Category Archives: micro

Dr Alex Klein

The Determinants of International Migration in Early Modern Europe

by Alexander Klein and Jelle van Lottum, discussion paper KDPE 1710, June 2017.

Non-technical summary

Migration was a common feature of pre-industrial societies. Because the vast majority of migrations took place within the confines of a country, a province or even a parish, in most cases such moves occurred over relatively short distances. However, long-distance migrations, involving moves of hundreds of kilometres or more, often of individuals entering foreign territories, were hardly rare (Page Moch 2003; Manning 2005; Van Lottum 2007; Bade et al. 2013). Recent estimates show that international mobility levels increased strongly after the medieval period, peaking in the late seventeenth century. In the latter half of the seventeenth century an estimated 8 percent of European individuals (residents of Russia excluded) could be considered an international migrant (Lucassen and Lucassen 2009). These numbers were surpassed only during the mass migrations to the New World in the nineteenth century (Hatton and Williamson 1998). Traditionally, studies on early modern international migration focus on two groups in particular: refugees and elite migrant groups (or individuals from them). Notwithstanding the substantial cultural and economic importance of these migrant groups, in reality they constituted only a fraction of Europe’s internationally mobile population (Lucassen 2012).

This paper offers the first multivariate regression study of international migration ‘common
men and women’ in pre-industrial Europe. Using unique eighteenth-century data about
maritime workers, we created a data set of migration flows among European countries to
examine the role of factors related to geography, population, language, the market and chain
migration in explaining the migration of these workers across countries. We show that among
all factors considered in our multivariate analysis, the geographical characteristics of the
destination countries, size of port towns, and chain migration are among the most robust and
quantitatively the most important factors influencing cross-country migration flows.

You can download the complete paper here.

Government must think seriously about farm and rural support after Brexit

Experts from the School of Economics Centre for European Agri-Environmental Studies have said the government must create suitable replacement support for UK farmers once the country leaves the European Union and Common Agricultural Policy (CAP) payments stop.

In a paper written for the National Institute of Economic and Social Research (NIESR) by Professor Sophia Davidova, Dr Alastair Bailey and honorary Professor Ulrike Hotopp, they note that the loss of the CAP could have a significant effect on the UK farm economy, agri-environment and rural jobs.

Analysis shows that the removal of the CAP without a replacement could risk the loss of about 250,000 jobs in non-farm small and medium-sized enterprises (SMEs), by considering both the direct and indirect effects of farmers’ purchasing power.

Furthermore, the majority of affected jobs, around 200,000, would be in highly rural areas, which would have a significant negative impact on rural job markets and economies.

The paper also notes that currently more than half of UK farms are heavily reliant upon CAP payments for their survival. Therefore, the government must think seriously about post-Brexit support to be put in place to ensure that UK farmers continue to contribute around 60% of domestic food supplies and to maintain the 70% of the UK land area they look after.

The paper adds that the government should see the end of access to the CAP as an opportunity to create a more effective system of subsidies that avoids the current situation where large, profitable farms receive the largest subsidies.

Dr Alastair Bailey said the government should see the situation as an opportunity to create a replacement to the CAP that could ensure those most in need of support were given the biggest focus of any new proposals.

The paper, Agriculture in the UK, is the latest in NIESR’s General Election briefing series and has been written with the intention of providing informed and rigorous evidence on key areas of UK life in the run up to the General Election on 8 June.

