3rd NCID Development Week

Jean-Louis Arcand, Director of the Centre for Finance and Development at the Geneva Graduate Institute, presented his newest research "Guns, Germs, and Slave: an Alternative View of the Colonial Origins of Comparative Development" as part of the Opening Session of the III Annual Development Week at the Institute for Culture and SocietyUniversity of Navarra

It's the way we colonized, not the colonization itself

Jean-Louis Arcand’s latest research examines this relationship between colonization and the legacy it has on the economics status in developing countries today. His theoretical claim argues that the current success of certain developing countries is a result of the interactions between colonizers and the indigenous people as the time of initial colonization. Their results suggests that "in countries where pre-colonial polities were largely decentralized led to establishment of institutions respective of property rights. By contrast, richer colonies with more centralized pre-colonial political systems, which, under colonial rule, experienced big population losses, were exposed to extractive types of institutions introduced by the European colonizers, which had long-term deleterious consequences for economic development," explained Arcand.

For him one of the clearest examples of his analysis can be seen today in Haïti and Dominican Republic, both sharing the same geography each having very different colonial stories and thus, economic development.

This discussion of colonization differs greatly from the conventional literature by Acemoglu, Johnson, and Robinson (2001), and ultimately brings a new and interesting perspective to the table.

Experts from different universities and institutions gathered at the University of Navarra to discuss the future of Africa during the III Annual Development Week, an international congress organized by the Navarra Center for International Development of the Institute for Culture and Society. Lectures throughout the week touched upon issues such as innovation in firms, inclusive growth, health and ethnicity, financial stability, and migration.

Marion Jansen, Chief Economist at the International Trade Centre, was one of these lectures. According to her one of the major barriers in Africa is the lack of information, as part of the market flows.

“In many African countries, especially in the north of Africa, there is a mismatch between the education system and what the labor market demands. Although the investment in education and its level have increased, employers do not find people that match their vacancies,” explained Jansen.

Furthermore Jansen concluded that this phenomenon, otherwise known as the “skills mismatch” causes high levels of unemployment and social tensions. During her presentation, Jansen indicated that in today’s interconnected and globalized world, where there are constant commercial relations and financial flows, it is very important for a country to remain connected. “Data shows that Africa is less connected than Latin America and Asia, and that the African regional integration has advanced less than in other regions.” In order to increase this integration Jansen concluded that it is necessary to lower the barriers so that the benefits of commerce may be able to reach greater numbers and simultaneously spur economic development. Marion explained that there are three fundamental pillars to this philosophy: the upgrading of the industry, the product diversification, and the increase of skills.

What to sell and how to do it

According to Jansen, one of the biggest barriers inhibits Africa from joining the global market flows is the lack of information. “Producers in developing countries frequently do not know what they can sell and how they can do it. That’s why the International Trade Centre works in this matter to provide information to other institutions and organizations which are responsible to make it available to business,” she said. During the 1990 African international trade was focused primarily in Europe, but more recently these trading flows have shifted towards Asia. “In the analysis we also see that many of the African products exported to Asia are commodity products, [while] trading with Europe are more manufactured products,” said Jansen. 

"To improve the lives of the poor we need scientific research to test the theories on the ground,” provided the foundation for Prakarsh Singh week long course titled “Applied Econometrics and Development.” Singh, assistant professor at Amherst College, concluded this course as part of the III Annual Development Week, an international congress organized by the Navarra Center for International Development of the Institute for Culture and Society at the University of Navarra.

 According to Singh, research in the development world has many challenges; mainly that data aggregation in randomized experiments requires time, funding, and contact with local organizations.  

“Normally a randomized experiment takes 18 months. If you are not able to collect the data you can use other sources of information such as the government statistics or surveys”. However, these sources do not always paint an accurate picture and can ultimately affect the results of the research. Moreover there are some cases –Democratic Republic of Congo, Eritrea or some parts of Zimbabwe– where microeconomic data is unavailable.

New Challenges in Research

“In research we also have opportunities, especially with advances in technology,” said Singh. For example, the Geographic Information System (GIS) is a software system that allows one to capture, store, and analyze geographical data. Thanks to this progress in technology, it is easier and more precise to collect of data, and, measure some variables that were unavailable before.

Those who attended the course were mainly students and teachers from the Faculty of Economics at the University of Navarra. “Participants already had advanced knowledge of the theories, but I wanted to teach them how to apply these concepts to the real world; how they can design their own experiments; and what to do once they have the data,” concluded Singh.