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A Blog about Public and Development Economics

A Ph.D. Student’s Rant about Development Economics

From the Economists for Firing Larry Summers blog:

Development Economics is not a “main-stream” Economics field. Most Development Economists are Development Economists because they really do care about the worlds’ poor, they tend to be more liberal and less dogmatic than your average economist, and many of them view other, more mainstream fields such as Macroeconomics or Macro Growth as witchcraft. They often point out that in Macro, you’ve always got these really difficult identification issues, and it’s often impossible to say w/ any certainty that you’ve identified a causal relationship as opposed to just correlation. With Micro-Development Randomized Trials, it is possible to know “things” with much more certainty.

While I can understand the views of Development Economists, I cannot really remember being impressed by any Development Economists, or have ever walked away from a Development Econ presentation/class feeling like I’ve really learned a new, important insight into the fundamental question of Economics: Why are some countries poor? And what can “we” do about it?…

Read the rest of this post on Economists for Firing Larry Summers >

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Filed under: Development Economics, , , ,

Can Family-Run Indian Businesses Improve Their Efficiency?

Ajay Shah’s article for the Financial Express points to recent research that suggests that smaller, family-run businesses stand to gain much from modern management science.

Some argue that the traditional family business knows what it is doing, and denigrate the fancy-pants MBAs and consultants. Others argue that the state of the art in scientific management has a lot to offer. In a remarkable recent paper titled Management matters: Evidence from India, a team of five economists (Bloom, Eifert, Mahajan, McKenzie, Roberts) has brought new evidence on the table.

The authors setup a free consulting program for 17 randomly chosen textile weaving firms in Tarapur and Umbergaon… Each of these firms was given consulting inputs from Accenture, a top-end global consulting firm.

The results were impressive. There was a rise in profit of the treated companies by Rs.1 crore a year. Even if the market price – of Rs.2 crore – was paid for the consulting, it pays for itself within two years.

Filed under: Academic Papers, Development Economics, , , , ,