Why Don't Economies Converge

Carole E. Scott is the Editor-in-Chief of B>Quest and a Professor of  Economics at the State University of West Georgia. Peter J. Boettke is a Senior Research Associate of the Austrian Economics Program at New York University and Editor of The Review of Austrian Economics. In August 1998, he will become an Associate Professor of Economics at George Mason University.His publications are listed in an appendix to this article.

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A matter of great interest to development economists is why don't all economies converge to a single economic growth path. Why is it that, instead, some countries, decade after decade, remain mired in poverty and experience very low or negative rates of growth, while others, already wealthy, grow much more rapidly? What explains the poverty of some countries and the wealth of others? Why haven't the former been able to profit from the example set by the latter?

Using macroeconomic data of uncertain accuracy, econometricians have sought to determine the causes economic growth and its pace. However, as Gregory Mankiw has observed, econometric analysis suffers from three problems: simultaneity, multicollinearity, and degrees of freedom.  [Mankiw, 275] In short, the problem is determining which variable is the cause, and which is the effect? The fact that the relationship between changes in "A" and "B" does not vary randomly doesn't tell us whether changes in "A"  causes changes in "B," or vice versa," or are both of them a cause or an effect of "C" and/or "D," "E", etc.? Nor does econometrics tell us for sure that there is a cause and effect relationship; only how likely it is that there is one.

I strongly suspect that things that cannot be quantified and, therefore, cannot be considered in an econometric analysis of an economy play a major role in determining the rate of economic growth it experiences. I suspect a relevant variable that cannot be quantified, corruption, is so prevalent in some LCDs (less developed countries) that it precludes the attainment of any but a very low rate of economic growth.

Only if we can determine what are the causes of economic growth can we possibly develop and  policies that, if followed, will produce it. Otherwise, we have to depend upon luck. To determine the causes of economic growth we must first decide what method of analysis to use.

With a comparatively few exceptions, modern economists prefer to analyze economic reality through the derivation of universally applicable theories developed via quantitative methods. Other social scientists are more likely--though ever less so as they copy the seemingly more scientific method favored by economists--to depend upon specific, descriptive studies lacking universal applicability. Boettke believes that the real world is far too complex to understand solely through descriptive studies, but he does not deny their usefulness if they are guided by theory because theory enables you to separate the "wheat from the chaff."

Peter Boettke on Culture's Role

Peter Boettke

If we confined ourselves to descriptive studies, Boettke believes, "alien cultural practices would forever remain alien and inaccessible to others. At the same time, if all there were to the human condition was the universal, then culture and history and area studies in general would disappear. We could learn as much about a people by sitting at our computer as we would by studying their history. Both extremes of exclusivity in social explanation are obviously be avoided. We need universal theory to understand, but we need uniqueness to whet our desire to understand the other. We are enough alike to learn from one another, but we are also different enough so as to have something to learn." [Boettke, Working Paper]

Boettke asks whether it could be that economies diverge, rather than converge, in terms of economic growth because, rather than things like (real) capital accumulation that econometricians seek to show cause economic growth by finding that they are correlated to economic growth, the rate of economic growth is determined by history and culture.

He is aware of the fact that the claim that culture plays a major role in determining a country's standard of living and its rate of growth has been debunked on the basis of the significantly different conditions found in Mainland China, Taiwan, and Hong Kong, all three of which share a very similar cultural heritage. Institutionalist economists might conclude from this comparison that the differences in their economic performance is due to differences in their institutions that have arisen as a result of non-culturally-related factors, such as the fact that Hong Kong was, until recently, a British colony. Because Taiwan is a market economy, Boettke might use this comparison to support his belief--one he believes data proves is correct--that the countries that do the best are market economies with a rule of  law that protects private property rights and the right to contract.

The Neoclassical school of economic thought that has so greatly influenced economic thinking in the Western world despite the Keynesian assault upon it assumes that the characteristics of a society are determined by the immutable nature of human beings. Institutionalist economists deny this, claiming that behavioral regularities are specific to a time and a place and persist as a result of enculturation. Therefore, principles derived by economists from Western societies would not be applicable in the East, even if they are correct, which they question.

