The Consequences Of Radical Reform

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The thread that runs from Edmund Burke to James Scott and Seeing Like A State goes: systems that evolve organically are well-adapted to their purpose. Cultures, ancient traditions, and long-lasting institutions contain irreplaceable wisdom. If some reformer or technocrat who thinks he's the smartest guy in the room sweeps them aside and replaces them with some clever theory he just came up with, he'll make everything much worse. That's why collective farming, Brasilia, and Robert Moses worked worse than ordinary people doing ordinary things.

An alternative thread runs through the French Revolution, social activism, and modern complaints about vetocracy. Its thesis: entrenched interests are constantly blocking necessary change. If only there were some centralized authority powerful enough to sweep them away and do all the changes we know we need, everything would be great. This was the vibe I got from Gabriel Over The White House (sorry, subscriber-only post), the movie exhorting FDR to become a fascist dictator. So many obviously good policies had built up behind the veto point that we needed a Great Man to come in, sweep them away, and satisfy the people's cries for justice. Obviously at its worst this thread can lead to authoritarianism.

These threads don't cleanly map to the modern left-right political spectrum. The first contains Jane Jacobs and anti-colonialists coexisting uneasily alongside religious fundamentalism and wisdom-of-repugnance-style arguments against homosexuality. The second contains Lenin, Mussolini, the Equal Rights Amendment, and neoliberal reformers. They don't even map cleanly to libertarianism vs. authoritarianism; the first has a libertarian streak, but could presumably justify various monarchies and theocracies; the second has clear authoritarian elements, but would also include extreme libertarians who want to abolish the state and run everything on market principles.

Into this eternal battle comes The Consequences Of Radical Reform: The French Revolution, by Daron Acemoglu, Davide Cantoni, Simon Johnson, and James Robinson (from 2009; h/t Rob B). Under Napoleon, the revolutionary French took over large swathes of Europe. They abolished their client states' traditional systems, replacing them with the Napoleonic Code and other "modern" legal systems. Europe at the time had so many tiny duchies and principalities and so on that you can actually do a decent experiment on it - for every principality Napoleon conquered and reformed, there was another one just down the river which was basically identical but managed to escape conquest. So the authors ask: did the radically-reformed polities do better or worse than the left-to-their-traditions polities?

(admittedly, this is measured in GDP, urbanization, and other “legible” statistics - but pretty broad ones, measured over decades from a distance of centuries, in a way that seems to track very-long-term development and is hard to fake)

Take a second to make a prediction here - a real prediction, with a probability attached.

If you're really feeling bold, post a comment with your prediction before reading further.

Are you sure you want to keep reading now? You’ll never get another chance to predict this from a position of ignorance!

...okay, fine. The study concludes:

The evidence suggests that areas that were occupied by the French and that underwent radical institutional reform experienced more rapid urbanization and economic growth, especially after 1850. There is no evidence of a negative effect of French invasion. Our interpretation is that the Revolution destroyed (the institutional underpinnings of) the power of oligarchies and elites opposed to economic change; combined with the arrival of new economic and industrial opportunities in the second half of the 19th century, this helped pave the way for future economic growth. The evidence does not provide any support for several other views, most notably, that evolved institutions are inherently superior to those 'designed'; that institutions must be 'appropriate' and cannot be 'transplanted'; and that the civil code and other French institutions have adverse economic effects.

Notice how merciless the authors are - not only rejecting the superiority of evolved over designed institutions, but equally skeptical of the superiority of local over foreign ones. "The evidence," they say, "does not support the thesis that institutions are efficiently adapted to the underlying characteristics of a society and that evolved institutions are superior to those that are designed or externally imposed."

In fact, they think that when designed imposed institutions fail, it's probably because they don't go far enough:

The success of the French reforms raises the question: why did they work when other externally-imposed reforms often fail? Most likely this is because the reforms were much more radical than is typically the case. The French reformed simultaneously in many dimensions and weakened the powers of local elites, making a return to the status quo ante largely impossible. Even when some pre-revolution elites returned to power after 1815, there was a permanent change in the political equilibrium. This scope and radicalism of the French reforms are common with the post-war reform experiences in Germany and Japan and stand in contrast with many other reform experiences.

