ECONOMIC VIEWS OF S. KUZNETS AND THE RECEPTION OF THE THEORY OF MEDIUM-TERM CYCLES IN THE POLITICAL ECONOMY NARRATIVE

On the example of four micro-plots, the key theses of the economic views of the Nobel laureate S. Kuznets have been revealed. The main papers of Kuznets and his supervisor – W. K. Mitchell have been analysed, the reception of methods used by S. Kuznets in the prospect of economic theory has been traced. The reception of the mechanics of S. Kuznets’ research in modern political economy theory, referring to the research of D. Acemoglu and J. Robinson has been considered. In Appendix to this paper, a brief analysis of the political interpretation of the S. Kuznets cycle theory, proposed by D. Acemoglu and J. Robinson has presented. The research presented in the article summarizes the experience of research on economic views of S. Kuznets and emphasizes the prospect of using the author’s experiential optics

Diversity of transition paths in Central and Eastern Europe in light of contemporary economic theories

Zainicjowany ponad ćwierć wieku temu proces transformacji ustrojowej krajów byłego bloku wschodniego miał charakter bezprecedensowy. Wyjaśnienie jego wymiaru ekonomicznego – możliwych i ostatecznie obieranych dróg przejścia od gospodarki nakazowo-rozdzielczej do gospodarki rynkowej – już przez samą tę bezprecedensowość, ale i niezwykłą złożoność stanowiło i wciąż stanowi wyzwanie dla nauk ekonomicznych. Celem artykułu jest ocena, w jakiej mierze współczesna ekonomia poradziła sobie z tym wyzwaniem i próba uzasadnienia tezy, iż przy objaśnianiu zróżnicowanych trajektorii rozwojowych krajów transformacji i tłumaczeniu przyczyn osiąganych na tym polu sukcesów (lub ich braku) zdecydowanie bardziej adekwatne okazały się koncepcje stworzone przez reprezentantów szkół leżących na obrzeżach lub poza głównym nurtem badań ekonomicznych.The process of systemic transformation in the countries of the former Eastern Bloc, spearheaded about a quarter of a century ago, was unprecedented in the economic history of the world. Its economic dimension – the available, and ultimately chosen, paths of transition from socialism to market economy – has challenged economic sciences. The challenge has been all the greater not only because of the novelty of the phenomenon, but also because of its unusual complexity. The paper aims to assess to what extent contemporary economics has succeeded in responding to this challenge and to prove that the concepts proposed by the representatives of schools from the margin of, or beyond, the mainstream economics turn out to be significantly more appropriate for explaining the diversity of transformation paths and elucidating the reasons behind the achievements (or lack thereof) of some [email protected]ł Ekonomiczno-Socjologiczny, Uniwersytet Łódzki, Instytut Ekonomii, Katedra Historii Myśli Ekonomicznej i Historii GospodarczejAcemoglu D., Robinson J. A. 2013 Why Nations Fail. The Origins of Power, Prosperity and Poverty, Crown Publishers, London (wyd. polskie: Dlaczego narody przegrywają. Źródła władzy, pomyślności i ubóstwa, tłum. J. Łoziński, Wydawnictwo Zysk i S-ka, Poznań 2014).Arthur B. 1989 Competing Technologies, Increasing Returns, and Lock-In by Historical Small Events, „Economic Journal”, no. 1.Aspromourgos T. 1986 On the Origin of the Term ‘Neoclassical, „Cambridge Journal of Economics”, vol. 10, no. 30.Colander D. C. 2000 The Death of Neoclassical Economics, „Journal of the History of Economic Thought”, vol. 22, no. 2.David P. 1985 Clio and the Economics of QWERTY, „American Economic Review”, vol. 75, no. 2.Dzionek-Kozłowska J. 2009 Transformacja ustrojowa z perspektywy koncepcji path dependence, „Ekonomia”, vol. 3.Dzionek-Kozłowska J. 2010 Rynek versus państwo w świetle dyskusji o path dependence, „Ekonomia i Prawo”, vol. 6.Galbraith J. K. 1990 The Rush to Capitalism, „The New York Review of Books”, 25th October.Godłów-Legiędź J. 1989 Z historii sporu o racjonalność gospodarki socjalistycznej, „Ekonomista”, nr 5-6.Godłów-Legiędź J. 2010 Współczesna ekonomia. Ku nowemu paradygmatowi?, Wydawnictwo C. H. Beck, Warszawa.Hodgson G.M. 2007 Evolutionary and