#ideadiary

[thelittlevillager]

Grit Book Summary - part 1

[stopwater49]

Some thoughts that might be useful for my future works

I dreamed that I died

the world inside a mirror

It's like the time moving backward

[thelittlevillager]

Grit Book Summary - part 2

[thelittlevillager]

3: Changing Schools

To transform any situation, need three forms of understanding: 1. Critique of the way things are 2. Vision of how they should be 3. Theory of change for how to move from one to other

Finnish school system - Broad and balanced curriculum - Schools and districts have considerable latitude in how to carry out curriculum - High priority to practical and vocational programs - Development of creativity - Training and development of teachers - Teaching is a high-status, secure profession - Schools and teachers to collaborate rather than compete by sharing resources, ideas, and expertise with each other - Schools encouraged to have close links with communities and with parents and other family members of students

Heart of education is the relationship between student and teacher.

The challenge is to create and sustain learning experiences within schools. The root task is to create conditions in which the relationship between students and teachers can flourish.

- At the most fundamental level, the focus of education has to be on creating the conditions in which students will want and be able to learn. - The role of teachers is to facilitate students learning. - The role of principals is to create the conditions in their schools in which teachers can fulfil these roles. - The role of policymakers is to create conditions in which principals and schools can fulfill these responsibilities.

[thelittlevillager]

Incomplete Urbanism: A Critical Urban Strategy for Emerging Economies by William SW Lim

Quotes from William Lim’s book

The challenge today is whether we can create and maintain assets for the future or recklessly consume assets of the future with disastrous consequences. It is in this context that current res-tructuring towards global sustainability must be examined. They can be achieved by accepting three key ideological re-ordering of priorities. 

1. Firstly, we must shift from a culture of consumerism to a culture of sustainability. Consumerism is not just about how money is spent. It is a deep-seated psychological condition of addiction not unlike drugs and alcoholism. 

In the West and Japan today, many are suffering from prolonged economic distress and income insecurity. These factors act like shock therapy contesting against wasteful consumption. 

Attraction to consumerism in emerging economies needs to be moderated, as available resources should be directed towards the provision of basic services and infrastructure as well as improvement in environmental quality and essential welfare facilities for everyone. 

2. It is essential to introduce critical new spatial arrangements and urban strategies in the context of grassroots globalisation and widespread application of digital networks. 

The younger generation is not opting to operate independently, while plugged into extensive digital network relationships with their counterparts. Cheaper rental offices with flexible spaces located in unstructured informal environments and in close proximity with each other is obviously the preferred option. This emergent unregulated spatial arrangement will be conducive to innovative startup experiments, including a whole range of creative and artistic activities, spontaneous events and grassroots celebrations. 

The primacy of high-rise dominated financial urban centres is eroding with increasing pace. In smaller cities, this destructive urban instrument of tabula rasa will be challenged or even abandoned. 

3. Lastly, we used to locate people in the centre of development, which means making progress equitable to reduce income gap and to improve spatial justice while enabling people to be active participants in the process of rapid social, economic and political changes. 

We need to create a post-consumer culture. A culture where the goal is not only to get people to consume less, but to create new values and lifestyles, strengthen bonding with families and friends, and find space in their lives for being engaged citizens. 

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Our challenge is to maintain historical continuity of our cities and to restructure them through an evolving process of integrating the past, present and future. Traditions and the creative present are not opposed. But a vital part of the cultural regenerative process and dynamic continuity in remembering is through a deep commitment in interdisciplinary understanding to uncover and apply the cultural essence and rootedness towards a new creative contemporariness. Remember - constructing the new is always an act of destruction. The present indiscriminate urban destruction or worse, the application of tabula rasa solution of complete eradication must be contested. 

[thelittlevillager]

Myth or Magic by Jeremy Lim

What makes a Good Healthcare System? 

Cost, Access, Quality and Resilience

Policy principles in Singapore’s Healthcare System

The need for co-payments to mitigate moral hazard

The potentially ruinous nature of subsidies

A fundamentalist belief in economic theory and the power of markets to drive efficiency and deliver the greatest value to society

Productivist welfare capitalism - social policy is strictly subordinate to the overriding policy objective of economic growth. Everything else flows from this: minimal social rights with extensions linked to productive activity, reinforcement of the position of productive elements in society and state-market-family relationships directed toward growth (Prof Ian Holliday)

The primacy of the state

At the core of government ideology are three mental models, or world views:

A rather dim and pessimistic view of human nature, that the general population, through inherent human weakness and failings, is ill-equipped to act in ways benefitting the entire populace and must be guided or even directed

The government must fulfil the role of decision-maker and central orchestrator for the good of Singapore

Strong economic perspective in deliberating policies

Issues with current financial aid for healthcare

Means-testing is usually done when needed. However, “proactive, financial counselling i.e. means-testing of all Singaporeans on a regular basis, not when patients are concerned about their health”. 

