Category Archive: Sources

  1. Brassieres of Atlantis

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    CAPITAL FLOWS

    Long held to be essential for development, capital flows have come under increasing scrutiny for their impact on the financial stability and autonomy of low and middle income countries.

    A recent paper by Karsten Müller and Emil Verner fuels the debate. Using a novel database of private credit in 116 countries since 1940, and drawing on more than 600 sources, it analyzes how the sectoral allocation of credit impacts financial stability in recipient countries. The findings suggest that credit to the non-tradeable sector (where goods cannot be sold internationally, such as construction, repairs, food services, and real estate) predicts lower medium-run growth, while tradable sector credit leads to higher growth in the medium-run.

    From the text:

    “Why does credit to households and non-tradable sectors, but not to the tradable sector, foreshadow lower future economic growth? First, credit growth to non-tradables and households may reflect that credit finances a demand boom, which may sow the seeds of a future bust. Consistent with this prediction, we find that household and non-tradable credit expansions are associated with a relative expansion in consumption relative to GDP, increasing shares of the non-tradable sector in output and employment, an appreciation of the real exchange rate, and an increase in house prices.

    Second, lending to non-tradables and households can increase financial fragility if these sectors face tighter (ex-ante) financing constraints or are more sensitive to changes in credit supply. We document that non-tradable sector firms are, on average, smaller and more reliant on loans collateralized by real estate compared to tradable sector firms. Credit expansions to the non-tradable sector are associated with a considerably higher likelihood of future systemic banking crises. In contrast, lending to the tradable sector has essentially no relationship with banking crises and also falls less after the onset of crises. Third, credit booms may lead to a misallocation of resources away from more productive sectors. Because the level and growth rate of productivity is generally higher in tradable industries, a reallocation away from tradables can cause lower aggregate productivity growth in the medium run. Taken together, the patterns we document suggest that credit expansions are not created equal. They highlight that “good” and “bad” booms can be differentiated based on what the borrowed money is used for along dimensions emphasized by economic theory.”

    Link to the text.

    • In a panel for the Center for Global Development, Atif Mian and Jing Cai discuss “The Peril and Promise of Financial Markets For Developing Countries.” Link. (For a summary of the discussion, see Mian’s excellent thread from earlier this year. Link.)
    • “The global financial cycle transforms the macroeconomic trilemma into a dilemma: independent monetary policies are possible if and only if the capital account is managed.” An essential piece by Hélène Rey examines how the global financial cycle shapes developing countries’ capacity for independent monetary policy. Link.
    • A 2019 paper by Yanliang Miao and Tuo Deng assess changes in China’s capital flow management since 1978. Link. And from 2003, Gerald Epstein, Ilene Grabel, and Jomo Kwame Sundaram compares capital management techniques in Chile, Colombia, Taiwan Province of China, India, China, Singapore and Malaysia during the 1990s. Link.

    (pinboard: captital_flows, finance, globalization)

    NEW RESEARCHERS

    YIMBYs & Financialization

    Renee Tapp is a postdoctoral fellow in urban planning and policy at the University of Illinois at Chicago. In a recent paper, she examines YIMBY groups in Los Angeles.

    From the abstract:

    “This paper advances debates around the financialization of housing with a case study of Los Angeles’s yes-in-my-back-yard (YIMBY) groups. In response to the post-2008 affordable housing crisis, YIMBYs have emerged in support of orthodox economic policies that deregulate land use, expedite construction, and intensify financial accumulation in rental housing. Using detailed empirical analysis collected from YIMBY housing activists, this paper examines how the market-based logics they advance take root in local land use issues. It focuses specifically on the impact of YIMBYs on existing divisions within urban politics, including the scale at which housing is contested. By conceptualizing the YIMBY position as one that facilitates financialization, this paper reveals the ways financialization is more than a mode of accumulation: it is a political process embedded in the state from the bottom up and inside out.”

    Link to the article.

    Each week we highlight research from a graduate student, postdoc, or early-career professor. Send us recommendations: editorial@jainfamilyinstitute.org.

    + + +

    • “Our analysis conservatively estimates that upwards of 6.4 million eligible children will not receive the CTC benefit.” In a new policy brief, JFI Fellow Jack Landry and Lead Researcher on Guaranteed Income Stephen Nuñez estimate the non-filer rates of the American Rescue Plan’s expanded childhood tax credit and investigate implications for reductions in childhood poverty. Link.
    • “We find that the Great Recession significantly increased student indebtedness, delinquency and default on student debt, and other forms of non-repayment of student loans.” A new working paper by JFI Fellow Sérgio Pinto and Senior Fellow Marshall Steinbaum on long-run impacts of the Great Recession. Link. And link to a PW essay on the subject.
    • “How much ability does the Fed have to stimulate the economy by cutting interest rates?” David Berger, Konstantin Milbradt, Fabrice Tourre, and Joseph Vavra examine recent interest rate paths by looking at mortgage prepayments. Link.
    • Fenaba R. Addo and William A. Darity, Jr. examine the racial disparities in the wealth holdings of American working class families after the recession. Link.
    • Matt Barlow and Alejandro Milcíades Peña look at emergency taxes following the 2001 debt default crisis in Argentina under Kirchnerism. Link.
    • “Competing coalitions of liberal and conservative philanthropists used their wealth and influence to define the parameters of the policy debate over the future of Detroit’s schools” Dan Cohen on philanthropy as a response to municipal government austerity. Link.
    • Lyn Ossome and Sirisha C. Naidu examine the links between gender and land ownership by evaluating the Fast Track Land Reform Program in Zimbabwe. Link.
    • Alejandra Salas-Porras and Martí Medina-Hernández trace changes in the Mexican corporate network over the last four decades. Link.
    • “Maize developed in parallel as a commodity serving the settler farmers, and an anti-commodity, or escape crop, providing subsistence to marginalised smallholders.” Klara Fischer on GM maize and the green revolution in South Africa. Link.
    • “Credit was scarce and expensive in colonial India. Existing explanations assume a lack of market competition let moneylenders charge high interest rates. The article challenges this view. Using new evidence from the Madras Presidency, the study finds that the interconnected issues of climate volatility and enforcement costs shaped the supply and prices of credit. Moneylenders rationed credit and imposed inflexible enforcement terms in the dry regions that faced higher climatic risk, but used contracts and flexible pricing strategies in the irrigated zones where risks were lower.” By Maanik Nath. Link.

  2. Red Coyote

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    ODIOUS DEBT

    Haiti won independence from France in 1804, but in return for recognizing its formerly enslaved colony, France later forced Haiti to pay an indemnity of 150 million francs and give preferential treatment to French exports. The debt was equivalent to 270 percent of GDP—Haiti only paid off its debt in 1950.

    Considering the absence of Haiti in larger conversations around sovereign debt, a new paper by Kim Oosterlinck, Ugo Panizza, Mark C. Weidemaier, and Mitu Gulati argues that Haiti’s debt should be seen as odious. The authors make the case that Haiti paid an exorbitant cost on an illegitimate debt, and that the nation is entitled to reparations.

    From the paper:

    “By any reasonable definition, the Haitian Independence Debt would seem to be odious. The circumstances suggest coercion, as does the fact that the agreement obliged Haitians to pay compensation for the freedom they had already won. The amount has been reported at around 300% of Haitian GDP (270% in our estimates), and it was understood that Haiti could pay only by borrowing vast sums from French banks, thus transforming the indemnity into a debt burden that would persist for generations. The debt cannot reasonably be characterized as in the best interest of the Haitian people. Yet we see little mention of it in the literature on odious debt or, indeed, in the larger literatures on sovereign debt or debt and development. To be sure, authors writing in French examine the intertwined history of Haiti and France and often discuss the Haitian Independence Debt. Likewise, articles in the popular press occasionally ask whether France owes compensation to Haiti for the episode. But these discussions have not yet made their way to the general sovereign debt literature or into the sub-field examining the doctrine of odious sovereign debt. Nor have they prompted a deeper examination of whether that doctrine should extend to debts imposed by former imperial powers in the context of independence and decolonization.