Institutional Economics as the New Mainstream?, „Evolutionary and Institutional Economic Review”, vol. 4, no. 1.Huntington S. 2008 Zderzenie cywilizacji i nowy kształt ładu światowego, Warszawskie Wydawnictwo Literackie Muza, Warszawa.Hurwicz L. 1973 The design of mechanisms for resource allocation, „American Economic Review”, vol. 63, no. 2.Hurwicz L. 1979 Socialism and Incentives: Developing a Framework, „Journal of Comparative Economics”, vol. 3, no. 3.Kostro K. 2001 Hayek kontra socjalizm. Debata socjalistyczna a rozwój teorii społeczno-ekonomicznych Friedricha Augusta von Hayeka, „DiG”, Warszawa.Kyriazis N.C., Zouboulakis M.S. 2005 Modeling institutional change in transition economies, „Communist and Post-Communist Studies”, vol. 38, no. 1.Landes D. S. 1998 The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor, W. W. Norton, New York (wyd. polskie: 2000 Bogactwo i nędza narodów. Dlaczego jedni są tak bogaci, a inni tak ubodzy, tłum. H. Jankowska, Warszawskie Wydawnictwo Literackie Muza, Warszawa).Lazear, E.P. 2000 Economic Imperialism, „Quarterly Journal of Economics”, vol. 115, no. 1.Legiędź T. 2013 Nowa ekonomia instytucjonalna a zmiany paradygmatu rozwoju gospodarczego, „Ekonomia”, nr 4.Liebowitz S. J., Margolis S.E. 1990 The Fable of the Keys, „Journal of Law and Economics”, vol. 33, no. 1.Liebowitz S. J., Margolis S.E. 1995 Path Dependence, Lock-In, and History, „Journal of Law, Economics and Organization”, vol. 11, no. 1.Maślak E. 2000 Paradygmat ekonomii ewolucyjnej, „Gospodarka Narodowa”, nr 1-2.Matera R. 2014 Studia nad bogactwem i ubóstwem narodów na przełomie mileniów – wkład Darona Acemoglu i Jamesa A. Robinsona, „Ruch prawniczy, ekonomiczny i socjologiczny”, vol. 76, nr 1.Nelson R. R., Winter S. G. 1982 An Evolutionary Theory of Economic Change, W. W. Norton, Cambridge, MA, London.North D. C. 1990 Institutions, Institutional Change and Economic Performance, Cambridge University Press, Cambridge.North D. C. 1991 Institutions, „Journal of Economic Perspectives”, vol. 5, no. 1.North D. C. 2010 Understanding the Process of Institutional Change, Princeton University Press, Princeton.Olson M. 1982 The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities, Yale University Press, New Haven, London.Olson M. 1992 The Hidden Path to a Successful Economy, [in:] The Emergence of Market Economies in Eastern Europe, C. Clague, G. C. Rausser (eds.), Blackwell, Cambridge.Puffert D. J. 2004 Path Dependence, Network Form and Technological Change, [in:] History Matters: Essays on Economic Growth, Technology and Demographic Change, W. Sundstrom, T. Guinnane, W. Whatley (eds.), Stanford University Press, Stanford.Snowdon B., Vane H., Wynarczyk P. 1998 Współczesne nurty teorii makroekonomii, Wydawnictwo Naukowe PWN, Warszawa.Snowdon B., Vane H. 2005 Modern macroeconomics. Its origins, development and current state, E. Elgar, Cheltenham UK, Northampton MA.Teoria wyboru publicznego. Główne nurty i zastosowania, J. Wilkin (red.), Wydawnictwo Naukowe Scholar, Warszawa.Wilkin J. 1995 Jaki kapitalizm, jaka Polska?, Wydawnictwo Naukowe PWN, Warszawa.Wilkin J. 2012 Teoria wyboru publicznego – homo oeconomicus w sferze polityki, [w:] Teoria wyboru publicznego. Główne nurty i zastosowania, J. Wilkin (red.), Wydawnictwo Naukowe Scholar, Warszawa.Williamson J. 1990 What Washington Means by Policy Reform, [in:] Latin American Adjustment: How Much Has Happened? , J. Williamson (ed.), Institute for International Economics, Washington.Williamson J. 2005 The Strange History of the Washington Consensus, „Journal of Post- Keynesians Economics”, vol. 27, no. 2.Winiecki J. 2004 Determinants of Catching up or Falling Behind. Interaction of Formal and Informal Institutions, „Post-Communies Economies”, vol. 16, no. 2.Winiecki J. 2012 Transformacja postkomunistyczna. Studium przypadku zmian instytucjonalnych, Wydawnictwo C. H. Beck, Warszawa.Zukowski R. 2005 Routes out of Socialism as Path-Dependent Process: Central Europe’s Experiences and Lessons for Cuba, „Cuba in Transition”, vol. 15.Zweynert J., Goldschmidt N. 2006 The Two Transitions in Central and Eastern Europe, „Journal of Economic Issues”, vol. 15, no. 4.1(73)142