What we don’t know about Medifund:

No way of knowing whether all ready Singaporeans actually received assistance from Medifund --> what happens to asset-rich, cash-poor Singaporean retirees?

Completeness or adequacy of financial support --> “full help” is defined as occuring only after patients had exhausted “all other means of payment” --> what is the appropriate degree of “exhaustion”?

Reports number of applications, but not the number of unique applicants --> not possible to know exactly how many Singaporeans are dependent on Medifund for access to healthcare. This is critical as a marker of the adequacy of Singapore’s entire financing edifice. 

Dignity --> What does it say about Singapore if 3, 5, or even 10% if her people are dependent on the government handout for healthcare needs. 

On Disruptive Innovation: Many of the most powerful innovations that disrupted other industries did so by enabling a larger population of less-skilled people to do in a more convenient, less expensive setting things that historically could be performed only by expensive specialists in centralised, inconvenient locations (Clayton Christensen)

Healthcare as ‘credence goods’ i.e. good or services that consumers find difficult to judge the quality of both before and after usage. Because of the information asymmetry, consumers or patients are vulnerable to being both overcharged and overtreated. Patients onlt know their doctors are experts, and have no choice but to ‘take it on faith’. ... Faith can be lacking or undeserved, and so governments step in with a plethora of regulations, all in the name of protecting the patient. 

On Leadership: ‘First Follower: Leadership Lessons from Dancing Guy’ video described how a dancing guy is followed by one person and then another and finally the dancing culminates in a movement. Being a first follower is an under-appreciated form of leadership. The first follower transforms a lone nut into a leader. If the leader is the first, the first follower is the spark that makes the fire, The second follower is a turning point: it’s proof that the first has done well. Now it’s not a lone nut, and it’s not two nuts. Three is a crowd and a crowd is news. 

[thelittlevillager]

Quotes from “Mario Vargas Llosa on freedom, liberalism, dictatorship and ideas”

“The Call of the Tribe” Mario Vargas Llosa on freedom, liberalism, dictatorship and ideas. Retrieved from https://www.economist.com/openfuture/vargas-llosa?cid1=cust/ddnew/email/n/n/20180426n/owned/n/n/ddnew/n/n/n/nAP/Daily_Dispatch/email&etear=dailydispatch&utm_source=newsletter&utm_medium=email&utm_campaign=Daily_Dispatch&utm_term=20180426 on 27 April 2018. 

Equality of opportunity is to start [in equal conditions] from a certain point…and for this, education is absolutely fundamental. In fact, the most advanced societies, the Nordic ones for example, have this equality of opportunity, there is high-quality public education that prepares each generation for a certain equality at the outset.

So I believe that when a society perceives that there is equality of opportunity, it accepts difference in wealth. It accepts that there are those who contribute much more to the development of a society and therefore receive higher income.

What is unfair, what is unacceptable, is that there isn’t equality of opportunity. That there are those born with privilege that guarantees them success, or that others are guaranteed failure from the beginning. That is unacceptable. But I believe this is a liberal idea, deeply liberal.

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Reason should govern society, we must avoid passion, we must avoid the purely instinctive, the irrational. In contrast, unlike some liberal thinkers I don’t believe that the irrational and passions can be supressed in life.

On the contrary, they must find an outlet because they are part of the human condition. And I think culture is the privileged vehicle for this aspect of human nature to find its place, in poetry, in painting, in music, in literature. I think this uncontrollable essence of personality should find an outlet and society should accept it as it is, even though it releases monsters from their cages and shows us our monsters.

I believe this is an important issue, because now feminism wants to establish a sort of censorship of all things they call machismo, and so this is a new inquisition that would simply put an end to literature and culture, if what we want to establish is a kind of ideologically correct literature, or ideologically correct painting…

I think it’s a battle that must be fought. It’s very good, the struggle of women is very just because it aims to get rid of discrimination, but wanting culture to submit to these rules of a moral or political kind is simply going to finish off culture. It’s a new inquisition. I think we must fight this energetically. The idea of politically correct literature is dangerous for the future. Extremely dangerous.

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I believe that the great danger in our age is nationalism, it’s no longer fascism, nor communism. These ideologies have become completely outdated. But in contrast, nationalism is a defect that is always there under the surface and above all, at moments of crisis, can be very easily exploited by demagogues and power-hungry leaders. Nationalism is the great tradition of humankind; unfortunately it’s always present in history.

And so, I believe that it’s the great enemy of democracy. It’s the great enemy of freedom and a terrible source of racism. If one believes that being born into or forming part of a particular community is a privilege, then that is racism. I believe that one must fight nationalism energetically if one believes in democracy, in freedom, especially in this age of mixing and the building of great blocks.

