Historical Sources of Institutional Trajectories in Economic Development: China, Japan, and Korea Compared

This essay provides a game-theoretic, endogenous view of institutions, and then applies the idea to identify the sources of institutional trajectories of economic development in China, Japan, and Korea. It stylizes the Malthusian-phase of East Asian economies as peasant-based economies in which small families allocated their working time between farming on small plots - leased or owned - and handcrafting for personal consumption and markets. It then compares institutional arrangements across these economies that sustained otherwise similar economies. It characterizes the varied nature of the political states of Qing China, Tokugawa Japan, and Yi Korea by focusing on the way in which agricultural taxes were enforced. It also identifies different patterns of social norms of trust that were institutional complements to, or substitutes for, political states. Finally, it traces the path-dependent transformations of these state-norm combinations along subsequent transitions to post-Malthusian phases of economic growth in the respective economies

Brutalisation as a Survival Strategy: How the 'Islamic State' Is Prolonging Its Doomsday Battle

The recent bomb attacks at the Istanbul airport (28 June 2016), in a tourist cafe in Dhaka, Bangladesh (2 July), and in Bagdad (3 July) were part of a "Ramadan campaign" announced by the spokesman of the self-declared 'Islamic State' caliphate in late May 2016. This series of attacks was intended to make the Islamic holy month of Ramadan "a month of calamity everywhere for the non-believers." It has generated significant international attention for an organisation which has recently lost the cities of Ramadi and Falluja in Iraq and which is under serious pressure in the strategic city of Manbij in Syria. This article analyses the Islamic State's (IS) contextual use of different forms of violence and argues that the attacks and the defeats are two sides of one coin: the group is losing territory and credibility by failing to continue with its expansion of the universal Islamic caliphate that "Caliph" Abu Bakr promised in summer 2014; it is now compensating for these territorial losses by expanding its field of action through terrorist attacks, thereby suggesting a fictitious expansion. The article explains how the group has exhibited a three-stage "cycle of violence" in which violence has served specific functions. In the first stage, from roughly 2003 to 2010, violence was used as part of a mobilisation strategy. In the second stage, from 2010 to 2015, violence served mainly to facilitate the group's expansion and rule. In the third stage, which began in 2015, the increasingly brutal violence and the fictitious expansion have constituted the centrepiece of a survival strategy. Against this background, the article suggests that the Islamic State will most likely not have a future as a territorial entity but will, at best, survive as a terrorist apocalyptic sect

A ‘Third Culture’ in Economics? An Essay on Smith, Confucius and the Rise of China

China's rise drives a growing impact of China on economics. So far, this mainly works via the force of example, but there is also an emerging role of Chinese thinking in economics. This paper raises the question how far Chinese perspectives can affect certain foundational principles in economics, such as the assumptions on individualism and self-interest allegedly originating in Adam Smith. I embark on sketching a 'third culture' in economics, employing a notion from cross-cultural communication theory, which starts out from the observation that the Chinese model was already influential during the European enlightenment, especially on physiocracy, suggesting a particular conceptualization of the relation between good government and a liberal market economy. I relate this observation with the current revisionist view on China's economic history which has revealed the strong role of markets in the context of informal institutions, and thereby explains the strong performance of the Chinese economy in pre-industrial times. I sketch the cultural legacy of this pattern for traditional Chinese conceptions of social interaction and behavior, which are still strong in rural society until today. These different strands of argument are woven together in a comparison between Confucian thinking and Adam Smith, especially with regard to the 'Theory of Moral Sentiments', which ends up in identifying a number of conceptual family resemblances between the two. I conclude with sketching a 'third culture' in economics in which moral aspects of economic action loom large, as well as contextualized thinking in economic policies