    From one perspective, it is not surprising that the odious debt literature overlooks the Haitian Independence Debt. The standard model of odious debt presumes corruption in the borrower government. The Haitian Independence Debt does not fit this model. Still, it is puzzling that the literature on “odious” sovereign debts ignores perhaps the single most odious sovereign debt in history.”

    Link to the text.

    • In a 2016 book, Jeff King traces the history of the doctrine of odious debt in international law. Link.
    • Anna Gelpern, Sebastian Horn, Scott Morris, Brad Parks, Christoph Trebesch dive into more than 100 debt contracts China has signed with foreign governments, examining some unorthodox conditions that the world’s largest creditor demands when lending money. Link.
    • In 1919, Keynes’ Consequences of the Peace made the economic case against war reparations, arguing that Germany did not have the budget to pay. He predicted that Germany would be hit by a transfer problem through worsening terms of trade, and that large reparations would have terrible consequences across Europe. Link.

    The spotlight of this newsletter was written by guest contributor Simon Hinrichsen, a doctoral student at London School of Economics and a portfolio manager at a pension fund. His work and research focus on sovereign debt, international finance, and open economy macroeconomics in emerging markets. Find him on twitter @simonh_dk and link to his research.

    NEW RESEARCHERS

    Family Leave Policy & Civil Rights

    PhD candidate in political science at Northwestern University KUMAR RAMANATHAN studies the emergence of the civil rights agenda in the mid-20th century. In a recent article, he examines the role of civil rights policy in family and medical leave.

    From the text:

    “Family and medical leave policy in the United States is often noted for its lack of wage compensation, but is also distinctive in its gender neutrality and its broad coverage of several types of leave (combining pregnancy leave with medical, parental, and caregiving leave). This article argues that the distinctive design of leave policy in the United States is explained by its origins in contestation over the civil rights policy regime that emerged in the 1960s. Before the 1960s, advocates had unsuccessfully pursued maternity leave provision through a social insurance model akin to that of programs such as unemployment insurance. In the early 1970s, women’s movement advocates creatively and strategically formulated demands for maternity leave provision that fit an interpretation of the new policy regime’s antidiscrimination logic. Because of this decision to advance an antidiscrimination claim, advocates became committed to pursuing a leave guarantee on gender-neutral grounds, which in turn enabled the broad-coverage leave design.”

    Link to the article, link to Ramanathan’s website.

    Each week we highlight research from a graduate student, postdoc, or early-career professor. Send us recommendations: editorial@jainfamilyinstitute.org.

    + + +

    • “Higher ed institutions consistently underestimate the non-tuition costs of attending college, and overestimate the amount of incoming aid from grants and scholarships.” A new report by Laura Beamer, JFI’s Lead Researcher in Higher Education Finance, investigates how schools mislead students on costs. Link. Explore the rest of the Millennial Student Debt project here.
    • Benjamin Franta on economic consultants in the oil industry, and attempts to shape climate policy. Link.
    • Maximiliano Facundo Vila Seoane on data localization and securitization in India. Link. And a recent piece by Seema Chisti examines the Modi government’s position on Pegasus. Link.
    • “We compare Union and Confederate policies directly and highlight the importance of taxation for assuring the value of inconvertible money.” Ariel Ron and Sofia Valeonti study taxation and currency depreciation in the Civil War. Link.
    • Daniela Caterina and Nikolai Huke examine calls for austerity in Italy and Spain by looking at the “disciplinary effects of capital accumulation” and the state’s fiscal capacity. Link.
    • “What makes US government bonds safe assets?” By Zhiguo He, Arvind Krishnamurthy, and Konstantin Milbradt. Link.
    • Roni Hirsch examines John Hicks, Knight, and Keynes’ accounts of uncertainty and inequality. Link. (ht: Paul)
    • Tatiana Berringer on regional integration and Mercosur under the PT government in Brazil. Link.
    • “I study the political impact of the first populist radio personality in American history. Father Charles Coughlin blended populist demagoguery, anti-Semitism, and fascist sympathies to create a hugely popular radio program that attracted thirty million weekly listeners in the 1930s. I find that exposure to Father Coughlin’s anti-Roosevelt broadcast reduced Franklin D. Roosevelt’s vote share in the 1936 presidential election. Coughlin’s effects were larger among Catholics and persisted after Coughlin left the air. Moreover, places more exposed to Coughlin’s broadcast were more likely to form a local branch of the pro-Nazi German-American Bund and sold fewer war bonds during WWII.” By Tianyi Wang. Link.

  3. Circus Act

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    OFFSET MARKETS

    Earlier this year, global carbon markets were valued at a record breaking $277 billion. The number contrasts strikingly with this summer’s wave of devastating fires, many of which proliferated precisely in protected forests designed to offset carbon emissions from other industries.

    In a 2019 book, GARETH BRYANT traces the history of carbon offset markets, considering how their institutionalization has altered climate-related political contestation.

    From the text:

    “The policy predecessor to carbon markets was sulphur dioxide trading in the United States. From the 1970s, the Environmental Protection Authority began to introduce elements of emissions trading in its regulation of pollution. Growing support for the market-based approach vis-à-vis ‘command and control’ measures among sections of government, business and non-government environmental organisations resulted in amendments to the Clean Air Act in 1990 that established a nation-wide sulphur dioxide trading scheme. The scheme’s key innovation was that, within the overall cap, emissions allowances allocated or auctioned to certain power plants could be traded to cover the pollution of other power plants.

    US negotiators extolled the cost-efficiency of tradeable permits in advancing their goal of ‘binding but flexible’commitments in the Kyoto Protocol. The US overcame opposition from the EU by making the inclusion of carbon trading instruments a condition for agreement on key European demands for binding emissions reduction targets. It also successfully overturned opposition from developing countries through the transformation of Brazil’s clean development fund into a mechanism where emissions reductions from clean development projects in developing countries could be sold to developed countries and count towards their targets. The Clean Development Mechanism (CDM) was thus born.”

    Link to the book.

    • “Our analysis reveals dynamic connections between the green corporate social responsibility (CSR) claims of the UK’s EDF Energy, and the unsustainable realities of a CDM certified installation in India—the refrigerant gas producing factory of Gujarat Fluorochemicals Limited.” Steffen Bohm, Vinicius Brei, and Siddhartha Dabhi scrutinize carbon commodity chains. Link.
    • An edited volume by Jørgen Wettestad and Lars H. Gulbrandsen compares the development and operations of world’s nine largest carbon market systems. Link.
    • In his PhD dissertation, William Lock investigates how “schemes which produce carbon credits for sale in voluntary markets undermine local development, emissions reductions and biodiversity conservation in San Martin, Peru.” Link. And in an article from last year, Wendy Miles recounts local experiences of the Kalimantan Forests and Climate Partnership in Indonesia. Link.

    NEW RESEARCHERS

    Wrongful Discharge Laws

    In a 2019 paper, visiting professor of economics at Grand Valley State University ERIC HOYT studies the impact of wrongful discharge laws on employment and wages.