So the Catalan independence movement is a big danger for Spanish and European democracy. Because if secession had succeeded, imagine the precedent that would have set in Europe. Brexit was already something dangerous. Brexit represents a very dangerous form of nationalism, which has already done a lot of damage to the European Union, and I think to Great Britain as well. But in Spain the triumph of secession would have set a terrible example, just imagine, for Hungary, Poland, Denmark, wherever there are outbreaks of nationalists operating today.

I think that the most ambitious political construction that exists in the democratic world today is the European Union, with all the limitations that it might have. But it’s a feat that is very important. It has already kept Europe at peace for 70 years for the first time in its history, and enemy number one of that is nationalism. Therefore we must fight it, confront it.

I lived in Barcelona for five years. Back then, there weren’t any nationalists. Nationalists were small minority factions. What there was, was a great democratic movement to get rid of the dictatorship, to turn Spain into a democracy. Unfortunately, this has been artificially created, by an autonomous [regional] government that had a clear political scheme and to which was given control over education. This was decisive for them to create, artificially on the basis of historical lies, the nationalist argument. My impression is that fortunately, the worst is behind us. But it’s still there, and it’s a latent danger.

[thelittlevillager]

Tourism Notes

From Tourism and Travel Management by University of Queensland (https://courses.edx.org/courses/course-v1:UQx+TOURISMx+3T2017/course/?utm_content=d6100fdd-db76-4f12-955f-383cbd0a50ed&utm_medium=email&utm_campaign=recurringnudge_day3&utm_source=schedules&utm_term=course-v1%3AUQx%2BTOURISMx%2B3T2017)

How to encourage sustainable tourism: 

Incentives - things to value-add to guest experiences e.g. discounts and vouchers

Partnerships - to demonstrate organisations’ commitment to the cause

Support and Reminders - similar; but support is pre, during and after the visit, while reminders are after the visit

Reason to care - anything that engages visitors and encourages them to become involved in environmental initiatives

Main Goals of Tourism

Generate Income

Increase Foreign Exchange Earnings

Create Employment

Different levels of the tourism management system

Global Distribution System - allows travel agents to book a range of products and services by providing a connection to supplier reservation systems

Internet Booking Engines - allows customers to book directly with suppliers

Online Travel Agents - e.g. Expedia, Booking.com

Destination Management System - coordinate marketing content and bookings at the regional level

Channel Managers - ensure that tourism products are visible and bookable across a range of online travel agents, mobile travel apps and even social media

Electronic Word of Mouth e.g. TripAdvisor - trusted most by tourists

Disruptive Innovations

Clayton Christensen’s disruptive innovation - start in low end then move to high end market; or create new market when previously none existed e.g. airbnb - started small then moved higher, but also new market for the hosts

New Technologies + New Business Model + New Value Chains

Target Audience for Hotels and Airbnb are different. 

Features of peer-to-peer accomodation

Perfect Segmentation - can find a house that suits needs perfectly

Balance of Power - ratings for both guests and hosts

Opportunity for Continuous Improvement - based on guest reviews

Risk Assessment - based on limited information - disappointment toward house, lack treatment for house

Hosts do not always sell well

Guests need hosts’ permission to book - assessment of profit for each booking

Why do hosts open?

Commercial providers maximise profit. 

But for peer-to-peer networks,  

Income - pay the bills, afford luxury, money

Social interaction - love of meeting others

Share - sharing with others

Benefits of Ptp

Open destination to new travellers

Create accommodation in rural and regional areas

Boost local economies

Strategic Responses

Create your own disruption

Acquire the disruptor before it becomes a threat

Offer the same benefits

Differentiate yourself

Challenges - Should disrupters by permitted? Regulated? 

TILES Model

T - Temporal data - current events, seasons, travel itinerary

I - Identity - apps show interests, demographics, activity preferences

L - Location - current location and nearby attractions

E - Environment - weather, traffic congestion, waiting times

S - Social Media - family and friendship groups, travel companion

+ Artificial Intelligence

e.g. Australian zoo - virtual tour information provided through app 

Ten Travel Functions of Mobile Devices

Informing e.g. traffic jam

Contextualising e.g. umbrella reminder based on weather conditions

Personalising e.g. changing flight times based on personal itineraries

Socialising e.g. asking for recommendations on facebook

Managing e.g. book rental cars

Translating e.g. Chinese signs into English

Purchasing e.g. digital wallet

Gamifying e.g. make tourist itineraries more interesting

Augmenting e.g. AR to help navigate new places

Reflecting e.g. reminders one year later

Virtual Reality (replaces live world)

Promotion - How to integrate virtual experience of travel and the actual experience? e.g. Mariott’s 4D goggles outside the marriage registry offices 

Entertainment & Interpretation - recreation of historical settings for museums

Accessibility - places that are hard to access e.g. Antartica

Planning - explore tourist environments before they are built 

Presence - whether mentally disengaged from current environment and immersed in virtual space

