Category Archive: Sources

  1. Spot on the Map

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    POLICY DRIFT

    In addition to straining America’s existing welfare infrastructure, the pandemic has fundamentally altered labor markets and generated a wide range of new social needs. Policy responses to these changing circumstances have the potential to shape the trajectory of US inequality for decades to come.

    In a 2010 paper, JACOB HACKER and PAUL PIERSON argue that failure to adapt to political developments is more than just passive inaction; in recent American history, it has been among the most effective strategies for active welfare dismantlement.

    From the paper:

    “A convincing political account of American inequality must explain its defining feature, namely, the stunning shift of income toward the very top. Equally important, it must explain how public policy has contributed to this trend. This means not only identifying public policies that can be linked to large increases in inequality; but also providing an account of the political processes that have led to the generation of those policies.

    One oversight of existing political accounts is the presumption that if government played a central role in rising inequality, then a host of new laws and policies must have been created over the past thirty years to drive the upward distribution of income. Very important inequality-inducing laws and policies have in fact been created. But these are but one of the two principal mechanisms through which politics can reshape how an economy works. A second mechanism, which we call drift, is equally, if not more, important. Drift describes the politically driven failure of public policies to adapt to the shifting realities of a dynamic economy and society. It is not the same as simple inaction. Rather, it occurs when the effects of public policies change substantially due to shifts in the surrounding economic or social context and then, despite the recognition of alternatives, policy makers fail to update policies due to pressure from intense minority interests or political actors exploiting veto points in the political process. The design of U.S. political institutions makes policy enactments especially difficult, while maximizing opportunities to pursue policy agendas based on the exploitation of drift.”

    Link to the article, link to the book.

    • “Drift is difficult to study empirically because it refers to change through inaction. We suggest that closer attention to case-specific empirical implications of the effectiveness of policy implementation can make drift a more tractable concept.” Daniel Bélanda, Philip Roccob and Alex Waddan analyze US retirement security and health care coverage. Link.
    • Michael Caniglia asseses how policy drift has shaped implementation of mortgage interest deduction policy. Link. And Daniel J. Galvin examines how changing labor markets have undermined the utility of the Fair Labor Standards Act: “The eroding value of the minimum wage as the cost of living rises is only the best-known example of how drift undermines the FLSA. Most pernicious, however, is the declining enforcement capacity of the Wage and Hour Division.” Link.
    • “Studies of drift have paid surprisingly little attention to its feedback effects—the ways in which drift, like the adoption of new policies, may alter institutional arrangements, reshape the universe of organized interests, and recast the dynamics of political action.” A new piece by Hacker and Galvin situates drift within the literature on policy feedbacks. Link.
    ‡ welfare inequality policy

    NEW RESEARCHERS

    On-call and on-demand work in the United States

    Sociology PhD Candidate at the University of Chicago PETER FUGIEL studies labor and organizations, using working time as a lens on stratification and labor market institutions. In a 2019 paper, Fugiel and Susan J. Lambert reassess the prevalence of on-call and on-demand work in the US, finding that as many as 23% of workers are working on-demand.

    From the abstract:

    “On-call and on-demand work is more common in the USA than official statistics suggest. Conventional measures treat on-call work and irregular schedules as forms of employment that are categorically distinct from standard employment with regular hours. But this categorical approach confounds multiple dimensions of working time and fails to provide clear criteria for classification. A categorical approach is particularly inadequate in the US case, where the line between standard and non-standard employment is blurred by fragmented labour market institutions and unilateral employer control over working time. Using data from several recent national surveys, the authors show that at least 6% of employees work on-call and as many as 23% work on-demand. On-call work and on-demand work are most prevalent among employees with non-standard arrangements such as part-time, temporary agency, or shift work. However, employees with full-time, day shift, and other standard arrangements account for a substantial share of on-demand and on-call workers.”

    Link to the piece, link to Fugiel’s website.

    ‡ labor_market precarity new_researchers

    Each week we highlight great work from a graduate student, postdoc, or early-career professor. Have you read any excellent research recently that you’d like to see shared here? Send it our way: editorial@jainfamilyinstitute.org.

    + + +

    • “To prevent another crash, we need a market proration system that ties oil production to oil demand. This would not be new for the Texas Railroad Commission.” New on the Phenomenal World: Gabriel Mathy on Gardiner Means, the Texas Railroad Commission, and oil prices. Link.
    • We are hiring a fellow for quantitative work with our guaranteed income initiative, to support ongoing collaboration with cities in the United States and Brazil designing and piloting guaranteed income policy. Link to the full description and application details.
    • “We develop a new source of micro-data on union membership to examine the long-run relationship between unions and inequality.” New version of a great paper from Henry S. Farber, Daniel Herbst, Ilyana Kuziemko, and Suresh Naidu. Link.
    • “Non-financial businesses in South Africa fundamentally transformed their investment behaviour during the 1990s, shifting from more productive uses such as trade credit towards highly liquid and potentially innovative financial investment. Financial operations—fueled by foreign capital inflows—are linked to the price inflation in property markets.” Ewa Karwowski on financialization and housing in Johannesburg. Link. And Fenghua Pan, Fangzhu Zhang and Fulong Wu analyze state-led financialization in China. Link.
    • Mustafa Yağcı’s new book examines “The Political Economy of Central Banking in Emerging Economies.” Link.
    • “This article provides the first rigorous cross-national analysis of middle class regime preferences, systematically investigating the importance of its economic relationship to an authoritarian state. My findings imply that a state-supported middle class may delay democratization.” Bryn Rosenfeld undermines existing theories on the democratizing role of the middle class. Link.
    • A new INET working paper finds that “US taxpayers have been footing the bill for every new drug approved between 2010 and 2019.” Link.
    • Wim Carton, Adeniyi Asiyanbi, Silke Beck, Holly J. Buck, and Jens F. Lund “survey the ‘long history’ of carbon removal, drawing out lessons for ongoing research and the emerging public debate on negative emissions.” Link.
    • “Stockholm is in the midst of overhauling its defence and security strategies in response to a resurgent Russia, a rising China, an unreliable, erratic, and declining America, escalating incoherences and infightings within the EU, and atmospherically-induced increased activity in the Arctic.” Nima Khorrami on Sweden’s changing security strategy. Link. And Hans Dahlqvist uses Swedish labor history from 1880s until 1938 to critique the narrative of the Swedish model. Link.
    • “The experience of bureaucratic incompetence and its ability to cause otherwise intelligent people to behave outright foolishly opens up a series of questions about the nature of power and violence. The unique qualities of violence as a form of action means that human relations ultimately founded on violence create lopsided structures of the imagination. Situations created by structural violence, by which I mean forms of pervasive social inequality that are ultimately backed up by the threat of physical harm, invariably tend to create the kinds of willful blindness we normally associate with bureaucratic procedures. To put it crudely: it is not so much that bureaucratic procedures are inherently stupid, or even that they tend to produce behavior that they themselves define as stupid, but rather, that they are invariably ways of managing social situations that are already stupid because they are founded on structural violence. The bureaucratic imposition of simple categorical schemes on the world is a way of managing the fundamental stupidity of such situations. In the hands of social theorists, such simplified schemas can be sources of insight; when enforced through structures of coercion, they tend to have precisely the opposite effect.” Link to David Graeber’s 2006 Malinowski lecture on bureaucracy and violence. Link also to Graeber’s 2017 book with Marshall Sahlins On Kings. And link to Debt: The First 5000 Years.

  2. Form and Color Study

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    GREEN INDUSTRY

    The compound risks of climate catastrophe and Covid-19 have defined the year thus far. As the world continues to reel from the effects of the pandemic, and storms and wildfires dot the map, calls for marshaling a green recovery have proliferated.

    The history of green investment thus far has been infamously more modest. In a comparison of the Japanese and American solar panel industries from 1973 – 2005, MAX JERNECK elucidates the rocky paths to financing low-carbon industry. From the paper:

    “The United States was the birthplace of the solar cell, and American firms dominated the industry in the 1970s. Beginning in the early 1980s, the American photovoltaic (PV) industry lost ground to foreign, and particularly Japanese, competitors. By 2005, the American share of the global market had declined to under ten per cent.

    In Japan, technologically innovative PV firms had ample financing and were sheltered from the turbulence of financial markets. In the United States, the financial system was unwilling to finance small entrepreneurial firms, causing the industry to become concentrated among large corporations. By identifying and evaluating ‘difference makers,’ it is possible to draw conclusions about which aspects of the low-carbon development process were amenable to human action, and therefore relevant to the task of devising a strategy for the future transition to a low-carbon economy. Knowing where to look requires a theory of both the mechanisms driving industrial change in general, and the particular institutional arrangements regulating them in the countries under study.”

    Link to the article.

