but these people who benefited mightily from the plantation complex and from about 40,000 people being chatt slaves did not
have any idea of introducing a uh Declaration of Independence they actually established a very draon regime you know executions were Common Place uh you know all the power was concentrated in the hands of about 150 families that
were the big plantation owners and the way that the independence declaration evolved and other things evolved in the US was actually in reaction to British power I mean the the important story which of course everybody knows is that Declaration of Independence was in order for the Americans to reject the European imposition to some degree but actually The Story Goes much further back if you take the first uh semis successful
colony in jamest town you know what makes jamest Town unique is not that or actually very common actually in some sense but first in history it's it it actually broke completely new ground institutionally it introduced the head right system small holder property it introduced the general assembly and none of this was because the Virginia Company who colonized and owned the place wanted to they wanted to set up a system very
similar to the one in Barbados or Jamaica it was against the wishes of their British Masters because the settlers said no we're not going to go along with that and they had enough political power to do it so therefore the system the the sort of the story is more complicated it's not that European ideas directly came it's the European ideas interacting with the local conditions and often the success came from local conditions making European
strategies of dominance unsuccessful if we think about the USSR which has terrible institutions for more than 70 years an awful form of Communism it falls there's a bit of a CSE today they seem to have a higher per capita income
than you would expect AR priori if you just as an economist read about communism isn't that mostly just because of what is now Russian or Soviet human capital that's an interesting question you know I think the the Russian story
is is is complicated and I think part of Russian income per capita today is because of Natural Resources so it's always a problem for us to know exactly how natural resources should be handled because you can do a lot of things wrong and still get quite a lot of income per capita via natural resources so but the fans come here they almost immediately move into North American per capita income levels as immigrants right
they're not bringing any resources they're bringing their human capital if people from Gabon come here it takes them quite a while to get to the absolutely absolutely there's there's no doubt that Russians are bringing more human capital you know if you look at the Russian educational system especially during the Soviet time there was a lot of emphasis on math and physics and some foundational uh areas and there's a lot of selection among the
Russians who come here there are a lot of criminal Lan elements who come to Europe and they do very well but for different reasons than the mathematical or the physical scienes human capital that they're bringing but I would say
you know what the uh Russian scientists are bringing and that's very well sort of documented for example in the case of after the uh collapse of the Soviet Union you know Russian mathematicians came here and took uh jobs from American
mathematicians because they were actually better well that's both human capital and institutions meaning that the reason why that's actually persisting is is not simply that you know the current generation of Russians have parents who are very high human capital that matters of course that matters for the values but really Russian educational institutions have persisted you know take away those they collapse and nothing remains and you've
seen that happen in some of the Russian republics for example so they had pretty good uh educational institutions at the time but then with in the context of the Civil Wars that ensued for example some of those educational institutions have collapsed and rebuilding them has been much harder I'm sure you know the Manu VI and romor paper so they have a solo model but they put human capital in and human capital has a very high degree of
explanatory power so presumably you disagree with them like in the context of their work a solo model a growth model what exactly do you specify differently than Manu wild and R well I think p r wild is is a very important
paper for its time but it also has a lot of problems so the most major problem of Manu and wild is that it's a regression framework of cross-country uh differences or changes that really has no way of dealing with omitted variable
bias and one way of seeing that in the context of Mur romor and wild if we go a little bit into the details is that if you compute the implied rate of returns to human capital they are about four or five times as large as what you would get from Min regression so the miner regression says if you get one more year of schooling you're going to increase your earnings by about 6% in the US perhaps as high as 8 or 9% in some
developing countries let's say 10% let's be generous so that means that if you are going to increase your uh rate of schooling by 3 or 4% and if there are no major human capital externalities and we can come back to that then you know that's going to increase your GDP per capita by 25 30% that's a very small number relative to the gaps that we actually observe so if you look at what the crossum externalities are if you take Bill Gates and put him
out in the jungle he can't do much but if he works we'll come back to that so that's why I said let's come back to the human capital externalities but let to understand where the Manu RoR and while either go wrong or right about your depending on your views on human capital externalities is that their implied returns that three or four years would be Associated by three or four-fold increases in income per capita and and