Emergence and persistence of inefficient states

We present a theory of the emergence and persistence of inefficient states based on patronage politics. The society consists of rich and poor. The rich are initially in power, but expect to transition to democracy, which will choose redistributive policies. Taxation requires the employment of bureaucrats. By choosing an inefficient state structure, the rich may be able to use patronage and capture democratic politics, so reducing the amount of redistribution in democracy. Moreover, the inefficient state creates its own constituency and tends to persist over time. Intuitively, an inefficient state structure creates more rents for bureaucrats than would an efficient one. When the poor come to power in democracy, they will reform the structure of the state to make it more efficient so that higher taxes can be collected at lower cost and with lower rents for bureaucrats. Anticipating this, when the society starts out with an inefficient organization of the state, bureaucrats support the rich, who set lower taxes but also provide rents to bureaucrats. We obtain that the rich–bureaucrats coalition may also expand the size of bureaucracy excessively so as to generate enough political support. The model shows that an equilibrium with an inefficient state is more likely to arise when there is greater income inequality, when bureaucratic rents take intermediate values, and when individuals are sufficiently forward-lookin

Modelling Authoritarian Regimes

In the last few years, a body of ideas based on political economy theory has been built up by North and Weingast, Olson, Przeworski, and Acemoglu and Robinson. One theme that emerges from this literature concerns the transition to democracy: why would dominant elites give up oligarchic power? This paper addresses this question by considering a formal model of an authoritarian regime, and then examining three historical regimes: the Argentine Junta of 1976-1983; Francoist Spain ,1938-1975; the Soviet System ,1924-1991. We argue that these historical analyses suggest that party dictatorships are more institutionally durable than military or fascist ones.Democratic Transition, Authoritarian Regimes, Rational Choice Theory.

Factors of regional poverty reduction in Colombia: Do institutional conditions matter?

