Jump to content
Sign in to follow this  
Imenol

Economics VS Economic History

Recommended Posts

Hello everyone,

I thought about starting a thread about a subfield that seems to interest many of us, namely economic history. In particular, I was wondering how you envision the relationship between what economists do and what we historians do. After all, people in both departments are concerned with a similar set of questions. For instance, both disciplines have focused lately on understanding  the origins of markets and capitalism, yet the methods employed could not be more different (compare, for instance, Sven Beckert to Robert Fogel or Baudrel to Daron Acemoglu). I was curious to know if you find inspiration in any economist or if you have ever felt inclined to use any of their methods (modelling, etc). I am also curious as to whether you think there will be more convergence (no pun intended) between the two disciplines or whether they will always remain far apart from each other.

Share this post


Link to post
Share on other sites

As someone who has worked in both fields, I can say that the state of Economic history within economics is not doing particularly well, especially after the quantitative turn. That being said, recent turns in cultural economics may be of particular interest to historians outside of economic history. As far as the ability to work together, I think there are some particularly good examples (Namoi Lamoreaux in particular comes to mind and Emily Erickson is an interesting example in historical sociology), but it depends on one's willingness to work within rational choice theory.  

Share this post


Link to post
Share on other sites
2 minutes ago, DGrayson said:

As someone who has worked in both fields, I can say that the state of Economic history within economics is not doing particularly well, especially after the quantitative turn. That being said, recent turns in cultural economics may be of particular interest to historians outside of economic history. As far as the ability to work together, I think there are some particularly good examples (Namoi Lamoreaux in particular comes to mind and Emily Erickson is an interesting example in historical sociology), but it depends on one's willingness to work within rational choice theory.  

I think that the same could be said of economic history within history (long ignored, but now experiencing a comeback). Within economics, I feel that history is gaining more traction as well. One of the big bestsellers in economics has been Acemoglu's Why Nations Fail, which takes a long historical view to explain uneven development. Of course, there is also Piketty, who advocates for deeper engagement with historians and who has shown why it matters to look at inequality over the very long term. Economists such as Nathan Nunn, Barry Eichengreen, and Avner Greif are producing very interesting work, yet they generally seem to shy away from quoting historians. So do historians -in his recent work on slavery and capitalism, Walter Johnson barely acknowledges the work of economists in the topic, including that of Robert Fogel or his institutional partner Nathan Nunn. 

I wonder if one must, necessarily, work within the framework of rational choice theory to engage with econ. Perhaps what economics could contribute to history is a deeper understanding of empirical methods (it seems rather surprising to me that most historians never learn what a p value is and it worries me that such state of affairs might turn history into a discipline that is more lax than other social sciences in determining causality). Yet I wonder how a convergence between both disciplines could take place without throwing away those things that make history unique... 

Share this post


Link to post
Share on other sites

I think you need to remember that economic history is split between the American approach and European approach. Most American universities start within a neoliberal economic framework then slowly adds historical events as you begin to master the statistical approaches. Meanwhile, the European approach integrates numbers and statistics after getting a significant grounding in the historical events. I have trained in both systems and I find the American approach to be very biased which produces some obscure results. For Instance, Why Nations Fail by Acemogulu and Robinson has serious flaws and assumptions that could only be produced by examining numbers and statistical records before the events. They manage to push the entire colonial experience into a category while breaking the post-colonial experience into several categories over time, but not space. Therefore, they come to the conclusion that inclusive institutions and economic growth are tied together, while extractive institutions can cause growth but not long-term growth. We can rebut this from different angles and make serious dents to their argument, however, I think, understanding that they come from an American approach helps us more than systematically denouncing their work.

In short, I am beyond skeptical of using statistical methods to "weigh" history. There is a lot of work being down at the University of Missouri-Kansas City which is steadily eroding the science from statistics. For example, the tests of rigor commonly used within economic history (p-value) is heavily biased by the statistical program, data set, and the way the information is inputted into the program. This allows for the statistician to "manipulate" the data set and create series of high rigor tests that reinforce the thesis. Due to this research, I think economic history needs to be seriously questioned and ripped apart because it is unclear whether statistics are a reliable method for making "scientific conclusions."

Share this post


Link to post
Share on other sites
On 1/25/2018 at 4:39 AM, Tigla said:

I think you need to remember that economic history is split between the American approach and European approach. Most American universities start within a neoliberal economic framework then slowly adds historical events as you begin to master the statistical approaches. Meanwhile, the European approach integrates numbers and statistics after getting a significant grounding in the historical events. I have trained in both systems and I find the American approach to be very biased which produces some obscure results. For Instance, Why Nations Fail by Acemogulu and Robinson has serious flaws and assumptions that could only be produced by examining numbers and statistical records before the events. They manage to push the entire colonial experience into a category while breaking the post-colonial experience into several categories over time, but not space. Therefore, they come to the conclusion that inclusive institutions and economic growth are tied together, while extractive institutions can cause growth but not long-term growth. We can rebut this from different angles and make serious dents to their argument, however, I think, understanding that they come from an American approach helps us more than systematically denouncing their work.

