To boldly go where no economist has gone before

Economists tend to write relatively dry, but succinct abstracts. José Gabriel Palma, a professor at the University of Cambridge, dares to break the mold.  The title of the paper gives you a hint of things to come: Latin America’s social imagination since 1950. From one type of ‘absolute certainties’ to another — with no (far more creative) ‘uncomfortable uncertainties’ in sight.

The abstract is long (the paper itself is 33 pages single spaced!) but definitely worth checking out in full.  I’ve underlined some of my favorite parts:

Latin America is a region whose critical social imagination has stalled, changing from a uniquely prolific period during the 1950s and 1960s — revolving around structuralism, ‘dependency analyses’, Baran and Sweezy’s-type analysis of ‘monopoly capitalism’, French structuralism, the German Historical School, Keynesian and macroeconomics, and the ideas of endogenous intellectuals (such as Mariátegui) — to an intellectually barren one since the 1982 debt crisis and the fall of the Berlin Wall. Although this has happened in most of the world, in Latin America both the process of re-legitimisation of capital, and the downswing of the cycle of critical thinking have been particularly pronounced as neo-liberalism has conquered the region, including most of its progressive intelligentsia, just as completely (and just as fiercely) as the Holy Inquisition conquered Spain — transforming critical thinkers into an endangered species.

As pre-1980 critical analytical work had been characterised by an unremitting critique of the economy, once the mainstream left conceded the economy as the fundamental hub of the struggle, there seemed to have been little else left in terms of basic ideological principles to hold onto in a thoughtful way — i.e., it was as if the mainstream left had lost not just some but all its ideological relevance, making it particularly difficult for them to move forward in an innovative way. As a result, in terms of development strategies and economic policies both the traditional and the ‘new-left’ are in one way or another still stuck in the past.

While in some countries the former basically wants to recreate the past, in others the latter seems to be unable to do anything more imaginative than to attempt to create a future which is simply the exact opposite of that past — the main guiding economic policy principle being to transform practically anything that before was considered “virtue” into “vice”, and vice-versa. This narrow ‘reverse-gear’ attitude of the ‘new-left’ has delivered not only a disappointing economic performance (particularly in terms of productivity-growth), but also rather odd political settlements characterised by a combination of an insatiable capitalist elite, a captured and unimaginative progressive political élite (the dominant classes are quite happy to let them govern as long as they do not forget who they are), passive citizens, and a stalled social imagination — a dull mélange that from time to time is sparked off by spontaneous outbursts of students’ discontent. Meanwhile, the world (with its new technological and institutional paradigms) moves on, and Asia forges ahead.

Continuing to chart his own path, Palma also has the longest list of key words that I’ve ever seen, including “Foucault,” which might be a first in economics:

Latin America, Ideology, Critical Thinking, Structuralism, Dependency, Neo- liberalism, Fundamentalism, ‘New-Left’, Top 1%, Keynes, Foucault, Prebisch, Hirschman.

New and interesting working papers

1. Engineers, Innovative Capacity and Development in the Americas by William F. Maloney and Felipe Valencia Caicedo

Using newly collected national and sub-national data and historical case studies, this Using newly collected national and sub-national data and historical case studies, this paper argues that differences in innovative capacity, captured by the density of engineers paper argues that differences in innovative capacity, captured by the density of engineers at the dawn of the Second Industrial Revolution, are important to explaining present at the dawn of the Second Industrial Revolution, are important to explaining present income differences, and, in particular, the poor performance of Latin America relative income differences, and, in particular, the poor performance of Latin America relative to North America. This remains the case after controlling for literacy, other higher to North America. This remains the case after controlling for literacy, other higher order human capital, such as lawyers, as well as demand side elements that might order human capital, such as lawyers, as well as demand side elements that might be confounded with engineering. The analysis then finds that agglomeration, certain be confounded with engineering. The analysis then finds that agglomeration, certain geographical fundamentals, and extractive institutions such as slavery affect innovative geographical fundamentals, and extractive institutions such as slavery affect innovative capacity. However, a large effect associated with being a Spanish colony remains capacity. However, a large effect associated with being a Spanish colony remains suggesting important inherited factors.

