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-   -   Are benevolent autocrats good for economic development? (http://www.physicsforums.com/showthread.php?t=520064)

BWV Aug8-11 11:46 AM

are "benevolent autocrats" good for economic development?
 
As for example, Tom Friedman states:

One-party autocracy certainly has its drawbacks. But when it is led by a reasonably enlightened
group of people, as China is today, it can also have great advantages. That one party can just
impose the politically difficult but critically important policies needed to move a society forward
in the 21st century.


William Easterly attacks the idea here

http://williameasterly.files.wordpre...-2nd-draft.pdf

Quote:

“Benevolent autocrat” is a perpetually popular concept in development policy discussions. This paper suggests this popularity is not solely explained by academic theory and evidence. The history of the concept shows the role of political motivations for embracing the concept. The literature on cognitive biases shows multiple biases that would lead to beliefs in benevolent autocrats even if they did not exist, especially as these interact with stylized facts about autocracy and growth. Neither political motivations nor cognitive biases imply disproof of the concept, but they do suggest the need for even more rigorous scrutiny. The theory implied by a benevolent autocrat story is na´ve relative to modern theories of autocracy, and it presumes an implausible level of knowledge by autocrats. The evidence underlying “benevolent autocrat” interpretations has equally plausible – or more plausible -- alternative explanations. The well-known “leaders matter” results of Jones and Olken (2005, 2009) do not demonstrate that intentions and actions of individual autocrats affect growth. Since democratic rights are an end in themselves, the burden of proof is on autocrats to show that they provide material payoffs that offer a trade-off with such rights. This paper argues they fail to meet that burden of proof.
he outlines the common cognitive biases that lend people to this conclusion, which is interesting as it touches upon basic epistemological issues in regards to any discussion of economic policies

a) reversing conditional probabilities - the fact that several growth success stories had autocratic leadership (South Korea, Singapore, China, etc) misses the fact that while 90% of the growth success stories were autocracies, only 10% of all the autocracies were growth success stories

b) availablilty heuristic - big success is greatly over-reported relative to big failures

c) leadership attribution bias - "A large literature on the “fundamental attribution error” finds that test subjects tend to attribute an outcome too much to individual personality, intentions, and skill and not enough to situational factors." The exaggerated importance of US Presidents, Corporate CEOs and athletic coaches is another example

d) "hot hand" fallacy - attributing a random streak to some sort of special skill

e) law of small numbers - too small a sample size to draw meaningful conclusions

f) action bias - "technocratic views of development give action-oriented experts much more of an active role.
However, if experts already know the answer, then there is not much room left for democratic
determination of economic policy. Hence, anyone who considers themselves as an expert advisor may
have a bias towards autocrats. As James Buchanan said, policy-oriented economists and other public
intellectuals may prefer to be “proffering policy advice as if they were employed by a benevolent despot.”"

Easterly concludes:

"This paper has suggested a number of cautions about jumping too quickly to benevolent autocrat
explanations of growth successes. Formal theory and evidence provides little or no basis on which to
believe the benevolent autocrat story. The benevolent autocrat story has been around for a long time and
has proved very adaptable to many different political motivations. The interaction between well-known
cognitive biases and stylized facts would predict beliefs in benevolent autocrats even if they did not exist.
This paper has repeatedly cautioned that these arguments do not automatically disprove the benevolent
autocrat story. People who have certain political motivations and cognitive biases are likely to believe in
benevolent autocrats. It does not follow that people who believe in benevolent autocrats have political
motivations and cognitive biases. (Equating the two is itself the reversing conditional probabilities
cognitive bias.)
The benevolent autocrat story for any ONE autocrat and growth outcome is ultimately non-falsifiable:
there is just one observation and many possible stories. Those with strong priors in favor of benevolent
autocrats are still likely to go with that story.
The point of this paper is that such strong priors exist for many bad reasons as well as good ones, and that
economists should retain their traditional skepticism for stories that have little good theory or empirics to
support them."

WhoWee Aug9-11 11:52 AM

Re: are "benevolent autocrats" good for economic development?
 
Is this applicable in places like Somalia or Haiti?

BWV Aug9-11 02:52 PM

Re: are "benevolent autocrats" good for economic development?
 