the later literature that followed you know some of it very good some of it not so good because there are other methodological issues but they all uniformly find much more limited uh returns to human capital and that's not my work it's a here I'm actually building on other people's work such as Pete kenau Andres Rodriguez Clair or others who have really made this point very effectively so the the only sort of nuance here is exactly what you've
pointed out some sort of human capital externalities could it be that you know the return for a society from education is much much larger and what we mention with Min regressions when we look at an individual's own earnings increasing and that would be the realm of human capital externalities and those could come in one or two forms they could come either through some sort of local externalities meaning that I get more education and I
make people around me richer or they could come through some sort of R&D externalities that I become more educated and as a result of that I invent something and and and make everybody in the world more productive now the first one the local human capital externalities that's something I've actually sort of investigated in for example in my work with Josh angress and we don't find much evidence for it and it's not so surprising at some level
you there's there could be some small externalities but you know are you going to become suddenly much more productive because uh a bunch of McDonald's workers suddenly increase their education level by two years sure perhaps when you go to McDonald's you'll get better service there might be some other small externalities but it's not going to be a transformative event to increase your rate of return by three or four
now the R&D externalities are different but you moved from from Turkey to MIT right that made you much more productive exactly I'm I'm moving into an area with better technology and better institution right mainly better people to work with some better people to work with but uh but the better for people at the top the externalities probably are very very high so Mark Zuckerberg and Peoria is maybe doing quite well yeah but he's not
building Facebook absolutely absolutely so I think teams really matter so if you're going to build a new product you really want the best very best Engineers but I'm not sure whether I would call that actually an externality if that
happens in the context of a firm The Firm internalizes it so that's why firms pay really amazingly High wages to teaching human capital people who make the people around them more productive and if that's being reflected to Wages
that's already in thein the returns so I think it's really hard to cook up stories for human capital externalities that's going to get you anywhere close to manur RoR and wild type of numbers or implications but say the Nord house paper which suggests most innovators get only about 2% of the returns of their creation doesn't that mean the mincer wage equation doesn't pick up many of the benefits of cooperation right so for
the very very top the very very top innovators there is uh clearly some uh externalities I think the nas numbers are probably extreme because there's also a lot of business stealing that's going on at the top meaning that when
people innovate they actually take other people's market so Google is got an amazing uh value I mean you know it's one of the most valuable companies that human history has ever seen but some of it came because it actually took the
market of other uh search engines such as Yahoo or Alta Vista it also created value for its customers and but it's it's been also been pretty good at capturing that value but the important thing again is those are very exceptional one or two uh Innovations and and you know when you say the average level of schooling increases from you know 10 to 11 it's not we're not really not capturing that you know some of the people who you know innovate
and and and capture such values are not the most educated one and they're not educated in the US you know one of the great things about us is actually we attract those talents again because of the business environment because of the institutional environment as well as the teams that they can form when they come to the US there's another paper I'm sure you know by Casey Mulligan and co-authors and he even argues maybe
having democracy doesn't matter that much it affects your political institutions but if you adjust for demographics it doesn't predict your educational spending if you look at either Chile pre or post P Spain pre or
post Franco other than have politics works most of the budget doesn't change much what do you think of that AR yeah so I think I think that that's really uh Off the Mark uh you know the early work on Democracy you know such an important
topic and people were really excited about understanding what democracy does so they rushed in with the tools that we had available at time in the 1990s or early 2000s but you know you have to be careful of course if you sort of Judge
whether democracy successful or Not by comparing China to Switzerland you're going to get you know not very meaningful answers that's like the uh uh Chief case of comparing apples and oranges so so I have written a couple of
papers on this and the econometrics here really matters for a variety of reasons so you don't want to compare apples and oranges you also want to be careful because it turns out that there's one Surefire predictor of when a country democratizes it's economic crisis dictatorships don't go often because they decide citizens should rule themselves they collapse and they collapse more uh likely in the midst of severe economic recessions so so you
really have to take care of these things and when you do that you find two things they're both amazingly robust uh one is that democracies grow faster so when a country democratizes for another three or four years it takes it it takes time for it to get out of the crisis then it starts a much faster growth process you know it's not going to make Nigeria turn into Switzerland but a country that democratizes adds about 20 to
