This is an archived version of the PW Sources newsletter from Saturday, May 13. Sign up to receive PW Sources directly to your inbox here.
Alice H. Amsden (1943-2012) was a pathbreaking developmental economist who examined East Asia’s economic rise in the late twentieth century.
Her classic 1992 study, Asia’s Next Giant: South Korea and Late Industrialization, argued that state involvement was key to the country’s growth.
From the text:
“South Korea’s growth is a classic example of late industrialization. It has involved a high degree of state intervention to get relative prices “wrong” in order to overcome the penalties of lateness, the growth of large diversified business groups to transcend the hardships of having to compete without the advantages of novel technology, the emergence of salaried managers responsible for exploiting the borrowed technology, and a focus on shop floor management to optimize technology transfer. In other countries—in Turkey and India, for example—subsidies have been dispensed primarily as giveaways. In South Korea the wrong prices have been right because government discipline over business has enabled subsidies and protection to be less than elsewhere and more effective. If the big business groups of South Korea have been loaned long term capital at negative real interest rates, the government has demanded that they use the borrowed capital productively, not speculatively. If they have been allowed to sell in protected domestic markets, they have had to produce and sell in the export market. Discipline over business as well as labor provided the starting point for high growth rates of productivity, which allowed Korea to borrow extensively in international capital markets without overextending itself financially.”
+ “The transition in Taiwan from inward foreign investment, to national ownership, to outward foreign investment by nationally owned firms was systematically planned and institutionally driven.” From Amsden and Wan-wen Chu’s Beyond Late Development: Taiwan’s Upgrading Policies. Link.
+ “The rise of the financial services sector, the triumph of the Treasury over the State Department in foreign economic affairs, and the plunge in Third World growth rates are all closely connected.” From Amsden’s Escape From Empire: The Developing World’s Journey through Heaven and Hell. Link.
+ “Amsden found that foreign investors typically arrived on the scene after an industry had already been started, and the progression from the arrival of foreign investment to the emergence of nationally owned firms did not occur spontaneously.” By Justin Lin. Link. And Antonio Andreoni and Ha-Joon Chang on Amsden’s legacy for a new developmentalist agenda. Link.
Drug Cartels in Mexico
ITZEL DE HARO LOPEZ is a PhD student at the department of agricultural and applied economics at the University of Wisconsin-Madison. In her job market paper, she explores the relationship between trade and crime in Mexico’s avocado sector.
From the abstract:
“This paper aims to answer whether declining drug revenues have motivated cartels to target licit businesses, such as avocado farms, rather than continue specializing in the production and distribution of illicit drugs. To do this, I exploit exogenous variation in the demand for pure heroin in the U.S. between 2011 and 2019. In particular, I use the introduction of Fentanyl in the U.S. as a proxy for the reduction in the demand for pure heroin in Mexico to answer whether this led to an increase in homicides and cartel presence in avocado and poppy-growing municipalities. Using municipal level data, I show that the decrease in the demand for heroin increased homicide rates (including those of agricultural workers) in avocado-growing municipalities. I find no evidence of higher cartel presence in these municipalities, suggesting that, while DTOs do not seem to be moving into these municipalities, they have become more violent toward civilians. Furthermore, I find that the fall in the demand for heroin led to a decrease in cartel presence and homicide rates in poppy-growing municipalities. Overall, this paper provides evidence of inter-sector spillovers resulting from drug demand changes.”
+ + +
+ Phenomenal World is hiring an editorial intern for the summer. This part-time, paid opportunity is open to all CUNY undergrads. See more details and apply here. And please share widely!
+ “Surveying the contemporary landscape of sovereign debt and IMF lending programs reveals pervasive inequalities in the Bretton Woods system.” New on PW, Mona Ali on reforming the IMF. Link.
+ “In the contemporary global economy, asset prices are much more sensitive to interest rate adjustments than consumer prices.”Also new on PW, Josh Ryan-Collins on the paradox of contemporary monetary policy. Link.
+ “A public bank in Los Angeles could support the city’s broader infrastructure, housing, and sustainability goals.” The second publication in JFI and Berggruen’s joint report series on public banking in Los Angeles, by Halah Ahmad, Jack Landry, and Paul Williams. Link. And read the latest release by Michael McCarthy on democratic governance for public banks here.
+ Shahla Al-Kli and Jared Miller on decarbonization and political transformation in Iraq. Link
+ “Brexit has blown a sizeable hole in Britain’s economic model, and major reforms are needed to recover lost ground.” By John Springford. Link.
+ “The report concludes that the small amount of revenue LA Metro may lose by implementing a universal fareless policy could be recouped by eliminating TAP and divesting from fare enforcement.” By Strategic Actions for a Just Economy. Link.
+ A report from Rift Valley Institute on privatization from below in Somali cities. Link.
+ “Two aspects of the Central Asian slave trade contributed to its decentralized character. First, a significant portion of the trade took place between nomads and other nomads. Second, the nature of slavery itself in the region was distinctly rural: eyewitness accounts as well as studies of the region’s urban economies have confirmed that the predominant type of work that slaves performed was agricultural. The demographic of slaves from India, once prominent in the region, was fast disappearing by the eighteenth century, as an influx of Iranian Shῑʿite slaves from Khurasan took its place. The Turkmen deserts north of Khurasan became increasingly prominent zones of captivity, transport, trade, and sale. By the late nineteenth century, Iranian Shῑʿites would, by all accounts, constitute the overwhelming majority of the region’s slaves. Through the northward trajectory of these trade networks, they came to form a significant demographic in Khwarazm and Bukhara.” By Jeff Eden. Link.
Each week we highlight research from a graduate student, postdoc, or early-career professor. Send us recommendations: email@example.com