"Institutions, development economics and modernization theory " – professor James Robinson

Our guest is James Robinson. He is the University Professor and institute director of The Pearson Institute for the Study and Resolution of Global Conflicts at the University of Chicago. We talked about "Why Nations Fail", the current state of development economics, why economists started writing books, modernization theory, coauthorship with Daron Acemoglu, why British universities are lagging behind American ones and whether Milton Friedman is overrated.

Behzod: Today our guest is James Robinson. James Robinson is a university professor at the Harris School of Public Policy at the University of Chicago. He's a co-author of the book Why Nations Fail and recently The Narrow Corridor. James Robinson welcome.

James Robinson: Thank you very much.

Behzod: I’ll start right away and I know it’s a cliché. I know you’ve been a hundred talks about it but I have to ask. Why do nations fail? 

James Robinson: Ah, heh. Well they fail economically. I think that’s the important thing. The focus is about economic development. Failure could be a really cruel thing, but we are trying to focus on economic underdevelopment. Why some countries are much more successful economically than other countries and the unsuccessful ones fail. They fail because they don’t have the right institutions, the right rules. They create incentives of opportunities. If you want to have prosperity you need to have innovation, you need to have entrepreneurship, you need people to invest and to that you need incentives and opportunities. That's structured by the rules in society by what we call institutions. The institutions vary enormously around the world with very different consequences for incentives and opportunities and very different consequences for economic success or failure.

Behzod: The fact that institutions are important was a broad consensus in economics and political science. The question that begs here is where do good institutions come from?

James Robinson: You’re right. If you read Adam Smith’s The Wealth of Nations that in some sense is about institutions and a lot of economics is about markets and property rights, monopoly is bad. Institutional variation has all these consequences for the efficiency of resource allocation and prosperity. But I guess what’s more different about our book or approach is trying to understand that variation in institutions. Why is it that some parts of the world have terrible institutions in terms of their economic effects and others have much better institutions. For us that’s about politics. We make in a book distinction between the extractive economic institutions and inclusive economic institutions. Extractive economic institutions are associated with poverty and inclusive economic institutions are associated with prosperity. Inclusive economic institutions are about the creation of broad-based incentives and opportunities. But what explains the variation in extractive economic institutions in North Korea versus much more inclusive economic institutions in South Korea? That’s to do with the politics. Behind variation in economic institutions lies variation in political institutions. For us the key step is to go beyond the economics and think about the politics that lies behind institutional variation.

Behzod: In your book you use North Korea, South Korea a lot. Also, you have an example of Nogales, Arizona versus Nogales, Mexico and so on. But in general I think when one reads your book it feels that good  institutions come from idiosyncratic events. Division of Korea or something that is very exogenous. It comes from the sky. So do we have to wait for a good luck that other institutions will approve?

James Robinson: I think we use those examples because they’re what we call natural experiments, that’s what social scientists will call natural experiments. This is sort of variation in institutions which is kind of exogenous to other factors that you might think will create prosperity or poverty.  

Behzod: Like geography, culture...

James Robinson: Exactly. Korea with centuries of common history, language, religion, political unification, and then, suddenly gets split in half in the late 1940s and two very different sets of institutions get set up north and south of the border. The example you mention of Nogales on the border of Mexico in the United States is very similar. Historically this border gets created and everything is very comparable on different sides of the border in cultural or geographical point of view. Then you get this massive divergence in economic development because north of the border in Nogales gets incorporated into the United States with very different sets of institutions from the south of the border which gets incorporated into Mexico. You are talking about the third part of the book. Three parts of the book are making this argument about the relationship between economic institutions and prosperity. When we are saying: ‘’Okay but what lies behind this variation and economic institutions is political institutions?’’ Then the next question which you are raising is how come political institutions look so different. In our perspective on that which we get a lot more in our new book that is about history. In the first chapter…

Bekhzod: What do you mean history?

James Robinson: I mean the language we used to talk about. It may be idiosyncratic factors involved in the historical development of institutions but it is really about power. The end of the day the type of political institutions you get is about power. To get inclusive economic institutions in all language you need inclusive political institutions. One of the components of that is distribution of power in society. It's very hard to have inclusive economic institutions when political power is very concentrated in the hands of the North Korean Communist party. So you need power to be spread in society. How does power get spread in society? People get organized. They collect collectively. Think of the Arab Spring. People mobilized, their demand changed. How does that emerge in society? I think there's a lot of idiosyncratic reasons for that but the language we use in the book is so to  say... There are these moments in history what we call critical junctures where societies get reformed and many different types of factors may operate at that moment. In the first chapter for example, it may be one of the best illustrations of this book, is taking Nogales and then going back in history and asking how did the US and Mexico look, why did they look so different. If you go back 500 years you see there is not much difference at all. Europeans came, they colonized North America, they colonized South America. They all tried to do the same thing, get rich, exploit indigenous people, grab land and find gold and silver in El Dorado. If you look at the British colonization of the United States they would model themselves on the Spanish. It wasn’t some British cultural project, no, they wanted the same thing as the Spanish. They wanted gold and silver, they wanted to exploit indigenous people they wanted to live like kings. 