Three key dimensions of ‘presence’ in Virtual Reality experiences

Physical space - control environments in virtual space thru physical movements

Involvement - getting the person involved through sensory elements and movements

Realness - ensuring content and activities are believable, live-like and natural

Challenge of VR - disengages people from real world - e.g. VR in aircraft cabin

Augmented Reality (live view of the world overlaid with AR) e.g. smart glasses

Navigation - travel directions, warning, safety info

Interpretation - virtual tour guides to provide history of buildings and city, historical buildings imposed on the real scene

Translation - own language

Promotion - see information of places as people walk

Personalisation - based on each individual’s preferences

Communication - virtual avatars into travel spaces to share experiences with friends and family

Gamification - carrying out games and missions in real world e.g. Pokemon Go, to explore destinations and attractions (wouldn’t it be interesting to develop an app that allows you to learn more information about specific tourist attractions, plans out an itinerary for you, while carrying out missions to find certain ancient object etc?)

Role of Governments in Tourism Development

Legislator and Regulator - developing legislations and regulations that influence various aspects of the sector and the businesses within it

Planner - they develop a range of policies and plans that impact on tourism or are directly developed for tourism

Coordinator - they coordinate the various public and private sector stakeholders in tourism

Entrepreneur - governments own and invest in tourism infrastructure

Stimulator - governments generally fund tourism marketing programs designed to attract tourists

Protector of Interests - governments have overall responsibility for protecting the interests of the people who live in a tourism destination, as well as the environment and other resources

Tourism Plan

Cover a variety of aspects including:

Creating enjoyable products and experiences for tourists

Improving the quality of life of host community residents

Designing and controlling the physical patterns of development

Providing a mechanism for conserving and protecting resources

Identifying promotion and marketing strategies for destinations

Outline the mechanisms for stakeholder coordination

Adaptive Management (Continuous Improvement)

Process for implementing management in the fact of uncertainty while learning from management outcomes and integrating that learning into adapted management approaches. 

The International Union for the Conservation of Nature (IUCN) has developed a management effectiveness cycle which has 6 aspects: 

Context - understand the system through research and monitoring

Planning - plan for the long term

Inputs - resource and fund the plan’s actions

Process - involve stakeholders in management

Outputs - implement actions of the plan

Outcomes - evaluate outcomes

Leveraging Events

Previous mindset on legacy - leaving a legacy through building lasting impressions from the event - i.e. legacy focuses on the event specifically. But now shifted towards “leveraging events” i.e. using big events like the Commonwealth Games or Olympic Games to build awareness and stimulate tourism and development in other areas. Leveraging is about strategic planning, with the event being just one part of the overall strategy. E.g. South Korea promoting Gangwondo’s tourism in preparation for the Winter Olympic games, with many different shows promoting the locations (e.g. Dragon Club, Goblin), and promotion events available. 

Leveraging Process has four key components

Leverageable resource needs to be identified. 

Opportunity should be identified and strategic goals should be set. 

In order to maximise benefits from event visitors and trade, strategies to lengthen visitor stay, entice visitor experience, enhance business relationships and retain event expenditure within the destination should be made. 

Tourism is about creating, selling and managing a series of experiences. People are buying experiences and memories. 

Four characteristics that differentiate tourism services from goods

Intangibility

Heterogeneity - no standardised version, perception of quality varies for person to person. 

Inseparability - production and consumption of the services happens at the same time, so hard to control quality

Perishability - cannot store unused airline seats and hotel rooms, so lose income earning opportunity, creates challenges for pricing as well as matching supply and demand

Experience Factors

Basic Factors - cause dissatisfaction if not fulfilled, but does not lead to satisfaction if delivered, taken for granted e.g. clean bed linens

Performance Factors - lead to satisfaction if they are fulfilled but dissatisfaction if not fulfilled e.g. hotel reception

Excitement or Delight Factors - increase satisfaction if delivered, but do not cause dissatisfaction if they are missing e.g. free wine in the room

Four Realms of Experience

Two Continuums

Customer Participation - active or passive participation

Connection, or environmental relationship - unites customers with the experience - absorption to immersion

Therefore four realms are: 

Entertaining (Absorption & Passive)

Educational (Absorption & Active)

Sense of Escape (Immersion & Active)

Aesthetically Pleasing (Immersion & Passive)

Most memorable experiences include these four elements, although not always in equal amounts

Co-creation:

What visitors bring to the moment + what tourism business provide

When a guest is able to personalise their experience using the stage that is provided by a tourism business or destination

Emotion:

Creating opportunities for social interaction between hosts, family members, friends or other travellers

Encouraging visitors to participate in an activity or by creating a personal link between the visitor and experience

Provide opportunities to customise the experience

Appeaing to multiple senses of sight and sound

Telling a story with memorable characters or creating a theme

Does not have to be expensive, rather creative ideas

Phases of Guest Journey

Anticipation - Build desire & create excitement and expectations

Transit - Reassure and signage

Onsite - Activities, talks, entertainment site

Transit - Rest on the way home

Reflection - Reminders through souvenirs and photos 

Touch points to create experiences - help to identify places to help tweak design or services to boost positives. 