In short, I am beyond skeptical of using statistical methods to "weigh" history. There is a lot of work being down at the University of Missouri-Kansas City which is steadily eroding the science from statistics. For example, the tests of rigor commonly used within economic history (p-value) is heavily biased by the statistical program, data set, and the way the information is inputted into the program. This allows for the statistician to "manipulate" the data set and create series of high rigor tests that reinforce the thesis. Due to this research, I think economic history needs to be seriously questioned and ripped apart because it is unclear whether statistics are a reliable method for making "scientific conclusions."

It is likewise better to critique economic work with an understanding of economic theory and methodologies rather than systematically denouncing it because you don't understand it.

The purpose of Nations isn't to establish a history of international economic development - that would be impossible. It is a pop science monograph based on Acemoglu's work on institutions and development, which largely uses contemporary datasets and is built upon a strong foundation of institutionalist work by other economists. I'm surprised that the notion that institutions aid economic development is controversial to you; it's pretty much an accepted axiom with a lot of theoretical and empirical backing in economics at this point. Perhaps Acemoglu can be tasked with misusing a historical metaphor, but that's not really relevant to the science behind the claims. Economists could improve on the outreach and communications front, for sure, but to claim that one of the most prominent practitioners should be "denounced" based on his literary journalism is ridiculous.

As for your critique of p-value, yes, ditto, and this is not a mistake economists make. A p-value doesn't determine a regression's validity - and it certainly has nothing whatsoever to do with causality. The misinterpretation of p-values is a prominent issue, but in fields that do not have an institutional legacy of statistical methods, such as, I'd imagine, history. Statics absolutely are a valid method for making "scientific" conclusions - if they are applied correctly.

The closest thing to economic history produced by economists that I know of tends to be essentially an exercise in long-run statistical inference. It's an interesting exercise and has applications in other economic work, but it is understandably far from the concerns of historians. In my layman understanding of history, historians ask different questions about past events than economists, answer them in different ways, and are looking to arrive at different results. It's not obvious to me how statistical work outside of descriptive statistics could be integrated at all into historical scholarship or what the benefits of doing so would be. That doesn't mean historical work is bad. That doesn't mean it needs to be "ripped apart". Before you rip apart a piece of scholarship, especially outside of your purview, consider whether the question you're interested in is the question it's answering. Both economics and history have valuable insights about society, as do anthropology, political science, literature, and visual art, and those insights may be very different, which is their strength, and we don't need to have a dick-measuring contest about which are more valid. 

Share this post


Link to post
Share on other sites

American historian who did an field in quantitative economic history, here.

On 1/24/2018 at 8:10 PM, Imenol said:

Within economics, I feel that history is gaining more traction as well.

4 hours ago, ExponentialDecay said:

The closest thing to economic history produced by economists that I know of tends to be essentially an exercise in long-run statistical inference. It's an interesting exercise and has applications in other economic work, but it is understandably far from the concerns of historians.

When thinking about the relationship between history and economic history it is also useful to make a distinction within economics departments between historical economics and economic history, proper. I'd lump Acemoglu, Johnson, and Robinson's highly cited recent works in the former--only engaging with history as a dataset to test some theory. This type of work has no trouble getting published and looks good on the econ job market. It is telling, however, that none of these authors would label himself an economic historian--It's not particularly clear how this sort of presentist theory-focused work, largely reliant on cross-national panels (and precious little attention to primary sources) is compatible with our work as historians.

But there is also a different strand of economic history (on display in the JEH and EHR, but unfortunately little in the JQE or AER), which I would label economic history, proper, which might be more open to useful cross disciplinary engagement. Unfortunately, interest in it within economics departments has been been in a long decline stretching at least back to cliometricians break with historians. Like the European approach mentioned above, it engages more deeply with historical sources. It's also always have a much more permeable boundary with business history and an interest historical economic development for its own sake--though the cannier young scholars will do their best to frame their questions in present theoretical terms for the job market. Its practitioners will still use quantitative methods and theory but they also develop some expertise in their geographic area of study--displaying much less tendency to jump around wildly between projects or rely on cross-national panels abstracting away from historical specificity. As DCGrayson mentioned above, Naomi Lamoreaux is a great (if unfair example since she trained in a history department) of how one can fruitfully mix economic methods and theory to answer questions about historical economic development. Some other economic historians that might be worth a read for Americanists include: 

-Eric Hilt - His above-linked review article is definately worth a read and he has done some interesting work on corporate forms/the economics of whaling

-Gavin Wright - A senior scholar who regularly engages with historians and is a *must* read for anyone studying slavery in the US

-Paul Rhode and Alan Olmstead - who have done a lot of good work on agricultural history and may have already come to historians' attention for challenging Ed Baptist's economic arguments (which like most of the new history of capitalism literature has belatedly taken Fogel and Engerman seriously but not any of the follow-up work by economic historians)

-Mary O'Sullivan has some great work on financial history and the corporate form that mixes economic theory, archival work, and quantitative evidence (usually no more complicated than needed to make her point) where each element helps inform the others.

