Do Institutions Matter? Taking Another Look at the Claims of Daron Acemoglu
Summary
This episode critiques Daron Acemoglu’s institutional theory, arguing that his "reversal of fortune" thesis relies heavily on a few British settler colonies and ignores pre-colonial political structures. The discussion highlights how indigenous constraints on rulers and specific British constitutional traditions, rather than colonialism generally, drove prosperity in places like the US and Australia. Counterexamples from Finland, Ghana, and subnational American data suggest that persistence of local conditions often outweighs colonial institutional legacies, challenging the broad applicabil…
Topics discussed
Introduction: The Economist's critique of Acemoglu
Settler mortality data flaws and circular reasoning
Pre-colonial institutions in Africa and the 'reversal' thesis
Statistical reliance on Neo-European colonies
The specific role of British constitutional inheritance
Narrowing the lesson: Settlement vs. Colonial Power
Economic freedom vs. political institutions in growth
The Asian Tigers: Authoritarian success vs. predictions
Finland: Retained autonomy under non-British rule
Ghana: Pre-colonial property rights and post-independence choice
Subnational evidence: Persistence over reversal in the Americas
Conclusion: The thesis remains oddly unconvincing
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