    From the text:

    “This paper estimates the effect of wrongful discharge laws, a court-based form of employment protection, on real wages. Theoretical literature argues that employment protection policies like wrongful discharge laws raise employers’ firing costs, leading to an inward shift in labor demand that pulls down both workers’ wages and employment levels. I find that one wrongful discharge law in particular, the good faith doctrine, increases average real wages by 2.34 percent for all private-sector workers, 3.33 percent for private manufacturing workers, 1.96 percent for private nonmanufacturing workers, 3.25 percent for women, 2.37 percent for men, 3.93 percent for nonwhite workers, and 2.81 percent for white workers in the private-sector over all of the years these policies are in place. My results show that wrongful discharge laws, whether by increasing workers’ bargaining power or by increasing their labor productivity, boost workers’ wages, particularly for low wage workers, women, and workers in the manufacturing and logistics industries, where unions have been traditionally strong and workers occupy key nodes in production and supply chains.

    Link to the paper, link to Hoyt’s website.

    Each week we highlight research from a graduate student, postdoc, or early-career professor. Send us recommendations: editorial@jainfamilyinstitute.org.

    + + +

    • “Central bank independence was formally instituted in many economies in the 1990s and is often associated with the ‘Third Way’ of that decade. But CBI has a much longer history.” New on PW, Aditi Sahasrabuddhe on the history of central bank independence and cooperation. Link.
    • We’re hiring for our CUNY-Phenomenal World paid fall editorial internship, open to all CUNY undergraduates. Please share widely, and find more information on how to apply here.
    • “To fully exit our current disaster and move toward something resembling a fair society, we must do three things: plan, spend and build. We must become the developer.” In Noema Magazine, JFI Fellow Paul Williams explores the potential for public housing to solve the housing crisis. Link.
    • “Climate scientists have long emphasized the importance of climate tipping points like thawing permafrost, ice sheet disintegration, and changes in atmospheric circulation. Yet, climate economics has either ignored them or represented them in highly stylized ways.” Simon Dietz, James Rising, Thomas Stoerk, and Gernot Wagner provide unified estimates of the economic cost of climate tipping points. Link to the paper, and link to Wagner’s writeup in Bloomberg.
    • Martin Bekker examines 150,000 police-reported events of protest in South Africa between 1997 and 2013. Link.
    • Jon Sward, Niranjali Amerasinghe, Andrew Bunker and Jo Walker on reforms to IMF surveillance policy in service of a just climate change transition. Link.
    • Georgina Drew investigates local resistance and ideas of rural development surrounding a Coca-Cola bottling plant in Uttar Pradesh, India. Link.
    • “[This essay] examines the formation of a national economy as a controversial economic and political project that pitted eastern capitalists against western populists.” Noam Maggor on market-making in the American West. Link. And see a PW essay from Maggor and Anton Jäger on the American populist movement and central banking. Link.
    • Christian Dustmann, Attila Lindner, Uta Schönberg, Matthias Umkehrer, and Philipp vom Berge on the reallocation effects of a minimum wage in Germany. Link.
    • “During the early twentieth century the Japanese weaving industry experienced significant technological and organizational changes, which involved both the diffusion of the power loom and the the factory system. This study finds that production value per worker was around two times larger in factories compared with weavers and outworkers under the putting-out system, after controlling for the technological difference. This difference is supposed to reflect the difference in the mode of work—that is, working hours and work intensity—between factories and weavers and outworkers. Meanwhile, production per worker was two to three times larger for powered factories than non-powered factories, other things being equal. Thus, the magnitude of the impact of organizational difference was almost comparable to that of technological difference.” By Tetsuji Okazaki. Link.

  4. 13 Hour Cymbal Spiderclock

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    AGRARIAN-URBAN POLITICS

    Observers in the past decades have commented on increased urbanization in India, which has led to new challenges for development, housing, and labor. But the majority of India’s population, and thus electoral power, remains in rural regions.

    In a 2018 article, SAI BALAKRISHNAN examines how agrarian political power manifests in urban spaces, looking to real estate markets in Mumbai.

    From the paper:

    “The electoral power of the agrarian countryside is evident in the relationship of Mumbai to its hinterland. India is the second largest exporter of sugar in the world and more than 40% of India’s sugar exports come from the western Maharashtra region. Sugar production in the region is organised in the form of cooperatives. These sugar cooperatives have been heavily subsidised by the state: 90% of sugar cooperative finances came from state-guaranteed cooperative bank debt; over three quarters of the equity was a direct handout from the state budget. It was Mumbai’s thriving industrial economy that was the source of sugar subsidies. Mumbai’s industrial classes tolerated the diversion of capital from the city to the countryside, as they understood that the state government legislators relied on the peasants for their votes, and that capital diversion was the price to be paid for the political stability from subsidised agrarian prosperity.

    In a market-oriented urbanising economy, these elites continue to influence the making of urban real estate markets by flexing their regulatory muscle. The price of a plot of land increases when it is well connected to roads and transport networks, when it has uninterrupted water supply, when it can rise high in the air and thus maximise development rights. Politicians control these road, water and air resources, and in a context where local governments are not yet fully empowered as decisionmakers, state-level politicians wield immense control over resources that get capitalised into the price of land.”

    Link to the piece.

    • “Over two-thirds, perhaps as much as three-fourths, of the nation’s GDP is generated in cities where less than a third of the country lives.” In a 2011 column, Ashutosh Varshney examines the power of urban India. Link. And in a 1995 book, Varshney digs deeper into the urban-rural electoral balance. Link.
    • In a 2020 opinion piece, Balakrishnan traces the Covid-induced migrant crisis in India, in which millions traveled from cities to villages, to patterns of unequal agricultural development dating back to the Green Revolution. Link.
    • “Caste structures not only access to land, resources and power, but also the agrarian land transition in the context of a ‘new city’ project.” In a recent article, Carol Upadhya studies land pooling in Andhra Pradesh. Link.

    NEW RESEARCHERS

    Prisons & Shelters

    Assistant professor of Urban Studies at Barnard College CHRISTIAN SIENER studies the political economy of homelessness. In his dissertation, he analyzes the foundations of homeless shelters in New York City by looking at the case of Camp LaGuardia, the city’s largest homeless shelter until its closure in 2007.

    From the text:

    “The appearance and expanded use of homeless shelters is concomitant with the rise in prisons across New York since the early-1980s. This study demonstrates further, historical continuity with a case study of conditions surrounding the transition of Camp LaGuardia, a prison that slowly transformed into a homeless shelter. The dissertation thus examines the continuities and ruptures between homeless shelters and prisons, both of which have historically been institutions intending to effect individualized behavior modification. Rather than seeing these institutions as disconnected, I position them in their historical relationship: the invention of the homeless shelter out of prison restructuring through its earliest example in New York City. I understand this relationship not only through the overlap of people who spend time in each place, but also through the ideological configurations of what the institutions are meant to do.”

    Link to the paper.

    Each week we highlight research from a graduate student, postdoc, or early-career professor. Send us recommendations: editorial@jainfamilyinstitute.org.

    + + +

    • We’re hiring for our CUNY-Phenomenal World paid fall editorial internship, open to all CUNY undergraduates. Please share widely, and find more information on how to apply here.
    • “Rich countries’ pandemic policies are sucking growth and capital out of the developing world.” Jayati Ghosh warns of stagflation in emerging markets. Link.
    • Brett Christophers examines how US single-family homes became an asset class following the Great Recession. Link.
    • Temesgen Tesfamariam Beyan on migration, remittances, and the transformation of agricultural societies in Eritrea. Link.
    • Fabian Pape on swap lines and the Fed’s role in domestic and global markets. Link. (ht: Paul)
    • “Inflation, in short, does not have to be a totalizing problem…the far greater threat, history shows, is inflation fearmongering.” Andrew Yamakawa Elrod in the Boston Review. And see Yamakawa Elrod’s PW piece on inflation from earlier this year. Link.
    • Shinsuke Tanaka, Kensuke Teshima, and Eric Verhoogen on how battery recycling regulation in the US led to negative environmental outcomes in Mexico. Link.
    • “By the time significant PPP money arrived in some minority neighborhoods, they’d already lived through the months of shutdowns and the worst of the pandemic’s economic impact.” In Bloomberg, Shruti Singh, Andre Tartar and Christopher Cannon on delays in PPP funds in Chicago. Link.
    • “Between 1881 and 1910, Swedish society underwent two transformative developments: the large-scale roll-out of a national railway network and the nascence of grassroots social movements which came to dominate economic, social and political spheres well into the twentieth century. I implement a market access framework to show that, by reducing least-cost distances between localities, railways intensified the influence exerted by neighbouring concentrations of membership, thereby enabling social movement spread. Subsequently – in Sweden’s first election with universal male suffrage in 1911 – localities with greater social movement mobilisation exhibited higher turnout and Social Democrat vote shares.” By Eric Melander. Link.

