|
|
|
| 2008 |
DRI Working Paper No.29 View Paper
Author: William Easterly, NYU
Title: Can the West save Africa?
Abstract: In the new millennium, the Western aid effort towards Africa has surged due to writings by well-known
economists, a celebrity mass advocacy campaign, and decisions by Western leaders to make Africa
a major foreign policy priority. This survey contrasts the predominant "transformational" approach
(West saves Africa) to occasional swings to a "marginal" approach (West takes one small step at a
time to help individual Africans). Evaluation of "one step at a time" initiatives is generally easier than
that of transformational ones either through controlled experiments (although these have been much
oversold) or simple case studies where it is easier to attribute outcomes to actions. We see two themes
emerge from the literature survey: (1) escalation. As each successive Western transformational effort
has yielded disappointing results, the response has been to try an even more ambitious effort. (2) the
cycle of ideas. Rather than a progressive testing and discarding of failed ideas, we see a cycle in aid
ideas in many areas in Africa, with ideas going out of fashion only to come back again later after some
lapse long enough to forget the previous disappointing experience. Both escalation and cyclicality
of ideas are symptomatic of the lack of learning that seems to be characteristic of the "transformational"
approach. In contrast, the "marginal" approach has had some successes in improving the well-being
of individual Africans, such as the dramatic fall in mortality.
|
| 2007 |
DRI Working Paper No.28 View Paper
Author: Tobias Pfutze, NYU
Title: Do Remittances Promote Democratization?
Abstract: This paper presents evidence for international migration to have played a significant role in the Mexican democratization process. It argues that the non-taxability of remittances reduces an incumbent government's ability to maintain political patronage systems and, as a result, elections will become more competitive. The empirical results, using data from municipal elections in Mexico, support this theory. Estimating an instrumental variable probit model, I find that remittances significantly increase the probability of a party in opposition to the former state party PRI to win in a municipal election. Moving from the first to the third quartile of the remittances measure increases that probability in previously state party ruled towns by more than 15% when party preferences are controlled for. |
DRI Working Paper No.27 View Paper
Author: William Easterly, NYU and Brookings
Title: How the Millennium Development Goals are Unfair to Africa
Abstract:Those involved in the Millennium Development Goal (MDG) campaign routinely state “ Africa will miss all the MDGs.” This paper argues that a series of arbitrary choices made in defining “success” or “failure” as achieving numerical targets for the Millennium Development Goals made attainment of the MDGs less likely in Africa than in other regions even when its progress was in line with historical or contemporary experience of other regions. The statement that “Africa will miss all the MDGs” thus paints an unfairly bleak portrait of Africa. |
| 2006 |
DRI Working Paper No.26 View Paper
Author: Diego Comin, NYU; William Easterly, NYU; Erick Gong, UC Berkeley
Title: Was the Wealth of Nations Determined in 1000 B.C.?
Abstract: We assemble a dataset on technology adoption in 1000 BC, 0 AD, and 1500 AD for the predecessors to today's nation states. We find that this very old history of technology adoption is surprisingly significant for today's national development outcomes. Although our strongest results are for 1500 AD, we find that even technology as old as 1000BC matters in some plausible specifications. |
DRI Working Paper No.25 View Paper
Author: William Easterly, NYU
Title: Are Aid Agencies Improving?
