“Academic standards are leading us to concentrate on the less important policies. The worst case scenario is development economists risk becoming irrelevant because [they] concentrate on small issues that policy makers don’t think are important.” – Bill Easterly
Summary of interview w/ VoxDev
- Growth response to globalization policies (esp. in Africa, e.g.)
- BUT Intellectual backlash against globalization
Doubts are legitimate – it’s hard to measure causality of these macro dynamics.
But do have persuasive correlations (high rates of inflation are strongly negatively correlated with growth rates). Linked to worse welfare. But rigorous causality determination is difficult – can’t rule out third factor or reverse causality.
Academics are reluctant to study inflation and growth and globalization; we need to present non-causal correlations if that’s the best we can do. It’s a responsibility of the economist to look at these as honestly as possible, even if isn’t most rigorous type of evidence. It’s what we’ve got!
Not enough research on big-picture policies.
Zimbabwe is relapsing into high inflation – will be very destructive and needs to be studied. Venezuela another example of poor policies around inflation. Not many policy makers / academic economists will think of these as good policies, but they used to be very common in S. America and Africa in 1970s-90s.
Incentives in economic publishing – prioritize rigorous resolution through causality. Young economists: by all means, stick with this! Tenured professors: stylized facts are also useful pieces of evidence. Need to work on these big, non-causal issues, too.
Evidence on small scale programs are less relevant for policy-makers.
Good model of what we should do more of: Acemoglu’s work. Easterly’s own research.
Paradox: development economists really want to talk about these big pictures, but very challenging to publish any research on them b/c of huge prioritization of rigor.
Wish the “brightest young minds in our field” have to do RCTs instead of look at the big questions.
IMF / World Bank are more interested in policy practicalities so they’re not as biased as journals.
(Small) RCTs useful for NGOs / specific aid agency programs.
Governments want institutional reforms or macro policy changes.