Friday, February 17, 2017

More on the great divergence

Why the Middle East fell behind By Jared Rubin "This post is not going to cover all of the reasons why the Middle East fell behind. There are a lot of reasons for the reversal of fortunes between (northwestern) Europe and the Middle East, most of which complement each other. I will discuss what I believe to be the two most important reasons: what I will call Timur Kuran’s “demand side” argument and my “supply side” argument (it is my post after all … of course I think the argument in my book is right!). I will also dismiss one argument which simply cannot account for the main historical facts: what I will call the “weak colonization” argument (as opposed to the “strong colonization” argument; I will define both terms below). I will refrain from discussing many alternative hypotheses which I do think shed some light on the divergence between northwestern Europe and the Middle East. For example, the relative political fractionalizationand frequent interstate warfare that embroiled Europe for most of the medieval and early modern periods may have set it up to have greater fiscal capacity than the Middle East (or China). This makes sense to me, and it seems to be part of the explanation. Likewise, differences in family structures (nuclear vs. clan) may have encouraged different types of institutional formation in Europe and the Middle East (or China), with the more individualistic Europeans forming institutions more conducive to inter-group commerce than the more “collective” Middle Easterners. This too makes sense to me, and it was likely an important aspect of the divergence. The point here is that such a large scale event like the divergence between two sets of economies over centuries is almost certainly multi-causal. It is true that these causes all interacted with each other – sometimes as substitutes and other times as complements – and pinning down the direction of these interactions is an important part of the story. But that is indeed another story."
Another via Brad DeLong :
"We argue that forms of executive constraint that emerged under feudal institutions in Western Europe were associated with increased political stability and find empirical support for this argument. While feudal institutions served as the basis for military recruitment by European monarchs, Muslim sultans relied on mamlukism—or the use of military slaves imported from non-Muslim lands. Dependence on mamluk armies limited the bargaining strength of local notables vis-a`-vis the sultan, hindering the development of a productively adversarial relationship between ruler and local elites. 
We argue that Muslim societies’ reliance on mamluks, rather than local elites, as the basis for military leadership, may explain why the Glorious Revolution occurred in England, not Egypt."
"'Roads to Xanadu' explores why the full potential of scientific discovery and invention, now regarded as a source of weath and power, is not often realized in its country of origin. The reason, paradoxically, lies not in failure but in success- in the tendency of cultures and civilizations to ossify around those economic institutions and ideologies that, at some stage, provided maximum stability and wealth. These institutional structures are often retained by bureaucracies and the power elites who are their beneficiaries long after they have become redundant. Economic growth and cultural development do not stem merely from technological innovation but from social and political change. However, the motivation for such a change rarely comes from within. Often, it has been the competetive threat from outside that has forced societies to come up with new and innovative social, economic and political structures."

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