I submitted my PhD thesis today. In economcis, the PhD thesis is rather a formality. The effective examination of your thesis is already done during the job market process. But, I don't know why, I feel more strongly today than when I got a job offer that I have done something. Formality does have some meaning, maybe.
My second-to-last lunchtime concert at LSE is a performance by a Czech pianist Libor Novacek.
Mozart: Rondo in D, K485
For the first time ever in my life, I enjoy Mozart. Libor Novacek juxtapose various expressions within this piece of music, sometimes even at the same time by playing the piano in one way by one hand and in the other way by the other hand. Libor reveals his sutble, but generous and embracing touch on keys. I would get bored if somebody else plays this piece, as the music itself, as usual for Mozart, is rather simply structured. But with Libor's hands, it sounds totally different.
Mozart: Rondo in A minor, K511
The same comments as above. I have heard some of the melodies in this piece.
Janacek: In the Mists (1912)
An intersting and sleepy piece. Towards the end, I nearly fall asleep, not because I get bored. It is because I'm pleased with Libor's play.
Brahms: Sonata No.2 in F sharp minor Op.2
A theatric, Christian Lacroix-ish piece. Again I easily imagine myself being bored if someone else plays this piece. But Libor plays it in a pleasant way. Towards the end, my mind is truly refreshed.
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Another thing that deserves a mention: the Steinway piano, recently bought by LSE, sounds superb. Part of the reason I enjoyed Matan Porat two weeks ago, I now notice, is also owing to this piano.
Now I have time to attend LSE's lunchtime concert series. This week's guest is Matan Porat, a pianist.
Bach: Partita No.1 in Bb Major
Boring. I keep thinking something else. Porat's staccato style of playing the piano doesn't sound fit for this piece of music.
Schumann: Davidsbundlertanze Op.6
Porak shows incredible subtlety during the quite part of this piece. The same motif repeats towards the end, and the way he moves on from there to the last part of extravaganza with a sensitive coda firmly grips my attention.
Bartok: "Out of Door" Suite (1926)
This is an amazing piece of contemporary music. It must have influenced progressive rock musicians in the 1970s. The piece begins with unusually intensive use of bass keys, which is a nice logical progression from the end of the previous piece played.
Porak again shows his incredible subtlety in the quiet part of the piece, but his more aggresive side gets along very well with Bartok, too. I learn that this pianist is amazing with this sort of music in which dynamism and stasis create a stark contrast.
LSE's Catering Services emailed students to ask for completing online surveys on LSE catering and eating habits.
The prize for cooperation is ...
"a free meal in The Garrick or Brunch Bowl"
I don't need that! (The Garrick and Brunch Bowl are the names of LSE student canteens.)
As I'm grumpy a lot about LSE's catering outlets (so I almost never use them in favour of other school canteens near the campus), I'm willing to participate in this survey anyway, expecting that I'm allowed to give a comment on LSE catering services in sentences.
But the survey only asks multiple choice questions, not allowing the respondent to provide any opinions freely.
I wanted to say, "Why does a bowl of salad with dressing cost nearly 2 pounds?" or "LSE canteens may be above the average in UK universities, but they are certainly below the average by non-UK standards."
So LSE Catering Services do not seriously take into consideration the views from students. No hope for much improvement in the future.
Well, it doesn't matter to me as I leave LSE this autumn. But I'm sorry for LSE students to continue suffering from LSE canteens.
So LSE RLAB Lift is finally back in operation after a two-week strike. Fingers are crossed.
Here's an excerpt from an email message sent to all members of LSE Research Lab today:
... the faulty component was replaced yesterday but this has highlighted further faults on the electronics in the main lift controller.
LSE Rlab lift seems to be trying to undermine my effort. Last Friday, I decided to recode the number of times he - yes, I would say he's he because this kind of behaviour is not typical for women (am I sexist?) - breaks down. But what he cares about is the number of hours he doesn't need to work. So he seems to make each break-down take longer to fix.