25% more to its GDP per capita and then the second thing again com completely the opposite of what you said from malan's research one of the most important mechanisms for that seems to be that when you democratize you tax more so the taxation the budgets go up and you spend more especially on education and health so the health of the population improves so the child mortality is one of the things that improves very fast primary and secondary
enrollment improves a little bit more slowly but it improves very steadily now in your new book The Narrow Corridor with James a Robinson there's a theory about States and societies reinforcing each other in a red queen kind of matter and giving you ongoing synergistic gains over time what's the underlying factor that determines why some societies succeed in that and others don't yeah so I mean I think does the theory
collapse into some other theory is another way of putting my question I'm sure I'm sure every Theory at some level collapses into another theory but you know geography theories don't right right right disease burden theories typically don't they don't they don't so I think you know just let me build on the Democracy question so I think what's really interesting about democracy and this evidence that I talked about it's really about
Society regular citizens having their voices heard in the political sphere that's what democracy is wonderful for but at the end end of the day that translating into better Public Services like education Healthcare uh so that's
really what this book is about that's what the narrow Corridor is about it's how do you make States and societies work together and if you look at most of human history that's it doesn't work either you have stateless societies no
centralized law no third party enforcement so lawlessness and lots of other costs or you have despotic states that don't listen to society and impose their will often very repressively and otherwise on society but you know the original part of the book is to say actually squeeze in between these two things there is this red queen Dynamics the corridor where States and societies sort of uh support each other and that
supporting process is a contentious process it's not that they are happily cooperating they are trying to race with each other each each is trying to have the upper end but as long as that competition doesn't sort of become
destructive it can actually add to the capacity of both of them so in that sense it is an Institutional Theory it is also about norms and cultures because you really need the right norms and cultures for society to participate in
politics and the right sort of understanding of what that participation is about but at some level I also don't see it that easily being reduced to Other Stories because it is exactly about this cooperation and competition dimension of state and Society empowering both which at least to our understanding was not idea that has received much attention but when you start thinking about it it really opens up New Horizons about your
interpretation of the world but just empirically what do you think is the best underlying pre-existing predictor of getting into that positive synergistic Dynamic so we spend quite a lot of time in the book going through several examples of countries that have been able to do that and there are two prerequisites it is that you need to have both an already mobilized Society with the norms and traditions of participating politics and you need
that's human capital somewhat right well so uh let me let me say the other and I'll come back to the human capital that's that's a good question but I'm going to disagree uh and then you also need some sort of institutional elements
that survive or that are present about how institutions are how State institutions are run how bureaucracy is organized how Administration is organized so let me get take a specific example and then we can talk about human
capital in that context so one of the most I mean you cannot talk about about Liberty without at least addressing to some degree why Europe is exceptional why is it that certain representative institutions developed most strongly in
Europe and and certain aspects of Liberty not they did not only develop in Europe the demand certainly was there throughout the world but they took strongest roote in Europe so what was special about it culture GRE or Roman
Heritage uh geography so we say none of this it's actually this the meeting of bottom up political participation and the institutions of the Roman Empire even if after the Western Roman Empire had collapsed so where does the bottomup element come from well it comes from the Germanic tribes who were raiding and F sometimes fighting and sometimes fighting with sometimes fighting against the Romans but after the Western Roman
Empire collapsed especially the Franks sort of amalgamation of several other Germanic uh tribes really took root uh throughout uh throughout that area well the Franks did not have much human capital they did not have any
educational institutions they didn't know how to read and write they learned that from the church after uh sort of they they adopted uh Christianity but what they had were these traditions of organizing their politics you know this
is recognized by Julius Caesar and stacus during the times of the Roman Empires and the early chroniclers of the merovingians and the carolingians they had this view that the Chiefs had to serve the people so the chiefs were often temporarily appointed during wartime and out of War they held back they had all these assemblies so some historians called them the assembly politics of the German tribes so everything had to be done through
assemblies and those Traditions were the ones that they tried to fuse and successfully quite successfully in the hands of Clovis and Charlamagne for example together with the much more top- down uh Roman Empires institutions so
it's the human capital came out of that process especially with the church's uh doctrines and teachings as the one of the sort of key repositories of human capital around the Middle Ages uh sort of Ling out but when you look at the