A supposed cultural block to economic development in some LDCs is what is called a backward-bending labor supply curve. According to this theory, the people in some societies work less as the hourly wage rate rises because they have no desire to earn more than a given amount of money, and as the wage rate rises, it takes less time to earn that amount. These are people with a very limited desire for goods and services who, once they have enough money to purchase the desired amount of them, prefer leisure activities to more goods and services.

According to Boettke, the basic economic insight is that people respond rationally to incentives. Because people are rational, they consider both costs (disincentives) and benefits (incentives) in determining what alternative they will select to achieve the ends they seek. Societies' institutional structure and rules affect the costs and benefits of the various alternatives available to achieve one's ends and what alternatives are available. Rules, Boettke argues, are a function of culture. They emerge from a country's evolutionary past. Like fellow Austrian economist F. A. Hayek, he believes rules are not designed by reason, rather reason is developed because rules are followed.

"The promise," he believes, "of material progress is not just a matter of adopting certain rules of the game, such as private property and freedom of contract. Economics may establish the properties of alternative rules, but culture and the imprint of history determine which rules can stick in certain environments. The problem is not one of private property and freedom of contract generating perverse consequences, but the fact that some social conventions and customary practices simply do not legitimate these institutions. If market transactions--which are universal--are constrained to a sub rosa existence, then commercial life and development will be limited. To move from that sub rosa existence, legal-political institutions must be adopted, but such adoption is only possible if there is a cultural fit." [Boettke, Working Paper] "Lifting a people from beneath the struggle for survival is rare in history and is by no means a universal promise to all. The only path is an indigenous one independent of whether it is one of progress or stagnation." [Boettke, Working Paper]

Boettke summarizes his argument as a simple syllogism:

  1. People respond rationally to incentives.
  2. Incentives are a function of the rules of the game.
  3. Rules are only RULES if customary practice dictates.

So, he believes that a large-scale attempt at social change will  fail if it is not rooted in the customary beliefs and traditions of a society. I suspect that the Shah of Iran's failure to modernize (called Westernization by his opponents) Iran would be cited by Boettke as an evidence that this is true. On the other hand, decades earlier a similar, imposed cultural modernization took place in a similar society, Turkey.

His message to those seeking to understand the causes of economic development and how to promote it is that "we have to find a way to understand the ideas, beliefs, habits that are indigenous to an area, and then see how the political, legal and economic institutions that are correlated with economic development [free markets] fit in the social ecology." [Boettke, Working Paper]

In Mali, he observes, the imposition of Western, scientific method for producing rice proved to less efficient than the traditional method because customary practice was "rooted in an understanding of the world which the enacted change failed to respect, and the result was an unintended undesirable outcome of good intentions in public policy." [Boettke, Working Paper] Customary practice was based on water temples that were both places for the worship of various gods and the management of the irrigation schedule. In Africa,unintended, negative consequences resulted from the imposition of practices that had been successful elsewhere. There British ideology failed to respect the social ecology of the Maasai and, as a result, their pastoral procedures became less efficient.

Social change and the discarding of myths does not always fail as they did in these cases. "When social change begins with a respect for the customary practice and mutates, or when the customary practice already is conducive to economic experimentation (and the reward structure which induces such behavior), then modernity's unintended positive side is revealed." [Boettke, Working Paper]

A study of  early New England by Stephen Innes, he says, reveals an example of a social ecology that led to economic development. There "a mutated cultural mix of British culture with Puritan ideology combined to free the economy of restraints and place moral sanction on private property and the work-ethic. The fierce devotion to God in this case led to a social commitment to engage the world and prosper. This underlying customary belief system was reinforced by explicit public policy within the Puritan Commonwealth to promote economic growth and development. The Massachusetts Bay success story was not a result of 'finding treasure' in terms of natural resources, but rather requires explaining precisely because the success was from transforming a resource-poor environment into a thriving international economy." [Boettke, Working Paper]  The success of the Dutch Republic, too, he says, was not due to "finding a treasure."

