Reversals of national fortune, and social science methodologies

Abstract

Among non-European regions colonized by Europeans, regions that were relatively richer five centuries ago (like Mexico, Peru, and India) tend to be poorer today, while regions that originally were relatively poorer (like the United States, Chile, and Australia) tend now to be richer. Acemoglu, Johnson, and Robinson (abbreviated AJR) established the generality of this reversal of fortune. Chanda, Cook, and Putterman (abbreviated CCP) have now reanalyzed it, taking as a unit of analysis populations rather than geographic regions. That is, India's population was Indian 500 y ago and is still overwhelmingly Indian today, whereas the United States' population was Native American 500 years ago but is overwhelmingly Old World (especially European) today. Reversals of fortune disappeared when CCP analyzed populations rather than geographic regions: for instance, the geographic region of the modern United States has become relatively richer since AD 1500, but the predominantly European population now occupying the United States was already relatively rich in AD 1500. Evidently, European colonists carried ingredients of wealth with them. I discuss the biological and cultural baggage transported by European immigrants and associated with wealth. Among that baggage, AJR emphasize institutions, CCP emphasize social capital, and I identify many different elements only loosely coupled to each other. This paper discusses the problem, especially acute in the social sciences, of “operationalizing” intuitive concepts (such as mass, temperature, wealth, and innovation) so that they can be measured. Basic concepts tend to be harder to define, operationalize, and measure in the social sciences than in the laboratory sciences.