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An Institutional Approach to the End of Western Ascendancy

An Institutional Approach to the End of Western Ascendancy. SIEPR, March 9, 2012. 23 years ago it all seemed so simple. “ An unabashed victory of economic and political liberalism … the Triumph of the West. ”

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An Institutional Approach to the End of Western Ascendancy

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  1. An Institutional Approach to the End of Western Ascendancy SIEPR, March 9, 2012

  2. 23 years ago it all seemed so simple “An unabashed victory of economic and political liberalism … the Triumph of the West.” “The end point of mankind’s ideological evolution and the universalization of Western liberal democracy as the final form of human government” – Francis Fukuyama, “The End of History”

  3. But now … Source: IMF

  4. China is catching up Source: IMF

  5. Emerging markets have outperformed Source: MSCI

  6. And Western public finance is in crisis Source: IMF

  7. With the U.S. on a clearly unsustainable path Source: CBO

  8. Innovation seems to be moving East Source: WIPO

  9. It’s now an Oriental work ethic Source: Conference Board

  10. A gap has opened up in education too Source: OECD

  11. Not to mention healthcare Source: World Bank

  12. So what exactly is going wrong in the West? Occupy Wall Street, 2011 http://img.ibtimes.com/www/data/images/full/2011/10/14/174091-occupy-wall-street-march.jpg

  13. Let’s remind ourselves what went right Source: Angus Maddison

  14. It wasn’t just economic ... Source: Angus Maddison

  15. ... it was also political Source: Angus Maddison; Statesman’s Yearbook

  16. But you can’t just blame imperialism

  17. or geography http://commons.wikimedia.org/wiki/File:Trabant_a_Mercedes.jpg

  18. or national character http://www.telegraph.co.uk/news/worldnews/asia/northkorea/8031761/

  19. It was about institutions http://www.edinphoto.org.uk/0_buildings_s/0_buildings_-_statue_adam_smith_037745.htm

  20. Adam Smith on China – Adam Smith, Wealth of Nations (1776)

  21. Laws and institutions today Source: WEF

  22. Where is the rule of law secure? Note: Hong Kong beats the U.S. in 15 out of 15 categories, Taiwan in 9, PRC in 2. Source: WEF

  23. And where in the West is it lacking? Source: WEF

  24. Where is economic freedom greatest? Source: Heritage Foundation

  25. And where in the West is it weakest? Source: Heritage Foundation

  26. Where is it easiest to do business? Source: IFC

  27. And where in the West is it hardest? Source: IFC

  28. And where in the West is it hardest? Source: IFC

  29. So the Great Re-convergence has deep roots Source: Angus Maddison

  30. But don’t kowtow just yet …

  31. 1989 has finally come to the Arab world Libyan graffiti: “Constitutional rule, elected president,  four-year non-renewable term limits” http://blog.lgiu.org.uk/2011/09/on-libya-and-institutions/

  32. And it may yet come to China too Protesters in Wukan, Guangdong province BBC

  33. Remember Churchill’s words “Civilization … means that violence, the rule of warriors and despotic chiefs, the conditions of camps and warfare, of riot and tyranny, give place to parliaments where laws are made, and independent courts of justice in which over long periods those laws are maintained.” © Niall Ferguson 2012

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