    • In a related paper for Science, Jerneck takes a closer look at the financing impediments to the solar industry in the US. Link.
    • In the New Republic, Kate Aronoff writes on the prospects of a National Investment Authority. Link. Read also Saule Omarova’s Data For Progress proposal for a NIA. Link.
    • “On what foundations might an alternative economy be built? Neither population nor GDP will be its fundamental metric, but rather land scarcity.” Troy Vettese in 2018 on a “half-earth” approach to climate catastrophe. Link. See also: Robert Pollin in 2019 on degrowth and a Green New Deal. Link.
    ‡ climate industrial_policy climate_change

    NEW RESEARCHERS

    Voting for austerity

    Postdoctoral research fellow at the Max Planck Institute for the Study of Societies MIKELL HYMAN studies the politics of local welfare provision. In a recently published paper, she examines why policy feedbacks failed to sustain municipal pensions benefits in post-2008 Detroit.

    From the introduction:

    “After decades of population loss and declining federal and state funding, the 2007 – 2009 foreclosure crisis and recession hit the City of Detroit’s budget particularly hard. In 2013, a state-appointed emergency manager took Detroit to bankruptcy court, initiating the largest municipal bankruptcy in American history. The bankruptcy reached an expedient resolution through a negotiated settlement that hinged on a deal between a group of foundations, the Detroit Institute of Arts, the state government, and retired municipal workers. In order for the city to exit bankruptcy, however, the proposed settlement had to be endorsed by a voting majority of at least one group of adversely impacted creditors. If retirees rejected the deal, the foundations—unaccustomed to negotiating over the size of their gifts—threatened to withdraw, leading the city to pursue deeper cuts. Thus, in a highly constrained context, city retirees experienced a rare moment of agency.

    Drawing on video footage of retiree association meetings, supplemented by interviews, court documents, and media coverage, this article investigates how intermediary actors–those who represented retiree interests in court proceedings and backstage negotiations–attempted to persuade retirees to publicly accept the withdrawal of key legal and economic protections. I synthesize two interactionist theories of loss to argue that retirees accepted the plan through a process of ‘collective cooling.’ Through this process, retirees’ collective self-understanding was shifted from that of contractual rights holders to charitable dependents. Key components of this process included, first, adjusting the group’s understanding of how they were perceived by powerful outsiders and, second, redefining the loss from one that reflected poorly on retirees to one that did not.”

    Link to the piece, link to Hyman’s website.

    ‡ welfare policy_feedbacks new_researchers

    Each week we highlight great work from a graduate student, postdoc, or early-career professor. Have you read any excellent research recently that you’d like to see shared here? Send it our way: editorial@jainfamilyinstitute.org.

    + + +

    • We are seeking a fellow for quantitative work with our guaranteed income initiative, to support ongoing collaboration with cities in the United States and Brazil designing and piloting guaranteed income policy. Link to the full description and application details.
    • “The decoupling between production and development has left us with something more predatory and less connected to the sorts of social infrastructure that has accompanied it in the past.” This week on the blog, Brendan Harvey interviews philosopher Richard Westra. Link.
    • Joe Francis on measuring historical GDP: “In a world of accurate historical statistics, backwards extrapolation and benchmark estimates would produce the same results. This is not the case.” Link.
    • “We construct network measures of nursing home connectedness and estimate that nursing homes have, on average, connections with 15 other facilities.” M. Keith Chen, Judith A. Chevalier, and Elisa Long on nursing home staff networks and Covid-19. Link. ht Steve N.
    • New paper from Vanessa Ogle on “funk money,” and the growth of tax havens: “Decolonization created a money panic that led white settlers, businessmen, and officials to seek to move funds out of the colonial world. Instead of being repatriated to metropolitan countries with high tax rates and exchange controls, money moved to tax havens.” Link. (See also: a recent newsletter featuring Ogle’s work.)
    • “Some ‘supply’ chains also function as tax chains, with transfer pricing shenanigans allowing firms to shift profits to low tax jurisdictions.” Brad Setser on trade and tax competition and global supply chains. Link.
    • Paul Williams on the strengths and shortcomings of Biden’s housing plan: “There isn’t a whisper of public asset expansion.” Link.
    • “In the mid-1970s, Congress moved to regulate the National Security Agency (NSA) at a moment when such regulation might have restricted the growth of electronic surveillance. The Ford administration played a crucial role in preventing that from happening.” Peter Roady on the crafting of the Ford administration’s legal intelligence framework. Link.
    • A 2019 working paper by Antonio Accetturo, Michele Cascarano, and Guido de Blasio analyzes the effect of 16th-19th century pirate attacks on Italy’s population distribution. Link.
    • “Colorblind tax data obscure racial inequality and prevent its remedy. They also undermine the democratic accountability of tax policy.” Jeremy Bearer-Friend analyzes a century of colorblindness in federal tax data. Link.
    • “Institutionalization of the insane in the United States prior to 1923 can be partly explained by rent-seeking behavior of physicians. The increase in life expectancy that took place during the waning decades of the 19th century increased the likelihood of reaching age ranges associated with dementia and other neurological diseases. In this context, there was a greater demand for state intervention in the care of the insane (especially from burdened families). State-level politicians were only too eager to acquiesce as it meant that they would acquire a new area of responsibility as the care of the insane was previously provided at the local and county levels through almshouses. This new area of responsibility meant a greater ability to dispense patronage. Where the medical community was best organized was also where institutionalization increased most.” By Vincent Geloso and Raymond March. Link.

  3. Escaping the Bleak

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    DIGITAL CURRENCIES

    Covid is accelerating the transition away from cash and encouraging the development of state-backed digital currencies. In the past two weeks, the People’s Bank of China launched a trial run for digital renminbis in three major cities, and the Boston Fed announced a research initiative examining the technicalities of a Central Bank Digital Currency (CBDC) in the United States.

    Despite its purported benefits, the shift threatens to fundamentally alter the priorities of central banks, the structure of payment markets, and the regulatory framework required to ensure financial stability. A 2018 paper by SHEILA DOW considers the limitations of CBDCs for this latter aim.

    From the piece:

    “The development of Central Bank Digital Currencies feeds into a more general debate on the state’s role in the financial sector. Markets price according to evidence of the past, but also according to conventional judgements about that evidence. Since these conventional bases for pricing are vulnerable to discrete changes which spread across markets, there is considerable scope for financial instability. Innovation in payments systems and digital currency assets is just part of an ongoing process of financial innovation outside the current boundaries of regulation.

    Governments have placed the full onus for macroeconomic policy on monetary policy, with fiscal policy restricted to reductions in budgetary deficits and the size of the state. Ironically, since fiscal austerity policies held down aggregate demand and elevated expectations of risk attached to real projects, increases in the money supply were accompanied by low inflation. Consequently, monopoly control of the money supply in order to promote monetary stability seems to be beside the point. Rather the focus needs to be on how the financial sector might be regulated in such a way as to generate credit for useful projects and liquidity as a refuge from uncertainty. Central bank digital currencies may pose benefits, but to consider them the core of a generalised policy to avert future crises is to look in the wrong place.”

    Link to the article.

    • “Time and effort would be better spent on upgrading existing payment networks rather than pursuing options that, for all their innovation, could create more problems than they solve.” This week’s FT editorial urges caution in rolling out CBDCs mid-crisis. Link. And a Philadelphia Fed working paper from June preempts these concerns, warning that the introduction of digital currencies may turn central banks into “deposit monopolists.” Link.
    • “If banks are no longer willing to act as financial intermediaries, central banks should consider using CBDCs to circumvent the banking system and inject liquidity directly to those who need it the most.” Elham Saeidinezhad and Jack Krupinski present an alternative view on digital currency creation as crisis management (stay tuned for Saeidinezhad’s forthcoming piece on Phenomenal World). Link.
    • In a series of collected essays published by the European Money and Finance Forum at Bocconi University, analyses of CBDC pilots in Uruguay and Sweden. Link.
    • From 2017, Ole Bjerg on the “Policy Trilemma of CBDCs.” Link.
    ‡ central_banks money digital_currency

    NEW RESEARCHERS

    Revolution and Redistribution in Colombia

    In a 2019 paper, Assistant Professor in Economics at the Universidad de los Andes MARÍA DEL PILA LÓPEZ-URIBE examines why democratic reforms which extended political participation to the Colombian National Peasant Movement between 1957-1985 failed to effectively redistribute wealth.

    From the abstract:

    “Far from causing an increase in social spending, I show that the state organization of a social movement that extends the political rights of the threatening group can be used to identify rebel leaders and provide private goods to them, in return for preventing social unrest and demobilizing their supporters. I study the context of the organization by the state of the most important social movement in Colombian history—the National Peasant Movement (ANUC)—over a period of almost three decades. Using three newly digitized data sets of Colombian municipalities, I find that rather than leading to broad redistribution to the benefit of the peasantry, the reform instead led to an increase in targeted redistribution in terms of public jobs and lands. In particular, by matching the names of the peasant leaders to the beneficiaries of the land reform, evidence suggests that peasant leaders disproportionately benefited from land reform, especially in municipalities where the communist threat was higher. Finally, I find suggestive evidence that buying off the rebel leaders was an effective counter-revolutionary strategy as it led to fewer revolutionary activities after the support of ANUC was terminated (1972-1985).”