  5. Shifting States

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    NON DISCLOSURE AGREEMENTS

    75 percent of US firms currently make use of non-disclosure agreements. Originally developed to protect trade secrets, today’s agreements have expanded to include information on salaries, skills, client lists, and employment practices.

    In a 2019 research paper, legal scholar ORLY LOBEL considers the impact of restrictive clauses on worker mobility, diversity, and inequality.

    From the paper:

    “In his seminal work Exit, Voice, and Loyalty, political economist Albert Hirschman proposed an interplay between the three concepts. When an organization breaks down, individuals can effect change by either leaving or by working from within to right the wrongs. Loyalty, Hirschman argued, moderates the choice between exit and voice. In corporate settings, employees regularly experience discontent and must decide what form of action to take. But what happens when both exit and voice are restricted?

    In today’s labor markets, non-disclosure agreements (NDAs), non-compete agreements, innovation assignment clauses, non-disparagement agreements, mandatory arbitration, and secrecy policies all create exit and voice constraints. Recently, a steep rise in these clauses has shaped human capital in ways that are harmful to all workers as well as to industries at large. Regardless of enforceability, NDAs are routinely expansive and used to signal to employees that a range of knowledge, information, and speech is off-limits. In particular, salary as proprietary information shows the connections between market competition, secrecy, and inequality: if women and minorities are in the dark about their undervalued talent, they are less likely to seek exit or to speak up to be equally compensated for their performance. Another such example is information pertaining to diversity. In recent years, major companies have claimed that their diversity information is a trade secret—in 2018 Microsoft filed a lawsuit against its Chief Diversity Officer, claiming that the employee had knowledge on how to achieve more inclusion. In another case, IBM alleged that the executive held trade secrets which include diversity data and strategies. When corporate contracts, practices, and culture limit employees’ ability to advocate organizational change, the many shades of inequality and status quo are sustained.”

    Link to the piece.

    • “From event planners to chefs to investment fund managers to yoga instructors, employees are increasingly required to sign agreements that prohibit them from working for a company’s rivals.” In the NYT, Steven Greenhouse reports on the proliferation of non-competes among low wage workers. Link. And in a related article, Neil Irwin investigates restrictive agreements for minimum wage workers at sandwich company Jimmy John’s. Link.
    • In a paper from 2014, Randall Thomas, Norman Bishara, and Kenneth Martin analyze postemployment restrictions in 500 S&P 1500 companies. Link.
    • “Broad use of NDAs facilitates equilibria where firms with worse employment practices can ‘pool’ reputations among firms with better practices.” Jason Sockin, Aaron Sojourner, and Evan Starr on NDAs and information flows. Link.

    NEW RESEARCHERS

    Market Concentration and Productivity Slowdown

    Visiting scholar at the Minneapolis Fed’s Opportunity & Inclusive Growth Institute and recent graduate from Northwestern JANE OLMSTEAD-RUMSEY studies firm dynamics, labor markets, and growth. In her job market paper, Olmstead-Rumsey looks at the connection between market concentration, innovation, and sluggish productivity growth.

    From the abstract:

    “Since around 2000, U.S. aggregate productivity growth has slowed and product market concentration has risen. I construct a measure of innovativeness based on patent data that is comparable across firms and over time and show that small firms make more incremental innovations in the 2000s compared to the 1990s. To understand the implications of this fact for firm dynamics and growth, I develop an endogenous growth model where the quality of new ideas is heterogeneous across firms. I use a quantitative version of the model to infer changes to the structure of the U.S. economy between the in 1990s and the 2000s. This analysis suggests that declining innovativeness of market laggards can account for about forty percent of the rise in market concentration over this period and the entire productivity slowdown. Changes in firms’ R&D investment policies in response to the decreased likelihood of laggards making drastic improvements amplify the productivity slowdown.”

    Link to the paper, link to Olmstead-Ramsey’s website.

    Each week we highlight research from a graduate student, postdoc, or early-career professor. Send us recommendations: editorial@jainfamilyinstitute.org.

    + + +

    • “Understanding the construction industry can help us move beyond a mechanical image of ‘labor shortages’—too much demand, too few unemployed—toward a richer understanding of the institutions that reproduce the labor force and determine its compensation.” New on the site, Andrew Yamakawa Elrod on what the history of the construction industry tells us about skills gaps and labor shortages. Link.
    • “The report has made clear that the climate in which the US became a superpower no longer exists. Why are politicians stuck on twentieth-century answers to the twenty-first century’s problems?” Kate Aronoff on the IPCC report and climate policy. Link.
    • An interactive atlas for exploring the observed and projected climate information underpinning the latest IPCC report. Link. Read the policymaker summary of the report here, and see a collection of all the figures here.
    • “Counting carbon: historic emissions from fossil fuels, long-run measures of sustainable development and carbon debt.” By Jan Kunnas, Eoin McLaughlin, Nick Hanley, David Greasley, Les Oxley, and Paul Warde. Link.
    • A thread from Daniela Gabor on the political economy of infrastructure. Link.
    • “We should not mince words: if this is the stance of the Biden administration then its decarbonisation agenda has been well and truly buried.” Adam Tooze on the Biden Administration’s move to pressure OPEC+ to boost production. Link. And Tooze on the EU-US divide in climate policy. Link.
    • A paper by Jan Stockbruegger looks at the International Maritime Organization’s failure to regulate shipping emmissions. Link. And link to a summary post at Monkey Cage.
    • Lenore Palladino and Chirag Lala on the evolution of asset management and the case for a public asset manager. Link.
    • “Inflation, right at this moment, is exactly two things. We’re seeing a big increase in the price of fossil fuels. That’s one. And two, we’re seeing an increase in the price of automobiles. And that’s it. That is 100 percent of what we are calling inflation today.” Link. Eric Levitz interviews JW Mason on the inflation debate. (And, linked last week, Mason’s essay on the subject.)
    • Dani Rodrik on trade and inequality. Link.
    • “This article analyzes a newly constructed individual level dataset of every English death and probate from 1892–1992. This analysis shows that the twentieth century’s “Great Equalization” of wealth stalled in mid-century. The probate rate, which captures the proportion of English holding any significant wealth at death rose from 10 percent in the 1890s to 40 percent by 1950 and has stagnated to 1992. Despite the large declines in the wealth share of the top 1 percent, from 73 to 20 percent, the median English individual died with almost nothing throughout. All changes in inequality after 1950 involve a reshuffling of wealth within the top 30 percent. I translate the individual level data to synthetic households; the majority have at least one member probated. Yet the bottom 60 percent of households hold only 12 percent of all wealth, at their peak wealth-holding level, in the early 1990s.” By Neil Cummins. Link.

  6. Blast Off

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    US-MEXICO ARMS FLOWS

    This week, the Mexican government sued eleven major US arms manufacturers, alleging that they facilitated the illegal flow of guns into the country. The proliferation of US-manufactured guns in Mexico during recent years has been well-documented, but their presence precedes the twentieth century.