Simon Schama attributes the rise of the Dutch Republic in two or three generations "...from a ramshackle and beleaguered confederacy of towns and provinces into a global empire of apparently unlimited prosperity and power" to federalism when absolutist centralization was the norm" [Schama, The Embarrassment of Riches...] However, until recently, the dominant belief among development economists was that the LDCs could not become DCs (developed countries) unless a centralized government followed a policy of substantial intervention in the operation of the economy.

Over the past decade, New Zealand, too, is an example of a transformation like that of the Dutch Republic. As Gwartney, Lawson, and Block have pointed out, he notes, "in 1985, New Zealand was plagued by an expansionary and unstable monetary policy, restrictions on foreign currency holdings, high marginal tax rates, a large transfer sector, exchange rate controls, and capital market restrictions. Much has changed in the last decade." [Gwartney. Lawson, and Block, Economic Freedom...] According to an index of economic freedom derived by Gwartney, Lawson, and Block , "...New Zealand now ranks as the third most free economy in the world, and after years of sluggish economic growth, real GNP increased at an annual rate of 5.2% in 1993 and 6% in 1994."[Boettke, Working Paper] David Harper, he observes, attributes the change in New Zealand to a mutation of the culture further toward the entrepreneurial end of the spectrum.

Boettke believes culture as a core concept in social analysis cannot be understood in the absence of economic logic, as when culture and economic logic do not clash, "...experimentation flourishes and material progress lifts the masses of people from subsistence."  [Boettke, Working Paper] When they clash, "...the struggle for survival continues as economic behavior is diverted either into a sub rosa existence or manifests itself in counter-productive 'rent seeking' games."  [Boettke, Working Paper] That is, people seek economic advancement, not by serving society by providing it with goods and services, but by political means--having others' incomes transferred to them.

If culture plays an important role in causing countries to exhibit different rates of economic growth as Boettke believes, it would seem that in a country where there are no regional cultural differences, regional convergence would exist; while in countries where there are significant regional cultural differences, regional rates of growth would be no more likely to be converging than are countries'. Because many differences that exist between countries that may affect economic growth do not exist between regions within a country, a study of the rates of growth of regions within countries would seem to provide a good test of his belief.

If culture plays a deciding role in economic development, for convergence to take place at a high level of economic growth, either we must become a one world culturally, or cultures must shed those of their aspects which hinder economic growth and add new ones than encourage it.

A Contrary View

When Bernado Villegas, Dean of the School of Economics at the University of Asia and the Pacific in Manila, was doctoral candidate at Harvard in the early 1960s, the literature on economic development he was assigned to read assured him that South Korea was a hopeless case. A celebrated article an American journalist wrote claimed that the Philippines could never develop because it had a "damaged culture." [Villegas, 16] It was hopelessly mired in corruption, mismanagement, and inward-looking economic policies. However, recent successful economic turnarounds in Asia, he claims, demonstrate that there are no cultures inherently incompatible with sustainable economic growth.

While, he says, in the past Confucian values were said to explain China's backwardness, today some are giving Confucian values credit for rapid growth rates in Asia. "The list of these values usually includes respect for authority, orderliness, commitment to a common cause, frugal living, valuing education, saving for the future, a diligent work ethic and family loyalty." [Villegas, 16]

While he does not claim that culture is irrelevant, the history of Asia, he says, proves that culture per se neither hinders nor helps economic development. "All major cultures--in Asia as elsewhere-- have unique strengths and weaknesses. Economic failure can generally be attributed not to a cultural failing, but to the inability of leaders to build on the strengths found in every culture." [Villegas, 16]

Villegas claims that the dramatically different experience of North and South Korea, who are "drawn from the same cultural stock" proves that a country's rate of economic growth is not dependent upon the nature of its culture. However, while it is true that these two countries once shared the same culture, their cultures are today quite different. North Korea is a communist country, and as Chairman Mao's destruction even of the physical evidence of China's past graphically illustrates, the communization of a country requires that its existing culture be replaced by a communist one. In China, the communists did their best to  eliminate Confucianism. In Russia, too, the attempt to completely eradicate its  past culture extended even to the destruction of such physical signs as it as Orthodox churches, some of which in post-communist Russia have been rebuilt.

