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An easy way of observing and predicting changes in the structure and behavior of any free-market economy is to track changes in its circular flow model of economic activity. Using book titles as a literature review in combinations with a few classics, I describe how the circular flows of free -market economies evolved from little, gentle, and now nearly powerless government role, culminating in super-duper capitalism. First the evolution generated great wealth and income, and of late also increasing inequality. Processes like globalization that allowed for economic convergence also spurred enormous tensions. The resulting stresses and strains are responsible for unpopular populism and nationalism. The doughnut economic model provides a reasonable framework for explaining what we observe. It shows a decline in the social foundations of human rights, made worse by breaches in the “planetary boundaries” both of which squeeze the livable space ever more tightly like a boa-constrictor suffocating its prey. In this paper I do not go as far as measuring my observations, but the directions for policy and future research have clearly been established. Regarding the latter, one may want to examine how COVID19 has shocked into scurrying towards a delusion of a system that was already slouching towards an illusion. It turns out that the illusion is not a new prediction. In his critique of Marx and rationalization of Kondratieff’s waves (K-waves) Schumpeter predicted that capitalism as an innovation is not immune to the “gale of creative destruction.”Keywords. Circular flow model, Doughnut economic model, Social foundations of human rights, Inclusive and sustainable development, Planetary limits, Unpopular populism, Super-duper capitalism.JEL. O47, O33, E19, Z0.

This paper develops a framework (a) to examine whether or not the African business e nvironment hinders or promotes the knowledge economy (KE), (b) to determine how the KE affects econom ic performance, and (c) how economic performance relates to the inequality-adjusted human socioeconomic development (IHDI) of 53 African countries during the 1996-2010 time period. We estimate the linkages with three related equations. The results support a strong correlation between the dynamics of st arting and doing business and variations in KE. The results also show that there exists a weak link between KE and economic performance. Nonetheless, KE-influenced performance plays a more important role i n socioeconomic development than some of the conventional control variables like foreign direct investment (FDI), foreign aid, and even private investment.

GDP remains too much of an imprecise measure of the standard of living. There is a need for either substitutes or complements. Nighttime lights are a reasonable indicator of the extent, scale, and intensity of socio-economic activities, but a poor measure of national welfare. However, if nighttime lights are understood to constitute externalities, then their effects can be used to adjust measured growth for welfare. From that angle, nighttime lights appear to exert sub-optimal positive externalities in developing countries, and supra-optimal negative externality in developed countries. This means that even if we assume equal growth rates in developing and developed countries, welfare is enhanced by increasing nighttime lights in developing countries and reduced by increasing nighttime lights in developed countries.Keywords. Artificial lights and economic growth, Nighttime lights and growth, Growth and welfare, Nighttime lights and real well-being (welfare).JEL. H23, O15, D62, I12, O47, I31, R13, Q52.

We argue that there exists an indirect link between globalization and the knowledge economy of African countries in which globalization influences ‘peace and stability’ and peace and stability affects governance, and through governance the knowledge economy. We model the link as a three-stage process in four testable hypotheses, which permits an empirical analysis without sacrificing economic relevance for statistical significance. The results indicate that the impacts on governance of peace and stability from globalization defined as trade are stronger than those of peace and stability resulting from globalization taken to be foreign direct investment. We conclude that foreign direct investment is not a powerful mechanism for stimulating and sustaining the African knowledge. However, since the effects of globalization on peace and stability can influence governance both positively and negatively, we also conclude that the prospect for the knowledge economy in African countries may be realistic and attainable, as long as these countries continue to engage in the kind of globalization that enhances peace and stability.