    In a 2013 text, BRIAN DELAY investigates how the newly-independent Mexican state navigated wars while lacking capital to purchase arms, leading to a reliance on US creditors.

    From the piece:

    “During the 1850s and 1860s, in response to demand created by several coups and regional rebellions, more than a decade of civil war, and a foreign occupation, ammunition would pour into Mexico by the tons and firearms by the many tens of thousands. Most of this material came from the United States, most of it came on credit, and mostly the terms were ruinous. During the French Intervention of 1862–1867, Mexico’s conservatives conspired with Napoleon III to install Archduke Maximilian as Mexico’s king. Mexico’s president-in-exile, Benito Juárez, dispatched scores of agents to US cities in search of capital and weapons with which to retake control. Existential desperation encouraged them to make fantastical promises, and to sell more than thirty million dollars in bonds at steep discounts.

    Historian John Hart has sleuthed out the list of buyers, and it reads like a who’s who of America’s incipient Gilded Age. These men were not so naïve as to expect prompt repayment on the bonds. They expected the bonds to give them not scheduled returns so much as leverage to secure land deals, mining concessions, commercial privileges, and, above all, railroad projects. The creditors clamored for repayment as soon as the liberals retook the capital. Finally in 1876, despairing of ever recouping their investments, these bondholders conspired with colleagues in the railroad business to fund and arm a coup by Mexican General Porfirio Díaz.”

    Link to the text.

    • In a 1973 article, Robert Ryal Miller traces US military support for the Juaristas during the French intervention. Link. And Lindsay Schakenbach Regele identifies the US War and State Department’s support of the gun manufacturing industry pre-1848 as “national security capitalism.” Link.
    • In a 2013 study, Arindrajit Dube, Oeindrila Dube, and Omar García-Ponce examine the effects of the 2004 expiration of the US Federal Assault Weapons ban on cross border violence, where California was the only border state to retain a state-level ban. Link.
    • “Of the 11,000 guns turned over to the ATF in 2009, almost 90 percent were traced to U.S. gun shops.” In the Boston Review, Sarah Hill investigates violence in Ciudad Juárez. Link.

    NEW RESEARCHERS

    STATE STATISTICS

    Assistant Professor of Data Science at Utica College JING-MAO HO studies the intersection of sociology, computer science, and statistics. His dissertation examines the modern state’s use of statistics from 1826 to 2010.

    From the abstract:

    “Why do modern states routinely keep official statistics on their societies? [I present] arguments about how gathering official statistics as a technology of state power facilitate modern states’ engagements in democratic state building, capitalist state building, colonial, and post-colonial state building, and war making in world society. These arguments are illustrated by historical case studies and tested by cross-national longitudinal analyses of the worldwide establishment of National Statistical Systems (NSSes) in 157 countries from 1826 to 2010. The analyses demonstrate that, although there are regional and temporal variations, democratization, capitalist development, aggregate war onsets, colonization, and inter-governmental linkages generally prompt modern states to establish NSSes. How does the statistics profession become globally institutionalized? [I analyze] the worldwide founding of national statistics associations from 1833 to 2011, arguing that the statistics profession emerged in the nineteenth-century West and spread to other parts of the world in the twentieth century.”

    Link to the text, link to Ho’s website.

    Each week we highlight research from a graduate student, postdoc, or early-career professor. Send us recommendations: editorial@jainfamilyinstitute.org.

    + + +

    • Laura Millan Lombrana on the lack of weather stations in Africa and consequences for climate science. Link.
    • “The United Kingdom imposed an arms embargo on Chile in 1974 but not on Argentina after the 1976 coup, despite brutal military dictatorships in both countries.” Rodrigo Fracalossi de Moraes investigates the politics of UK arms sales. Link.
    • Peng Lu, Xiaoguang Fan, and Fan Fu create a new dataset of China’s super rich. Link.
    • Mónica Unda Gutiérrez on the role of business sector lobbying in Mexico’s 2013 tax reform. Link.
    • “When employers’ explicit gender requests were unexpectedly removed from a Chinese job board overnight, pools of successful applicants became more integrated: women’s (men’s) share of call-backs to jobs that had requested men (women) rose by 63 (146) percent.” By Peter Kuhn and Kailing Shen. Link.
    • Adrienne Buller and Benjamin Braun examine “asset manager capitalism” in the UK. Link.
    • “Investors’ attention to domestic politics varies with conditions in global capital markets.” Cameron Ballard-Rosa, Layna Mosley, and Rachel Wellhausen on sovereign borrowing. Link.
    • Rebecca Rays finds that regional development banks and sub-regional development banks have much greater borrower representation than global multilateral development banks. Link.
    • “In 1786, the Van Staphorst brothers, America’s Dutch investment bank, entered the French office of the Director General of Finance, intent on making an offer for a portion of France’s holdings of American bonds. Unknowingly, their offer set off a bidding war that could have ended with poorly capitalized American financial adventurers owing a large portion of bonds which could threaten the fragile health of American credit. At the eleventh hour, the Van Staphorsts conjured up a bold, unprecedented, scheme to persuade the French that it would be unnecessary to sell their American bonds at discounted prices.” By Peter Theodore Veru. Link.

  7. Burning Bridge

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    MICRO-STRATEGY

    Accounts of major historical shifts tend to treat states as unified actors responding to external incentives. In a new article, INGA RADEMACHER complicates this assumption. Drawing on archival documents from the German Federal Cabinet and Bundesbank Council from 1960-1981, she argues that competition among state actors is a crucial, but often overlooked, factor in shaping policy trajectories.

    From the piece:

    “The globalisation literature argues that capital mobility, and capital flight in particular, are critical drivers of austerity. However, during the 1970s, capital outflows were not a problem in the German economy. Rather, capital inflows caused problems for monetary actors—triggering conflicts between Bundesbank and administration. In the 1970s, when the expansion of Eurodollar markets peaked, the Bundesbank’s autonomy became increasingly curtailed as so-called ‘hot money’ flooded the German capital market. But the enforcement capacity of the central bank increased with the breakdown of the Bretton Woods system.

    Initially, central bank officials were not convinced of monetarist ideas. Instead, during the debates over solutions to the crisis—capital controls or the float of the Deustchmark—in January 1973, the central bank reviewed two rival approaches to resolve inflation: a ‘dirigiste’ approach and monetarism. Since the dirigiste proposal found considerable support among a large group of central bankers, including the president of the Bundesbank, Karl Klasen, it seems unlikely that ideational changes drove the shift to new policy instruments in the central bank. Instead, monetarist policy settings and instruments were suddenly endorsed on the basis of strategic considerations on how to enhance the power position of the central bank in the overall macroeconomic system. This micro-level analysis shows that institutional instruments are only one way that central bankers gain power within the larger macroeconomic framework. They also actively utilise opportunities in the political and economic context to bargain with the government.”

    Link to the text.

    • “The analysis of change does not come easily to institutionalists, for its opposite—stability—is built into the very definition of the term institution itself.” Kathleen Thelen and James Conran on theorizing institutions as sites of “political contestation.” Link.
    • “The inclination and capacities of democratic governments to pursue specific growth regimes depend not only on economic circumstances but also on evolving electoral conditions.” A recent paper by Peter Hall. Link. And from 2019, Baccaro and Howell on “social blocs and growth models.” Link.
    • From Robert Putnam’s seminal 1988 essay on the “logic of two-level games”: “Domestic politics and international relations are often somehow entangled, but our theories have not yet sorted out the puzzle.” Link.

    NEW RESEARCHERS

    Egyptian-Chinese Economic Zones

    In a 2018 paper, PhD candidate in development studies at SOAS University of London SAFA JOUDEH analyzes economic zones in Egypt.