So he didn't work last Sunday (I didn't come to the School last Saturday. Maybe he didn't work on that day, either, but to be fair, I won't base my count on guesswork.), and he is still out of service today.
I've changed my strategy. I will count the number of days he is lazy.
Number of days LSE RLAB Lift is out of service since 1st September 2006: 3.
I've decided to record the dates when the lift of LSE RLAB is out of order. It has been playing up so many times in the past four years, but today it's egregious because the lift was out of service last Sunday and Bank Holiday Monday due to maintenance. I had to walk up stairs to the fifth floor several times. Four days on, it again breaks down.
I bet it will break down in the next 12 months more than 50 times.
Number of times LSE RLAB lift breaks down since 1 September 2006: 1.
During the past couple of months, several weird sculptures have popped up around the LSE campus.
Before moving on, click here to open the map of the LSE campus in a seprate window to understand the location of each sculpture .
It was a couple of months ago that a penguin and a baby elephant suddenly appeared on Clare Market (a street between the Old Building and St Clement's Building). Look at this:
Do you think these two sculptures have improved the landscape? I seriously don't think so. First of all, the color of these sculptures, especially the penguin, does not match the landscape at all. Second, this is NOT art at all. It's just animals that we are used to seeing at a zoo or on television. It does not evoke any new sensation. I really thought that vandalism wouldn't be a public nuisance in this case.
The LSE didn't stop there. At the centre of John Watkin's Plaza, a newly-paved square in front of the Library building, a weird sculpture was erected a couple of weeks ago. Look at this:
Can't see it clearly? Let me zoom it up:
Do you think this fox head has improved the landscape? I seriously don't think so. I liked John Watkin's Plaza. Its design is quite contemporary. With this sculpture standing at the centre, however, the Plaza has become a very dull public space that you can find anywhere else. You certainly know at least one public space where a weird, incongruent public art scuplture stands at the centre, don't you?
A few days ago I realized that the LSE has erected 12 sculptures in total around the campus. From which I learned that the disgusting sculptures outside Tower Three were also part of this public "art" project. Look at this:
Do you think this contemporary(?) sculpture has improved the landscape? I seriously don't think so. Again the colour of these three poles DOES NOT match the landscape AT ALL. Plus what's on the top of each pole is this:
Hedious. Absolutely hedious.
This passage called Clement's Inn is just next to the Royal Courts of Justice. Entering from the Strand, it's quite nice a view:
But if you keep walking, then you'll see
and
Worse, at the other end of Clement's Inn sits an eagle head
WHY ARE THEY ALL ANIMALS?
Admittedly, the location of each sculpture seems to be a solution to the contrained optimization problem - choosing the best combination of a sculpture and a place among sculptures donated by Canadian businessman Louis Odette (according to the LSE's explanation) and locations within the LSE campus. Each scuplture is erected at the best place around the campus. I would like to take my hat off for the LSE staff in charge of this decision. But this is a solution to the CONSTRAINED optimization problem. If the choice set of sculptures hadn't been limited to those donated by Louis Odette, the LSE staff wouldn't have chosen these ANIMALS. If the choice set hadn't been limited to the LSE campus, these sculptures would have been erected somewhere FAR AWAY from the LSE campus.
True, this kind of thing is a matter of personal taste. I don't like them, but somebody else might like them. I'm sure Louis Odette - "a noted patron of sculptures to public spaces" according to the LSE's plea - likes them.
Why don't you just appreciate them in your personal space, rather than forcing people to appreciate them in public spaces?
I would like to know what you would say. Am I the only person who is strongly offended by these ANIMALS? Leave your comment, please.
Monday (23rd):
1430-1600 Job market seminar by Alvaro Bustos from Princeton
The rest of afternoon - Fatigue from last week's work prevented me from thinking properly...
Tuesday (24th) through Thursday (26th):
Wrote a research memo in which I describe a theoretical model that I have in mind and its solutions and implications. As this process involves mathematics, you can't skip any single step in logic. This requires you to think real hard. So it took longer to finish and I got exhausted more than expected.