-Price Fishback (and coauthors), Joshua Hausmann, Jason E. Taylor, Peter Temin, and a slew of others could be of interest to historians of policy, particularly involving the New Deal

-Rick Hornbeck - he cuts a bit closer to the historical economists side of my divide but tends to be very good about doing his historical homework

-Claudia Goldin - She's more of a pure economist doing some work on historical data but definitely worth reading for any historian interested in women's place in the economy

Share this post


Link to post
Share on other sites
8 hours ago, ExponentialDecay said:

In my layman understanding of history, historians ask different questions about past events than economists, answer them in different ways, and are looking to arrive at different results. It's not obvious to me how statistical work outside of descriptive statistics could be integrated at all into historical scholarship or what the benefits of doing so would be. 

I found your comment very useful, but I am not convinced that this is the case. Think about Emily Oster's paper on witchcraft. Her question is, quite simply, why the persecution of witches emerged in early modern Europe. This is a question that many historians have pondered and have tried to answer with different methods. I think Imenol's point remains valid: there are situations when both historians and economists try to answer the same question in radically different ways, and it might behoove us to wonder which method might be best under which conditions.

On the other hand, I was also surprised by your comment regarding p values' lack of relation to causality. It is my understanding that p values do have to do with causality, even if they are not a proof of causality. A p value below a certain level means that the null hypothesis can be rejected (the hypothesis that your proposition is untrue). Therefore, isn't it a way to estimate if your proposition is true (for instance, if a particular variable has a significant effect on an outcome?

Edited by Yellow Mellow

Share this post


Link to post
Share on other sites
16 minutes ago, Yellow Mellow said:

I found your comment very useful, but I am not convinced that this is the case. Think about Emily Oster's paper on witchcraft. Her question is, quite simply, why the persecution of witches emerged in early modern Europe. This is a question that many historians have pondered and have tried to answer with different methods. I think Imenol's point remains valid: there are situations when both historians and economists try to answer the same question in radically different ways, and it might behoove us to wonder which method might be best under which conditions.

On the other hand, I was also surprised by your comment regarding p values' lack of relation to causality. It is my understanding that p values do have to do with causality, even if they are not a proof of causality. A p value below a certain level means that the null hypothesis can be rejected (the hypothesis that your proposition is untrue). Therefore, isn't it a way to estimate if your proposition is true (for instance, if a particular variable has a significant effect on an outcome?

There are too many variables for one p-value to determine causality.  I was a poli-sci minor, so I had to take quantitative research methods. I did a paper on the application of Hofestede's Masculinity Index on the election of women in worldwide parliaments. I hypothesized that more masculine societies voted for more women (opposites attract hypothesis). This ended up being founded.  More masculine societies were more likely to elect WOMEN. However, it was not because they were more masculine societies, even though that's what the p-value suggested.  There are many other factors, the largest being a UN sanction that bars certain nations from receiving funds through the IMF unless their parliaments are representational of the gender distribution of the population. There is a religious factor- Muslim countries (score high on the HMI) are more likely to elect women. More educated societies are more likely to elect women (High HMI). Countries at war are more likely to elect women (High HMI).My p-value (<.001) was good, but the hypothesis was not. 

Correlation does not equal causation. P-value can null a hypothesis, but it cannot prove a hypothesis true.

Share this post


Link to post
Share on other sites

@ExponentialDecay I am an economic-historian-in-training in Europe. The last year has been spent learning the malleability of statistics can be combined with "historical lenses" to create works that are not based on historical reality. I used Acemoglu's work, as an example, because it was posted before and more importantly, academics think it will be one of the most influential books for the economic history of development, state-building, and decolonization. By approaching several histories from a purely statistical angle, Agecmolu and Robinson fall into the same exact trap as development economists; development programs need to be based on 'Western' ideas, money, and institutions. However, the Soviet and Chinese (also the West German case but there is not too much on them yet) examples thoroughly disprove this reliance and ability of 'non-Western' programs and aid to cause 'positive' (according to Acemoglu and Robinson) economic, social, and political leaps. This trend of socialist aid helping and developing the 'Third World' is best demonstrated in India. Throughout the Cold War, Soviet aid built hundreds of projects ranging from bridges to steel factories while American aid was mostly focused on increasing farming outputs based on pesticides and mass-corporate farming structures. It should not surprise anyone that the American structure caused massive amounts of soil erosion and crop failures throughout the 1970s and 80s, while the Soviet programs helped India create an export pool. I don't mean to glorify the Soviet example, but we cannot simply ignore it, too, because of the country was communist. Indian development projects are fleshed out further in The Price of Aid by David Engerman.

While I am not denouncing the field of economic history, especially since that is my own field,  I am suggesting that the current state of economic history is closer to economics and statistical analysis than history. Once we go deeper into the historiography, we get book titles such as The Spread of Modern Industry to the Periphery since 1871, which attempts to problematize the idea that the spread of industrialization does not effectively spread from Europe before 1918. The problem with this book is that the periphery is defined as any place other than Western Europe, which dilutes the meaning of periphery from colonial debates and other historiographies.

As for your comment about me not understanding the economics, I have a degree in Economics and another in History. I understand the economic theories and their lack of creativity for several decades, as well as the immoral and unethical usage of statistics by economists. Just look at the Reinhart-Rogoff piece (and the economists who think they were correct) on debt limits for the current issues plaguing economics.