    Link to the piece, link to López-Uribe’s website.

    ‡ redistribution political_economy new_researchers

    Each week we highlight great work from a graduate student, postdoc, or early-career professor. Have you read any excellent research recently that you’d like to see shared here? Send it our way: editorial@jainfamilyinstitute.org.

    + + +

    • “In thinking about logistics, we often consider global supply chains which begin with the manufacturer and end up at Walmart. In doing so, we exclude major transit ports like Singapore, Dubai, or Oman. Those ports are middlemen in global trade routes, and these routes are fundamentally tied to colonial histories.” Katy Fox-Hodess in conversation with Laleh Khalili on Phenomenal World. Link.
    • The MTA is only the second muni bond issuer to turn to the Fed’s recently launched Municipal Liquidity Facility (MLF). A report by the Center for Popular Democracy explains the underutilization: “97% of the 255 cities, states and counties named as eligible for the program are functionally excluded as a result of highly costly and restrictive loan terms.” Link.
    • “Do Americans prefer to work for businesses that look more like democracies or autocracies?” A new paper from Soumyajit Mazumder and Alan Yan finds that “Americans have a preference for workplace democratization, and the magnitude is economically significant.” Link.
    • From the most recent issue of Agrarian South: Fabiano Escher on land politics in Brazil, and Paramjit Singh & Inderjeet Singh on states, markets, and agriculture in Punjab. Link and Link.
    • “Culture allows societies to accumulate an evolved body of knowledge that is greater than any single individual could learn within their lifetime or fit within their mind.” Nathan Nunn on “History as Evolution.” Link.
    • Amartya Sen, Angus Deaton, and Tim Besley discuss “Welfare Economics: Past, Present, and Future.” Link.
    • A new IZA Discussion Paper by Luna Bellani, Anselm Hager, and Stephan E. Maurer draws on a “database of Texan state legislators between 1860 and 1900” to “document the persistence of the Southern slave owning elite in political power after the end of the American Civil War.” Link. Another new IZA report analyzes how Americans used their stimulus checks. Link.
    • Chris Dillow on the feasibility and potential pitfalls of a sovereign wealth fund in the UK. Link.
    • “I explore how the tea-growing districts of China and colonial India were integrated into the global division of labor over a formative century of boom-bust expansion. As tea exports from China and India soared and competition grew fiercer, planters, factory overseers, peasants, and government officials shifted their attention from the wealth-creating possibilities of commerce to the value-creating potential of labor and industrial production. Periodic market crises compelled Chinese and colonial Indian officials to seriously question older Smithian theories premised upon the ‘sphere of circulation.’ Instead, both regional industries pursued interventionist measures focused on the ‘abode of production.’ In India, officials passed special laws for indentured labor recruitment. In China, reformers organized tea peasants and workers into agrarian cooperatives.” Andrew B. Liu’s 2015 dissertation, “Competition, Labor, and Economic Thought in Coastal China and Eastern India, 1834-1942.” Link.

  4. Lamp Effect

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    DEFINING CLASS

    Standard postwar theories of class composition in the global north emphasized occupational differences between employers, blue collar, and white collar workers. But deindustrialization, and the army of underpaid service workers it generated, has increasingly muddied these categories.

    In a 2018 article, MORITZ KUHN, MORITZ SCHULARICK, and ULRIKE STEINS redraw these distinctions for the era of asset ownership. Using household-level archival data from the Survey of Consumer Finances, they argue that portfolio composition and asset prices, rather than income or occupation, are the defining features of class in the contemporary economic landscape.

    From the paper:

    “A channel that has attracted little scrutiny so far has played a central role in the evolution of wealth inequality in postwar America: asset price changes induce shifts in the wealth distribution because the composition and leverage of household portfolios differ systematically along the wealth distribution. While the portfolios of rich households are dominated by corporate and noncorporate equity, the portfolio of a typical middle-class household is highly concentrated in residential real estate and, at the same time, highly leveraged. These portfolio differences are persistent over time.

    An important upshot is that the top and the middle of the distribution are affected differentially by changes in equity and house prices. Housing booms lead to substantial wealth gains for leveraged middle-class households and tend to decrease wealth inequality, all else equal. Stock market booms primarily boost the wealth of households at the top of the wealth distribution as their portfolios are dominated by listed and unlisted business equity. Portfolio heterogeneity thus gives rise to a race between the housing market and the stock market in shaping the wealth distribution. A second consequence of pronounced portfolio heterogeneity is that asset price movements can introduce a wedge within the evolution of the income and wealth distribution. For instance, rising asset prices can mitigate the effects that low income growth and declining savings rates have on wealth accumulation.”

    Link to the piece.

    • “Of course, income from work remains vitally important for many people as a way to access subsistence goods, but by itself it is less and less able to serve as the basis of what most people would consider a middle-class lifestyle.” In the LARB, an excerpt from Lisa Adkins, Melinda Cooper, and Martijn Konings’ forthcoming book, The Asset Economy. Link.
    • “I discuss three clusters of class analyses, each associated with a different strand of sociological theory. The first identifies classes with the material life conditions of individuals; the second focuses on the ways in which social positions afford some people control over economic resources; the third considers how economic positions accord some people power over the lives of others.” Erik Olin Wright in 2009. Link.
    • “Wright’s class scheme is based on the premise of a free market system and private production organizations under advanced capitalism; however, the mode of production in transitional China is a complex hybrid.” Xin Liu on “Class structure and income inequality in transitional China.” Link. And Alejandro Portes and Kelly Hoffman analyze changing social structures across Latin America. Link. And a brand new Göran Therborn article on the “Dreams and Nightmares of the World’s Middle Classes.” Link.
    ‡ class employment labor_market

    NEW RESEARCHERS

    The domestic drivers of international orders

    Postdoctoral Researcher at the Watson Institute ERIK PEINERT investigates the politics of policymaking in advanced industrial states. A recent paper, “Cartels, competition, and coalitions,” argues that domestic industrial relations shape international trade agreements.

    From the abstract:

    “Most theoretical and empirical accounts of trade politics focus on political conflict among competing private interest groups and over policies between the dichotomy of trade liberalization and protectionism. This article argues instead that issues of antitrust, market power, and competition are central to the politics over free trade, and that in this domain state actors are comparatively more important. Original archival evidence from the American New Deal and post-war foreign economic policy shows that post-war free-trade policies were heavily influenced by views, formed in the 1930s, about domestic industrial organization and antitrust. These preferences were then pushed into international economic policy during and after World War II through trade negotiations, extraterritorial application of American law, and pressure for domestic competition laws abroad. In one of the most prominent episodes of trade liberalization, an antitrust campaign and debate permeated trade issues, based in independent state learning and economic preferences.”

    Link to the piece, link to Peinert’s website.

    ‡ trade political_economy new_researchers

    Each week we highlight great work from a graduate student, postdoc, or early-career professor. Have you read any excellent research recently that you’d like to see shared here? Send it our way: editorial@jainfamilyinstitute.org.