merovingians they did not have high human capital they certainly had much less human capital than the Romans uh before the Roman Empire had collapsed you're thinking about human capital in terms of some kind of education if you
think of it in terms of norms customs and also ideas they had Christianity you get the conciliar movement quite early in Western Christianity you get underlying Democratic forces in the Bible itself there's an emphasis on the
individual of the nobility of an individual who is not powerful in terms of military force sacri why isn't that the kind of solo residual question those are good questions uh so I agree some and I disagree some so first of all as I said early on Norms are critical so and I said what are the Germanic people what are the Franks bringing yes it's the Norms there they have some institutions so the the assemblies have become
institutionalized but this it's mostly Norms as I said but the ideas that they are bringing aren't associated with any sort of religious ideology or anything like that they're just much more practical and the role of the church is
actually quite much more complex than what first meet the eye first of all the Maro Indians uh weren't or the Franks weren't initially Christian they became Christian as a statebuilding effort so Clovis uh decided to uh convert to
Christianity but it wasn't a personal conversion he converted together with all of his Warriors and and and he wanted to have the additional political hierarchy created thanks to the church and we know that when the church institutions and the Roman institutions meet with uh with other sort of conditions they did not lead to anything like the corridor that we see starting during the Merovingian and the carolingian times you know the
place where the church was extremely strong and Roman institutions were extremely strong was Byzantium so the Eastern Roman Empire survived and it was actually much better organized in many ways in the Western Roman Empire Christianity played a a a very very important role their bureaucratic tradition persisted but no Liberty emerged in the byzantian Empire because you had the one blade which was the state institutions but you the other
Blade the bottom up politics was completely missing if you think about the longer term history of Islam which is in many parts of the world there are some recent examples of electoral democracies in in Muslim countries but there are actually remarkably few compared to the history of Christianity doesn't that suggest the power of Christianity as an idea on political institutions is remarkably strong well I think you know Islam is not uh
exceptional there are many other religious Traditions Christianity is exceptional in my account not Islam well uh okay so let's let's talk about that we can come back about to Islam because we do actually spend quite a bit of time both about the origins of Islam as a state building religion and also how it has been used and uh and abused uh during recent times but about Christianity you know it I would say the Byzantium EX example says there is
nothing exceptional about Christianity in the hands of the byzantian Emperors Christianity was as repressive and as a top- down state religion as any and and and examples of that abound you know from Portugal to Spain both in their own countries when they be the the monarchs became strong enough or the way that they imposed this in their colonies Christianity turned out to be extremely consistent with top down politics
imposition uh stamping out of all sorts of Rights and bottom up sure once you get the printing press and literacy individualism then blossoms right and demands some Ro that are not in Christianity the roots of that are exactly in the mixture of Christianity with the bottomup politics of the Frank institutions so you see that for example again in the case of the Anglo-Saxon Britain or England so in the case of anglo-saxon England you know
Christianity plays a much secondary role relative to the the assembly politics in the way that the Saxon brought to the British aisle so you see those assemblies playing a role at every stage constraining Kings and completely changing the political Traditions even after the Norman Conquest Christianity you know comes in and out into the picture but it's completely secondary now once of course those political Traditions become well rooted and the
country is Christian those two start merging and some of the exporting of these ideas beyond the boundaries of the Germanic tribes themselves or Britain sometimes have as religious element but I don't think I would interpret that as saying that there is something inherently different about Christianity is there something inherently different in East Asia and the Confucian tradition so you take South Korea the park Administration in the 1960s it's
remarkably corrupt no rule of law yet South Korea now is a completely developed Nation more or less on a par with France democratized but isn't that endogenous to there being some cultural element in East Asia which is common to
Taiwan Singapore mainland China we will see yes but is that the case I think what's what's uh very important and and we spent quite a bit of time in the book on this in the context of Chinese history is not necessarily the Notions
of Liberty or bottomup politics what's really very exceptional about East Asia are the traditions of State capacity that go back to the Chin Dynasty uh in in China and confucious teaching as has been adopted by by the successive Chinese dynasties is an important part of it and it spreads from China to uh Korea to Vietnam and and you have these sort of more meritocratic organization of the bureaucracy for example and you
have strong States but but at least with some capacity not just you know tinpot dictators but what you want to think about there again is not a simply cultural thing it does certainly survive in the forms of culture it does
certainly survive in the form of norms but its institutional underpinnings are very important as well so the exact way in which the state is organized the exact way in which the bureaucracy is organized and the relationship between
