In next week’s New York Review of Books, Korean development economist Ha-Joon Chang responds to a review of his new book, Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism. Chang defends his argument that the majority of rich nations today benefited from infant industry protection, and stands by his analysis that developing countries under an interventionist regime grew faster than those with neoliberal policies, looking at the period from 1980 to 2000. Pointing to Switzerland, which didn’t give women the vote until 1971, he disputes his reviewer’s argument that representative democracy was a key to the economic development of Western countries.
Chang concludes:
Mr. Easterly says that economic growth does not come from “experts” like me but entrepreneurs, like Ju-Yung Chung, the legendary founder of Hyundai. He conveniently omits the details that prove my point: before it succeeded in the world market, Chung’s auto venture was supported by decades of import bans, export subsidies, and tariff protection.
For Easterly, these salvos only strengthen his original argument that Chang finds “spurious patterns in partially random economic outcomes.” Chang’s rebuttals on infant industry protection and growth rates under neoliberal vs. interventionist regimes are further examples of ”selective use of evidence (confirmation bias) and excessive reliance on too little data.”
Easterly continues:
Chang misses the point on how the evidence for any one good thing—like representative democracy—is only reliable in the very long run (lots of data) and cannot be confirmed or rejected with only a few examples (too little data). So he refutes my case for democracy with lots of data—by reliance on too little data (whether women in one country—Switzerland—could vote after 1971? Of course this is not trivial from a moral standpoint, but its weight as evidence is minuscule). The now-rich countries have been more democratic than the rest of the world on average in the long run and have been steadily increasing in democracy.
Mlodinow’s book [The Drunkard's Walk, reviewed in the same article] warned that our brains are so hard-wired to misunderstand randomness that we make the same mistakes even after somebody points out the mistakes. I have been guilty of this myself in my own career, and unfortunately Chang now does the same with this letter.
Find the full exchange here.
2 Comments
Umm, in this context, what is the relevant description of ‘democracy’?
Whether women can vote? Elections? Freedom of the press? And how to measure democracy in a scientific context?
To me, democracy is when the rulers are held responsible for their actions, when the transaction costs of changing the actions of the rulers (policy) are relatively low, and where the common man can engage in meaningful political discourse.
All of this can, in fact, be achieved without voting rights for anyone. In fact, under certain circumstances, voting can be bad for democracy. During the May elections in Malawi, I experienced a whole village sitting still outside the voting registrar for the entire day, protesting that ‘their’ candidate (Tembo) had not given them T-shirts, as he had done to the neighbouring village. They refused to vote until they got T-shirts, and hence they sat outside in the sun the entire election day, waiting in vain.
Malawi had free and fair elections, but the democracy in Malawi suffers from serious flaws, and elections seems to make some of these flaws worse. Especially as long as voters look upon their votes as assets they can sell for a T-shirt.
Maybe I am dumb, but to say that some countries “have been more democratic than the rest of the world on average in the (very) long run” sounds as nonsense to me. I thought the point of prof. Easterly’s original review was that we really do not know enough to make this kind of assertions without lots of particular qualifications.
One Trackback
[...] e restrizioni commerciali) possa giocare un ruolo positivo nel processo di crescita. In un breve intervento, William Easterly replica a questa affermazione e ribadisce l’importanza fondamentale [...]