    + + +

    • In case you missed our event with Mona Ali, Daniela Gabor, Izabella Kaminska, Matt Klein, JW Mason, Michael Pettis, Brad Setser, Jon Sindreu, Colby Smith, Nathan Tankus, and Adam Tooze, watch it here. And, for an extensive but not exhaustive reading list compiled by the panelists, click here.
    • Join us next Friday August 21 at 3pm EST for a research session with Thea Riofrancos, on the subject of her new book Resource Radicals, on resource nationalism and environmental movements in Ecuador. Email editorial@jainfamilyinstitute.org to register.
    • “Rather than being the product of individual characteristics of peripheral states, sovereign debt crises are inherent to the asymmetric character of global liquidity.” New on Phenomenal World: Karina Patricio Ferreira Lima on proliferating sovereign debt crises since Covid-19. Link.
    • Last week, we shared several items on the US unemployment insurance system. There has been some change in the intervening days with a new White House EO on pandemic unemployment compensation. Link to WaPo coverage, and link to BI coverage, in which expert Michele Evermore says: “It’s absolutely 100% impossible states will have this up in a couple of weeks.”
    • “We argue that finance has been a causal factor for the decline in manufacturing value added (MVA) and the share of employment in the manufacturing sector in Nigeria, as such, necessary for understanding premature de-industrialization.” By Oluwafemi Awopegba and Richard Itaman. Link.
    • “We use novel data from the Freedman’s Savings Bank—created following the American Civil War to serve free Blacks—employing an instrumental variables strategy exploiting the staggered rollout of bank branches. Families with accounts are more likely to have children in school, be literate, work, and have higher occupational income, business ownership, and real estate wealth.” By Luke Stein and Constantine Yannelis on financial inclusion. Link, and link to an excellent blog post by Áine Doris on the Freedman’s Savings Bank and the limits of financial inclusion.
    • A NBER paper on the mortality consequences of climate change induced temperature increases. Link.
    • Elliot Ash, Daniel Chen, and Arianna Ornaghi use natural language processing to determine a judge-specific measure of gender attitudes, and find that “slanted judges vote more conservatively in gender-related cases, and are more likely to reverse lower-court decisions if the lower-court judge is a woman than a man.” Link. (And re-upping a favorite paper co-authored by Ash analyzing judicial opinions written by former Manne seminar attendees. Link.)
    • Eric Levitz on the attack on the US Postal Service. Link. See also: a recent newsletter on the political history of the USPS.
    • A paper by Gustavo Oliveira, Canfei He, and Jiahui Ma looks at how a 2006 shift in Brazilian policy transformed the Chinese agrochemical industry. Link.
    • A new article by Caitlin Rosenthal: “Capitalism when Labor was Capital.” Link. See also Suresh Naidu’s paper from April of this year on American slavery and labor market power: “American slavery is the historical labour market that looks closest to the textbook model of perfect competition.” Link.
    • A new CEPR paper by Yixia Cai and Shawn Fremstad on the differential exposure to housing insecurity is the US during the pandemic. Link.
    • “Spread the Fed,” a two-part post by Robert Hockett. Link.
    • “Vienna invested more heavily in policing in the Mediterranean after 1848 than it did in other regions, such as Western Europe, due to the multitude of ‘Forty-Eighters’ settled there and the alleged inadequacy of the local polities (e.g., the Ottoman Empire, Greece) to satisfactorily deal with the refugee question themselves. The article explains that Austria made use of a wide array of both official and unofficial techniques to contain these allegedly dangerous political dissidents. These methods ranged from official police collaboration with Greece and the Ottoman Empire to more subtle regional information exchanges with Naples and Russia. However, they also included purely unilateral methods exercised by the Austrian consuls, Austrian Lloyd sailors and ship captains, and ad hoc recruited secret agents to monitor the émigrés at large. Overall, the article argues that Austrian policymakers in the aftermath of 1848 invented new policing formulas and reshaped different pre-existing institutions, channelling them against their opponents in exile.” By Christos Aliprantis. Link.

  5. Ships in Port

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    UNEMPLOYMENT

    It’s been over a week since Congress allowed the Federal Pandemic Unemployment Compensation scheme to lapse, and negotiations over an extension have reached a gridlock. But even prior to its end, access to the enhanced benefit was far from equal across the country—a host of administrative and practical hurdles in states like Florida and Alabama prevented scores of applicants from receiving aid.

    The absence of a functional and unified federal unemployment scheme is a characteristic feature of America’s patchy safety net. In a 1987 paper, Edwin Amenta, Elisabeth S. Clemens, Jefren Olsen, Sunita Parikh, and Theda Skocpol trace the history of this decentralized structure through a comparative analysis of 1930s UI legislation in Wisconsin, New York, Massachusetts, Ohio, and Illinois.

    “The states, not the federal government, were the units that debated health and unemployment insurance bills and passed workers’ compensation and mothers’ pension laws during the Progressive Era and after. The debates surrounding unemployment insurance provide considerable insight into the political dynamics of industrial society. More than any other component of welfare policy, the states’ response to unemployment politicized antagonisms between capital and labor. Moreover, the emergence of unemployment as a legitimate target for state action entailed both the development of a politically viable interpretation of the cause of unemployment, and decisions concerning the appropriate extent of the government’s intervention in the economy.

    Neither organized labor nor political parties have been identified as important shapers of Social Security. But, as we have seen, a programmatic political alliance between organized labor and the Democratic party did shape generous unemployment insurance in New York, and the influence of labor, mediated by Democratic parties, also mattered in Massachusetts, Ohio, and even Illinois. Moreover, in Wisconsin, the 1932 unemployment benefits law grew out of patterns of administrative-led political bar- gaining established in the Progressive Era. This bargaining included organized labor and its political allies, the Milwaukee Socialists; it also occurred in a partisan context marked by the strong influence of Progressive Republicans. In short, if we examine politics at the state level, we discover that organized labor and political parties (as actors and as organizational structures) played a much more important role in the shaping of American unemployment insurance than nationally focused research reveals.”

    Link to the piece.

    • A report from the New York State Department of Labor provides a legislative history of UI following the passage of the Social Security Act in 1935, with an appended chronology of significant legislative changes on the federal and state level. Link. And two Congressional Research Service reports summarize the structure of the current federal system, including that of the Unemployment Trust Fund which supports states in the case of insolvency. Link and link.
    • In a 1990 paper, Steve Valocchi examines the internal dynamics of the unemployed workers movement in the 1930s US: “The movement’s inability to change its organizational form in the face of early New Deal reforms led to the precipitous decline in protest activity in 1934.” Link.
    • “Governments shape the meaning of unemployment through policies and public declarations. Some kinds of joblessness come to ‘count’ as unemployment while others do not.” In a 2004 book, Philip Baxandall situates categories of unemployment in Hungary within the country’s changing political context. Link.
    ‡ unemployment history welfare

    NEW RESEARCHERS

    Labor Conditions in 1970s Coal Mines

    TRISH KAHLE is recently appointed Assistant Professor at Georgetown University Qatar. Her PhD dissertation examines the 1970s American energy crisis through the lens of the Appalachian coalfields. Kahle argues that contrary to expectations at the time, the crisis did little to alter the consumption of coal-fired energy. It did, however, dramatically alter the working conditions of coal miners.

    From the abstract:

    “In the post-1945 period, rapidly expanding electricity consumption—both among industry and by ordinary people—offered coal miners a new place in American society. But this new role could be measured in black lung, workplace death, and environmental destruction. Miners leveraged this growing disparity to force the crises into national view, and through collective action, they helped secure the passage of new safety laws and environmental regulations. Yet at the very moment when miners’ power, influence, and collective action should have continued to expand, it instead contracted, and by the end of the 1970s the United Mine Workers entered a stage of decline from which it has never recovered. The energy crisis which defined much of the 1970s was not fundamentally about scarcity. Instead, it represented a political crisis of the relationships that bound energy workers to energy consumers, and which were mediated through government, market, and industrial institutions.”

    Link to the piece.

    ‡ energy political_economy new_researchers

    Each week we highlight great work from a graduate student, postdoc, or early-career professor. Have you read any excellent research recently that you’d like to see shared here? Send it our way: editorial@jainfamilyinstitute.org.

    + + +

    • Join us this coming Thursday, August 13 at 10am ET for a discussion led by Adam Tooze on “Geoeconomics and the Balance of Payments,” with Daniela Gabor, Nathan Tankus, Michael Pettis, Mona Ali, John Sindreu, Matthew Klein, Izabella Kaminska, Brad Setser, JW Mason, and Colby Smith. Under discussion: taxing capital flows, Trade Wars Are Class Wars, the “global savings glut”, the financing of the US deficit, China-US, the Eurozone, overbanking, the dollar system, and much else. Register here, and email us with any questions about the event.
    • “The Keynesian revolution was successful because it coincided with the rise of a new politics: the New Deal in the United States and social democracy in Europe. Keynes didn’t create those political movements, and those movements didn’t create Keynes.” On the blog, an interview with Stephen Marglin on his career and his forthcoming book Raising Keynes. Link.
    • We are hiring for a fellowship in ethics of governance of AI, to work on a project with a United Nations organization. Link to our opportunities page for more information.
    • Santiago José Gahn compares time series data on US capacity utilization from the Federal Reserve Board and the Census Bureau, demonstrating its decline since 1989. Link.
    • “Political decision makers make choices in a complex and uncertain world, where even the most qualified experts may not know what policies will succeed. Worse, they may be averse to admitting what they don’t know.” Matthew Backus and Andrew T. Little “model the strategic communication of uncertainty.” Link.
    • The breadth of the late Emmanuel Farhi’s work, in a few examples: on the demand for safe assets; on fiscal unions; and on classical theories of taxation and rationality. Link, link, link. h/t reader Omeed M
    • A new, open access book by Line Rennwald analyzes “the evolution of working-class support for social democratic parties in Western Europe,” tracing changes in class structure as well as the position of parties on critical issues. Link.
    • “As a political project, neoliberalism in Lebanon was contradictory. It used free-market rhetoric in order to justify illiberal and monopolistic practices.” Kamal Dib with a sweeping account of changes in Lebanon’s banking and finance systems since the early 2000s. Link.
    • Sam Collings-Wells on the series of Ford Foundation funded pilots aimed at fostering “urban community development” across India and the US between 1958 and 1966. Link.
    • “How much life in the United States is lost to encounters with the police?” Drawing on a demographic life table model, Elizabeth Wrigley-Field calculates: “The loss of years per 100,000 people over their collective lifetimes is largest for Black men, with 5,696 years of life lost to all encounters with police, of which 3,772 years are lost to police use of force. This implies a loss of roughly 16,000 years of life for recent cohorts of Black men.” Link.
    • From 2017, M. Anne Pitcher examines housing markets in Luanda and Nairobi. And a new article by Katie Jane Fernelius analyzes the rise of “private cities” across Sub-Saharan Africa. Link and link.
    • “This article argues that coupling assistance with coercive authority—a hallmark of contemporary poverty governance—generates an expansive surveillance of U.S. families.” Kelley Fong studies the impact of Child Protective Services on low income families. Link.
    • “Does fiscal consolidation lead to social unrest? Using cross-country evidence for the period 1919 to 2008, we examine the extent to which societies become unstable after budget cuts. We find a positive correlation between fiscal retrenchment and instability. Expenditure cuts are particularly potent in fueling protests; tax rises have only small effects.” By Jacopo Ponticelli and Hans-Joachim Voth. Link.