State and Society the fact that Society hasn't had much of a voice really helps some of those Traditions evolve if you go back in time long enough for example to the otoman spring period China looks very different so it was a political change that happened especially during the big Wars of the Waring period that really changed those Traditions those institutions so again my interpretation would be that it's very much along the
lines of what I'm talking about which is the interplay of norms and institutions together shaping these things and there isn't a sort of a special Chinese genetic or some some such human capital or idea that's surviving it's those
norms and institutions that are recreating themselves in different guises and why Nations fail you're quite bearish on China do you still agree with that assessment yeah I mean I think I would say that China is an experiment
that we have never seen in the world so in many ways if you look at growth of China in the 1980s it's very fast but it's not unusual there are many other countries that grow in more or less the same way which is that you get rid of
the most inefficient parts of your system the completely regulated agricultural prices that were you know leading to famines when the when the country actually had high agricultural productivity in the '90s uh you see the
state-owned Enterprises uh rationalizing and some private businesses entering into industry all of those are very very similar to you know what happened with the Prussian growth for example 19th century with the Russian growth but it all even has some elements of commonality with the Soviet growth during the 1930s 40s and the 50s but what we are seeing right now is against the predictions of many pundits but very
much consistent with the sort of the framework that we're we're sort of uh presenting in the narrow Corridor the imbalance between State and Society meant that you know growth went handin hand with the states control over Society not weakening and in many ways during shining getting stronger but what makes China exceptional is that like no other despotic extractive Society in history it has a complete obsession with
Innovation and technology so you know when you look at other despotic states they understand they have to use technology they understand they have to build some Edge in some things such as War making but they are not pouring resources they're not trying to reorganize Society in a new way in order to bring forth Innovation while still keeping that despotic control so China is the first Society that's really systematically trying to do that China
wants to keep the despotic control of the Chinese Communist Party while at the same time be a leader in digital technology leader in Telecom leader in Ai and it's pouring a lot of resources it's providing incentives and the
question is whether this is going to succeed my view is you know it is not a complete failure but it's not going to be a huge success and you see the problems in it already and we can go into some of the details I don't want to
keep going on and on but there are tensions you really need you called it individualism I'm I'm I'm happy to call it that I would have called it something differently but you need that individualism spark you need that experimentation for the most radical type of Innovations to take place and China is missing that it's going to try to pour more and more resources to make up for it but I'm not sure whether it's going to work how predictive do you
think your theories are so say you looked at Africa knowing all of what's in your books and your articles and you played a Philip tatlock forecasting tournament which countries in Africa will do quite well over the next 30
years are you better at that than other people are I don't think I would be that good at it because I think you know one of the things that you see uh when you start thinking about the complex of Institutions and Norms you know Details
Matter leadership matters uh collapses matter you see some elements that can be the basis of some broad Tendencies so we said this in why Nations fail 7 years ago and we're saying it again you know I don't think China is going to seamlessly democratize and enter the corridor and start uh having very strong Civil Society institutions you're not going to be able to build very strong State capacity institutions in places that
have a tradition of completely distrusting the state you also are going to have a very different growth experience in places where you have a tradition of State capacity so Vietnam is going to be very different than uh you know Burma for example because in in parts of Vietnam you have this uh tradition and institutions of States uh organizing production organizing organizing irrigation and in Africa you know Rwanda and Bundi you know with a
with a tradition of much stronger State institutions are going to be very different Ethiopia has some of that also and those countries can pursue a very different growth strategy than say Nigeria Nigeria is an amalgamation of many many many different uh you know ethnicities tribes and and and nationalities it had none of it well Yuba perhaps a little bit have some of these uh sort of traditions of of older Empires but the country is not going to
have a top- down growth strategy like the one that Rwanda and Ethiopia have but these are just very general Tendencies You Know Nigeria can collapse into Civil War again and there is very difficult to predict those things you can predict the fault lines you can predict some of the comparative advantages You can predict what is going to be very difficult but making very specific predictions is going to be very hard if you had to name two or three
non-obvious nations to be bullish on are there any picks you would make oh that's a that's a great question you know I don't know what nonobvious means but uh in America fine we can Latin America I would pick Uruguay and Chile I think those are two societies that have you know made the Investments for both getting the bottom up politics working and the top- down state institutions they both have very deep conflicts Chile
