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.

Speakers

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Paul Romer
Senior Fellow / Marron Institute

Paul Romer, economist and policy entrepreneur, is a co-recipient of the 2018 Nobel Prize in Economics Sciences and University Professor in Economics at NYU. He has spent his career at the intersection of economics, innovation, technology, and urbanization, working to speed up human progress.

Paul received the Nobel Prize in Economic Sciences for his work “integrating technological innovations into long-run macroeconomic analysis,”
which integrated ideas and innovation into economic models for the first time, making clear the societal benefits possible when people join together and collaborate in new ways.

Paul previously served as the Chief Economist at the World Bank where he worked to advance the multilateral institution’s critical research function. He is the Founding Director of NYU’s Marron Institute of Urban Management, which works to help cities plan for their futures and improve the health, safety, and mobility of their citizens, as well as the founder of the Charter Cities initiative, which introduced a framework designed to help traditionally disenfranchised populations share in the benefits of rapid urbanization.

Paul has made numerous contributions to public policy, including writing an opinion for the United States Justice Department on the Microsoft Antitrust ruling, serving on the Singaporean Prime Minister’s Independent Academic Advisory Panel on University Policy, and consulting for a host of other governments and legislators on policy initiatives tied to education, urbanization, science, technology, and innovation.

Prior to coming to NYU, Paul taught at Stanford University’s Graduate School of Business and in the Economics departments of the University of California, Berkeley, the University of Chicago, and the University of Rochester. While teaching at Stanford, Paul founded Aplia, an education technology company dedicated to increasing student effort and classroom engagement. To date, students have submitted more than 2.4 billion answers to homework problems on the Aplia website. Aplia was sold to Cengage Learning in 2007.

He is currently a Research Associate at the National Bureau of Economic Research, a Fellow of the American Academy of Arts and Sciences, and a non-resident scholar at Macdonald-Laurier Institute in Ottawa, Ontario. In 2002, he received the Recktenwald Prize for his work on the role of ideas in sustainable economic growth.
 Paul earned a B.S. in mathematics from the University of Chicago and a Ph.D. in economics from the University of Chicago after completing graduate work at the Massachusetts Institute of Technology and Queens University.

His writing has appeared in the Wall Street Journal, the Financial Times, Econometrica, and The American Economic Review, and is a regular speaker at events ranging from TED and Aspen Ideas Festival to editorial boards and industry conferences worldwide.