Why nations fail | James Robinson | TEDxAcademy
-
0:18 - 0:20Thank you very much.
I am James Robinson. -
0:20 - 0:25I am going to talk about why nations fail
and why nations succeed as well, -
0:25 - 0:27which is really about
why some countries are poor -
0:27 - 0:29and some countries are prosperous.
-
0:29 - 0:35It turns out you can tell a lot
about the answers to that question -
0:35 - 0:37by looking at the Korean
peninsula at night. -
0:37 - 0:41If you look at Korean peninsula at night,
you see some obvious things. -
0:41 - 0:45That South Korea
has a lot of light, electricity. -
0:45 - 0:48North Korea, on the other hand,
-
0:48 - 0:49is rather dark.
-
0:49 - 0:51There you can see a spot of light.
-
0:51 - 0:56That's probably the presidential
palace in Pyongyang. -
0:56 - 0:58(Laughter)
-
0:58 - 1:02Now, there could be different reasons
why North Korea is very dark at night. -
1:02 - 1:06It could be that North Koreans
have electricity and light bulbs, -
1:06 - 1:09but they just think candles
are more romantic. -
1:09 - 1:10(Laughter)
-
1:10 - 1:11It could be, on the other hand,
-
1:11 - 1:14that North Koreans
have electricity and light bulbs, -
1:14 - 1:17but they are just trying
to reduce their carbon footprint. -
1:18 - 1:20I think, however,
the more plausible explanation -
1:20 - 1:25is that actually North Koreans don't
have access to the types of technologies -
1:25 - 1:31like electricity and power
and light bulbs that South Koreans do. -
1:31 - 1:35And that enormously restricts
their economic potential. -
1:35 - 1:39So one thing we know about the difference
between poor countries and rich countries -
1:39 - 1:41is that poor countries, like North Korea,
-
1:41 - 1:46tend to have much worse technology
than rich countries. -
1:46 - 1:48Let me tell you about
some other things we know -
1:48 - 1:51about the differences between
poor countries and rich countries. -
1:51 - 1:54Poor countries have
much less educated people. -
1:54 - 1:57They tend to have
much less healthy people. -
1:57 - 1:58They live shorter lives.
-
1:58 - 2:02They have much worse government
services, like infrastructure. -
2:02 - 2:06So, here is an idyllic Congolese
driving scene in a part of the world -
2:06 - 2:09where I do a lot of research,
the Democratic Republic of the Congo. -
2:09 - 2:14This is what they call, somewhat
ironically in the Congo, Interstate No 1. -
2:14 - 2:17And you can see that driving
on Interstate No. 1, -
2:17 - 2:20you spend a lot of time digging
your car out of sand and mud. -
2:20 - 2:23This is the dry season.
If it was the rainy season, forget it. -
2:23 - 2:25You are not going anywhere.
-
2:25 - 2:29So poor countries have much worse
infrastructure public services. -
2:29 - 2:34So why is it that poor and rich countries
differ in terms of their public services, -
2:34 - 2:37their technologies,
their levels of education? -
2:37 - 2:40Well, some people think
that it's just that poor countries -
2:40 - 2:42are too poor to afford to build roads,
-
2:42 - 2:47or too poor to use modern technologies
like electricity and light bulbs - -
2:47 - 2:49not that modern, really,
if you think about it. -
2:49 - 2:51But anyway, they're too poor to use it.
-
2:51 - 2:53But I didn't think that's right.
-
2:53 - 2:55Most of poor counties where I do research,
-
2:55 - 2:59lots of resources that could
be used for these things are wasted. -
2:59 - 3:02Now, here is an example of that.
-
3:02 - 3:04You may know this gentleman.
He is called Robert Mugabe. -
3:04 - 3:06He is the president of Zimbabwe.
-
3:06 - 3:08He has been president for 34 years.
-
3:08 - 3:11You think, you probably known him
as a good politician. -
3:11 - 3:14What you didn't know
is he's also a remarkably lucky man. -
3:14 - 3:18In fact, he won the lottery.
So how about that? -
3:18 - 3:21Someone who is a great politician
and he also wins the lottery. -
3:21 - 3:23I mean, come on. Does Greece
have politicians like that? -
3:23 - 3:25I mean, Britain doesn't.