Edited by Tigla
Catching little grammar mistakes that annoyed me.

Share this post


Link to post
Share on other sites
17 hours ago, Yellow Mellow said:

I found your comment very useful, but I am not convinced that this is the case. Think about Emily Oster's paper on witchcraft. Her question is, quite simply, why the persecution of witches emerged in early modern Europe. This is a question that many historians have pondered and have tried to answer with different methods. I think Imenol's point remains valid: there are situations when both historians and economists try to answer the same question in radically different ways, and it might behoove us to wonder which method might be best under which conditions.

On the other hand, I was also surprised by your comment regarding p values' lack of relation to causality. It is my understanding that p values do have to do with causality, even if they are not a proof of causality. A p value below a certain level means that the null hypothesis can be rejected (the hypothesis that your proposition is untrue). Therefore, isn't it a way to estimate if your proposition is true (for instance, if a particular variable has a significant effect on an outcome?

I am not familiar with Emily Oster's paper on witchcraft, but to take an example that probably all of us have hear of, idk, the rise of China, an economist looking at that question would probably subsume or assume away a lot of individual factors into a model and end up running a productivity analysis, whereas an historian would take a more holistic view, examine things like culture in more detail (rather than filing it all under "institutions" with some indicator variable), in ways that we can't model, and the two would come up with complimentary but texturally different conclusions that don't mix the way oil and water don't mix. I'm grateful for @emperor norton's list of historical monographs, because I really don't have broad familiarity with historical methods, but from the works that I've read that I'd class as economic history not written by economists, that's the impression I get.

p measures how well your model fits the data. It's a poor measure of validity because it's easy to make a model fit the data in a superficial way. The statement that variable y changes significantly due to changes in variable x (this is usually what you are actually observing, not "effect") on its own is not enough to say anything about causality without running other tests.

Share this post


Link to post
Share on other sites

@Tigla 

Quote

However, the Soviet and Chinese (also the West German case but there is not too much on them yet) examples thoroughly disprove this reliance and ability of 'non-Western' programs and aid to cause 'positive' (according to Acemoglu and Robinson) economic, social, and political leaps. This trend of socialist aid helping and developing the 'Third World' is best demonstrated in India. Throughout the Cold War, Soviet aid built hundreds of projects ranging from bridges to steel factories while American aid was mostly focused on increasing farming outputs based on pesticides and mass-corporate farming structures. It should not surprise anyone that the American structure caused massive amounts of soil erosion and crop failures throughout the 1970s and 80s, while the Soviet programs helped India create an export pool. I don't mean to glorify the Soviet example, but we cannot simply ignore it, too, because of the country was communist.

I'm not entirely sure what the example you cite disproves. It's fairly straightforward that investing money in infrastructure projects helps a country develop, and whether that money is capitalist, socialist, or comes from aliens on Mars is inconsequential. If you are arguing that somehow "the West" or development economists don't know that infrastructure investment aids development, that is patently false: there is a vast body of both empirical and theoretical work on this, and it has been widely accepted in policy circles for the past 40 years, to the point where the majority of the World Bank's lending budget is put towards physical infrastructure projects. I'm not sure how it disproves the thesis of Nations, which is that institutions aid development. That the USSR funded a successful project abroad is not testament that Soviet institutions are better than "Western" institutions - in this case, the institutions relevant to development outcomes in India are, of course, the Indian institutions. Speaking of Soviet institutions, much Soviet policy work, mainly in social policy, has produced incredible results - 100% literacy rate achieved within a generation, from paltry beginnings, and social safety nets that would be inventive and progressive even now - and there are examples in their ultimately wrongheaded industrial and R&D policy that I would still cite, but when all's said and done, when you live in a market system, the best institutions are market institutions (you don't wear skis to go swimming), and there I think "Western" institutions are superior. Which is not to say that socialism, or something close to it, can never work - it's just not our reality for now.

I know less about the history of my field than I'd like to, but the beauty of economics is that I don't have to to do effective work. Development economics has actually come pretty far since your apparent break with it: we not only look at physical capital, but human capital (anything from health to education to capacity building), and natural capital, and they can be integrated into both micro and macro theory. A lot of work has also been done on pricing and funding schemes, which enables hybrid public-private funding schemes for things like steel mills in countries that need that support. A lot of work is being done on targeting interventions better, in order to maximize efficiency gains and equitable outcomes. It's an evolving field.

Quote

While I am not denouncing the field of economic history

Oh, I have no strong opinion on the field of economic history. To me it appears that you're denouncing the field of economics, and on that I do have a strong opinion.

Once we go deeper into the historiography, we get book titles such as

 The Spread of Modern Industry to the Periphery since 1871, which attempts to problematize the idea that the spread of industrialization does not effectively spread from Europe before 1918. The problem with this book is that the periphery is defined as any place other than Western Europe, which dilutes the meaning of periphery from colonial debates and other historiographies.

It's saying that industry did or didn't spread from Europe? In any case, periphery in economics is just the logical opposite of center. It doesn't intend any value-laden meaning. I understand that, in other intellectual traditions, "periphery" has other meanings, which is fine - who am I to tell you how you want to use a term? But I also think it's silly to effectively read a book in a language you don't understand and then complain that it doesn't make sense.

