EC 482: INSTITUTIONS, DEVELOPMENT & HISTORY

Term: Spring 2011 Instructor: K. Kivanc Karaman e-mail: kivanc.karaman@boun.edu.tr

Time: Location:

TThTh 934 IB312 NH 103 NH 103

I. INTRODUCTION The course reviews the literature on institutional analysis, and how it contributes to our understanding of economic, political and social outcomes. In the first few lectures, preliminaries of economic and institutional analysis will be discussed. In the second part, we will discuss articles on particular historical and contemporary episodes. In the third part, we will focus on evidence from Ottoman and Republican political economy. In discussing each article, we will follow certain steps. 1. The conceptual issue under investigation will be highlighted 2. Relying on game theory, econometrics, or previous theoretical work on the issue, an argument will be developed and verified 3. The implications of the argument will be discussed The emphasis will be on identifying the underlying mechanisms, rather than details of the historical case investigated and the technical tools employed. II. BACKGROUND AND PREREQUISITES The course is designed as an advanced undergraduate/introductory graduate course, and requires: Literacy in Game Theory: While the details of game theoretic analysis will not be the focus of the course, the student is expected to be able to reproduce key arguments in words in an accurate and consistent manner. Literacy in Econometrics; i.e. familiarity with regression analysis. Literacy in Economic and Political History: The game theoretic models are derived and presented in the context of evidence from various historical periods and places, ranging from premodern Europe and Middle East to contemporary developing world. The students are responsible for the historical evidence presented, and as such, basic knowledge of world history and interest in the subject will significantly improve the performance in the course. III. CLASS ORGANIZATION, REQUIREMENTS The students will be assigned readings for each week. The reading will be available online, and I will send an email listing the pages you are responsible for and the points you should pay attention to. I will occasionally ask for a response paper. In particular, in the email I send you, I will ask you to answer certain questions. Commonly, I will ask you to identify The conceptual/historical question that the assigned reading tries to answer The key argument of the paper Alternative theories The evidence that the reading advances to support its argument (empirical or historical) Criticisms over assumptions/ argument/ evidence 1

You are expected to provide evidence that you have worked on the material, and not that you have mastered it. Questions that you might have should be sent to me through email. For questions with merit, I will make announcements to the whole class, and, if necessary, update the existing handouts. Exams will contain essay questions and basic game theoretic analysis. Students are responsible for assigned readings, presentation/discussion in class and any other written material that I provide. Students are also responsible for questions that require extending the presented framework to environments not covered in class. I might possibly give pop quizzes, if I feel the class is not up to date on readings. I do take attendance, and it matters for your grade. There will be one midterm and a final. To qualify for a make-up exam it is necessary that the student contacts me before the exam. IV. COURSE MATERIALS: Institutional Economics is at the frontier of economic research, and few textbooks have been written. Thus, the selected readings consist of journal articles and book chapters. Below is a tentative list of papers to be covered. 1. Background on Institutional Analysis i. ii. North. 1991. "Institutions," Journal of Economic Perspectives. http://pfchristensen.googlepages.com/North_Instituions.pdf Acemoglu and Robinson. 2006. Institutions as a Fundamental Cause of Long-Run Growth. http://econ-www.mit.edu/files/4469 Rodrik, Subramanian and Trebbi, 2004. Institutions Rule: The Primacy of Institutions over Geography and Integration in Economic Development. Journal of Economic Growth. http://www.springerlink.com/content/j3l71744234772tx/fulltext.pdf Easterly. 2003. Tropics, germs, and crops: how endowments influence economic development. Journal of Monetary Economics. http://goo.gl/uLuix Easterly. 2001. The elusive quest for growth: economists' adventures and misadventures in the tropics North. 1990. Institutions, Institutional Change and Economic Performance. Greif. 2005. Institutions and the Path to the Modern Economy. Aoki. 2001. Toward a Comparative Institutional Analysis. David. 1994. "Why Are Institutions the 'Carriers of History'?: Path-Dependence and the Evolution of Conventions, Organizations and Institutions". Structural Change and Economic Dynamics

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2. Formal and Informal Institutions i. Greif. 1994. Cultural Beliefs and the Organization of Society: A Historical and Theoretical Reflection on Collectivist and Individualist Societies Journal of Political Economy. http://www.jstor.org/stable/2138652 2

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Collins. 2004. The Logic of Clan Politics: Evidence from the Central Asian Trajectories. World Politics. http://muse.jhu.edu/journals/world_politics/v056/56.2collins.pdf

