Knowledge that Transforms

This paper studies the origins of an import substitution strategy of development, summarizes the consequences of that strategy, and reviews the problems that led to its failure. The fundamental difficulty was its discouragement of the indigenous social learning necessary for sustained, independent development. The emergence of an outward-oriented, minimal-government strategy is due to the success of Korea and Taiwan. This strategy fails to recognize that social learning requires a strong role for national agents and that this role can be penalized by undue openness. An effective strategy must protect and induce domestic learning without penalizing exporting.

Economists and psychologists who study emotions have worked in near-total isolation from each other. The article discusses some areas in which economists might take account of emotions. After a survey of the main features of emotions as analyzed by psychologists and physiologists, the article discusses three aspects of the relation between emotion and choice. (1) Given that emotions may be intrinsically valuable or instrumentally useful, can one choose to have them? (2) Can emotions supplement rationality in cases where it yields indeterminate prescriptions for choice? (3) When an emotion and self-interest suggest different courses of action, how do they interact to produce a final decision?

After a very long hiatus, economists have begun again to study the relationship between economics and religion. This article seeks to summarize and evaluate the principal themes and empirical findings that have appeared in some 200 recent papers on the economics of religion. Although some of the research concerns the economic consequences of religiosity, most applies standard economic theory to the study of individual religious activity, the characteristics of religious groups, and the impact of regulation and competition on religious markets.