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asked ago in General Economics Questions by (140 points)
I sent this to Mr Guo Xu on his article in the AER for November 2018 but have not received an answer.   Does anyone have ideas on whether the article made sense given the different legal status of different colonies?


Dear Sir

Your article does not discuss how your data set sorts out self governing colonies from others.

For example, from 1855 in NSW, the Legislature, not the Governor, had control over fiscal policy.  Similarly for Canada, NZ and South Africa.

By contrast in Hong Kong, Sir John Cowperthwaite as Financial Secretary firmly and rightly believed in no tariffs and free trade.  But HK raised revenue in a nontax way through land rents (one third of its income) so he could afford the 15% tax rates which made HK the third financial centre after London and NYC in the 70s.

The test of a Governor’s success should be national income per capita.

Cowperthwaite and others took a bankrupt wrecked port of 450,000 in 1945 which had lost its hinterland to a rising standard of living for some 6.5 million people by the 70s.

If I had achieved something like that as an Australian Treasury official I would not be a lawyer now.

I took up law because it is too hard to make a living as an honest economist.

Kind regards

 

Terry Dwyer

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