But the context was very different. There were a lot of different features which led colonial society to develop differently in North America in this critical juncture. And then it has enormous consequences, path dependent if we use this social science jargon, and down the road. So that is the moment when these societies are shaped and formed and the distribution of political power is determined in the particular ways. That moment could depend on all sorts of things what you are calling idiosyncratic processes. But what those societies inform themselves the enormous amount of kind of inertia and continuity. So if you ask me to talk about this variation in the world like why does East Asia look the way it does, why Africa does, why Europe does? I think that's why you have to go back to these moments where many forces often come together to shape societies in particular ways and that's a very messy complicated process. If you're trying to explain variation in human society there is some simple kind of master variable climate or something like that really all agricultural productivity. I think humans are very creative, very Innovative. They do all sorts of different things and different contacts. I always think of the example if you compare humans to ants. There is lots of ant species. Think about Darwin. When ants get into a different environment, speciation, and they adapt to a different environment. Homo sapiens did not do it, homo sapiens developed in East Africa, and they spread to Greenland. What they did in Greenland they invented ice fishing and igloos and a taste for polar bear or seal. There are no seals in Ethiopia. If you build an igloo in Ethiopia it will melt. Humans innovated to deal with this different context, they innovated technology, they innovated institutions. To me that's the story but that's a difficult process to kind of gross because creativity explodes in lots of different ways. You have to find the framework for disciplining. But it's not a simple story I don’t think, unfortunately.

Behzod: If you don't accept geographical, cultural or other explanation that explain a variation in development of the countries how would you think about the fact that most of the poor countries are concentrated in the South?

James Robinson: We did a lot of academic research on that. When I first started thinking about this 25 years ago there was a lot of research about how the tropics will pull around. Jeffrey Sachs had this map of temperate zones where rich and so... We thought okay that's a real correlation there. How can you explain why that correlation exists in the data but it doesn't represent any causal relationship between climate and economic development? The answer we came up with that it’s because this historical process of institution creation during the colonial period created correlation between institutions and geography. That's the real story, not the geography itself. It happens that historically institutions are created in the colonial period. Created this correlation between institutions and latitude. That's why there's a correlation between development and latitude. That's for several reasons but the most obvious one is that tropical latitudes were very unhealthy for Europeans to settle. So you didn't have these colonies of settlement in tropical latitudes and you get much more extractive institutions in that contact. There was much more focus on exploiting natural resources, exploiting indigenous people. That pushed these societies and these institutions in a particular direction.

Behzod: I see. The book Why Nations Fail is widely criticized and widely read. I think it’s criticized because it is widely read. What is your most favorite criticism that you think is valid?

James Robinson: One of the difficult things about institutional analysis is that if I look at the details of institutions in any particular country North Korea, Zimbabwe, in Africa, Columbia, in South America lots of the details are very different. Labor market institutions or property rights or the legal system or... The things that we try to do with this terminology of extractive institutions and inclusive institutions is find a language that sort of... All the details of the institutions in North Korea and Zimbabwe and Columbia might be very different but here is one thing that they have in common. They are all extractive. You need some simple language like that to develop the argument. That’s cost associative. I could talk about two aspects of that. One aspect is if you want to give advice to people, if you want to help people change society then suddenly all the details become extremely important. If you want to know what to change or how to change talking about this very broad level of extractive and inclusive it doesn't help you too much. Then you need to know about all the details. Our book doesn't have much to say about that. I try to be very honest about that when people ask me but I think it’s just a problem with the institutional analysis. Things are complicated and the complications are important. 

Behzod: The context is important.

James Robinson: The context is important. We want to try to make this general argument there. Another thing which is a problem is that there's probably too much focus on certain types of institutions that are easy to observe or measure, like the legal system or the laws...

Behzod: Democratization.

James Robinson: Yeah, right. But there is a lot of what Douglas North called informal institutions of social norms that are very important. You can’t understand the difference between North America and South America just by looking at laws. Lots of the social norms are very important. And that's not well conceptualized I think. In some societies it is much more difficult to measure and estimate the effect on behavior or prosperity. I think that I could give you many examples of how and that is something we are trying to study in Africa and also in Columbia. But I think the book does not do a good job at sort of clarifying these different distinctions. We try to keep it simple to develop the argument that comes at a cost and people have right to criticize that. 

Behzod: Development economics before the book or your studies was about giving a whole bunch of money to the poor of the world. The World Bank, building schools...

James Robinson: Still is, I think... 

Behzod: Still is but… Building a well, a school, building a hospital... The assumption there is that once you have some level of human capital the development will follow. You and your book and your research say even if you check all the boxes in terms of development education is so important. Development is not gonna happen necessarily. So those things are not sufficient conditions. They may be necessary but not sufficient. But some people argue about this in the following way. They say “sure institutions are important, but good institutions come from educated populace” so once you have certain level of literacy and education when people would start demanding good institutions. How would you think about that?

James Robinson: We did quite a lot of research on that too. On that simple modernization hypothesis about whether economic development or education actually leads to better institutions in some dimensions. There is nothing there. Once you look at the data properly you don’t find any support for this modernization idea that development or education on its own, will lead to better institutions.  It is very interesting the way you phrase that because this is one thing I’ve never understood I've been an economist now for like 40 years or something and when I took economic development as an undergraduate and then as PhD most developed economists are not interested in why countries are poor. They just want to evaluate policy interventions and I just never understand that. Like whenever I go to a seminar where someone is presenting a development paper I ask myself: ok, this is about Indonesia, did I learn anything about why Indonesia is a poor country?

Behzod: Probably not.  

James Robinson: Exactly, and I’ve never understood that mentality. You articulated it very well.

