Week 3: When growth does not spread: Understanding the Americas and India

Question 1

What geographical features gives Europe an advantage?

Answer 1

-Europe has better land suitability for cultivation and good topography and navigable rivers

-A ‘Goldilocks’ character

Question 2

What is the relationship between Malaria and Development

Answer 2

-Duality

Question 3

How does black death provide economic efficiency?

Answer 3

Labor becomes scarce → Wages rise → Incentives to innovate increase

Question 4

Why can’t geography not be an explanation for why North America is richer?

Answer 4

-1500 South > North
-Geography does not change

Question 5

What does urbanization lead to (in the context of Americas in the 1500)?

Answer 5

-Specialisation
-as dense populations compared to North America before colonialism

Question 6

How does urbanization in South America vs North America in the 1500s link to colonialism?

Answer 6

• led to extractive institutions vs inclusive institutions

Question 7

Engerman and Sokoloff inequality stats?

Answer 7

1500-1800
60 % of 6m migrants of the new world were slaves

Question 8

What 3 economies do Engerman and Sokoloff use to distinct the Americas?

Answer 8

1. Sugar
2. Mineral Resources
3. Land abundant and empty

Question 9

Sugar economies?

Answer 9

-The elite made instuations that set themselves at the top and bennefitef them (persisting even after abolition of slavery)
- had the highest per capita
(including slaves) incomes in the New World.
-Barbados Jamaica

Question 10

Rich Mineral Resources?

Answer 10

-Spanish were more interested in extracting natural resources from here then setting up for modern econ growth
-Peru, Mexico

Question 11

Land Abundant and Empty?

Answer 11

North America
But not south of U.S, slave cotton plantations not a
dynamic sector of the US economy, ever

Question 12

Engerman and Sokoloff link to institutions?

Answer 12

-first 2 economies (sugar/mineral resources) led to extractive institutions and poor econ grwoth

• land abundant and empty led to inclusive institutions and econ growth

Question 13

Acemoglu, Johnson & Robinson (AJR)

Answer 13

Disease Climate in conquered lands determines whether the conquerors settle

If Good: create inclusive institutions

If Bad: create extractive institutions

AJR use settler mortality as their measure of disease climate

Question 14

Critique of AJR?

Answer 14

-Malaria also effects local population, overlooking resilience and adaptation of indigenous population

Question 15

Growth stats of India?

Answer 15

• A comparison of the wages of unskilled urban workers
  in 1595 and 1961 shows that the purchasing power of
  wages under Akbar was higher

Question 16

Can institutions explain Indian econ history?

Answer 16

-Institutions do not explain it as Britain offered property rights

-Engerman and Sokoloff: factor endowment’s: crops are not chosen by London

-AJR: settler morality- Europeans did not settle in large numbers but no extractive institutions

Question 17

Bad parts of British colonial rule?

Answer 17

-lack of independent econ policy (deindustrialization as policy promoting British industrial goods, cheaper cotton) (ROY)
-Exploitation (Home charges,India had to pay for British ruling over them) (ROY)
-Mismanagemnt (Bengal Famine)

Question 18

Good parts of British colonial rule?

Answer 18

-commercialization
-property rights and institutions
-Technological transfer and infrastructure
-social reform

Question 19

Perspectives on British rule in India?

Answer 19

-Nationalist Interpretation (e.g., Mukherjee
-Revisionist View (Roy)

Question 20

What does Nationalist Interpretation (e.g., Mukherjee say abt India?

Answer 20

-Deindustrialization:
-Drain of Wealth: India’s surplus was systematically transferred to Britain.

Question 21

What does Revisionist View (Roy) say abt India?

Answer 21

-trade integration global market
-Drain as payment for administration and infrastructures
- India’s agricultural stagnation predated British rule

Question 22

Other factors other than British rule leading to stagnation in India?

Answer 22

-Geogarphy and climate: India depends on monsoons and poor irrigation

-Social Strucutres: Caste system (einforced social hierarchies that restricted mobility and innovation)

-Education
-low literacy rates -> stifling human capital development

Question 23

Do institutions cause growth ?

Answer 23

-may not have a simple casual relationship

Question 24

How do good institution come from?

Answer 24

-Good institutions emerge from the culture and actions of individuals, reflecting a Bottom-Up process.

Question 25

Roy reading takeaways to why India did not develop?

Answer 25

-Limited public investment (small gov and limited tax rev)

-focus on free trade: also exposed India to British cotton , deindustrialaizaton

-lack of political autonomy

Question 26

AJR reading takeaways?

Answer 26

-Importance of institutions using Nogales, two cities discrediting geo, climate, culture but institutions

-English in North America could not replicate Spanish model, due to lack of native population

-Political institutions General Assembly in Jamestown in U.S
rejection of Cadiz Constitution in Mexico

-US developing patent system, and comp bank system