Experimental economics and development economics are hot topics, as was seen with the Nobel laurates of 2019. This year’s recipient of the Jan Söderberg Family Prize in Economics and Management is economist and economic historian Nathan Nunn of Harvard University. He became a researcher to better understand the world around us. Why are societies and cultures different? Why are some more economically successful than others? What explains the dynamics of success and then decline that we observe historically across so many societies?

“My primary interests are in understanding how societies evolve over time and how historical processes are able to help us better understand the world today. This means trying to understand the evolution of economic systems, social systems, culture, and psychology and the interplay between each of these,” Nathan Nunn says.

In his research, Nunn examines the effects that historical events and factors have on subsequent societal outcomes. The quantitative analysis includes the use of historical data, often from archival sources, or anthropological fieldwork, which are then linked to later outcomes, measured in the shorter and longer-run.

“Professor Nunn’s findings and advanced quantitative methods have become well known and intensively debated during the past ten years. Innovative quantitative studies have grown into a significant sub-field and here professor Nunn has made a name for himself. His creative use of data from the past and present made him a perfect recipient for our prize, since it is awarded to work that has renewed the research field,” says Fredrik Andersson, dean at Lund University School of Economics and Management, as well as chair of the prize committee.

Three key findings signed Nathan Nunn:

1. The levels of trust within Africa is still affected by the slave trades

Researchers Abhijit Banerjee, Esther Duflo and Michael Kremer were awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2019 for their experimental development economics. Nathan Nunn’s research moves in similar areas. He is for example cited by Duflo and Banerjee in their 2014 article Under the Thumb of History? Political Institutions and the Scope for Action, concerning how slave trade had a long-time negative effect on economic progress in certain African areas. Nunn comments:

“I think there is a lot we agree upon, as scholars working with economic development. In the article they raise the question of whether understanding the historical roots of economic development means that policy cannot be effective today. I don’t think the answer to this is yes. In fact, I think understanding how a country got to where it is today is important for helping the country move forward in a positive direction tomorrow. Understanding the historical and evolutionary dynamics of a society is crucial for this.”

In his research on the effects of the Slave trade, Nathan Nunn showed that across the Americas, the more dependent on slavery a nation was in 1750, the poorer it was in 2000. He found the same relationship inside the US. In 2000, states with more slaves in 1860 were poorer than states with fewer slaves and much poorer than the free Northern states.

Some of Nathan Nunn’s most cited studies argue that a substantial part of Africa's current underdevelopment appears to be caused by the long-term effects of the Atlantic and Arab slave trades. He has published findings on how current differences in trust levels within Africa can be attributed to the impact of the Atlantic and Arab slave trades, which have caused the emergence of low-trust cultural norms, beliefs, and values in ethnic groups heavily affected by slavery.

“I want to understand the vast differences in economic development that we observe across the globe. Why is the African continent, by far, the poorest region of the World today? Can Africa’s history and some of the events in its past, like the slave trades, explain its current level of economic development? Understanding the root causes of comparative development will help us understand the best policies to employ moving forward,” professor Nunn says

2. Labour mobility more useful than foreign aid

Nathan Nunn is a proponent of rethinking economic development, arguing that rich countries could do things differently to help developing countries. Instead of investing in development, for instance, they could just stop doing things that harm poor countries.

“Many of the harmful things The West is doing to developing countries fly under the radar within development economics for a variety of reasons. One is that some of them, like anti-dumping duties, are not particularly glamorous. Another is that many of the harmful things being done are viewed as being outside of development economics and within the world of politics or political economy. For example, migrant restrictions are often viewed as a political issue more than a development one,” he says and continues:

“In fact, the evidence is pretty clear that labour mobility tends to help all involved. Those who move are better off, so are their families, so is the receiving country, and surprisingly the evidence even suggests that so is the sending country. The rationale for not loosening restrictions against free movement of labour does not seem to be economic in nature. It is strange that as economists, we would strongly promote free markets and freedom of choice, but not expect this in labour markets.