[EN] Colombia has a unique history, which has been heavily conditioned by armed conflict lasting more than 50 years. This study examines the institutional conditions for success and failure in reducing poverty in Colombian departments by considering changes that took place between 2003 and 2014. Fuzzy-set qualitative comparative analysis identifies the changes in regional conditions that reduce poverty over time. The pathways for poverty reduction are multidimensional, and many involve changes in institutional attributes such as government transparency, absence of violence, and electoral turnout. The framework developed in this paper can be used to monitor necessary and sufficient pathways in regional clusters.This work was funded by Grant AGL2015-65897-C3-3-R, ¿Spanish Ministry of Science, Innovation, and Universities¿.Nieto-Alemán, PA.; García Alvarez-Coque, JM.; Roig Tierno, N.; Mas Verdú, F. (2019). Factors of regional poverty reduction in Colombia: Do institutional conditions matter?. Social Policy and Administration. 53(7):1045-1063. https://doi.org/10.1111/spol.12474S10451063537Acemoglu, D., & Robinson, J. A. (2012). Why Nations Fail: The Origins of Power, Prosperity and Poverty. ASEAN ECONOMIC BULLETIN, 29(2), 168. doi:10.1355/ae29-2jAlkire, S., & Santos, M. E. (2013). A Multidimensional Approach: Poverty Measurement & Beyond. Social Indicators Research, 112(2), 239-257. doi:10.1007/s11205-013-0257-3Amin, A. (1999). An Institutionalist Perspective on Regional Economic Development. International Journal of Urban and Regional Research, 23(2), 365-378. doi:10.1111/1468-2427.00201Angulo, R., Díaz, Y., & Pardo, R. (2015). The Colombian Multidimensional Poverty Index: Measuring Poverty in a Public Policy Context. Social Indicators Research, 127(1), 1-38. doi:10.1007/s11205-015-0964-zAtkinson, A. B., & Bourguignon, F. (1982). The Comparison of Multi-Dimensioned Distributions of Economic Status. The Review of Economic Studies, 49(2), 183. doi:10.2307/2297269Bastiaensen, J., Herdt, T. D., & D’Exelle, B. (2005). Poverty reduction as a local institutional process. World Development, 33(6), 979-993. doi:10.1016/j.worlddev.2004.09.019Baumann, C., & Winzar, H. (2014). The role of secondary education in explaining competitiveness. Asia Pacific Journal of Education, 36(1), 13-30. doi:10.1080/02188791.2014.924387Belhadj, B. (2011). New fuzzy indices of poverty by distinguishing three levels of poverty. Research in Economics, 65(3), 221-231. doi:10.1016/j.rie.2010.10.002Belhadj, B., & Limam, M. (2012). Unidimensional and multidimensional fuzzy poverty measures: New approach. Economic Modelling, 29(4), 995-1002. doi:10.1016/j.econmod.2012.03.009Betti, G., Cheli, B., Lemmi, A., & Verma, V. (2006). Multidimensional and Longitudinal Poverty: an Integrated Fuzzy Approach. Economic Studies in Inequality, Social Exclusion and Well-Being, 115-137. doi:10.1007/978-0-387-34251-1_7Bretthauer, J. M. (2014). Conditions for Peace and Conflict. Journal of Conflict Resolution, 59(4), 593-616. doi:10.1177/0022002713516841BTI. (2018).Colombia Country Report. Project “Shaping Change—Strategies of Development and Transformation.” Retrieved fromhttp://www.bti‐project.org/en/reports/country‐reports/detail/itc/COL/Bozzoli, C., & Brück, T. (2009). Agriculture, Poverty, and Postwar Reconstruction: Micro-Level Evidence from Northern Mozambique. Journal of Peace Research, 46(3), 377-397. doi:10.1177/0022343309102658Charlton A. &Stiglitz J.(2004).Capital market liberalization and poverty.Initiative for Policy Dialogue Working Papers. 1–22.Collins, P. D. (2012). GOVERNANCE AND THE ERADICATION OF POVERTY: AN INTRODUCTION TO THE SPECIAL ISSUE. Public Administration and Development, 32(4-5), 337-344. doi:10.1002/pad.1640DANE. (2015).Regional GDP; Demography; Poverty rates [Data file]. Retrieved from:http://www.dane.gov.co/index.phpDeaton, A. (2010). Price Indexes, Inequality, and the Measurement of World Poverty. American Economic Review, 100(1), 5-34. doi:10.1257/aer.100.1.5Abbie Erler, H. (2012). A New Face of Poverty? Economic Crises and Poverty Discourses. Poverty & Public Policy, 4(4), 183-204. doi:10.1002/pop4.13Fiss, P. C. (2011). Building Better Causal Theories: A Fuzzy Set Approach to Typologies in Organization Research. Academy of Management Journal, 54(2), 393-420. doi:10.5465/amj.2011.60263120Flores, T. E. (2014). Vertical