Path dependence - immigration

By Daniek Zomer

In this web-post, I explain how the immigration crisis can be explained through application of the path dependency theory. I argue that this outcome can be traced back to the development of nation states along their extension of citizenship laws through which the state defined its members. 

Events such as the French Revolution and American Constitutionalism were critical junctures that broke the ties and obligations of the individual towards the ancient regime. Consequently, these revolutions changed citizenship into an egalitarian condition, supported by a legal constitution that granted the protection of individual-rights by national institutions. At the same time, nation-states developed due to this, as citizenship laws defined the terms of belonging to the nation-state, by birth or ancestry (jus soli/ jus sanguinins). Hence, the essence of a nation-state is the institution of citizenship. 

This institutional framework provided a stable and cohesive political context in which the nation state had political power and granted rights to people living on its territory. Moreover, both models are means to define national identity. However, it also determined the definition of alien others. This has long not been problematic. 

Nevertheless, the nation-state model faces challenges these days. Such as, globalization and technological high-speed networks which reduce central control and the role of national government. This complicates the institutional path in which nation-states long have functioned as it blurs the lines of territory and increases diversity of the citizens that belong in one society. 

Thus, vague boundaries and diverse identities undermine the concept of cultural belonging to a homogeneous nation. As such, new approaches of citizenship are necessary, which include collective identities that permit many people to belong to more than one society. 

Path dependency of international airports

By Kelly Ursem

Path dependency refers to the fact that history matters. It is an idea that states that decisions on a product or practice are dependent on past knowledge and will impact future events. Thus, we tend to continue on this path as our past choices make institutions and decisions “sticky” and resistant to adjustment as they become more costly to deviate from over time, thus remaining on a stable and ‘predictable’ path.

Positive feedback and increasing returns are important to consider when referring to path dependency, as it is a social process that exhibits increasing returns. These ideas hold that decisions are constricted by previous process that altered the costs and benefits of the choices made, therefore leadings to stable paths that are challenging to diverge from.

Decisions based on geographical location are forms of path dependency, such as Amsterdam Airport Schiphol. Schiphol opened in 1916, 20 minutes away from the capital city of The Netherlands and was initially used as a local airbase for the military, and was gradually used by other civil airports in 1920. The airport expanded over time, hereby allowing over 100 different airlines to pass by weekly, whereby roads and urban development (such as buildings for businesses) were created based upon Schiphol’s location.

As Schiphol made the decision to expand and be accessible to other airlines, many institutions were set up based upon its location, such as roads leading to the airport, flying routes for airlines and the building of terminals and runways. Thus, Schiphol benefited from positive feedback and increasing returns as it has lead to a stable and successful path of expansion of the airport. Hence, the decision of allowing other civil airports to stop at Schiphol started the path, whereby a decision to relocate would be extremely costly, facing a lot of negative feedback.

Choir practice

By Lauren Wessel

Pierson argues examining temporal processes help explain fundamental social mechanisms. However, after readings these texts, I noticed that many things in my personal life could be explained through path dependence too.  

On a drizzling Sunday morning during choir practice, I was dreaming away in my sheet music whilst listening to solo auditions. This led me wonder: why are always the same people auditioning? In my choir, choristers start when they’re about 10, and get assigned to the alto or soprano section. The development of your voice has “increasing returns” over time, meaning that once your voice develops as an alto, it becomes increasingly difficult to switch to the soprano section. Most solos were for the sopranos, which resulted in the same people getting chosen every time. These people were used to getting solos, so the risks of choosing someone else, got greater over time.

However, once at dress rehearsal, half of the choir was missing due to a flu epidemic. This left the conductor with a choice: hoping the usual solo singers would get better before the concert, or holding open auditions. The latter option turned out to be a good one as great solo singers were discovered. Afterwards, the conductor introduced open auditions to give all choristers equal opportunities. This did, however, not have the desired effects. Mahoney points out that after a critical juncture, the relative benefits of maintaining the status quo increase over time. The people that seized the opportunity to audition right after the introduction of the open auditions, became better at auditioning for solos, and thus solo performances, as they had more experience than the other. This has now resulted in equilibrium again, where a select group gets chosen for solos. 

