15 th Century: The Printing Revolution Mid 15 th century Gutenberg improves printing technology.
15 th Century: The Printing Revolution Made production, preservation, and dissemination of written knowledge cheaper. Increasing returns to scale - profits. First book – The Bible. Reading and writing became more useful, and induced HC acquisition. Stimulated the development of vernacular languages. Undermined the authority of the catholic church. Reformation; King James Bible (1604-11) Rise of the enlightenment and modern science
Printing in the Ottoman Empire Ottoman Sultans forbade printing in Arabic script between the 15 th and 18 th centuries. Istanbul: first book printed in Arabic script in 1729. Printing took off only in the 19 th century. Religious authorities claimed that printing books would decrease the value of oral learning. New knowledge may depreciate old knowledge. Minorities were allowed to print books in their own languages.
Military Technologies – Firearms The Ottomans were eager to adopt advanced military technologies. Gun powder and guns production. Janessaries - firearms bearing infantry starting from the 1380s. Artillery. The Ottoman siege in Vienna (1528)
Explaining technology adoption Conservative nature of Muslim societies. Assuming the result. Why was the ban lifted? Not consistent with adoption of military technologies. Not PC. An explanation should account for: Initial ban on printing in Arabic script, yet not in other script. Rapid adoption of firearms. Removal of the ban on printing in the 18 th century.
Explaining Technology Adoption Acemoglu and Robinson (APSR, 2006) model political aspects of new technologies adoption. Political elites may block technologies that threatened them, even if it impedes economic development. Blocking new technologies occurs when political competition is at intermediate values, Blocking does not occur when the elite's rule is secure or when political competition is intense.
A (very) simple model of technology adoption Ruler, Agent, and (passive) Citizenry. Ruler collect a share β (legitimacy) of S (surplus), and transfers T to the Agent. Legitimacy: educators/books or military force. The Agent (military/”clergy”) decides to legitimize the Ruler or to incite a revolt and capturing a share α of S at probability p. Assuming β>α because of damage/cost of revolt. To avoid revolt the ruler offers the Agent: T=pαS The ruler's surplus is: βS-T=S(β-pα)
A model of technology adoption New technology θ affects S(θ), α(θ), β(θ),and p(θ). The Ruler suppresses new technology if: S(β-pα) > S(θ)[β(θ)-p(θ)α(θ)]
Technology Adoption Firearm technology Ottoman elite was based mainly on infantry Janessaries, adopted firearms starting 1380s. Mamluk elite was based on cavalry resisted the adoption of firearms. In terms of the model, firearms Increase S by conquests. Increase β ability of army to to collect tax. Decrease p likelihood of successful revolt (?) Light firearms vs. artillery Decrease α greater cost of preparing for rebellion and greater destruction in revolt (?).
Technology Adoption Printing technology Printing in Aranic script was banned by the sultan in 1485, few decades after Gutenberg`'s invention. The ban was relaxed in 1726, yet publications on religious were still prohibited, and texts were censored. Only in the 19 th century printing took off. Minorities printed books starting 1490s. In terms of the model, printing Could increase S by productivity. Decrease β ability of “clergy” to legitimize ruler. Could raise p likelihood of successful revolt. No effect on α losses from revolt (?).
Technology Adoption - Summary Military technology was adopted by the state, yet was forbidden to subjects, because it enhanced the ruler's payoff. Printing technology weakened the “clergy”'s ability to legitimize the ruler, and reduced the latter's expected payoff despite productivity gains. Printing was adopted when “clergy”'s ability to legitimize the ruler was weakened. Corruption of religious establishment. Rise of local elites in the 17 th and 18 th centuries. Political elites could intentionally block economic development to secure their position.
Printing Why European rulers did not block printing? Speculation: fragmentation of Western Europe posed a coordination problem. Some rulers benefited from undermining the catholic church. Mokyr on rise of secular science: Innovative scientists could run to other states when local authorities threatened them. Competition between rulers induced them to use innovations, fearing that other would take advantage of them.
Why is the ME Economically Underdeveloped Timur Kuran
Main argument Around 1000 AD the Middle East was a developed region. Yet, it failed to undergo the institutional development that Europe did. At 1800 AD Islamic commercial institutions were similar to those eight centuries earlier. This paper points on institutions that hindered economic development, including: Islamic law of inheritance. Lack of corporations in sharia. The waqf (pious foundation). Initially these institutions were not obstacles for economic development. Later on, these institutions had an adverse role.
Background: Path Dependence Past decisions affect the trajectory of the economy and create a lock-in situation. Lock-in situations occur when there is a large fixed cost and increasing returns to scale /positive externalities, which make a switch to more efficient trajectory un-profitable. Some pressure groups block efficient changes because of their private interests. Common dimension of path-dependency: Technology. Institutions.
Technological Path Dependence Communication signals (cellular etc.) Mac vs. PC Typing technology: the keyboard (QWERTY) Fitted the old typing machines. Not efficient for computer typing Switching costs are large because people are used to the previous system.
Institutional Path Dependence Institutions are rules / equilibria. Switching rules / equilibria should be coordinated. Likely to be costly. May harm some players. Therefore, some economies may be locked-in an inefficient equilibrium.
Institutional Features of the Islamic ME Egalitarian inheritance system. No long living corporations. Partnerships were practically limited in scope and to a single mission. No banks, only dubiously legal money lending between individuals. Weak property rights and arbitrary taxation. Provision of public goods by funds privately endowed for eternity to Waqfs. Legal Pluralism, and minorities' ability to choose legal system. Difficult to pool resources for large scale long term enterprises Weak incentives Inflexibility of supplied PG Advantage of minorities
Comparison to the “West” Unequal inheritance laws facilitated accumulation of lands and capital. The Catholic Church and Christian orders, cities, universities were incorporated from the High Middle Ages onwards. Provisioned secular and religious public goods. Starting from the 16 th century commercial corporations were based in this legal concept but opt to make profits. Long Political struggle for limiting ruller's ability to abuse property rights (e.g. The glorious revolution, 1688)