The importance of the Political in Political Economy

I’ve always been more interested in political economy than economics as a stand alone discipline.  Perhaps because my undergraduate degree was in Political Science and I recognized early on that it didn’t matter how good your economic policies were–if you couldn’t convince the electorate of that fact, you were unlikely to be able to pass said policies.  And if you did, it would be hard to build much public enthusiasm for them.  I try to teach my students how important it is to understand both the politics and the economics of a certain situation because understanding one without the other will be less than useful.  To wit, I once had an undergraduate student many years ago suggest the world would be a much better place if there were economist dictators in each country.  It was hard to keep a straight face on that one and it was also hard to know where to start on the many things wrong with that argument.

Anyway, I’m thinking of these things today because of the Mexican government’s almost ludicrous inability to sell their economic reforms.  I’ve railed before about EPN’s crack PR team that seems to know absolutely nothing about PR.  Here is another instance where I think a tiny drop of common sense would tell a PR person (or anyone actually) that the following TV advertisement is *not* how to sell the government’s economic reforms.  Dios mio, check it out for yourself. Note that it has no English sub-titles, understandably given its target audience, but I think you’ll be able to get the drift even if you don’t speak Spanish.  Strangely, it does have Spanish subtitles, which seems off putting and insulting.  (there is that PR team working overtime again).

Unsurprisingly, the reaction on social media has been scathing  Here are a few reactions:

a. “anuncio imbécil”  (Idiotic ad)

b. ““Nos quieren quitar hasta la libertad de quejarnos.” Ese anuncio es poco convincente, almidonado y construido sobre uno de los estereotipos sociales más humillantes: el del “mexicano humilde.”  [roughly translated:  they even want to take away our freedom to complain.  The ad is unconvincing, stiff (stilted), and based on one of the most humiliating social stereotypes, that of the humble (poor) Mexican.

As the article rightly points out, for a government with such low popularity and credibility to design a campaign arguing that people should shut up and stop complaining is really something. One of the actors in the spot actually says “Ya chole con tus quejas,” which means “enough already with your complaints.”   Hmm, I wonder why their polling numbers are so low?

History & Economic Development, Part 2

Jared Diamond’s Guns, Germs, and Steel blew my mind when I first read it years ago and I continue to use it in my Graduate development course.  Among other things, he discusses which regions first moved from hunting and gathering to settled agriculture (called the Neolithic Revolution) and why.  He goes on to show how this revolution gave these regions a big jump up in terms of economic development, showing that early geography mattered a lot for regional development and led to some path dependence.  What’s also interesting, however, is that geography wasn’t fate.  The Fertile Crescent, the region which first moved to settled agriculture, is hardly a bastion of high economic development today.

Along those lines, Ola Olsson and Christopher Palk have an interesting new working paper entitled “Long-Run Cultural Divergence: Evidence From the Neolithic Revolution.”  It turns out that the early leg up has implications for current political development too.  Here’s the abstract:

This paper investigates the long-run influence of the Neolithic Revolution on contemporary cultural norms and institutions as reflected in the imension of collectivism-individualism. We outline an agricultural origins-model of cultural divergence where we claim that the advent of farming in a core region was characterized by collectivist values and eventually triggered the out-migration of individualistic farmers towards more and more peripheral areas. This migration pattern caused the initial cultural divergence, which remained persistent over generations. The key mechanism is demonstrated in an extended Malthusian growth model that explicitly models cultural dynamics and a migration choice for individualistic farmers. Using detailed data on the date of adoption of Neolithic agriculture among Western regions and countries, the empirical findings show that the regions which adopted agriculture early also value obedience more and feel less in control of their lives. They have also had very little experience of democracy during the last century. The findings add to the literature by suggesting the possibility of extremely long lasting norms and beliefs influencing today’s socioeconomic outcomes.