My Conversation with Melissa Dell

By Tyler Cowen

From the impact of the Mexican Revolution to the different development paths of northern and southern Vietnam, her work exploits what are often accidents of history — whether a Peruvian village was just inside or outside a mine’s catchment area, for example — to explain persistent differences in outcomes. Her work has earned numerous plaudits, including the John Bates Clark Medal earlier this year.

On the 100th episode of Conversations with Tyler, Melissa joined Tyler to discuss what’s behind Vietnam’s economic performance, why persistence isn’t predictive, the benefits and drawbacks of state capacity, the differing economic legacies of forced labor in Indonesia and Peru, whether people like her should still be called a Rhodes scholar, if SATs are useful, the joys of long-distance running, why higher temps are bad for economic growth, how her grandmother cultivated her curiosity, her next project looking to unlock huge historical datasets, and more.

DELL: Yeah, I’ve done some work looking at the persistence of economic development in Vietnam. The work I did, actually, was limited to what was South Vietnam because there’s also been huge events, obviously, that have happened in the past hundred years in North Vietnam, with a war that destroyed much of the country and was fought over an extended period of time.

But when you look, in general, at places in Vietnam that have a similar recent history, but going back in time, one of them was part of a much stronger, more centralized state. The other one was part of what is today Cambodia, a much weaker state, generally ruled by local lords instead of by a strong centralized state.

You see the towns that were part of the stronger, centralized state going back before colonialism, so several hundred years ago. More recently, they have better-functioning local governments. They’re richer. They’re better off, which shows that places that have a long history of governance seem better able to do that more recently.

So places going back a long time ago — they were part of the central state. They had to collect taxes locally to send up to the central state. They had to organize military conscripts. The central state mandated that they had certain laws.

More recently, those places also have more functional local governments and are also better off economically, whereas the places that never had that structure that comes from a state — it was, essentially, if you were living in that area, there’d be a warlord that you sent tribute to. But there was never any regular taxation, never any organized local government under a central state. Those places much more recently — when there were constitutional reforms in Vietnam that gave them a degree of self-government — they weren’t able to do that very effectively.

They weren’t able to keep the positions on their local city council filled. They weren’t able to provide, as effectively, local public goods, like education or health services. So really, having this long history of governance makes places more able to do that today. That’s relevant because there’s been a big push to have local governments provide an important role in providing public goods, et cetera.

If places don’t have a history of doing that, perhaps not surprisingly, they tend to have a much harder time. When the World Bank says, “Well, we want to give local autonomy to let local governments decide how to provide schools in the way that works best for them,” that’s going to work in places that have a long history of providing education. In places that don’t, they’re more likely to have a hard time.

COWEN: But if you select your cases on the basis of having similar histories, aren’t you selecting for persistence because the locales that have reversals of fortune — a big war in North Vietnam, Communism coming to North Vietnam — that’s a kind of mean reversion. It deliberately gives them a not-similar history. Do you then not overrate the degree of persistence in the dataset by just taking the sliver that is indeed continuous with its own history?

DELL: I think that you could imagine writing papers about different things. Our motivation was, we wanted to think about if the historical state could have a role at all. In order to do that, you don’t really want to compare South Korea to the Philippines — which is what most of the historical literature on this does — because they’re different in so many ways. We know that South Korea looks really different from the Philippines, but there’s so many ways that they can be different.

By looking within South Vietnam, we wanted to say, “Okay, these are places that had a much more recent modern history. Can their past history still matter?” But we’re not saying that that begins to explain everything. There’s other forces that happened more recently that we think are also important.

Certainly, there can be mean reversions, and the argument is not that things are always persistent. I think part of the literature is about understanding why sometimes things persist and sometimes they don’t. Certainly, more recent events can matter, and we’re not claiming that there’s an R-squared of one that a place’s history is its destiny, but that there are these forces.

Next up will be Nathan Nunn, and I asked him a series of related questions about persistence…