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Reinventing the Wheel

Reinventing the Wheel

When I worked at the World Bank, management was always checking up on us to make sure our research was relevant for real-world economic development. The standard test question was, "What would your research suggest the finance minister of country X should do?" This question reflected the standard view that has endured since the beginning of development economics six decades ago — that all countries begin with a blank slate and that development happens when today’s government leaders execute wise policies. My job was simply to tell the leaders what those wise policies were.

Imagine the dismay of my managers if my advice to the finance minister had been, "Make sure your country was well caught up on technology — 500 years ago." But seemingly irrelevant as that advice might be, it’s actually true. If a country had the printing press and the magnetic compass in 1500, it’s a pretty safe bet it has a strong national economy today. Ancient history still matters for today’s development, providing unique insight into why the lights are still off in the dark corners of the world and what we might do to change that.

Strangely, history has never figured into the equation when it comes to exploring why some countries prosper and others don’t. To understand how it might relate, Diego Comin at Harvard Business School, Erick Gong at the University of California, Berkeley, and I started by compiling a list of 11 ancient technologies that were around in 1000 B.C.: Was there written language? The wheel? Agriculture and iron tools? We drew today’s boundaries on the ancient world and assigned each separate technology history to the future country that would form within that territory. Then we expanded the survey to 1500 A.D., looking for the adoption of 24 technologies, including oceangoing ships, paper, printing, firearms, artillery, the magnetic compass, and steel.

We found that there was a remarkably strong association between countries with the most advanced technology in 1500 and countries with the highest per capita income today. Europe already had steel, printed books, and oceangoing ships then, while large parts of Africa did not yet have writing or the wheel. Britain had all 24 of our sample technologies in 1500. The Democratic Republic of the Congo, Papua New Guinea, and Tonga had none of them. But technology also travels. North America, Australia, and New Zealand had among the world’s most backward technology in 1500; today, they are among the wealthiest regions on Earth, reflecting the principle that it’s the people who matter, not the places. As migration has transformed parts of the world that were nearly empty in the Middle Ages, technology has migrated with them.

And these differences had already appeared in 1000 B.C.: Late Bronze Age culture in what is now Western Europe already had pack animals, ceramics, and metalwork, while the Central African Neolithic culture did not. In short, the winners keep winning. As Billie Holiday sang, "Them that’s got shall get/Them that’s not shall lose."

Why is technology so decisive? It’s the building block, as our study confirmed, of future innovation — and that in turn, of course, is the engine of national economic growth. The Romans could not have built aqueducts without prior knowledge of cement masonry. James Watt drew on advances in metallurgy, chemistry, mechanics, and civil engineering — all of which he had learned in the mining industry — to make the steam engine. Put the steam engine on rails, and you’ve got trains. And so on.

OF COURSE, IN SOCIAL SCIENCE, no generalization is universal. The most important counterexample is China, which in 1500 had plow cultivation, printing, paper, books, firearms, the compass, iron, and steel, and yet failed to emulate Europe’s Industrial Revolution in the centuries that followed. Scholars have argued that autocratic Chinese emperors killed off technological progress for domestic political reasons. For example, one Ming emperor banned long-distance oceanic exploration for fear of foreign influence threatening his power, after Chinese ships had already reached East Africa in 1422.

This gives us a hint as to how political formation affects development: Fragmented Europe did not have any one autocrat who could kill off technological innovation, and the constant threats of living in a hostile neighborhood spurred the advancement of military technology. And because borders were relatively open around 1500, the reality that citizens could leave for more advanced places — the forerunner of today’s "brain drain" — kept alive the spirit of innovation.

But does this research imply a fatal determinism, a preordained outcome to the world’s race for economic dominance, destined to be lost by countries trying to catch up with the West? Is there inherent racism in the notion that some peoples carry technological innovation with them? No and no. As China’s history has shown, when governments stop killing innovation, good things happen. Technological change has also dramatically speeded up, and lower communication and transportation costs make it cheaper and easier to borrow advanced technologies from other countries — allowing societies to leap forward.

Finland, for instance, was a pastoral society with little cultivation technology and no oceangoing ships in 1500; now it’s home to Nokia and some of the world’s leading cruise-ship builders. The explosive growth in cell phones in Africa, skipping the intermediate step of land lines, is a promising sign of what Africa’s tech future could look like — if it weren’t for its plague of poor governments. In today’s globalized and hyperconnected world, the possibilities for jumping around mean that the technology of 1500 can only explain part of the variation of per capita incomes — the other part of technological progress is still up for grabs.

So what does this tell us about the prognosis for bringing the world’s bottom billion up from poverty? For one, it tells us that we’ve been doing development wrong. The traditional approach to development was as a top-down process led by great men and benevolent autocrats, advised by great experts. Former World Bank chief economist Stanley Fischer used to joke about a new grammatical tense he called the "World Bank imperative form": Country reports were long lists of things that "must be done" by the authorities, ranging from grandiose infrastructure projects to implementing detailed plans to meet health, nutrition, sanitation, and education needs. But our research shows that development is not about what you dictate, but what you discover. Little penicillin did far more to improve the world’s lot than big plans conceived around a conference table.

The World Bank imperative approach gave us Africa’s stagnation, the failure of economic reforms in the 1980s and 1990s, and the disastrous transition from communism to capitalism in the former Soviet Union. These and many other disappointments over the past half-century do not predict a cheery future for the great-men-cum-great-experts approach.

Most importantly, what the history of technology tells us is that the blank-slate theory is a myth. Top-down development programs simply don’t work. In fact, the principal beneficiaries of Western largesse today — African autocrats and dysfunctional regimes — are themselves the main obstacles to development. If there’s anything that "must be done" to spur future development, it’s to create the conditions necessary to empower the ordinary individuals who
will create new and unforeseen technologies out of old ones. There’s a Thomas Edison born every minute. We just have to help them turn the lights on