-
3:25 - 3:29So, he is a lucky guy, and I am thinking,
I am sort of trying to suggest -
3:29 - 3:33that this may not be
completely coincidental -
3:33 - 3:36that he happens to have been
president for 34 years -
3:36 - 3:40and he also in his spare time
wins the lottery. -
3:40 - 3:41(Laughter)
-
3:41 - 3:48That road, by the way,
I showed you in 2010 in the Congo, -
3:48 - 3:52in 1960 that was a nice
tarmaced surfaced road -
3:52 - 3:55that has since deteriorated into the bush.
-
3:55 - 3:59So I don't think the real reason
that poor countries are poor -
3:59 - 4:01and prosperous countries are prosperous
-
4:01 - 4:03is that poor countries just cannot afford
-
4:03 - 4:06to do the sorts of things
necessary to become rich. -
4:06 - 4:08I think the explanation is,
-
4:08 - 4:11and that is what I am going to argue
in the rest of my presentation, -
4:11 - 4:16that poor countries and rich countries
are organized in very different ways. -
4:16 - 4:20And that organization in rich countries
-
4:20 - 4:23creates incentives
and opportunities for people, -
4:23 - 4:26and in poor countries, it doesn't.
-
4:26 - 4:28In fact, most poor countries
are organized in ways -
4:28 - 4:33which block people's incentives
and block people's opportunities. -
4:33 - 4:35And that's what creates poverty.
-
4:35 - 4:38So let me give you
a very specific example of that -
4:38 - 4:40which I've realized
it is sort of the theme, you know, -
4:40 - 4:44it's almost the motif of the whole event,
which is the light bulb. -
4:44 - 4:47I was only expecting to connect this
to North and South Korea, -
4:47 - 4:51but there we had all these light bulbs
and Shakespeare that started the day. -
4:51 - 4:52So what is this?
-
4:52 - 4:54This is a patent.
-
4:54 - 4:57It was taken out by Thomas Edison in 1880,
who invented the light bulb. -
4:57 - 4:59So Edison had an invention.
-
4:59 - 5:01And what did he do?
He took out a patent. -
5:01 - 5:04The patent protected
his intellectual property rights. -
5:04 - 5:06It stopped people from copying his idea.
-
5:06 - 5:09And that created incentives
for people to innovate. -
5:09 - 5:16So, that was a very important stimulus
for innovation in 19th century U.S. -
5:16 - 5:19Let me tell you a few other things
about the patent system. -
5:19 - 5:22The patent system was actually set up
by the US constitution. -
5:22 - 5:24The first patent law's in 1790,
-
5:24 - 5:26and Thomas Jefferson, not Thomas Edison,
-
5:26 - 5:30one of the founding
fathers of the United States, -
5:30 - 5:32was actually on the first patent board
handing out patents. -
5:32 - 5:34The system was open to everybody.
-
5:34 - 5:37So, it didn't matter who you were,
you could pay the same fee, -
5:37 - 5:38you got a patent,
-
5:38 - 5:42and the government protected
your intellectual property rights, OK? -
5:42 - 5:46Now, that's absolutely crucial
because we know as economists -
5:46 - 5:49that one of the huge differences
between poor and rich countries -
5:49 - 5:53is exactly innovation,
exactly technological change. -
5:53 - 5:56It's that new technologies
that don't spread -
5:56 - 5:58from South Korea to North Korea.
-
5:58 - 6:02So, here's an example of would call
an economic institution, -
6:02 - 6:06a kind of rule that creates incentives
and opportunities in society, -
6:06 - 6:08and this institution
has a particular property -
6:08 - 6:10which I'm going to call inclusive.
-
6:10 - 6:14It's inclusive in a particular
and important way -
6:14 - 6:17because if you look at who are
these people who are filing patents? -
6:17 - 6:19You know, Thomas Edison. Who?
-
6:19 - 6:21What were their social backgrounds?
-
6:21 - 6:24Well, it turns out,
they came from all over society. -
6:24 - 6:27Poor people, rich people,
elite, non-elite, -
6:27 - 6:31farmers, artists, professional people,
educated people, non-educated people. -
6:32 - 6:36Talent, ideas, skill,
creativity, entrepreneurship -
6:36 - 6:39are spread very broadly in society.
