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The Surprising Instability of Export Specializations

We study the instability of hyper-specialization of exports. We have two main findings. (1) Specializations are surprisingly unstable: Export ranks are not persistent, and new top products and destinations replace old ones. Measurement error is unlikely to be the main or only determinant of this pattern. (2) Source-country factors are not the main explanation of this instability: Only 20% of the variation in export growth can be explained by variation in comparative advantage (source-by-product factors), while another 20% of the variation in export growth can be explained by variation in bilateral (source-by-destination) factors.

How much long-run economic growth happens at the country level?

Policy and academic discussions of economic growth usually focus on country-level outcomes and determinants. But how much of the variation in long-run growth really happens at the country level? To answer this question, we collect data on growth at the national level (from standard sources), or at the provincial level (from Gennaioli et al.  (2014 )), and decompose it into variation due to province, country-level or supra-national factors. 

By Diego Anzoategui, William Easterly, and Steven Pennings

The European Origins of Economic Development

Although a large literature argues that European settlement outside of Europe during colonization had an enduring effect on economic development, researchers have been unable to assess these predictions directly because of an absence of data on colonial European settlement. We construct a new database on the European share of the population during colonization and examine its association with economic development today. We find a strong, positive relation between current income per capita and colonial European settlement that is robust to controlling for the current proportion of the population of European descent, as well as many other country characteristics. The results suggest that any adverse effects of extractive institutions associated with small European settlements were, even at low levels of colonial European settlement, more than offset by other things that Europeans brought, such as human capital and technology. 

William Easterly and Ross Levine

Socio-Religious Institutions and Economic Migration: Case Study of the Bai Clansmen from Anxi, Fujian in Southeast Asia, c. 1880-present

Spanning over 24 generations, the descendants of Bai Yingshun have dispersed all over southeast Asia away from their homeland, the Chinese city of Longmen. Thousands of miles away from Longmen, the Bai maintain a strong sense of the identity of their forefathers in a way that has affected their economic outcomes. The story of the Bai suggests that, even outside the nation-state, an informal institution like an ethnic group can be a powerful force in shaping one's economic well-being. 

Kwee Hui Kian

The Murid Ethic and the Spirit of Entrepreneurship: Faith, Business and Mobility among Murid immigrants in Gabon

The Muridiyya order founded by the Senegalese Muslim cleric, Shaykh Ahmadu Bamba Mbakke, at the turn of the 20th century, has been the object of extensive scholarly investigation.[1] From its inception research on the Murid organization has focused primarily on the political and economic dimensions of the order. Scholars have investigated the role of the Muridiyya in Senegal’s colonial economy they have also explored the relationships between the Murid leadership and the colonial and post-colonial Senegalese state.  By reconstructing the history of Murid migration to Gabon, this paper contributes to the growing scholarship on Murid international migration. 

Cheikh Anta Babou

A Long History of a Short Block: Four Centuries of Development Surprises on a Single Stretch of a New York City Street

Economic development is usually analyzed at the national level, but the literature on creative destruction and misallocation suggests the importance of understanding what is happening at much smaller units. This paper does a development case study at an extreme micro level (one city block in New York City), but over a long period of time (four centuries). 

William Easterly, Laura Freschi, and Steven Pennings

The Influence of Ancestral Lifeways on Individual Economic Outcomes in Sub-Saharan Africa

We explore the role of an individual’s historical lineage in determining economic status, holding constant his or her current location. This is contemporary to the more common approach to studying how history shapes economic outcomes across locations. Motivated by a large literature in social sciences stressing the beneficial influence of agricultural transition on contemporary economic performance at the level of countries, we examine the relative status of descendants of agriculturalists vs. pastoralists.

Stelios Michalopoulos, Louis Putterman and David N. Weil

The New Economic Case for Migration Restrictions

A new strand of research posits that migration restrictions could be not only desirably redistributive, but in fact globally efficient. This is the new economic case for migration restrictions. The case rests on the possibility that without tight restrictions on migration, migrants from poor countries could transmit low productivity (“A ” or Total Factor Productivity) to rich countries—offsetting efficiency gains from the spatial reallocation of labor from low to high-productivity places. We provide a novel assessment, proposing a simple model of dynamically efficient migration under productivity transmission and calibrating it with new macro and micro data.

Listen to the podcast episode here.
See the infographic here.

Michael Clemens & Lant Pritchett

Housing Affordability: Top-Down Design and Spontaneous Order

Urban planners are often suspicious of spontaneous order, associating it with chaos and anarchy. Though top-down design is indispensable for the construction of city infrastructure, it too often imposes excessive regulatory standards, which make housing unaffordable to the poor. In rapidly urbanizing countries, poor migrants from the countryside are especially hard hit. Subsidized housing provided to low-income households by governments rarely helps, as often this housing is too limited in scope.
Alain Bertaud

Read the working paper here
Listen to the podcast episode here.