Friday, January 22, 2010

institutions and culture

Tyler Cowen on good economic institutions and a culture of education.

I would rephrase "family structure which encourages an obsession with education" with "a success-obsessed culture that also values property rights" more generally, but basically yes, I'd bet a whole lot on the idea that institutions that promote entrepreneurship by creating a safe investment environment (which works when the culture is cooperative by respecting property rights), and a culture of success, are the most important determinants of economic prosperity. I'm firmly on Bill Easterly's side in the Easterly-Sachs debate.

It's not that I'm an expert on economic development, it's just one of those things that seems so utterly banally obvious, I can hardly believe there's a debate at all...

I think people just don't like that answer, because it severely limits what a third party activist can do to help alleviate poverty, and at worse implies that such efforts may be damaging. And everyone thinks they would be so much more successful if only they had a little bit more money now, so of course it would help to throw money at the Sudan.