One of the key economic development challenges facing Sub-Saharan Africa (SSA) is its low agricultural productivity. Governments, donors, and foreign investors have underinvested in African agriculture even though research evidence shows that higher agricultural productivity would boost economic growth and poverty reduction. Solutions to the problem require a number of interconnected strategies, including, but not limited to, research on seeds and inputs, extension services, rural development, credit, institutional, and trade and price stabilization policies. We use the system two-step Generalized Method of Moments to examine whether official development assistance (ODA) for agriculture and rural development is helping to boost agricultural productivity. We find a positive relationship between ODA and agricultural productivity. However, when broken down into the main agricultural ODA recipient sectors, there is a substitution effect between food crop production and industrial crop production. While there exists a positive relationship between ODA for industrial and export crops output per worker (agricultural productivity), ODA for food crops has a negative relationship. Better public institutions and economic freedom are also found to enable agricultural productivity growth and to increase the ODA effectiveness. We correct the results for spurious correlation assuming that more ODA might be allocated where agricultural productivity is already increasing due to some other factors. Concerning the determinants of ODA allocation, we find that the allocation of ODA for agriculture is primarily determined by agricultural need, and that the expected effectiveness increases the ODA receipts. Finally, there is a weak ODA-led structural economic change effect in SSA. Labor released from agriculture to the urban sector(s) has a positive market effect on agriculture but is not engendering significant structural economic transformation.

Salter’s simple and clear explanation of productivity and how it relates to technical change has anchored many elaborate and fancy growth and change analyses. Unfortunately many of these elaborations do not even reference Salter. They should. This note shows that some old ideas are like wine which gets better with age.Keywords. Salter and productivity; Salter and technical change; productivity and technical change.JEL. O30, 040.

I use a seemingly simple analogy of lunar and solar eclipses and set theoretical language to characterize how objects (factors) and ideas (forces) have determined the course of economic progress. In the early Ages economic progress depended heavily on objects, i.e., objects eclipsed ideas. From the end of Classical Antiquity to the present, objects, ideas, and their interactions and intra-actions have driven economic progress. The future of economic progress would depend principally on ideas, not because objects would vanish, but because object productivity would increasingly depend on ideas. While the welfare implications of the full idea eclipse of objects are difficult to pin down, they are not inconceivable. One obvious outcome is that different regions and countries will continue to perform differently because ideas will remain unevenly distributed, and even when they are evenly distributed, they will not be equally productive in all places. Such a policy implication recommends more investment in ideas than in objects in order to close the gaps in economic progress across regions and countries.Keywords.Economic progress, Object-idea eclipse, Idea-object eclipse.JEL. O10, O33, O47, N10.

This paper comments on a number of social obstacles to the economic growth and technological change of African economies from the perspective of economic history. Economic history is full of evidence about what held African economies back for years. Some obstacles are of domestic origin such as excessive consumption and luxury masqueraded as public investment. Other obstacles were imposed from outside such as the destruction and weakening of traditional African religions and religious leadership as well as other wide ranging institutions. The combined effects can be summed up in one word: de-institutionalization. De-institutionalization devalued local knowledge (technology) thereby reducing performance. It is not possible to turn the clock back, but current policy is better-off bringing these obstacles into discussion as they stand a good chance of lowering the socalled “Africa dummy” variable common to growth regressions. Future research would also benefit if it sought to adjust conventional economic theory to allow space for the special features of African economies. Market theory is misleading in treating private use rights as antithetical to private ownership rights. For example, the suggestion that land tenure in Africa is anti-growth is inconsistent with the spectacular growth China has experienced even without private property rights.Keywords.Social obstacles, Growth and change, African economies, ‘Primitive’ economies, African traditional economies.JEL.N17, N27, N87, O33, O43, O55; P47, P52.

The Lucas and Romer production functions are currently the two most popular descriptions of the new growth theories in which knowledge is endogenous to economic growth and technological change. However, in both production functions the relationship between technology and human capital is implicit, and human capital is measured as an area. The latter is inconsistent with common understanding by which knowledge can be deep and wide and evolving over and in time, meaning human capital is 3D. This paper takes human capital as being 3D and frames it in Lucas and Romer production functions. Both functions bunch knowledge together, i.e., human capital and technological knowledge are strictly inseparable. Analysis and intuition find that if we take human capital to be a volume, the Lucas production function is most appropriate for use at the micro-economic level where emphasis is on production knowledge. At the macroeconomic level the Romer production function appears more reasonable, as knowledge is far more than just production knowledge. A limitation of the paper is how to actually calculate human capital as a volume and then to estimate the production functions empirically. The limitation represents a fruitful direction for future research.