But this is why I love economics. This process often takes you somewhere you didn't expect. Which means you find a new thing. I mean, the conclusion derived from this process is often different from what you expected. If you just rely on verbal arguments, this won't happen. Which means you don't really make progress in expanding our knowledge on society. That's why economists hate most arguments without explicit mathematical modelling made by social scientists outside economics.
Friday (27th):
1300-1400 EOPP Work-in-progress Seminar
Afternoon - Wrote email to Professor Caselli, the speaker at today's seminar, on his presentation as what he's trying to do is quite similar to my research - I should talk to him soon. Then figured out how to use Excel2Latex for Ameet. The end result is written down here (look for "EXCEL2LATEX").
1800-1900 EOPP Happy Hour
Saturday (28th):
Complied the dataset for my research. Although it's theoretical, to motivate my research, it's good to present the data showing what I'm trying to explain is in fact a reality. (I followed Tim's advice last week.)
Sunday (29th):
Started reading Esteban and Ray (2006) to hone my skill of writing a theoretical paper. Debraj Ray's papers are good for this purpose - they are theoretically rigorous but still carry a huge relevance to reality so I don't get bored. What struck me during this week (and during the Christmas holidays, when I worked on the same research idea) is the fact that I haven't been exposed enough to theory papers. (This is partly because both development economics and political economy these days tend to be empirical (for development economics, to the extent that Dilip Mookherjee - one of the leading theoretical development economists of the present days - expresses his concern that there is too little theory in the field) and because due to my research topic I've been forced to read tons of descriptive (ie. non-mathematical) papers in political science, which was more often than not agony.) That is why I took almost a week to write up even a sketch of a simple model, or so I thought.
Also started proof-reading the proofs of Tim's forthcoming book as part of research assistance work for Tim.
Here's an example of my daily life as an economics PhD student at LSE interested in development economics.
Monday (16th):
1300-1400 Development & Growth PhD Seminar
1430-1600 Job Market Seminar by Tavneet Suri from Yale
1700-1830 LSE/UCL Development & Growth Seminar by Eric Verhoogen from Columbia
The rest of the day - Read Esteban and Ray (2001) to figure out how larger groups can be more effective in conflict.
Tuesday (17th):
Late morning - Have a brief chat wih Tim on my own research and on our Health & Democracy project.
The rest of the day - Following Tim's advice, try to find data on agricultural tax rates in Africa and East Asia for my own research and get to know Anne Krueger et al. eds. The Political Economy of Agricultural Pricing Policy (John Hopkins University Press, 1991).
Wednesday (18th):
Morning - Following what Tim told me yesterday, run a few regressions for the health & democracy project (in vain).
1600-1730 LSE/UCL Development & Growth Seminar by Alwyn Young from Chicago
The rest of the day - Read Suri (2005) for the health & democracy project.
Thursday (19th):
Morning - An idea occurs to me and run a few regressions for the health & democracy project (in vain).
Lunchtime - Have power lunch with Sonia (by power lunch I mean a lunch over which conversations are all about each other's research)
Afternoon - Read Montalvo and Reynal-Querol (2005) for my own research. Try to find a way to get around an ad hoc assumption made in the theoretical model that I'm working on - and learn that the marginal cost of insurgency must be convex.
Friday (20th):
Morning - Try to find data on cross-country infrastructure data for my own research and remember Canning (1998).
Early afternoon - Have a chat with Maitreesh (my supervisor) on my research and receive a couple of modelling tips, told to write a short memo of the model and its analysis based on which we can talk further.
The rest of the afternoon - Work on the theoretical model for my own research and come up with an idea to implement Maitreesh's advice.
1800-1900 EOPP Happy Hour
The rest of the evening - Talk to Tianxi on where the accountability of the Chinese government comes from and then to Madhav on our potential new research project inspired by today's EOPP Happy Hour. After coming home, read Lemieux (1998) from which Suri (2005) seems to get inspiration.
Saturday (21st):
Continue reading Lemieux (1998). Then start writing a short memo of the model, following what Maitreesh told me yesterday.