is a very highly unequal country economic inequality I think actually understates social inequality and that is you seeing that with protests we're seeing that with with distributional conflicts but despite that I think this
combination makes Chile uh unique in in many ways and Uruguay I think has has has attempted to do the same thing I think Ethiopia is is a great uh example to to watch uh you know it's been it's been crushed under brutal dictatorships
for so long but but it has uh some of the elements of sort of uh State institutions that are much stronger than the rest of Africa and and again you know what you're seeing with ABI Ahmed now is this attempt to bring out the bottom up element I think that's that's very important you know you can go a little bit more micro in the book we talk about Lagos Lagos is a super interesting case because it was the favorite example for everybody who
wanted to talk of chaos and Anarchy so was a lowless city falling into pieces gangs were roaming the streets but then what you actually witnessed in Lagos is exactly the type of thing that our framework suggests is a way out some politicians who understood that the only way out of the moras was you're going to promise to offer better State Services better tax collection better refuse collection better schooling while at the
same time encourage Society to monitor them better so this sort of dual action of increase the state's capacity while society's controls get tightened as well now in these conversations we usually have a segment underrated versus
overrated I'll toss something out you give your opinion you're free to pass Oran pamuk oh I think he is uh just right he's an amazing writer and uh brilliant voice for turkey Turkish Pizza overrated or underrated oh I love it I
love it again I'm not sure I would say underrated but yes I love it so I perhaps underrated randomized control trials as a method for development economics the way I would put it is that every tool is useful you should not
overuse and overemphasize any tool if you think that randomized control trials are useless that's absolutely wrong but if you think that they're going to answer the majority of the questions in development economics that's even more
wrong cross-country growth regressions underrated or overrated same thing I think uh they are they were hugely overrated they have so many problems but if I say they are un they are overrated I don't I wouldn't mean to say that you should not look at Cross Country data if your questions are about which countries develop and National development path which are just overwhelmingly important for lifting millions and billions of
people out of poverty you have to look at CrossCountry comparisons publishing in a top five journal there's a current obsession with this right getting Str why overrated what's your take well you know I think economists have to appeal to a broader audience and you know our science has to be solid and Publishing in the top five journals is a good discipline because it makes sure that we don't slack off we don't do Shorty research and and get the
credit for it but if it becomes an obsession it is at the cost of communicating with the rest of the world and that's not healthy either so since at the moment all of the incentives in Academia and economics depend on publishing the top five journals I would say somewhat overrated because we should also value people who are able to reach a broader audience think outside the box and sometimes fads really determine uh
you know who can get published and what can get published in top five journals so if uh if you have some big ideas and you're looking at the data the world in a different way but your identification isn't solid you're never going to get
into a top five journal but we shouldn't be discouraging that type of research the Turkish movie director Nuri bil Salon overrated or underrated so he's okay he's okay what's your favorite pamuk novel I probably would say uh
White Castle for me I think it would be snow now the future of political Liberty in Turkey are you optimistic and what's the path back well I don't think it's easy to be optimistic I try to be optimistic but turkey is going through a really really bad time you know the new presidency with executive powers and no checks and balances is terrible turkey has become much much more polarized over the last 15 years all of the independent
agencies Judiciary institutions have completely collapsed there is not even a modicum of judicial Independence in Turkey you know if you can look at the military period and you can say the the courts were not independent of the military at the time that's true but the extent to which that could happen is not comparable to today but on the other hand when the West especially Europeans look at Turkey they misinterpret it they
misinterpreted in the 2000s thinking well erdogan was a force for democracy by the time you know he became the darling of uh of some European uh media Outlets he was already undermining all Turkish institutions but they are also
misjudging the situation in Turkey thinking that he's an absolute dictator what really distinguishes erdogan is his weakness as well as his strength and he really depends on some sort of public opinion and enough support from the
public to be able to do it and many of the worst economic policies in Turkey are attempts to get that and some of the very bad foreign policies are attempts to get that support so and what we have seen in the uh latest Municipal
elections uh last this summer was exactly that erdogan did not have the power to sort of stop a huge electoral backlash that happened against them so that says that a way out is possible from Turkey but it's going to be a very
slow way out and the fact that the opposition itself is problematic divid doesn't have a clear ideology of building Turkish democracy I think all of these make the end game really really hard and uh treacherous in Turkey the pkk are they terrorists and should America be supporting them well pkk are of course terrorists uh there's no doubt about that the YG's relationship with the pkk that's much more complex but it