Existing literature demonstrates clearly that knowledge is the sum of common knowledge and uncommon knowledge. Common knowledge is mostly inherited and it may or may not have scientific bases. Uncommon knowledge is mainly a product of the motions of science and technology. Scientific and technological motions depend on human capital, so that world knowledge is human capital by implication. From here analysis is not so unusual as the concept of human capital is not new. Through out history people have been interested in valuing human life. What prevented rapid progress in the beginning was inhibitions to likening humans to machines. As soon as economists overcame their inhibitions, human capital theory developed quickly along the familiar logistic curve, picking up speed after Mincer devised a practical formula for it. However, the Mincerian equation formalized a misconception in three ways. First, it based human capital only on labor, thereby overstating the production role and disregarding the importance of human capital in innovation and knowledge creation. Second, it measured human capital as an area, ignoring common language and understanding that as knowledge human capital is at least 3D “solid”, with depth, width, and the time over and in which it accumulates. Finally, it neglected key interactions between the quantity and quality indicators of human capital. These misconceptions are what this paper tries to shed light upon by proposing a commonsensical measure of human capital as a volume. Analysis finds that disregarding interactions our commonsensical measure of human capital is larger than conventional Mincerian measures of human capital. Taking interactions into account, it is possible for our measure to be larger, smaller, or equal to conventional measures.

This comment is not a typical outcome of a typical research activity, and it not written like one. For example, although I have a list of references, I do not provide a formal literature review. The list is simply an acknowledge of the work that might have influenced my thoughts on the topic at hand. It is also not a review or any other evaluation of Lewis’s work, of which there are many by more eminent and famous friends, colleagues, and students of his. Lewis’s impact on Development Economics is well-known and appreciated. Less known and openly appreciated is his economic theory of growth and technological change, but I am not going to stress that either. My maintained claim is that the Newly-Industrialized Asian economies (NIAEs) have read carefully and followed closely and well Lewis’s theory in devising their growth and change strategies and policies, with local adjustments, of course. Many African countries on the other hand appear to have followed Lewis halfheartedly and in a helter-skelter way. Consequently, the difference in the performance of the two regions is no longer a matter of contention. The objective of this comment is to restate what I believe are Lewis’s key lessons to developing countries, and to show that although Lewis led all developing countries to water, proverbially speaking, some African countries have so far chosen not to drink. I find that there is a deliberateness in the order of the development process as conceptualized in Lewis’s theory of economic growth and technological change. First, for a country to grow it has to acknowledge that scarcity is real and to learn to be efficient, to economize. Second, efficiency requires good economic institutions to sustain it. Third, institutions need to not only have knowledge, defined as technological knowledge plus social knowledge, but more importantly such knowledge must grow, spread, and be used. The fourth “proximate cause” of growth in this order of preference is physical capital. Following capital, in the fifth and sixth places, respectively, are population (labor) and other natural resources (land), and government. Lewis is new classical (not to be confused with neo-classical) in that his theory of growth and change takes population and natural resources as given for any developing country, and counts government as a throwback to classical economics to suggest that economies perform best when government’s role is well defined and constrained. By implication good government is a function of good institutions, learning and knowledge growth. I conclude from this evidence that some African countries have refused to acknowledge scarcity, paid lip-service to knowledge accumulation, growth, and diffusion, over-stressed their need for physical capital and the abundance of their natural resources, neglected their populations, and failed to assign government its proper role. The result, until recently, has been slow growth.