Sunday (22nd):
Continue writing a short memo of the model.
This post is just to play a role of my 2006 diary, which I haven't found time for buying.
January
9(mon) 1pm: My presentation at EC501 Development & Growth PhD Seminar.
February
21(tue)-23(thu) 6pm: Alan Krueger's LSE public lecture
It's been a hectic week.
Last weekend I came to conclude that some kind of democratization does increase government consumption (see 19th October). If the dictator holds democratic elections without running for office himself, government consumption goes up. If the dictator runs for office, either winning or losing, government consumption does not change.
Last Monday I attended Torsten's lecture, realising one of his latest working papers deals with almost exactly the same question as the one I've been investigating - how democratization affects government consumption. His conclusion is that democratization followed by the parliamentary form of government increases government consumption while that follwoed by the presidential form of government does not.
Which is correct? The rest of Last Monday was spent on finding it out. The conclusion is Torsten is right and I'm wrong.
The next morning I talked to Torsten on this. He seems happy. :) But it seems to me that this is the result I was looking for. This government consumption project seems to reach its conclusion. So what should I do next?
On Thursday, I talked to Tim on this. When I started talking about my idea that turned out to be wrong, he showed his interest in whether or not the dictator runs for office. I used it as a right hand side variable (a variable explaining something else). He suggested to use it as a left hand side variable (a variable to be explained). Conversations flew and leadership survival in autocracy - when economic conditions make a difference in leadership turnover in autocracy - came out as a promising research topic. There is a huge literature on this in politicla science. But, as usual with political science, there has been no formal theory and their regressions always suffer from endogenous bias (ie. unable to tell the direction of causality). So there is room for an economist (ie. me) to investigate the issue.
Somehow, I saw some light. But the story didn't end here. (To be continued...)
My presentation, scheduled a week on Monday (14th), is postponed to the first week of next term. A job market candidate who was supposed to present next Monday takes my slot as another job market candidate also presents his work at the same time next Monday in a different PhD student seminar (the macroeconomics field), dividing LSE faculty members as the audience. For job market candidates, giving presentations at this time of the year is a practice for their job talks early next year. So it's good for them to have as many faculty members as possible in the audience and to have them provide critical comments. Since last year, the LSE faculty has got more serious on the placement of their job market candidates (that's my impression). So their presentations are given higher priority than mine.
Which is very lucky to me. I was still struggling to find what I could talk about a week on Monday. I repeatedly thought about cancelling the presentation. Now I can cancel it for a good reason. Hooray!
(If you don't know anything about "job market candidates", have a look at this guide, and you'll know what job hunting for economics PhD graduates is like.)
(Before reading this post, have a look at 14th October.)
Tim asked me to come to his office to talk about my research. He knew that I got stuck with my dictatorship project. And what he told me was kind of a helping hand.
He suggested as an alternative research plan the investigation of the findings by Mulligan et al. (2004). They argue that democracy doesn't matter for economic policies empirically. This is a manifestation of the Chicago political economy school in the 1970s and 80s - political institutions do not matter for economic policies as efficiency concerns always drive the policy-making whatever political institutions are in place.
Obviously Tim doesn't like this argument - he is one of the founding-fathers of the new political economy literature, the main theme of which is how political institutions shape policies.
As their empirical strategy is quite half-hearted, this project, if less ambitious, will more likely yield returns immediately. Plus it's more or less related to what I've been doing, so it may give me a break-through in the dictator project as well.
Psychologically, this suggestion does a lot to me. Tim is a great economist - as it can be seen in this LSE news - but he's also great in terms of stimulating researchers (including PhD students) surrounding him. I believe that these years of sitting at a desk in Sticerd, the research institute directed by him, will benefit my future life as a researcher. I've learned a lot on how to create an active research environment.
Talked to my supervisor. What I should do now is (1) try to extract something from the dictatorship project, even if it's not that interesting; (2) find an applied theory work given that running regressions in the past year didn't take me anywhere, which indicates that I'm probably not good at empirical research; and (3) make even more efforts because not even having a single paper written at this stage of the PhD life (the beginning of the fourth year - PhD students usually finish their study by the end of the fifth year by writing three papers) is pretty much a red alert.
