New York City / Thursday Oct 03,2013
12:00 pm - 1:30 pm

Paul Romer

Room 7-191
Kaufman Management Center
44 West 4th Street
New York, NY 10012

Thanks to Paul Romer for leading this week’s brown bag discussion. The discussion focused on what Romer calls the Startup Dynamic, a dynamic that is at the heart of the charter cities concept.

Social progress depends greatly on a society’s ability to adapt its rules to changing circumstances. Rules include both formal laws but also informal social norms. Norms are socially determined notions about the right and wrong ways of doing things. For progress to be sustained, a society’s norms must evolve over time.

For example, successful shifts from hunter-gatherer societies to sedentary agriculture required an adjustment in norms about food sharing. In hunter-gatherer bands, where it was less clear when the next meal would arrive and in what quantity, social norms mitigated risk by encouraging the sharing of game with the group—regardless of whether someone had assisted in the kill. With the advent of sedentary agriculture, a social norm that permitted people to keep most of their their surplus harvest encouraged individual initiative and generated considerably more food in successful agrarian societies.

Though the evolution of social norms is central to social progress, norms tend to persist because they are socially determined. Once a group establishes a norm, the norm tends to reinforce itself as people observe one another behaving according to the norm—even incurring a cost to punish one another for straying from it. Romer argues that a key obstacle to social progress is the persistence of inefficient norms. Think, for example, about the persistence of norms that prescribe narrow roles for women in societies that otherwise aspire to develop dynamic, modern economies.

Romer believes that civic startups are a key mechanism by which people can shift away from persistently inefficient social norms. When dissidents can experiment with new ways of doing things in startups, new ways of life can emerge and, if demonstrably successful, spread to societies that would otherwise prove resistance to change. Thinking at the city-scale, Romer cites the examples of William Penn’s efforts in Philadelphia—a city that brought religious tolerance to the American colonies—and Deng Xiaoping’s efforts in Shenzhen—a city that brought market-based economic principles to communist China.


Paul Romer
Paul Romer
University Professor (on leave) / NYU

Paul Romer, an economist and policy entrepreneur, is a University Professor taking leave from NYU to serve as Chief Economist of the World Bank starting September 26, 2016. Romer was the former Director of the Marron Institute and the founding director of the Urbanization Project at the Leonard N. Stern School of Business. The Urbanization Project conducts applied research on the many ways in which policymakers in the developing world can use the rapid growth of cities to create economic opportunity and undertake systemic social reform.

Before coming to NYU, Paul taught at Stanford University's Graduate School of Business. While there Paul took an entrepreneurial detour to start Aplia, an education technology company dedicated to increasing student effort and classroom engagement. To date, students have submitted over 1 billion answers to homework problems on the Aplia website.

Prior to Stanford, Paul taught in the economics departments at the University of California, Berkeley, the University of Chicago, and the University of Rochester. He is a Research Associate at the National Bureau of Economic Research and a Fellow of the American Academy of Arts and Sciences. He is a non-resident scholar at both the Center for Global Development in Washington, D.C. and the Macdonald Laurier Institute in Ottawa, Ontario. In 2002, he received the Recktenwald Prize for his work on the role of ideas in sustaining economic growth.

Paul earned a bachelor of science in mathematics from the University of Chicago. He earned a doctorate in economics from the University of Chicago after doing graduate work at the Massachusetts Institute of Technology and Queens University.