The Douglass North Best Book Award
This year’s winner of the 2022 Douglass North Best Book Prize is The Gilded Age: The Paradox of Economic Growth and Vast Corruption, by Yuen Yuen Ang. Dr. Ang is a professor of political science at the University of Michigan.
As members of SIOE know, the prevailing view of corruption is that it stifles economic growth. Yet counterexamples exist, even if we often think of them as exceptions that prove the rule. For example, the “robber baron” age in 19th-century U.S., or China over the last 40 years. Dr. Ang focuses squarely on trying to unravel the seeming paradox of growth coexisting with corruption. In doing so, she develops provocative new theory to distinguish among different types of corruption, each of which has a distinct impact on economic activity. She combines this with novel exploration of data to derive support for her theoretical arguments. Ultimately, Dr. Ang delivers a compelling explanation for the apparent paradox of China’s high growth and high corruption – based on the specific nature of corruption in current China – and demonstrates that similar conditions existed in the U.S. during its 19th-century “robber baron” period, thus suggesting that such “exceptions” can be explained theoretically. This outstanding book has already made substantial waves in academia and in policy circles, and we are confident that it will influence the direction of research on corruption for years to come.
We thank Professor Ang for producing this wonderful, thought-provoking book, and we are delighted for SIOE to honor The Gilded Age with the 2022 North Book Award. And, we encourage all SIOE members to read The Gilded Age and share it with their friends and loved ones!
The Ronald H. Coase Dissertation Award
The 2022 Ronald H. Coase Dissertation award goes to Ashutosh Thakur for his dissertation titled, “Essays on the Applications of Matching Theory to Political Economy.” Ashutosh completed a PhD in Political Economy at Stanford University’s Graduate School of Business in 2021 and is now Assistant Professor at National University of Singapore. Ashutosh’s dissertation applies the tools of market design and matching theory to public institutions, a dissertation that one of his committee members has described as “path-breaking.” The awards committee agrees.
The dissertation includes two entirely different applications of market design. The first study explores the matching mechanism within the Indian Administrative Service, and specifically the allocation of civil service officers to geographies. Ashutosh finds evidence for imbalances results in assigning poorer quality bureaucrats to disadvantaged states. Importantly, he does not stop there, but instead digs deeply into the causes, costs, and other implications of these imbalances. His second study applies matching tools to an entirely different setting, the United States Senate and how committee assignments are decided. He finds that the two dominant political parties apply different matching rules, and these different rules have different ramifications for how assignments operate. Overall, his approach reveals the power of applying mechanism design to these settings.
Throughout our discussion of Ashutosh’s work, the committee was impressed by three attributes of his dissertation. First, its novelty and aspiration: this was an ambitious body of research that takes market design methods into new territory and thereby opens up new perspectives on understanding public institutions. Second, its execution: each study was outstanding, combining the technical approach of mechanism design with realistic assumptions about power and politics that are central to how governments operate. Lastly, its coherence: the settings of Ashutosh’s two studies could not be more different, and yet the dissertation coheres into single intellectual contribution that extends beyond the sum of each chapter’s contributions on their own. In short, he has produced a deeply researched dissertation that convincingly demonstrates the value of applying market design to public institutions.
Ashutosh’s work exemplifies the scholarship that SIOE exists to support: “rigorous theoretical and empirical investigation of the nature, behavior, and governance of organizations and institutions,” and we are happy to recognize it in the context of this award.
The Oliver E. Williamson Best Conference Paper Award:
The 2022 Oliver E. Williamson Best Conference Paper goes to “The Dynamic Consequences of State-Building: Evidence from the French Revolution” and to the authors Cédric Chambru (University of Zurich), Emeric Henry (Sciences Po), Benjamin Max (Sciences Po).
In this inspiring paper, the authors look at the long-run effect of state-building on economic development. They look back to one of the most formative periods of modern Europe, the time after the French Revolution of 1789. In 1790, the Constituent Assembly had to decide how to organize government and they created the departmental structure of modern France. The Assembly met a massive challenge – how to decide on the capital of each department. While initially, because of equality concerns and political pressure, it was considered to rotate administrative functions across cities, this idea was dropped, making the temporary capital the permanent one.
Comparing the development of cities that were initially considered with the ones that were finally chosen the authors find moderate effects in the medium term, but strong long-term effects in terms of population growth, public goods and productivity. This is even more remarkable, because in the short run, cities chosen as capitals raised more taxes and conscripts., resulting in lower short-term growth.
The paper is based on a smart identification strategy, subtle theoretical arguments and a fascinating account of how political decision-makers tried to solve a complicated problem of state-building and how impactful their decisions turned out to be.