This blog post does not explain large social mechanisms, and this was not my intention. It does show that in my daily life, seemingly small choices made by actors can have large consequences for the institutional structure. 

When positive feedback ends

By Daan Schouten

This post will illustrate that the concept of path dependency is not just applicable to big processes such as institutional change. The European Patent Office (EPO) is responsible for granting European patents. As better performance pays off, positive feedback incentivizes people to pursue a career within EPO. Because EPO is the only one of its kind in Europe, and the work is highly specialized, the concept of negative feedback applies also: the longer one works for EPO, the harder it becomes to find an alternative job with similar payoffs.

The work environment changed radically with the appointment of Benoît Battistelli in 2010. The new president of EPO is said to have brought with him a ‘culture of fear’. Five employees committed suicide: one on the last day of his vacation, another from the seventh floor of the branch located in Rijswijk. A Dutch court claimed Battistelli fundamentally breached principles of human rights when preventing labor union Suepo from effectively organizing. However, EPO enjoys immunity and Dutch courts have no jurisdiction to investigate what goes on within EPO.

Employees face a distressing situation: their career path suddenly lost its allure, the negative feedback associated with resignation is very strong, and the immunity of EPO leaves them with dim future prospects. Strikingly, the appointment of Battistelli has been a relatively contingent event, one whose consequences few could have foreseen when deciding to specialize in patent law.

In terms of contingency, this case is similar to the effect of American intervention in Central America, which James Mahoney claims to have prevented liberalism from developing in Nicaragua and Honduras. Also, it is informative to see the distinction between this example of career path dependency and the economic version, which posits that outcomes should always be optimal because people also consider the long term: one can hardly blame EPO’s employees for the suboptimal outcome of their past decisions. 

Rising Stars, Rising Returns: How Hollywood Came to Dominate the International Film Industry

By Hannah van der Ham

Around the year 1870, Hollywood was nothing but a small agricultural community. Only a few decades later, it became the most recognizable film industry in the world. Why this happened to Hollywood, and not any other nearby village or town, can be explained by path dependence.

As Pierson explains, path dependence is a process involving positive feedback, where the outcome depends on the sequence in which events unfold. The resulting path is self-reinforcing for four different reasons.

First of all, events have large unpredictability. Around the beginning of the 20th century, a few motion-picture companies had moved towards Los Angeles. By chance,  one of these companies produced a movie in Hollywood simply because it had the right settings that were needed for the particular movie. The movie, called In Old California, became a success, which resulted in more motion-picture companies moving to Hollywood. Consequently, Hollywood kept growing.

Secondly, inflexibility discourages switching from a path. The large set-up costs of the film studios and motion-picture companies provide a disincentive of rebuilding all that in a different place. The larger Hollywood becomes, the more costly this would be.

Moreover, due to nonergodicity, small events will matter, especially those in the beginning.  Because of a ban on movie theatres in Hollywood by the time In Old California was released, the movie was instead shown in Los Angeles. This allowed more people to see it and thus attracting more film makers to Hollywood. Also, if In Old California would have received a bad rating, no film makers might have moved to Hollywood and the industry would not have emerged there. However, one bad Hollywood movie now does not have a similar effect, as Hollywood is already “locked in”.

Lastly, the outcome that gets established may lead to inefficiency. Hollywood might not be the most optimal place for film making.  However, with every new movie that is produced in Hollywood, the returns increase and the possibility to move away from this path becomes more costly.

Niche parties in Europe

By Thomas Giacoletto

There are different approaches to historical analysis, and they all bring different aspects of the studied phenomenon to light. This post will illustrate two of them, taking as an example the emergence of niche parties in Europe.

