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The O-Ring Theory of Economic Development (1993) (jstor.org)
26 points by nvader on Nov 15, 2023 | hide | past | favorite | 9 comments



Kremer, M. (1993). The O-Ring Theory of Economic Development.

The Quarterly Journal of Economics, 108(3), 551–575. doi:10.2307/2118400

https://sci-hub.ru/10.2307/2118400

Sci-Hub, largely a one person venture, delivers information to millions across the planet while undercutting a paid journal model that seeks to profit by gatekeeping research much of which is socially funded.

The linked paper by Kremer appears to focus on high quality production chains with near zero tolerance for failure (the O-Ring that brough down a space shuttle) and treats this with the usual economic modelling tools.

I can't say I've ever been happy with those tools modelling actual real life humans - they do such interesting out of band things such as start Sci-Hub or choose to work on difficult demanding projects for "the challenge" moreso than "hyper rational economic reasons" that maximise returns.


Saw someone use this for an explanation of why the German economy is so competitive. High concentration of industrial excellence, with all the factors needed to sustain it.


Hasn't the German economy been faltering pretty hard now? They just reported some of the worst declines in business activity.


If that's year-over-year numbers, that's still skewed by pandemic effects. Numbers for 2022 were artificially high because of time-shifted demand from the previous two years (and Germany in particular imposed pandemic restrictions longer than most of the world.) So 2023 numbers will look bad in comparison to artificially high 2022 numbers. Compare an annualized differential from 2019 to 2023 if you want to see the real picture.


But other countries like the USA aren't seeing the same issue hell even Greece is reporting good numbers.


Media says a lot of that. I think it's not that bad quite yet. And there's still time for things to turn around.


Nope, we can't turn things around. With cheap russian gas gone and the last nuclear powerplants shut down energy is just to expensive in germany for it's manufacturing based economy.


Cheap gas is gone, but there's still gas. Where do you think the uranium comes from for power plants? Even the US imports a big part of it from Russia.


Not sure about right now (obviously there are some energy challenges), but it has been a powerhouse for centuries.




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