Behzod: I am from Uzbekistan, and in 92 Uzbekistan had almost a hundred percent literacy rate. Everybody went to school, we had roads and airports. Metro in the city of Tashkent was built in 1977. Everybody was pretty healthy; mortality rates were okay and so on. Having all those necessary conditions we still could not develop. I think the institutional part wasn’t there. and I still think whenever the development economies want to achieve by building schools, wealth and roads may maximum make a country like Uzbekistan in 92. But the growth may not followed. 

James Robinson: But maybe Uzbekistan has all sorts of latent potential and advantages that some country in Africa or Central America doesn't have. It’s an optimistic way of thinking about that. Think about China. China had a very bad 200 years until the 1970s. The second half of the 18th century things started getting very bad in China. The Grand Canal silted. Qing state fell apart. Many aspects of Chinese society are very complementary with economic development. Like this notion of meritocracy. It is more like a sociological idea. I don’t think our theory captures this very well either. In China talking of social norms like this notion of meritocracy is very deeply ingrained. Confucius said ‘’promote the worthy and talented’’  and that’s how people think in China. The university of Chicago, Wisconsin is full of Chinese students. And you ask these Chinese students where do they come from. Massive social mobility. You compare that with India, you don't have it in India because you have this caste system and that is another problem with our theory I’d say. There are other sources of variation in the world apart from what we emphasize here. I am emphasizing more sociological. Of course, it is connected to politics but what impresses me and you’ll see reading a new book, there is a lot about China. I spent a lot over the last 5 years reading about Chinese history trying to understand what goes better in China and I become very impressed with this example of kind of sociological force which we did not capture either. 

Behzod: Do you think economists by large don't understand the context of anthropology and do you think it’s a problem?

James Robinson: I don't think they think it's relevant.  

Behzod: Do you think it's a problem or not? 

James Robinson: Yes, I think it's a problem. It depends on what you want to understand if you want to understand why there is the hyperinflation in Zimbabwe you don't need to understand the anthropology.

Behzod: Why not though. You know the government prints money because it has to repair the hospital. There is a lot of context too.

James Robinson: There is a deeper context in terms of the pressures that lead to this printing money.  But we understand that the reason for this hyperinflation is that the government is printing money. There is a theory that kind of applies without knowing anything about Zimbabwe. But you are right inside at some deeper level. If I wanted to ask why the government embassy is printing money there is always pressures, and politics, and corruption and then I have to get much more into. I think economists they have in mind  this general theory. Sorts of physics like Newton's equations of planetary motion and gravity, and we have markets and supply and demand and general equilibrium. That kind of explains everything. That's applies in Argentina, Uzbekistan, Zimbabwe. We don’t need to know anything. Economists think like that. They think like physicists. It is off shoe to this immense kind of mathematization of economics. They keep themselves into thinking they have for this general theory. I am an economist I like economics and I think that economic approach is very powerful but you need to understand the context and it's lacking in a lot of things. It lacks enormous amount of understanding of the variation in the world in terms of societies and institutions. So you know the discussion of African development for example which I work on a lot. It goes on in the complete absence of any understanding or knowledge of African societies. Everything that I know based on my experience in Africa is that all these things in Africa, these aspects of African society are extremely important in understanding how anything works. 

Behzod: Do you think development economics is a field? What it needs to do more off?

James Robinson: I think it needs to study the context much more seriously and people need to ask themselves much more systematically. It's so not just about the causal effect of some intervention. It’s about why is this country poor why don't things work. Move beyond this obsession with the causal effect of development aid or interventions just try to ask much more systematically what's different about poor countries.

Bekhzod: What you are saying is very messy though. If you want to publish an economics paper in development economics. We gave whole bunch of books, or we did some intervention in some poor country and then here are the results or here is none. You clearly show using experiments basically and control trials and stuff. A clean cut cause a link between whatever you did and whatever the outcomes were. If you come and say you have to understand the context and why the country is poor then things get really messy and the context gets really messy it's not like publications and so on but like career progression... 

James Robinson: Yes it's messy but it is also fascinating and interesting. 

Behzod: Do you get published though?

James Robinson: Of course, you get published. We’ve shown you could publish. Journals are full of stuff like that, there are people who work in that space and you kind of  get things published. You just have to do it with types of methodological tools that economist like. I always tell PhD students you can study anything you like but you have to present it in a way that economists think is intellectually respectable, so I think we managed to study it, we managed to publish things in good journals and it can be done. And it is incredibly interesting I just find the world so fascinating in all these variations and human societies maybe it's more complicated from what you're describing but it is also much more fun.

Behzod: To be fair even in your work, in your journal articles, Why Nations Fail it seems to me you wrote Why Nations Fail because you couldn't put a lot of context in your papers. Would you agree or not?

James Robinson: It's true that a lot of examples in there were things from academic papers which were eliminated by referees and editors. One of the motivations for writing Why Nations Fail was that we wanted to put together a lot of things we've found inspiring ourselves. Some inspiring ideas, research. We thought if we found them inspiring some students will find them inspiring.  And you still publish the paper and you write the paper. I actually think it’s okay. Maybe too much idiosyncratic details, knowledge it makes it difficult to replicate. I like details a lot but  I understand the average economist doesn't like details so maybe it's good to put them somewhere else. It helps other people understand better what the study is about and why it is important and how it correlates the things I understand. Maybe it is socially desirable to do what you are describing. 

Behzod: So we are in a kind of stable equilibrium where moving is quite costly. Let me ask you a different question.

James Robinson: None of my articles have ever been translated into Uzbek so it's good that I have written that book.

Behzod: When you wrote your first book, Why Nations Fail is your first book for the general audience. Did you expect it to be international bestseller and blockbuster type of book or not? What were you priors when you were writing the book?