-
6:39 - 6:42And if you want to have
a prosperous society, -
6:42 - 6:45you need to have a set of institutions
-
6:45 - 6:48that can harness all that
latent talent in society. -
6:48 - 6:51That's what inclusive
institutions are about, -
6:51 - 6:55and that's exactly how
the patent system worked. -
6:56 - 7:00Countries like Zimbabwe,
or Democratic Republic of Kongo, -
7:00 - 7:02or North Korea, which are poor,
-
7:02 - 7:04have economic institutions
-
7:04 - 7:08that create very different
incentives and opportunities -
7:08 - 7:11than inclusive economic institutions
like the patent system. -
7:12 - 7:15To illustrate that in a richer way,
-
7:15 - 7:19let me bring time
from 1880 right up today, -
7:19 - 7:22and talk about why the United States
is richer than Mexico, -
7:22 - 7:24just across the border.
-
7:24 - 7:27I'm going to do that
in a very particular context. -
7:27 - 7:30I'm going get you think about
the two richest men in the world, -
7:30 - 7:31Bill Gates and Carlos Slim.
-
7:31 - 7:36Bill Gates from United States of America,
Carlos Slim from Mexico. -
7:36 - 7:39What's really interesting
about the comparison -
7:39 - 7:42is the way those people made their money.
-
7:42 - 7:44Bill Gates was an entrepreneur.
-
7:44 - 7:47He set up a company when he was
a Harvard undergraduate. -
7:47 - 7:51He made a fortune through innovation
in the computer software industry. -
7:51 - 7:53Carlos Slim, on the other hand,
-
7:53 - 7:56made a fortune
through creating monopolies, -
7:56 - 7:59and through owning a monopoly,
a telecommunications monopoly. -
7:59 - 8:03According to the Organization
of Economic Cooperation and Development, -
8:03 - 8:07Carlos Slim's monopoly created
an enormous amount of wealth for him, -
8:07 - 8:10reduces national income in Mexico
by about 2% a year, -
8:10 - 8:16for the period of 2005 to 2009
it actually reduced income in Mexico -
8:16 - 8:19by 130 billion dollars.
-
8:19 - 8:20So, in the United States,
-
8:20 - 8:24Bill Gates responded
to the inclusive nature of institutions, -
8:24 - 8:27creating incentives,
creating opportunities. -
8:27 - 8:29What happened?
-
8:29 - 8:32He generated innovation,
he generated new ideas, -
8:32 - 8:33and that created wealth for him,
-
8:33 - 8:36it created a vast amount
of wealth for society. -
8:36 - 8:39What happened in Mexico
was something very different. -
8:39 - 8:42The way to create wealth
was not through innovation, -
8:42 - 8:44but through creating monopolies.
-
8:44 - 8:46Monopolies block
other people's opportunities, -
8:46 - 8:50and they block other people's incentives.
-
8:51 - 8:55Extractive institutions is what I'm
going to call the opposite of inclusive. -
8:55 - 8:59I gave the patent system as an example
of an inclusive economic institution. -
8:59 - 9:01Let me say that there is something else,
-
9:01 - 9:05and that's what's going on in Mexico,
in North Korea, and Zimbabwe. -
9:05 - 9:08I'm going to call that
extractive economic institutions. -
9:08 - 9:13Rules in society that impede
incentives and opportunities. -
9:14 - 9:19So, that's the difference between
poor and rich countries, in a nutshell. -
9:19 - 9:23But now, let's go
one layer back in the onion -
9:23 - 9:26and ask, "OK, fine. So how come
the United States ended up like that?" -
9:26 - 9:28or "How come Mexico is like that?"
-
9:28 - 9:31and "Why is Zimbabwe like that?"
-
9:32 - 9:35The example of president
Mugabe winning the lottary -
9:35 - 9:38is perhaps meant to plant
a seed in your mind. -
9:38 - 9:41And so now, I'd like the seed
to sort of grow a little. -
9:41 - 9:43But I'm not going to grow it in Zimbabwe.
-
9:43 - 9:50Let me go back to the United States and
back to the patent system, back in 1790, -
9:50 - 9:53when Thomas Jefferson
was on the patent board, -
9:53 - 9:54and get you to think,
-
9:54 - 9:57"OK, so how come they ended up
with this patent system like this? -
9:57 - 9:59What was the secret?"