-ENDS-

Article by Dan Worth, University of Kent Press Office

Press coverage generated by this article:

Farm Business: http://www.farmbusiness.co.uk/business/politics/government-must-think-seriously-about-farm-and-rural-support-after-brexit.html

Farming Life: http://www.farminglife.com/farming-news/government-must-think-seriously-about-farm-and-rural-support-after-brexit-1-7982890

FG Insight: https://www.fginsight.com/news/250000-non-farming-jobs-to-go-if-farm-payments-ditched-21497

Yorkshire Post: http://www.yorkshirepost.co.uk/news/thousands-of-jobs-dependent-on-future-farm-support-payments-study-finds-1-8569932

The Scottish Farmer: http://www.thescottishfarmer.co.uk/news/15334219.CAP_exit_threatens_supply_chain_jobs/

Farmers’ Union of Wales: http://fuw.org.uk/if-agriculture-fails-so-will-our-rural-communities-fuw-warns/?platform=hootsuite

Narberth & Whitland Observer: http://www.narberth-and-whitland-today.co.uk/article.cfm?id=110931&headline=Straws%20in%20the%20Wind%20by%20Meyrick%20Brown&sectionIs=news&searchyear=2017

 

 

 

 

 

 

Dr Alex Klein

Why did socialist economies fail? The role of factor inputs reconsidered

by Tamás Vonyó and Alexander Klein, discussion paper KDPE 1708, April 2017.

Non-technical summary

The role of institutions features prominently in comparative studies of economic development. Eastern Europe after 1945 provides a textbook case, where relative decline in income per head and productivity has been linked to institutional failure. The inefficiency of central planning compared to the market economy is well established both theoretically and empirically. The socialist system, it has been argued, was relatively successful in mobilizing resources but stifled innovation and entrepreneurship. Planned economies thus achieved ‘a satisfactory productivity performance in the era of mass production, but could not adapt to the requirements of flexible production technology’ (Broadberry and Klein 2011, p. 37). Effective in the phase of extensive growth, socialist economies slowed down abruptly as investment reached diminishing returns, which contributed to their collapse in the 1980s. While Eastern European countries seem to have maintained high rates of labor participation and very high levels of investment in  physical  capital,  they  were  shown  to  have  become  increasingly  inefficient  compared  to  western market economies in their use of production factors and intermediate inputs.

This paper does not challenge the view that the planned economy was inefficient, but the above characterization  of  the  socialist  growth  experience  is  out  of  date.  As  the  literature  review  will demonstrate,  the  majority of  previous  studies  found that the last  decades  of  communism  witnessed sharply diminishing, during the 1980s often negative, rates of productivity growth. The inefficiency of the socialist system was manifested in productivity failure. We consider these results biased by the inconsistent use of data on output and factor inputs. Researchers benefited from revised data on national income that yielded substantially lower rates of economic growth than what government statistics had suggested, but they have still used official data on capital formation, or estimated capital stock from official investment data. Under central planning, investment statistics are just as difficult to trust as national accounts. We will show that socialist economies invested considerably less in physical capital than previously claimed. Likewise, official employment figures overstate the growth of labour input as average work hours declined from the 1960s onward. We suggest a much larger role for factor inputs and a smaller one for productivity in the relative decline of Eastern Europe, especially in the 1980s, than what earlier interpretations advocated. We reveal fundamental differences between the growth experience of small socialist countries and what we know about the Soviet economy in the same period.

You can download the complete paper here.

Dr Anirban Mitra

Consumption spikes and election days

‘There is ample anecdotal evidence on political parties bribing voters with cash or consumption goods prior to elections, in India and other developing countries. However, there is an expected lack of hard evidence on the extent and form of vote-buying.’

This is an excerpt from a recent article by the School’s Dr Anirban Mitra, Shabana Mitra and Arnab Mukherji (Indian Institute of Management Bangalore) published in Ideas for India, which analyses consumption patterns of households around elections, and finds a spike for some items just before elections.

You can read the full article here: http://ideasforindia.in/article.aspx?article_id=1802

Dr Maria Garcia-Alonso

Brexit and strategic trade control

Dr Maria Garcia-Alonso recently presented at a workshop on ‘Brexit and Strategic Trade Control: Consequences and Ways Forward’ on 24-25 April in Chaudfontaine, Belgium.  The workshop was jointly organised by Quentin Michel (European Studies Unit, University of Liege) and Ian Stewart (King’s College London) and was attended by a small group of government officials, academics and industry policy makers with the purpose of examining the implications of Brexit on strategic trade controls.