is an arms length relationship and uh and they are not independent of the pkk but the uh the situation of of course in u the in Syria is much more complicated so first of all the US for a variety of reasons made the choice of working with ypg and going back on it is costly as a signal to Us's allies and the alternative is that you know creating a vacuum there is not going to help anybody I think the biggest threats that
we are facing right now are Islamic State terrorists getting free or getting a tow hold in that area or the Syrian and the Russian army uh now complet controlling that strip or at least the much of that strip so I think none of those are good for the future of the Middle East and they're not really good for uh for the security of the West especially again if the Islamic State comes back so so I think uh the current situation before uh the Turkish
offensive had a lot of problems but where we're regretting right now is even worse is women's autonomy a variable in your theory and how should we think about the apparent inability of many countries in or near the Middle East to mobilize the productive opportunities for women I think it's a huge problem I mean you know if you have a country like Saudi Arabia where women are essentially not part of the labor force for all
practical purposes you're just like running a race with one of your arms and one of your legs tied behind you so it's it's a huge problem but does that Cove with the Red Queen dynamic in your new book or it's a separate institution no
it is it is you know it's the part of the process of Liberty building so you cannot you know this is one of the things you know you can ask me you can say you know you're going to say you know Britain was getting free or was
already free in the 19th century when it was uh reforming its Democratic institutions but what about women women didn't have the right to vote they had no rights their assets could be taken away from them their children can be taken away from them how is that a free Society well this is one of the things that we try to Grapple with in the book Liberty is a process it's all of these various social hierarchies and
restrictions on what people can do in their economic and social lives being broken down one by one and women's freedom is a very important element of it and along the lines of what we are emphasizing it's not something that was
given as a gift by man it was something it's not something that naturally came just by in and of itself it was a process of political change people protested they wanted more rights they wanted more voice and it was even more
importantly it was a process of cultural norm change you know even after you know women got to vote in the US and Britain for example you wouldn't say that women were free there were so many Norms that discriminated against them in the workplace in the family in what they could do in so in social life and all of these had to change slowly but it's this process of political and social change together and economic change follows
from that in the narrow Corridor you're very critical of the Indian cast system but if I just do simple comparative analysis India is wealthier than either Pakistan or Bangladesh which are largely Muslim don't have a formal cast system
so can the Indian cast system be such a major factor holding India back that's a good question but you know we have to remember uh I don't know enough about Bangladesh to be able to comment on Bangladesh but in the case of Pakistan
there are two observations that are relevant one is that Pakistan of course ended up with the most feudal parts of the Indian subcontinent in some sense and the way that its political system evolved was an adaptation to those feudal political uh social relations so the the strengthening of the army the uh the alliance between sort of the dictatorial power of army generals and and and politicians together with the feudal landowners I think was not
something that was invented out of rock cloth but even more importantly the sort of Muslims in the Indian history should not be thought of as a separate category they are part of the cast system the cast system by creating social
hierarchies in the same way that it affects the Untouchables the dalls it also affects the Muslims so they're part of that social hierarchy and the evolution of their Norms their economic opportunities were very much shaped by
that whole heritance your comparison of the histories of Guatemala and Costa Rica uh your book assigns a very large role to the differential histories of coffee plantations in both countries but if we look also at the distribution of income within countries who's wealthy in Guatemala who's poor as a gross generalization the feris skinned people are wealthier the indigenous are poor they've been oppressed they have much
worse schools they may not have schools at all why isn't the difference between Guatemala and Costa Rica mostly a matter of ethnicity and not so much a matter of the differential history of coffee plantations isn't that the more
economical theory that also explains distribution of income within each country I don't think so because the reason for that is you know I I I would say that account that we provide is fairly economical the middle of the 19th
century Costa Rica and Guatemala are not that different they're were recently part of the same Empire and all of the economic sort of Powerhouse economic Heartland of the kingdom of Guatemala is in Guatemala that's where all the big land owners are that's where all the big trade associations are Costa Rica is sort of a marginal land so it is that political background that really shapes how they react to the new opportunities
being made available by the transport Revolution and the coffee economy so they go in the small holder Direction whereas Guatemala doubles down on repression so who are the people who are being repressed well the people who are
being repressed are the ethnically in the Indigenous inhabitants of of Guatemala they are you know it's a very very naked Savage form of repression no education no economic opportunities it's and it actually goes on well into the