James Robinson: No. Acemoglu gave this Lionel Robbins lecture in the London School of Economics in 2004. We wanted to write a book for the Robbins lectures, we started writing a book, and we decided it was too boring. There was too much cut and paste from articles, and tables of regression, statistics. We thought there is no point, people have read the articles, there is no point in writing the book. It is just waste of everyone’s attention and time. To write a book we should do something much more ambitious and different. I started teaching this class in Harvard sort of trying to do that basically, and we thought this is fun, we read a lot of different things, and we try to write in a different style but you have no idea if you can be successful in that. I remember having a conversation about this. The first book the technical one sold about 10,000 copies, so we thought if we sell 300,000 copies we will be happy. That's how confused we were because in English the book sold about a million. If you take hardback, softback and electronic it’s about a million copies.

Behzod: It was just the only 300 in Ukrainian language. 

James Robinson: The whole thing was completely off. In this book's you have to capture the moment. Look at Piketty’s book. Piketty sold a million copies and Piketty never thought it was gonna sell a million copies it's full of detail but somehow it captures people's imagination the moment is right and I think we were lucky. 

Behzod: Well, I read and Why Nations Fail in 2013 the first time or 2012.

James Robinson: It came out in 2012.

Behzod: And I think I was lucky because I was a junior in college at that time and I was in math department, but I was thinking about economics all the time. I was from Uzbekistan and I was living in Singapore and it was much richer country. I couldn't quite get what was going on and this book was very important in shaping my thinking. “Oh, wow now that all makes sense”. So, when I was first started looking for books in economics, I couldn't find that many contemporary economists writing books for the general audience at that time. But now in 3 to 5 years there are so many books written by economists for the general audience. What happened, why economists are writing books? Did you start the movement?

James Robinson: I don’t know, that's a good question. That's definitely true, everybody is writing.  You used to be told that writing books is a disaster. Nobody read them. It was not good for your career distracting from writing articles and that is what you should be doing. People told that to us, but Acemoglu and I, we never really cared what people thought, we’ve done what we thought was the right thing to do. Sometimes you win sometimes you lose. Hit and miss. People get interested in an idea, or they don’t. If you spent too much time worrying about what other people say you never going to do anything original, you just have to believe in yourself and follow your impulses. What you think is interesting, what drives your curiosity and just believe in that. People told us it was a waste of time writing a book and why we were doing it, and we weren’t any good at doing this. But I don't know why everybody's doing it now. Maybe because people realize you could be successful doing this. Paul Collier wrote this book The Bottom Billion which was quite successful. 

Behzod: I was in Thai airport two years ago, and went to the bookstore at the airport. There was your book Why Nations Fail but I found a book by Alvin Roth, the Nobel Prize economist who does mechanism design and stuff Who Gets What. And I picked it up. Imagine it's an airport and the book is about mechanism design. It’s a fun book I had like 8 hours of layover, so I read the book. But there were at least dozens of books written by contemporary economists. The incentives didn't change very much, and I was like what was going on. 

James Robinson: I don't think these incentives changed I think it's a healthy behavior. 

Behzod: Let's talk about Professor Robinson. One of the curios part of your biography to me was you did your undergraduate in Britain and you are British but you went to Yale for your PhD. Why did you choose USA for PhD? 

James Robinson: That's an interesting question. I went to London School of Economics to study political science. This was 1979. Mrs. Thatcher had just been elected, it was a very political moment but then every political meeting I went people just talked about economics all the time. Monetarism, Hayek and Milton Friedman and privatization and the market, so I thought I need to understand economics. Then I started taking this proper economics classes and I just found them so much more inspiring than the political science classes I was taking.  Political science was so descriptive and economics looked like mechanism for getting answers to questions. Economic class which was taught by Miki Maeshima, very distinguish Japanese mathematical economist, it was about everything it was about why central planning in the Soviet Union failed, what created capitalism and the role of Protestantism. In the spirit of capitalism we read Keynes, we read Walrus, we read Marx and Schumpeter. They were just big inspiring questions about the world and I thought I should quit political science and going to  switch to economics. Then I got fascinated trying to understand how does economics work. I was very confused when I was an undergraduate but I just knew I loved it and I wanted to understand. Then I did Masters degree and planned to make PhD in England in LSE. But I got scholarship, the government paid. I went to Warwick. I remember I went to professor Kenneth Wallis econometrician who had his PhD in Stanford, and I asked him I wanted to do a PhD in economics. I really like this, I don't think whether I'm good at it. He said ‘’where you going to apply?’’. I said London School of Economics, Oxford, Cambridge. He said ‘’why don’t you go in the United States’’. I said ‘’What?’’ ‘’Yeah,  your PhD in the United States’’. ‘’How would I pay for that’’. And he said, ‘’they pay’’. It never occurred to me. Then I went to Marcus Miller, another professor of mine, who did his PhD in Yale. I said ‘’Professor Wallis says I should do PhD in the United States. What do you think?’’ and he said, ‘’Fantastic idea’’. So I had massive support from people, a lot of people with US PhDs there. I thought, gosh, why not. This is the preinternet days. This was 85, so everything was on the mail. You are a young guy you couldn't imagine that world where you do things with letters and stuff. I didn't know where to apply but Wallace did his PhD in Stanford in California that was like Uzbekistan. Marcus Miller did his PhD in Yale, and he said I'll write you a letter for Yale, you should go to Yale. So I applied to Yale and I got into Yale and it  got me a scholarship. I was very badly informed but I loved it. When you come to the United States suddenly your worldview changes and your professional goals become succeeding and navigating in American Academia. That's here I am all those years later. 