What should our concerns be about this paper?

First, this is from 2009 (I’m only just hearing about it, sorry). Normally I'd be inclined to trust it; Daron Acemoglu is the most-cited economist of the past ten years, and I've never heard anyone say a bad word about him. But I feel like concerns about spatial autocorrelation in this kind of cross-country research have gotten much stronger over the past decade, and I'm not sure 2009 economists knew how to take this problem seriously. Are we sure it's not just something like "France invaded countries close to it, France is pretty close to the economic core of Europe, so countries in the economic core of Europe did better than countries elsewhere"? The authors note there was no tendency for French-invaded countries to outperform their neighbors before the French invasion, but that could just be because "economic core of Europe" only started being meaningful post-Industrial-Revolution. I don't know enough about what safeguards you're supposed to have against these kinds of things to know whether this paper had them.

Second, isn't it sort of weird that Britain, the country that got least invaded by Napoleon and had some of the deepest-rooted institutions of all, was the one that really kicked off the Industrial Revolution? I guess you would have to argue that one really exciting data point is less interesting than the overall trend you get by doing statistics to dozens of countries over decades.

Third, when you look at the actual French reforms involved, they're...kind of obviously good. Things like breaking up guilds and letting anybody who wanted enter the market. You could be forgiven for thinking that "free markets are better for economic growth than walled-off guilds" isn't exactly a dizzying insight, and doesn't generally prove the superiority of designed institutions to evolved ones. But then, isn't the whole point of Seeing Like A State that things which seem obviously true sometimes aren't? So isn't it fair to show an obviously true thing in fact being true as a rebuttal? Also, isn't it a good reminder that when people talk about scary things like "a technocrat replacing evolved institutions with a stroke of the pen", often this means common-sense good things like breaking up rent-seeking guilds? I think my real concern here is that someone might use this paper to support some sort of far-left reform, saying "come on, this shows that reforms work better than leaving institutions in place", when an alternate lesson is "capitalism works better than not-capitalism".

Scott primarily wrote about peasant communities, with some of his better-known critiques (eg Brasilia) being extensions of what he learned about peasants. He condemned extractive institutions that tried to change peasant communities. So you could argue that "actualy, ending feudalism is Good" is very Scott-compatible, maybe the most Scott-compatible thing. But then you would lose the right to apply Scott to most modern political debates, where there are no peasants to be found, and everything is the weird mix of extractive and altruistic typical of modern states.

I think these are some pretty powerful critiques, but for me a lot of the value of this paper was in asking the question. See eg Making Beliefs Pay Rent In Anticipated Experiences. It's easy to be intellectually dazzled by counterintuitive stories of modernizing reforms making things worse. But then you have a paper in front of you saying "Imposing modernizing reforms on countries either increased or decreased their GDP by a lot, you need to guess which!" and it's like, @#$%, now I have to stop being intellectually dazzled and actually make a prediction! And even before reading the results section, I realized that I had no confidence at all that imposed reforms always make things worse, outside some book of cherry-picked examples of imposed reforms making things worse.

Do I believe they have a tendency to generally make things better? I'm not sure. One thing I'm still chewing over was a throwaway line in the paper saying that of course getting conquered by a foreign enemy is good for economic growth, look at Japan and Germany after WWII. The idea was that the occupying American forces couldn't care less about the entrenched power structure and vetocracy in Germany and Japan, so they rammed through whatever reforms seemed like good ideas at the time, and they were in fact mostly good ideas. On the other hand, the Soviet Union tried the same thing in East Germany and that went less well.

So maybe the moral of the story is something like - replacing stagnation and entrenched interests with good reform is good, and with bad reform is bad. Which sounds obvious, but I do think that considerations of "is this potentially challenging a carefully evolved system of traditions?" is less important than I originally believed.