What are you working on?

I’m in the Economics Department here at MIT. Outside of my teaching responsibilities, most of my time is spent on economic growth research. That means understanding how and why societies grow, the consequences of that growth and, perhaps most importantly, why it is that some countries are able to achieve economic growth and better standards of living for their populations while others are not.

Economists have been thinking about these kinds of issues for a long time. Often though, the thinking occurs within old frameworks, and so part of my research is motivated by the consideration of whether we are asking and answering the right questions. The current economics framework has been very good at identifying sources of economic growth in terms of educational achievements, or technology, or organization of markets, but hasn’t really dug deeper into why markets are organized differently. Why is it that in some places there is investment into education, or adoption and embracing of new technologies, and in other places there is not? That is basically what brought me to my recent research on political economy and institutions. The major theme that has been keeping me busy right now, and over the past five years at least, is understanding the roles of institutions, how institutions emerge, and why dysfunctional institutions arise in different places.

How do we know that institutions really matter? This sounds like a simple question, but in terms of statistical or econometric structure it is actually rather complicated. A very common view in both policy and academic circles is that to understand the problems of economic development in much of the world––especially places like southern Asia, the Caribbean, and sub-Saharan Africa––one must look at geographic factors. For instance, is the geography and ecology of Africa simply not conducive to development because of hot temperatures and greater soil depletion? In this line of reasoning, we are essentially talking about factors that are outside of human control. And if you look at the approach that many people––the UN, the World Bank, and many economists––take to achieve solutions, it is all about how we can provide aid or intervene in a way that softens the impact of these various inherent disadvantages.

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