Behzod: What do you think of current state of British higher education. In my opinion British higher education institutions are lacking behind the American ones. Do you agree with this statement and if yes then why?

James Robinson: I think so, but I think there has been a lot of change.

Behzod: But they still lag, you think?

James Robinson: Maybe yes they do but there is a lot of change in Britain. There is a lot of openness and social mobility. I don't know so much other academics but if you look at economics or political science. Political science is kind of moving even slower than economics. You go to the university of Bath or the University of Bristol, they are full of foreigners from all over the world, can come and they hire...

Behzod: I have a friend in Warwick from Uzbekistan.

James Robinson: Here you go. I think there used to be a lot of these places, very incestuous they just hire their own students. But I think it is crumbling. The kind of resources you have in the US, in the US private universities like Chicago or whatever they're really good at raising money. There is a lot more resources here. The British universities with a few exceptions, London School of Economics is very good at doing that...

Behzod: Even Oxford and Cambridge are not as big names as they used to be, even in economics. For example Alfred Marshall was in Cambridge. Even in other departments you think that British schools are in top 10. What do you think?

James Robinson: I think there is a lot of good scholars in those places. I think there are constraints modernizing. In the place like Oxford undergraduate education is incredibly committed to this very intensive seminar culture. If you go to Oxford as an undergraduate, you meet for hour after hour...

Behzod: With your professors. 

James Robinson: Yeah. Most people would never willing to do that. Most academics in  the United States, if they offered me a job in Oxford and expect me to spend hour after hour after hour I never do it. They want to maintain that culture and it's a fantastic education. You get a fantastic education but making it compatible with kind of US style, carrier, incentives and opportunities is actually a challenge. 

Behzod: Is growing up in Britain give you a certain edge in a way you I think about the world? Moving to the country with  the same kind of language changes the way you think or not?

James Robinson: My father, he was an engineer, and he started working in the Colonial service.

Behzod: I don’t know what's Colonial service. 

James Robinson: Like the British colonial government. He worked in West Africa, in Nigeria. When I was a kid he lived in West Indies, in Trinidad. I grew up in the house full of African art and books about the world. My father, he hated England. When he moved back overseas he ended up working in South Arabia. I had a very globalized upbringing. I find it so exciting traveling and understanding. When I take these classes on economic development, I guess what I knew about poor countries what I learned never resonated with anything that I thought I knew about developing countries. What I learned in economic development class never resonated with my incoherent notion of life. What are the problems in Africa. One of the greatest things for me personally, intellectually, and professionally. I started working in Columbia, in South America, I teach every year for 25 years in Bogotá in University of the Andes, I have all of these Columbian students. 

Behzod: Did you teach English?

James Robinson: I teach English. I do a lot of research. In Columbia Economic Department was 6 of my PhD students and that's just being great for me because I learned a lot about culture and society which is very different from England or the US or where I grew up. That has been fantastic, a sort of transformative experience for me, helping me think about social science. My wife is Columbian, so I'm very involved in that being able to experience different cultures. That's a real privilege and that's one of the great things about Academia. It helps you reflect on why the United States is so successful, why is Britain like it is, why is Columbia so different. 

Behzod: Your co-author Daron Acemoglu. He was growth macro economist before you met. 

James Robinson: Kind of, he does lots of things. 

Bekhzod: But you were doing economic and political development. How did you guys meet? Why did you meet and how this co-authorship thing happened?

James Robinson: We met in March 1992 when I gave a job talk at the London School of Economics. He was a PhD student. Him and Thomas Piketty, and Fabrizio Zilibotti all three of them were PhD students sitting at the front row together at the LSE. So I gave a job talk about my dissertation work which is on a repeated Game Theory and then we went out for dinner. He and Piketty were the star students. We went out for dinner he, me, Kevin Roberts and Ken Binmore who were two economic theorists at the LSE. During the seminar Acemoglu kept interrupting me all the time. ‘’No, no, no. If you change that assumption that result would not go through.’’ And I was thinking, who is this irritating guy. People interrupt each other, that's the culture of economics. We went out for dinner, we went to this Indian restaurant at Covent Garden, and we sat next to each other, and we really got on at the personal level. We realized we had all sorts of things in common, interests in common.  Then I took a job in Australia, University of Melbourne, my first job. I went to Australia, I was on the faculty for 3 years and I taught for two years. The first year I was there I came to the conference at the University of York in England. Acemoglu was there too, and we kind of connected, and we started talking on e-mail. E-mail just got invented at that time. I went to Australia I  remember this guy explaining to me (it was September 1992) explaining to me what e-mail was. I had no idea what e-mail was. We started connecting, talking about ideas. I taught in Australia for two years and I visited the University of Pennsylvania. Then we got together at this conference at Yale and started talking about ideas. At that time he was hired by MIT. We were talking about all sorts of different stuff like macroeconomics and labour. At the end of the year (was like spring 1995) we were in his office at MIT. We wrote our ideas like 1, 2, 3, 4, 5. We had like five-page note on this and five-page note on that, what was the most interesting idea we had. We should commit to one project what was the most interesting idea we had.  And we decided the most interesting idea we had what turned into this paper Why Did the West Extend the Franchise. It took time to get the model right. 

Behzod: It took 5 years. 