Abstract: The record of the aid agencies over time seems to indicate weak evidence of progress over time in response to learning from experience, new knowledge, or changes in political climate. The few positive results are an increased sensitivity to per capita income of the recipient (although it happened long ago) a decline in the share of food aid, and a decline in aid tying. Most of the other evidence -- increasing donor fragmentation, unchanged emphasis on technical assistance, little or no sign of increased selectivity with respect to policies and institutions, the adjustment lending-debt relief imbroglio -- suggests an unchanged status quo, lack of response to new knowledge, and repetition of past mistakes. |
DRI Working Paper No.24 View Paper
Author: Alberto Alesina, Harvard University; William Easterly, New York Univerity; Janina Matuszeski, Harvard University
Title: Artificial States
Abstract: Artificial states are those in which political borders do not coincide
with a division of nationalities desired by the people on the ground. We
propose and compute for all countries in the world two new measures
of the degree to which states are artificial. One is based on measuring
how borders split ethnic groups into two separate adjacent countries. The
other measures how straight land borders are, under the assumption the
straight land borders are more likely to be artificial. We then show that
these two measures seem to be highly correlated with several measures of
political and economic success. |
DRI Working Paper No.23 View Paper
Author: Rema Hanna, Graduate School of Public Service, New York Univerity
Title: U.S. Environmental Regulation and FDI: Evidence from a Panel of U.S. Based Multinational Firms
Abstract: This paper measures the response of U.S. based multinational firm to the Clean Air Act Amendments (CAAA), which dramatically strengthened U.S. environmental regulation. Using a panel of firm-level data over the period 1966-1999, I estimate the effect of regulation on a multinational’s foreign production decisions. The CAAA induced substantial variation in the degree of regulation faced by firm, allowing for the estimation of econometric models that control for firm-specific characteristics and industrial trends. I find that the CAAA caused regulated multinational firm to increase their foreign assets by 5.3% and their foreign output by 9%. In aggregate, this increase represents approximately 0.6% of the stock of multinationals’ domestic assets in polluting industries. Contrary to common beliefs, I find that heavily regulated firms did not disproportionately increase foreign investment in developing countries. Finally, this paper presents limited evidence that U.S. based multinationals increased imports of highly polluting goods when faced with tougher U.S. environmental regulation. Overall, these results are consistent with the view that U.S. environmental regulations cause U.S. firm to move capital and jobs abroad. |
DRI Working Paper No.22 View Paper
Author: Marianne Bertrand, University of Chicago Graduate School of Business, NBER, CEPR and IZA; Simeon Djankov, International Finance Corporation and CEPR; Rema Hanna, Graduate School of Public Service, New York Univerity; Sendhil Mullainathan, Harvard University and NBER
Title: Does Corruption Produce Unsafe Drivers?
Abstract: We follow 822 applicants through the process of obtaining a driver’s license in New Delhi, India. To understand how the bureaucracy responds to individual and social needs, participants were randomly assigned to three groups: “bonus,” “lesson” and comparison groups. In the bonus group, participants were offered a financial reward if they could obtain their license fast; in the lesson group, participants were offered free driving lessons. To gauge driving skills, we performed a surprise driving test after participants had obtained their licenses. Several findings about corruption emerge. First, the bureaucracy is responsive to individual needs. Those who want their license faster (e.g. the bonus group), get it 40% faster and at a 20% higher rate. However, the bureaucracy is insensitive to social needs. Learning to drive safely is not how those in the bonus group obtain their license: in fact, 69% of them were rated as “failures” on our independent driving test. Second, those in the lesson group, despite superior driving skills, are only slightly more likely (by 8 percentage points) to get a license than the comparison group and far less likely (by 29 percentage points) than the bonus group. Third, bureaucrats create red tape by arbitrarily failing drivers, independent of their actual driving skills. These findings reject the view that corruption is used primarily to circumvent socially unimportant parts of regulation. |
DRI Working Paper No.21 View Paper
Author: Shanker Satyanath, New York University; Daniel Berger, New York University
Title: Capital Controls, Political Institutions, and Economic Growth: A Cross Country and Panel Analysis
Abstract: Disastrous events like the East Asian financial crisis of 1997-98 highlight the potential humanitarian consequences of governments’ decisions to liberalize international capital flows. Despite these consequences little systematic attention has been paid to whether and how politics affects the relationship between capital controls and long term growth. Statistical analyses conducted by economists largely show no correlation between capital controls and long term growth. We show that this is not the case when political institutions are taken into account. We demonstrate that countries that are simultaneously authoritarian and have a large number of societal divisions are negatively affected by capital controls, while democratic countries do not suffer adverse growth effects from capital controls. In doing so we systematically address the concerns of measurement error, reverse causation, and omitted variables bias that make it difficult to precisely assess the causal effects of capital controls. Our results are robust to numerous changes of specifications and samples and have significant policy implications. |
DRI Working Paper No.20 View Paper
Author: Shanker Satyanath, New York University; Arvind Subramanian, IMF