  6. Nocturnal Pasture

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    OFFSHORING

    Much research has documented the vast sums of “missing wealth” stored in tax havens, and detailed its implications for inequality, fiscal policy, and economic growth. Less present in the discussion is the institutional and political history of these offshore financial centers.

    In a 2017 paper, VANESSA OGLE recounts the making of what she terms the offshore “archipelago”—the various institutions that, outside of the core of powerful nation-states, became central to the international financial system. From the paper:

    “Contemporary definitions of tax havens are often too static to capture the more fluid and multifaceted legal constellation among such sites as they appear to the historian. In the age of empire, the natural state of affairs entailed legal unevenness. This world was made up of centralized nation-states, multiethnic land empires, overseas empires with their colonies, protectorates, settlements, and dominions, as well as ‘informal empire’ with its regimes of extraterritoriality and legal pluralism. Local administrations in overseas territories had considerable leeway in drafting company and bank laws or tax codes and accounting standards for these respective entities and sub-entities. Legal and political unevenness greatly benefited tax avoidance on a global scale.

    As empires came undone, an archipelago-like landscape of distinct legal spaces re-created some of the unevenness that had characterized the nineteenth century. Yet in the twentieth century, this offshore world and the unevenness it offered existed in and for a world order in which bounded, homogeneous national state spaces and generally sizable nation states had eventually become the norm. The New Deal, the European welfare state, decolonization, and the Bretton Woods system were state-based and government-driven projects. The offshore world emerged on a more significant scale precisely at the moment when these state-based projects began to assume their greatest importance. It consisted of tax havens, flags of convenience registries, offshore financial markets and banking institutions, and special economic zones. This landscape allowed free-market capitalism to flourish on the sidelines of a world increasingly dominated by larger and more interventionist nation-states.”

    Link to the piece.

    • Antonio Coppola, Matteo Maggiori, Brent Neiman, and Jesse Schreger recalculate global capital flows, accounting for cross-border financing and tax havens: “We find that portfolio investment from developed countries to firms in large emerging markets is dramatically larger than previously thought. The national accounts of the United States, for example, understate the U.S. position in Chinese firms by nearly $600 bn, while China’s official net creditor position to the rest of the world is overstated by about 50 percent.” Link.
    • Drawing on interviews with key informants from banks, shell companies, foreign real estate, and investor citizenship programs, Alexander Cooley and J. C. Sharman argue that “professionals in major financial centers serve to lower the transaction costs of transnational corruption by senior foreign officials.” Link.
    • Daniela Gabor and Cornel Ban’s 2017 paper on the political economy of shadow banking. Link. And Jan Fichtner’s 2016 “anatomy” of the Cayman Islands offshore financial center. Link.
    • The 2011 book The New Fiscal Sociology, edited by Isaac Martin, Ajay Mehrotra, and Monica Prasad, marks and collects interdisciplinary research in the comparative history and politics of taxation. Link.
    ‡ finance history political_economy

    NEW RESEARCHERS

    Land Reforms in Monarchical Iraq

    Omar A. M. El-Joumayle is a PhD student in Economics at the University of Pavia. In a 2019 article co-authored with Bassam Yousif, he examines the challenges to agrarian reform between 1944 and 1958 in monarchical Iraq. Drawing on continuities in the country’s institutional history, the article outlines the influence of big landholders in preventing structural land redistribution despite popular demand.

    From the paper:

    “In 1869, the Ottoman state implemented the Land Code of 1858 in Iraq, extending central government control to facilitate tax collection. Ottoman rulers reasoned that peasant cultivators would agree to pay tax directly to the central government in exchange for security of tenure on land. In Iraq, the law conflicted with tribal customs, where land was controlled by the tribe as a whole. Fearing military conscription, individual cultivators were reluctant to register lands in their names, so tribal sheikhs and urban entrepreneurs registered lands under theirs instead. Under the League of Nations mandate, in 1916-1932, the British elevated the position of tribal sheikhs and placed low taxes on agricultural output.

    We present data about the representation of large landholders in the Chamber of Deputies. The proportion of deputies who were tribal sheikhs averaged between 32 and 38% of the total in the 1940s and 1950s, higher than their representation in the 1920s and 1930s. Tribal representatives were more influential and effective in the Chamber than emergent, urban-based parties that were electorally weak relative to the powerful landholders of tribal chiefs, who still dominated rural politics.”

    Link to the paper.

    ‡ institutions political_economy new_researchers

    Each week we highlight great work from a graduate student, postdoc, or early-career professor. Have you read any excellent research recently that you’d like to see shared here? Send it our way: editorial@jainfamilyinstitute.org.

    + + +

    • “Both the market and national security regulatory systems leave in place the business model of telecoms, and consequently, they cannot ensure the civic provision of essential communications tools.” On the blog, Sebastian Benthall and Jake Goldenfein analyze the limits of existing telecommunications regulatory frameworks in light of the social consequences of COVID-19. Link.
    • We are hiring: and for a fellowship in ethics of governance of AI, to work on a project with a United Nations organization; and for an editorial associate, to work on Phenomenal World and across our projects. Link to our opportunities page for more information.
    • In the NYT, Somini Sengupta and Julfikar Ali Manik cover the floods in Bangladesh. Link. And a new study by Ebru Kirezci, Ian R. Young, Roshanka Ranasinghe, Sanne Muis, and Robert J. Nicholls et. al finds that “With no coastal protection or adaptation, there will be an increase of 48% of the world’s land area, 52% of the global population and 46% of global assets at risk of flooding by 2100.” Link to the piece, link to coverage in the FT.
    • Maria Eugenia Giraudo on the distributional politics of commodity booms: “Analying the design and implementation of fiscal policy during the soy boom in Argentina and Brazil, I argue that domestic institutions mediated the capacity of the state to design and implement tax structures related to natural resources.” Link.
    • Jacob Orrje on how technology, logistics, and trade facilitated the Republic of Letters. Link.
    • “Our evidence suggests that employers did not experience greater difficulty finding applicants for their vacancies after the CARES Act.” Ioana Marinescu, Daphné Skandalis, and Daniel Zhao estimate the job market impacts of increased unemployment insurance. Link. On the problems with wage replacement versus expanded UI: coverage in the Times.
    • Bradon Ellem, Johan Sandström, and Curt Persson “compare the iron ore sectors and mining regions of Malmfälten in Sweden and the Pilbara in Australia” to study the impact of liberalization in each country. Link.
    • Using a novel measure of multiple jobholding, Paul Glavin finds that “almost 20% of Canadian workers reported multiple jobholding in 2019—a rate three times higher than Statistics Canada estimates.” Link.
    • Jean-Philippe Dedieu examines the “influence of Malian exile networks in Africa and Europe on the formation of domestic pro-democracy organizations and the overthrow of the Traoré regime in 1991.” Link.
    • “We estimate the effect of a reduction in communication time on imports of three product categories in 19th century cotton textile trade: yarn, plain cloth, and finished cloth. In order to identify causal effects, we use exogenous variation in the ruggedness of the submarine seafloor to predict in which year countries get connected to the global telegraph network. The telegraph dramatically reduced the time it took to exchange information expressed in words, but did not affect the exchange of physical objects such as product samples. Using evidence from cotton traders’ communication, we show that the examined three products differed in their codifiability, that is, in the extent to which merchants specified product attributes in words. Empirically, we find that communication time reductions had the largest effect on imports of the most codifiable product; yarn, and the smallest effect on the non-codifiable product, finished cotton cloth.” By Réka Juhász and Claudia Steinwender. Link.