James Robinson: We probably submitted it in 1998. It takes time after you submit, it took about three years to get the model right, to get the motivation right. We had to read a lot of history books, and so we realized we stumbled on to a fantastic topic because the reason we did that I was trying to teach myself a political science literature. I was doing it at the University of Pennsylvania, I went to Stephen Coate who is a very distinctive political Economist. I asked him what should I read. I go into the library and I take American Political Science review. I go back issue after issue after issue to see what kind of literature was. Now you have Google but in those days that's what I did. Then at some point I realized. I remember calling Acemoglu and say ‘’this topic is so much better than we thought’’, there is no mathematical model or political science at this topic. This topic is totally unresearched, this topic is so important and no one's done anything on that. This is fantastic. That is why we picked this topic. 

Behzod: When you write books together how do you divide the work? Like somebody does history, somebody does writing?

James Robinson: I think we’ve been working together for so long now, we are really good at dividing tasks. You read this and you read this and you do the first draft of this and I do the first draft of this. We get on together so well, we are such a good friends, we are so used to each other's way of working, it's very easy to do that. Sometimes he gets initiative and does something. Like at the moment he's telling me I need to read the book by Richard Wrangham who is primatologist at Harvard. He studies chimpanzees, he writes about evolution and human behavior. He has a very famous book about cooking, the invention of cooking. His claim is that if you look archeologically the invention of cooking in human, human invented cooking, cooking meat, it makes much more efficient processing nutrients and proteins. The human brain gets much bigger at the time when cooking. The claim is the invention of cooking food allowed humans to process nutrients much more efficiently, led to massive increase in the size of human brains, so he has a book about that, but he has a new book about social norms and what distinct about humans other primates societies. It's hard for me to describe.

Behzod: What is your opinion on current state of economics PhD education? They don't teach history of economic thought, they don't teach philosophy. Do you think those subjects are worthy of a trade of micro, macro, matrix. How would you think about PhD education? Asking for a friend.

James Robinson: I've done lots of different things but I didn't do it at the same time when I was a student I was just trying to learn this game theory and all these technical things and I was super interested in political economy but it didn't exist and I didn't really understand how to study that. There was always sort of social choice theory but I couldn't understand how that related to politics. The answer is that it doesn't really it sort of seemed like it might do. It is very technical and complicated. I was very interested in history and development, I've always been super fascinated by history, reading history books, but I couldn't figure out how to study that. It's so complicated, development it was just too complicated to handle. I've done a lot of different things and then the last 10 years of my life 15 years of my life I've spent a lot of time in developing countries doing fieldwork, talking to people, interviewing people. I’m going to Bolivia next week for ten days with my Bolivian friend. We are going to do fieldwork in rural areas and talk to people trying to understand how these institution works. Traditional way the Bolivian society organizes and functions politically and economically. I’ve done a lot of these in the last 15 years but I never did that until the age of 45. When you are a PhD student you can’t do fieldwork and learn how to do empirical stuff. You can’t do all of that, you can’t do philosophy. There’s too many things to know. So I always say you have to space it out. You can’t expect students to do things that you were not able to do yourself. You have to specialize. I think the economist toolkit is very powerful and it takes a lot of work to master it. It takes a lot of work, concentration, seriousness. You should focus on mastering that. You have to learn how to ask interesting questions. At the end of the day it is the questions that matter. You are interested in the world, why the world works away. That is why we become social scientists. Not because we are interested in whether the value functions. When you release technical things we have to worry about, keep your eye on important questions and just start finding the way of addressing them and tackling them. I think you can combine that.

Behzod: Interesting. In one of your previous interviews you have mentioned that you don’t really like consulting foreign governments in their economic strategy development or economic growth consulting and so on. Why is that?

James Robinson: I had one experience of that in South Africa and it was awful. It was absolutely awful. It was a team of all these people at Harvard who went mostly from the Kennedy School but there were all sorts of people like Abhijit Banerjee, Philip Aghion involved in advising, the government in South Africa and I just felt like first these people don’t know anything about South Africa.  But they promise the moon, they promise they're going to increase the growth rate by 5%. I felt like it was just dishonest. We don’t understand enough about their problems to be able to promise. I thought it was a lot of bullshit basically. I thought it was dishonest intellectually. I'm very happy to talk to anybody who is interested, I am happy to think about any problem or I like my friend Timofey Mylovanov from Ukraine. If he wants me to think about something in the Ukraine or whatever I am happy to talk to him. I know politicians in Columbia for example or in Africa that I believe in, I believe in their sincerity and honesty. One thing has always struck me. Any country you go in the world no matter how poor or dysfunctional many aspects of the society may be there is always serious people who want to change things. I worked a lot the last 10 years in Democratic Republic of Congo in Central Africa. In Congo there are no roads, it is really poor, unstable, the government does not control half of the country. There is lots of corruption sure. But there are also people who want to change things and I think that’s true everywhere in the world.  So, I just tend to… Somebody wants my help and I feel it’s sincere I'm happy to help them think about something or do something I am capable of doing. But to me that business of economic advising it's just you know it's not...

Behzod: To be fair. Take a country that is underdeveloped, poor institutions and so on. Let’s say the political will exists, and they want to improve. Who should they ask if you think it is dishonest to ask a whole bunch of Harvard professors?

James Robinson: It is dishonest to show up in Uzbekistan and say “I'll be here for a week and I'm going to tell you what you need to do, to increase growth by 5%”. 

Behzod: Somebody has to do it though. 

James Robinson: You need much more sustained relationship and commitment. If you are a country who wants to do that then I think they're people, there’s lots of people at the World Bank or the International Monetary Fund very clever, well-prepared people. But you have to engage in a kind of real relationship. The problem is they come, and they don’t tell counties what to do. 

