Grafe and Irigoin’s revisionist take on the political economy of the Spanish Empire does not stand up to much scrutiny.
Revising our assessment of the Spanish empire is in vogue among economic historians. Most notably, Regina Grafe and Alejandra Irigoin (2006; 2008) have sought to revise the nature of the empire’s political economy. Their goal is to refute those who claim that the wealth gap between Anglo and Latin America today is due to the ‘extractive’ institutions established by the Spanish in their colonies compared to the more ‘inclusive’ institutions established by the British (e.g. North, Summerhill & Weingast 2000; Engerman & Sokoloff 2011; Acemoglu & Robinson 2012). While critiques of such deterministic narratives should be welcome, Grafe and Irigoin’s argument unfortunately rests on a misreading of their own data.
The differential impacts of globalisation rather than institutional differences best explain divergence among ex-European colonies.
Daron Acemoglu, Simon Johnson and James Robinson (AJR, 2002) famously argued that a ‘reversal of fortune’ had taken place among ex-European colonies. Generally speaking, they argued, those ex-colonies that had been richest in 1500 would become the poorest by the end of the twentieth century. This, they claimed, was due to the different institutions established by Europeans.
My new paper details the problems of measuring the periphery’s terms of trade in the nineteenth century.
In a previous post I outlined some of the problems encountered by Jeffrey Williamson when he attempted to measure the periphery’s terms of trade in the nineteenth century. I have now uploaded a new ‘Technical Paper’ titled ‘The Periphery’s Terms of Trade in the Nineteenth Century: A Methodological Problem Revisited’, which is a considerably revised version of Chapter 2 of my PhD dissertation. In it I have detailed the methodological issue and why it affects Williamson’s analysis.
Jeffrey Williamson’s estimates of the periphery’s terms of trade in the long nineteenth century are misleading.
Jeffrey Williamson‘s (2011) book Trade and Poverty: When the Third World Fell Behind is one of the most interesting attempts to explain the ‘great divergence’ between rich and poor countries. It is a shame, then, that it is marred by his use of Mickey Mouse numbers.
Over 30 years ago Andre Gunder Frank summarised the ideas that are promulgated by today’s ‘neo-institutionalists’ in debates about the ‘great divergence’.
Andre Gunder Frank‘s Lumpenbourgeoisie, Lumpendevelopment was published in 1972, almost half a century ago. Reading it now, it is surprising how contemporary it seems. Most notably, in a few pages Frank appears to provide a review of the ‘neo-institutionalist’ literature that is so prominent today in debates about the ‘great divergence’ between rich and poor countries.