(2021-03-09) Alexander The Consequences Of Radical Reform

Scott Alexander: The Consequences Of Radical Reform. 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.

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.

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

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?

"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."

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-world-war-ii reform experiences in Germany and Japan and stand in contrast with many other reform experiences."

when you look at the actual French reforms involved, they're...kind of obviously good. Things like breaking up trade 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

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".

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?" (e.g. Chesterton's fence argument) is less important than I originally believed.