Behzod: Exactly. And sometimes they don’t know a lot of context too. 

James Robinson: They don’t know the context. So I think that's a matter of developing kind of intellectual capacity within the country. There are many interesting examples of that in Indonesia.

Behzod: Like the Berkley Mafia?

James Robinson: They develop their own autonomous capacity to evaluate ideas. And say, ‘’is that a good idea for us, do we're really going to do that?’’ and they could criticize it. I think it’s about investing in education, developing your own talent, your own people. Think about the Chinese. Chinese are very good at that also. 20 years ago I went to give lectures at Chinese Academy of Social Sciences and one thing that really impressed me was just the self-confidence of these Chinese people, academics. None of them studied overseas. They were like - yeah, that’s interesting, we could think about it. It’s a Peking University. I find China absolutely fascinating. They pick and choose ideas like Japan. I think you have to engage. Of course, academics in the United States know lots of things that are useful for developing countries, but they also know things that are not useful. I think you have to have the capacity to pick and choose and decide what's right for your society and your country and what will work in your country.

Behzod: Basically you are saying local economists are better equipped in thinking about development than somebody from the United States who comes in for 10 days then tells them how to reform.

James Robinson: I think so. It is very important to develop autonomous capacity.  

Behzod: What do you think about textbook view of economic development? A lot of people criticize economic textbooks being unrealistic and so on. But for me if you live in poor country textbook service is pretty good for approximation what has to be done. Like free trade is not trivial idea in Uzbekistan. 

James Robinson: You need to invest in education, you need to have entrepreneurship, trade but you also need to manage trade, think about comparative advantage. If you look at countries that have been very successful in the last 50-60 years in terms of industrializing and exporting. Trade is very important but managing trade if you look at South Korea or anywhere. They manage that in the best interest of the country. So I agree with you that what’s in textbooks is important for poor country to do but it's often not really explained how you do that. What are the barriers to that. If it is obvious what you need to do to become developed why doesn’t everyone do it. 

Behzod: And there are political constraints. Social incentives versus private incentives are different. If you are an autocratic leader somewhere you don’t necessarily want to free up trade because some people are benefitting from restrictive trade. 

James Robinson: Sure. That’s not a problem you learn how to solve in economic textbooks.

Behzod: What I’m saying is a goal is an aspiration like saying. Economic textbook argues free trade is good for everyone. Do you ever think in this way? Is there value in economic textbooks? 

James Robinson: I think there’s value to ideas. Think about the debates in the United States about China or trade or the wall or Mexico. I think you could say a lot of people don’t understand in the way economists understand the benefits of trade. There is an important role for just clarifying these ideas and try to explain them to people and illustrating what are the costs for not having free trade. But at the same time economists massively underestimate how much dislocation trade causes. Think about Britain. British politicians massively underestimated the dislocation that was going to be caused by free labor mobility within the European Union are they just signed up for this free labor mobility and some economists probably told them that’s fantastic.

Behzod: It increased the whole pie but the problem was with distribution. 

James Robinson: Well the politicians didn’t think about that. The economists tend to focus too much on that and don’t think enough about consequences. 

Behzod: Like political consequences, like Brexit.

James Robinson: Yeah.

Behzod: By many counts we are living in the most peaceful time in history of humanity and you are professor of conflict studies as well. What is your theory why the violence has declined? Do you agree with this statement by the way?

James Robinson: It depends on how you normalize things. It is true if you normalize fatalities by population. If you want to normalize by population then violence has gone down. 

Behzod: Crime in the US. Southside of Chicago was pretty notorious twenty years ago. It’s not better now. Much better. But still better. Crime is lower in the US and in the most of the developing world.  What’s going on, why there’s so little conflict? 

James Robinson: I’m not sure I have research on that. If you wanted to push me, I'd say there is change in the world. We talked about this a little bit in the new book. We talked about the corridor, the size of the corridor, and we point out that there're many things about the modern world that have changed that make this corridor different. It may be much broader than it was a hundred years ago or two hundred years ago. Structural factors to do with, there’s much more democracy in the world now than there used to be so people participate much more in politics as more accountability. We have other research showing that tends to promote public good provision. Perhaps there’s sort of political development in some senses has been moving societies towards greater participation, greater inclusion. That spills over into less conflict in international relations. Democracy is much less likely to fight each than other types of political regimes. Political development spills over into lower levels of international or interstate conflicts. I am not sure I have a great answer to your question, that’s kind of where I go. 

Behzod: In your new book The Narrow Corridor you argue that there are basically two steady states. One is very strong Leviathan and the second one is...

James Robinson: Three states. 

Behzod: Two steady states though. You talk about corridor being not very sustainable and not very steady. 

James Robinson: That’s inclusive steady state.

Behzod: There are two bad steady states, one very strong Leviathan like China. Strong societies like Yemen in a thousand years or something. really terrible states to be in. When the state is weak there's a lot of bad ones. When the state is strong the levels are lower but still very bad. A lot of repression. Only hope that humanities hope for is that narrow corridor between the state and society. 

James Robinson: You can see if you read Why Nations Fail how we came to think like that because in some sense China and Yemen are both extractive. But they are radically different. That societies are extractive for radically different reasons. Those differences are extremely important if you want to think about political development or how Yemen change or what would you have to do in Yemen to make it more inclusive. What would you have to do in China. We just decided we could develop a simple framework which would allow us to speak at a much richer and more interesting way about these differences and between this balance between the state and society and what was it. What circumstances allowed to this kind of much more inclusive societies to emerge. I think it ends up being much more complicated than Why Nations Fail.

