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Category: Economics

Published November 28, 2011

DC Folks: Talk on Food Prices and Food Riots at the CGD on Monday, December 5

I will be giving the Center for Global Development’s Massachusetts Avenue Development Seminar next Monday, December 5, 2011, at 4 pm. In case anyone would like to meet beforehand, I am free in late morning and early afternoon, so please drop me an email.

Here is the announcement for the seminar:

The Center for Global Development presents
a Massachusetts Avenue Development Seminar (MADS) on

Food Prices and Riots:
Estimating How the Level and Volatility of Food Prices Shape Social Unrest in the Developing World, 1990-2011

Featuring
Marc Bellemare
Assistant Professor of Public Policy and Economics
Sanford School of Public Policy, Duke University

With Discussant
Ed Carr
Associate Professor
Department of Geography, University of South Carolina
and
American Association for the Advancement of Science Fellow
United States Agency for International Development

Monday, December 5, 2011
4:00pm–5:30pm

at

Center for Global Development
1800 Massachusetts Avenue, NW, Third Floor, Washington, DC
*Please bring photo identification*

Paper Abstract:  Can food prices cause political unrest? Throughout history, riots have frequently broken out, ostensibly as a consequence of high food prices. This paper studies the impact of food prices on political unrest using monthly data at the international level. Results indicate that in the period 1990-2011, food price increases appear to have led to increases in political unrest, whereas food price volatility has been associated with decreased political unrest.

Published November 22, 2011

The Cost of Complex Land Titles and Ellickson’s Must-Read Book for Development Folks

Chinese customs and law have traditionally prevented a land seller from conveying outright title to a buyer. The ancient custom of dian, which persisted until the 1949 revolution, gave a land seller and his lineage an immutable option to buy back sold land at the original sale price. This little-analyzed custom discouraged soil conservation and land improvements, and, especially after 1600, contributed to China’s inability to keep pace with England. After calamitous experiences with land collectivization between 1951 and 1981, China’s Communist government began to confer private land-use rights. But, instead of making outright sales, it chose to award contractual rights only for a fixed-term, for example, 50 years in the case of an industrial parcel. For the same reasons dian did, this policy threatens to impair China’s prospects of economic development.

This is the abstract of Robert C. Ellickson’s latest paper. Land rights have been very much on my mind lately, as I am revising a paper studying their effect on rice productivity in Madagascar.

If you have an interest in development and are not familiar with Ellickson’s work, you are seriously missing out.

Ellickson is Walter E. Meyer Professor of Property and Urban Law at the Yale Law School. The first half of his book Order Without Law — which ranks among my the top five social science books — develops a theory of social norms, the essence of which is that social norms emerge and evolve in a way that maximizes the welfare of the community. This is the informal-sector equivalent to Posner’s hypothesis that the common law evolves in a way that is wealth-maximizing.

The second half of Order Without Law illustrates that theory by presenting a case study of the many social norms observed by the cattle ranchers of Shasta County, CA.

If you think you might be interested in reading Ellickson’s book but aren’t sure about purchasing the book and would like a teaser, read Ellickson’s 1989 Journal of Legal Studies article titled “A Hypothesis of Wealth-Maximizing Norms: Evidence from the Whaling Industry.” That article presents Ellickson’s theory of social norms and applies it to the norms that emerged to regiment New England’s whaling industry in the 18th and 19th centuries.

Published November 21, 2011

Chronocentrism: “This Time It’s Different”

Chronocentrism has been defined by British science journalist Tom Standage as “the egotism that one’s own generation is poised on the very cusp of history.” It is to time what ethnocentrism is to ethnicity.

From Fukuyama’s The End of History and the Last Man — “History is directional, and its endpoint is capitalist liberal democracy” — to Rifkin’s The End of Work — “We are entering a new phase in history, one characterized by the steady and inevitable decline of jobs” — to Millenarians, present-biasedness and the belief that the old rules no longer apply seem insuperable for many people.

Nowhere was this clearer than when the world’s population hit seven billion a few weeks ago. Never mind the past 25 million years of human evolution, during which humans always managed to develop technologies to feed themselves. Never mind the fact that famines are man-made and not directly caused by a lack of food to go around. Never mind all that: many commentators saw fit to inform us that the old rules no longer applied, and that we were about to enter an era of starvation and famine.

The Four Most Dangerous Words in the English Language

But chronocentric policy making can be dangerous. The four most dangerous words of investing — “This time it’s different” — are also the four most dangerous words in the English language.

Going back to the example of the world at seven billion, if you believe we have crossed a special population threshold beyond which we will experience constant starvation and famine, you are probably willing to adopt drastic population-control policies that would curtail the freedom to have as many children as they want many people currently enjoy.

Would that be right? And how confident would you have to be that “this time it’s different” to justify a potential loss of welfare spread out over so many people?