Why Nations Fail Illustrated
Lecture 1: Introduction
October 2, 2018
Masayuki Kudamatsu
This course in a nutshell
"A history of the world, but not a typical one" (BBC History Magazine)
Causes of income inequality
across countries
Economics as a tool to
understand politics & economy
Value of a concept
to see the world
With this book, we will learn 3 things:
1
2
3
This course in a nutshell (cont.)
Today's Road Map
Theory proposed by Why Nations Fail
Footnotes on institutions, drivers of economic growth,
and what economics is like
Course schedule
Income inequality across countries
Class discussion
Grading policy
Online discussionboard
Term paper
1
2
3
4
Wait, who is the instructor of this course?
Who am I ?
Born and bred
in Tokyo
Study PhD in economics
at London School of Economics
2002-07
Do research
at Stockholm University
2007-15
What did I research?
Democracy in Africa
helps more babies survive
Connections
AND good job performance
promote politicians in China
Democracy in Africa
helps more babies survive
Connections
AND good job performance
promote politicians in China
Research agenda pursued by
the authors of Why Nations Fail
very closely related to
these pieces of my research
Today's Road Map
Theory proposed by Why Nations Fail
Footnotes on institutions, drivers of economic growth,
and what economics is like
Course schedule
Income inequality across countries
Class discussion
Grading policy
Online discussionboard
Term paper
1
2
3
4
Meet the authors of Why Nations Fail
James A. Robinson
Listen to his TED talk on the book until 2'37''
Class discussion time
Why do we see
such a big difference
in living standards across countries?
Having your own answer
will help you understand the reason proposed by Why Nations Fail.
Jim's answer (part 1)
What cannot be an answer?
Continue listening to his TED talk on the book until 4'06''
Jim's answer (part 1)
It's NOT because
poor countries
cannot afford
technology,
education,
or infrastructure
Money is
simply wasted
Today's Road Map
Theory proposed by Why Nations Fail
Footnotes on institutions, drivers of economic growth,
and what economics is like
Course schedule
Income inequality across countries
Class discussion
Grading policy
Online discussionboard
Term paper
1
2
3
4
Jim's answer (part 2)
Continue listening to his TED talk on the book until 9'19''
Theory proposed in Why Nations Fail
Jim's answer (part 2)
Example
Incentive & opportunities
for everyone to innovate
Patent given to people with various backgrounds, both rich and poor
Economic institutions
how society is
organized for
economic activities
Income inequality across countries
A concept proposed by Douglas North
(Nobel laureate in 1993)
Footnote 1: Institutions
"humanly devised constraints that structure political, economic and social interactions"
e.g.
When college graduates find a job
Japan
before graduation
Most countries
after graduation
Douglas North (1991) Institutions, p. 3
vs
Footnote 1: Institutions (cont.)
This question has been the research agenda
pursued by the authors of Why Nations Fail for past 20 years
Institutions
Economic performance
?
Footnote 2: Drivers of Economic Growth
People need to have an incentive to invest and innovate
e.g.
Do you want to set up a firm to sell your innovative products?
Economic growth
Investment
Innovation
Jim's answer (part 3)
Continue listening to his TED talk on the book until 13'23''
Theory proposed in Why Nations Fail
Jim's answer (part 3)
Broad Distribution
of Political Power
Strong
State Capacity
Economic Institutions
Political Institutions
+
Incentive to
Invest
&
Innovate
Meet the authors of Why Nations Fail
Daron Acemoglu
The first 45 seconds of this interview
summarizes what we've learned so far
Footnote 3: What is economics?
Today's Road Map
Theory proposed by Why Nations Fail
Footnotes on institutions, drivers of economic growth,
and what economics is like
Course schedule
Income inequality across countries
Class discussion
Grading policy
Online discussionboard
Term paper
1
2
3
4
Course schedule
The sequence of chapters in Why Nations Fail
is a bit hard to follow
I've reshuffled the sequence as follows
Weeks 2-4: How institutions affect prosperity
October 9
Chapter 3
October 16
Chapter 7
October 23
Chapter 8
North/South Korea
the Congo
How institutions matter for prosperity
Why did
Industrial Revolution
take place
in England?