Steinmo (2008) and other historical institutionalists would, for example, ask: ‘how did electoral institutions, and the party systems that they created, influence the formation of niche parties in France after the second World War?’ This approach focuses on institutions to explain behavioural change over time, and would, for this example, help us understand how the electoral institutions shaped political actors’ behaviour. The conclusion of this study would illustrate the incentives electoral institutions create, and how these have changed over time; previously not giving incentives for the creation of niche parties, and doing it now. The main issue with this approach is that it would only give indications about the exact context of the study. This means that there is no generalisation possible, and that another country (for example) would have to be studied in such detail in order to draw conclusions.

Bates ea. (1998), on the other hand, would use their analytic narrative method in order to both use the context, and come up with “explicit and formal lines of reasoning” through the use of combined historical method and game theory. They would ask: ‘are electoral systems that give centrifugal incentives, more likely to generate niche parties?’ Their study would clearly explore the historical context of the emergence of niche parties (using documents…) and design a game that would seek to explain the actions of actors as responses to incentives given by the electoral system. With the outcome of their study, they would have modelled individual’s reactions to particular incentives given by the institutional structure.

The analytic narrative method might lead to less information to be collected about the case and the context, but it seems more useful if you want to be able to explain behavioural patterns. Furthermore, it seems to help us understand more about how individuals behave than the other method.

The European Monetary Union and Historical Institutionalism

By Ferdinand Folland

The financial crisis that hit the European Monetary Union (EMU) is a case which illustrates both the benefits of Historical Institutionalism (HI) and its limitations. Since its inception the EMU has strived for a more interconnected European economy. In attempting this through the EMU and various other treaties that followed, both before, during and after the crisis, it has also created limitations for political actors in terms of fiscal and monetary policy. With sunk costs going into such interstate institutions and continued belief in the ideals of the EU and EMU this severely limited the actions of political actors. Verdun shows this in her paper by going through the actions that were committed, in particular the rise of new institutions, in the wake of the financial crisis.

Verdun's paper highlights the benefits of looking at problems through the theoretical lens of HI. By looking at the design of the EMU it provides insight into some of the origin of the problems Europe experienced and the nearly path dependent sequence of events that follows. Thus she highlights the importance of historical and institutional context, and the value in viewing history not as a series of independent events. One aspect which is not covered extensively enough is the political process which occurred in affected countries. The unfortunate result of focusing too much on institutions is that it becomes easy to neglect the societal explanations when embedded political actors, such as politicians, and interest groups ranging from bottom-up populist movements to powerful actors from the financial sector interact. It is possible for HI to incorporate a societal framework into its focus on institutions, however it is a regrettable outcome that a tradition relying on institutional explanations at times forget to analyse the actors within them.

Female political representation

By Marleen Bornat

Steinmo (2008), Bates (1998) and Tilly (1990) propose different approaches to the study of social science and history. Tilly (1990)  categorises these approaches by distinguishing between small-scale versus large-scale analysis and humanism versus social science. I will use my capstone topic, the political representation of women, and show how the two methods advocated by Bates (1998) and Steinmo (2008) would change the type of research question one would investigate and the kind of conclusions one is able to draw.

Bates (1998) proposes a method he dubs “analytical narrative” which combines historical narratives (accounts and stories) with the analytical rigor of rational choice theory, particularly game theory, to investigate a problem/puzzle. If one wants to examine the underrepresentation of women in the political sphere, one may for example ask: “Does clientelism pose an obstacle to women’s political representation?” To research this question, one would conduct interviews and surveys with politicians while also designing a game that helps to uncover behavioural patterns. This method may (i) yield new predictions that can be examined and (ii) provide a model that can be tested in other cases.

Steinmo (2008) advocates a different method named “historical institutionalism” which looks at institutions to unravel the sequencing and change of social, economic and political behaviour over time. It views human beings as both norm-abiding and self-interested and studies individuals as well as institutions in a particular context (ibid.). A research question one would investigate as a historical institutionalist would be: “How do institutions influence women’s descriptive representation in the German legislature?” Consequently, one would holistically analyse how institutions structure political behaviour, by for instance empowering and/or constraining male and female politicians differently across time. Historical institutionalism would only allow for conclusions to be made about how institutions constrain women’s representation in this particular context (this context can range from several countries to individuals).

