Tuesday, July 22, 2008

Well waddaya know?

One of the surprising claims of my new superheroes (Weingast, North and Wallis) is that per capita GDP in "limited access orders" range from $400 to $8000 while "open access orders" enjoy $20 000 and above. It's a bold claim and it doesn't really sound plausible and was greeted sceptically by Russell Roberts and Greg Torr. But, it's not exactly like it takes lots of intrepid research to find out, and they'd get caught out in like a nanosecond if they got it wrong...

So I checked and as far as I could make out the upper bound is more like $13 000, where a whole bunch of countries are straining at the leash, but there really is an amazing gap till the next group of countries. It seems like a pretty big deal to me, I wonder why nobody talks about it...

Added: Here's Trevor's link. I browsed each column, but I looked mostly at the World Bank's figures.

4 comments:

Trev said...

link?

Greg Torr said...

If the claim is that there's a bunch of countries with low per capita GDPs and a bunch with high ones, with a big gap in between, then it's hard to disagree. But is it really that easy to delineate these countries according to their limited vs open acess orderiness? And even if it is, why are we to assume that open access was the cause of the economic success, and not the other way round?

stuart said...

Obviously I'm not really competent to judge. Singapore and Hong Kong seem like pretty obvious counter examples.

Singapore falls short of open access in important ways, but it does meet most of the criteria (of course it's better than other rich countries on some measures), so I don't think it’s implausible that they count. Also open access isn't a synonym for “good”.

I don’t think the claim is that open access causes economic success but that they cause each other. In the paper they constantly mention the double balance principle which causally links economic and other political conditions (openness thereof). Stable equilibrium is can’t be reached without both.

stuart said...

not insisting that the limited access/open access thing is correct, is there an actual reason why there's this gap? or could it just be random? I'd guess it isn't random.