History of England
from 13c to 19c
Extractive institutions cause poverty
Inclusive institutions lead to prosperity
Ottoman Empire
Austria-Hungary
Russian Empire
Ming/Qing dynasties
Ethiopia
Somalia
October 30
Chapter 4
November 6
Chapter 1
November 13
Chapter 10
United States
vs Mexico
from colonization
to early 20c
Weeks 5-7: Origins of inclusive institutions
Western
vs Eastern Europe
after Black Death
in 14c
Spain vs England
after Rise of Atlantic
Trade in 16c
Australia
French Revolution
and its spread to
Western Europe
Japan vs China
in 19c
December 4
Chapter 13
Weeks 8-10: Persistence of Extractive Institutions
November 20
Chapter 9
November 27
Chapter 12
Colonization of
Southeast Asia by
Europeans in 17c
Slave trade in
sub-Saharan
Africa
British colonization
of South Africa
in 19c
Guatemala
Sierra Leone
Ethiopia
before/after
the 1974 coup
US South
before/after
American Civil War
Zimbabwe
Argentina
Colombia
North Korea
Uzbekistan
January 8
Chapter 6
December 11
Chapter 14
United Kingdom
in 19c
United States
in early 20c
Republic of Venice
Roman Republic
Weeks 11-13: Survival of Inclusive Institutions
Botswana
US South
in the 1950s and 1960s
Brazil
since the 1970s
December 18
Chapter 11
Weeks 14-15:
Prosperity without Inclusive Institutions?
Soviet Union
Neolithic Revolution
Mayan city-states
January 22
Term paper workshop
January 15
Chapter 5
Today's Road Map
Theory proposed by Why Nations Fail
Footnotes on institutions, drivers of economic growth,
and what economics is like
Course schedule
Income inequality across countries
Class discussion
Grading policy
Online discussion board
Term paper
1
2
3
4
Grades matter for your future
Historically,
college grades do not count at all
for job hunting in Japan
Not any more!
日本経済新聞 May 16, 2018
Also, your GPA does matter for studying abroad
Grading Policy
Term Paper (79%)
Participation in
Online Discussion
(21%)
| S | A | B | C | F |
|---|---|---|---|---|
| 90 or above | 80-89 | 70-79 | 60-69 | Less than 60 |
Online Discussion Board
We use Prulu.com
I've sent you an email invitation to join
Register with your email address
If you haven't received an invitation, email me at
kudamatsu@osipp.osaka-u.ac.jp
Announcements on the course will also be posted there
Online Discussion Board (cont.)
Post questions on the assigned chapter of Why Nations Fail
by 3 pm of each class date
Help Masa focus on where you get stuck during his lecture
Get used to reading a lot in English
Task 1
Stupid questions
are welcome!
Your grade will be based on
whether you post a question, not what you ask.
Online Discussion Board (cont.)
What's written in Why Nations Fail
may not make sense to anyboby.
Task 2
Answer the questions posted by other students
Good answers will give you bonus in your grade
Bad answers do not count
Posting an answer
is your "optimal" strategy (i.e. the best affordable choice)
"Teaching is the best way to learn"
Online Discussion Board (cont.)
Mistakes
do not count
In this course...
I want you to
Fail gracefully
Because...
Grading Policy
Term Paper (79%)
Participation in
Online Discussion
(21%)
| S | A | B | C | F |
|---|---|---|---|---|
| 90 or above | 80-89 | 70-79 | 60-69 | Less than 60 |
Pick a country
And discuss whether
Theory of Why Nations Fail can
explain economic performances
of the country of your choice
Term Paper
Causes of income inequality
across countries
Economics as a tool to
understand politics & economy
Value of a concept
to see the world
With this book, we will learn 3 things:
1
2
3
This course in a nutshell (cont.)
Solve a problem, not a quiz
College admission exam
You solved quizzes
There were always
the correct answers
Real world
You have to solve problems
No one knows
correct answers
A concept will help you solve a problem that has no correct answer
No exam. Term paper instead.
Therefore
Don't call me
"Sensei."
And
I might be wrong. You might know better.
We all strive to solve a problem.
Pick a country
And discuss whether
Theory of Why Nations Fail can
explain economic performances
of the country of your choice
Term Paper
Pick a country
You cannot choose a country of another student's choice
First come, first served
Post which country you've chosen on Prulu discussion board
The following countries cannot be chosen
as discussed in detail by Why Nations Fail
Argentina
Australia
Botswana
Brazil
China (except since 1979)
Colombia
DR Congo
Ethiopia (except since the 1990s)
France
Guatemala
Japan
North Korea
Mexico
Russia (except since the 1990s)
Sierra Leone
Somalia
South Africa
United Kingdom
United States
Uzbekistan
Zimbabwe
Pick a country (cont.)
Term Paper Preparation
Last 30-45 minutes of each class
You'll have time to prepare for writing term paper
Last 1 or 2 classes
You'll give a talk on your draft term paper
Learn the importance
of receiving feedback and revise your draft
Data for economic performance
Documentation on economic and political institutions
How to write paragraph essays
Practice applying the theory with Japan as an example
Email a PDF copy to kudamatsu@osipp.osaka-u.ac.jp by
9 am on
Wednesday 13 February
Last class
Exam period
22 January
29 January - 8 February
For your information:
Submission Deadline
because I have to submit your grades by 20 Feb...
Your to-do list until next class
Register with Prulu, the course online discussion board
(Check your email invitation)
Pick a country for your term paper
and post it on Prulu
Read Chapter 3 (except the last section on pp. 91-95)
and post questions on Prulu
1
2
3