Market Segmentation - Splitting tourists up into groups of similar tourists (or market segments) and understanding them really well, and developing an irresistible experience specifically for them. 

Common sense segmentation i.e. based on common sense information available about them e.g. children, age 

Data-driven market segmentation i.e. based on data. Choosing to target a market segment is a long-term commitment; data-driven market segmentation analysis is tricky (high quality data as starting point e.g. sufficient sample size) - do real segments exist or do they need to be created artificially? use raw data and visualise data in easily understandable way. Monitor market changes. 

Measuring Service Quality

Reflect on expectations then compare to performance of what you actually received

Why might a particular dimension be important? 

When might it be more important depending on the context? 

When might ‘too much’ of one dimension be a problem? 

What might be the ‘perfect formula’ for my business? 

Reliability - Delivering what you promise, consistently, to meet customer expectations

Assurance - When the service provider just makes you feel at ease, that everything is under control

Tangibles - ‘Physical’ part of service i.e. ‘servicescape’ or the surroundings e.g. cleanness of hotel reception

Empathy - How employees show care, concern and connection to the customer

Responsiveness - Timely, efficient, and appropriate for the type of service

Pine and Gilmore’s article (https://hbr.org/1998/07/welcome-to-the-experience-economy) talks about the experience economy.

‘If airlines truly sold experiences, more passengers would actually shop in the seat-pocket catalogs for mementos of their flight.” - why doesn’t SQ use the products that they are selling e.g. using specific perfume in the airline, certain hand soap, certain blankets...? 

Good service is no longer enough to differentiate one business from another. Instead, they suggest that we need to design and stage experiences - we need to use services as the stage and goods as props to engage individuals. 

Tourism Workforce

Macro - global, policy and destination level

Meso - organisational level

Micro - individual level 

Labour intensive, customer facing jobs, seasonal precarious employment

Benefits - transferable skills, entrepreneurial opportunities, locational and social mobility

Job Embeddedness - the factors that influence employees to ‘stay in their jobs’ vs factors 'preventing them from leaving’. - Two main dimensions: On the job and Off the Job - Within each, three components: Links, Sacrifice and Fit

Organisational Climate =/= Organisational Culture

Organisational Climate is directly linked to positive organisational outcomes. It does not accurately represent the relationship between policy and service excellence, and it is not the same as organisational culture. 

Service Profit Chain

Internal Service Quality --> improves employee satisfaction --> satisfied and loyal customers --> increases revenue and profitability. 

Future Workforce Drivers

Demographic: higher birth rates in developing countries lead to high levels of unemployment for youth, while low birth rates in developed countries lead to vacancies not filled. Hence, trends show retirees in developed countries moving from urban to rural locations, while youth in developing countries are moving away from rural to urban centres. So tourists and workers are moving in opposite directions. 

Environmental: global warming e.g. Maldives islands submerged & Terrorism

Economic: 

Experiential: from untapped markets of developing countries, will affect traditional frontline jobs as replaced by androids. 

Crisis/Disaster Management Lifecycle

Pre-event Phase: plans can be put in place to reduce the chance of a crisis or disaster occurring, or reducing the size of the impact if it does occur. This proactive approach can help speed up response and recovery efforts. However, most destinations and businesses tend to be reactive and commence planning once a crisis or disaster hits. 

Initial Response Phase: Restores communication, electricity and transport networks. This is essential before tourists can return to the destination. 

Recovery Stage: Business recovery and restoring economic activity to the affected destination. This may involve communication and marketing activities to encourage tourists to return.

Original State: Return to original state, or may even be new and improved state with new tourism infrastructure, transportation network, and also valuable lessons to address another crisis. 

[thelittlevillager]

“Climate shifts aren’t limited to the weather” by Thomas L Friendman in New York Times, 2 Aug 2017. 

[thelittlevillager]

From “Grit” by Angela Duckworth

Picture credits: http://ognature.com/sunshine-hills-path-beautiful-sunlight-grass-meadow-rays-winding-glow-amazing-road-view-sky-rainbow-long-clouds-wallpaper-phone/

[thelittlevillager]

Chapter 4: Small Differences and Critical Junctures - the Weight of History

The Black Death is a vivid example of a critical juncture, a major event or confluence of factors disrupting the existing economic or political balance in society. A critical juncture is a double-edged sword that can cause a sharp turn in the trajectory of a nation. On the one hand it can open the way for breaking the cycle of extractive institutions and enable more inclusive ones to emerge, as in England. Or it can intensify the emergence of extractive institutions, as with the Second Serfdom in Eastern Europe. 