Title: The Political Economy of Nominal Macroeconomic Pathologies
Abstract: Recognizing that inflation and the macroeconomic policies that affect it can emanate from distributional conflicts in society, we examine the deep determinants of several nominal pathologies and related policy variables from a distributional perspective. We develop new instruments and use well-established existing instruments for these deep determinants and find that two deep determinants-- societal divisions and democratic institutions --have a powerful and robust causal impact on nominal macroeconomic outcomes. Surprisingly, given the widespread attention accorded to the effects of populist democracy on inflation, democracy robustly serves to reduce inflation over the long term. A one standard deviation increase in democracy reduces inflation nearly four-fold. A similar increase in societal divisions increases inflation more than two-fold. Our results are robust to alternative measures of democracy, samples, covariates, and definitions of societal division. It is particularly noteworthy that a variety of nominal pathologies and/or their proximate policy causes discussed in the recent macroeconomic literature, such as procyclical policy, absence of central bank independence, original sin, and debt intolerance, have common origins in societal divisions and/or undemocratic political institutions. |
DRI Working Paper No.19 View Paper
Author: David Leblang, University of Colorado; Shanker Satyanath,New York University
Title: Politically Generated Uncertainty and Currency Crises:
Theory, Tests, and Forecasts
Abstract: While it is widely acknowledged that political factors contribute to currency crises there have been few efforts at using political variables to improve crisis forecasts. We discuss ways in which political factors can be incorporated into theoretical models of crises, and develop testable hypotheses relating variations in political variables to variations in the probability of a currency crisis. We show that the incorporation of political variables into diverse crisis models substantially improves their out-of-sample predictive performance. |
| 2005 |
DRI Working Paper No.18 View Paper
Author: William Easterly, NYU
Title: How to assess the needs for aid? The answer: Don't ask.
Abstract: not available |
DRI Working Paper No.17 View Paper
Author: William Easterly, NYU; Jozef Ritzen,
Office of the President, Maastricht University;
Michael Woolcock, Development Research Group, The World Bank, and Kennedy School of Government, Harvard University
Title: Social Cohesion, Institutions and Growth
Abstract: We present evidence that measures of ‘social cohesion’, such as income inequality and ethnic fractionalization, endogenously determine institutional quality, which in turn causally determines growth. |
DRI Working Paper No.16 View Paper
Author: Rema Hanna, Wagner School of Public Service, NYU; Esther Duflo, Department of Economics, MIT
Title: Monitoring Works: Getting Teachers to Come to School
Abstract: In the rural areas of developing countries, teacher absence is a widespread problem. This paper tests whether a simple incentive program based on teacher presence can reduce teacher absence, and whether it has the potential to lead to more teaching activities and better learning. In 60 informal one-teacher schools in rural India, randomly chosen out of 120 (the treatment schools), a financial incentive program was initiated to reduce absenteeism. Teachers were given a camera with a tamper-proof date and time function, along with instructions to have one of the children photograph the teacher and other students at the beginning and end of the school day. The time and date stamps on the photographs were used to track teacher attendance. A teacher’s salary was a direct function of his attendance. The remaining 60 schools served as comparison schools. The introduction of the program resulted in an immediate decline in teacher absence. The absence rate (measured using unannounced visits both in treatment and comparison schools) changed from an average of 42 percent in the comparison schools to 22 percent in the treatment schools. When the schools were open, teachers were as likely to be teaching in both types of schools, and the number of students present was roughly the same. The program positively affected child achievement levels: a year after the start of the program, test scores in program schools were 0.17 standard deviations higher than in the comparison schools and children were 40 percent more likely to be admitted into regular schools.
|
DRI Working Paper No.15 View Paper
Author: William Easterly, Department of Economics, New York University
Title: "Reliving the 50s: the Big Push, Poverty Traps, and Takeoffs in Economic Development"
Abstract:The classic narrative of economic development -- poor countries are caught in poverty traps, out of which they need a Big Push involving increased aid and investment, leading to a takeoff in per capita income -- has been very influential in development economics since the 1950s. This was the original justification for foreign aid. The narrative lost credibility for a while but has made a big comeback in the new millennium. Once again it is invoked as a rationale for large foreign aid programs. This paper applies very simple tests to the various elements of the narrative. Evidence to support the narrative is scarce. Poverty traps in the sense of zero growth for low income countries are rejected by the data in most time periods. There is evidence of divergence between rich and poor nations in the long run, but this does not imply zero growth for the poor countries. Moreover, this divergence is more associated with institutions rather than the disadvantages of initial income. The idea of the takeoff does not garner much support in the data. Takeoffs are rare in the data, most plausibly limited to the Asian success stories. Even then, the takeoffs are not associated with aid as the standard narrative would imply. |
| 2004 |
DRI Working Paper No.14 View Paper
Author: Kevin Davis, School of Law, New York University
Title: "What Can the Rule of Law Variable Tell Us About Rule of Law Reforms?"