 

Quote

I have a degree in Economics and another in History. I understand the economic theories and their lack of creativity for several decades, as well as the immoral and unethical usage of statistics by economists. 

 

Aw, bless you.

Edited by ExponentialDecay

Share this post


Link to post
Share on other sites

@ExponentialDecay The only part of your comment that actually contributed to a conversation was the initial quote. What I found interesting is the lack of political history involved with development economics. Development economists in the USA, USSR, and China have quotes, ranging both time and space, where they blatantly state the goal of development economics is not to "develop" countries, but rather to implement a political regime based on the developer's ideology, political system, and economic system. In the case of India, you have two competing systems that are both investing in infrastructure; one is focusing mainly on a heavy industry sector while the other is focusing on agriculture. As these policies were implemented, both sides thought their infrastructure projects were the solution, however, one was more incredibly efficient (the Soviet) than the other. Additionally, both countries began spending political capital in order to ensure a friendly government, which caused projects to become based on political power, rather than economic returns. This scenario has played out (and still continues to play out) with differing effects throughout the "developing world."

Interestingly, the local experiences of these projects and the local outcomes of these areas witnessing development projects were omitted. Of course, a project may increase the national income of a country, but at what cost? I can recommend two books that are fairly interesting and explain this conundrum. Africa's Freedom Railway by Jamie Monson and Dams, Displacement, and the Delusion of Development by Barbara Isaacman and Allen Isaacman delve into the local experience and reality of completing massive development projects. In short, the experiences of people range from an absolute decrease in real income, a temporary increase in social mobility, destruction of the environment, and erosion of familial traditions. The typical response to this issue revolves around the idea of "developing" a select few groups of society, who then can pull the rest of society up with it; since mass development came crashing down as an idea in the 1970s.

Lastly, the idea that funding from the World Bank and International Monetary Fund as being anything other than detrimental is laughable. International Organizations and Development, 1945-1990 by Marc Frey, Sönke Kunkel, and Corinna Unger is an excellent book that pushes this idea out of the window. These two institutions were based on Keynesian ideas but were radically altered into centers of neoliberal thinking and financing in the 1980s; most clearly after the end of Robert McNamara's presidency at the World Bank. These policies were implemented throughout the 1980s and 90s, which led to countries being exploited by international corporations, rather than supported by the international community. One needs to only watch the documentary "Life and Debt" to understand this problem.

To address your claim that I am denouncing economics, simply, no. The current state of economics was not the one envisioned by Keynes, Smith, Ricardo, Marx, and most pre-WWII economists. These thinkers wanted to place economic scientific rigor within a social context which helped to better enhance the field of economics to explain reality. The idea that science and rigor can solve all problems has become prevalent in the field. After the '08 Financial Crisis, however, the field has opened quite a bit but still relies on statistics and science to explain everything, while then ignoring the local experiences because of a theory. That is why I chose not to pursue a career in economics. The inability and lack of desire for economists to engage with humanities is my issue; obviously not you because you are actively engaging here.

Share this post


Link to post
Share on other sites
2 hours ago, Tigla said:

@ExponentialDecay The only part of your comment that actually contributed to a conversation was the initial quote. What I found interesting is the lack of political history involved with development economics. Development economists in the USA, USSR, and China have quotes, ranging both time and space, where they blatantly state the goal of development economics is not to "develop" countries, but rather to implement a political regime based on the developer's ideology, political system, and economic system. In the case of India, you have two competing systems that are both investing in infrastructure; one is focusing mainly on a heavy industry sector while the other is focusing on agriculture. As these policies were implemented, both sides thought their infrastructure projects were the solution, however, one was more incredibly efficient (the Soviet) than the other. Additionally, both countries began spending political capital in order to ensure a friendly government, which caused projects to become based on political power, rather than economic returns. This scenario has played out (and still continues to play out) with differing effects throughout the "developing world."

One of the problems with your argument is that you provide evidence from the 80s to denounce the field of development economics now. I do not know enough about the history of US aid to question your point regarding the different nature of US and USSR investments during the Cold War, or their varying degrees of effectiveness. But I can tell you that it is simply wrong to declare that the US or the World Bank focus chiefly on agriculture today. If you want to understand the current consensus  on development and aid, you should look at the MIT Poverty Lab in addition to the WB. The projects in which the MIT participates are generally much more heterogeneous and small-scale, but they achieve a high degree of success by being more scientific, not less so (which in this case it simply means to look at whether a particular measure has positive of negative effects, rather than to make sweeping statements as to whether development aid is good or bad). In any case, politics is still important, of course -but the field has gone a long way since you last checked. 

Edited by Imenol

Share this post


Link to post
Share on other sites
3 hours ago, Imenol said:

One of the problems with your argument is that you provide evidence from the 80s to denounce the field of development economics now. I do not know enough about the history of US aid to question your point regarding the different nature of US and USSR investments during the Cold War, or their varying degrees of effectiveness. But I can tell you that it is simply wrong to declare that the US or the World Bank focus chiefly on agriculture today. If you want to understand the current consensus  on development and aid, you should look at the MIT Poverty Lab in addition to the WB. The projects in which the MIT participates are generally much more heterogeneous and small-scale, but they achieve a high degree of success by being more scientific, not less so (which in this case it simply means to look at whether a particular measure has positive of negative effects, rather than to make sweeping statements as to whether development aid is good or bad). In any case, politics is still important, of course -but the field has gone a long way since you last checked. 