3. Improving institutional contracts is crucial

Nathan Nunn’s work also deals with how countries' ability to enforce contracts is a more important determinant of their comparative advantage than skilled labour and physical capital combined.

“A key part of comparative advantage – and what goods countries produce, which we know is intimately linked to income – is the quality of a country’s legal institutions; namely, its contracting institutions. For policy makers, knowing how to improve the quality of a country’s institutions is a tough feat. Institutions are determined through historical and evolutionary processes and they are remarkably resilient. Comparative advantage appears to be driven, by deeply rooted historically determined factors. This makes improving institutions a much tougher task than accumulating human or physical capital.”

More reading:

• Relationship-Specificity, Incomplete Contracts and the Pattern of Trade
• The Long-term Effects of Africa's Slave Trades
• The Slave Trade and the Origins of Mistrust in Africa
• Rethinking Economic Development
• Slavery, Inequality, and Economic Development in the Americas: An Examination of the Engerman-Sokoloff Hypothesis

Contact:

Nathan Nunn
Frederic E. Abbe Professor of Economics at Harvard University
Phone: 857-445-5682
nnunn [at] fas [dot] harvard [dot] edu (nnunn[at]fas[dot]harvard[dot]edu)

Fredrik Andersson
Dean, Lund University School of Economics and Management
+46 (0)46 222 86 76
fredrik [dot] andersson [at] ehl [dot] lu [dot] se (fredrik[dot]andersson[at]ehl[dot]lu[dot]se)

Jan Söderberg
Contact the press officer for contact with Jan Söderberg.

Louise Larsson
Press officer, Lund University School of Economics and Management
+46 (0)46 222 08 44
louise [dot] larsson [at] ehl [dot] lu [dot] se (louise[dot]larsson[at]ehl[dot]lu[dot]se)

Images for press use:

Download images of Nathan Nunn from Box folder

Interviews

Professor Nathan Nunn is available for interviews prior to the visit in Sweden through e-mail or telephone/Skype (user: nathan_nunn). He is available after 4pm EST on 21 January and all day on 22 January. He is also available on 27 January after 12pm EST and 28 January before 3pm EST. Please e-mail Nathan Nunn to schedule an interview.

Nathan Nunn is also available for scheduled interviews during the visit to Sweden. Please contact the press officer Louise Larsson to book an interview.

Facts: Nathan Nunn
Professor Nathan Nunn is the Frederic E. Abbe Professor of Economics at Harvard University. He was born in 1974 in Canada and is an economist by training as well an often cited economic historian.
Nathan Nunn holds a B.A. in economics from Simon Fraser University (1998) and a M.A. (2000) and a PhD (2005) in economics from the University of Toronto. After his graduation, Nunn worked as an Assistant Professor (Senior Lecturer) at the University of British Columbia before moving to Harvard University in 2007. There, he was promoted to the Paul Sack Associate Professorship in Political Economy in 2011, became full professor in 2012, and has held the position of Frederic E. Abbe Professor of Economics since 2016.

Read more about Nathan Nunn https://scholar.harvard.edu/nunn/home
 

Facts: Jan Söderberg Family Prize in Economics & Management
The Jan Söderberg Family Prize in Economics and Management awards SEK 1 million to a leading international scholar under the age of 50 in the field of Economics and Management. The Prize is to be awarded on 25 March at a ceremony in Lund. This is the second time the Prize is awarded, since its inauguration in 2019.

The basis for the Prize is: it shall be awarded to a person who has made a discovery or contribution within the fields of economics and management of eminent significance and whose work has demonstrably renewed research and application in its domain.

Read more about the Prize at lusem.lu.se

The 2020 Economics and Management Day will follow the day after the Prize ceremony. It takes place at the School on 26 March and offers a full programme of interdisciplinary lectures. This year’s theme: Leadership of Tomorrow – challenges and perspectives.

Read more about the 2020 Economics and Management Day