C. Peter Timmer, guest blogger
We are at a critical juncture with respect to the worldwide need for scholars who understand the broad forces shaping economic development and its impact on poverty reduction. These forces are driven from the macro economy, with critical sectoral and political dimensions that are virtually impossible to navigate without broad-based and policy-oriented training.
Since the development failures of the 1970s, and especially since the failures of post-Soviet privatizations to produce the predicted rapid growth in the Eastern bloc, mainstream economists have understandably been increasingly reluctant to claim that they have answers to big problems. By contrast, when economic development first came of age as an academic topic in the 1960s, economists were trained to conduct research on the big problems of world poverty. Crucially, this research was valued by the profession itself, in the form of academic appointments and international recognition.
Consider a telling example: In 1964, Carl Eicher and Lawrence Witt, professors at Michigan State University, published an edited volume on Agriculture in Economic Development in the McGraw-Hill series on International Development. The list of contributing authors includes four future Nobel Prize winners in economics (Douglass North, Simon Kuznets, Theodore W. Schultz, and W. Arthur Lewis). Even more of the great names in economics were represented—Henry Rosovsky, Ragnar Nurkse, Zvi Griliches, and Albert Hirschman, for example. And these esteemed economists were all examining the role of agriculture in economic development!
Today, it would be impossible to put together such a list of distinguished authors to contribute their research on the interface between an important sector and the rest of the economy, whether the sector is agriculture, health, education, services or trade. In the wake of the “micro” revolution in economics and the perceived failures of economic policy advice from the 1970s to the 1990s, economists are urged by their profession, and by their training, to think small. While there is a booming “development economics” profession, with very few exceptions, these economists work on micro-level problems, with a heavy focus on tightly controlled data sets and careful empirical analysis. The profession as a whole has sharply furthered this trend, by hiring and promoting only those economists whose work exhibits the rigor of precise empirical work.
This situation leaves us with surprisingly little real development knowledge. We have learned quite a bit about certain localities which happen to have good data, and we are learning more and more about individual behavior in poor countries. But the most important problems of development are no smaller than they were in the 1960s, nor do they offer good, clean data. They are messy, and not subject to controlled experiments. The recent “food crisis” is a salient and powerful example of the need for economists to work at the interface of macro, institutional and political economy problems. Yes, the profession can say something about supply response to price increases at the local level, using the data available on individual farmers. But the widespread impoverishment and perhaps famine that may result from high food prices in world markets are due to big, global forces: governments’ both selfish and altruistic motives to ensure food supplies at reasonable prices; market behavior both locally and in world markets; energy and food policies in rich countries whose rationales are orthogonal to effective food policies in developing countries. How should we think about the development challenges of the food crisis? The profession has been remarkably absent. The current generation of development economists simply is not equipped to think about big messy problems or offer policymakers help in navigating these circumstances.
The last time it was fashionable to think about whole economies in the context of the world system was in the 1960s, and the economists trained then are now reaching retirement age. There are virtually no replacements. That situation must be remedied, and it can be. The challenge is that the world needs economists trained both broadly and deeply, as only a doctoral program can do successfully. The economics profession currently has a narrow view of what is valuable in a tenure-track economist, and it makes it very hard for young economists to pursue work that could impact world development in a large way.
As a result, we have no upcoming cohort of university-based researchers who can serve as effective policy advisors—those with the depth of training necessary to frame the hard problems, to think through the analytical process in the context of available data, and to draw useful insights from the analysis. To remedy this, a three-pronged approach is appropriate: first, provide funds and institutional structure to match students and recent PhDs with the older generation of expertise; second, provide opportunities for on-the-job learning in policy environments; and third, provide the leadership and resources to change incentives for young economists in their field.
C. Peter Timmer, a leading authority on food policy, was recently awarded the Leontief Prize for Advancing the Frontiers of Economic Thought by Tufts University’s Global Development and Environment Institute. (Read a report on the event, with a link to his lecture, here.)
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