Inequality, Land Reform, and Insurgency in Colombia. Peace Economics, Peace Science and Public Policy, 20(1), 5-31. doi:10.1515/peps-2013-0058GAN. (2018).Colombia Corruption Report. Retrieved fromhttps://www.business‐anti‐corruption.com/country‐profiles/colombia/Gates, S., Hegre, H., Nygård, H. M., & Strand, H. (2012). Development Consequences of Armed Conflict. World Development, 40(9), 1713-1722. doi:10.1016/j.worlddev.2012.04.031Glick, R., & Taylor, A. M. (2010). Collateral Damage: Trade Disruption and the Economic Impact of War. Review of Economics and Statistics, 92(1), 102-127. doi:10.1162/rest.2009.12023Grindle, M. S. (2004). Good Enough Governance: Poverty Reduction and Reform in Developing Countries. Governance, 17(4), 525-548. doi:10.1111/j.0952-1895.2004.00256.xHarriss, J. (2007). Bringing Politics Back into Poverty Analysis: Why Understanding Social Relations Matters More for Policy on Chronic Poverty than Measurement. SSRN Electronic Journal. doi:10.2139/ssrn.1752973Herrera, J., Razafindrakoto, M., & Roubaud, F. (2007). Governance, Democracy and Poverty Reduction: Lessons Drawn from Household Surveys in Sub-Saharan Africa and Latin America. International Statistical Review, 75(1), 70-95. doi:10.1111/j.1751-5823.2006.00005.xIbáñez, A. M., & Velásquez, A. (2009). Identifying Victims of Civil Conflicts: An Evaluation of Forced Displaced Households in Colombia. Journal of Peace Research, 46(3), 431-451. doi:10.1177/0022343309102661Justino, P. (2011). Poverty and Violent Conflict: A Micro-Level Perspective on the Causes and Duration of Warfare. IDS Working Papers, 2011(385), 1-25. doi:10.1111/j.2040-0209.2011.00385_2.xLijphart, A. (1997). Unequal Participation: Democracy’s Unresolved Dilemma Presidential Address, American Political Science Association, 1996. American Political Science Review, 91(1), 1-14. doi:10.2307/2952255Lister, M. (2007). Institutions, Inequality and Social Norms: Explaining Variations in Participation. The British Journal of Politics and International Relations, 9(1), 20-35. doi:10.1111/j.1467-856x.2007.00246.xMahler, V. A., Jesuit, D. K., & Paradowski, P. R. (2013). Electoral Turnout and State Redistribution. Political Research Quarterly, 67(2), 361-373. doi:10.1177/1065912913509306Medzihorsky J. Oana I. E. Quaranta M. Schneider C. Q. &Oana M. I. E.(2017).Package ‘SetMethods’.Moyano Pesquera, P. B. (2018). La implicación de los agentes sociales y económicos en el desarrollo rural: una necesidad insatisfecha. Economía Agraria y Recursos Naturales, 17(2), 55. doi:10.7201/earn.2017.02.03Mwangi, E., & Markelova, H. (2009). Collective Action and Property Rights for Poverty Reduction: A Review of Methods and Approaches. Development Policy Review, 27(3), 307-331. doi:10.1111/j.1467-7679.2009.00448.xNeff, D. (2013). Fuzzy set theoretic applications in poverty research. Policy and Society, 32(4), 319-331. doi:10.1016/j.polsoc.2013.10.004Pierson, P. (1993). When Effect Becomes Cause: Policy Feedback and Political Change. World Politics, 45(4), 595-628. doi:10.2307/2950710Pierson, P. (2000). The Limits of Design: Explaining Institutional Origins and Change. Governance, 13(4), 475-499. doi:10.1111/0952-1895.00142Putnam, R. D., Leonardi, R., & Nonetti, R. Y. (1994). Making Democracy Work. doi:10.2307/j.ctt7s8r7Ragin, C. C. (2008). Redesigning Social Inquiry. doi:10.7208/chicago/9780226702797.001.0001Royuela, V., & García, G. A. (2013). Economic and Social Convergence in Colombia. Regional Studies, 49(2), 219-239. doi:10.1080/00343404.2012.762086RUV. (2016).Regional forced displacement. Unique victims registry. [Data file]. Retrieved from:http://rni.unidadvictimas.gov.co/RUVSchneider, H. (1999). Participatory governance for poverty reduction. Journal of International Development, 11(4), 521-534. doi:10.1002/(sici)1099-1328(199906)11:43.0.co;2-jSen, A. (1983). Development: Which Way Now? The Economic Journal, 93(372), 745. doi:10.2307/2232744Sen, A. (2008). Violence, Identity and Poverty. Journal of Peace Research, 45(1), 5-15. doi:10.1177/0022343307084920Steele, A. (2011). Electing Displacement: Political Cleansing in Apartadó, Colombia. SSRN Electronic Journal. doi:10.2139/ssrn.1864165Tebaldi, E., & Mohan, R. (2010). Institutions and Poverty. 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Inequality and Authoritarianism in the Developing Countries