Although investigating the determinants of economic performance in dictatorship is an exciting topic, the difficulty with this topic is that there is no stylised fact on this issue at all. You can come up with any theories you like. But if that theory has no empirical backing, then it's useless. That's what I learned from my supervisor a year ago - which is why I started doing empirics.
So the best strategy right now should be to find a stylised fact that's not been fully explained by any theories...
EC501 Development & Growth PhD student seminar at lunchtime. Until last year, present at this seminar were only one junior faculty member (Oriana in the Michaelmas term or Robin in the Lent term) plus one senior public economics professor. This year, senior development economics faculty members (Tim and Maitreesh) are also among the audience. Looks like professors in the development & growth field get really serious about educating PhD students. That's definitely a good thing for us. Hooray!
This new academic year sees a couple of changes in the courses offered to PhD students of economics at LSE. One of such changes is a new course EC524: Empirical Methods in Applied Economics. This course aims to bridge the gap between pure econometrics and empirical economic research. It's often the case that what you learn in a standard econometrics course is not enough to do empirical research in applied fields (labor economics, development economics, etc). You often find that what econometric researchers - those developing estimation techniques by using statistical theories - say in their econometrics lectures is different from the consensus among empirical researchers - those analysing economic data by using the estimation techniques - in applied fields. Such differences can be learned by reading empirical papers on your own, through research guidance by your supervisor, or from comments to your seminar presentation on your work.
Obviously this is not the most efficient way to learn. Hence this course. I think this kind of course is very rare even amont US top schools. Luckily, the lecture notes of the first part of the course - nonstructural identification lectured by labour economist Professor Steve Pischke - are accessible to anyone. If you're interested, check them out. It's very useful to anyone conducting microeconomic empirical analysis, especially program evaluation.
A new academic year begins, after the whole summer of unproductive research of mine. (It was not that I was lazy. I mean that returns to efforts I put into my research were very low.)
The Department of Economics at LSE runs EC501 Work-in-progress Seminar - the seminar where PhD students have to make presentations on their research - separately in several fields of specialization (see here for the list of fields). This year development economics (called Development & Growth) and public economics are separated, which is a good thing as last year there were so many PhD students in the combined field so not every student could present their work. (But these separated two seminars are scheduled at the same time, which is inconvenient for those interested in both.)
The Development & Growth PhD seminar takes place in Monday lunchtime. Today, after we go through guidelines for presentation (which could be useful for any econ PhD students), presentation slots are allocated among us. Higher-year students are required to present first. So my slot is 14th November even though at the present moment I don't have anything to talk about...
The second DESTIN-STICERD joint seminar. (See here for the first one held last November.)
This time, the main theme is "Aid and the End of Poverty". As it suggests, the background is Jeffery Sach's recent book The End of Poverty (see 9th April for Sach's basic argument) and a recent political initiative undertaken by the British government to end poverty in Africa (see Commission for Africa website).
The first speaker is Francesco Caselli, representing development economists. His main point is that the effectiveness of aid depends on which world the poor live in, the nonconvex one or the convex one.
In the nonconvex world (or the world endowed with increasing return technology), the poor cannot get richer because of (1) minimum consumption to survive (therefore they can't save at all), (2) lack of education, (3) lack of healthiness, and (4) lack of infrastructure. But if your wealth exceeds a certain level, then these problems are suddenly solved, hence you start getting richer and richer. This is the world Jeffery Sachs envisions, and the rationale for more aid as aid money brings the poor immediately above the threshold level of wealth.
In the convex world (or the world endowed with decreasing return technology), on the other hand, the poorer you are, the higher the investment return. In this case, aid is wasteful because at the end of the day everyone reaches the equilibrium level of wealth (remember the Solow growth model). What matters is the curvature of production function, which is affected by, say, governance.