"Forty-seven years of communist rule," says Liu Binyan, a Chinese dissident who is the Director of the Princeton China Initiative, have destroyed religion, education, the rule of law, and morality. Today [1993] this dehumanization caused by the despotism, absolute poverty and asceticism of the Mao era is evidenced in the rampant lust for power, money and carnal pleasures among many Chinese." [Liu, 21] So much for Taiwan and China sharing the same culture!

Supporting Views

Austrian economists like Boettke are on the "right" of the economic/political/social spectrum. Some non-Austrians on this end of the economic philosophy spectrum share his view that culture plays a significant role in determining an economy's growth rate. Like Boettke, Thomas Sowell, an economist; Richard D. Lamm, a politician; David Landes, an economic historian; Lee Kuan Yew, a politician; and Christopher Lingle, an economist, believe that the role culture plays is extremely important.

Go to Thomas Sowell on Culture's Role

Go to Lamm, Landes, Lee, and Lingle on Culture's Role


Binyan, Liu, "Civilization Grafting: No Culture Is an Island," Foreign Affairs (September/October 1993), pp. 19-21.

Boettke, Peter J., "Why Culture Matters: Economics, Politics and the Imprint of History," Working Paper, http://www.econ.nyu.edu/user/boettke/culture.htm (An earlier version of this paper was presented at the Southern Economic Association meetings in 1995. Other versions have been published.)

El Pais, "A World of Scandal," World Press Review (May 1993), pp. 8-11.

Gwartney, James, Lawson, Robert, and Block, Walter, Economic Freedom of the World: 1975-1995 (Vancouver, 1996).

Harper, David A., Wellsprings of Enterprise (Wellington, 1994).

Innes, Stephen, Creating the Commonwealth: The Economic Culture of Puritan New England (New York, 1995).

Lamm, Richard D., "The New Wealth of Nations," Chronicles (October 1991), pp. 25-27.

Landes, David, The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor (New York, 1998).

Lingle, Christopher, "Asian Century About to Lose Out to the Global Millennium," Asia Times (April 22, 1997).

Lingle, Christopher, "Communitarian Capitalism," Reason Online: http://www.reasonmag.com/9610/col.lingle.html   (October 1996).

Mankiw, Gregory, "The Growth of Nations," Brookings Papers on Economic Activity" (Vol. 1, 1995).

Schama, Simon, The Embarrassment of Riches: An Interpretation of Dutch Culture in the Golden Age (Berkeley, 1988).

Sowell, Thomas, Race and Culture: A World View (New York, 1994).

Villegas, Bernardo, "Fractured Thinking on Cultures, Asian Business (March 1996), p. 16.

Wyszomierski, Teresa and Christopher Lingle, "More Crises to Come in Southeast Asia," Journal of Commerce (September 22, 1997),

Zakaria, Farceed, "Culture Is Destiny: A Conversation with Lee Kuan Yew," Foreign Affairs (March/April 1994), pp. 109-126.


Publications of Peter J. Boettke

1. Books

Why Perestroika Failed: The Politics and Economics of Socialist Transformation (London:Routledge, 1993), 199pp.

The Political Economy of Soviet Socialism: The Formative Years, 1918-1928 (Boston:Kluwer Academic Publishers, 1990), 246pp.

Edited, with an introduction. Market Process Theories, 2 volumes (Aldershot: Edward Elgar), in press due out September 1997. (Co-editor, David L. Prychitko).