you know late 20th century the military dictatorship in Guatemala and the Civil Wars they were all along the lines of indigenous versus non-indigenous people and the elites that were created by the unequal land distribution versus not so it is that sort of history that you have to take into account when you say that people with indigenous uh inheritance and origin are are actually poorer and the reason why I'm saying the uh
ethnicity based explanation is not as an obvious one when you look at other areas where economic history has been different then the role of indigenous Heritage is very different so going back to Chile again of course the people with
uh you know indigenous background in Chile have had a worse time than sort of the elites who live in Santiago but the income gaps are much much smaller because you know the economy sort of went in a different direction the extent
of repression especially after democratization and people got the vote and with the secret ballot you know significantly decreased and States uh started providing proving services to in terms of education and healthare to these people and those gaps really significantly narrowed so I don't think you can sort of just tell the makuch and Chile they're very poor right they live in some of the worst parts of the country they have the worst schools
again that's that's that's part of the history but if you look at the income gaps they're much much less than the ones in Guatemala again as a result of the much much lower levels of repression that they've suffered you know as a as a result of uh of of the history our final segment we call this the donon s MoGo production function so how you work how do you and Jim Robinson collaborate what's your mix of talking writing do
you go for three-hour Walks Like conman and tki did how does it work well you know uh Jim and I have been working for now 22 years we started working together in 1994 oh no what oh my goodness 25 years God time flies by uh 1995 early 1995 and we've worked we've written so many papers together that we really sort of our way of thinking has merge so in the early phases we did spend a lot of time together Jim would come and stay
with me I would go and stay with Jim but then as we become sort of busier and we're in different cities we don't do that as much so there's a lot of email conversation and sometimes you know long phone conversations but we're sort of uh
able to understand each other when we write for example it's very difficult for people to tell which part of a paper which part of a book we have written because we've been working uh so closely together you know Google Docs so you
trade a word file back and forth no it's a it's a word file back and Doc i i u I use voice recognition software so Google Docs is not great for that yet but perhaps one day it will be great you know we would really benefit a lot from spending 3 hour walking afternoons together but you know sometimes you do what you can do what's your best non-obvious productivity trick coffee but that's obvious right that's obvious uh well you know if you ask me
that question 8 years ago I would have said I never or 10 years ago I never read blogs or anything like that on the internet and that saves a huge amount of time nowadays I do a little bit more of the sort of the internet reading uh because now everything's on the internet but I try to protect my time so I try to remain focused uh in the office I meet with people I talk with people but when it's time for work I do the work rather
than you know goof around on the internet what TV shows do you watch uh I haven't watched anything on TV per se so downloads you know uh that's a productivity trick right there right that's that's a productivity trick uh right now I'm watching uh Berlin Station which is a uh a show about sort of spies and Spooks which is one thing I have a weak spot for you know none of the new Netflix things have really caught my
fancy all that much the House of Cards was okay but so I guess uh one of the one of the things is I still prefer movies than to sort of these very elaborately produced TV shows but again that probably shows my age what's your
favorite movie and has it influenced your thought I think at a deep level many of the movies that I watched as as a Young Man influenced many of the things that I have worked on or the way that I've approached I I like the khawa
movies like ran and they're sort of this historic sort of thing the Bergman seventh seal but I also like the sort of the more humorous big fan of the python and uh and and such things and and I guess they they do give you a perspective about the way that you look at things but I'm not sure that any specific movie has the themes of the narrow Corridor in it and finally last question you're well known for having advised a large number of successful
students what is your best piece of nonobvious advice for advisers hoping to promote or somehow improve their students I think advising students is a lot about a human relation so understanding what it is that people really need at that point is really important so I try to push my students uh if they are getting overly confident about the quality of their paper you really have to push them because you know no paper is perfect and you can
always do better but if they're getting as many students often do somewhat down because the whole research process is so hard you have to find the right way of motivating them because you know you're dealing with amazing people who are doing amazing work and putting their you know thoughts and soul into it so I think the support from their advisers is the is is the least that they deserve to close I'll just remind you all again the
new book by Deron asoglu and James a Robinson is the narrow Corridor State societies and the fate of Liberty Dron thank you very much thank you Tyler it was a really great pleasure thanks guys thanks for listening to conversations
with Tyler you can subscribe to the podcast in iTunes Stitcher or your favorite podcast app and if you like this podcast please consider rating it on iTunes and leaving a review this helps other people find the [Music] show