England developed inclusive political institutions because of two factors. First were political institutions, including a centralised state that enabled her to take the next radical - in fact, unprecedented - step toward inclusive institutions with the onset of the Glorious Revolution. Second, the events leading up to the Glorious Revolution forged a broad and powerful coalition able to place durable constraints on the power of the monarchy and the executive, which were forced to be open to the demands of this coalition. This laid foundations for pluralistic political institutions, which then enabled the development of economic institutions. 

Differences are often small to start with, but they cumulate, creating a process of institutional drift. The richly divergent patterns of economic development around the world hinge on the interplay of critical junctures and institutional drift. Existing political and economic institutions - sometimes shaped by a long process of institutional drift and sometimes resulting from divergent responses to prior critical junctures, create the anvil upon which future change will be forged. 

No presumption that any crtiical juncture will lead to a successful political revolution or to change for the better. Revolutions and radical movements replacing one tyranny with another, in a pattern of the iron law of oligarchy (Robert Michels). Only a few cases where critical junctures were used to launch a process of political and economic change that paved the way for economic growth e.g. Botswana. Critical junctures can also result in major change toward rather than away from extractive institutions - inclusive institutions may gradually become more extractive because of challenges during critical junctures e.g. Venetian Republic. 

Afghanistian, Haiti and Nepal have much in common institutionally - lack of political centralisation - with most nations in Sub-Saharan Africa, and are thus some of the poorest countries in the world today. 

Importance of Contingency: While the history of economic and political institutions important to understand vicious or virtuous cycles, contingent factors influence the building or destruction of institutions. E.g. Seretse Khama led the anti-colonial struggle in South Africa with the intention not of entrenching the traditional institutions but of adapting them to the modern world. 

[thelittlevillager]

Chapter 3: The Making of Prosperity and Poverty

North Korea vs South Korea

NK experienced a collapse in agricultural productivity. Lack of private property meant that few people had incentives to invest or to exert effort to increase or even maintain productivity. Stifling, repressive regime was inimical to innovation and the adoption of new technologies. But Kim family have no intention of reforming the system. SK economic institutions encourage investment and trade, investment in education. Policies encouraging investment and industrialisation, exports and the transfer of technology. –> Neither culture nor geography nor ignorance can explain the divergent paths of North and South Korea. Rather, Institutions.

Inclusive/Exclusive Economic Institutions

To be Inclusive, economic institutions must feature secure private property, an unbiased system of law, a provision of public services that provides a level playing field in which people can exchange and contract, and permit the entry of new businesses and allow people to choose their careers. Secure private property are central, since only those with such rights will be willing to invest and increase productivity. Such rights must exist for the majority of people in society.

1. Secure property rights, the law, public services, and the freedom to contract abd exchange all rely on the state, the institution with the coercive capacity to impose order, prevent theft and fraud and enforce contracts between private parties. 2. Society also needs other public services: roads and a transport network; public infrastructure; basic regulation to prevent fraud and malfeasance. Degree of coordination necessary to do so on a large scale - central authority –> State is thus inexorably intertwined with economic institutions, as the enforcer of law and order, private property and contracts, and often as a key provider of public services. –> Inclusive economic institutions need and use the state.

Inclusive economic institutions –> inclusive markets, technology, and education. The ability of economic institutions to harness the potential of inclusive markets, encourage technological innovation, invest in people, and mobilise the talents and skills of a large number of individuals is critical for economic growth.

Inclusive/Exclusive Political Institutions

Politics surrounds institutions. Inclusive institutions may be good for the economic prosperity of a nation, but some people or groups will be much better off by setting up institutions that are extractive. When there is conflict over institutions, what happens depends on which people or group wins out in the game of politics. Who wins depends on the distribution of political power in society.

Political institutions are key determinant of the outcome of this game. Rules that govern incentives in politics. They determine how government is chosen, which part of the government has the right to do what, who has the power in society, and to what ends that power can be used.

If distribution of power is narrow and unconstrained, political institutions are absolutist and those who wield this power will be able to set up economic institutions to enrich themselves and augment their power at the expense of society. In contrast, political institutions that distribute power broadly in society are pluralistic, and political power rests with broad coalition or a plurality of groups.

Inclusive economic institutions = pluralistic political institutions + sufficiently centralised and powerful states. Without centralisation, no real authority that can control or sanction what anyone does, leading to chaos and inability to enforce even minimal amount of law and order to support economic activity, trade or even basic security of citizens.

Extractive economic institutions thus naturally accompany and inherently depend on extractive political institutions. Strong feedback loop: political institutions enable the elites controlling political power to choose economic institutions with few constraints or opposing forces and enable elites to structure future political institutions and their evolution. As such, extractive economic and political institutions tend to support each other and persist.