Although the aforementioned methods as well as categories proposed by Tilly (1990) appear to be relatively fixed, most research rather falls somewhere along the continuum and usually only identifies to some extent with a particular category.

Angola vs Burundi

By Daniek Zomer

In this webpost, I apply the hypothesis that cultural fractionalization affect economic growth, as discussed by Nunn, to two African countries and analyze the outcomes. I use the method of similarity, since the two countries, Angola and Burundi are different in the aspect that Angola has exported many slaves while Burundi has not. Yet, both countries face ethnic conflict today.

Theory: how slave trade explains underdevelopment. 

Here, I focus on the former part. The theory implies that Angola would have more cultural fractionalization than Burundi, since Angola exported more slaves. Ethnic fractionalization deals with the number of distinct cultural groups in a state. The argument goes that slavery increased crime and distrust between African communities. Consequently, ethnic fractionalization weakened political structures/institutions necessary for development. Hence, my research question is: to what extent have slave trades increased crime/distrust?

First, how much do both countries differ in cultural fractionalization? Index Mundi shows that Angola has higher rates of ethnic fractionalization, and more ethnic diversity, than Burundi. Second, I analyze the responses of citizens on what they consider to be the development priorities of their country. This gives an indication about the perceived trust-culture within both countries. Surprisingly, categories that are related to crime such as anti-corruption were most prioritized by Burundians. 

Source: http://microdata.worldbank.org/index.php/catalog/1865, page 11

Additionally, Angolan citizens believed that anti-corruption, agricultural development and eduction would contribute the most to economic growth. Moreover, 9% indicated equality of opportunity. While Burundian citizens believed that energy, anti-corruption and agricultural development would be most helpful.

Finally, the theory implies that Angola would have more distrust and corruption than Burundi. Yet, while the absolute numbers show higher cultural fractionalization. It seems that Burundi has similar perceived levels of corruption/distrust which would undermine the argument that slavery increased distrust among ethnic groups.

Historical approaches to LUC

By Nynke de Vette

Tilly, Steinmo and Bates argue for different methods on how to do history and social science research. The types can be summarized in a quadrant distinguishing between large versus small-scale analysis and a humanistic versus social science approach. The variation in research approaches lead to different kinds of questions. Taking LUC as an institution that Tilly, Steinmo and Bates want to research, what kind of questions would each scholar ask?

Tilly’s approach is the most comprehensive in terms of scale and approach. For example, a large-scale humanistic approach would result in the study of mentalities. I think an interesting study that can result from this would be to investigate the types of people LUC tends to attract in terms of personality and opinion on ‘Global Challenges.’

Bates, through an analytic narrative, could follow up from this research by investigating the effect of the student composition on the rest of the institution. How does it affect classroom discussion? Do people often think the same thing leading to little discussion? How does it affect the campus life? The narrative component would entail identifying patterns of behaviour and interaction through interviews and surveys. I think the use of games is appropriate here, because the observed patterns and generalization can thereby be formalized.  

Steinmo argues for an approach named historical institutionalism, which seeks to explain real-world outcomes by looking at the role of institutions and by using history as an analytical tool. I believe Steinmo would be interested in explaining what careers LUC graduates pursue. He would look at how LUC as an institution prepares students for careers through the content and quality of the academic programme. History plays a major role in this research question as all the evidence is found amongst former LUC students. Thus, Steinmo would investigate the graduating classes as a whole, but also by individual cases. It would require investigating old curriculum documents also.

Exogenously triggered, Endogenous Institutional Change: The Arrival of Refugees

By Katharina Bauer

I argue that the current arrival of refugees can be seen as an exogenous 'puncture', triggering the shift to a new equilibrium state of institutions concerning border transit in Europe. I hypothesize that the arrival of refugees exogenously triggers contextual changes that in turn leads to endogenous institutional change in European countries.

