"Mitt Should Do Some More Reading"

Mitt Romney is finally admitting what he said about culture:

Mitt Romney caused a stir among Palestinians earlier this week when he suggested culture plays a role in the Palestinian Authority’s economic shortfalls. ...[Palestinians called the remark ignorant and unfair, pointing out that Mr. Romney didn’t address their lack of sovereignty and limitations enforced by Israeli military authorities]

He reversed course in an interview with Fox News Tuesday and denied making such a comment, saying, “I’m not speaking about it–did not speak about the Palestinian culture or the decisions made in their economy. That’s an interesting topic that deserves scholarly analysis, but I actually didn’t address that.”

Well it appears Mr. Romney has changed his mind again because in an opinion piece in the conservative National Review Online, the Republican reversed course and owned up to the comments he made. ...

But while he may have owned up to the remarks, what he said is wrong:

Mitt, Jared and David, by Daron Acemoglu and James Robinson: ...Mitt Romney..., wading into the debate about the origins of inequality and prosperity around the world...:

I was thinking this morning..., you see the G.D.P. per capita, for instance, in Israel which is about $21,000, and compare that with the G.D.P. per capita just across the areas managed by the Palestinian Authority, which is more like $10,000 per capita, you notice such a dramatically stark difference in economic vitality.

He continues:

Culture makes all the difference. And as I come here and I look out over this city and consider the accomplishments of the people of this nation, I recognize the power of at least culture and a few other things. One, I recognize the hand of Providence in selecting this place. 

Mitt Romney also identifies the origins of his thinking as David Landes’s The Wealth and Poverty of Nations and Jared Diamond’s Guns, Germs and Steel (though presumably not the origin of his numbers, which are incorrect; the gap between per capita in Israel and West Bank and Gaza is about tenfold).

Well actually, Jared Diamond doesn’t say much about culture. ... In fact his theory would predict that Israelis and Palestinians should have identical levels of prosperity. ... Mitt Romney is instead taking his cue from David Landes. But as we show in Why Nations Fail, cultural differences cannot explain differing levels of prosperity. ... This is surely the case between North and South Korea, for example. After all, does Mitt and David think that there were huge cultural differences between the north and the south of the 38th parallel before the separation of Korea into two?

Of course the difference between Israel and Palestine is not the same as the two Koreas. It was created by the migration of Jewish people, mostly after World War II. Many came from much more developed parts of the world... They brought more advanced technologies and high levels of human capital... As Maristella Botticini and Zvi Eckstein point out in their book The Chosen Few: How Education Shaped Jewish History, the origins of these very high human capital levels are in the historical adoption of institutions in Jewish society. This is where the roots of Isreal’s current prosperity lie. They have further been strengthened by Israel’s integration into the world economy...

Why hasn’t this prosperity spilled over to the Palestinians since the British left in 1948? A definitive answer would need to be based on much more research, but a plausible one comes from the reaction of Saeb Erekat, an aide to President Mahmoud Abbas of the Palestinian Authority, to Mitt´s remarks:

this man doesn’t realize that the Palestinian economy cannot reach its potential because there is an Israeli occupation.

It seems to us that Mr. Erekat, not Mitt Romney, has the right idea.

We end this by agreeing with what Sandeep Baliga and Jeff Ely say on their blog. Mitt should do some more reading.