    From the abstract:

    “This paper focuses on the global integration of economic zones for the movement of knowledge and technology. Using the case of China’s Economic and Trade Cooperation Zone in Egypt, it examines the dynamics of coordinating global value chain activity in a foreign-operated industrial cluster highlighting two main determinants of achieving technological progress, industrial planning and institutional dynamics. The key question asked is whether a framework for the operation of economic zones that is controlled by lead economies can succeed in enhancing industrial competitiveness of domestic enterprises. As evidenced by this case study, the organisation of global production, including decisions relating to the choice of location, industry focus, vertical cooperation and shifts in value chain activity, is not determined endogenously within the chain but by the policy imperatives of the lead economy. Accelerating GVC participation fails to ensure the vertical move upward of domestic enterprises, and may counter the development of indigenous capabilities in the host economy.”

    Link to the text.

    Each week we highlight research from a graduate student, postdoc, or early-career professor. Send us recommendations: editorial@jainfamilyinstitute.org.

    + + +

    • Watch a recording of last week’s panel on the future of social democracy, which featured Stephanie Mudge, Adam Przeworski, and Wolfgang Streeck, and was moderated by Waltraud Schelkle. Link.
    • JW Mason on alternative visions of inflation. Link. And see a PW essay by Andrew Elrod on the various causes and effects of inflation. Link.
    • “Economic policymakers in Thatcher and Reagan’s administrations in the early 1980s did not set out to ‘fail forwards’ by generating a crisis that would enable a statist kind of neoliberalism.” Jacqueline Best studies the early days of neoliberalism. Link.
    • Annie Lowrey writes on administrative burden and the “time tax.” Link. And read a PW Sources edition from 2019 on the political choices behind administrative burdens. Link.
    • Kevin Corinth, Bruce Meyer, and Angela Wyse present a new dataset to better understand homelessness and the social safety net in the US. Link.
    • Killian Clarke looks at bias in datasets on Middle Eastern protests. Link.
    • Matthew M.C. Allen, Maria L. Allen, Syed Imran Saqib, and Jiajia Liu examine ‘state-permeated capitalism’ in the solar photovoltaic industry in China and India. Link.
    • “Factoring in precarity puts into question the idea of comparing the incomes of formal employees with those in informal jobs in one unified, clean dataset. That dataset is the ‘killer app’ of poverty reduction.” Rishabh Kumar on the debates around global poverty. Link.
    • Scott Timcke on Kwame Nkrumah and current day fintech in Africa. Link.
    • “These bills would return the federal government to its more familiar historical role in bolstering and directing the nation’s growth.” In the Washington Post, Robert Manduca, Nic Johnson and Chris Hong on the Biden infrastructure legislation. Link. And see Johnson’s PW essay on the New Deal-era Reconstruction Finance Corporation. Link.
    • “This article assesses why the French and US banks Paribas and Speyers underwrote a series of loans to revolutionary Mexico in 1912 and 1913, when the state was in the process of collapsing. Based on unpublished primary documents, the article shows that the 1913 loan involved a conflict of interest. The credit delayed a default and sustained the price of Mexican securities while Paribas, its main underwriter, was liquidating its Mexican portfolio. Paribas accessed pessimistic but accurate first-hand information on Mexico, while the public read over-optimistic press reports. Paribas forced the government to sell the bonds on the primary market at a price that was low, controlling for publicly available data. It subsequently sold the bonds at a margin on the secondary market.” By Leonardo Weller. Link.

  8. Rayfish

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    CASTE & LABOR

    Structures of unfree labor have always been at the edge of current and historical discourse on labor, mobility and caste in South Asia. This has been in focus during the COVID-led migrant crisis in India, where around 11.4 million migrant workers were forced into an exodus from urban to rural areas.

    In a recent book, RADHIKA SINGHA unpacks the category of ‘menial’ labor as one structured by caste, class and race. She focuses on the massive role of Indian labor—involving 563,369 followers or non-combatants in the British Indian Army—in Mesopotamia and France during World War I.

    From the book:

    “In colonial civil offices, ‘menial establishment’ was the formal categorisation for the lowest rung of employees, from peons (messengers) down to file-suppliers, bhistis and sweepers. The label ‘menial’ was often used in discussion of their service conditions. In exploring this condition of ‘menial’ status, we have the benefit of a valuable body of writing which has shown how caste norms tended to hem powerless communities into the hardest and most stigmatised sectors of work regimes—even in those which were being refashioned under the drives of colonialism and capitalism. ‘Untouchability’ was thereby recast in new contexts, and low pay, degrading conditions of work, and corporal discipline were ‘naturalised.’ The attached followers found it particularly difficult to challenge their consignment to menial status because of the presence in their ranks of ‘untouchable’ castes who swept, cleaned latrines, washed clothes, and crafted leather. This was work characterised both as a ‘trade’—that is, as a caste structured specialisation—and as ‘polluting.’ Regimental followers, public and private, were, in the manner of domestic servants, expected to be constantly at hand to tend to the physical needs of their institutional superiors, who felt they had a personal right to chastise followers for inadequate service, evasion, or questioning of demands. The fact that regiments found themselves having to supplement the income of public followers and employ ‘private’ followers blurred the line between public employee and domestic servant.”

    Link to the text.

    • “War propaganda often focused on the figure of the returning soldier or labourer who was shown as coming back less superstitious, more receptive to modern medicine and sanitary living, more open to new ideas about farming.” Scroll.in’s Rohan Venkat interviews Singha on the geography of the war and her use of archives. Link.
    • Kate Imy provides a different perspective of race and status in the British Indian army through a focus on Gurkha combatants. Link.
    • Sukanya Shantha’s reporting uncovers the continuing segregation of prisoners along caste lines and the institutional entrenchment of caste-determined labor regimes. Link. And a recent roundtable on Rupa Viswanath’s book on the nature of caste in India highlights the durability of caste as a form of labor control of the lowest orders. Link.

    This top section of the newsletter was written by guest contributor Meghna Chaudhuri, Visiting Assistant Professor of History at Boston College. She is working on a book about agrarian finance in South Asia, global development and the intertwining of ethical and economic subjectivity under capitalism as a form of life. Follow her on Twitter @mformanic.

    NEW RESEARCHERS

    Financial Inclusion & the State

    In a 2020 article, PhD candidate in political science at the University of Western Ontario TYLER GIRARD examines state policies geared towards bank account ownership in the global South.

    From the text:

    “The dominant arguments concerning the appropriate actions by policymakers to increase financial inclusion, specifically in terms of financial regulations and policy interventions, largely reflect a ‘market-enabling’ policy framework whereby the state is meant to facilitate greater competition within the financial sector, decrease the regulatory burden on firms and avoid the direct provision of financial services through state-owned institutions. This paper will address the following question: what is the relationship between a market-enabling state policy framework and bank account ownership in the global South? This study adopts a novel and more comprehensive approach by using a modified index constructed from expert evaluations. Using ordinary least squares regression, the analysis suggests a positive relationship between a market-enabling state policy framework and increased bank account ownership among the total population, but the relationship diminishes among key subpopulations: adult women, rural adults and the poorest 40 per cent of adults.”

    Link to the article, link to Girard’s profile.

    Each week we highlight research from a graduate student, postdoc, or early-career professor. Send us recommendations: editorial@jainfamilyinstitute.org.