Increased arrivals of refugees impact the readiness of EU member states to strengthen their border protection. In fact, some EU countries, such as Germany and Hungary, have increased border controls or closed of borders completely. Recently, the Hungarian government introduced new laws, making it punishable to cross borders. This has particular consequences for cross-border movement within the Schengen Area. The Schengen Area comprises most EU member states except the UK and Ireland. Within this area, citizens are allowed to cross borders without being subjected to border checks. Thus, free movement is guaranteed for any person legally present on EU territory. Laws and controls introduced to regulate refugee influx oppose the principle of free movement across borders in Europe. This change in rules also ultimately affects European citizens.

Decentralization of control over national boundaries, triggered by the arrival of refugees, can pinpoint a shift in equilibrium state of institutions governing European borders. Centralized management of the refugee influx, such as the “Refugee Quota” promoted by the EU Commission, has been rejected mainly by Eastern European countries.

On an additional note, it is interesting to see, that decentralization has also been a reaction of African communities to heightened hostilities emerging from slave trade, stated by Nunn (2008). Parallels between the two cases could be drawn regarding the responses of governing authorities to heightened chaotic and insecure environments.

Different Paths to Development

By Yoon Jin Lee

Acemoglu and Robinson, in Chapter 9 of Why Nations Fail?, argue that extractive institutions (in the case of most African countries, these were based on slavery), which were imposed by the former European colonizers, hindered African and Southeast Asian countries from industrializing. Hence, the economic development of European countries largely benefited from the underdevelopment in other countries and explains the world inequality today. To what extent does this argument apply to other cases? This essay attempts to evaluate the external validity of the authors’ argument by examining the case of Korea.

The Japanese colonized Korea for thirty-five years and extensively extracted labor, resources, and all kinds of Korean products for their own benefits. For example, by 1936, Japanese took control of two-thirds of total Korean land, with a dramatic decrease in the number of Korean owner-tenants, and an increase in the number of Korean tenants from 39.4 percent to 55.7 percent (5). This is similar to the case in South Africa where Europeans stole the land of Africans for their own economic benefits. But interestingly, although these former colonies experienced similar cases of slavery and extraction from the colonizers, South Korea is one of the most economically prosperous countries, while many African countries are still suffering from a massive poverty. This essay attributes this contrast to the difference in institutions set up by the colonizers.

The Japanese, although using Korea for their benefits, created “a strong central state [that] included solid institutions.” These institutions included corporate governance, banking systems and meritocratic bureaucracy, which barely or did not exist in many African countries (6-7). The Japanese implemented these institutions due to their ambition in using Korea for their war efforts and in bringing Korea completely under their control. In contrast, most Europeans, who merely wanted to extract cheap labor force and resources, implemented extractive institutions that prevented their colonies from developing. This difference in institutions, then, accounts for the difference in post-colonial developments between South Korea and African countries.

To conclude, Acemoglu and Robinson were correct to argue that extractive institutions of European colonizers hampered their colonies from developing. Thus, strong institutions are significant for a country to develop.  

Belgian Colonization of Congo

By Emma Lucas

When Congo became independent from Belgium in June 1960, there were only sixteen university graduates out of a population of thirteen million. Many argue that this lack of education is part of the reason why Congo still faces so many problems in their development and stability. According to Acemoglu, Robinson and Johnson colonial powers adopted strategies for colonization based on the areas they colonized. Some former colonies were controlled via existing power structures while other colonies, e.g. United States, attracted settlers. According to the scholars, this resulted in different means of getting economic benefits from the colonies. However, I think that the way of keeping the colonies under control also changed. The settlers expected that the colonies were similar to the country they left, which meant that to create stability in the colonies the colonial power had to prevent the settlers from thinking that independence would improve their living conditions.

However, Congo did not have these settlers. Rather, the colonial powers dependent on existing power structures. They tried to extract as much wealth as possible, and often used oppressive means to get that wealth. That means that to keep power, the colonial powers had to oppress the people. Therefore, the colonial powers had an incentive to actively prevent the people from gaining power and creating a population that could be ready for independence. This explains that for example in Congo, but also in many other former colonies, education and promotion of vocational training of African peoples were discouraged.