On several levels. Both countries have suffered from bad autocratic regimes in the past. Most importantly though would be gaining a proper level of skepticism over any top down plan, no matter how well intentioned, to fix these countries

WhoWee Aug9-11 02:57 PM

Re: are "benevolent autocrats" good for economic development?
 
Quote:

Quote by BWV (Post 3443887)
On several levels. Both countries have suffered from bad autocratic regimes in the past. Most importantly though would be gaining a proper level of skepticism over any top down plan, no matter how well intentioned, to fix these countries

What better way to demonstrate the value of a benevolent vs a bad autocratic system?

BWV Aug10-11 09:51 AM

Re: are "benevolent autocrats" good for economic development?
 
Quote:

Quote by WhoWee (Post 3443897)
What better way to demonstrate the value of a benevolent vs a bad autocratic system?

the point is how do you define benevolent? Its easy to define a "less bad" autocracy - i.e. one where the leader does not use the public purse as his personal ATM and put opponents in concentration camps. But the point of the paper is while we know some policies are destructive (Maoist communism, Mobutu-style kleptocracy) we know very little about what positive actions will result in future economic growth.

WhoWee Aug10-11 11:43 AM

Re: are "benevolent autocrats" good for economic development?
 
Quote:

Quote by BWV (Post 3445215)
the point is how do you define benevolent? Its easy to define a "less bad" autocracy - i.e. one where the leader does not use the public purse as his personal ATM and put opponents in concentration camps. But the point of the paper is while we know some policies are destructive (Maoist communism, Mobutu-style kleptocracy) we know very little about what positive actions will result in future economic growth.

Again, the only way to measure the results of a "less bad" example would be in comparison to the specific "bad" model. The only valid place to study the problem is at a place where the prior results of a "bad" model are known - then changed and measured.

BWV Aug10-11 11:45 AM

Re: are "benevolent autocrats" good for economic development?
 
Quote:

Quote by WhoWee (Post 3445374)
Again, the only way to measure the results of a "less bad" example would be in comparison to the specific "bad" model. The only valid place to study the problem is at a place where the prior results of a "bad" model are known - then changed and measured.

but the problem with these analysis is that you cannot control for the dozens of extraneous variables - maybe the bad example had rich oil reserved discovered, for example

WhoWee Aug10-11 11:48 AM

Re: are "benevolent autocrats" good for economic development?
 
Quote:

Quote by BWV (Post 3445377)
but the problem with these analysis is that you cannot control for the dozens of extraneous variables - maybe the bad example had rich oil reserved discovered, for example

I brought up Somalia and Haiti because they are poor countries. An oil rich country has a far different set of variables.

BWV Aug10-11 12:35 PM

Re: are "benevolent autocrats" good for economic development?
 
Quote:

Quote by WhoWee (Post 3445385)
I brought up Somalia and Haiti because they are poor countries. An oil rich country has a far different set of variables.

but the point is there are too many different factors - their social and economic histories (Somalia is tribal while Haiti is not for example), neighboring countries (the US vs. Kenya) the fact that Haiti is experiencing a Malthusian trap related to deforestation and population density while Somalia is not densly populated (both countries have roughly 9 million people but Somalia has over 20x the land area) Haiti has a large expatriate population sending money home, while Somalia does not. Foreign aid is 40% of Haiti's budget while Somalia does not have a central government. You can make up ad hoc post-ante stories why so and so factor is relevant or not, but you cannot really separate all of these from an abstract concept like how "good" a leader is

WhoWee Aug10-11 12:47 PM

Re: are "benevolent autocrats" good for economic development?
 
Quote:

Quote by BWV (Post 3445457)
but the point is there are too many different factors - their social and economic histories (Somalia is tribal while Haiti is not for example), neighboring countries (the US vs. Kenya) the fact that Haiti is experiencing a Malthusian trap related to deforestation and population density while Somalia is not densly populated (both countries have roughly 9 million people but Somalia has over 20x the land area) Haiti has a large expatriate population sending money home, while Somalia does not. Foreign aid is 40% of Haiti's budget while Somalia does not have a central government. You can make up ad hoc post-ante stories why so and so factor is relevant or not, but you cannot really separate all of these from an abstract concept like how "good" a leader is

My point is that you need to pick a single sample to study - you wouldn't try to combine several chemistry experiments into one - would you? You need to consider the specific variables of each sample.

BWV Aug10-11 12:51 PM

Re: are "benevolent autocrats" good for economic development?
 