How is it flawed to show historical examples of the failure of development economics? Also, the books I cited in both of my previous posts have been published after 2005 and the documentary is from 2001. Furthermore, the authors in the books demonstrate that development economic theory has not changed since the 1980s; instead, the wording of arguments changed, but the theories that are still used were created in the 1980s, or in some cases, in the 1960s with minimal changes in the 80s. In fact, I was asked to present material at the Festival for New Economic Thinking in Edinburgh this year on this exact topic. Thus, stop claiming that I have no idea what the present-day literature or economists are thinking on development programs and projects.

For a more concrete (and respected) example, Joseph Stiglitz was forced out of the World Bank for siding with the work of Post-Keynesian and Marxist economists for denouncing their theories as effective and helpful for the development of 'Third World' countries. After "Life and Debt" was released to the public, Stiglitz came out, again, and used his time at the World Bank to support the documentary. He has argued (and continues to do so today) that 'Third World' countries enter an asymmetry of information when entering negotiations with the World Bank. The bank knows the current loan structures and planned projects for the upcoming years, while individual 'Third World' countries do not have that information until entering into a loan with the bank. Thereby, giving the bank the ability to determine projects that benefit its sources of money, not the 'Third World' countries. All of this stems from Stiglitz's work on the asymmetry of information in markets, which won him a Nobel Prize in 2001. Also, the work from Ha-Joon Chang and Erik Reinert is complementary to Stiglitz's statements. Therefore,  respected and accepted economists, who have worked at the highest level in development economics, think there is a problem with the current state of development economics.

Instead of continuing this circular argument, I think it is best to agree to disagree.

Edited by Tigla

Share this post


Link to post
Share on other sites
2 hours ago, Tigla said:

How is it flawed to show historical examples of the failure of development economics? Also, the books I cited in both of my previous posts have been published after 2005 and the documentary is from 2001. Furthermore, the authors in the books demonstrate that development economic theory has not changed since the 1980s; instead, the wording of arguments changed, but the theories that are still used were created in the 1980s, or in some cases, in the 1960s with minimal changes in the 80s. In fact, I was asked to present material at the Festival for New Economic Thinking in Edinburgh this year on this exact topic. Thus, stop claiming that I have no idea what the present-day literature or economists are thinking on development programs and projects.

If you have a background on economics as you claim, perhaps you could profit from reading this by Duflo and Kremer (two of the really top names in development now) https://economics.mit.edu/files/765 It discusses how randomized controls can be used to evaluate the effectiveness of policies, a movement that was in its infancy at the time of the paper and that has become hegemonic right now. Honestly, I think no one is criticizing you for failing to share your credentials with us. Rather, we have an issue with the content of your comments. The issue is that you argue that the field of development economics has had "minimal changes" since the 80s, which is simply untrue. The move towards randomized trials, the focus on human capital, and the embrace of small-scale projects is an incredibly significant and well-documented shift that has deeply affected the profession in recent years. 

Yes, Stigliz has produced very important work on markets with imperfect information. What is your point? He has also celebrated the move towards randomization and the work of development economists now, as recently as in his 2015 report on the state of the American economy. 

Edited by Yellow Mellow

Share this post


Link to post
Share on other sites
1 hour ago, Yellow Mellow said:

If you have a background on economics as you claim, perhaps you could profit from reading this by Duflo and Kremer (two of the really top names in development now) https://economics.mit.edu/files/765 It discusses how randomized controls can be used to evaluate the effectiveness of policies, a movement that was in its infancy at the time of the paper and that has become hegemonic right now. Honestly, I think no one is criticizing you for failing to share your credentials with us. Rather, we have an issue with the content of your comments. The issue is that you argue that the field of development economics has had "minimal changes" since the 80s, which is simply untrue. The move towards randomized trials, the focus on human capital, and the embrace of small-scale projects is an incredibly significant and well-documented shift that has deeply affected the profession in recent years. 

Yes, Stigliz has produced very important work on markets with imperfect information. What is your point? He has also celebrated the move towards randomization and the work of development economists now, as recently as in his 2015 report on the state of the American economy. 

 

I'm not sure how many more books from historians that I need to keep posting to this thread, but here we go:

The move towards randomized trials -  International Development and the Social Sciences: Essays on the History and Politics of Knowledge by Frederick Cooper and Randall Packard

The focus on human capital - Secular Missionaries: Americans and African Development in the 1960s by Larry Grubbs

The embrace of small-scale projects - Thinking Small: The United States and the Lure of Community Development by Daniel Immerwahr

 Cooper and Packard's book does not directly deal with the concept of randomized trials, however, they focus on the political nature devised around statistics to "prove" certain things, while relegating other "factors" as a measuring error. In fact, all three books show that the three concepts named by Yellow Mellow were actively used in the 1960s. Since these are the "new" trends, my statement about the lack of ingenuity and creativity still holds.

