A recent post talked about the advantages of specialization in general, and for aid agencies in particular. But what should you specialize in? Obviously, in your “comparative advantage,” which is economists’ laborious jargon for “what you’re good at.” But where does comparative advantage come from and how do you find your own? These thoughts were prompted by watching US Open tennis on TV, where anyone who can read their –ova’s and –ieva’s is struck by the amazing predominance of Eastern European women in pro tennis. To be precise, 48 of the 128 women in the singles draw were Slavic (there’s a few Slavic men in the US open too, but it’s far more pronounced with women). Where does Eastern Europe’s comparative advantage in female tennis come from?
(Marginal Revolution asks a related question about where all the pretty Russian women (fashion models, tennis, etc.) suddenly came from, but here at Aid Watch we NEVER use cheap, sexist promotional tactics like discussions or pictures of beautiful women.)
National stereotypes are NOT OK, but SOMETIMES they MAY reflect SOME little underlying comparative advantage (which is obviously cultural rather than racial). According to a really old and lame joke, which OTHER people have made, and I am repeating here under duress only for educational purposes:
Heaven is where the police are British, the cooks French, the mechanics German, the lovers Italian, and it is all organized and run by the Swiss. Hell is where the police are German, the cooks British, the mechanics French, the lovers Swiss, and it is all organized and run by the Italians.
The classic economist’s explanation of comparative advantage is that it reflects what you possess in abundance relative to what you lack, compared to others. So a fertile-land-abundant country like the US has a big comparative advantage in agriculture –DUH.
Another (not mutually exclusive) explanation is that you develop comparative advantage by “learning by doing,” which is economists’ laborious jargon for “practice.” In Malcolm Gladwell’s entertaining new book Outliers, the explanation for Bill Gates’ success is that, by some accidents of fate, he happened to be one of the few 8th graders in the nation with almost unlimited access to a powerful computer in 1968. When you’ve been writing software since the 8th grade (plus possessing IQ in abundance, even if you lack everything else) you have a comparative advantage when you launch a software company 8 years later.
So some hints for aid agencies or NGOs deciding what is their comparative advantage is (1) what do you have in abundance compared to the others, and (2) what have you been practicing at already for 8 years?
And now let's crowd-source the question: how did Slavic women get a comparative advantage in tennis?