So, besides strengthening harmful institutions, colonial powers would have set up the former colonies to fail by creating circumstances that made independence difficult. However, for settlers-colonies, to prevent independence colonial powers would have created circumstances very similar to their own, which could explain the difference between the current development offormer colonies.

British Colonial Policy in Oman, an Informal Colony

By Ingeborg de Koningh

The Sultanate of Oman, which I called home for a number of years, never formally constituted part of the British Empire, yet the extreme dependency of the Omani regime enabled the British to exert economic and political control of Oman, similar to colonial levels. In their analysis of pre- and post-colonial development statuses, Acemoglu, Johnson, and Robinson limit their discussion to those colonies legally recognized by colonial powers. Bearing Oman’s status as an informal colony in mind, I wondered to what extent the reversal of fortune might be applicable here too.  

After a brief period of colonization, Oman expelled the Portuguese in 1650 and subsequently established equitable trading relations with the Brits. In the following centuries, Oman expanded its territory by colonizing areas down the East African coast and flourished from the slave and ivory trade. Thus, by the mid-nineteenth century Oman was a powerful and prosperous nation.

Yet, this agreement ceased to satisfied the British- Oman had become too powerful for their taste and domestic anti-slavery agenda in the Indian Ocean condemned Omani trading policies. An internal power struggle in Oman’s ruling family arbitrated by the British consul in Muscat gave opportunity to increase political control, sustained by the new regime’s dependence on British arms for its existence, and to bend Oman’s trade and regional influence towards utilization for own benefit. Consequentially, the British gradually institutionally abolished the slave trade and restricted the extent of extraterritorial control. While British control of the Indian Ocean was secured, Oman was left in economic malaise until the discovery of oil fields in the 1950s.

So Oman’s time as an informal British colony did cause a reversal of fortune, yet not through the implementation of extractive institutions. It was the institutional destruction of Oman’s main sources of revenue which caused the reversal of fortune. 

Colonialism: to be continued...

By Lotte Levelt

The topic of colonialism has always been controversial and surrounded by heated debate. It is generally agreed that the expansion of Europe from the 15th till the 20th century has ceased, but this century-long colonisation has certainly left its marks in both ex-colonised and ex-colonising countries. The colonised countries’ side of the story regarding the consequences of colonialism is predominantly subject to research. Nonetheless, the way colonialism is treated in previously colonising countries is at least striking, and perfectly illustrates how colonialism is still sensitive and perhaps in a way perseverant.

The Netherlands, a previous - and major - coloniser itself, illustrates just how delicate the subject matter is. The country has been questioned and criticised multiple times in the way it deals with its colonial past, for instance in lawsuits and regarding education about colonialism. What is termed ‘politionele acties’ (‘police actions’) by the Dutch state was in fact the Indonesian War of Independence, both terms describing the military aggressions of the Netherlands in attempting to prevent the end of Dutch control in Indonesia between 1947 and 1949. Furthermore, a case of a woman being raped by five members of the Royal Dutch Indies Army during the aggressions has come to light. The Dutch government stated the case had expired - a claim that was later refuted in court, as it concerns a crime against humanity.

The Dutch case in Indonesia presents a solid of example of how the sensitivity and controversy of colonialism is still widespread and will most likely continue so in the future. The way previous colonisers deal with their colonial history differs per country. What is apparent, however, is the need for these previous colonising countries to take responsibility, instead of shutting their eyes for something that may have happened in a faraway place, a long time ago.

What could Soviet Union have learnt from developmental South Korea?

By Camelia Vasilov

Kohli (2004) argues that the pattern of state authority – and particularly the institutionalization of the relationship state-private sector – is crucial in explaining why essentially the same developmental challenge resulted in different outcomes for South Korea, Brazil, India and Nigeria. I think that we can gain useful insight from this theory into the success and failure of the Soviet Union.

Indeed, the efficacy of the government in imposing growth-inducing economic decisions, at the expense of much human suffering, was the key to the miraculous Soviet industrialization and urbanization achieved in only 15 years. But the Soviet system carried the seeds of its own destruction.