    + + +

    • Join us this Tuesday, July 27 at 10am ET for a conversation on the past, present, and future of social democracy inspired by our book, Market Economy, Market Society. Featuring Stephanie Mudge, Adam Przeworski, and Wolfgang Streeck, and moderated by Waltraud Schelkle. Register here.
    • “Countries’ exports under the previous era of globalization predict over half of the variance of today’s real GDP per capita. What you exported in the past matters for where you are on the development ladder today.” New on PW, Isabella Weber on the legacy of the two globalizations. Link.
    • “Were those most impacted by COVID-19 likelier to support government interventions in public health and economic stimulus?” New research from JFI, based on polling data collected in 2020, assesses public opinion towards guaranteed income. Link.
    • “We conclude that with sustained strong demand, the US could plausibly reach an employment-population ratio on the order of 68 percent over the next decade. This is equivalent to an additional 28 million jobs beyond the CBO’s projection.” A new Roosevelt Institute report by JW Mason, Mike Konczal, and Lauren Melodia. Link.
    • “The evidence is consistent with the possibility that urgent care centers—which are increasingly owned by or contract with hospital systems—induce greater spending on hospital care.” By Janet Currie, Anastasia Karpova, and Dan Zeltzer. Link.
    • Jacopo A. Baggio analyzes thirty years of research on climate change, between 1990 and 2019. Link.
    • Arindrajit Dube examines the impacts of the expiration of pandemic unemployment insurance programs in 25 states. Link.
    • “We show that growing attention to new macroeconomic research was a reaction to both mounting external criticisms against the Fed’s decision-making process and the spread of new macroeconomic theories and econometric techniques.” Juan Acosta and Beatrice Cherrier on changes in economic analysis at the Fed’s Board of Governors in the 1960s. Link.
    • Michael D. Bauer and Glenn D. Rudebusch on social discount rates and the rising cost of climate change. Link.
    • “The truth is that millions of citizens in the world’s largest democracy go hungry every year, even in the absence of war, famine––or a pandemic.” Mridula Chari on food subsidies, colonial histories, and India’s long struggle against hunger. Link.
    • “After the 1348 Black Death, the Republic of Siena went through a period of recurrent plagues, military threats, and famines. Did the city maintain its fiscal capacity, and, if so, how? Despite the increasing external threats, the coalitions were able to maintain fiscal capacity until the second half of the fifteenth century. They did so by adopting progressive fiscal instruments that allowed the city to raise the resources needed to deal with increasing fiscal pressure. However, these instruments ultimately linked the fiscal capacity of Siena to the economic trends of northern and central Italy. When in the second half of the fifteenth century the region entered into an economic downturn, the fiscal capacity of Siena plummeted and the city lost its independence.” By Mattia Fochesato. Link.

  9. Inextinguishable Fire

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    CLIMATE PLANNING

    Earlier this week, the EU published a series of proposals aimed at reducing its carbon emissions by 55 percent by 2030. The legislation has revived debates on the economic models best suited to facilitating investment and decarbonization.

    A Financial Times article by MAX KRAHÉ was circulated widely this week, in which he argued for the importance of central planning in the green energy transition. In an April report for the Royal Belgian Academy, Krahé examines the structural justifications for his position.

    From the text:

    “As of today, we lack an agreed-upon, reliable methodology for distinguishing between sustainable and non-sustainable investments. Unfortunately, this is not a problem of insufficient data or the imperfect implementation of a theoretically sound methodology. Instead, the problem lies with the basic methodology of the dominant approach that has been used to draw this distinction so far: a bottom-up approach that tries to rate the sustainability performance of individual companies by looking at firm-level performance indicators—such as emissions, the use of land, water, or energy, average and minimum wages, corporate governance structures, and so on—without taking into consideration the wider context into which these firms are embedded. As the report shows, there are deep, conceptual reasons that stand in the way of determining the contribution that individual investments make to sustainable development. In particular, where we cannot identify counterfactuals, the question of sustainability can only be asked of systems as a whole, and not of their individual components. While there is a combination of methods that allows downwards translation, from system-level sustainability to identifying individual sustainable investments, there is no reliable method to translate upwards, from individual investments to their impact on a system’s overall sustainability, and hence to the unsustainability of that individual investment. Concerning this link, the report’s central finding is that upwards translation is impossible in dynamic systems. The link between individual investments and system-level sustainable development is a one-way street.”

    Link to the full report.

    • “The ECB is admitting climate as a concern because it may affect price stability and financial stability. It is not addressing the fact that the financial system itself funds the fossil-fuel economy and thus drives the climate crisis.” In Social Europe, Adam Tooze comments on the Bank’s Strategy Review. Link.
    • “Academics have been warning for years that solar power faces a fundamental challenge that could halt the industry’s breakneck growth: the more solar you add to the grid, the less valuable it becomes.” James Temple on solar’s market failures. Link.
    • “While both the Soviet Union and the United States were interested in regional weather control, the Soviets listed ‘the development of climate-control methods among the most urgent problems of Soviet science.'” Noah B. Bonnheim examines the ideological history of climate engineering. Link.

    NEW RESEARCHERS

    Low-income Housing Policy

    Assistant Professor of Sociology at Princeton JOHN ROBINSON studies the politics of low-income housing policy in the United States. In a 2020 article, he analyzes the rise of state housing finance agencies (HFAs) in the 1960s, which remain the leading suppliers of credit for low-income renters today.

    From the introduction:

    “Both HFAs and federal insuring offices (FIOs) played a key role in expanding credit access to marginalized groups: the former as direct lenders, and the latter by subsidizing and insuring debt provided by private lenders. While FIOs became the focal point of public blame over the credit expansion, HFAs proliferated in a majority of states between 1968 and 1975. What explains these divergent outcomes? My core findings show that FIOs merely redistributed credit toward marginalized groups by openly defying exclusionary market expectations without redefining valuation practices around the allocation of debt for marginalized renters. By contrast, HFAs reconstituted credit’s baseline racial assumptions by introducing new market values and rationalities that—often inadvertently—subverted established market rules and the racially reactionary campaigns waged to enforce them. Specifically, by relying on speculative bond finance—in particular a novel instrument called “moral obligations bonds”—HFAs mobilized a subversive vision that pioneered new markers of debt soundness, new notions of suburban prosperity, and a new blueprint for managing racial tensions.”

    Link to the text, link to Robinson’s website.

    Each week we highlight research from a graduate student, postdoc, or early-career professor. Send us recommendations: editorial@jainfamilyinstitute.org.