Quote:

Quote by WhoWee (Post 3445475)
My point is that you need to pick a single sample to study - you wouldn't try to combine several chemistry experiments into one - would you? You need to consider the specific variables of each sample.

but thats the whole point of economics - you cannot do controlled experiments on whole economies. You cannot separate these variables other than by resorting to very crude statistical tools

daveb Aug10-11 12:59 PM

Re: are "benevolent autocrats" good for economic development?
 
Well, no, currently, I would say that benevolent dictators aren't good for economic development - but that's just because there currently aren't any benevolent dictators (IMO). Could there be benevolent dictators? In theory, yes, though to be clear, we would need to identify thopse things that classify someone as a benevolent dictator first.

WhoWee Aug10-11 01:01 PM

Re: are "benevolent autocrats" good for economic development?
 
Quote:

Quote by daveb (Post 3445498)
Well, no, currently, I would say that benevolent dictators aren't good for economic development - but that's just because there currently aren't any benevolent dictators (IMO). Could there be benevolent dictators? In theory, yes, though to be clear, we would need to identify thopse things that classify someone as a benevolent dictator first.

Back to Haiti - didn't Baby Doc indicate he would get it right this time?:rolleyes:

daveb Aug10-11 01:05 PM

Re: are "benevolent autocrats" good for economic development?
 
Maybe he meant he would get :!!) right this time.

BWV Aug10-11 02:05 PM

Re: are "benevolent autocrats" good for economic development?
 
Quote:

Quote by daveb (Post 3445498)
Well, no, currently, I would say that benevolent dictators aren't good for economic development - but that's just because there currently aren't any benevolent dictators (IMO). Could there be benevolent dictators? In theory, yes, though to be clear, we would need to identify thopse things that classify someone as a benevolent dictator first.

Not that I agree, but here is a commonly cited example - South Korea, during a period that largely coincided with the rule of Park Chung-hee, went from a per capita income below that of Haiti to one that was converging on Western standards. Park was an autocrat and suppressed political dissent, but did not tolerate corruption and encouraged economic liberalization.

WhoWee Aug10-11 02:30 PM

Re: are "benevolent autocrats" good for economic development?
 
Quote:

Quote by BWV (Post 3445586)
Not that I agree, but here is a commonly cited example - South Korea, during a period that largely coincided with the rule of Park Chung-hee, went from a per capita income below that of Haiti to one that was converging on Western standards. Park was an autocrat and suppressed political dissent, but did not tolerate corruption and encouraged economic liberalization.

Unlike Haiti (for example) Park Chung-hee choose Economic reform and expansion over dependence on foreign aid.
http://www.geocities.ws/mortuzakhaled/park.pdf

"Amidst this crucial economic situation Park Chung-hee took over the charge of
the President of Korea and throughout the whole tenure of his regime it was
backed by military administration. Park Chung-hee like prior ruler did not pay
much emphasis on the unification of Korea; rather he declared that economic
4
progress of Korea was his primary goal.7"

daveb Aug10-11 03:33 PM

Re: are "benevolent autocrats" good for economic development?
 
Quote:

Quote by WhoWee (Post 3445620)
Unlike Haiti (for example) Park Chung-hee choose Economic reform and expansion over dependence on foreign aid.
http://www.geocities.ws/mortuzakhaled/park.pdf

Nice find there! Very interesting reading.

Pyrrhus Aug10-11 08:10 PM

Re: are "benevolent autocrats" good for economic development?
 
Quote:

Quote by BWV (Post 3445488)
but thats the whole point of economics - you cannot do controlled experiments on whole economies. You cannot separate these variables other than by resorting to very crude statistical tools

I am not sure about the value of Dictators connections with Economic development, but so far the examples given in this thread are related more to failure. An example of a Success is Chile with the famous "Chicago boys" and Augusto Pinochet story.

I bolded this part as I am not sure what you mean by "very crude"? Econometrics has become very sophisticated and flexible. Its methods are used in many other areas such as finance, marketing, medical sciences, and others. Furthermore, you don't seem to understand that the omitted variables have different effects on the estimates. Economists typically control for the variables that are more relevant, and thus try to reduce the bias on the estimates. It is possible that there are variables omitted that will bias the estimates, but what is actually important is the magnitude of the bias. "Small" bias is not a problem.


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