As Olson (2000) shows, it wasn’t just the state appropriation of all capital, but rather the peculiar system of taxation that squeezed the maximum worth of people’s work and gave the Soviet Union “more resources for the purposes of leadership that any society in history” (p.120).

Soviet taxation was nearly total on regular working hours, as only the state was entitled to the benefits of people’s work, whose wages were kept below subsistence level. However, there was no taxation on working extra hours – Stakanovist practices were actually monetarily rewarded – or engaging in little trades on the side, unrecognized by the state, as long as one was not caught. Basically, people had to work outside the planned economy as well if they wanted to survive.

But eventually these tiny markets that emerged within the cracks of totalitarian power became essential for fixing the mistakes of planned economy – and the state lost more and more transactional information and thus control over the emerging entrepreneurs.

Wouldn’t it have better if the SSSR took these entrepreneurs under its wings and aligning its goals with them? An agent with the same preferences as the principal is no longer a problem. In South Korea - a cohesive-capitalist state in Kohli’s framework – this is exactly the case: the two horses of business and state are pulling in the same direction (p.21). Could the Soviet Union have become a cohesive-capitalist state? Is China undergoing this transition now? 

The Malawian experience

By Casper Gelderblom

In his book about state-directed development, Atul Kohli distinguishes three different state types: cohesive-capitalist states, fragmented multiclass states and neo-patrimonial states. While the relatively strong organizational underpinning of the first two types renders growth-stimulating industrialization possible, neo-patrimonial states’ interventions in their economies have led to “disastrous results,” Kohli claims. Illustrating this argument with the case of Nigeria, he shows that neo-patrimonial regimes’ treatment of resources and companies as their own patrimony keep the country from achieving economic development. Convincing as the Nigerian illustration may be, not all historical evidence supports Kohli’s presentation of neo-patrimonialism as necessarily destructive.

In the first 15 years after independence, the neo-patrimonial state of Malawi, for example, achieved a rate of economic development which the World Bank at the time lauded as “impressive”. Despite president Banda’s personal ownership of more than half of the shares of an enormous corporation that largely controlled the country’s largest chains of supermarkets and shops, hardware stores, the tobacco industry and its two banks, his neo-patrimonial rule was characterised by truly impressive growth numbers. Between 1964 and 1979, Malawi’ average annual GDP growth rate was 5.9%, the annual increase of real GDP per worker about 3%, the growth of manufactured output averaged 5.6% p.a. in the 1970s and, most telling in relation to industrialization, the share of the manufacturing sector in the country’s GDP increased from 7% in 1964 to 13% in 1980.  

The early post-colonial Malawian experience indicates that neo-patrimonialism is not necessarily destructive - it might even lead to strong economic performance. This raises interesting questions for political economy scholars: what characteristics of neo-patrimonial states stimulate or hinder economic development? Given the obvious differences between Nigeria and Malawi, does the presence/absence of resources matter for the economic impact of neo-patrimonialism? And what role does regime type play? Whatever the answer to these questions, one thing is certain: the case of Malawi calls for a more differentiated consideration of the nature and impact of neo-patrimonialism than the one Kohli presents.

Culture and ethnic profiling

By Hugo van Lent

Nathan Nunn argues how cultural norms and values have to be taken into account when studying institutional development in time. Different cultures, which are essentially different heuristics or rules of thumb, may therefore be used to explain institutional divergence in time.

Racial or ethnic profiling – singling-out individuals on the basis of their skin colour – is a widespread and institutionalised practice in the United States; the American police is often accused of racism and many consider racial profiling a violation of human rights if not of the American constitution. Others, however, argue that, because African-Americans have a higher-than-average crime rate, racial profiling is simply the most effective way to reduce crime, and that reasonable suspicion might be warranted when one sees a black man stalk one’s car at night. In any case, American popular support for racial profiling tends to be high.

In Germany, on the other hand, racial profiling as a policy is not as widespread and often disputed; in fact, racial profiling was declared unlawful in 2006. Instead of in the United States, where racial profiling is used often and is even defended by officials as if it were official policy, ethnic profiling in Germany is considered improper. Indeed, comparing such policy to that of the SS was decided legal.

