Economic Backwardness in Political Perspective

We construct a simple model where political elites may block technological and institutional development, because of a 'political replacement effect'. Innovations often erode elites' incumbency advantage, increasing the likelihood that they will be replaced. Fearing replacement, political elites are unwilling to initiate change, and may even block economic development. We show that elites are unlikely to block development when there is a high degree of political competition, or when they are highly entrenched. It is only when political competition is limited and also their power is threatened that elites will block development. We also show that such blocking is more likely to arise when political stakes are higher, and that external threats may reduce the incentives to block. We argue that this model provides an interpretation for why Britain, Germany and the U.S. industrialized during the nineteenth century, while the landed aristocracy in Russia and Austria-Hungary blocked development.

Economic Freedom and the Advantages of Backwardness

According to econometric studies, economic freedom and its improvement increase growth rates. But their effects are dominated by the effects of the level of economic development and human capital. Do these findings imply that defenders of capitalism and economic freedom exaggerate their case? Not at all.Consider the level of economic development that determines the potential advantages of backwardness. Economists usually discuss the reasons for the existence of these potential advantages: less developed economies can borrow technologies, business models, and marketing procedures from more advanced economies; and imitation may be easier and faster than innovation on which the leading economies have to rely.Plausibly, these advantages are greater at moderate levels of backwardness where the level of human capital formation permits the exploitation of the opportunities of backwardness. Or, less developed economies have more scope for reallocating labor from less productive work in agriculture to more productive work in industry or services. Or, it is probably easier to find profitable investments in developing countries -- say, in transport infrastructure -- than in highly developed economies where many of the obvious investments have already been made. I do not want to join the debate about the relative merit of these arguments. Nor do I want to add arguments from other social sciences according to which the process of economic development implies value changes that feed back to undermine prospects for later economic growth

Economic Backwardness in Security Perspective

Modern political economies are distinguished from each other by the institutions that mediate actors’ interactions, falling somewhere along a spectrum between pure market and non-market mechanisms. But how did these institutions originally emerge? With regard to the financial sector, I argue that higher levels of national security threats in combination with economic backwardness lead to a financial system more dominated by banking relationships. To evaluate the argument, I conduct a focused comparison of Japan and Germany before WWII since they had similar political and legal institutions and were both ‘backward’, but differed with regard to the security threats they faced. Germany confronted more menacing threats from neighboring great powers as well as greater domestic unrest following unification in 1871, which led the government to direct lending to sectors vital to the nation’s security via banks. Japan, by contrast, did not face the same level of threats to its security, and consequently securities markets were more dominant.Economic History; Germany; Japan; Government; War; Finance; Financial Institutions

Colonial independence and economic backwardness in Latin America.

This paper explores the connections between independence from Spain and Portugal and economic backwardness in Latin America. The release of the fiscal burden was offset by higher costs of self-government, while opening up to the international economy represented a handmaiden of growth. Independence had a very different impact across regions and widened regional disparities. The commitment to the colonial mercantilism conditioned the new republics' performance but, on the whole, GDP per head increased in the half a century after emancipation. It appears that inherited Iberian institutions cannot be blamed for Latin America's poor performance relative to the US, especially if the scope is widened to include the post-independence performance of former European colonies in Africa and Asia. It is suggested that before jumping to the usual negative assessment of nineteenth century Latin America, a comparison of post-independence performance in other world regions will be required

Law and Institutions: two reasons for Sicilian backwardness?

Many reasons for the low level of local development in Sicily have been advanced through the years, often connected to historical and geographical explanations. More frequently the reasons of the backwardness (better low rate of development) is connected to high level of crime and of mafia phenomenon, or to structural grounds (first of all, Sicily is an island) and intra regional markets’ dimensions. Little space, instead, has been devoted to institutions and law and to the effectiveness of legislative self-government. In ours paper we will slight the constitutional profile trying, instead, to answer, with the typical approach of the economic analysis if is it possible that some reasons of the backwardness of Sicilian economic development are hidden just in this constitutional diversity of Sicily.

Imperialism, dependency, and social class

African Studies Center Working Paper No. 45INTRODUCTION: The purpose of this essay is to examine what has become known in the language of post-World War II social science as "dependency theory." Although all variants of this dependency theory are more or less nationalist and anti-imperialist, they are not uniformly socialist or Marxist. That is to say, many of those working within the broad category of dependency theory are not fundamentally anti-capitalist. Thus, they do not articulate a socialist program for breaking the constraints they see as being responsible for poverty, backwardness, stagnation, and underdevelopment. In the writings of these non-socialist or "bourgeois-nationalist" writers, the problem was seen merely as the domination of weaker economies by stronger ones. If this domination could be removed, so would be the economic backwardness that characterizes most of the Third World. The result would be capital accumulation and an independent, autonomous but nevertheless capitalist development. "Independent" or "autonomous" capitalist development should not be equated with some abstract notion of "absolute autarky." Absolute autarky is here understood to mean the complete severing of all economic links that any particular political-economic formation has that extend beyond its boundaries. It is, however, argued that some degree of autocthonous development is necessary if structural underdevelopment is to be overcome. [TRUNCATED

The Economic and Social Consequences of the Reconstruction of the Economy of the BAZ County in Hungary

Structural changes in the region's economy caused fast growing unemployment in the early 1990's. Both government and local authorities made significant efforts to stop the economic decline and the social crisis. In 1995 an integrated decentralised programme was created for the county's economic development. The realisation of different actions in 8 sub-programmes initiated the development in the post-industrial economic structure and enhanced the attractiveness of the county for international investors. For the period of 2000-2006 was a new Regional Development Plan elaborated, which aims to end the backwardness of the county with forced economic development. The new priorities are innovation-oriented renewal with an orientation towards export and support of research and development activities, mainly in small and medium sized enterprises

COLONIAL INDEPENDENCE AND ECONOMIC BACKWARDNESS IN LATIN AMERICA

This paper explores the connections between independence from Spain and Portugal and economic backwardness in Latin America. The release of the fiscal burden was offset by higher costs of self-government, while opening up to the international economy represented a handmaiden of growth. Independence had a very different impact across regions and widened regional disparities. The commitment to the colonial mercantilism conditioned the new republics’ performance but, on the whole, GDP per head increased in the half a century after emancipation. It appears that inherited Iberian institutions cannot be blamed for Latin America’s poor performance relative to the US, especially if the scope is widened to include the post-independence performance of former European colonies in Africa and Asia. It is suggested that before jumping to the usual negative assessment of nineteenth century Latin America, a comparison of post-independence performance in other world regions will be required.

Why Darwin was English

A ‘late developer’ argument, common to Psychology and Economic History, can be used to explain cultural innovation. It argues that the 19th century theory of natural selection arose in England and not Germany because of – and not in spite of – England’s scientific backwardness. Measured in terms of institutions, communities, and ideas, the relative retardation of English science was precisely what enabled it to adopt German advances in novel ways