This research attempts a theoretical and quantitative analysis of authoritarian regimes enduring in the developing countries. We attempt computer visualization of the model developed by Acemoglu and Robinson in order to derive an empirical hypothesis easily. There is a reason for us to accept the model that they build on the principle of dynamic stochastic general equilibrium. The numerical simulation describes a causal relationship between national income sharing and regime change, and delineates the economic impact of regime transformations. The random effects ordered probit analysis of panel data provides evidence that supports the hypothesis from the simulation. This result contributes to empirical democratization studies because of non adherence to a positive relationship between inequality and democracy among quantitative researches. According to The Economic Origins of Dictatorship and Democracy, the poor have no incentive for regime transformation and authoritarian regimes are preserved in a state of equilibrium in comparatively equal societies.Dictatorship, Acemoglu and Robinson Model, Democratization, Computer Simulation, Panel Data Analysis

Mastering Panel 'Metrics: Causal Impact of Democracy on Growth

The relationship between democracy and economic growth is of long-standing interest. We revisit the panel data analysis of this relationship by Acemoglu, Naidu, Restrepo and Robinson (forthcoming) using state of the art econometric methods. We argue that this and lots of other panel data settings in economics are in fact high-dimensional, resulting in principal estimators -- the fixed effects (FE) and Arellano-Bond (AB) estimators -- to be biased to the degree that invalidates statistical inference. We can however remove these biases by using simple analytical and sample-splitting methods, and thereby restore valid statistical inference. We find that the debiased FE and AB estimators produce substantially higher estimates of the long-run effect of democracy on growth, providing even stronger support for the key hypothesis in Acemoglu, Naidu, Restrepo and Robinson (forthcoming). Given the ubiquitous nature of panel data, we conclude that the use of debiased panel data estimators should substantially improve the quality of empirical inference in economics.Comment: 8 pages, 2 tables, includes supplementary appendi

A Simple Endogenous Growth Model With Asymmetric Employment Opportunities by Skill

In this paper we present the outlines of an endogenous growth model that focuses on the labour market- and skill-aspects of economic policy measures that may have an impact on technological change, and hence on the long term effectiveness of the policy measures concerned. The link between skills and technology is two-fold. On the one hand, new technology is high-skilled intensive, while on the other hand, process R&D may actively change the skill-mix of existing production technologies in the direction of a more intensive use of least-cost production factors/skills. Hence, we endogenise both product R&D and process R&D decisions. The product R&D generates new varieties of goods with a higher quality than older varieties. New and older varieties are assumed to be imperfect substitutes, so that new varieties only gradually replace older varieties. Process R&D in turn is geared towards downscaling the skill-requirements of the jobs associated with producing the different varieties of output. Because high-skilled labour has different uses (it is an input to final output production, but also into product and process R&D activities), whereas low-skilled labour is used only in final output generation, we can show how various alternative policy measures may affect R&D decisions, hence growth performance, but also the distribution of income between skills. We also show that the promotion of process R&D in particular has beneficial effects both for the employment perspectives of low-skilled workers and for growth in general. In simulation experiments with the model we show that the model, even in its present state, is able to mimic the stylised facts reported by Acemoglu (1997), who observed for the US that an increase in the supply of high-skilled labour does not necessarily imply a fall in the relative wage rate of high-skilled workers in the long run. We show that the ensuing increase in R&D activity creates its own demand for high-skilled workers when new products arrive on the market that are high-skilled intensive during the first phase of their life-cycle, as we assume it to be the case. This in turn invokes endogenous process R&D reactions that change the long term composition of the demand for labour by skill and by sector. In various experiments we found that the model generates an interesting interplay between both types of R&D that may have important consequences for the distribution of income between skills, for growth and more generally for the design of economic policy.economics of technology ;