  7. Avey From Cane

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    PUBLIC HEALTH FEDERALISM

    Catastrophic deficiencies in the federal response to the Covid-19 pandemic have led to renewed discussion over federalism and its discontents. The divergence among state responses to the crisis in the absence of federal guidance has produced analyses of Trump’s unique, “narrow” sense of federalism, pronouncements of “a new era of federalism,” and hopes for a solidarity-minded “civic federalism.”

    In a 1997 article, health law professor JAMES G. HODGE JR. analyzes the impact of state-centric “new federalism” jurisprudence on the government’s ability to realize public health goals. Hodge places new federalism in the context of decades of increasing intrusion by the federal government on states’ power over public health policy:

    “The impact of new federalism on the field of public health law is seen in the history of public health regulation. The metamorphosis of public health regulation from purely local to predominantly national means resulted from increased federal presence in the field corresponding to a deemphasis on traditional federalism. It is an inescapable conclusion that an increased federal presence shifted public health goals. National public health priorities dominate local ones. New federalism restrains the federal intrusion on state public health powers by requiring Congress to operate within the constraints of the political process. As a result, state police powers exercised in the interest of public health are strengthened emphatically by the political process confining federal authority to enter the field.”

    Full paper available here.

    • In an article published this April, Hodge reassesses federal vs. state public health powers in light of disparate responses to the pandemic: “Americans are left wondering, ‘which level of government is actually in charge here?’ In the face of a pandemic like Covid-19, the answer under principles of federalism is increasingly clear: neither.” Link.
    • “American federalism—with its fissures and fractures—haunts the state of emergency.” A March post from Phillip Rocco. Link. (See also Rocco’s recent post on fiscal federalism in Notes on the Crises.) Along similar lines: Rocco, Daniel Béland, and Alex Waddan on the fiscal barriers to pandemic response. Link. And Nicole Huberfeld, Sarah H. Gordon, and David K. Jones argues that the pandemic has magnified the state-level inequities fostered by federalism. Link.
    • For another view on the relationship between federalism and public health: A 2014 paper by Adam Varvel on the West Nile outbreak of 1999. Link. See also: A post-SARS policy brief on the impact of federalism on international health regulations. Link.
    ‡ public_health policy institutions

    NEW RESEARCHERS

    The politics of swap lines

    In a 2019 paper, PhD Candidate in Government at Cornell ADITI SAHASRABUDDHE examines the Fed’s liquidity swap lines during the 2008 crisis to explain the selections of emerging market swap recipients.

    From the paper:

    “By evaluating transcripts of the Fed’s deliberations, this paper identifies strategic motivations underlying the Fed’s decision-making and argues the Fed was more likely to grant a swap to economies that shared its policy preferences for greater capital account openness. Further, the article argues that the influence of shared policy preferences was mediated by political and diplomatic considerations. The article concludes that the Fed strategically chose its emerging economy partners to reinforce economic alliances, particularly with those who experienced increased influence in economic governance post-2008.”

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

    ‡ central_banks political_economy new_researchers

    Each week we highlight great work from a graduate student, postdoc, or early-career professor. Have you read any excellent research recently that you’d like to see shared here? Send it our way: editorial@jainfamilyinstitute.org.

    + + +

    • “The late nineteenth century was an era in which capital accumulation increasingly guided federal policymaking, yielding a large and growing class of landless wage workers.” New on the Phenomenal World this week: historian Emma Teitelman on the evolution of property rights and the mining industry on the American frontier. Link.
    • We are hiring for an associate to work on JFI’s editorial team: on Phenomenal World, this newsletter, and across JFI’s projects. Read the job description here, circulate it widely, and email us with any questions about the position.
    • This past Tuesday, Yakov Feygin presented research on the global dollar system and prospects for a national endowment in the United States. Link to a recording, link to Feygin’s paper with Nils Gilman on building a national endowment. For more information and registration details for future seminars, click here.
    • “We find that black (Hispanic) households cut their consumption 50 (20) percent more than white households when faced with a similarly-sized income shock. Nearly all of this differential pass-through of income to consumption is explained, in a statistical sense, by differences in liquid wealth.” Fantastic new paper by Peter Ganong, Damon Jones, Pascal Noel, Fiona Greig, Diana Farrel, and Chris Wheat on wealth and consumption smoothing. Link.
    • João Ferreira et al review transformations in housing policy across Latin American cities over the last decade. Link.
    • A new report from Autonomy recommends a four-day work week as a strategy for targeting unemployment in the UK. Link. (For an overview of the German Kurzarbeit program, which inspired their approach, see this 2015 paper from the ILO.)
    • “It is not a matter, as in the 1970s, of defusing a nuclear stand-off or, as before 1914, a geoeconomic rivalry of the kind analyzed by Hobson. While we must do both these things, the novel challenge we face is how to disarm economic growth as a planetary threat.” Adam Tooze in the LRB on China, the US, and the twenty-first century. Link.
    • A new report from the Student Borrower Protection Center on the growth of “shadow student debt.” Link. h/t Laura
    • Construction workers’ wages in Sweden from 1831 to 1900. By Johan Ericsson and Jakob Molinder. Link.
    • “The transition from Lulism (2002–16) to Bolsonarism (2018–) was marked by the rise and fall of the economy and the collapse of the political system.” A paper based on ten-year longitudinal ethnography on the rise of conservative subjectivity in Brazil, by Rosana Pinheiro-Machado and Lucia Mury Scalco. Link. h/t Paul
    • Martin Ravallion on the randomistas. Link.
    • Gianluca Benigno, Luca Fornaro, and Martin Wolf on “the global financial resource curse.” Link.
    • “In April 1906 the San Francisco earthquake and fire caused damage equal to more than 1 percent of GNP. Although the real effect of this shock was localized, it had an international financial impact: large amounts of gold flowed into the country in autumn 1906 as foreign insurers paid claims on their San Francisco policies out of home funds. This outflow prompted the Bank of England to discriminate against American finance bills and, along with other European central banks, to raise interest rates. These policies pushed the United States into recession and set the stage for the Panic of 1907.” By Kerry Odell and Marc Weidenmier. Link.

  8. Dramatic Fire

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    CENTRAL BANKS AND CLIMATE

    Common wisdom around central bank independence (CBI) is increasingly a matter of debate. Before the Covid-19 crisis, a growing number of scholars and commentators have proposed means by which central banks can address looming climate catastrophe—either by integrating new risks into their assessments, or by promoting more active resource allocation—and argued that central bank’s attention to climate risk has focused too squarely on financial stability.

    In a 2018 working paper, SIMON DIKAU and ULRICH VOLZ outline how, despite the “second-best” nature of this kind of intervention, the shift is already occurring:

    “Allocating financial resources toward or away from certain sectors and companies implies favoring certain segments of the economy over others and appears to be incompatible with our modern understanding of independent central banks. Nonetheless, many central banks in emerging and developing economies have resorted to these policies as viable, second-best solutions to promote sustainable development and green investment. The notion of the neutrality of monetary policy has come under intense scrutiny more recently, not least in the context of discussions about the distributional consequences of the negative interest and quantitative easing policies adopted by major central banks. It is apparent that central banks in developing and emerging economies especially, and in Asia in particular, have been at the forefront of using a broad range of instruments to address environmental risk and encourage green investment.”

    Full paper available here.

    • On VoxEU, Markus K. Brunnermeier and Jean-Pierre Landau on the applicability of central banking tools for the climate crisis: “The conventional wisdom on monetary policy is that it has no impact on long-term growth; its influence is mostly felt on a 1.5 to 2.5 years horizon. By contrast, climate change is all about the long term; effects and policies materialize and matter over several decades.” Link.
    • An IMF report by Pierpaolo Grippa, Jochen Schmittmann, and Felix Suntheim surveys the field: “Climate change will affect monetary policy by slowing productivity growth (for example, through damage to health and infrastructure) and heightening uncertainty and inflation volatility.” Link.
    • As governor of the Bank of England, Mark Carney gave an oft-cited 2015 speech, proposing a scheme of physical risks, liability risks, and transition risks. Link. And Jean Boivin argues for abandoning CBI in the face of Covid. Link.
    ‡ banking finance climate

    NEW RESEARCHERS

    The geography of US immigration detention

    Assistant Professor of Sociology at Washington University in St. Louis MARGOT MOINESTER studies the growth of US immigration enforcement. In a 2018 paper in Demography, Moinester examines the spatial variation in detention practices and outcomes across states.