The latter ruling is key; it explains why racial profiling is not institutionalised in Germany, even though it would arguably be more effective there than in the US, which have a much larger population of non-whites. Unlike in Germany, because of how blacks were traditionally disadvantaged in the US, being black has been associated with poverty and crime as a heuristic – a rule of thumb. Instead, Germans have a heuristic tendency to associate profiling with their national-socialism because of their past and are therefore vehemently opposed to it. Hence this example of institutional divergence can be understood as the product of cultural differences rather than efficiency.

Corruption: the break down of informal institutions

By Laura Ombelet

Singapore consistently ranks as one of the least corrupt countries in the world. While the word ‘corruption’ is virtually antonymous with ‘good government’, tackling corruption continues to remain notoriously difficult even for strong modern states. 

By definition, corruption is an informal institution. Under Helmke and Levitsky’s framework, corruption is a competing informal institution that directly violates the formal rules that exist within government. Informal institutions are often considered highly resilient to change, and this could be why corruption proves to be so difficult to eradicate. However, as countries like Singapore demonstrate, corruption networks can be weakened. So, how is this possible?

Singapore is one of the most well known examples of corruption eradication and today considers itself one of the ‘cleanest and corruption free countries in the world’. If we view the eradication of corruption as informal institutional change, then according to Helmke and Levitsky, this could be the result of changes in formal institutional strength or effectiveness. Before 1959, Singapore was controlled by the British and The Prevention of Corruption Ordinance was not strictly enforced due to weak laws, an uneducated public and underpaid public officers. Consequently corruption was rife. When the new government took over, administrative measures and preventative guidelines were established to reduce corruption. Court punishment for corruption was strengthened and so the costs associated with corruption increased. Therefore committing corruption became a far less viable option than before and with time, levels of corruption decreased. As stated by Helmke and Levitsky, ‘these costs will induce actors to abandon the informal institution’, which is exactly what happened in Singapore.  

If we focus on Singapore, eradicating corruption appears to be rather straightforward. However, Singapore has the added advantage of being a small state; less hindrance to communication makes implementing policy change far easier. Therefore, although we can conclude that the emergence of strong formal institutions aids the eradication of corruption, it is not always the only reason. 

Trading favors. A note on informal institutions and culture

By Camelia Vasilov

Helmke and Levitsky (2004) propose a research agenda on informal institutions based on their interaction with the formal ones. They start their analysis by saying what informal institutions are not – and one of the things they are not is culture. In contrast, for Nunn (2012) informal institutions are, at their core, culturally determined heuristics, or “shortcuts” for decision-making.

In this post I will explore the tensions between the two views using the example of the informal exchanges of goods and services that arose under the Communist regimes in Soviet Union and China: blat and guanxi, respectively.

Helmke and Levitsky give blat as an example of accommodating institutions, which according to their definition are “often created by actors who dislike outcomes generated by the formal rules but are unable to change or openly violate those rules” (p. 729). In both the Soviet Union and China, informal exchange performed the same functions: it was needed for maintaining the livelihood of people unable to support themselves only on the basis of the received wages, and for meeting the impossible targets of state planning.

Ledeneva (2008) notices that there are differences between these practices that fulfill essentially the same goal, namely the reciprocity considered moral, their legitimacy and their incipient codification. She argues that these differences are rooted in the culture. For example, while blat was pervasive in the entire Soviet Union, few could articulate when asked what its rules were. On the contrary, “the code of guanxi is derived from the kinship ethics and popular Confucianism” (p. 127), and this new practice was thus planted into an old cultural field, thus increasing its stability and even legitimacy.

The separation between culture and informal institutions evident in this case seems to support Helmke and Levitsky’s argument. However, one could make the case that Confucianism itself, taken here as culture, was also a set of informal institutions that shaped the decision-making of people for so long that it became the norm. Nunn might point out that although blat and guanxi performed the same role, their came about in society in a rather distinct ways, which would make them historically different practices.