 

2. The Wind of Change: Maritime Technology, Trade and Economic Development by Luigi Pascali

The 1870-1913 period marked the birth of the first era of trade globalization. How did this tremendous increase in trade affect economic development? This work isolates a causality channel by exploiting the fact that the steamship produced an asymmetric change in trade distances among countries. Before the invention of the steamship, trade routes depended on wind patterns. The introduction of the steamship in the shipping industry reduced shipping costs and time in a disproportionate manner across countries and trade routes. Using this source of variation and a completely novel set of data on shipping times, trade, and development that spans the great majority of the world between 1850 and 1900, I find that 1) the adoption of the steamship was the major reason for the first wave of trade globalization, 2) only a small number of countries that were characterized by more inclusive institutions benefited from globalization, and 3) globalization exerted a negative effect on both urbanization rates and economic development in most other countries.

 

3.  Rainfall Risk and Religious Membership in the Late Nineteenth-Century United States by Philipp Ager and Antonio Ciccone

Building on the idea that religious communities provide mutual insurance against some idiosyncratic risks, we argue that religious membership is more valuable in societies ex- posed to greater common risk. In our empirical analysis we exploit rainfall risk as a source of common economic risk in the nineteenth-century United States and show that religious communities were larger in counties where they faced greater rainfall risk. The link between rainfall risk and the size of religious communities is stronger in counties that were more agricultural, that had lower population densities, or that were exposed to greater rainfall risk during the growing season.

Does education or personal connections matter more for getting ahead in Africa?

Thanks to my excellent colleague Moussa Blimpo (@mpblimpo) for letting me know about a really interesting 2013 Gallup survey asking Africans from 31 countries what factors matter most to be successful in life. The results are heartening in that people from most countries listed education as the number one factor.  There is a lot of interesting regional variation though.

For instance, the percentage choosing education as the most important factor was highest in Botswana (73%) and lowest in Cote d’Ivoire (13%).   Here is a table of the results:

education_africa

 

 

Apparently the results don’t vary much across demographic factors such as age and gender, but they do vary considerably according to income, political stability, and colonial heritage.  It’s clear from just looking at the table that some of the more prosperous and stable countries also have citizenry that think education is more important than personal connections for getting ahead.  Likewise, the countries at the bottom of the table are poorer and less stable.

There also seems to be a split between countries of French and British colonial heritage; that is, countries of British heritage are more likely to rank education higher than personal connections in the survey. The article notes that “Overall, across English-speaking countries in Africa, 51% of residents say education is most important to success; among residents in French-speaking countries, the figure drops to 28%.”  Gallup created a nice map to illustrate the differences:

africa_map

 

 

Life imitates art, Ukrainian edition

Manzil Lajura posted an awesome photo on Facebook of a Ukrainian parliamentary fight converted into Renaissance art.  Click on the photo below to have a better look at the “art.”

ukraine_fight

Some of the comments on Twitter were also hysterical.  Here are a few of my favorites:

Is that the Golden Mean I see? 

It’d be even more renaissance if they were naked  

Caravaggio would be proud. Look at the foreshortening on that arm. 

Perhaps more Baroque than Renaissance. Note the ‘illusionism’ of lower figure’s hands across the ‘frame  

h/t James Harvey @jamesharveytm via one of the funniest tweeters out there, Clayton Hove (@adtothebone)

USA’s Latin America policy finally grows up

Instead of killing an elected president and installing a military dictator like we did in Chile, or changing governments like a rich person changes underwear like we did in Central America, or trying to assassinate a sitting head of state like we did in Cuba, the US has finally gotten around to having a mature, serious, Latin American policy…..

 

Wait, what? Oh hell no!

An Obama administration program secretly dispatched young Latin Americans to Cuba using the cover of health and civic programs to provoke political change, a clandestine operation that put those foreigners in danger… Beginning as early as October 2009, a project overseen by the U.S. Agency for International Development sent Venezuelan, Costa Rican and Peruvian young people to Cuba in hopes of ginning up rebellion. The travelers worked undercover, often posing as tourists, and traveled around the island scouting for people they could turn into political activists.

Three things.

1. Could we please, please, please, abolish USAID once and for all? Please?

2. Despite the half-assed stupidity baked into this plan, it actually is an improvement over the cases discussed in my opening ‘graf

3. This was the Obama admin.? Not Reagan?