Edited, with an introduction and conclusion. The Elgar Companion to Austrian Economics (Aldershot: Edward Elgar Publishing, 1994), 628pp.

Edited, with an introduction. The Collapse of Development Planning (New York: New York University Press, 1994), 334pp.

Edited, with an introduction and conclusion. The Market Process: Essays in Contemporary Austrian Economics (Aldershot: Edward Elgar Publishing, 1994), 320pp. (Co-editor, David L.Prychitko).

2. Journal Articles

"Where Did Economics Go Wrong: Modern Economics as a Flight From Reality," Critical Review, 11, no. 1 (Winter 1997): 11-64.

"Soviet Venality: A Rent-Seeking Model of the Communist State," Public Choice, 93, nos. 1-2 (1997): 37-53. (Co-authored with Gary Anderson).

"Why Culture Matters: Economics, Politics, and the Imprint of History," Nuova Economia e Storia, No. 3 (September 1996): 189-214. [In Italian]. English language version published in modified form in LSE-AMA-gi: Journal of the LSE Hayek Society, Vol. 2, no. 1 (1998): 9-16.

"Good Economics, Bad Sex (And Even Worse Philosophy): A Review Essay of Richard Posner, Sex and Reason, Review of Political Economy, 7, no. 3 (1995): 360-373.

"Why Are There No Austrian Socialists? Ideology, Science and the Austrian School," Journal of the History of Economic Thought, 17 (Spring 1995): 35-56.

"Hayek's The Road to Serfdom Revisited: Government Failure in the Argument Against Socialism," Eastern Economic Journal, 21, no. 1 (Winter 1995): 7-26.

"The Reform Trap in Politics and Economics in the Former Communist Economies," Journal des Economistes et des Etudes Humaines, V, nos. 2/3 (June - September 1994): 267-293.

"Mr. Boulding and the Austrians: Boulding's contribution to subjectivist economics," Cuandernos de Ciencias Economicas y Empresariales, No. 26 (1994): 99-109. (Co-authored with David L. Prychitko) [Translated into Spanish]. English language version to be published in Laurence Moss, ed., Joseph A. Schumpeter, Historian of Economics: Perspectives on the History of Economic Thought - Selected Papers from the History of Economics Society Conference, 1994 (London: Routledge, 1996): 250-259.

"The Political Infrastructure of Economic Development," Human Systems Management, 13, no. 2 (1994): 89-100.

"Perestroika and Public Choice: the economics of autocratic succession in a rent-seeking society," Public Choice, 75, no. 2 (February 1993): 101-118. (Co-authored with Gary Anderson).

"Analysis and Vision in Economic Discourse," Journal of the History of Economic Thought, 14, no. 1 (Spring 1992): 84-95.

"Interpretive Reasoning and the Study of Social Life," Methodus: Bulletin of the International Network for Economic Method, 2, no. 2 (December 1990): 35-45. Reprinted in David L. Prychitko, ed., Individuals, Institutions, Interpretations (Brookfield, VT: Avebury, 1995): 59-80.

"The Theory of Spontaneous Order and Cultural Evolution in the Social Theory of F.A. Hayek," Cultural Dynamics, 3, no. 1 (1990): 61-83.

"The Political Economy of Utopia: Communism in Soviet Russia, 1918-1921," Journal des Economistes et des Etudes Humaines, 1, no. 2 (June 1990): 91-138.

"Institutions and Individuals: A Review Essay of Geoffrey Hodgson, Economics and Institutions," Critical Review, 4, nos. 1-2 (1990): 10-26. Reprinted in David L. Prychitko, ed., Individuals, Institutions, Interpretations (Brookfield, VT: Avebury, 1995): 19-35.

"The Political and Economic Challenges of Perestroika," Market Process, 8 (Spring 1990): 19-35.

"Evolution and Economics: Austrians as Institutionalists," Research in the History of Economic Thought and Methodology, 6 (1989): 73-89.

"Austrian Institutionalism: A Reply," Research in the History of Economic Thought and Methodology, 6 (1989): 181-202.

