Institutions Matter-but So Does History; a Compariosn of Mediaeval Dubrovnik and Other Dalmatian Cities

Abstract : That institutions matter in determining economic performance is widely accepted, and many analysts, like Acemoglu and Robinson (2012), demonstrate this with historical case studies comparing English and Spanish colonies, or Mediaeval Venice. Havrylyshyn and Srzentic (2015) argued good institutions explained the prosperity of tiny Ragusa/Dubrovnik, which became a major rival in maritime trade to mighty Venice 20 times its size. Compiling data for the period 12th-17th c., on performance, institutions like judicial procedures and social programs, they demonstrated that Ragusa had high-quality institutions . This paper extends the analysis asking: why didn’t the larger and older city-states of Dalmatia like Split or Zadar succeed as Ragusa did? Was it because they did not have high-quality institutions ? With some new data on legal and social institutions for other Dalmatian cities, the paper that while Ragusa may have been one of the earliest to put in place good institutions, the others were not that far behind or very different. Thus institutions alone can't explain Ragusa’s greater success; they may have been a necessary condition for success but not sufficient. History suggests an alternative explanation: Venice ruled over most of Dalmatia and restricted economic and trading rights of these cities with inter alia the Ottoman empire, essentially monopolizing this for itself. As Ragusa remained largely sovereign it was able to undertake such trade and to determine its own policies on fiscal, trading, regulatory, institutional and social matters. Its superior performance relative to the others is thus to be attributed to the exogenous historical fact of Venetian Imperialism

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Rethinking Development: Broadening the Goals and Altering the Approach

Abstract : A new strand of “sustainable development economics” (SDE) is reframing comparative economics. We summarize SDE’s three-part analytical challenge for each society: the need to “re-couple” progress on incomes with objective and subjective measures of human wellbeing; to “de-couple” progress on incomes from processes of environmental degradation; and to “we-couple” gains in living standards such that no group feels excluded from opportunities for progress. In this multi-dimensional context, economic systems are not judged on a single dimension ranging from “good” to “bad,” but instead relative to the different outcomes they generate across a range of domains. In investigating drivers of outcomes, SDE is agnostic regarding appropriate levels of aggregation and considers societal forces including business, academia, and civil society, in addition to public institutions and policies. Keywords: economic growth, environmental sustainability, inequality, economic systems, institutions, measurement

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Are the Transition Economies Still in Transition?

Abstract : Thirty years ago, most observers thought that the transition from a planned to a market economy would be a long process. Instead, the changes occurred very quickly and the transition countries do not look all that different than many emerging market economies. In the first part of the paper we discuss whether transition was truly special. In the second part, we look at the characteristics of the transition economies. Our data shows that they have similar economic structures and share many similar economic and political problems as other countries at similar income levels. We found only one area where transition stands out as different. The financial sectors of the transition economies are smaller and less well functioning than those in other countries. Forthcoming in Handbook of Comparative Economics, ed. by Elodie Douarin and Oleh Havrylyshyn, Palgrave. Pre-publication paper available from author pwachtel@stern.nyu.edu

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