Therefore, the question is which world the poor live in. Based on evidence available, the convex world seems more likely as empirical studies have shown that return to education is higher in poorer countries and that return to physical capital is also higher in poorer countries (see Professor Caselli's own working paper).
He also raises two questions. Are the middle class people (whose wealth level is above the threshold in the non-convex world) becoming richer fast? If so, the world is non-convex. Is there any evidence that aid triggered the take-off of the economy? If so, the world is non-convex.
The second speaker is Dr. Teddy Brett from DESTIN. He points out quite a few countries where aid worked because the government was good (Uganda after the 1980s, India, Botswana, Ghana, Mozambique, Morocco, and, to a lesser degree, Egypt). So we shouldn't be so pessimistic. His main point is that aid is effective with good governance, which consists of bureaucratic capacity and the government's commitment.
Now it's PhD students' turn. The third speaker is Masa Kudamatsu from STICERD.
Yes, I was the speaker. :) I talked about under what conditions self-interested political leaders are willing to use aid money to tackle poverty. I introduced two theories in the literature of policy-making in autocracy.
The first one is Mancur Olson's stationary bandit theory (see McGuire and Olson 1996). According to this theory, political leaders tackle poverty by using aid money if both of the following two conditions are met: (1) The government is capable of collecting taxes (Self-interested politicians are assumed to consume tax revenue for their own benefit, and therefore we need to have a positive correlation between poverty reduction and tax revenue); (2) Political leaders won't be ousted in the near future (otherwise leaders cannot reap the benefit from poverty reduction even if the first condition is met).
The second one is the agency model approach (or what is sometimes called the political accountability model), first proposed by Barro (1973) "The Control of Politicians: An Economic Model", Public Choice, 14, pp.19-42, and Ferejohn (1986) "Incumbent Performance and Electoral Control", Public Choice, 50, pp.5-25. Although these two authors had in mind democratic politics, the basic idea can be applied to autocracy as well (see Gallego and Pitchik 2004, for example). This theory tells us again that we need both of the two conditions to be satisfied so that self-interested political leaders are willing to tackle poverty out of aid money: (1) the poor can play a role in leadership selection (otherwise political leaders will stay in office without tackling poverty); (2) the poor can trust a potential new leader who will assume office after the current leader is ousted (otherwise, the poor are happy with the incumbent who takes poverty serious only marginally because the alternative to the current leader is even worse). (The second point was brought to attention by Bueno de Mesquita et al. 2002, and Padro-i-Miquel 2004 applied it to African ethnic politics.
I couldn't effectively connect these ideas to the points raised by the two faculty members earlier in the seminar. That was my regret. But I guess the presentation went well overall as Robert Wade, a professor from DESTIN, told me it was interesting and crisp. (I didn't know the meaning of "crisp". Later I looked it up in the Collins Cobuild English Dictionary; it says, "If you describe someone's writing or speech as crisp, you mean they write or speak very clearly, without mentioning unnecessary details.") Special thanks goes to Paolo, who gave me comments on my slides, saying, "Difficult to understand." :)
The last speaker is Elliot Green from DESTIN. He is a specialist of Uganda. He points out that the headcount ratio (the percentage of the poor over the total population) in Uganda had been in decline during the 1990s but went up around 2000. He attributes this dynamics to the coffee price in the world market. If you look at the headcount ratios by region, the number of poor people is falling mainly in the central region, where coffee beans are produced. Plus, the world coffee price was on the rise durng the 1990s and began falling until 2002. He also mentions that democratic elections for regional governments in Uganda actually caused a fall in tax revenue because the governments cut taxes in order to win votes. This is detrimental to good governance in his view (and, it seems, in the view of most development studies researchers) because the link between the government and citizens is broken without tax collection. (This argument is shared by The Economist magazine as well. See this article.)
So there seemed to be a consensus between me and Elliot (and some DESTIN students) that tax collection is key to poverty reduction.