"Story-Telling and the Human Sciences: A Review Essay of Don McCloskey," The Rhetoric of Economics," Market Process, 6, no. 2 (Fall 1988): 4-7; 28.Reprinted in Peter J. Boettke and David L. Prychitko, eds., The Market Process: Essay in Contemporary Austrian Economics (Aldershot: Edward Elgar Publishing, 1994): 179-186.

"The Soviet Experiment with Pure Communism," Critical Review, 2, no. 4 (Fall 1988): 149-182.

"Virginia Political Economy: A View from Vienna," Market Process, 5, no. 2 (Fall 1987): 7-15. Reprinted in Peter J. Boettke and David L. Prychitko, eds., The Market Process: Essays in Contemporary Austrian Economics (Aldershot: Edward Elgar Publishing, 1994): 244-260.

"Understanding Market Processes: An Austrian View of 'Knowing'," in Marketing Theory: American Marketing Association Winter Educators' Conference Papers and Proceedings (Chicago: American Marketing Association, 1987): 195-199.

"Beyond Equilibrium Economics: Reflections on the Uniqueness of the Austrian Tradition," Market Process, 4, no. 2 (Fall 1986): 6-9; 20-25. (Co-authored with Steven Horwitz and David Prychitko). Reprinted in Peter J. Boettke and David L. Prychtiko, eds., The Market Process: Essays in Contemporary Austrian Economics (Aldershot: Edward Elgar Publishing, 1994): 62-79.

3. Short Papers, Comments and Book Reviews

Book Review of Timur Kuran, Private Truths, Public Lies, Constitutional Political Economy, forthcoming.

Book Review of Joseph Stiglitz, Whither Socialism?, Journal of Economic Literature, XXXIV (March 1996): 189-191.

Book Review of Malcolm Rutherford, Institutions in Economics, History of Political Economy, 28, no. 3 (Fall 1996): 527-529.

Book Review of N. Scott Arnold, The Philosophy and Economics of Market Socialism, Public Choice, forthcoming.

Book Review of Carol Graham, Safety Nets, Politics and Economic Reform, Eastern Economic Journal, 22, no. 1 (Winter 1996): 101-102.

Book Review of Viktor Vanberg, Rules and Choice in Economics, Journal of Economic Behavior and Organization, forthcoming.

Book Review of Brian McCormick, Hayek and the Keynesian Avalanche, Review of Political Economy, 8, no. 3 (July 1996): 338-341.

Book Review of Raimondo Cubeddu, The Philosophy of the Austrian School, History of Economic Ideas, 3, no. 1 (1995): 161-163.

Book Review Essay of Bruce Caldwell, ed., Carl Menger and His Legacy in Economics, Research in the History of Economic Thought and Methodology, 13 (1995): 287-295.

Book Review of Yuri N. Maltsev, ed., Requiem for Marx, Austrian Economics Newsletter (Summer 1995): 5-6.

Book Review of David Gordon, Resurrecting Marx: The Analytical Marxists on Freedom, Exploitation and Justice, Reason Papers, No. 19 (Fall 1994): 175-180.

Book Review of C.D. Foster, Privatization, Public Ownership and the Regulation of Natural Monopoly, Journal of Economic Literature, 32 (December 1994): 1916-1918.

Book Review of Roman Frydman, Andrzej Rapaczynski, John S. Earle, et. al., The Privatization Process in Central Europe, Vol. 1, and The Privatization Process in Russia, Ukraine and the Baltic States, Vol. 2, Cato Journal, 14, no. 1 (Spring/Summer 1994): 163-165.

"Ludwig Lachmann and His Contribution to Economic Science," Advances in Austrian Economics, Vol. 1 (1994): 229-232.

"Credibility, the Monetary Regime, and Economic Reform in the Former Soviet Union," Cato Journal, 12, no. 3 (Winter 1993): 577-584.

Book review of Merton Peck and Thomas Richardson, ed., What is to be Done?, Public Choice, 75 (1993): 288-290.

