Women’s Trade Union League Parade, 1908

Organizations, Civil Society, and the Roots of Development

Modern developed nations are rich and politically stable in part because their citizens are free to form organizations and have access to the relevant legal resources. Yet an estimated 80 percent of the world’s people live in countries that do not allow these freedoms. Why?

Contributors to Organizations, Civil Society, and the Roots of Development, a new NBER volume from the University of Chicago Press, seek to answer this question by exploring how developing nations of the 18th and 19th centuries — including the United States, United Kingdom, France, and Germany — made the transition to allowing their citizens the right to form organizations. Initial patterns of change were in the opposite direction, as political coalitions restricted potential rivals for political control. Ultimately, however, it became clear that these restrictions threatened the foundation of social and political order.

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Declining Productivity Growth in the Developed World
Related to Reduced Ability of R&D to Unearth New Ideas

Growth in the developed world — where growth depends primarily on new ideas — has been in slow, steady decline since the end of World War II, while so-called catch up growth in China and India has been accelerating, keeping global growth relatively stable, Nick Bloom of Stanford University and the NBER observes. The problem for the United States, Europe, and Japan is that "ideas are simply becoming harder to find…. What we’re seeing is R&D expenditures ever increasing but productivity growth slowing down.” His working paper on the subject and other papers by NBER researchers on related topics are featured on the Bureau's new page on Productivity and Growth.

New NBER Research

12 December 2017

Mutual Funds as Venture Capitalists?
Evidence from Unicorns

Large mutual funds with comparatively stable funding are more likely than other funds to invest in unicorns — highly valued, privately held start-ups — according to a study by Sergey Chernenko, Josh Lerner, and Yao Zeng. Having to manage their liquidity more carefully than venture capital investors, the mutual funds require stronger redemption rights.

11 December 2017

Exploding Asthma and ADHD Caseloads:
The Role of Medicaid Managed Care

In the U.S., nearly 11 percent of school-age children have been diagnosed with ADHD, and approximately 10 percent of children with asthma — numbers that have risen inexplicably in the last decade. The increase is concentrated in the Medicaid caseload. Anna Chorniy, Janet Currie, and Lyudmyla Sonchak find that the widespread change in Medicaid programs from fee-for-service reimbursement to managed care contributed to the increase.

8 December 2017

Diagnosing the Italian Disease

Italy’s labor productivity stopped growing in the mid-1990s. An analysis by Bruno Pellegrino and Luigi Zingales suggests that this was likely caused by the failure of Italian firms to take full advantage of the revolution in information and communications technology. Lack of meritocracy in the selection and rewarding of managers due to familyism and cronyism may have contributed to this outcome.
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Why Small- and Large-Size Farms in India
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Labor market practices and the cost of acquiring capital goods combine to make small- and medium-size farms in India more productive than moderate-size farms, a study featured in the new edition of The NBER Digest shows. Also featured in this month’s issue of The Digest: An exploration of the rise in corporate cash holdings since 2000, a comparison of flood-risk fears among coastal and inland dwellers in Rhode Island, an evaluation of the efficacy of performance ticket auctions in discouraging speculators, a study of the impact of cutbacks in H-1B visas, and an analysis of housing wealth fluctuations on seniors’ health care choices.
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Integrated Assessment Models Have Transformed
Scholars’ Approaches to Coping with Climate Change

The science, economics, and policy of climate change involve fields ranging from atmospheric chemistry to game theory, creating an imperative for development of models that integrate knowledge from multiple domains into a single framework. William Nordhaus, creator of two such models, writes about his work in the current edition of The NBER Reporter. Also featured in this quarter's issue, NBER affiliates report on their work identifying barriers to postsecondary educational achievement in the United States, exploring gender discrimination in the developing world, and linking an influential 200-year-old theory to modern economics. The issue includes text and video of the annual Martin Feldstein Lecture.
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Under-Reporting of Deaths among Non-Whites
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Contrary to social scientists’ expectations, traditional mortality rate models have shown blacks and Hispanics having significantly lower mortality rates than non-Hispanic whites at the oldest ages. A study summarized in the current edition of the NBER's Bulletin on Aging and Health finds that these anomalies can be explained by varying degrees of unreported deaths among races. The researchers find that an error-corrected model that accounts for unreported deaths produces mortality rates that are in line with socioeconomic expectations.
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