-
9:59 - 10:03And I think there were two secrets,
and they are very political. -
10:03 - 10:06So, ultimately, I think what matters
for economic prosperity, -
10:06 - 10:11for success and failure, is inclusive
and extractive economic institutions. -
10:11 - 10:13But lying behind that is politics.
-
10:13 - 10:16And I want to emphasize
two dimensions of politics. -
10:16 - 10:19One is, how did you end up
in the United States -
10:19 - 10:22with this patent law
that treated everybody equally, -
10:22 - 10:26that gave everybody equal access
to patenting on the same terms. -
10:26 - 10:30That was because in the United States
in the late 18th century, -
10:30 - 10:34political power was sufficiently
broadly distributed in society, -
10:34 - 10:36but you couldn't have some
oligarchive patent system. -
10:36 - 10:40You couldn't have a patent system
where Thomas Jefferson could decide, -
10:40 - 10:44"Mmm, maybe you get a patent,
and maybe you don't. -
10:44 - 10:47Maybe I'll give you a patent,
but I don't like your face. -
10:47 - 10:49You're not getting a patent."
-
10:49 - 10:54That wasn't possible, given how
democratic US society was at that time. -
10:54 - 10:58So, one thing which is important about
creating these inclusive institutions -
10:58 - 11:01was the distribution
of political power in society. -
11:01 - 11:03The broad distribution of political power.
-
11:03 - 11:06The other thing was important,
was at that time, -
11:06 - 11:09the United States had a strong state
that could enforce the patent. -
11:09 - 11:11It wasn't just a matter
of passing the law, -
11:11 - 11:12it was enforcing the law.
-
11:12 - 11:16The state would come, and they would
protect your intellectual property rights. -
11:17 - 11:19So, these two things are very important.
-
11:19 - 11:22So let me bring that to the present
-
11:22 - 11:24and show you a photograph
of Bill Gates in Washington DC. -
11:24 - 11:25Now, what is he doing here?
-
11:25 - 11:29He's giving testimony
to the US anti-trust authority. -
11:29 - 11:31Here's the strong US state in action.
-
11:31 - 11:34Both of these elements
that I talked about, -
11:34 - 11:37the distribution of power
and the strength of the state -
11:37 - 11:38are crucial for understanding
-
11:38 - 11:41the difference between
Bill Gates and Carlos Slim. -
11:41 - 11:43How did Carlos Slim
get his monopolies? -
11:43 - 11:47It was a one-party state,
the PRI, the one-party state, -
11:47 - 11:50which had been in power
since the late 1920s, -
11:50 - 11:55in the 1990s, privatized
a monopoly to Carlos Slim. -
11:56 - 11:58Mexico has very nice anti-trust laws.
-
11:58 - 12:03But it's inconceivable that Carlos Slim
would have to do what Bill Gates did, -
12:03 - 12:06which was to come and, you know,
-
12:06 - 12:09"I swear to tell the truth, the whole
truth and nothing but the truth," -
12:09 - 12:12in front of anti-trust authorities
in Washington DC. -
12:12 - 12:14So, this is the power of the state.
-
12:14 - 12:17And if you think about
both of these examples, -
12:17 - 12:18both of these elements come in.
-
12:18 - 12:21The fact that Carlos Slim
could create his monopolies -
12:21 - 12:25because political power was not
broadly distributed in Mexico, -
12:25 - 12:29and the anti-trust laws that exist
in Mexico cannot be enforced, -
12:29 - 12:32because the state is too weak
to enforce them. -
12:32 - 12:34In the United States it's inconceivable
-
12:34 - 12:38that you could have such
a monopolization of industry, -
12:38 - 12:41and the state is capable
of enforcing the law. -
12:41 - 12:45And in fact, anti-trust laws
are a fascinating example. -
12:45 - 12:48If you go back to a hundred
years before this. -
12:48 - 12:51This is the octopus
of the Standard Oil Company. -
12:51 - 12:54The Standard Oil Company
was run by John Rockefeller. -
12:54 - 12:59It was an enormous attempt to build
a monopoly in the United States. -
12:59 - 13:02You can see here, it's got its tentacles
around the White House, -
13:02 - 13:05it's got its tentacles
around the politicians, around Congress, -
13:05 - 13:10it's enveloping the political system
with its wealth and connections. -
13:10 - 13:15It was broken up
by federal anti-trust authority. -
13:15 - 13:19So, there's a long battle
against monopolies, -
13:19 - 13:23against extractive institutions
in an inclusive society. -
13:23 - 13:26So, what about Greece?