Book review of Max Alter, Carl Menger and the Origins of Austrian Economics, Journal of Economic History, 52, no. 2 (June 1992): 519-521.

"The Soviet Experiment with Pure Communism: A Rejoinder to Nove," Critical Review, 5, no. 1 (1991): 123-128.

Book review of Jack High, Maximizing, Action and Market Adjustment,Southern Economic Journal, 58, no. 2 (October 1991): 540-542.

Book review of Svetozar Pejovich, The Economics of Property Rights, Cato Journal, 11, no. 1 (Spring/Summer 1991): 169-171.

Book review of Jurgen Habermas, On the Logic of the Social Sciences, Southern Economic Journal, 57, no. 1 (July 1990): 251-252.

Book review of Ronald Liebowitz, ed., Gorbachev's New Thinking, Business Economics, 25, no.2 (April 1990): 68.

"Comment on Joseph Farrell, 'Information and the Coase Theorem,'" Journal of Economic Perspectives, 3, no. 2 (May 1989): 195-197.

"Apartheid and the Market: A Response to Hoffenberg," Critical Review, 1, no. 3 (Summer 1987): 133-134. (Co-authored with Steven Horwitz and David Prychitko).

"The Roots of Apartheid: A Book Review Essay," Critical Review, 1, no. 1 (Winter 1986-1987):115-122. (Co-authored with Steven Horwitz and David Prychitko).

Book Review of Alexander Shand, The Capitalist Alternative: An Introduction to Neo-Austrian Economics, Market Process, 4, no. 1 (Winter 1986): 16-17.

4. Contributions to Books

"James M. Buchanan and the Rebirth of Political Economy," in Steve Pressman and Ric Holt, eds., Against the Grain: Dissent in Economics (Aldershot, UK: Edward Elgar Publishing, forthcoming).

"Ludwig von Mises," in John Davis, Uskali Maki, Wade Hands, eds., The Handbook of Economic Methodology (Aldershot, UK: Edward Elgar Publishing,forthcoming).

Coase, Communism, and the Black Box of the Soviet-Type Firm, in Steven Medema, ed., Coasean Economics: Law and Economics and the New Institutional Economics (Boston: Kluwer Academic Publishing, 1998): 193-207.

"What is Wrong with Neoclassical Economics (And What is Still Wrong with Austrian Economics)," in Fred Foldvary, ed., Beyond Neoclassical Economics (Aldershot, UK: Edward Elgar Publishing, 1996): 22-40.

"Credibility, the Monetary Regime, and Economic Reform in the former Soviet Union," in James Dorn and Roustem Noureev, eds., Monetary Reform in the Post-Communist Countries (Moscow: Catallaxy Press, 1995): 64-72. [In Russian].

"Credibility, Commitment and Soviet Economic Reform," in Edward Lazear, ed., Economic Transition in Eastern Europe and Russia:Realities of Reform (Stanford, CA: Hoover Institution Press, 1995): 247-275.

"The Failed Political Economy of Government Management in East and West," in James Dorn and Larisa Piyasheva, eds., From Plan to Market: The Future of the Post-Communist Republics (Moscow: Catallaxy Press, 1993): 295-306. [in Russian]

"The Collapse of Communism in the USSR: Cold War Victory or Cold War Illusion?," in Anandi Sahu and James Paine, eds., Defense Spending and Economic Growth (Boulder, CO: Westview Press, 1993): 187-201.

"Competition," in William Outhwaite and Tom Bottomore, eds., The Blackwell Dictionary of Twentieth-Century Social Thought (Oxford: Basil Blackwell, 1992): 100-103.

"Entrepreneurship," in William Outhwaite and Tom Bottomore, eds., The Blackwell Dictionary of Twentieth-Century Social Thought (Oxford: Basil Blackwell, 1992): 196-198.

