As I stated in Phase 1, this post is devoted to chapters 4 and 5 and the closing of the historical overview of the work of Helpman. Indeed, we recall briefly that his work consists of three main sections: History, Theory and contemporary evidence to illustrate and explain the importance of institutions and their evolution in the economy of a country. The channels of influence is so complex and diverse, it is clear that each paper studies a selected aspect of the relationship without being exhaustive. These two chapters are based on the hypothesis of Engerman-Sokoloff, conducting a careful analysis of history to to provide historical verification of this theory.
Chapter 4, "Slavery, Inequality and Economic Development in the Americas" by Nathan Nunn proceeds in two steps defined:
- Nunn wants to check if the historically heavy reliance slavery in the newly conquered countries, is causing economic inequalities
- In a second step, Nunn seeks to ensure that economic inequalities are the cause underdevelopment which marks the following decades.
Indeed, the sequence highlighted by Engerman and Sokoloff is as follows: factor endowments (including property) determine the use of slaves on plantations causing a deepening economic inequalities and policies affecting the evolution of institutions in a manner favorable to economic development. In other words, under this assumption around the world who have had a heavy reliance on slavery, as a result of initial inequality in endowments institutions have formed more negative or less conform to the requirements of economic development, thereby failing to solid democratic foundation of a strong education system, funding important research and innovation ...
By focusing on the American continent, Nunn tested this hypothesis on the 1750s, seeking to estimate the impact of the share of slaves in the population on GDP per capita of the early twenty-first century, to prove that inequalities in development today are explained by inequalities Past tied to slavery.
Nunn seeks initially to estimate the relationship between current income and the proportion of slaves in the total population in 1750. Why it considers the following log-linear relationship, which involves other fundamental variables of economic development: a + =
lnYi b.Si / Li + c.Li / Ai + I + ui
with Yi income per national head in 2000, Si / Li by slaves in the total population in 1750, Li / Al density of population in 1750, I and a fixed effect reflecting the nationality of the settlers, reflecting their degree of involvement and type of settlement (exploitation of natural resources, territorial conquest). These fixed effects are introduced in order to capture the largest share of the argument of Engerman and Sokoloff. Acemoglu had already largely developed this idea that the type of colonization and the nationality of the settlers strongly impacts the future economic development of the colonized country, particularly through the contrasting trends established institutions (see Acemoglu, Johnson and Robinson 2002).
It is obvious that the analysis and selection of variables Nunn is conditioned by the availability of historical variables, which obliges to speculate further. Thus, the population density is introduced in order to control the model, since it is supposed to capture the economic prosperity of the time (cf. Acemoglu, Johnson and Robinson 2002). The variable is used by Nunn to approximate the distribution of factors of production when the historical use and ownership of land shortage. The results of estimating this equation are very satisfactory, with significant coefficients. For example, the proportion of slaves in the population is negatively correlated with income in 2000 as illustrated by the case of Jamaica in 1750 which recorded an incredible rate since 90% of the population came from the slave trade. Jamaica currently supports a low GDP per capita of $ 3,640 in 2000. However, Nunn shows that while Jamaica had a more moderate appeal to slavery, for example 46% of the population (the time registered in the Bahamas), Jamaica's per capita income would be $ 11,580 instead of 3640 $.
Nunn tests the robustness of the result by splitting the group of countries (Americas) into two groups: Canada / US and other African countries in order to evict any bias associated with analysis the heterogeneity of economies. The relationship between past slave use and income today remains negative and significant. Yet if the results confirm the general philosophy of the hypothesis of Engerman and Sokoloff, they do not analyze the channels through which influence the use of acts of slavery on the development of contemporary inequalities.
The author refines his study focusing partly on the British West Indies, then a second time on the various U.S. states. What
Nunn seeks to prove that the chains are causality between the two phenomena . Indeed, Engerman and Sokoloff stipulated that slavery plantations caused a widening economic inequalities, which resulted in turn delayed economic development to the present day through a lack of institutional evolution. It is important to analyze separately the two relations, namely in a first-slave relationship, inequalities and inequities in development. Using the Gini coefficient on the data available in 1860, Nunn shows a positive and significant relationship between the proportion of slaves in the population and inequality economic in terms of land ownership. Within the U.S., economic inequalities are persistent long-term. It is well known that the U.S. is one of the most unequal countries in the world and Nunn agrees that finding, stating that the most unequal states in 1860 are also the most unequal in 2000. It remains to demonstrate the relationship Nunn-economic inequalities in the past, present development, the result of institutional change favoring the elites instead of providing the foundations for balanced growth. However, according to historical data it is impossible to show that economic inequality in 1860 are correlated with per capita incomes of the 2000s. It is therefore impossible to use the positive relationship between slavery and inequality in explaining the relationship between slavery and economic development in the long term. If the latter relationship reflects a historical reality, it can not be explained through the initial economic inequality and those resulting from slavery today.
Regarding the British West Indies, historical data available by countries (Bahamas, Grenada, Guyana, Jamaica, St. Lucia, Trinidad and Tobago ... etc.) are important in any case sufficient to test the hypothesis in more detail (data collected by Higman in 1984) it becomes possible to test channels of influence specified by Engerman-Sokoloff at the heart of the relationship Slavery underdevelopment. Nunn can now test if the relationship also depends on how the settlers made use of slavery. By distinguishing the forced laborers in plantations (large scale) or domestic slaves or in some factories to assess whether the two types of servo impacting the same way as the development today. In fact, Nunn said that the Caribbean is characterized, the slaves were exploited in plantations of coffee, sugar or cotton. The estimated equation is similar to the first, except that each type of slavery may impact differently on economic development. Nunn demonstrates that whatever the configuration and type of control, the effect on development is negative, which strengthens the relationship started. It is impossible to prove that the control in plantations is more detrimental to economic development than any other form of slavery. When Nunn decided to replicate his analysis using data available on various U.S. states, the results carry much the same.
So if this is not through the arguments of Engerman and Sokoloff that can explain this relationship, it remains a question mark on his explanation and the causal chain leading to inequalities of contemporary economic development.
So that Acemoglu, Bautista, Querubin and Robinson also analyze the impact inequality on economic performance, starting from the same premise, but differs significantly from the perspective used by Nathan Nunn. Indeed, in Chapter 5, Acemoglu et al. distinguished from the outset economic inequalities inequalities policies. Indeed, given the relative failure of Nathan Nunn to demonstrate that slavery past impacts the present development through the deepening of economic inequalities, the authors seek to prove that the arguments of Engerman and Sokoloff is considering not valid not economic inequality but inequality policies. Using the close relationship between economic and political inequalities, Acemoglu et al. seek to demonstrate that it is the political inequalities that are the cause of economic inequality in the origin of developmental delay. The relationship is simple: if the elites control political power, they can create and sustain rent-seeking, which will prevent any renewal policy and have no interest in providing essential public services to economic development, including the enrollment of population. It should be noted that the existing literature the issue is very controversial, especially on the relationship between democracy and economic development level, sometimes divergent opinions are about the ambiguity of the relationship.
I propose that next post should be devoted to the analysis of this historical controversy, but mainly on the theoretical link between Democracy (political inequalities) and Economic Development, putting in parallel the historical analysis of Acemoglu and developments Theoretical selected by Helpman in his book to provide an overview of the complexity of the issue.
0 comments:
Post a Comment