The workshop was conducted under Chatham House rules with participation in private capacities, however, the main findings of the workshop can be found on the King’s College website: https://projectalpha.eu/2017/05/#

 

Dr Zaki Wahhaj

Agricultural insurance for rural farmers

Dr Zaki Wahhaj and Dr Harounan Kazianga (Okhlahoma State University) have initiated a research project on ‘Enhancing access to weather index agricultural insurance in Burkina Faso’ in partnership with Innovations for Poverty Action.

Rural households in developing countries are often heavily dependent on rainfall for farming purposes and the lack of rain can lead to crop failure and loss of income. Yet, for a variety of reasons, farmers are reluctant to purchase insurance products that insure against adverse rainfall shocks. The aim of this project is to investigate one potential solution to this problem that relies on making use of links between urban migrants and their relatives in rural areas for the purpose of marketing insurance.

The research project is being financed by the International Initiative for Impact Evaluation with an initial grant of 75,000 USD.

Keynes College

Lost in the Storm: The Academic Collaborations that Went Missing in Hurricane Isaac

by Raquel Campos, Fernanda L. L. de Leon and Ben McQuillin, discussion paper KDPE 1707, April 2017 

Non-technical summary

When an academic participates in a large conference, her likelihood of subsequently writing a paper with at least one participant at the conference increases by one-sixth (close to 18%). Moreover, it seems that conferences improve the quality of matching among co-authors, leading to papers that are published in higher-ranked journals.

These findings are documented in the paper “Lost in the Storm: The Academic Collaborations that Went Missing in Hurricane Isaac”. This is part of an ongoing programme of work, funded by the Leverhulme Trust, in which economists at University of Kent and University of East Anglia utilise a natural experiment to understand the role of conferences in academic and scientific production generally.

In late August 2012, the imminent landfall of Hurricane Isaac forced the cancellation – at less than 48 hours’ notice – of an important event in political scientists’ annual calendar: the American Political Science Association (APSA) Annual Meeting. By analysing the output patterns – in terms of published and working papers – among 17,468 academics that attend conferences (including academics scheduled to have participated in this cancelled conference, in previous editions of the APSA meeting and/or editions of a similar Annual Meeting), the authors estimate the effects of conferences on the likelihood of academics to form new co-authorships, and provide evidence for the role of conferences as important facilitators for academic networking.

The collaborations that were “lost” (because of the conference cancellation) were disproportionately those that would have been between academics affiliated to geographically distant institutions and whose existing research was closely related. These seem to be recipes for better research, as the remaining collaborations that did form (among participants that did not meet in the cancelled conference) led to papers appearing in journals ranked, on average, 5 places lower.

These results speak to the role of conferences and, more generally, of network constraints in preventing the formation of efficient scientific teams. It is already known that most academic and scientific papers are written by collocated authors, but some questions remain unanswered. First: does inter-institutional collaboration make better science, or is it rather adopted as a research strategy specifically for the most promising and ambitious projects? The results in the present paper suggest strongly the former. Second: do academics and scientists work so predominantly in collocated teams due to preference, or because they are in some way constrained from forming the more productive inter-institutional collaborations. The results in this latest study support the network-constraints explanation and suggest that conferences perform an important function in alleviating these constraints, by allowing academics to meet new collaborators.

You can download the complete paper here.

Dr Amrit Amirapu

Justice delayed is growth denied: The effect of slow courts on relationship-specific industries in India

by Amrit Amirapu, discussion paper KDPE 1706, February 2017.

