Why Africa is so poor

5 May, 2016 at 19:15 | Posted in Economics, Statistics & Econometrics | 1 Comment

A few years ago, two economics professors, Quamrul Ashraf and Oded Galor, published a paper, “The ‘Out of Africa’ Hypothesis, Human Genetic Diversity, and Comparative Economic Development,” that drew inferences about poverty and genetics based on a statistical pattern …

dumb_aWhen the paper by Ashraf and Galor came out, I criticized it from a statistical perspective, questioning what I considered its overreach in making counterfactual causal claims … I argued (and continue to believe) that the problems in that paper reflect a more general issue in social science: There is an incentive to make strong and dramatic claims to get published in a top journal …

Recently, Shiping Tang sent me a paper criticizing Ashraf and Galor from a data-analysis perspective … I have not tried to evaluate the details of Tang’s re-analysis because I continue to think that Ashraf and Galor’s paper is essentially an analysis of three data points (sub-Saharan Africa, remote Andean countries and Eurasia). It offered little more than the already-known stylized fact that sub-Saharan African countries are very poor, Amerindian countries are somewhat poor, and countries with Eurasians and their descendants tend to have middle or high incomes.

Andrew Gelman

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  1. There are complex social and historical reasons why wealth is concentrated in Europe, North America and later in East Asia, but not in the Middle East, South America, and especially Africa, but mainstream economists will never begin to get anywhere near understanding these important questions because they never really want to ask them in the first place. It would require multidisciplinary analysis and engagement with other social scientists, historians, and basically putting models away for a while all together.

    We see this all the time. For example Krugman sees a correlation in the data and immediately sees Dear Model as explaining causation and then leaps to the inevitable policy conclusion:

    http://krugman.blogs.nytimes.com/2016/05/04/real-exchange-rates-and-european-adjustment/?module=BlogPost-Title&version=Blog%20Main&contentCollection=Opinion&action=Click&pgtype=Blogs&region=Body&_r=0

    He does not ask why a devaluation is unlikely to get the same results in the periphery of Europe as it would in the industrial north where the Marshall-Lerner condition would be more likely to be satisfied. If he was genuinely interested he would engage with country specialists who would explain what happened when devaluations were attempted pre-Euro. But no, that involves real history and explanation.


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