In yet another of their implacable attempts to deny the reality of racial differences, they make some quite surpising assumptions — such as the immutability of institutions and the inability of poor people to change or benefit from example

There is absolutely no doubt that institutions matter but why different people have the institutions they do will astound you. They apparently have no choice in the matter. But I won’t go on. Let Steve Sailer tell the story:

MIT’s Daron Acemoglu is a rock star among economists, one of the ten most cited in his profession. This is largely because of the paper the Istanbul-born Armenian cowrote in 2001: The Colonial Origins of Comparative Development. Other economists have found that it provides a suave way to finally answer the embarrassing question of why, in the 21st century, some countries are rich and some are poor.

Acemoglu has a big new book out with James A. Robinson, Why Nations Fail: The Origins of Power, Prosperity, and Poverty, that makes his case at great length.

To understand Acemoglu’s professional popularity, you have to grasp how awkward the major features of global economic reality are to careerist economists. If you look naively around the world, you might get the impression that, say, Chinese territories such as Taiwan, Singapore, and Hong Kong have been economically dynamic because they have a lot of Chinese people in them. Moreover, the Overseas Chinese control much of business in Southeastern Asia, so we might assume that the Chinese tend to have a lot on the ball wherever they go.

The epochal conclusion that Deng Xiaoping, urged on by Singapore’s Lee Kuan Yew, drew from this in the late 1970s was that if all the Chinese folks in the world were getting rich except the Maoist Chinese, the problem must lie more in the “Maoist” than in the “Chinese” part. And, indeed, once liberated from Mao’s dogmas and whims, the Mainland Chinese responded with one of history’s greatest economic surges.

To an economist looking for invitations to conferences, however, the danger of adopting the Lee-Deng perspective is its flip side: Some other peoples, such as black Africans, New World Indians, and Pacific Islanders, have tended to lag notably behind Northeast Asians and Europeans, whether at home or abroad, and under all sorts of ideologies and institutions.

Acemoglu’s contribution was to come up with a regression analysis that, he claimed, showed that Third World poverty was the fault of those all-purpose bad guys, European imperialists. In colonies where early Europeans settlers faced low risks of dying from tropical diseases (such as Massachusetts), they set up good “inclusive” institutions. But in colonies where white men died like flies (such as Nigeria), they set up bad “extractive” institutions.

Institutions are (practically) everything, you see. If, say, the Central African Republic is poor, it’s not because it’s a republic in Central Africa (or because poverty is the default condition of humanity), but because it has extractive institutions. And that’s because Europeans didn’t set up inclusive institutions for the Central Africanese.

If Australia or New Zealand or Canada are richer than the Central African Republic, it’s not because Australia or New Zealand or Canada are full of Europeans, it’s because the Europeans hogged the inclusive institutions for the places they colonized. Or something. Acemoglu wrote: “These results suggest that Africa is poorer than the rest of the world not because of pure geographic or cultural factors, but because of worse institutions.”

According to Acemoglu, that’s pretty much all you need to know. From the abstract of his 2001 paper:

“Our estimates imply that differences in institutions explain approximately three-quarters of the income per capita differences across former colonies. Once we control for the effect of institutions, we find that countries in Africa or those farther away from the equator do not have lower incomes.”

Now, you might think that Acemoglu’s model for predicting national wealth in ex-colonies, such as the United States or New Guinea, is:

1. More white people means more wealth.

How dare you think such a thing! Instead, it’s a two-step process:

1. More white people hundreds of years ago means better institutions today.

2. Better institutions then means more wealth today.

Two steps are better than one, according to Occam’s Butter Knife.

In Why Nations Fail, Acemoglu and Robinson have extended their Inclusive Good/Extractive Bad dichotomy. If anything good ever happened anywhere in world history, it was due to “inclusive institutions” and vice-versa. Sir Karl Popper, the philosopher of science, would have torn his hair out trying to read Why Nations Fail. He would have found Acemogluism as unfalsifiable (and thus as unscientific) as Freudianism and Marxism.