    + + +

    • Why did social democratic parties liberalize their economies in the 1980s and 1990s, and was there an alternative? Join us on July 27 at 10am ET for a conversation around our book, Market Economy, Market Society. Featuring Stephanie Mudge, Adam Przeworski, and Wolfgang Streeck, and moderated by Waltraud Schelkle. Register here.
    • “While the power & resources of local government remained enormous in the early 2000s, they were deployed to facilitate the role of the private sector in urban life.” On the site, Kim Phillips-Fein interviews Benjamin Holtzman about his new book charting the political transformations that followed New York City’s 1975 fiscal crisis. Link.
    • “They Worked.” A new research brief by JFI Senior Fellow Claudia Sahm on the effects of the $1,400 relief payments. Link.
    • “Any of these proposals would mark a radical break in American public finance, but something similar will be necessary to catch up to the rest of the world.” In the Times, writes on the Fed, municipal bonds, and climate policy. Link. (The piece features comments from Claudia Sahm, and discussion of research by many scholars who participated in our recent panel on investment and decarbonization. Link to the transcript of the event.)
    • “From the deployment of AI in service management, to the ‘opening up’ of administrative datasets, digitalisation initiatives have uprooted established modes of public sector organisation and administration. They have also fundamentally transformed the political economy of the welfare state.” Rosie Collington explores the link between AI and privatization in Denmark. Link.
    • “This article demonstrates how gender equality policies which aim to reduce the burden of women’s unpaid care and domestic work through the state-supported marketization create a vulnerable group of under-paid care and domestic workers.” Sumika Yamane on care work policy in Sweden, Singapore, Taiwan, Hong Kong, and Japan. Link.
    • Lars Fredrik Andersson, Liselotte Eriksson, Paul Nystedt examine the history of health insurance cooperatives in early twentieth century Sweden. Link.
    • “We contribute to the understanding of the internal differentiation among China’s business elites by documenting the emergence of a particular kind of large, non-state business group that we argue is more akin to a mafia system than any standard definition of a firm.” A new paper by Meg Rithmire and Hao Chen. Link.
    • In an article from May, Matthew F. Nichter analyzes the interracial unionism of the UPWA. Link.
    • “We construct a database linking European royal kinship networks, monarchies, and wars to study the effect of family ties on conflict.” Seth G. Benzell and Kevin Cooke assess the causal impact of relative mortality on war duration from 1495-1918. Link.
    • Mario Small, Armin Akhavan, Mo Torres and Qi Wang draw on more than 6 million queries to “compute the difference in the time required to walk, drive or take public transport to the nearest bank versus alternative financial institution from the middle of every block in each of 19 of the largest cities in the United States.” Link.
    • “We construct a database linking European royal kinship networks, monarchies, and wars to study the effect of family ties on conflict. To establish causality, we exploit decreases in connection caused by apolitical deaths of rulers’ mutual relatives. These deaths are associated with substantial increases in the frequency and duration of war. We provide evidence that these deaths affect conflict only through changing the kinship network. Over our period of interest, the percentage of European monarchs with kinship ties increased threefold. Together, these findings help explain the well-documented decrease in European war frequency.” A network of thrones, by Seth G. Benzell and Kevin Cooke. Link.

  10. Dawning Man

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    THE HAITIAN STATE

    Haiti’s President Jovenel Moïse was assassinated on Wednesday, plunging the country into greater political unrest following months of protests around Moïse’s controversial decision to rule by decree.

    A 2006 article by ROBERT FATTON JR. investigates Haiti’s state formation after independence, shedding light on the country’s current distributional struggles.

    From the article:

    “Slaves knew that their freedom depended on the destruction of the plantation economy; however, Haiti’s place in world production and utter dependence on sugar exports also rested on the plantation system. At independence Haitian rulers confronted a cruel choice. If they preserved emancipation by supporting the former slaves’ aspirations to become independent peasants, they would ultimately condemn the country to material underdevelopment. If they promoted an immediate economic recovery, they would be compelled to impose a military-like discipline on the newly freed masses and they would thus emasculate emancipation itself. Moreover, the high army officers who led the revolution were determined to keep and expand their power; this in turn required maximising revenues and foreign exchange. The plantation system facilitated the collection of taxes and privileged the concentration of land ownership in the hands of the new ruling class. Thus the imperatives of economic recovery and defending emancipation against the potential military aggressions of the great powers coincided with the class interests of the first postcolonial leaders to create patterns of unequal land ownership and forced labour. Gross material inequalities and political despotism opened a massive chasm between rulers and citizens. The outcome of the slaves’ revolution for freedom was paradoxically a new authoritarianism in the name of emancipation.”

    Link to the text.

    • “Despite diplomatic disavowal and economic embargo, Haiti was at the forefront of transforming and liberalizing early 19th-century American trade.” N. Pierre examines British-Haitian trade immediately following Haiti’s independence. Link.
    • “It cannot be denied that the US occupation forces put an end to many of the structures on which 19th-century political chaos rested, but they did so at the cost of creating an equivalent of Frankenstein’s monster: a new army.” Mats Lundahl on Haiti’s political development. Link.
    • “The government of Haiti has received just 1 percent of humanitarian aid. NGOs and private contractors in Haiti have consequently built an extensive infrastructure for the provision of social services.” Vijaya Ramachandran and Julie Walz look at aid spending after the 2010 earthquake. Link. And in a recent article, Darlène Elizabeth Dubuisson analyzes local resistance to NGO bureaucracy. Link.

    NEW RESEARCHERS

    Landlord Power & Employment Guarantees

    KARTIK MISRA is Assistant Professor of Economics at The University of the South. In a 2019 article, he studies how land ownership affects the outcomes of an employment guarantee program in India.

    From the abstract:

    “By providing 100 days of guaranteed employment to every rural household, the National Rural Employment Guarantee Act (NREGA) can challenge the hegemony of landed elites as major employers in the Indian countryside. Using the colonial classification of landlord and non-landlord based land-revenue institutions in India, this paper provides a political economy explanation for regional variation in the labor market impact of NREGA. Comparing the labor market impacts of NREGA between the landlord and non-landlord districts, we find that the provision of public employment under NREGA and correspondingly, its impact on rural wages is muted in landlord districts. In these districts, public employment under NREGA substitutes for self-farming but has no impact on private wage employment. However, the program is highly successful in raising wages by generating more public employment in non-landlord districts. In these districts, the provision of public employment under NREGA crowds-out labor primarily from unpaid domestic work, reflecting an increase in women’s participation in the program.”

    Link to the text, link to Misra’s website.

    Each week we highlight research from a graduate student, postdoc, or early-career professor. Send us recommendations: editorial@jainfamilyinstitute.org.

    + + +

    • Join us on July 27 at 10 am ET for a conversation around our first book, Market Economy, Market Society, and the past, present, and future of social democracy in Europe. The event, hosted with LSE Sociology, will feature Stephanie Mudge, Adam Przeworski, and Wolfgang Streeck, and be moderated by Waltraud Schelkle. Register here.
    • “Drake nor Cayton dismissed the fundamental force of productive relations, but in their study of Black life, they knew they needed to delve deep into the cultural practices and associational life that shaped socioeconomic experience.” New on PW, Davarian Baldwin recommends St. Clair Drake and Horace Cayton’s Black Metropolis as part of the Phenomenal Works series. Link.
    • Nils Redeker investigates the savings glut and the decline of labor power. Link.
    • “The article takes stock of this extremely rapid transition from a traditional and ancestral system, inherited from the water-led civilization of Persia, towards a universal model of water supply in Iran.” By Ayda Alehashemi and Jean-François Coulais. Link.
    • In the Atlantic, Matthew Gordon Lasner on the history of condos. Link.
    • “The rise in tuition and student debt in turn contributed to a sharp decline in homeownership which was concentrated in suburban and urban areas.” By Zachary Bleemer, Meta Brown, Donghoon Lee, Katherine Strair, and Wilbert van der Klaauw. Link. For more analysis on the geography and political economy of student debt, see JFI’s millennial student debt series here.
    • Elham Saeidinezhad argues that the Fed should focus on the distributional impacts of unequal access to cheap debt. Link. And in a recent PW essay, Saeidinezhad analyzes the Fed’s risk management after 2008. Link.
    • Christoph Albert, Paula Bustos and Jacopo Ponticelli look at the effects of climate change-related extreme weather events on labor and capital allocation in Brazil. Link.
    • Manohar Samal examines the use of municipal bonds for urban infrastructure projects in India since 1997. Link.
    • “While economic growth is generated by advances in production efficiency alone, changes in firm-level demand can nevertheless have an indirect impact on aggregate growth through their effect on incentives to conduct R&D.” Marek Ignaszak and Petr Sedláček offer a new perspective on demand-driven growth. Link.
    • “Prominent economists have supposed that the private production of full-bodied gold or silver coins is inefficient: due to information asymmetry, private coins will be chronically low-quality or underweight. An examination of private mints during gold rushes in the US in the years 1830–63 finds otherwise. While some private gold mints produced underweight coins, from incompetence or fraudulent intent, such mints did not last long. Informed by newspapers about the findings of assays, money-users systematically abandoned substandard coins in favour of full-weight coins. Only competent and honest mints survived.” By Lawrence White. Link.