-
13:26 - 13:28(Laughter)
-
13:28 - 13:30Let me say something about Greece.
-
13:30 - 13:32How does Greece fit into this?
-
13:32 - 13:37Well, of course, compared to Zimbabwe,
or the Democratic Republic of the Congo, -
13:37 - 13:42or Haiti, or North Korea,
Greece is an enormous success. -
13:42 - 13:46Greece has been enormously successful,
economically, in the past 100 years. -
13:46 - 13:48It's diversified its economy,
-
13:48 - 13:51it's raised people's
living standards enormously, -
13:51 - 13:54it's broadened education, health, etc.
-
13:54 - 13:57But I think, the problems
of Greece in the last decade -
13:57 - 14:03stem from the problems of reconciling
these two dimensions of politics -
14:03 - 14:05that you need to create
an inclusive society. -
14:05 - 14:10Reconciling, building
an effective strong modern state -
14:10 - 14:11with having a democracy
-
14:11 - 14:14where political power
is broadly distributed. -
14:14 - 14:16Now, when I talked about the United States
-
14:16 - 14:21you might have been thinking, "Gosh,
these things smoothly come into place, -
14:21 - 14:23you have one thing, you have the other.
-
14:23 - 14:25You want to have a broad
distribution of power -
14:25 - 14:27that makes the state accountable.
-
14:27 - 14:30You want to have a strong state
because that makes democracy effective. -
14:30 - 14:32You can enforce the rules,
-
14:32 - 14:35but I think the more you look,
and the more you think, -
14:35 - 14:37you see that actually in many contexts
-
14:37 - 14:39these two dimensions
are difficult to reconcile. -
14:39 - 14:44They sometimes have
an enormous contradictory feature. -
14:44 - 14:47And I think that's part
of the problem in Greece, -
14:47 - 14:50particularly since
the redemocratization in 1974, -
14:50 - 14:54is that Greek society
has found it difficult to reconcile -
14:54 - 14:58building an effective central
state based on rules. -
14:58 - 15:00Remember my example of the patent system,
-
15:00 - 15:04how crucial it was that this was a rule,
the patent system applied to everyone, -
15:04 - 15:06the same rules applied to everyone.
-
15:06 - 15:09That's what generated
these incentives and opportunities. -
15:09 - 15:14If Thomas Jefferson had been handing out
patents to people on the basis, -
15:14 - 15:18"Hey, I want to be president,
so if you support me, -
15:18 - 15:21let's start building a coalition,
then you get your patent." -
15:21 - 15:25"I don't like your face. You don't
look like you're going to be on my team. -
15:25 - 15:27You're not going to get a patent."
-
15:27 - 15:29If that had been how
the US patent system worked, -
15:29 - 15:31then it would not have
the incentive effects, -
15:31 - 15:36the effects on innovation and economic
development, that it did have. -
15:36 - 15:38And I think that once you think about it,
-
15:38 - 15:42you can see that when you
increase political power, -
15:42 - 15:44when you create political power
broadly in society, -
15:44 - 15:49that can create pressures to undermine
the functionality of the state. -
15:49 - 15:50To undermine the strong state.
-
15:50 - 15:54To make the state become a tool
of the political struggle -
15:54 - 15:59rather than a neutral arbiter
of new rules and universal principles. -
15:59 - 16:03And I would say, that's the root cause
of a lot of the problems, -
16:03 - 16:05from my perspective, in Greece.
-
16:05 - 16:09Trying to make the state
work properly, to enforce rules, -
16:09 - 16:13to not be clientalistic,
to enforce universal principles. -
16:13 - 16:16And a lot of the economics
stems from that. -
16:16 - 16:19The way I'm talking now
is sort of politics. -
16:19 - 16:22Politics, it's about politics.
Economics is crucial. -
16:22 - 16:26But economic institutions
and economic incentives and opportunities -
16:26 - 16:29are embedded in a political society.
-
16:29 - 16:31And they stem from a political process.
-
16:31 - 16:34And I think that's being
the problem in Greece. -
16:34 - 16:36Think about the deficit
or the fiscal problem. -
16:36 - 16:39Why has that happened?