Now, I’m a big fan of inclusive institutions and don’t like exploitative ones. But Acemoglu’s dogma strikes me as a tad superficial. For instance, he focuses on the border cities of Nogales, Arizona, and Sonora. Why is the American side richer? It must be because America has better institutions.

OK…but what makes for better institutions north of the border? After all, Mexico has had plenty of opportunity to study American institutions. Could the enduring differences have something to do with America having a lot of Americans?

What’s the real story behind good and bad institutions? Two brave economists from Africa, Isaac Kalonda-Kanyama of the University of Johannesburg and Oasis Kodila-Tedika of the University of Kinshasa, have tackled this question head-on in a new study entitled Quality of Institutions: Does Intelligence Matter? Their conclusion:

“We analyze the effect of the average level of intelligence on different measures of the quality of institutions, using a 2006 cross-sectional sample of 113 countries. The results show that average IQ positively affects all the measures of institutional quality considered in our study, namely government efficiency, regulatory quality, rule of law, political stability and voice and accountability. The positive effect of intelligence is robust to controlling for other determinants of institutional quality.”

Don’t expect Kalonda-Kanyama and Kodila-Tedika to get big career boosts from their finding.


I taught in a School of Sociology at a major Australian university for many years and did a lot of research while I was there. The one sociological fact that impressed me most during all that time, however, was something I saw during a trip to Califonia in the ’70s. I was staying in Los Angeles and decided to take a day trip down to Tijuana, which was at that time much better known for brass bands than for drugs and crime.

I was impressed by the 8-lane American concrete highway leading all the way to the border but was astounded to emerge from border control onto a dirt track lined with barrels. A first-class American freeway suddenly gave way to a Mexican dirt track. I guess that the Mexicans have improved their side of the border since then but the contrast between the two sides of the border could not have been more graphic at the time and has stood in my mind ever since as proof of the importance of culture and its associated institutions.

And there is no difficulty in seeing why Mexican culture bears much responsibility for the state of Mexican roads. But with the tutelary example of a triumphant American culture visible just over the border, how do we explain the failures of Mexican culture today? Are Mexicans incapable of learning? That claim sounds rather like a racist statement in itself.

To attribute current Mexican culture to something Spaniards did hundreds of years ago rather that to what Mexicans are like today is something only a Leftist could believe. No doubt the conquistadores had a big influence in their time but culture is ever-changing and what it is at any one point in time has to reflect the choices made by people around that time.

Note just a few examples of rather rapid changes of culture within the same society. These days men rarely wear hats. Within living memory men were regarded as improperly dressed if they stepped outside their door at any time of the year without a hat on. I remember going to work with a hat on myself. And in the 19th century, beards were virtually universal on men. And less trivially, what has happened to the distinction between the deserving and undeserving poor that so dominated 19th century social thinking? One could go on about the decay of civility, manners, standards etc. The very idea of a static, immutable culture and its associated institutions is a towering absurdity.

And when it comes to differences between cultures, look, for instance, at whether in the given culture there is little general respect for impartial justice. In such a culture you will bribe the judge and the judge will take the bribe. And much flows from that

Furthermore, the claim that the British left behind some sort of malevolent cultures and institutions in Africa is itself malevolent. When the British departed places like Nigeria and Ghana they left behind well-organized countries with good communications and prosperous economies — plus standards of law, order and justice far higher than anything there today. In short, they left behind excellent foundations for the development of modern, prosperous and civilized societies. That no such development took place is the doing of the inhabitants, not the doing of the evil “colonialists”.

How Leftists hate that very word: “colonialist”! It seems to make them shake with rage, regardless of the reality it denotes. They are deeply irrational people. That there has never been in recent centuries a more rabid colonial power than Soviet Russia doesn’t count, of course

Posted by John J. Ray (M.A.; Ph.D.). For a daily critique of Leftist activities, see DISSECTING LEFTISM. To keep up with attacks on free speech see TONGUE-TIED. Also, don’t forget your daily roundup of pro-environment but anti-Greenie news and commentary at GREENIE WATCH . Email me here

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