This paper analyzes a newly assembled data set consisting of subjective indices of corruption, the amount of red tape, the efficiency of the judicial system, and various categories of political stability for a cross section of countries. Corruption is found to lower investment, thereby lowering economic growth. The results are robust to controlling for endogeneity by using an index of ethnolinguistic fractionalization as an instrument.

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Corruption and Growth

https://link.springer.com/content/pdf/10.2307%2F3343168.pdf

Development as Freedom

A Treatise on the Family. G. S. Becker. Cambridge, MA: Harvard University Press. 1981. Gary Becker is one of the most famous and influential economists of the second half of the 20th century, a fervent contributor to and expounder of the University of Chicago free-market philosophy, and winner of the 1992 Nobel Prize in economics. Although any book with the word "treatise" in its title is clearly intended to have an impact, one coming from someone as brilliant and controversial as Becker certainly had such a lofty goal. It has received many article-length reviews in several disciplines (Ben-Porath, 1982; Bergmann, 1995; Foster, 1993; Hannan, 1982), which is one measure of its scholarly importance, and yet its impact is, I think, less than it may have initially appeared, especially for scholars with substantive interests in the family. This book is, its title notwithstanding, more about economics and the economic approach to behavior than about the family. In the first sentence of the preface, Becker writes "In this book, I develop an economic or rational choice approach to the family." Lest anyone accuse him of focusing on traditional (i.e., material) economics topics, such as family income, poverty, and labor supply, he immediately emphasizes that those topics are not his focus. "My intent is more ambitious: to analyze marriage, births, divorce, division of labor in households, prestige, and other non-material behavior with the tools and framework developed for material behavior." Indeed, the book includes chapters on many of these issues. One chapter examines the principles of the efficient division of labor in households, three analyze marriage and divorce, three analyze various child-related issues (fertility and intergenerational mobility), and others focus on broader family issues, such as intrafamily resource allocation. His analysis is not, he believes, constrained by time or place. His intention is "to present a comprehensive analysis that is applicable, at least in part, to families in the past as well as the present, in primitive as well as modern societies, and in Eastern as well as Western cultures." His tone is profoundly conservative and utterly skeptical of any constructive role for government programs. There is a clear sense of how much better things were in the old days of a genderbased division of labor and low market-work rates for married women. Indeed, Becker is ready and able to show in Chapter 2 that such a state of affairs was efficient and induced not by market or societal discrimination (although he allows that it might exist) but by small underlying household productivity differences that arise primarily from what he refers to as "complementarities" between caring for young children while carrying another to term. Most family scholars would probably find that an unconvincingly simple explanation for a profound and complex phenomenon. What, then, is the salient contribution of Treatise on the Family? It is not literally the idea that economics could be applied to the nonmarket sector and to family life because Becker had already established that with considerable success and influence. At its core, microeconomics is simple, characterized by a belief in the importance of prices and markets, the role of self-interested or rational behavior, and, somewhat less centrally, the stability of preferences. It was Becker's singular and invaluable contribution to appreciate that the behaviors potentially amenable to the economic approach were not limited to phenomenon with explicit monetary prices and formal markets. Indeed, during the late 1950s and throughout the 1960s, he did undeniably important and pioneering work extending the domain of economics to such topics as labor market discrimination, fertility, crime, human capital, household production, and the allocation of time. Nor is Becker's contribution the detailed analyses themselves. Many of them are, frankly, odd, idiosyncratic, and off-putting. …

A Treatise on the Family

Trust: The Social Virtues and the Creation of Prosperity

Amartya Sen (1933–) was born and educated in India before completing his doctorate in economics at Cambridge University. He has taught in India, England, and the United States and is currently the Lamont University Professor at Harvard University. He is one of the most widely read and influential living economists. His books have been translated into more than thirty languages. In 1998, he was awarded the Nobel Price in Economics for his work on welfare economics, poverty and famines, and human development. He has also made major contributions to contemporary political philosophy. In this essay, he proposes that alternatives be appraised by looking to the capabilities they provide for individuals rather than only by individual utilities, incomes, or resources (as in commonly used theories). Introduction Capability is not an awfully attractive word. It has a technocratic sound, and to some it might even suggest the image of nuclear war strategists rubbing their hands in pleasure over some contingent plan of heroic barbarity. The term is not much redeemed by the historical Capability Brown praising particular pieces of land – not human beings – on the solid real-estate ground that they ‘had capabilities’. Perhaps a nicer word could have been chosen when some years ago I tried to explore a particular approach to well-being and advantage in terms of a person's ability to do valuable acts or reach valuable states of being.