    From the paper:

    “Focusing on the practice of immigration detention, the study analyzes the records of all 717,160 noncitizens detained by Immigration and Customs Enforcement (ICE) in 2008 and 2009—a period when interior enforcement was at its peak—to estimate states’ detention rates and examine geographic variation in detention outcomes, net of individual characteristics. Findings reveal substantial state heterogeneity in immigration detention rates, which range from approximately 350 detentions per 100,000 noncitizens in Connecticut to more than 6,700 detentions per 100,000 noncitizens in Wyoming. After detainment, individuals’ detention outcomes are geographically stratified, especially for detainees eligible for pretrial release. These disparities indicate the important role that geography plays in shaping individuals’ chances of experiencing immigration detention and deportation.”

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

    ‡ immigration deportation new_researchers

    Each week we highlight great work from a graduate student, postdoc, or early-career professor. Have you read any excellent research recently that you’d like to see shared here? Send it our way: editorial@jainfamilyinstitute.org.

    + + +

    • We are hiring for an editorial associate to work on JFI’s editorial team. Read the job description here, circulate it widely, and email us with any questions about the position.
    • “As in the 19th century, the lines between the imperial core and its dependencies are blurred, those dependencies have differential status in the imperial hierarchy, and a single currency is an important bulwark of that empire.” New Phenomenal World post by UVA economic historian Herman Mark Schwartz, on the geopolitics of the global dollar system. Link.
    • Join us on Tuesday July 21 for the second in our Social Wealth seminar series. Yakov Feygin will present on “Sovereign Wealth Funds and Public Wealth Building Institutions in the Context of the Global Dollar System.” To attend, please RSVP at sws-reservations@jainfamilyinstitute.org, to read more about the series click here, and click here to view a recording of the first session with Naomi Zewde.
    • On Thursday July 23, we are co-sponsoring The Dial‘s event with Zachary Carter on his bestselling and widely-lauded biography of Keynes, The Price of Peace. Carter will be in conversation with Ian Kumekawa, author of The First Serious Optimist, a book about A.C. Pigou and the birth of welfare economics. Link to the event page.
    • Elizabeth Linos looks at the electoral effects of the Honduran PRAF conditional cash transfer, finding major rewards for mayors, despite their being randomly assigned to the treatment. Link.
    • A tale of two wage subsidies: comparing American and Australian responses to Covid. By Steven Hamilton. Link.
    • A new paper by Mark Ellis on southern sociologist TJ Woofter Jr.’s contributions to New Deal policymaking. Link.
    • From Nathan Tankus’ Notes on the Crises, a great piece by Philip Rocco on fiscal federalism and the defunct Advisory Commission on Intergovernmental Relations. Link. For more on the ACIR: a paper by Bruce McDowell marking its shuttering in 1996. Link.
    • Alexander Kentikelenis and Sarah Babb on “norm substitution” and the transformation of the IMF. Link.
    • Inés Berniell et al on the impact of noncontributory Argentine pension reform on household gender relations. Link.
    • On academic urban legends: “I draw upon a case in which a decimal point error appears to have misled millions into believing that spinach is a good nutritional source of iron.” Link.
    • A new paper by Sriram Balasubramanian, Rishabh Kumar, and Prakash Loungani on the locational variation in living standards in India. Link.
    • “At the end of the eighteenth century, the large-scale warfare that confronted the major European powers exceeded their financial capabilities. By the 1790s, French, British, and Dutch naval crews resorted to mutiny on an enormous scale. They were driven by fatigue, harsh conditions of service, and disagreements with higher command. Decades later, the Real Armada witnessed a series of riots, resembling those of its rival powers but linked to the struggles for independence in the Hispanic-American colonies. During the 1810s and 1820s, naval mutinies developed alongside progressive radicalism and a growing desire to engage in politics—which explains why more than one crew ended up delivering their vessel to anti-colonial factions.” On the “republican” mutinies in the Spanish Navy, by Vera Moya Sordo. Link.

  9. Through The Fields

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    ORGANIZED NETWORKS

    Michael Mann’s four volume magnum opus, The Sources of Social Power, analyzes the history of human societies from antiquity to the present. Theoretically, the work’s major contribution is the so-called IEMP model, which examines historical shifts through the relations between ideological, economic, military, and political power. In Mann’s work, no single source of power takes analytical precedence over any other.

    From the third volume:

    “We may distinguish distributive from collective power—that is, power exercised over others, and power secured jointly through cooperation with others. Power may also be authoritative or diffuse. The former involves commands by an individual or collective actor and conscious obedience by subordinates, and the latter spreads in a relatively spontaneous and decentered way. Finally, it can be extensive, organizing large numbers of people over far-flung territories, or intensive, mobilizing a high level of commitment from a limited group of participants. The most effective exercise of power is collective and distributive, extensive and intensive, authoritative and diffuse. That is why a single source—say, the economy or the military—cannot alone determine the overall structure of societies.

    The four power sources offer distinct organizational networks and means for humans to pursue their goals. But which means are chosen, and in which combinations, depends on interaction between what power configurations are historically-given and what emerge interstitially within and between them. This is the main mechanism of social change in human societies, preventing any single power elite from clinging indefinitely onto power. The sources of social power and the organizations embodying them are promiscuous. They weave in and out of each other in a complex interplay between institutionalized and emergent, interstitial forces.”

    Link to the introduction.

    • “The expansion of global networks seems to weaken local interaction networks more than national ones.” In a 2011 paper, Mann complicates popular analyses of globalization. Link.
    • Collected reflections on Mann’s work, with commentary from Robert Brenner, John Hobson, and David Laitin, among many others. Link.
    • “The oligarchic regime of the Roman conquest state was maintained as long as political, military, and ideological power were controlled by the same aristocratic collective. Once military power broke from political and ideological constraints, the rule of the collective was replaced by warlords and monarchs.” Walter Scheidel draws on Mann’s framework in his comparative history of ancient Rome and China. Link.
    • “Michael Mann can confidently say that the relationship between revolutions and geopolitical pressures is ‘as consistent a relationship as we can find in macrosociology.’ Yet no such correlation exists in Latin America.” Miguel Angel Centeno challenges Mann’s conclusions with a history of Latin American nation-states. Link.
    ‡ sociology history political_economy

    NEW RESEARCHERS

    Bureaucratic oversight and welfare provision

    PhD candidate in Political Science TARA SLOUGH studies the distributional politics of bureaucracy in low-income countries. In a 2019 working paper, she developes a national-scale factorial audit experiment of Colombia’s two largest national social welfare programs to test how bureaucratic behavior shapes inequality in access to public benefits.

    From the paper:

    “Inequalities in access to public goods and services have long challenged developing democracies, inhibiting efforts to reduce socioeconomic inequality and promote economic development. Some inequality is the deliberate result of politicians’ budget policies or targeting, but inequalities may also emerge in the production of these goods and services. As ‘producers of public goods,’ bureaucrats map politicians’ budget allocations into outputs. I argue that bureaucrats are prone to exert differential effort in providing service to different groups of citizens. Variation in bureaucratic effort in turn creates inequality in citizen access to public services. These disparities can emerge even when budget allocations are equitable. Taken together, my findings suggest that socioeconomic inequalities generate political inequalities in citizens’ ability to extract oversight over bureaucrats responsible for service provision. These inequalities in voice engender inequality in access to poverty reduction programs intended to mitigate existing disparities.”

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

    ‡ bureaucracy welfare new_researchers

    Each week we highlight great work from a graduate student, postdoc, or early-career professor. Have you read any excellent research recently that you’d like to see shared here? Send it our way: editorial@jainfamilyinstitute.org.

