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Globalization - The Great Unbundlings
Globalization - The Great Unbundlings
[Meer zien]Voorbeeld 4 van de 64 pagina's
Voorbeeld 4 van de 64 pagina's
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Voorbeeld van de inhoud
Week 1: The pre globalization era200'000 BCE (before common era = BC) – 1820 CE (common era =AD): evolution of
production and consumption duality à specific phases in the lecture slides
1. Humanization of the globe (started 200 millennia ago in Africa) (1st G)
2. Agriculture revolution: rise Middle East/Asia, Eurasian integration, rise EU (2nd G)
à the look for food = expanded humanity’s geographic range BUT
1st global warming caused by large increase in temperature + lack water (125) let them move
towards Fertile Crescent (via the Egyptian route) à not survived DNA proof
2nd global warming: 55-85 millennia ago à starting point for production (spread around the world:
70-50m Middle East, 40-30 EU, 40 Asia/Russia, 50 Asia/Japan, 20/15 NA, 15/12 South America)
= tech (Stone Age: 8000-3000 BCE = obsidian) and trade (Fertile Crescent and hunters à long
distance but very limited, animals still not domesticated)
è results of the 1st Globalization = humanizing the world, equilibrium C/P for bundling (= led
formation of civilians) but not for trade, only at the end of it = Agriculture Revolution
20-12 m ago = warming of the globe for no explained reasons (NB: due to climate reasons bundling
of production with consumption) à fertile agriculture land and abundant presence of water =
winning conditions for the Neolithic Revolution = rise of population
+ (A) rise ME (10’000-200 BCE)
+ innovations in the cities = Rule of Law (Hammurabi code), Agriculture (irrigation, seeds and
animals’ domestication), transition Bronze/Iron Age
+ trade (luxury products, animals used as means of transportation, confined to Mesopotamia)
(B) 200 BCE- 1350 CE: Eurasian integration through 2 games changers
à from the North = Silk Road crossing Tibetan Plateau (200 BCE), Han Dynasty and Roman
Empire connection, Mongolian Empire rise + ruling Silk Road under one authority (BUT still high
costs of trade and trade limited to clusters)
à from the South (by the sea) = the Islamic empire, reduction of trade costs through vehicle of
integration, trade couldn’t reach massive population è flat standard of living
(C) Rise of EU: from being the periphery (Center confined to ME/Asia) of which only a slight part
was integrated to the global economy to shift Barbarian/Rural Nobles vs any form of progress
à 4 factors:
- MAJOR DISRUPTION: black death (dissemination with Silk road, Islamic empire
decimated but contemporary lost ground for the nobles
+
- age of discovery (explorations started in 1419 = Portugal – Columbus – Cape of good hope,
early stage of EU colonization in Africa and Latin America)
- the Columbian exchange = shift of gravity to the North Atlantic (from US potatoes and
maize to recover the decimated population, but they brought to US disease that almost
decimated the Andes and Mesoamerica)
- renaissance and enlightenment (14th century = from periphery to world leading economic
and military power) à acceleration of the rise of EU by adding the thinking of
Descartes/Voltaire/Rousseau and Locke/Newton/Smith
- begin of industrial revolution = process characterized by incremental and technical,
organizational, social and institutional changes à transformation of the human conditions
à mainly expressed with transportation = sails and navigation maps
Overall: writing, cities, ethics, literature, poetry, government, organized armies BUT from
domination of ancient civilization on the economic activity to only 1/3 global economic activity
,3 phases!!
,Agriculture, Diffusion and Development: Ripple Effects of the Neolithic Revolution –
Putterman
Neolithic: revolution from hunting to agriculture - interesting for the economic growth, according
to the period of development different levels of technological development and social organization ,
later on persisted until EU 15th century
=> hypothesis: agricultural development. Associated with higher income today, association of bio-
and geographic data regarding the transition in macro regions (+ year of transition = quality of
institutions and income)
⁃ HO; 52% of the variation in 1997 incomes was explained by differences in the predicted
time since transition
⁃ CP; a longer history of states predicts greater income in 1500 and more rapid economic
growth between 1960 and 1998.