Share this post


Link to post
Share on other sites
8 hours ago, Tigla said:

@ExponentialDecay The only part of your comment that actually contributed to a conversation was the initial quote. The inability and lack of desire for economists to engage with humanities is my issue; obviously not you because you are actively engaging here.

I'll be honest, I find your response rather infuriating. If the only part of my comment that contributes to our conversation is the part where I quoted you, how am I actively engaging? For my part, your first reply bordered on offensive, but this one is way over the line, and it seems to me that your main interest here is to insult me and my field and otherwise express the chip on your shoulder. I will not engage with you, actively or otherwise, if you do not treat me with the respect I deserve as a fellow human being and co-citizen. 

That donor countries use development programs to further their own geopolitical interests should not be surprising to anyone. Some World Bank programs of the 80s were disastrous (many were not, and I disagree about the 90s), but I agree with the other posters that using examples from the 80s to critique development institutions now (much less development economics - which is used by practitioners at the WB but does in fact stand on its own as a bonafide academic field) is stupid. Your argument is missing a key element: how does this historical precedent you continue to cite affect the field today? Without that, we might as well argue that we should keep bombing those Fritzs.

What is "mass development"? The other idea you refer to, which I'm guessing is trickle-down economics, has not been in wide use since the late 80s, and was never supported by economists in the first place. Stiglitz is relatively solitary in the field for his critique of development instituions, and to call Ha Joong Chang an economist, much less a prominent one, is a travesty. 

Neoliberal thinking combines Keynes' ideas along with other prominent political economists' ideas (the neoclassical synthesis). When it comes to what prominent economists wanted the field to look like, I'm not sure they wanted or expected it to look like anything. They were a disparate group of thinkers who weren't even heavily influenced by one another in most cases, and I doubt they imagined their ideas coming together to form a discrete discipline. Prior to the 1950s, economics did not exist. What you are talking about is philosophy and political economy.

I went into economics in the end, but I was a very good humanities student and for a large part of undergrad I seriously considered going into literature. I am also a person from an IBRD recipient country, and in the end my choice wasn't between fields but between where I could make the most impact, because here is how this works. Economists are elitist and myopic, and there is a lot of work being done in the field which is illiterate in multiple ways and has nothing to do with reality, but if you're trying to convince someone to give you money, an economic argument will sound more convincing than a humanities one. A lot of it is because of the cultural zeitgeist and how undereducated people evaluate information they don't fully understand, but I don't live in Adam Smith's time - I live in 2018, and these are the circumstances I have to work with. Development institutions are deeply flawed in many ways and whether their impact warrants their tax dollars is an ongoing investigation, but they have a legacy and an institutional platform, and buy-in, and financial and political levers that have the power to create change. Development is an ugly world, and donors' interests need to be considered, whatever they are, and that's the system we live in. I read Althusser, I know I'm always already. I don't think we're going to critique our way out of the status quo, which is why I have 0 interest in dismantling anything or any other form of bloody revolution. It's not having a point of view on these issues that's rare - it's being in a position to implement your point of view into reality. And I just don't see how I'd do that as a rogue academic screaming into the ether. But, ngl, being in a position where the terrible neoliberal German government would clothe me and feed me for 10 years while I sat around thinking Big Thoughts would be a nice option to have.

Thanks for the resources. I think you should watch the next 3 minutes of this video

Edited by ExponentialDecay

Share this post


Link to post
Share on other sites
1 hour ago, Tigla said:

I'm not sure how many more books from historians that I need to keep posting to this thread, but here we go:

Well, what about if you try this: do not post any more books. Simply explain to us, in clear terms, which development programs now, or which development economists who are widely recognized within the academic community, fall into the mistakes that you attribute to the field since the 80s. 

Share this post


Link to post
Share on other sites
On 1/27/2018 at 1:46 PM, ExponentialDecay said:

I am not familiar with Emily Oster's paper on witchcraft, but to take an example that probably all of us have hear of, idk, the rise of China, an economist looking at that question would probably subsume or assume away a lot of individual factors into a model and end up running a productivity analysis, whereas an historian would take a more holistic view, examine things like culture in more detail (rather than filing it all under "institutions" with some indicator variable), in ways that we can't model, and the two would come up with complimentary but texturally different conclusions that don't mix the way oil and water don't mix. I'm grateful for @emperor norton's list of historical monographs, because I really don't have broad familiarity with historical methods, but from the works that I've read that I'd class as economic history not written by economists, that's the impression I get.

I completely agree with your assessment of the contrast between the holistic historical approach and the more schematized model-oriented economics approach to economic history. I'm more bullish on the ability to combine them productively (but not necessarily at the level of using some indicator for "institutions" as a whole), which was why I thought it productive to distinguish between economics that uses historical data and economic history. I'm not sure that I was as clear as I could have been, however, that this is a distinction within the larger discipline of economics--for better or for worse (FWIW, I lean towards the latter), most pure historians interested in economic questions now tend to go by different labels like history of capitalism, political economy, etc. So, the examples of economic historians I listed (with the exception of Lamoreaux) are all trained as economists and usually rely on quantitative economics. What separates them from the others is that they also do their historical homework and tend to frame their questions/models in a way that comes much closer to isolating the variables of interest.

