When I took his graduate class on the microeconomics of development, Chris Barrett mentioned that “Heterogeneity and the Three ‘Nons'” differentiate developing economies from industrialized economies:<\/p>\n
In a post titled “The Transformation Process of Rural Societies,” Frankfurt-based Chilean economist Dany Jaimovich discusses<\/a> a cool new paper<\/a>\u00a0of his which gets at #3 above, i.e., how one can move from non-anonymous to relatively more anonymous transactions:<\/p>\n The aim of the paper is to contribute to the empirical analysis of the process of transformation in traditional rural societies using a network perspective.\u00a0A unique database on economic networks (land, labor, inputs and credit) collected in 60 villages of rural Gambia, where traditional non-monetary economic exchanges –gift economy<\/em>– prevail, is used to study \u00a0the \u00a0behavior of \u00a0households involved in market transactions.<\/p>\n The empirical analysis is conducted at both household- and link-level …\u00a0In all the econometric specifications I find support for the two main hypotheses: (i)\u00a0Substitutability between internal and external exchanges<\/em>, i.e. households with external economic links are less likely to be involved in economic interactions within the village; and (ii)\u00a0Reciprocation \u00a0versus market<\/em>, i.e. households with external economic links are less likely to be involved in reciprocated exchanges with fellow villagers.<\/p>\n In the paper I discuss the assumptions required for a causal interpretation of the results, basically that unobservable characteristics determining the creation of internal links affect the the formation of external links in the same direction. I argue that this is plausible, but the potential bias remains as a not fully\u00a0solved\u00a0issue to be addressed in future\u00a0research.<\/p>\n This is a highly interesting, big-think type question. Indeed, I have noticed that economists and other social scientists often talk past each other because of the former’s emphasis on market economies and the latter’s emphasis on gift economies<\/a>\u00a0(or\u00a0moral economies<\/a>).<\/p>\n Dany gets as close as one can, I think, to bridging that gap and making sure economists and other social scientists can understand each other. His work reminds me of the work Marcel Fafchamps has been doing on market institutions<\/a> (and indeed, Dany uses Marcel’s dyadic regression technique<\/a>\u00a0to study network links).<\/p>\n Dany is also one of the very few social scientists to have studied The Gambia, on which I am currently working with a former advisee of mine. More on this work of ours later.<\/p>\n","protected":false},"excerpt":{"rendered":" When I took his graduate class on the microeconomics of development, Chris Barrett mentioned that “Heterogeneity and the Three ‘Nons’” differentiate developing economies from industrialized<\/p>\n