Behzod: I have one question that lingered in my mind. You're saying there are two types of states and it’s really persistent. One of the arguments of the book was that Yemen was pretty bad for like entire of its history. Society was much stronger than the state. And China too. From the empires, all the dynasties were pretty bad.  Russia after the collapse of the Soviet Union. Society became strong. Democratized.

James Robinson: Did it?

Behzod: The free press was there; the elections were there and so on. Oil prices went up. Leviathan came back. 

James Robinson: If you look at the collapse of the Soviet Union that was not a result of popular mobilization or society getting organized. It was the elites falling out. It was Gorbachev trying to deregulate the system, it was Communist Elites, it was Yeltsin. There’s much more the level of elite, politics. I don't think that ever got into civil society.

Behzod: Actually I think it was. I think Yeltsin wouldn't have that much of support because there was like at least two coup attempts against the land and basically the people of Russia defending democracy if you will. Remember GKChP, Gorbachev was in his resort, generals took over the power.

James Robinson: Yeltsin on a tank. 

Behzod: Correct, but the point was they listen to him precisely because there were so many people behind him. Not because the tank. 

James Robinson: I think if you look at that period you see these loans for shares, privatization. Things went on without any kind of accountability or constraints. They wrote this constitution with very strong presidential powers. I would say this is a failed attempt at... And you have this whole security state that kind of assisted, which Putin was kind of ingrained in. There was a sort of deep States that's the terminology of President Trump. If you look at the Czech Republic that adopted much more parliamentary institutions. Poland that was solidarity, there was a real upsearch in civil society. A popular reaction in a way that you never had in Russia it seems to me.  I would just say that Russia never got into corridor. One chapter in the book we discuss this example of the collapse of Eastern Europe and these very different trajectories. Why do we use the content of theory to describe these post communist dynamics in Eastern Europe. That’s kind of application to try to show model which helps you to try to think about this variation in the world.  

Behzod: You have a recent paper, Does Democracy Cause Growth? You use instrumental variable technique to basically look at democratization of the neighboring countries to see whether democracy effects go through.

James Robinson: I’m not sure that’s the most convincing part of the paper. What I find personally interesting about the paper is the work with modernization theory 15 years ago. Take the data. You do the simplest thing that an economist would think of. You do a very standard panel data analysis.  And we find no evidence of this modernization mechanism. What we find straight away is very robust posted correlation between democracy and public good provision and economic growth.

Behzod: So more papers are coming?

James Robinson: No, I think what is more interesting in that is just the simplest thing you do is very robust. Then you have to do more complicated things. You always worry about causality. It’s obviously not exogenous. Democratization may occur for lots of different reasons. It could be any other factors which influence whether you democratized but also economic growth. What you're describing is some of the more sophisticated ways we try to control for these problems of correlation is being a causal relationship. The simplest thing is very surprising because people always say so complicated we don't really know that whether democracy is… The simplest thing you do works. So that was surprising actually. Why didn’t other people find that? People try to do two things and they are complicated. Sometimes the simplest things are better. Like with this modernization stuff we just plotted the data. You just look at the changes and you plot the changes. Like a huge clout there is no relationship whatsoever.  The changes in income per capita and the change in democracy, education. Modernization is a statement about the changes. As you develop you should become more democratized. Let’s look at the changes. You look at the changes and see there’s nothing there without doing anything, just looking at the raw data.  I always tell students a good picture is worth a million regressions. If you look at colonial origins paper which is our most successful paper that we ever wrote, you just see the pictures, like the whole story is there in the pictures. There you have to show that these correlations are robust they have causal interpretation. A good picture is worth lots of analysis. You don’t believe me.

Behzod: I don’t know. Because some things you can’t actually plot. 

James Robinson: You could say Jeffrey Sachs has good picture but it turned out to be spurious.  

Behzod: At the end of the program I usually ask short answer questions like yes/no, you choose one of the two. Jared Diamond or Yuval Noah Harari?

James Robinson: I think they are both very interesting.

Behzod: You have to choose one.

James Robinson: Jared Diamond.   

Behzod: City of Boston or Chicago? 

James Robinson: Chicago.

Bekhzod: Is Milton Friedman overrated?

James Robinson: Yes. I think that essay in methodology is very confused and did a lot of damage in economics. You don’t need to care about the reality of assumptions.  

Behzod: The pool guy…

James Robinson: Yeah.

Behzod: Douglass North or Mancur Olson?

James Robinson: Douglass North.

Behzod: Tea or coffee?

James Robinson: Depends which time of day it is.

Behzod: Cambridge Massachusetts or Cambridge United Kingdom?

James Robinson: Cambridge Massachusetts.

Behzod: Who's your favorite British economist? 

James Robinson: Ever or now?

Behzod: Ever.

James Robinson: Adam Smith. 

Behzod: Karl Marx or Thomas Piketty?

James Robinson: Karl Marx. 

Behzod: I have my favorite quote of Tolstoy. He says, ‘’All happy families look alike and all unhappy families are unhappy in their own way. Do you think that relates to country's development too? All developed countries are alike and all developing countries are undeveloped in their own way. 

James Robinson: No. Because there are so many differences between Sweden, or the United States, or Canada, or Britain, or Japan. Rich countries are very dissimilar also. 

Behzod: James Robinson. Thank you. Thanks a lot.