This is an archived version of the PW Sources newsletter from Saturday, March 16, 2024. Sign up to receive PW Sources directly to your inbox here.

AGRICULTURAL MECHANIZATION

On March 6, Egypt agreed to float its currency in exchange for a $5 billion increase in its current loan program with the IMF. It remains to be seen how long the Egyptian pound may remain flexible, as the inflationary effects of a devalued currency will chafe against Egypt’s enormous bread subsidies—already strained by the war in Ukraine, a plunge in remittances, and more domestic farmland transitioning to flex crops.

In a 2002 book, TIMOTHY MITCHELL details how foreign direct investment mechanized Egypt’s agriculture and shifted production from staple foods to luxury consumption:

“The demand for mechanization had intensified among large landowners in the later 1970s, due to a supposed shortage of agricultural labor that lasted into the early 1980s. This ‘shortage’ took the form of a temporary rise in the wages of male agricultural laborers, particularly in regions close to large cities, caused by the higher wages available for urban construction work during the building boom of that period and by labor migration to the oil-rich countries of the Gulf. Agricultural wages, having averaged only one-third of the average real wage for all economic sectors during the first half of the 1970s, for a while began to catch up with urban wages. Large farmers, given the artificially low prices they received for their crops, were unable or unwilling to pay the higher wages. The larger cause of the labor ‘shortage,’ in other words, was the unequal distribution of land into large farms requiring hired labor (small farms use mostly family or cooperative labor) and the low agricultural prices imposed by the state. Rather than addressing these problems, however, the government, large farmers, and international development agencies turned to the high-payoff program of mechanization. The high payoffs did not take the form of increased yields but of higher profits to the new machine owners and their importing agents and foreign manufacturers. The demand for rural male labor was reduced once again, and the inequalities between agricultural laborers and landowners were kept in place. It is these inequalities that mechanization and other ‘high-payoff’ inputs consolidate, and that accounts of the Nile valley and the need to transform its ‘traditional’ agriculture keep from view.”

+  “Egypt’s credit policy seems to be heavily weighted toward large-scale livestock production whereas most of Egypt’s livestock is held by small farmers.” By Mohamed Abd El Azim and Ibrahim Soliman. Link. And Habib Ayeb and Ray Bush make the case for food sovereignty in Egypt and Tunisia. Link. 

+  “In 1997, more than 800,000 fellahin lost their landholding titles that allowed them to cultivate land on the basis of permanent rent contracts.” Detlef Müller-Mahn on informal sector activity in the aftermath of agrarian counter-reform in Egypt. Link.  And Mohammed Soliman on Egypt’s growing informal economy. Link.

+  “With state-market relations driven by rent seeking, the performance of economic sectors varied according to their proximity to those rents.” Robert Springborg on development under Egypt’s military regime. Link. And Richard Solomon’s new PW essay explores Egypt’s negotiations with the IMF, food import dependence, and the military. Link.

NEW RESEARCHERS

Bureaucrats and Industrial Policy 

PHILIPP BARTESKA is a PhD candidate at the London School of Economics. His job market paper, coauthored by Jay Euijung Lee, studies the relationship between bureaucracy and industrial policy in South Korea. 

From the abstract:

“What makes an industrial policy successful? This paper finds that the effect of an industrial policy changes tremendously with the implementing bureaucrat. We study Korean bureaucrats who promote exports on appointments to 87 countries between 1965, when Korea was one of the world’s poorest countries, and 2001. We exploit the rotation of bureaucrats between countries to show that individual bureaucrats matter greatly in boosting exports. Moving from a bureaucrat at the 20th percentile to the median is associated with a 40% increase in exports. This effect is comparable to that of opening an office, implying that this industrial policy has no effect under a 20th percentile bureaucrat. We exploit differential import demand growth to study a mechanism via which better bureaucrats increase exports: transmitting information about market conditions. Under better bureaucrats Korean exports increase more with a product’s import demand. Finally, we investigate whether experience can bridge the gaps between bureaucrats. We isolate quasi-random variation in experience exploiting a product’s import demand growth during the bureaucrat’s first appointment. In subsequent appointments exports increase in products with greater bureaucrat experience. This highlights that organizational capacity grows endogenously, implying a novel channel for path dependence in organizational capacity.”

+ + +

+  “An IMF rescue and devaluation of the Egyptian pound in turn are unlikely to substantially civilianize the public sector because the regime’s political survival rests on military management of the economy.” New on PW, Richard Solomon on Egypt’s military economy and the IMF. Link. 

+  “The language of climate change remains an elite, technical language. It is opaque and impenetrable to most people, and it excludes the working class.” New on the Polycrisis, Tim Sahay interviews Chris Shaw on the challenges of building a working-class climate coalition. Link.

+  Ndongo Samba Sylla challenges dominant assumptions about governments issuing debt denominated in foreign currencies. Link.

+  “Because the transmission of evidence is relational, the messenger can matter as much as the method. That is, the question of who is providing the evidence becomes crucial, too.”  Ranil Dissanayake, Janeen Madan Keller, and Erin Collinson on how research effectively reaches policymakers. Link.

+   Benjamin Braun, Donato Di Carlo, Sebastian Diessner, and Maximilian Düsterhöft on how monetary regimes such as the ECB influence structural policy beyond their mandate. Link.

+  “The CAA is an outcome of the new politics of Hindutva constitutionalism.” Hilal Ahmed on the Citizenship Amendment Act (CAA) in India, from June 2020. Link. And Shoaib Daniyal on how the newly-implemented CAA will affect West Bengal ahead of national elections. Link. 

+  “We find that for-profit hospitals are more likely to treat high-cost patients than not-for-profit hospitals.” A new study on for-profit psychiatric hospitals in California. Link. 

+   “In the 1610s and 1620s, a new computational technology took hold in England: printed mathematical tables for compound interest and discounting (‘present value’) problems. Historians of finance and accounting have long recognized these paper tools as predecessors of essential modern techniques like ‘discounted cash flow.’ Yet the history of these tables remains hazy. This article turns to one obscure but influential text—Ambrose Acroyd’s Tables of Leasses and Interest (1628)—as a guide to these questions. Two key facts emerge. First, despite the prominence of similar calculations in financial applications today, these early tables were not confined to England’s nascent financial sector. Rather, their foremost use related to agricultural property, specifically in assessing certain payments (‘fines’) landlords charged tenants for farm leases. Second, among the leading ‘early adopters’ were institutions of the Church of England.  Mathematical tables like Acroyd’s emerged out of long-running conflicts between church landlords and tenants over how to determine just and reasonable fines on church lands.” By William Deringer. Link.

Each week we highlight research from a graduate student, postdoc, or early-career professor. Send us recommendations: editorial@jainfamilyinstitute.org