Inclusive economic institutions are forged on foundations laid by inclusive political institutions, which make power broadly distributed in society and constrain its arbitrary exercise, thus making it harder for others to usurp power and set up extractive economic institutions for their own benefit. Inclusive economic institutions create a more equitable distribution of resources, facilitating the persistence of inclusive political institutions. 

Why not always choose prosperity?

Nations fail when they have extractive economic institutions, supported by extractive political institutions that impede and even block economic growth. This means that the choice of institutions - the politics of institutions - is central to our quest for understanding the reasons for the success and the failure of nations. Have to understand why the politics of some societies lead to inclusive institutions that foster economic growth, while the politics of the vast majority of societies throughout history has led and still leads today to extractive institutions that hamper economic growth. 

The fundamental problem is that there will necessarily be disputes and conflict over economic institutions. Powerful groups often stand against economic progress and against the engines of prosperity. Economic growth is transforming and destabilising process associated with widespread creative destruction. Growth thus moves forward only if not blocked by the economic losers who anticipate that their economic privileges will be lost and by the political losers who fear that their political power will be eroded. No reason why political institutions should automatically become pluralistic, there is no natural tendency toward political centralisation. Main barrier to political centralisation is again a form of fear from change. 

Growth under Extractive Political Institutions

Two distinct but complementary ways in which growth under extractive political institutions can emerge. 

1. Even if economic institutions are extractive, growth is possible when elites can directly allocate resources to high-productivity activities that they themselves control. 

2. Extractive political institutions permit the development of somewhat inclusive economic institutions. The position of the elite could be sufficiently secure that they may permit some moves toward inclusive economic institutions when they are fairly certain that this will not threaten their political power. 

E.g. South Korea under Park Chung Hee: transitioned from extractive political institutions toward inclusive political institutions. By the 1970s, economic institutions in South Korea had become sufficiently inclusive that they reduced one of the strong rationales for extractive political institutions - the economic elite had little to gain from their own or the military’s dominance of politics. Relative equality of income also meant that elite had less to fear from pluralism to democracy. 

Political centralisation is key to both ways in which growth under extractive political institutions can occur. Without some degree of political centralisation, not able to keep law and order, nor the leaders felt secure enough to manufacture significant economic reforms and still manage to cling to power, nor coordinate economic activity to channel resources toward high productivity areas. 

Even though extractive institutions can generate some growth, they will usually not generate sustained economic growth, and not accompanied by creative destruction - incentives not there for creative destruction and technological change. Growth without creative destruction and without broad-based technological innovation was not sustainable and came to an abrupt end. 

Extractive political and economic institutions create a general tendency for infighting, because they lead to the concentration of wealth and power in the hands of a narrow elite. Even if growth happened under extractive political institutions accompanied by inclusive economic institutions, there is always the danger that economic institutions become more extractive and growth stops. Those controlling political power will eventually find it more beneficial to use their power to limit competition to increase their pie, or even to steal and loot from others, rather than support economic progress. This, unless political institutions are transformed from extractive to inclusive. 

[thelittlevillager]

Chapter 2: Theories that don’t work

Most of current world inequality emerged since the late 18th century, following the Industrial Revolution. 

Geography Hypothesis claims that many poor countries are in the tropics, while rich countries are in the temperate climate. However, contradicted by rapid economic advance of countries such as Singapore, Malaysia and Botswana. Jeffrey Sachs: not the direct effects of climate on work progress, but two additional arguments - first, tropical diseases, particularly Malaria, have adverse consequences for health and therefore labour productivity; and second, that tropical soils do not allow for productive agriculture. 

But Geography Hypothesis cannot explain differences between north and south of Nogales, North and South Korea. Neither can explain differences between North and South America. Because History shows that it is not true that the tropics have always been poorer than temperate latitudes e.g. Aztec and Incan civilisations, where tropics were much richer than temperate zones. This reversal has nothing to do with geography, but something to do with the way these areas were colonised. Disease is largely a consequence of poverty and of governments being unable or unwilling to undertake the public health measures necessary to eradicate them. Agricultural productivity is low not due to soil quality, but is a consequence of the ownership structure of the land and the incentives that are created for farmers by the governments and institutions under which they live. Inequality largely due to uneven dissemination of industrial technologies and manufacturing production. 

Jared Diamond: inequality due to different historical endowments of plant and animal species about 500 years ago at the start of the modern period, which subsequently influenced agricultural productivity. In places where farming dominated, technological innovation took place much more rapidly than in other parts of the world. If spread of farming techniques happened, there should have been a catch-development, but instead inequality widened. This gap in incomes is closely connected to the uneven dissemination of modern industrial technologies, but this has little to do either with the potential for animal and plant domestication or with intrinsic agricultural productivity differences between Spain and Peru.

