Peter Henry on Growth, Development, and Policy

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4.7 • 4.3K Ratings

🗓️ 27 July 2009

⏱️ 65 minutes

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Summary

Peter Blair Henry of Stanford University talks with EconTalk host Russ Roberts about economic development. Henry compares and contrasts the policy and growth experience of Barbados and Jamaica. Both became independent of England in the 1960s, so both inherited similar institutions. But each pursued different policies with very different results. Henry discusses the implications of this near-natural experiment for growth generally and the importance of macroeconomic policy for achieving prosperity. The conversation closes with a discussion of Henry's research on stock market reactions as a measure of policy's effectiveness.

Transcript

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0:00.0	Welcome to Econ Talk, part of the Library of Economics and Liberty.
0:12.5	I'm your host Russ Roberts of George Mason University and Stanford University's Hoover
0:17.3	Institution.
0:18.7	Our website is econtalk.org, where you can subscribe, find other episodes, comment on this podcast,
0:25.8	and find links to other information related to today's conversation.
0:29.9	Our email address is mailadicontalk.org, we'd love to hear from you.
0:39.3	Today is July 15th, and my guest is Peter Blair Henry, the kind of Suk-E, Matsushita Professor
0:44.9	of International Economics at Stanford University's Graduate School of Business.
0:48.5	Peter, welcome to Econ Talk.
0:50.1	Thank you Russ, it's a pleasure to be talking with you.
0:53.2	And recent years there's been very influential work trying to show the importance of institutions
0:57.5	for a country's growth and its ability to escape from poverty.
1:02.4	What is the claim of that literature?
1:03.4	What do people mean by institutions and why are they important?
1:06.4	So let me talk broadly about what people mean by institutions, and when people talk
1:11.7	about institutions, they really have, in mind, sort of two classes in the literature.
1:17.7	One is sort of the legal institutions, which is, namely, when you think of a country's
1:23.0	legal system, is it closer to what we call an English common law system or French civil
1:30.5	law?
1:31.5	What's the difference between those two?
1:33.5	Well, without going too much into the details, English common law gives very strong
1:39.7	protection to things like private property, creditors, and so on.
	...

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