Which comes first: The culture or the institutions? One culture's institutions may not be capable of being migrated to another culture. Or a transplant may only take place if there is a positive receptor.
arthur ----Original Message----- From: Keith Hudson [mailto:[EMAIL PROTECTED]] Sent: Monday, October 07, 2002 10:23 AM To: [EMAIL PROTECTED] Subject: RE: Roots of development - a story Since my posting of the article from the current Economist about the relative importance of inputs of policy, institutions or geography in successful economic development, a FWer wrote for me and one or two more a most readable account of the influence of geography on personality. As a consequence, I would slightly modify the findings of the research I posted. OK, institutions may be more important than policy and geography, but I think that institutions are set within culture like raisins in a pudding, and geography must have some effect in the nature of the culture that ensues. However, it's really the pudding as a whole -- the culture, the total complex of prejudices -- that's difficult to change. For example, Russian economists, legislators, businessmen, and jurists, mostly superbly educated, have known for the last ten years exactly what institutions they need -- but they simply haven't been able to pull them off because of cultural inertia (mainly in the Duma but also elsewhere in the bureaucracy). The Japanese also know exactly what they need to do to reform their banking institutions, but can't quite persuade their (Ministry of Finance) minds to do it. Economists in the Latin countries know exactly what to do to get their institutions on track but their politicians haven't the courage to try and change the mass culture of dependency that has developed in the streets (I'm thinking of Brazil and Argentina especially) -- as it will need to, sooner or later. As for Africa -- what can I possibly say? Of the 34 countries in Africa, 19 countries are fighting civil wars -- some have been doing so with more or less savage intensity for many years -- and several more suffer politically inspired terror by their governments. I don't think that the politicians of most African countries either know or care what institutions they need, nor have they any culture that could bring these about in the near future. Even in South Africa, President Mbeki comes out with strange ideas but, because he's a near-dictator, its corruption-rife ANC don't even bother to debate. It won't be long before that country, too, becomes a full-blown dictatorship. The Arab/Muslim countries of the Middle East? Like Russia, many of their well-educated individuals know exactly what institutions they need but their religious culture is set implacably against their development anytime soon. So what do we do? To be honest, I don't think we can do much at all. We could, of course, keep on feeding them with more and more aid, but this wouldn't make any difference to their basic economies until the recipients want to change in a voluntary way -- until they seriously set about forming the sorts of institutions which England and America (in particular) developed between about 1820 (Company Acts, Joint Stock Banking Act, etc) and now (with more reforms and institutions still to come!). Japan partially did it in 1880 and is probably on the verge of success this time (that is, if it sorts out its bankrupt banks and multiple hidden cross-holdings soon). China is having a serious attempt, as are some other Asian countries. India is probably too corrupt, caste ridden and religiously polarised to succeed for at least another two generations. Keith Hudson ---------------------------------------------------------------------------- ------------ Keith Hudson, General Editor, Handlo Music, http://www.handlo.com 6 Upper Camden Place, Bath BA1 5HX, England Tel: +44 1225 312622; Fax: +44 1225 447727; mailto:[EMAIL PROTECTED] ________________________________________________________________________