3. Politics, State, Conflict i. Fearon and Laitin. 2003. Ethnicity, Insurgency, and Civil War.APSR. http://goo.gl/d8ymh ii. Kuran. 1991. "Now Out of Never: The Element of Surprise in the East European Revolution of 1989." World Politics. http://www.jstor.org/stable/2010422 iii. Karaman and Pamuk. 2010.Different Paths to the Modern State in Europe: How Political Regime Interacted Economic Structure and Interstate Competition iv. Greif, Milgrom and Weingast. 1994 Coordination, Commitment and Enforcement: The Case of the Merchant Gild." The Journal of Political Economy. http://www.jstor.org/sici?sici=0022-3808(199408)102:4%3C745:CCAETC%3E2.0.CO;2L&origin=repec Acemoglu, D. and J. A. Robinson. 2006. Economic Backwardness in Political Perspective, American Political Science Review. http://goo.gl/ds6IH North and Weingast. 1989. Constitutions and Commitment: Evolution of Institutions Governing Public Choice. Journal of Economic History. http://ideas.repec.org/a/cup/jechis/v49y1989i04p803-832_00.html Olson. 1993. Dictatorship, democracy, and development American Political Science Review http://www.svt.ntnu.no/iss/Indra.de.Soysa/POL3503H05/olson.pdf Bates. 2001. Prosperity and violence: the political economy of development. DeLong and Shleifer. 1992."Princes and Merchants: City Growth Before the Industrial Revolution." http://econ161.berkeley.edu/pdf_files/Princes.pdf Kuran. 2001. Explaining the Economic Trajectories of Civilizations: The Systemic Approach. http://www.usc.edu/schools/college/crcc/private/ierc/conference_registration/papers/ Kuran_final.pdf Easterly and Levine. 1997. Africa's Growth Tragedy: Policies and Ethnic Divisions, The Quarterly Journal of Economics. http://www.mitpressjournals.org/doi/abs/10.1162/003355300555466

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4. Religion, Culture i. Kuran. 2004. Why the Middle East Is Economically Underdeveloped: Historical Mechanisms of Institutional Stagnation. Journal of Economic Perspectives. http://www.jstor.org/stable/3216807 Also see http://www.nytimes.com/2010/10/16/world/middleeast/16iran.html?_r=1 Clark. 2010. Towards a political economy of religion? The Political Economist. http://goo.gl/rSU7v Berman and Iannaccone. 2006. Religious extremism: the good, the bad, and the deadly. Public Choice. econ.ucsd.edu/~elib/rex.pdf Michalopoulos, Naghavi and Prarolo. 2010. Trade and Geography in the Economic Origins of Islam: Theory and Evidence http://ideas.repec.org/p/fem/femwpa/2010.75.html 3

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5. Turkey i. Mardin. 1969. Power, Civil Society and Culture in the Ottoman Empire. Comparative Studies in Society and History. http://goo.gl/3SuqT Mardin. 1973. Center-Periphery Relations: A Key to Turkish Politics?. Daedalus. http://goo.gl/IEi9a ni and enses. 2007. Global dynamics, domestic coalitions and a reactive state: Major policy shifts in post-war Turkish economic development METU Studies in Development. http://goo.gl/T7ONQ Takn. 2008. AKPs Move to Conquer the Center- Right: Its Prospects and Possible Impacts on the Democratization Process. Turkish Studies. http://goo.gl/p7UsC Karadag. 2010. Neoliberal Restructuring in Turkey: From State to Oligarchic Capitalism. http://www.mpifg.de/pu/mpifg_dp/dp10-7.pdf Pamuk. 2004. Institutional Change and the Longevity of the Ottoman Empire, 15001800. The Journal of Interdisciplinary History. http://goo.gl/xd2BU Demiralp. 2009. The Rise of Islamic Capital and the Decline of Islamic Radicalism in Turkey. Comparative Politics. Heper and Keyman. 1998. Double-faced state: political patronage and the consolidation of democracy in Turkey. Middle Eastern Studies. http://goo.gl/vY6HJ arkolu. 2008. Ideology or economic pragmatism: determinants of party choice in Turkey for the July 2007 elections. Turkish Studies. http://goo.gl/hAk4w Karaman and Pamuk. 2010. "Ottoman State Finances in European Perspective, 15001914," The Journal of Economic History. http://goo.gl/03AyH Karaman. 2009. "Decentralized coercion and self-restraint in provincial taxation: The Ottoman Empire, 15th-16th centuries," Journal of Economic Behavior & Organization. http://goo.gl/HPjl8

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