Economic herstory

Posted in development, economics by jrahman on July 5, 2017

I have been trying to get back into the habit of writing.  Nothing fancy or ambitious.  Around a thousand or so words a week.  I asked a close friend on what I should be writing about.  He advised:

Rotate between three big buckets: politics/history, pop culture, and economics. When writing about the first topic, make sure it won’t sound ridiculous in six months. And avoid talking about people and focus more on theory and data.

My friend reminded me of this passage from a three-decade old paper on economic growth.

The consequences for human welfare involved in questions like these are simply staggering: Once one starts to think about them, it is hard to think about anything else.

I wonder what Nancy Stokey feels about that!  My partner will for sure not be happy if I spend all my time thinking about economics.  But when not thinking about strange stuff, it is indeed harder to come up with a bigger question than why some societies have so much higher living standards than others.

So, what do we know about the root causes of the disparities in wealth of nations.  One view, best articulated in Jared Diamond’s Guns, Germs and Steel, is that temperate climate and east-west continental alignment explains why the agricultural revolution took place in certain parts of Eurasia, and gave the relevant societies a head start over the rest of the world.

A counter view is best articulated by Daron Acemoglu and James Robinson.  They argue that geographical endowments affected initial institutions, which affected socioeconomic outcomes.  For example, western European countries developed inclusive institutions that respected property rights and civil liberties, which fostered innovation, allowing them to become more prosperous and colonise the rest of the world.  However, the colonisation strategies they adopted, and thus the institutions they introduced in the colonies, depended on geographical endowments. Where the Europeans settled, they set up good institutions. Elsewhere they set up institutions designed to extract resources, and the colonial legacies held these countries back upon independence.

You can get a flavour of this debate here and here.  My personal sense is that anyone claiming to explain history by a single theory is likely to be wrong.  And the other day I read something that makes me think it’s about time we start junking history and start taking herstory more seriously.

In a series of fascinating papers with her Utrecht University colleagues, Sarah Carmichael puts gender relations at the centre of long-term economic development.

Carmichael and co start with building a ‘female friendly index’ of traditional marital institutions across Eurasian societies as of .   Using detailed anthropological studies, they consider five metrics:

  • monogamy vs polygamy (former being more female friendly)
  • marital residence (proximity to groom’s residence is less female friendly)
  • female inheritance
  • endogamy (cousin marriage is less female friendly)
  • nuclear vs extended household (former is more female friendly)

Next, they show that not only does this index strongly correlate with gender measures such as female labour force participation, but after accounting for geographical factors, the index is negatively correlated with the distance from the centre of neolithic revolution.  That is, after controlling for factors such as distance from the tropics or soil fertility, the further a society was from the river deltas where agricultural revolution occurred thousands of years ago, the more female friendly its marital institutions were.

Specifically, such female friendly marital institutions were particularly prevalent in western Europe and north east Asia — the two old world regions that have seen the rise of modern capitalist economy in the last few centuries, after being relative backwaters for the previous couple of millennia.  Conversely, centres of neolithic revolution in the middle east, the subcontinent or China have the most patriarchal marital institutions, were centres of ancient civilisation and great pre-capitalist empires, but regions that fell behind in terms of capitalist development and all that came with it.

This is a remarkable result.  Diamond highlighted the downsides of agricultural revolution three decades ago.  Carmichael draws our attention to the fact that agriculture also put half of humanity behind a bar (sometimes literally!).  And she also shows us that as an extractive institution, patriarchy is not only much older than capitalism, smashing the former actually helps the latter.

Of course, correlation isn’t causation.  Carmichael and colleagues need to show the channels through which agricultural revolution and patriarchy reinforced each other and locked in a Malthusian equilibrium.  And they need to show how the lack of patriarchy facilitated the industrial revolution and capitalist development.

I look forward to reading more about this.



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