Obscure Causality

"I knew something was obstructing the fish's breathing..."

I’m currently on the shelf, waiting for my new job to start, and I’ve been filling the time doing a lot of reading. Mainly fiction from developing countries (which sometimes tell us quite a lot about the process of development), but I’ve also been re-reading David Landes’ The Wealth and Poverty of Nations, in which he looks at why the West is so wealthy through historical analysis. To sum up a five hundred page book in a few sentences, his argument is: the West had better natural endowments, and learnt respect for property rights earlier and better than other countries, which when coupled with an innovative impulse in Judeo-Christian societies lacking in others, ensured that it pulled away from other regions early and decisively. He is absolutely adamant that ‘for the last thousand years, Europe (the West) has been the prime mover in development and modernity’.

Consensus among historians now is that Landes’ argument is, not to put too fine a point on it, wrong in a number of aspects. Most centrally, his claim that Europe has been the world leader for one thousand years has taken heavy knocks of late. Kenneth Pomeranz’ The Great Divergence was the big counterargument, suggesting that ‘European exceptionalism’ emerges much later, perhaps in the 18th Century or even a little after this. This squares very much with the view taken by those historians who have taken the widest and most comprehensive view of the emergence of the world we live in, Chris Bayly and Victor Lieberman (of whose book I’ve only read the introduction – the other couple of thousand pages will have to wait).

Despite covering a period 500 or so years ago, this argument actually has great relevance for the modern business of development and moving people out of poverty. Though the bulk of historians suggest European dominance in the world economy happens late, there is a strong argument that those things that would eventually allow Europe to pull ahead of the rest start to emerge a couple of centuries before economic development truly accelerates away.

These characteristics and advances that would propel growth include property rights and innovation as specified by Landes, but also encompassing military organization and capacity, the emergence of maritime expeditions (which would lead to extraction of resources and the mercantilist system), and the development of credit and banking services, as well as new forms of ownership and patterns of landholding This is a really important point: the motors of development took around 200 years or more to interact and whir into action for the first-movers in modern development processes. Later developers also show a long lead-in for development: Japan since the Meiji Restoration in 1868 after which changes widely held to be important preconditions for the emergence of Japan as economic power in the 20th Century were introduced.

Why is this important? It raises the possibility that the time scales we’re talking about in modern development might be completely out of proportion to the those that historical development processes have taken, because we’ve been so engaged with proximate causes of transformation rather than underlying ones. I’m not suggesting that all development processes will and should take 200 years. Far from it – you would expect first movers to take far longer catch-up nations for a number of reasons, and we know much more about economies and care much more about generalizing economic development than at any stage before in human history. That said, of we accept that underlying causes of development operate over very long time frames, there are important implications for development thinking.

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