The influence of non-economic factors and forces on economic activities and their outcomes is undeniable. Love, being so central to many human activities, should similarly have some effects on the economic activity of nations. This paper (a) builds a simple but innovative model, (b) imposes it on a limited data set to estimate the effects of love experience and feeling on the economic activity of a group of 133 countries, and (3) compares such effects to those of other determinants of the economic activity, including Barro-Lee human capital, openness, and physical capital, as well as a broad measure of national well-being, HDI. The results strongly favor physical capital followed, by HDI and Barro-Lee human capital. Although small in magnitude, love effects are more statistically significant than those of openness. There appears to be some multicollinearity and model functional issues which challenge the robustness of the estimates and call for further research. However, the technical efficiency of the estimates is reasonable, so that one may conclude that love is important, but not critical to economic activity. The policy implications call for more investment in physical capital, schooling, and in the overall improvement of human development than in love experience and feeling, even though those are important too.

Economists failed badly both to predict and solve the Great Global Recession of 2008-2010 for two interconnected reasons. The first is that economics has moved too far away from its social foundations. The second reason is that the positivist economic methodology that economics follows has produced both benefits and costs, perhaps even costs than benefits, one may argue. This paper looks at the available evidence (not exhaustively) to argue for a Caldwellian methodological pluralism. It illustrates the advantages of such a methodological approach as well as the disadvantages of its alternatives, especially monolithic positivism.

This paper summarizes reactions to the theory of contestable markets and industry structure. The reactions came immediately after the theory was published. The summary finds that the proposed theory stands on sound grounds. However, empirically the theory leaves much to be desired especially for practical policy in developing countries.

Paul Romer’s radical idea of chartering cities to stimulate long run economic growth and development has provoked a hot debate, not all supportive. Some of the opposition argues that the charter-city model is an antiquated idea that conjures up brutal images of failed (neo)colonialism. This essay characterizes colonization, imperialism, and colonialism in order to shed extra light on why and how effects of chartering a city are dissimilar to the effects of colonization, imperialism, and colonialism. The characterization finds that while colonization, imperialism, and colonialism share strong historical affinities, no such connections can reasonably be made to the charter-city idea. A key assumption (requirement) of the charter-city model is voluntary participation of all players. Colonization, imperialism, and colonialism were forceful and repressive systems which relied on both government cohesion and administered prices, and were therefore inefficient. Monopoly gains (rents) from colonization, imperialism, and colonialism came at the expense of reduced consumer surplus elsewhere. Success depended on monopoly rents from the trade in “objects.” Under charter cities the potential benefits to the urbanization and the economic growth of developing countries are huge. The charter-city model requires voluntary agreements. By overcoming the twin problems of consensus building and commitment utilizing market mechanisms, charter cities generate gains from the exchange of ideas. Evidence is starting to emerge suggesting that people understand that charter cities are not tentacles of (neo)colonialism; they promise real benefits if only policy makers decide to break old rules.

One of the rude awakenings for economists from the current recession is an emerging understanding that economics has gone wild with its highbrow mathematical models that bear little resemblance to reality. The failure of economics to predict and solve the current global recession, has restored the “dismal science” title to the profession. It stems from the cultish fascination with Adam Smith’s Invisible Hand, centered around the belief in the efficient market hypothesis. This fascination exposes analytical holes in the methodology that economics has followed lately, as economics itself has moved too far away from its key social foundations. This situation is incomprehensible and needs redressing. I compiled a book - Selected Readings on the Anthropological Bases of Economic Behavior, Organization, and Control - to help economists and others get back in touch with their genealogy. This current paper is a watered down version of the introduction to Selected Readings. It concludes that real life is neither as simple nor economic as economic theory sometimes suggests. In fact, and for much of human history, non-economic factors and forces have driven economic activities. Selected Readings provides an opportunity for reinforced focus on economics principles. Alone and detached from its social foundations economics has a future only as fiction. As serious non-fiction, economics cannot successfully divorce itself from its elemental foundations in the social sciences. To advance its theory in the past economics needed to borrow from mathematics and physics. Such learning must continue. However, to remain policy-relevant economics cannot wish away the very social bases upon which it is founded. Without social foundations one might as well kiss economics goodbye.

