We previously documented a link between climate variation and historical civil wars in sub-Saharan Africa . Buhaug disputes this link, generating a series of animated news reports. The relationship between climate and conflict is an important topic that deserves careful scientific scrutiny, but we believe Buhaug’s approach is undermined by basic econometric mistakes, leading to what is currently an unhelpful debate. We briefly describe two main shortcomings in his analysis here . . .
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The development establishment today tolerates a shocking double standard on democracy for the rich versus democracy for the poor. . .
Abstract: This paper examines the impact of ethnic divisions on conflict. The analysis relies on a theoretical model of conflict (Esteban and Ray, 2010) in which equilibrium conflict is shown to be accurately described by a linear function of just three distributional indices of ethnic diversity: the Gini coefficient, the Hirschman-Herndahl fractionalization index, and a measure of polarization. Based on a dataset constructed by James Fearon and data from Ethnologue on ethno-linguistic groups and the "linguistic distances" between them, we compute the three distribution indices. Our results show that ethnic polarization is a highly significant correlate of conflict. Fractionalization is also significant in some of the statistical exercises, but the Gini coefficient never is. In particular, inter-group distances computed from language and embodied in polarization measures turn out to be extremely important correlates of ethnic conflict.
Joan Esteban, Laura Mayoral and Debraj Ray
Building on the economic research that demonstrates a positive relationship between height and worker ability, this paper considers whether employers use height as a tool for statistical discrimination. The analysis focuses on immigrants and native-born individuals because employers are likely to have less reliable signals of productivity for an immigrant than a native-born individual. Using multiple data sets, the paper presents a robust empirical finding that the wage gains associated with height are almost twice as large for immigrants than for native-born individuals . . .
We study an economy in which firms use labor and various vintages of capital in a CES production function for the final good. We explicitly solve for the investment in capital of a given vintage as a function of its age, and for the resulting stocks of capital. We show that for reasonable parameter values, inverted-U- shaped dynamics of investment and S-shaped dynamics for capital arise in equilibrium. We view the model as an explanation of intra-firm adoption lags, i.e., the observation that firms adopt innovations over time and not instantaneously.
Boyan Jovanovic and Jan Eeckhout
This essay serves as the introduction to a collection of critical writings on the relationship between institutions and economic performance. The essay not only provides an overview of the field but also explores some of the thorny questions surrounding the definition and measurement of institutions.
Kevin E. Davis
The textbook paradigm of economy-wide development rests on the premise of “balanced growth”: that is, on the presumption that all sectors will grow in unison over time as a country gets richer. This view has served us reasonably well in several circumstances, particularly those pertaining to macroeconomic models of long-term growth. An implicit view that growth is balanced across sectors, or something close to it, also underlies the notion of “trickle-down,” a stance that has strongly influenced development policy. Of course, we would all agree that balanced growth is an abstraction . .
We study inter-group conflict driven by economic changes within groups. We show that if group incomes are “low”, increasing group incomes raises violence against that group,and lowers violence generated by it. These correlations are tests for group aggression or victimization, which we apply to Hindu-Muslim violence in India. Our main result is that an increase in per-capita Muslim expenditures generates a large and significant increase in future religious conflict, an increase in Hindu well-being has no significant effect. This robust empirical finding, combined with the theory, suggests that Hindu groups have been primarily responsible for Hindu-Muslim violence in post-Independence India.
Anirban Mitra and Debraj Ray
Private international finance for individual and small business recipients seeking to improve development outcomes is particularly in vogue, and a bewildering variety of intermediaries have emerged to channel the growing capital flows. Some of these intermediaries work much like conventional charities, collecting and transmitting private donations for private recipients advancing development—defined to include both private sector growth and institutional reform . . .
n recent years scholars have begun to focus on the consequences of individuals’ exposure to civil war, including its severe health and psychological consequences. Our innovation is to move beyond the survey methodology that is widespread in this literature to analyze the actual behavior of individuals with varying degrees of exposure to civil war in a common institutional setting. We exploit the presence of thousands of international soccer (football) players with different exposures to civil conflict in the European professional leagues, and find a strong relationship between the extent of civil conflict in a player’s home country and his propensity to behave violently on the soccer field, as measured by yellow and red cards . . .
Edward Miguel, Sebastian M. Saiegh and Shanker Satyanath
We show that current differences in trust levels within Africa can be traced back to the trans-Atlantic and Indian Ocean slave trades. Combining contemporary individual-level survey data with historic data on slave shipments by ethnic group, we find that individuals whose ancestors were heavily raided during the slave trade are less trusting today. Evidence from a variety of identification strategies suggest that the relationship is causal. Examining causal mechanisms, we show that most of the impact of the slave trade is through factors that are internal to the individual, such as cultural norms, beliefs, and values.
Leonard antchekon and Nathan Nunn
Why has the expansion of women's economic and political rights coincided with economic development? This paper investigates this question, focusing on a key economic right for women: property rights. The basic hypothesis is that the process of development (i.e., capital accumulation and declining fertility) exacerbated the tension in men's conflicting interests as husbands versus fathers, ultimately resolving them in favor of the latter. As husbands, men stood to gain from their privileged position in a patriarchal world whereas, as fathers, they were hurt by a system that afforded few rights to their daughters . . .
nswering surveys is usually voluntary, yet much of our knowledge depends on the willingness of households and institutions to answer. We explore the implications of voluntary reporting on knowledge about microfinance. We show systematic biases in microfinance institutions’ choices about which survey to respond to and which specific indicators to report. The analysis focuses on data for 2,072 microfinance institutions . . .
Jonathan Morduch and Jonathan Bauchet
We assemble a dataset on technology adoption in 1000 Bc, 0 Ad, and 1500 AD for the predecessors to today’s nation states. Technological differences are surprisingly persistent over long periods of time. Our most interesting, strong, and robust results are for the association of 1500 AD technology with per capita income and technology adoption today . . .
This paper reviews the literature on culture and economics, focusing primarily on the epidemiological approach. The epidemiological approach studies the variation in outcomes across different immigrant groups residing in the same country. Immigrants presumably differ in their cultures but share a common institutional and economic environment. This allows one to separate the effect of culture from the original economic and institutional environment. This approach has been used to study a variety of issues, including female labor force participation, fertility, labor market regulation, redistribution, growth, and financial development among others.
Microfinance banks use group-based lending contracts to strengthen borrowers’ incentives for diligence, but the contracts are vulnerable to free-riding and collusion. We systematically unpack micro nance mechanisms through ten experimental games played in an experimental economics laboratory in urban Peru. Risk-taking broadly conforms to theoretical predictions, with dynamic incentives strongly reducing risk-taking even without group-based mechanisms. Group lending increases risk-taking, especially for risk-averse borrowers, but this is moderated when borrowers form their own groups. Group contracts bene t borrowers by creating implicit insurance against investment losses, but the costs are borne by other borrowers, especially the most risk averse . . .
In a recent paper, we documented strong historical linkages between temperature and civil conflict in Africa. Sutton et al. raise two concerns with our findings: that the relationship between temperature and war is based on common trends and is therefore spurious, and that our model appears overly sensitive to small specification changes. Both concerns reflect a basic misunderstanding of the analysis.
Shanker atyanath, Marshall Burke, Edward Miguel, John Dykema, and David Lobell