Non-technical summary

Commerce and manufactures can seldom flourish long in any state which does not enjoy
a regular administration of justice, … in which the faith of contracts is not supported by
law… Adam Smith, The Wealth of Nations, Book V, Chapter III

Are well-functioning formal judicial institutions important for growth and development? Some – including Adam Smith – have argued that they are needed to ensure efficient contract enforcement. Others have argued that informal contracting arrangements such as relational contracts, social norms or kinship networks can provide workable substitutes (Acemoglu and Johnson(2005)). For example, firms might be able to enter into long-term relationships with particular suppliers or customers, relying on the implicit threat that the relationship might end if the parties do not abide by the agreed upon terms. Whether such informal substitutes can adequately make up for more formal systems is an empirical question. In this working paper, I add to a small but growing body of evidence that suggests informal mechanisms provide at most an imperfect substitute: well-functioning courts are good for growth. The setting I study is that of district courts in India, where the most significant problem is speed.

The World Bank, as part of its “Doing Business” Indicators, estimates that it would take about four years to resolve a hypothetical commercial sales dispute over the quality of goods. Only a handful of countries are worse on this measure. Why should slow courts be detrimental to economic outcomes? Slow courts increase the cost of enforcing contracts by delaying the payoff of taking an agent to court. If contracts are costly to enforce, parties may avoid making investments or engaging in potentially surplus-generating transactions. This should be all the more true of transactions that only have value within a specific buyer-supplier relationship, such as the purchase or production of specially tailored intermediate inputs (e.g., branded shoe parts). Such relationship-specific transactions have a greater need for reliable contract enforcement, because if one or the other party doesn’t abide by the rules of the contract, the input has no resale value.

The empirical strategy employed in the paper hinges on this idea: well-functioning judicial institutions should be especially important in industries that require more relationship-specific inputs – what I call “contract-intensive” industries. The strategy is based on several international studies that document the effects of countries’ legal environments on their patterns of trade (Berkowitz et al. (2006); Nunn (2007); Levchenko (2007)). The resulting hypothesis is that firms in contract-intensive industries should grow relatively faster than those in non contract-intensive industries when they have access to more efficient courts.

I test this hypothesis, taking advantage of the considerable variation in court efficiency across
Indian states, and find that fast courts are highly predictive of future growth of contract intensive industries in India’s formal manufacturing sector. The results suggest that, for an industry in the 75th percentile of contract intensity, an improvement of one standard deviation in court efficiency would imply a higher annual growth rate of gross value added of 0.9 percentage points, which is about 50% of the average growth rate in the sample. Similar results hold for growth in employment, investment in capital and net entry of factories.

You can download the complete paper here.

Lost in the storm: how a hurricane blew through political science

As 80mph winds swept across the Caribbean and the southern US, Hurricane Isaac left 41 people dead and caused $2.4 billion (£1.9 billion) of damage. The cost to the academic field of political science is less well known.

However, a new study by the School’s Fernanda Leite Lopez de Leon together with Ben McQuillin and Raquel Campos, indicates that the destructive tropical cyclone led to 76 academic papers that would otherwise have been written never seeing the light of day. The paper was presented at the Royal Economic Society’s 2017 Annual Conference on 10 April.

This is an excerpt from an article in Times Higher Education by Ellie Bothwell. Click here to read the full piece.

Prof Rob Fraser

The Economic Impacts of Pests and Diseases

Good biosecurity policy decisions, particularly in relation to plant industry protection, are of ever-increasing importance. Growth in the speed and diversity of trade, the effects of climate change and the resultant spread of pests and diseases continue to highlight this.

A new book entitled Plant Biosecurity Policy Evaluation: The Economic Impacts of Pests and Diseases has been authored by the School’s Emeritus Professor Rob Fraser together with David Cook (University of Western Australia) and Andrew Wilby (University of Lancaster).

The book contains an introduction to the issues confronting plant biosecurity policymakers and how the economic risks of invasive species can be assessed over time.

It describes both probability models that show what might happen if species ‘invade’ a region and values models that help decide what management actions should be taken.

As the first book of its kind focusing on a comprehensive range of policies, case studies and applications, Plant Biosecurity Policy Evaluation is perfect for biosecurity policy makers, decision-support specialists, advanced students of agricultural studies, public policy and invasive species research.

The book is available to purchase from World Scientific:

www.worldscientific.com/worldscibooks/10.1142/q0064