During the floor discussion that followed, a couple of interesting interactions between economics and development studies emerged. In relation to Professor Caselli's question - is the middle class people getting richer quick? - Bettina, a DESTIN student, pointed out the fact that middle class people in poor countries simply invest their money overseas or emigrate to rich countries. Prof. Caselli's response was that it indicates the return to investment for middle class people is low, supporting the idea of the convex world.
Also in response to Professor Caselli's comment that good governance comes with a good leader, which is more or less a matter of luck, Dr Brett raised an interesting point. President Yoweri Museveni of Uganda and former President Charles Taylor of Liberia were both rebel leaders who succeeded in defeating the government forces. But under Museveni's rule Uganda has seen improvements in the economy (with caveats pointed out by Elliot, though) while Charles Taylor just brought another civil war to Liberia (see this BBC article). The difference between these two cases is, in Dr Brett's view, higher education. Uganda received a lot of aid money to improve its higher education system in the 60s and 70s, which President Museveni enjoyed before turning to be a rebel leader. This didn't happen in Liberia. So Dr Brett welcomes one suggestion made by the Commission for Africa that aid should target higher education in order to bring about good governance. This point is revealing to me as development economists all ignore the role of higher education in development.
The seminar ended with this argument on the quality of leadership. This is somehow encouraging to me because that's what I'm now trying to figure out: how the quality of leadership is determined in nondemocratic countries.
Overall, I benefited a lot from this seminar though other STICERD people didn't seem to (plus, none of STICERD professors attended the seminar)...
Debraj Ray's LSE public lecture titled "Polarization and Conflict". One of the best lectures I've ever attended, in the sense that it synthesizes theoretical and empirical works done by economists (including the lecturer himself, of course) to answer a practical question.
The lecture begins with the following question: Does ethnic division matters for civil war? Although there are quite a few reasons you can think of in favour, statistical analysis done by economists and political scientists has failed to identify the effect of ethnic division on the occurrence of civil war (see Fearon and Laitin (2003) "Ethnicity, Insurgency, and Civil War", American Political Science Review, 97, pp.75-90). This does not exclude the possibility that ethnic division indirectly affects civil war through, say, poverty. But the consensus emerging from the empirical literature is that ethnic fragmentation does not have a direct impact on civil war.
Professor Ray now asks this: Is the measure of ethnic division appropriate? The measure those empirical researchers have used is called "ethnolinguistic fractionalization index", which measures the probability that two people randomly picked up from a country belong to different ethnic groups (a good reference is probably Easterly and Levine 1997). Horowitz (1985), a book that takes a historical - rather than statistical - approach to this issue, suggests that broad cleavages, not fractionalization, matter. Civil war is more likely to happen when we see, in a given country, two large distinct groups rather than a large number of different groups. But how can we conceptualize this notion of "broad cleavages"?
Professor Ray, along with Joan Esteban, already made this happen in 1994 (see Esteban and Ray 1994). He created a measure of polarization. This measure captures two ideas: identity and alienation. Identity refers to how many people you are identified with - what can be called "local equality". Alienation refers to how far other people are from you - something called "global inequality". As civil war is not something you can do individually, you need to capture something social. That's what "fractionalization index" fails to do. But Esteban-Ray's polarization measure does.
Now a forthcoming paper in American Economic Review - "Ethnic polarization, potential conflict and civil wars" by Jose G. Montalvo and Marta Reynal-Querol - utilises this concept of polarization and does the same empirical analysis as Fearon and Laitin (2003) (see above). Guatemala, Sierra Leone, Nigeria, and Bosnia, countries well-known for civil war, turn out to be countries with high polarization index but low fractionalization index. Even after controlling for a bunch of other variables - income per capita, population, geography, etc. - it is shown that the index of polarization does have a direct impact on the probability of civil war.
The lecture closes with a remaining issue: Do economic differences across groups matter for conflict? Empirically, this question is hard to answer due to lack of data. But it's beginning to be collected. Theoretically, there are two types of civil war: vertical war (poor vs. rich ethnic groups as in Rwanda and Burundi) and horizontal war (economically similar groups fighting each other as in Nigeria). Research is now going on to figure out how economic differences across groups affect the occurrence of civil war.
