Melissa Dell: evaluation

Transcript context

…But say predictively, how much weight do you give persistence in your own understanding of the world? If we compare Pakistan and India throughout much of history, what we now call Pakistan was somewhat richer than much of India. It may well have had more state capacity. That’s harder to measure. Right now, Pakistan is considerably poorer, and people are more pessimistic about it. Do you look to the past and think we should upgrade our expectations about Pakistan because of persistence? I’ll give an example here from a little bit of a different context. I was presenting some work that I’d done on Mexico to a group of historians. And I think that historians have a very different approach than economists. They tend to focus in on a very narrow context. They might look at a specific village, and they want to explain a hundred percent of what was going on in that village in that time period. Whereas in this paper, I was looking at the impacts of the Mexican Revolution, which is a historical conflict in economic development. And this historian, who had studied it extensively and knows a ton, was saying, “Well, I kind of see what you’re saying, and that holds in this case, but what about this exception? And what about that exception?” And my response was to say my partial R-squared, which is the percent of the variation that this regression explains, is 0. 1, which means it’s explaining 10 percent of the variation in the data. And I think, you know, that’s pretty good because the world’s a complex place, so something that explains 10 percent of the variation is potentially a pretty big deal. But that means there’s still 90 percent of the variation that’s explained by other things. And obviously, if you go down to the individual level, there’s even more variation there in the data to explain. So I think that in these cases where we see even 10 percent of the variation being explained by a historical variable, that’s actually really strong persistence. But there’s a huge scope for so many things to matter. I’ll say the same thing when I teach an undergrad class about economic growth in history. We talk about the various explanations you can have: geography, different types of institutions, cultural factors. Well, there’s places in sub-Saharan Africa that are 40 times poorer than the US. When you have that kind of income differential, there’s just a massive amount of variation to explain. Nathan Nunn’s work on slavery and the role that that plays in explaining Africa’s long-run underdevelopment — he gets pretty large coefficients, but they still leave a massive amount of difference to be explained by other things as well, because there’s such large income differences between poor places in the world and rich places. I think if persistence explains 10 percent of it, that’s a case where we see really strong persistence, and of course, there’s other cases where we don’t see much. So there’s plenty of room for everybody’s preferred theory of economic development to be important just because the differences are so huge. In Vietnamese history, do you think that the presence of ethnic Chinese or people who are partly ethnic Chinese is, in fact, the most important persistence for assessing how communities are doing in relative terms?…

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