BUT the same date of transition is assigned to a large number of countries assumed to have
obtained agriculture from the same source
=> historical introduction or inheritance of agro tech? = transmission modes (as migration)
—> empirical relationship between agricultural transition timing and recent income, extending the
analysis in four directions:
1. Restoration of HO with new data on the timing of transition in individual countries,
demonstrating that the explanatory power of the more country-specific series for year of
agricultural transition is somewhat lower than that of HO’s data
2. Combine the revised agricultural transition data with a new dataset on global migration
since 1500 and show that the transition data perform better when adjusted to take
migration into account
3. Predict income for 1500 (first claim on HO study regarding 1500 development level) and
1997, as for HO (significant coefficient of 34% of the variance in the estimated income)
4. Repeat (3) with measure of length of experience with large scale political structures => in
case agriculture acts as a stimulation growth: alternative measure of agricultural transition
and the social and economic development to which it gives rise, and should perform
similarly in the HO regressions —> confirm the similarity of the data
= add to the evidence that differences in the timing of the transition to agriculture and
accompanying social changes have been important determinants of the variation of income among
countries today
+ history’s influence on economic capabilities is not limited to the locations in which innovations
first took place, because technologies and social capabilities can be transferred from one place to
another
More in to depth:
1. INCOME AS A FUNCTION OF REGION V. COUNTRY-SPECIFIC TRANSITION YEAR:
Have countries that made the transition to agriculture earlier tended to maintain their
technological lead and to enjoy higher incomes than other countries even today?
Revisiting test of HO: previously looked at differences in the timing of transitions to agriculture
and animal husbandry; therefore, differences in tech level and standards of living
Model: number of years since transition + geographic factors have also independently affected
levels of development (log of it explain 78% variance in the number of years since transition); the
technological differences associated with the number of years since the agricultural transition
affect levels of development
—> quality of institutions measured by: (i) quality of bureaucracy, (ii) rule of law, (iii) government
corruption, (iv) risk of expropriation and (v) risk of government repudiation of contracts
Assignment of values of years since transition and biogeography (if no data; nowadays countries as
observational units: studying possible impacts of early agricultural development on recent
economic and other outcomes using an international sample of country-level observations)
a. Using data of the country-specific transition year: smaller values
, b. Using estimates of YST: qualitatively the same but larger t-statistics (= relationship between the
hypothesized value andante actual one)
= income is increasing at a decreasing rate with the number of years since transition
+ adding the ‘quality of institutions’ measure boosts the explanatory power of the regression (YST
and institutions quality): 38% of the variation in the latter variable can be explained by differences
in the former
2. THE ROLE OF GLOBAL MIGRATION SINCE 1500
—> from previous results: more predictive power of regression from estimates than for country-
specific values
⁃ Because of earlier transition to agriculture is associated with higher income or faster growth
today not because growing grain for thousands of years has imparted special powers to the
land
⁃ BUT even though it might be that agriculture existed in some place and not in others: no
good predictions of present capabilities (dissemination, colonization and migration: for
instance, movement of Turkish speaking people, opening of trans-oceanic trading routes)
—> only element of it in the data: correlation between the EU/Middle East/North Africa for
Canada/US/Australia (=same transfer occurred by varying lesser degrees in some other
former colonial nation states, but we were unable to calibrate this transfer**), since the
spread of languages and legal system are considered as proxies for income variations
**BUT: rigorous approach is to correct for migration in proportion to its importance and sources
for all countries => solution would be to assign each country a value weighted for its population
origin
PO: assembled data on migration in a matrix -> estimated proportion of the ancestors of the
current permanent residents
=> results?
⁃ Replacement of the weighted average computed
⁃ Same method for all the countries; no inconsistencies
⁃ migration-adjusted YST-CS variable achieves a better fit in each of the equations than does
the YST-CS variable without adjustment for migration (larger t statistic and r squared) —>
why? HO’s values implicitly reflect both migrations and other kinds of diffusion of
technology that my migration adjustments miss, since I account for migration only from
1500 onwards ==> the timing of agricultural transitions had surprisingly strongly
persistent effects on current levels of income, but that migration and diffusion of
technologies (including perhaps social ones) also need to be considered in any full
accounting.
3. A MORE DIRECT TEST OF DIAMOND Predictions are more immediately relevant to
differences in income around 1500 than to differences today in D work: geography and bio-
in order to look at year of transition according to income and who has colonized the country
—> prediction of early development of agriculture, resulting population density and
specialization, and the diffusion of technologies and ideas among cultures enjoying periodic
contacts with one another (—> later on war capabilities and navigation skills) ==> risk in
predicting 1997 and 1500 since are very different due to migration not occurring before,
therefore distinction between urbanization and population density
Work divided in predictions depending on own work, HO and D: higher explanatory variable
coefficient pf own work BUT best with both indicators: ‘Years since transition’ can explain about
33% of the variation of income among the 57 countries for which we have estimates BUT 2/3 of Y
variations are not explained = able to confirm a variant of D hypothesis at the same historical
juncture on which he focuses, although the fit is curiously less precise because of imprecise
estimates of income in 1500 than in 1997, but there is an intriguing possibility that it also reflects
the fact that differences in living standards associated with differences in early development have
actually been magnified
4. AGRICULTURE AND THE STATE: AN OLD STORY THAT STILL HOLDS WATER
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