Friday, April 22, 2011

Those who win are good at winning

Let's begin with a famous quote from an equally famous paper:
The early differences in the extent of inequality across New World economies may have been preserved by the types of economic institutions that evolved and by the effects of those institutions on how broadly access to economic opportunities was shared. This path of institutional development may in turn have affected growth.
In other words, there is positive feedback from economic conditions to political institutions. Or, paraphrased in a way I've heard in many econ and poli sci classes, institutions preserve conditions that gave rise to them.

This statement has a huge potential for being a tautology, however. In a straightforward interpretation, it implies that if some institutions do not preserve initial conditions that breed them, they don't survive. So saying that institutions preserve conditions that gave rise to them may be like saying that all living organisms are great at reproducing. It's false, but superficial observation seems to confirm it because the only living organisms we see are those that are great at reproducing. Because those that are not that great at it aren't around for us to see. Because they hadn't been reproducing.

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