    + + +

    • “[Recent] targeting and implementation challenges have revealed an inconvenient truth for those advocating for universal (or targeted) guaranteed income programs: the United States currently lacks the necessary infrastructure to make such programs a reality.” Three of JFI’s guaranteed income team—Stephen Nunez, Sidhya Balakrishnan, and Sara Constantino—have published the first in a series of papers on the development of infrastructure for widespread cash disbursement in the United States. Link to the paper.
    • A new post on the Phenomenal World by sociologist Monica Prasad looks at the partisan history of US tax policy: “The Republican Party of today is defined by its commitment to tax cuts, deregulation, and austerity. But prior to the Reagan administration, the Republicans were actually the party seen as most likely to increase taxes in order to avoid deficits.” Link.
    • Our Social Wealth Seminar series launched this past Tuesday with a presentation from Naomi Zewde on inequalities in health and wealth. The next session, on Tuesday July 21, features Yakov Feygin on “Sovereign Wealth Funds and Public Wealth Building Institutions in the Context of the Global Dollar System.” Please RSVP at sws-reservations@jainfamilyinstitute.org, and read more about the series here. (And read Yakov’s recent piece, co-authored with Dominik Leusder, on the Phenomenal World.)
    • A town in Washington is printing a local currency as part of its Covid response. Link. See Nathan Tankus’ substack dispatch on local currencies as a countercyclical measure for more on the topic, and Paul Katz and Leandro Ferreira’s essay on the local currency and cash transfer program in Maríca, Brazil.
    • The gendered impact of the pandemic lockdown on paid and unpaid work in Spain. By Lídia Farré et al. Link. h/t Alison Oh
    • Siqi Luo and Tao Yang identify “a new model of enterprise-level collective bargaining in South China.” Link. Also in this issue of The China Quarterly: policing in Xinjiang, and rural property rights. Link and link.
    • New paper by Adam Przeworski, Jose Cheibub, and Ji Yeon Jean Hong compares response rates to the Covid crisis: “We examine at which stages of the spread governments introduced four measures that to varying degrees abrogate liberal rights: school closings, bans on meetings, compulsory lockdowns, and shutting work.” Link. Relatedly, Thomas Hale et al attempt to examine relationships between socioeconomic and political factors in the public health response to Covid. Link.
    • Identifying supply chain bottlenecks in a pandemic. By Vasvo Carvalho, Matt Elliott, and John Spray. Link.
    • Johan Ericsson and Jakob Molinder “examine how construction workers’ wages in Sweden developed between 1831 and 1900.” Link.
    • On the welfare impact of tourism in Barcelona: “We find that tourism is slightly negative for locals, however these losses mask substantial heterogeneity across the city.” By Treb Allen et al. Link.
    • A new paper by Piort Dworczak, Scott Kominers, and Mohammad Akbarpour on redistribution through markets: “Competitive-equilibrium allocation is not always optimal. When there is substantial inequality across sides of the market, the optimal design uses a tax-like mechanism.” Link.
    • “This paper suggests the price of leather was an important, if not a crucial factor in explaining Pope Paul’s decision in 1966 to repeal the prohibition against eating meat on Fridays. This decision was followed by a decrease in the price of leather, producing substantial rents for the Italian and Spanish leather goods and footwear industry. These rents, in turn, could explain why the Italian Cardinals (who continued to control the Curia) would have supported the Pope’s decree, rather than oppose it.” By Mark Thornton. Link

  10. Desert Walk

    Comments Off on Desert Walk

    GOLD RUSH

    Historically, the expansion of the American frontier symbolized a unity between political liberty and economic growth, at the same time as it justified the violent expropriation that continues to define the country’s racial and distributional politics.

    In a 1998 article, environmental historian DONALD J. PISANI analyzes these dynamics through the monopolization of California’s mining industry, arguing that legislation enacted during the California Gold Rush shaped the trajectory of property relations in the American West.

    From the piece:

    “Those who flocked to California at the end of the 1840s carried with them strong ideas about the nature of property, the right of American citizens beyond the pale of law to govern themselves, and the power of American citizens to make their own rules concerning the acquisition and use of public lands—including those containing mineral deposits. Nevertheless, Congress had authorized the sale of lead and copper lands. Would it now authorize the sale of gold-bearing land to the highest bidders? This was the question that faced the U.S. Army in California when gold was discovered in January 1848.

    In the late 1840s and early 1850s, free mining provided reasonably equal access to wealth. But during the 1850s, as corporations increasingly dominated mining, the law changed from encouraging economic democracy to protecting capital. Perhaps the best example was the legal permission to “follow the vein.” Initially California’s mining camp codes limited hardrock miners to part of a vein, often one hundred feet. As early as 1852, however, Nevada County modified its laws to encourage miners to follow a vein downward to any depth and in any direction, even if they tunneled under an adjoining claim. The new laws were designed to protect investors from financial loss when only the tail end of an out cropping was located within their claim. For decades after the golden years of the mining industry had passed, these monopolies enjoyed disproportionate power in the legislature.”

    Link to the open access article.

    • “War and emancipation brought profound change not only to the lives of enslaved people but also to broader patterns of economic development, forms of governmental activity, and, above all, property relations.” Emma Teitelman examines the “transregional wave of land enclosures” that took place during reconstruction. Link. (Stay tuned for Teitelman’s forthcoming piece in Phenomenal World.)
    • Paul Gates’ History of Public Land Law Development offers a comprehensive account of legislation regulating the use of the public domain. Link.
    • “The claim club or squatters’ association has long occupied a place in western history. No historian, however, has fully explored the social interactions in these frontier groups.” Allan G. Bogue examines the dynamics within the squatters associations which proliferated across the West in the early 19th century. Link. And Alan Derickson’s excellent book tells the history of hardrock miners’ self-organized health and welfare programs, which emerged in the following decades. Link.
    ‡ frontier history political_economy

    NEW RESEARCHERS

    Land concentration and long-run development

    MIT economics graduate student CORY SMITH’s job market paper looks at patterns of land concentration in the American frontier.

    From the paper:

    “Although the 1862 Homestead Act made small-scale farming the default settlement pattern in most frontier regions, I exploit a late-1800s policy known as railroad land grants, which opened specific parcels to large-scale ownership by wealthy landlords. The policy was applied in a “checkerboard” pattern, arbitrarily allowing concentration in every other square mile in large parts of the country.

    I collect a large database of modern property tax valuations and show that historical land concentration had persistent effects over a span of 150 years: lowering investment by 23%, overall property value by 4.4%, and population by 8%. I argue that landlords’ use of sharecropping raised the costs of investment, a static inefficiency that persisted due to land market frictions.”

    Link to the paper.

    ‡ economic_history land new_researchers

    Each week we highlight great work from a graduate student, postdoc, or early-career professor. Have you read any excellent research recently that you’d like to see shared here? Send it our way: editorial@jainfamilyinstitute.org.

    + + +

    • Join JFI for a new Social Wealth Seminar series: a semi-monthly forum exploring funding mechanisms for social policy in the US and across the world. The inagural seminar is on Tuesday, July 7th at 6PM EST, and features Naomi Zwede presenting on inequalities in health and wealth. Please RSVP at sws-reservations@jainfamilyinstitute.org, and read more about the series here.
    • “Instead of a preternatural ability to see the clear-cut means, motive, and opportunity of fictional characters in a pulp whodunit, the macroeconomic detective is armed with the knowledge that balance sheets always balance.” Alex Williams reviews Trade Wars Are Class Wars for the Phenomenal World. Link.
    • Also new on the blog, Zach Parolin discusses brand new research on the CARES Act and poverty measurement. Link. (See also Times coverage of the research, which we shared here last week.)
    • “Prepublication peer review should be abolished. We evaluate the effects such a change will have on the social structure of science from the perspective of epistemic consequentialism.” Remco Heesen and Liam Kofi Bright in the British Journal for the Philosophy of Science. Link.
    • Eric Foner in the LRB on US democracy and the electoral college. Link.
    • A working paper by Carlos Avenancio-Leon and Troup Howard uncovers “a nationwide ‘assessment gap’ which leads local governments to place a disproportionate fiscal burden on racial and ethnic minorities.” Link. Coverage in the WaPo. Link. See also: “The Power to Destroy: Discriminatory Property Assessments and the Struggle for Tax Justice in Mississippi.” Link. h/t Jay
    • Drawing on “firm-level census data from the financial liberalization in Hungary,” Felipe Saffie, Liliana Varela, and Kei-Mu Yi analyze the long term effects of increased capital flows. Link.
    • A new issue of the Cambridge ILLWCH focuses on labor relations in the Ottoman Empire and Turkey. Link.
    • In Catalyst, John Roemer with “Market Socialism Renewed.” Link. (See also: Maya Adereth and Jay Hodges’ interview with Roemer from last year.)
    • With time series data from India from 1990-2015, Tripura Sundari C. U. and Anindita Mitra “find that foreign direct investment has a positive and significant impact on pollution.” Link.
    • A BLS report on industry composition effects in state employment, tracking the industry composition of “nonrecovered states” which experienced the harshest jobless recoveries of the Great Recession. Link.
    • A 2017 thesis by Tobias Arbogast on the US plutonomy—”an economy where growth is largely powered by the wealthy”—and its effect on the capital-labor relation. Link.
    • A November 2019 Fed research paper by Theodore F. Figinski and Erin Troland looks at the relationship between health insurance and healthcare provision, using the 1950s expansion of union insurance and hospitals in Coal Country as a case study. Link.
    • “In 1600 the word ‘consumption’ was a term of medical pathology describing the ‘wasting, petrification of things.’ By 1700 it was also a term of economic discourse: ‘In commodities, the value rises as its quantity is less and vent greater, which depends upon it being preferred in its consumption.’ The article traces the emergence of this key category of economic analysis to debates over the economy in the 1620s and subsequent disputes over the excise tax, showing how ‘consumption’ was an early term in the developing lexicon of political economy. In so doing the article demonstrates the important role of ‘intoxicants’—that is, addictive and intoxicating commodities like alcohols and tobaccos—in shaping these early meanings and uses of ‘consumption.’ While these discussions had an ideological dimension, or dimensions, they were also responses to material increases in the volume and diversity of intoxicants in early seventeenth‐century England.” By Phil Withington in The Economic History Review. Link.