education and economic growth: a mokyrian perspective

In the spring, I wrote a series of posts about Joel Mokyr’s The Enlightened Economy, which argues that industrialization was precipitated by cultural change in the UK. This final (?) post on Mokyr’s book extracts some of Mokyr’s observations about education and contrasts them with a popular theory of the education/growth link.

First, what are some standard stories of the education/growth correlation?

  • By-product: The by-product thesis says that you first get growth, due to technical or institutional change, then people are wealthy enough to invest in education.
  • Average worker productivity: The standard story in the media (and among social scientists) is that education increases the average productivity of workers, which lead to growth. Education is an across the board “upgrade” in the economy.

What is the alternative? Well, Mokyr’s history suggests an alternative:

  • Elite reformation: Education mainly changes elites in two important ways that lead to economic growth. First, education shows innovators (the technical elite) the idea of translating abstract knowledge into concrete application. It also provides a common stock of knowledge (e.g., we all know chemistry or law). Second, education of political elites might make them more tolerant of wealth accumulation by innovators. Science and engineering are no longer threats to be punished through force or tax.

This Mokyrian theory is motivated by the observation that the UK saw massive economic growth with an almost illiterate population. Mokyr’s (implicit) elite reformation theory has a number of attractive features. It doesn’t require a massive re-education of the population before growth in the historical record. Second, it provides a concrete mechanism linking cultural change to institutional change (ie., the ideas get broadcast in educational institutions that elites tend to hang out at, like Oxbridge in the UK). Third, it explains why having an educated technical elite is not enough for growth, which explains why some nations with strong technical elites but misguided political elites remain mired in poverty (e.g., India). Finally, elite reformation theory doesn’t require you to explain why it is that sending the masses to trigonometry class – which they will promptly forget – makes them more productive.

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Written by fabiorojas

September 23, 2013 at 12:01 am

Posted in economics, education, fabio

One Response

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  1. The role of education for economic growth is an interesting question. In a recent paper (Applied Economics), Madsen and Yan have shown that contracting institutions (promotion of parliamentarianism, political reforms that strengthens the legal institutions, development of rule that vertically integrates an economy’s organizations, formation and improvements of legal institutions that reduce transaction costs, and capitalistic development such as financial development, territorial unification, promotion of international trade or other ways of overseas expansion), property right institutions (constraints on the executive) and culture (secularism) affect economic development and the Great Divergence through science and technology (the number of significant innovations over time) and human capital (the number of universities multiplied by the number of students enrolled in each university) according to a millennium of data (950-1850) for 12 countries in the East and in the West. It is also highly possible that elite reformation can improve both contracting institutions and property rights institutions.


    Umut Koc

    September 23, 2013 at 11:51 am

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