Amazing article! It’s been clear to me that institutions are the most important variable to a nation’s success since studying development economics. I found it strange that this was considered controversial. I’m happy to see the work of AJR winning the Nobel prize!
Insitutions were seen as hard to model and talking of power struggles between social groups was politically associated with marxism (that was against standard economics and reciprocally). AJR managed to study institutions and power struggles using standard economic tools and to make these questions fine to study within the mainstream of the profession. Two significant achievements.
I’ve recently gotten into the academic economic space so I’m not well versed. Are areas, like externalities, that are hard to measure and model under represented in economic research? Compared to how important they are to our economy and environment.
I'm happy to see the reference to Noah’s piece. You two are always the first I turn to on Substack when I'm looking for an informed and original perspective on trending topics in Economics. Keep up the great work!
Thank you for this insightful piece. I was wondering if it's entirely appropriate to say that the institutional revolution was 'initiated' by AJR. It seems there may be earlier contributions and authors who highlighted the significance of institutions as well.
Thanks, yes not the best term. Others preceded them. Besides North and Ostrom. Engerman and Sokoloff paper in the 90s comparing the development in the US and Mexico was very influential. I changed it for "ignited" as it really took off with their work.
Great post Lionel! Good context and explanation (and clearly better than some others I've seen!).
Thanks Thom!
Amazing article! It’s been clear to me that institutions are the most important variable to a nation’s success since studying development economics. I found it strange that this was considered controversial. I’m happy to see the work of AJR winning the Nobel prize!
Insitutions were seen as hard to model and talking of power struggles between social groups was politically associated with marxism (that was against standard economics and reciprocally). AJR managed to study institutions and power struggles using standard economic tools and to make these questions fine to study within the mainstream of the profession. Two significant achievements.
I’ve recently gotten into the academic economic space so I’m not well versed. Are areas, like externalities, that are hard to measure and model under represented in economic research? Compared to how important they are to our economy and environment.
I'm happy to see the reference to Noah’s piece. You two are always the first I turn to on Substack when I'm looking for an informed and original perspective on trending topics in Economics. Keep up the great work!
Thank you for this insightful piece. I was wondering if it's entirely appropriate to say that the institutional revolution was 'initiated' by AJR. It seems there may be earlier contributions and authors who highlighted the significance of institutions as well.
Thanks, yes not the best term. Others preceded them. Besides North and Ostrom. Engerman and Sokoloff paper in the 90s comparing the development in the US and Mexico was very influential. I changed it for "ignited" as it really took off with their work.