Adam Smith sought to illustrate some of his propositions in The Wealth of Nations (WON) with examples from Africa. However, the examples were few, and many were neither profound nor instructive from a principles viewpoint. I find that Africa figures very little in the WON, and nearly every time it appears cursory. With 20/20 hindsight, one may conclude that opinions about Africa have remained invariant with respect to time. Final value-judgment about whether that is a good or bad thing rests with the reader.

There is sufficient microeconomic evidence that holidays are important to economic life. Is there similar support at the macroeconomic level? This exploratory paper uses a simple approach to assess the impacts of holidays on the economic growth rates of 182 nations in 2002. It finds that the human development level has a larger effect on economic growth rate than holidays. At the aggregate level holidays affect economic growth positively, but in a statistically insignificant way. For example, increasing by one day the number of holidays per year adds 0.30% to annual growth rate. Unlike non-religious holidays, religious holidays, whether Christian or non-Christian, affect economic growth negatively. The results are meaningful, yet statistically weak insofar as their explanatory power is only around 20%. They suggest that instruments for holidays, such as total sales revenue during holidays ,or something, other than the number of holidays, may be better explanatory variables. One can think of any number of fixes like remodeling the problem, choosing alternative estimators and/or functional forms. For now, those fixes belong to future efforts.

I estimate and compare the effects of globalization, governance, and conventional factors and forces on the economic performance of Sub-Saharan African countries. The analysis finds that both physical and human capita as well as unexplained technical residuals affect economic performance, although human capital and technical change do not always have statistically significant impacts. The policy implication of these results calls for improvement of all three variables. Economic performance also varies with measures of globalization, suggesting that globalization is good for economic performance, but it is social globalization rather than economic globalization that is most beneficial. On average the quality of institutions are important to economic performance, but, when disaggregated, different measures of institutional quality have different effects on performance. The results are reasonable, even as there remains a need to improve them.

Using a simple production function approach I show that conventional factors and forces of production, national identity, and globalization are important to national well-being, but in varying ways. Whereas investment in capital and globalization, especially social globalization, affect national well-being strongly, national well-being is inelastic to all three measures of national identity. A reasonable conclusion is that nations gain more from interactions with other nations than from national isolation.

This paper provides a few general comments on the nature and economic value of industrial minerals and rocks and the need for an increased exploitation and use of these materials in developing countries. These materials are of great economic value as main raw materials for the construction, glass, abrasive, paper, chemical, ceramics, metallurgical and agricultural industries. Developing countries dispose of many of these materials, and could derive greater economic benefits from them. Per capita consumption of industrial mineral products continues to grow in developed countries and part of this demand could be met by exports from developing countries. The paper describes some of the issues to be addressed and steps to be taken if developing countries are to gain from industrial minerals and rocks

African countries may have fared poorly compared to some countries in other regions, but relative to their own performance history some African countries have done quite well over the past eight years. In particular 2004 and 2005 were especially good years. How can such performance be made to stick and even expand? The answer to that question requires better understanding of the source of good performance. This paper proceeds on the assumption that technology was, at least partially, responsible. The result shows that a feeble technology undercuts per capita real GDP across African countries. However, the impacts of new technologies, measured by the intensities of internet and cell phone use are very strong. The policy implication of the findings speaks to the need for investment in new technologies for which productivity is high and the adoption and diffusion costs seem low. Further research can clarify the findings and policy by expanding and improving the data coverage, and examining effects on income of different kinds of technologies.

This paper pulls together into one practical model two strands of economic theory to assess the impact of baseball player exports on the aggregate economic performance of the Dominican Republic. On one hand, foreign trade theory predicts a strong correlation between a country’s exports and economic performance measured as per capita income. On the other hand, microeconomic research finds a positive, but statistically insignificant, impact of sports activities on local economies. Analysis finds a strong correlation between baseball player exports and economic performance for the years 1962-2004, suggesting that both the USA and the Dominican Republic benefit from encouraging baseball player trade and repatriation of baseball export earnings.