-
16:39 - 16:41That didn't happen
for some technical reason. -
16:41 - 16:45It didn't happen because Greek governments
had the wrong economic advisors. -
16:45 - 16:49It happened because of this problem
of reconciling democracy -
16:49 - 16:51with creating a strong state.
-
16:51 - 16:55If the state becomes a tool
for serving private interests -
16:55 - 16:57and not public interests,
-
16:57 - 17:03serving individuals and not following
the collective welfare in society, -
17:03 - 17:06then of course you're going
to have terrible fiscal policy -
17:06 - 17:07and unsustainable debt problems.
-
17:07 - 17:10Stable macroeconomic
policies are public good, -
17:10 - 17:14but if the state become clientalized,
it's not about providing public good. -
17:14 - 17:16It's about providing private goods.
-
17:16 - 17:20So who's internalizing the debt
or the deficit? Nobody. -
17:20 - 17:24So, that's a natural context
to get unsustainable fiscal policy. -
17:24 - 17:26So what's the solution to this?
-
17:26 - 17:27Not fiscal austerity.
-
17:27 - 17:31Fiscal austerity might be necessary
to keep the Germans happy, -
17:31 - 17:35but you're treating the
symptoms, not the cause. -
17:35 - 17:36The cause is political.
-
17:36 - 17:39The solution to the problem
is to find a way of reconciling -
17:39 - 17:43these two elements to build
inclusive political institutions. -
17:43 - 17:45And where does that come from?
-
17:45 - 17:47That's a political project.
-
17:47 - 17:50That'a about organizing
people collectively. -
17:50 - 17:53Clientelism is always
individually rational, -
17:53 - 17:55it's just not collectively
rational for society. -
17:55 - 17:58So, you have to build a project.
-
17:58 - 18:01Politicians have to build
a project to build the state, -
18:01 - 18:03to build a non-clientelistic state,
-
18:03 - 18:07to reform the interface
between state and society in Greece. -
18:07 - 18:10And if you ask me, am I optimistic
or pessimistic about Greece, -
18:10 - 18:14then I'd start looking at the politics,
and I'd start looking at civil society -
18:14 - 18:17and ask, "Who has
that project? Where is it?" -
18:18 - 18:22(Applause)
-
18:22 - 18:23Thank you.
-
18:23 - 18:25(Applause)
- Title:
- Why nations fail | James Robinson | TEDxAcademy
- Description:
-
This talk was given at a local TEDx event, produced independently of the TED Conferences. Why do some states enjoy wealth, security, health and nutrition while others face poverty, unemployment, lack of health care and safety?
James Robinson is a political scientist and economist. Professor Robinson teaches Economics, History and Government at Harvard University. His main research interests lie in the study of the economies of developing countries. He travels a lot in Latin America and Africa and spends his summers teaching at the University of Bogota. In 2012, he was elected Fellow of the American Academy of Arts and Sciences. In 2007, James Robinson and Daron Acemoglu coauthored the book “Economic Origins of Dictatorship and Democracy”. The book was considered the best book released on U.S. policy and international relations. Their latest book, "Why Nations Fail", was included in the ten best releases of the 2012 list in Washington Post.
This talk was given at a TEDx event using the TED conference format but independently organized by a local community. Learn more at http://ted.com/tedx
- Video Language:
- English
- Team:
- closed TED
- Project:
- TEDxTalks
- Duration:
- 18:34
Peter van de Ven approved English subtitles for Why nations fail | James Robinson | TEDxAcademy | ||
Peter van de Ven accepted English subtitles for Why nations fail | James Robinson | TEDxAcademy | ||
Peter van de Ven edited English subtitles for Why nations fail | James Robinson | TEDxAcademy | ||
Peter van de Ven rejected English subtitles for Why nations fail | James Robinson | TEDxAcademy | ||
Suleyman Cengiz accepted English subtitles for Why nations fail | James Robinson | TEDxAcademy | ||
Suleyman Cengiz edited English subtitles for Why nations fail | James Robinson | TEDxAcademy | ||
Suleyman Cengiz edited English subtitles for Why nations fail | James Robinson | TEDxAcademy | ||
Chryssa R. Takahashi edited English subtitles for Why nations fail | James Robinson | TEDxAcademy |