Abstract: The recent resurgence of optimism regarding the role of legal
reforms in promoting development seems to be based in part upon crosscountry
statistical analyses that purport to show causal relationships
between variables measuring characteristics of legal institutions and
variables measuring levels of various kinds of development. However, the
persuasiveness of these analyses is limited by the quality of the legal data
upon which they rely. As it turns out, many of the variables that are
commonly used to measure respect for the rule of law, enforcement of
property rights and contracts do not capture information capable of
shedding light upon the potential impact of purely legal reforms. In some
cases the variables capture the interaction between legal and non- legal
features of society. In other cases they aggregate the effects of a large
number of legal institutions. In still other cases they capture information
about features of legal systems that are not amenable to reform. |
DRI Working Paper No.13 View Paper
Author: Boyan Jovanovic, Department of Economics, New York University
Title: "The Product Cycle and Inequality"
Abstract: This paper models the product cycle and explains how it relates to world
inequality. In the model, both phenomena arise because skilled people have a
comparative advantage in making high-tech products. The model can explain
up to a 10:1 income differential between people and up to a 7:1 differential
between countries. Tariff policies and intellectual-property protection have a
much larger effect here than in some other models.
|
|
DRI Working Paper No.12 View Paper
Author:Jonathan Morduch, Public Policy and Economics, New York University
Title: "Micro-insurance: the next revolution?"
Abstract: N/A
|
DRI Working Paper No.11 View Paper
Author: Adam Przeworski, Department of Politics, New York University
Title: "The Last Instance: Are Institutions the Primary Cause of Economic Development?"
Abstract: "Following North, neo-institutionalists claim that institutions are the ”primary” cause of economic development, ”deeper” than the supply of factors and methods for their use, what marxists would call ”forces of production.” Yet while the conclusion is di¤erent, the historical narratives di¤er little accross these perspectives. How, then, are such conclusions derived? Can anything be said to be ”primary”? I conclude that ”causal primacy” is an answer to an incorrectly posed question. Institutions and development are mutually endogenous and the most we can hope for is to identify their reciprocal impacts." |
|
DRI Working Paper No.10 View Paper
Author: William Easterly (New York University and Center for Global Development), Roberta Gatti (Development Research Group, The World Bank), Sergio Kurlat (Development Research Group, The World Bank)
Title: "Development, Democracy, and Mass Killings"
Abstract: "Using a newly assembled dataset spanning from 1820 to 1998, we study the relationship between the occurrence and cruelty of episodes of mass killing and the levels of development and democracy across countries and over time. We find that massacres are more likely at intermediate levels of income and less likely at very high levels of democracy. Surprisingly, discrete improvements in the democracy index do not translate into a lower chance of massacres unless the countries move to the highest level of democracy, and even that finding is not completely robust."
|
|
DRI Working Paper No.9 View Paper
Author: Jess Benhabib and Adam Przeworski
Department of Economics, Department of Politics, New York University
Title: "The Political Economy of Redistribution under Democracy"
Abstract: "We ask what redistributions of income and assets are feasible in a democracy, given the initial assets and their distribution. The question is motivated by the possibility that if redistribution is insufficient for the poor or excessive for the rich, they may turn against democracy. In turn, if no redistribution simultaneously satisfies the poor and the wealthy, democracy cannot be sustained. Hence, the corollary question concerns the conditions under which democracy is sustainable. We find that democracies survive in wealthy societies. Conditional on the initial income distribution and the capacity of the poor and the wealthy to overthrow democracy, each country has a threshold of capital stock above which democracy survives. This threshold is lower when the distribution of initial endowments is more equal and when the revolutionary prowess of these groups is lower. Yet in poor unequal countries there exist no redistribution scheme which would be accepted both by the poor and the wealthy. Hence, democracy cannot survive. As endowments increase, redistribution schemes that satisfy both the poor and the wealthy emerge. Moreover, as capital stock grows the wealthy tolerate more and the poor less redistribution, so that the set of feasible redistributions becomes larger. Since the median voter prefers one such scheme to the dictatorship of either group, democracy survives."