Capability and Well-Being

The present paper studies the role of economic variables and culture in determining a migrants decision to (a) return to his place of origin and (b) remit money. It is based on a sample of nearly two thousand migrant households from Punjab Uttar Pradesh and Tamil Nadu now living in a resettlement colony in Delhi. The data are used to examine many questions: Does ethnicity matter? How does the length of stay in Delhi affect a migrant households propensity to return to its origin and its propensity to remit money? How does caste affect behaviour? Is there a connection between remittance and a households income? The extent to which these variables are compatible with the economists scheme of analysing migration and remittance is then explored. (EXCERPT)

Migrants and the native bond: an analysis of microlevel data from Delhi.

/pdf/engaging-with-sen-on-gender-relations-cooperative-conflicts-4iojuqrwn9.pdf

Engaging with Sen on Gender Relations: Cooperative-Conflicts, False Perceptions and Relative Capabilities

This paper analyzes the evolution of
 sovereign credit ratings in the wake of the global financial
 crisis by studying changes in actual, shadow, and relative
 ratings between 2008 and 2012. For countries that do not
 have a rating from the major rating agencies, shadow ratings
 are estimated as a function of macroeconomic, structural,
 and governance variables. The shadow rating exercise
 confirms earlier findings in the literature that even after
 the financial crisis, many unrated countries appear to be
 more creditworthy than previously believed and can access
 international capital markets. The paper also develops a new
 rating scale called the "relative risk rating,"
 which ranks countries according to their actual or shadow
 ratings after controlling for changes in the world weighted
 average rating. When relative ratings in 2012 are compared
 with the first half of 2008, the world average rating is
 found to be weaker because of the financial crisis. The
 relative rating improved in developing economies such as
 Azerbaijan, Ethiopia, Kazakhstan, Indonesia, and the
 Philippines, whereas it deteriorated in crisis-affected
 high-income countries such as Cyprus, Greece, Spain,
 Portugal, Ireland, and Egypt. Interestingly, India, Jordan,
 Poland, and the United Kingdom had their rating outlook
 downgraded by the rating agencies, but their relative rating
 actually improved as other countries suffered even worse
 downgrades. A regression model is used to analyze the
 relative contributions of different variables to rating
 changes during 2008-2012, a helpful feature for policy
 makers interested in improving sovereign ratings.

Sovereign ratings in the post-crisis world : an analysis of actual, shadow and relative risk ratings

The arrival of the digital platform for buying and selling goods is altering the nature of markets by creating enormous economies of scale and enabling firms to reach purchasers far and wide. Further, digital platforms, especially when they are themselves profit-making firms, give rise to new regulatory challenges. This paper surveys research on the economics of digital platforms and their challenges to law and economics. Alongside, it builds simple models to characterize the nature of equilibria in oligopolistic and competitive markets that are mediated by private digital platforms. The paper closes with a discussion of regulatory options.

The Law and Economics of Markets with Digital Platforms

Measures of unemployment and poverty have tended to focus solely on those currently unemployed or below the poverty line. This approach has ignored the members of society that are vulnerable to becoming unemployed or falling into poverty. Current literature in this area has implicitly assumed that since someone who is vulnerable experiences pain from the chance of becoming unemployed or falling into poverty, our standard measures of unemployment and poverty do not accurately account for this pain. The implication is that vulnerability is a 'bad' and policies should aim to reduce the number of people who are vulnerable in a society. In this paper we argue that, at the macro level, vulnerability can be viewed as a 'good' because, with unemployment remaining constant, the presence of vulnerable people implies that there must also exist currently unemployed people who expect to find work in the near future. And a society where unemployment is more equitably shared is better than a society where the burden of unemployment is carried by only a few. Given this view of vulnerability we then suggest a class of measures that, unlike the standard unemployment rate, account for the amount of vulnerability that exists in a society. We show some attractive axioms that our measure satisfies, fully characterize our measure and apply it to data from the U.S. and South Africa.

Kaushik Basu

Papers

Migrants and the native bond: an analysis of microlevel data from Delhi.

Engaging with Sen on Gender Relations: Cooperative-Conflicts, False Perceptions and Relative Capabilities

Sovereign ratings in the post-crisis world : an analysis of actual, shadow and relative risk ratings

The Law and Economics of Markets with Digital Platforms

Vulnerability, Unemployment and Poverty: A New Class of Measures, Its Axiomatic Properties and Application