This is why I think they (in theory at least) might be able to carry on a productive dialogue with their colleagues in history departments. To take one of the examples I mentioned above, Hilt's articles on whaling rely on archival research not only to populate his data set, but to inform his theoretical analysis by putting flesh onto the institutional framework that existed in that corner of 19th c. American shipping and what contemporary actors thought about it. That leads him to analyze the effect of risk sharing via selling shares in whaling voyages on captains' choice of whale fishery to exploit, leveraging access to family capital to deal with the endogeneity problem. I think it would be a lot easier for historians to buy into an analysis like Hilt's focus here on how a specific institution--the trade in shares of whaling vessel--shaped specific agents' decisions than to buy into Acemogluesque conclusions about highly abstracted "institutions," as well as easier to integrate into a historical-style wholistic narrative.

And, to the extent that I wish to wade into this thread's current morass on the epistemic validity of historical/developmental economics--which isn't very far--I'd like to join Mellow Yellow in noting that new economic works have been working to address some of the issues raised about the validity of statistical methods and that there are still some areas for serious improvement. In addition to the ideal of randomized control trials, we've seen economists increasingly utilizing instrumental variables, regression discontinuity, and difference-in-difference research designs to limit the number of variables left to the error term--especially related to the endogeneity problem. (Indeed, I'm convinced that Acemoglu and his coauthor's influential articles gained attention as much for their clear, concise articulation of their IV methodology as their North and Weingast-ian institutional analysis.) That said, a less dogmatic/polemical version of at least one of Tigla's (earlier) points is in order: 

On 1/25/2018 at 3:39 AM, Tigla said:

In short, I am beyond skeptical of using statistical methods to "weigh" history. There is a lot of work being down at the University of Missouri-Kansas City which is steadily eroding the science from statistics. For example, the tests of rigor commonly used within economic history (p-value) is heavily biased by the statistical program, data set, and the way the information is inputted into the program. This allows for the statistician to "manipulate" the data set and create series of high rigor tests that reinforce the thesis. Due to this research, I think economic history needs to be seriously questioned and ripped apart because it is unclear whether statistics are a reliable method for making "scientific conclusions."

There are serious dangers with the regnant measures of statistical significance tied to data mining (https://xkcd.com/882/) and more generally with a scientistic attitude. But the response shouldn't be to throw out quantitative methods, but to maintain a humble attitude, continuing to refine them and our research designs, and in the policy arena remembering that long-tails matter. There are a couple episodes of EconTalk that have really helped me think through these sorts of issues while commuting or cooking dinner:

http://www.econtalk.org/archives/2015/03/campbell_harvey.html

http://www.econtalk.org/archives/2018/01/john_ioannidis.html

http://www.econtalk.org/archives/2014/06/hansen_on_risk.html

http://www.econtalk.org/archives/2014/06/hansen_on_risk.html

Share this post


Link to post
Share on other sites

@ExponentialDecay, you do have my apologies. I re-read my posts then realized that I fell into the same traps that my professor had specifically warned me about in an earlier presentation. I do not mean to disparage any field. Economics influences a lot of the work I do and I have fairly heated discussions with economists about the "truisms" of development economics, and economics generally. As I stated earlier, my issue with economics, as a field, is the use of statistics and theory to explain complex social relations and interactions, which is precisely why I turned to economic history. This "turn" has also shown me that economic history is still heavily reliant on statistics, rather than explaining the history of these interactions. Thereby, leading me to be overly cautious and suspicious of statistics as an explanatory tool.

As for Why Nations Fail, since this is what pushed us over the edge, it is perfectly fine that we have two differing opinions on the work. After reading the books listed above and many more, I came to the conclusion that his work is oversimplified and can be used as a starting point, but nothing more. Attempting to use Agecmolu's work beyond a starting point requires us to ignore a lot of local and international actors and events which pushed certain countries into poverty, not merely their institutions.

Again, my apologies to you. I will take your resources and comments into mind and begin sifting through them because I do want to engage with economists. 

@emperor norton , I have not heard these talks, but they are added to the list of must-listen-tos. The one book that I find highly influential and important for understanding economics is Statistics and the German State, 1900-1945: The Making of Modern Economic Knowledge by Adam Tooze; besides this book, I find the rest of Tooze's work on statistics in history very helpful. His work broadly demonstrates the ills and ways, economists, politicians, and other academics manipulated statistics (or they could) in order to push their political narrative. While I am not opposed to statistics and quantitative methods in academic work, I think it is important to remember what we are missing when using these methods.

Share this post


Link to post
Share on other sites

Similar to a previous post about the top economic historians in economics departments, would we be able to make a list of top economic historians in history departments)? Feel free to add to the list below:

  • Harvard: Sven Beckert
  • Northwestern: Joel Mokyr
  • Chicago: Jonathan Levy
  • Penn: Walter Licht

Share this post


Link to post
Share on other sites

That list seems a bit tilted towards the US... One would need to include Adam Tooze, Jan de Vries, John Coatsworth, Michael McCormick, Harold James... 

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use and Privacy Policy.