|
|
DRI Working Paper No.8 View Paper
Authors: Bruce Bueno de Mesquita (Hoover Institution, Stanford University and Department of Politics, New York University), James D. Morrow (Department of Political Science, University of Michigan), Randolph M. Siverson (Department of Political Science, University of California, Davis) and Alastair Smith (Department of Political Science, Yale University)
Title: "Testing the Selectorate Explanation of the Democratic Peace"
Abstract: Not Available
|
|
DRI Working Paper No.7 View Paper
Authors: Niall Ferguson (Stern, NYU) and Moritz Schularick (Free University Berlin and Deutsche Bank Research)
Title: "The Empire Effect: The Determinants of Country Risk in the First Age of Globalization, 1880-1913"
Abstract: "This paper reassesses the importance of colonial status to investors before 1914 by means of multivariable regression analysis of the data available to contemporaries. We show that British colonies were able to borrow in London at significantly lower rates of interest than non-colonies precisely because of their colonial status, which mattered more than either gold convertibility or a balanced budget. Allowing for differences not only in monetary and fiscal policy but also in economic development and location, the "Empire effect" was a discount of around 100 basis points. We conclude that investors saw colonial status as a no-default guarantee."
|
DRI Working Paper No.6 View Paper
Author: William Easterly
Title: "An Identity Crisis?: Examining IMF Financial Programming"
Abstract: The IMF uses its well-known “financial programming” model to derive monetary and fiscal programs to achieve desired macroeconomic targets in countries undergoing crises or receiving debt relief. This paper considers under what conditions financial programming would work best, and then tests those conditions in the data. The key restrictions of financial programming are assumptions about exogeneity of some components of identities with respect to others, and the assumption of stable and “reasonable” parameters for some very simple behavioral relationships. In at least the literal applications of the framework, financial programming does not do well in forecasting the target variables, even when some components of the identity are known with certainty. |
|
DRI Working Paper No.5 View Paper
Author: William Easterly
Title: "Empirics of Strategic Interdependence: The Case of the Racial Tipping Point"
Abstract: "The Schelling model of a "tipping point" in racial segregation, in which whitesflee a neighborhood in large numbers once a threshold of nonwhites is reached, is acanonical model of strategic interdependence. Moreover, the idea of "tipping" explaining segregation is widely accepted in the academic literature and popular media. I use census tract data for metropolitan areas of the US from 1970 to 2000 to test the predictions of the Schelling model and find that this particular model of strategic interaction largely fails the tests. There is more "white flight" out of neighborhoods with a high initial share of whites than out of more racially mixed neighborhoods."
|
| 2003 |
DRI Working Paper No.4 View Paper
Author: William Easterly, Ross Levine and David Roodman, Department of Economics, New York University. Carlson School of Management, University of Minnesota, and Center for Global Development
Title: "New Data, New Doubts: A Comment on Burnside and Dollar's "Aids, Policies and Growth(2000)"
Abstract: The Burnside and Dollar (2000) finding that aid raises growth in a good policy environment has had an important influence on policy and academic debates. We conduct a data gathering exercise that updates their data from 197093 to 197097, as well as filling in missing data for the original period 197093. We find that the BD finding is not robust to the use of this additional data.
Dataset |
DRI Working Paper No.3 View Paper
Author: Jess Benhabib and Mark M. Spiegel, Department of Economics, New York University and Federal Reserve Bank of San Fransisco
Title: "Human Capital and Technology Diffusion"
Abstract: This paper generalizes the Nelson-Phelps catch-up model of technology diffusion.We allow for the possibility that the pattern of technology difusion can be exponential, which would predict that nations would exhibit positive catch-up with the leader nation, or logistic, in which a country with a suffciently small capital stock may exhibit slower total factor productivity growth than the leader nation.
We derive a nonlinear specification for total factor productivity growth that nests these two specifications. We estimate this specification for a cross-section of nations from 1960 through 1995. Our results support the logistic specification, and are robust to a number of sensitivity checks. Our model also appears to predict slow total factor productivity growth well. 22 of the 27 nations that we identify as lacking the critical human capital levels needed to achieve faster total factor productivity growth than the leader nation in 1960 did achieve lower growth over the next 35 years. |
DRI Working Paper No.2 View Paper
Author: Niall Ferguson, Stern School of Business, New York University
Title: "British Imperialism Revised: The Costs and Benefits of 'Anglobalization"
Abstract: Not Available |
DRI Working Paper No.1 View Paper
Author: William Easterly, New York University Center for Global Development
Title: "National Policies and Economic Growth: A Reappraisal"
Abstract: Not Available |
|
|
|