"Economic Education and Social Change," in John Robbins and Mark Spangler, ed., A Man of Principle: Essays in Honor of Hans F. Sennholz (Grove City, PA: Grove City College Press, 1992): 63-74.

"The Austrian Critique and the Demise of Socialism: The Soviet Case," in Richard Ebeling, ed., Austrian Economics: Perspectives on the Past and Prospects for the Future (Hillsdale: Hillsdale College Press, 1991): 181-231.

"The Reagan Regulatory Regime: Rhetoric vs. Reality," in Anandi Sahu and Ronald Tracy, ed., The Economic Legacy of the Reagan Years (New York: Praeger, 1991): 117-123.

"The Business of Government and Government as a Business," in Richard H. Fink and Jack C. High, ed., A Nation in Debt: Economists Debate the Federal Budget Deficit (Frederick, MD: University Publications of America, 1987): 272-286. (Co-authored with Jerome Ellig).

5. Selected Non-Academic Publications

"Economic Research and Economic Education," The Freeman (January 1997): 2-3.

"From Here to There: A Review of Marshall Goldman, Lost Opportunity," The Money Review (Nov/Dec 1996): 27, 30-31.

"A Grand Time Was Had By All: A Review of Robert Samuelson, The Good Life and Its Discontnets," The Money Review (July/Aug 1996): 7-8.

"Classics Reconsidered: Ludwign von Mises, Human Action: A Treatise on Economics in The Freeman (May 1996): 411.

"Whose Economics, Which Economic Liberalism," The Freeman (December 1995): 746-747.

Book Review of Murray N. Rothbard, Economic Thought Before Adam Smith: An Austrian Perspective on the History of Economic Thought, Vol. I, and Classical Economics: An Austrian Perspective on the History of Economic Thought, Vol. II, in Economic Affairs (Summer 1995): 14-17.

Book Review of Gertrude Himmelfarb, On Looking into the Abyss, The Freeman (June 1995): 399-400.

"Morality as Cooperation," Religion & Liberty (May/June 1995): 6-9.

"The Story of a Movement: Essay review of Karen Vaughn, Austrian Economics in America," The Freeman (May 1995): 322-326.

Book Review of Jane Jacobs, Systems of Survival, The Freeman (March 1995): 198-199.

Book Review of Israel M. Kirzner, ed., Classics in Austrian Economics, 3 volumes, The Freeman (February 1995): 134-135.

"Shifting the Terms of the Debate," The Freeman (May 1994): 218-219.

"From Marx to Mises: A Review Essay," The Freeman (August 1993) 322-325.

"Yeltsin's Shock Therapy Applied Too Little Voltage," Orange County Register (Sunday, January 31, 1993), op-ed page.

"F.A. Hayek, 1899-1992," The Freeman (August 1992) 300-303.

"Constitutional Erosion Caused Capitalist Decay," The World and I (November 1991) 540-542.

Book Review of Richard Wagner, To Promote the General Welfare, The Freeman (October 1991) 395-397.

Book Review of Janos Kornai, The Road to a Free Economy, The Freeman, 41, no. 4 (April 1991) 162-163.

Book Review of Anthony De Jasay, Market Socialism, The Freeman, 41, no. 3 (March 1991) 114-115.

Book Review of Mancur Olson, et. al., Ideas, Interests and Consequences, The Freeman, 41, no. 2 (February 1991) 79-80.

Book Review of Mark Skousen, Economics on Trial, The Loyola Journal of Economics (December 1990) 3-4.

"Soviet Admissions: Communism Doesn't Work," The Freeman, 40, no. 2 (February 1990) 50-56. Reprinted in A World Without Walls: Selected Readings (Irvington-on-Hudson: Foundation for Economic Education, 1990) 14-20; reprinted in Richard M. Ebeling, ed., Disaster in Red: The Failure and Collapse of Socialism (Irvington-on-Hudson: Foundation for Economic Education, 1995): 239-251.

The image behind the title of this article is a very much altered version of a photograph by A. C. Caprio found on the Web at http://www.ltrr.arizona.edu