Summary of all my thoughts on AJR expressed on X since 15/10/24

Note this summarises my views of AJR as expressed on X/Twitter. For details, you must go there.

1 — I believe AJR are mostly wrong, but there are many many many bad criticisms of them. I might even venture to say, most criticisms of them are bad. A thread on an example of a bad but common criticism: https://twitter.com/pseudoerasmus/status/1849077320704766390

2 — AJR have been net bad for economic history, primarily because their horrible history has caused reputational damage to EH by being associated with them. Their other primary impact on EH was to bring in new people who, without them, would not have gone into EH. But I’m unclear about the net impact of this.

3 — AJR have been net bad for the study of economic development, because their (inadvertent) impact was to reinforce the pre-existing-fixation on secure property rights as the primary meaning of institutions amongst too many economists.

4 — AJR framework cannot deal with the historical development experience of East Asia and India. This is because they tend to suffer from a certain cognitive dissonance about democracy & development; and because the ‘developmental state’ does not fit naturally or automatically into their (mostly policy-neutral) models.

5 — AJR can be called Liberal Historical Materialism, i.e., Marxist analysis but for liberal ends. They are more left-orientated than previous institutionalists in economics. AJR emphasise the democratic inclusion aspect of liberal political institutions more than the sheerly economic freedom aspect of it. Hence the starting point of their model: distribution of resources => power => economic institutions.

6 — There had been a rich institutional literature in development prior to AJR, but mostly focused on agrarian institutions. This became less relevant with urbanisation, industrialisation, tertiarisation, etc.

7 — The AJR impact circa 2000 was to synthesise an enormous body of prior political economy literatures, along with a wealth of historical examples; and reduce these to a digestible form for economists who, circa 2000, had become unprecedentedly ahistorical in their thinking about economic development.

8 — AJR had such an influence, partly because there had been a perception circa 2000 that both state-led and market-led development had been disappointing. AJR’s use of history & colonialism rationalised this fatalism.

More on what I think was the context in which AJR made their successful intervention: https://twitter.com/pseudoerasmus/status/1847323256308568481