Culture Hypothesis: social norms related to culture can be hard to change, and sometimes support institutional differences. Level of trust and cooperation largely due to outcome of institutions, not an independent cause. Africa’s level of trust due to Kongolese lacking incentives to adopt superior technology. Middle East from Ottoman Empire, then English and French colonial empires, then hierarchical, authoritarian political regimes with few political and economic institutions that are crucial for generating economic success. 

Ignorance Hypothesis: world inequality exists because we or our rulers do not know how to make poor countries rich. poor countries are poor because they have a lot of market failures and because economists and policy makers do not know how to get rid of them and have heeded the wrong advice in the past. Rich countries are rich because they have figured out better policies and have successfully eliminated these failures. However, the main obstacle to the adoption of policies that would reduce market failures and encourage environmental growth is not the ignorance of politicians but the incentives and constraints they face from the political and economic institutions in their societies. When nations break out of institutional patterns condemning them to poverty and manage to embark on a path to economic growth, this is not because their ignorant leaders suddenly have become better informed or less self-interested or because they’ve received advice from better economists. It was politics that determined the switch from Communism and toward market incentives in China, not better advice or a better understanding of how the economy worked. 

[thelittlevillager]

Chapter 1: So close yet so different

Nogales split into Arizona in US and Sonora in Mexico - no difference in geography, climate or types of diseases present - so how could two halves of what is essentially the same city be so different? Why are the institutions of US so much more conducive to economic success than those of Mexico?

Institutional divergence in early colonial period + path dependency (inc constitutional progress and ease of access to financial systems) - enduring implications of the organisation of colonial society which shape the modern differences between US and Mexico.

Why is there inequality in the world? What caused them?

Very different institutions create very different incentives. Economic and political institutions shape the incentives of businesses, individuals, and politicians.

While economic instititions are critical for determining whether a country is poor or prosperous, it is politics and political institutions that determine what economic institution a country has.

Theory of World Inequality in this book shows how political and economic instituons interact in causing poverty or prosperity, and how different parts of the world ended up with such different sets of institutions.

Effects of institutions on the success and failure of nations - economics of poverty and prosperity + how institutions are determined and change over time, and how they fail to change even when they create poverty and misery for millions - thus the politics of poverty and prosperity.

[thelittlevillager]

2: Changing Metaphors

Life Sustainability.

By conformity, I mean the institutional tendency in education to judge students by a single standard of ability and to treat those who don’t meet it as “less able” or “disabled” - as deviations from the norm. In that sense, the alternative to conformity is not condoning disruption; it is celebrating diversity. Students’ individual talents take many forms and they should be fostered in similarly diverse ways.

1. Health: Promotes the development and well-being of the whole student, intellectually, physically, spiritually and socially. 2. Ecology: Vital interdependence of all thse aspects of development, within each student and the community as a whole. 3. Fairness: Cultivates the individual talents and potential of all students. 4. Care: Creates optimum conditions for students’ development, based on compassion, experience, and practical wisdom.

Economic: Education should enable students to become economically responsible and independent. - To cultivate the great diversity of young people’s talents and interests; - To dissolve the divisions between academic and vocational programs, giving equal weight to both areas of study; - To foster practical partnerships with the world of work so that young people can experience different type of working environments first-hand

Cultural: Education should enable students to understand and appreciate their own cultures and to respect the diversity of others. - To help students understand their own cultures - To understand other cultures - To promote a sense of cultural tolerance and coexistence

Social: Education should enable young people to become active and compassionate citizens.

Personal: Education should enable young people to engage with the world within them as well as the world around them. The conventional academic curriculum is focused almost entirely on the world around us and pays little attention to the inner world. We see the results of that every day in boredom, disengagement, stress, bullying, anxiety, depression, and dropping out. Yhese are human issues and they call for human responses.

[thelittlevillager]

1: Back to Basics

Why is education such a hot political issue? 1. Economic - well-educated workforce is crucial to national economic prosperity 2. Cultural - education is one of the main ways that communities pass on their values and traditions from one generation to the next. 3. Social - provide all students, regardless of background or circumstsncrs, with opportunities to prosper and succeed and to become active and engaged citizens. 4. Personal - for all students to realise their potential and live fulfilled and productive lives.

So what are the reformers doing to promote and raise standards? 1. Standardisation 2. Competition 3. Corporatisaion

What characteristics organisation leaders need most in their staff (IBM, 2008) 1. Adaptibility to change 2. Creativity in generating new ideas But standardisation can possibly crush creativity. Inverse relationship between countries that fo well on standardised tests and those who demonstrate entrepreneurial flair. In the mad rush to standardisation, many countries are now dashing to where they think the puck is rather than where it’s really going to be.

People do not come in standard sizes or shapes, nor do their abilities and personalities.