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Category Archives: Economics principles

Could aid revive business instead of stamping it out?

By Guest Blogger | Published July 30, 2010

This post is by Claudia Williamson, a post-doctoral fellow at DRI.


 This is a central question of The Aid Trap, by Columbia professors R. Glen Hubbard and William Duggan. Instead of supporting development, the authors argue, aid creates additional hurdles. While aid ‘crowds out or corrupts the business sector,’ we remain caught in an aid trap because business doesn’t pull at the heartstrings the way charity does.

The first half of the book…

Also posted in Books and book reviews | Tagged , , | Leave a comment

The coming end to China’s rapid growth

By William Easterly | Published July 19, 2010

China’s remarkable growth rate is unlikely to last. No country in history has managed to grow nearly so fast for so long.

“China is defying the law of gravity at the moment,” says New York University economist William Easterly, who has tracked economic development for decades. “But that doesn’t mean that gravity is wrong.”

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From 1900 to 2000, NYU’s Mr. Easterly says, per-capita growth of all countries ranged between 1% to 3% a year.

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Also posted in In the news | Tagged , | 10 Comments

Thank you, World Cup fans, I now understand institutions for development

By William Easterly | Published July 7, 2010

UPDATE July 8, 2010 12:10pm: link to a great new article on the spontaneous evolution of rules in the history of football (see end of post)

I learned a lot from the furious debate that followed the post about rules vs. norms, regarding whether Uruguay cheated Ghana.

My original notion was that intentionally breaking the rules to prevent a loss was cheating, and that it was too bad norms prevalent in Football World did not…

Also posted in Big ideas/ the secret to development is... | Tagged , , | 23 Comments

A journey through wealth and poverty in New York City

By William Easterly | Published June 28, 2010

The horizontal axis is moving South to North through adjacent census tracts on the route described.  The vertical axis is median household income in each census tract.

Why are there such extremes of wealth and poverty even inside a “developed” economy like New York City? What does it teach us about economic development and underdevelopment?

9 Comments

Response to Dani Rodrik on Washington Consensus

By William Easterly | Published June 23, 2010

Dani gives a response to some “counter-arguments” against his post favoring Import-substituting Industrialization (ISI) over Washington Consensus (WC) that had mysteriously “resuscitated” themselves after they “had long been laid to rest.” I appreciate Dani’s courtesy in not identifying the culprits in this misguided resuscitation of long-dead counterarguments, but it does make it a little difficult to carry on a precise debate. It’s possible that my post about skill vs. luck, and the comments…

Also posted in Aid policies and approaches | Tagged , , | 8 Comments

How skill beats luck in the World Cup of Development

By William Easterly | Published June 21, 2010

This blog periodically points out the role of randomness in development, much to the frustration of many readers. This post is how to set things up so that skill triumphs over luck.

Today’s official metaphor is, of course, for us sports-obsessed nuts, the World Cup. Early rounds have seen remarkable upsets: Switzerland beats Spain, Japan beats Cameroon, Serbia beats Germany. Yet no super long shot team has ever won the World Cup. In fact, 14…

Tagged , | 15 Comments

The Science of Development Trends

By William Easterly | Published June 18, 2010

HT Freakonomics

Also posted in Development satire | Tagged | 3 Comments

Goldman was hedging–how evil!!!!

By William Easterly | Published April 25, 2010

According to the Washington Post:

Goldman admits it had reduced its exposure to the overheated U.S. property market and had sought to limit possible losses through a strategy that would make money if home prices fell. It says such “hedging” is a routine part of its business and is intended to moderate risk to the firm, an especially vital function when markets shift violently, as they did in 2008.

The Post puts “hedging” in…

Also posted in In the news | Tagged , , | 13 Comments

Does health aid to governments make governments spend more on health?

By Laura Freschi | Published April 13, 2010

If you’re not an economist, you might reasonably assume that the answer to this question is yes. The story might go something like this: aid agencies give money to poor country governments to distribute bed nets or give vaccinations, and those additional funds are added to whatever money the country was able to scrape together to spend on health before the donor came along. As a result of the health aid, the total amount of…

Also posted in Aid policies and approaches, Global health, International organizational behavior | Tagged , | 26 Comments

Gujarati hotels and Chaldean liquor stores

By William Easterly | Published March 26, 2010

UPDATE 2 (3/27, 8:24am EDT) Great academic paper on Jewish domination of the diamond trade (see end of post)

UPDATE (3/26, 12:34EDT) Great NYT mag article explaining the details of the Gujarati hotel story (see end of post)

I’ve long been fascinated by the Vietnamese nail salon phenomenon. My female friends report a remarkably high concentration of Vietnamese women in nail salons in US cities. I even heard there was a nail trade magazine for…

Also posted in Academic research, Entrepreneurship, Migration | Tagged | 16 Comments