Topics to be Covered
This module opens with a presentation on the work of famous American political scientist Edward Banfield, originator of the theory of “amoral familism” - a web of habits and beliefs which prevents some societies from developing economically. From his fieldwork in Sicily, Banfield observed that economic development suffers when everyone in a community is completely focused on their own family’s self-interest to the exclusion of the community’s collective interests. The community he studied could not mobilize to work towards their common self-interest and saw their competition over scarce resources as a zero-sum game. Moreover, the families in his study viewed any governmental action as serving private interests and so considered government intrinsically corrupt. For these reasons collective action became impossible and the community remained economically underdeveloped. The next presentation with the title “Why Nations Fail” takes a longer, more historical, perspective on economic development and argues that institutions matter a great deal for the long-term economic development of countries. Broadly speaking, development is facilitated by institutions that reward productive economic activity, such as product innovation, and discourage non-productive economic activity. Historically, some countries have promoted economic growth through well-designed and democratic institutions. Some of these institutions govern property rights, such as the patenting system. In order to function effectively, such institutions must be run impartially for the benefit of the nation or other collectivity, not any one individual or group. When states and governments become tools for private interests, the state can no longer enforce property rights in a neutral way, and productivity as well as economic growth ultimately suffers. The final presentation, “The Origins of Power, Prosperity, and Poverty,” deals with the history of the colonization of the Americas. This history provides a great example of how certain kind of institutions spur or impede later economic growth. In Latin America the European colonizers tried to capture all of the gains from economic activity with highly extractive, exploitative, and repressive institutions, both economic and political. Ultimately, this system did not function nearly as well as the North American system. Here, the colonizers relied out of necessity on more inclusive institutions built around more widely distributed property rights as well as political rights. These more inclusive institutions served to propel economic growth, as more people had economic incentives to engage in productive activity.
Learning Outcomes
This module will enhance students’ grasp of the basic institutions - such as sound property rights and the rule of law - that influence the long-term performance of large-scale economies. Students taking this module will better appreciate the effects of different kinds of economic and political institutions, as seen from both a historical and an anthropological perspective.
