FAITH & ECONOMICS

NUMBER 66, FALL 2015

ARTICLES

The Christian Economist
Bruce Wydick

Physical Geography and the History of Economic Development
Gordon C. McCord and Jeffrey D. Sachs

Abstract: The geographical patterns of income differences across the world have deep underpinnings. We emphasize that economicdevelopment is a complex process driven by economic, political, social, and biophysical forces. Some economists have argued that the patterns reflect mainly the historical footprint of colonial rule and political evolution, and that geography’s effects on development occurred exclusively through its effects on this historical institutional development. We suggest that economic development has also been shaped very importantly by the biophysical and geophysical characteristics of economies. Per capita incomes differ around the world in no small part because of sharp differences across regions in the natural resource base and physical geography, and by the amplification of those differences through the dynamics of saving and investment. We posit that the drivers of economic development include institutions, technology, and geography, and that none of these alone is sufficient to  account for the diverse patterns of global growth. This paper discusses the role of physical geography ineconomic history, surveys relevant literature, presents new geographic variables for scholarly use, and documents empirical regularities suggesting an important role for geography in the distribution of economic activity around the world today.
JEL Codes: O1, N1, R1.
Keywords: development, geography, economic history.

Urbanization, Diet Change, and the Transformation of the Downstream and Midstream of the Agrifood System: Effects on the Poor in Africa and Asia
Thomas Reardon, Duncan Boughton, David Tschirley, Steve Haggblade, Michael Dolislager, Bart Minten, and Ricardo Hernandez

Abstract: In Africa and Asia, agrifood markets are important to the poor, and current rapid changes in these markets have implications for the poor. First, as a share of the national market, urban markets have gone from marginal some decades ago to dominant today. Thus the urban market is a main food product market the poor face as sellers. Second, the poor are exposed to the product market often as net buyers of products (both from local sources but also increasingly from urban sources of processed foods and fresh products re-“exported” from urban to rural markets). Third, the poor are also very exposed to labor markets as sellers of labor—both to the rural nonfarm and the urban labor markets. Fourth, the product market has transformed from mainly a grain market some decades ago to a market diversified byond staples into fruits, vegetables, meat, fish, dairy and edible oils. There is a chance for the poor to gain from this shift toward higher-value non-staples as farmers, and as workers since the employment multipliers are high from non-grains. Fifth, agrifood markets are also transforming structurally. Supply chains are getting geographically longer with urbanization, and developing (with a proliferation of SMEs in the early stages) and consolidating (with the emergence of supermarkets and large processors in the more advanced stages). This may lower food costs for the urban poor and increase the scope and volume of the urban market for rural suppliers. In sum, urbanization, diet change, and food system transformation all offer opportunities for the poor as suppliers of labor and products and sellers of labor. But accessing these opportunities requires “threshold investments” in human, physical or locational assets by the poor to seize these opportunities. The requirements can be geographic (hence geographic poverty traps) and micro (skills, productive assets).
JEL Codes: 012, 013, Q12, Q13.
Keywords: agrifood markets, food system, farm households, urbanization, poverty, rural suppliers.

Religion and Female Education: Trans-Megabloc Effects
Seth W. Norton and Annette Tomal

Abstract: This paper examines the link between trans-megabloc Christian groups and female education—both the attainment levels and the education gender gap—using the Barro-Lee education dataset for a sample of 97 countries. The term trans-megabloc (Barrett, Kurian and Johnson, 2001) refers to groups that are defined by a set of beliefs/behaviors that transcend Christian denominations or the categories of Catholic, Protestant, and Orthodox Christians. The three trans-megabloc groups are evangelicals, great commission Christians, and Pentecostal/charismatics. Other control variables are urbanization, tropics, colonial heritage, female labor force participation, and young adult mortality. Results show that increases in the percentage of trans-megabloc Christians decrease the proportion of unschooled population and increase the proportion of women who attain higher education. The greater the proportion of trans-megabloc Christians in a country’s population, the smaller the education gender gap for both unschooled and higher educational attainment. In no case for trans-megabloc religious groupings do we find significant bias against female educational attainment in an absolute sense or relative to male educational attainment. When other religions are included in regression estimates, the favorable trans-megabloc effects are muted and less statistically significant. In contrast, the negative effects of other religions are robust and nearly uniform for both female educational attainment and the female/male gender gap.
JEL Codes: I24, I25, Jl6, O15, Zl2.
Keywords: female education, educational attainment, education gender gap, religion, Christianity, trans-megabloc.

Institutions, Geography, and Trade: A Panel Data Study
Jeffry Jacob and Thomas Osang

Abstract: This paper employs a panel data approach to examine the impact of institutions, trade and geography on economic development. Our approach enables us to account for unobserved heterogeneity across countries, an issue that cannot be addressed in the cross-section framework. Moreover, employing the Hausman and Taylor approach allows us to obtain direct parameter estimates of the time invariant explanatory variables like geography or some institutional measures. Our findings are that institutions, economic integration, and geography are valid determinants of economic development with regard to statistical significance and  robustness but differ substantially in terms of their economic impact.
JEL Codes: O1, F1.
Keywords: development, institutions, openness, geography, panel data

Household Preferences for Municipal and Community-Managed Services: Survey Results from Guatemala
William F. Vásquez

Abstract: This article investigates household preferences for municipal and community-managed water services using survey data from Guatemala. Household preferences are elicited using a set of questions where respondents could choose between the municipality and a community-based water organization based on some institutional and service characteristics. Responses to one of those questions allow for identifying the households that would change water supplier if given the opportunity to do so. Results indicate that almost half of respondents with community-managed services would opt for changing to municipal services. In contrast, few respondents with municipal services (11.6 percent) would change to a community-managed system. This can be partially explained by perceived differentials in institutional characteristics such as responsiveness, capacity, and support from the central government. Monetary factors also influence the willingness of respondents with municipal services to change their water supplier. On the other hand, respondents with community-managed services would change water supplier due to the unreliability of their current services. Policy implications are discussed.
JEL Codes: O2, R5, I3.
Keywords: Water service management; household preferences; institutional characteristics; water service performance; Guatemala.

REVIEW ESSAY

The Law Does Not Make Us Righteous
John P. Tiemstra

BOOK REVIEWS

The Taste of Many Mountains by Bruce Wydick
Reviewed by Geri Mason

Distant Markets, Distant Harms: Economic Complicity & Christian Ethics by Daniel K. Finn
Reviewed by Victor V. Claar

Misbehaving: The Making of Behavioral Economics by Richard H. Thaler
Reviewed by Jeffrey Bloem

Seeking the City: Wealth, Poverty, and Political Economy in Christian Perspective by Chad Brand and Tom Pratt
Reviewed by Lance Wescher

How Adam Smith Can Change Your Life: An Unexpected Guide to Human Nature and Understanding by Russell Roberts
Reviewed by Paul D. Mueller