Posted by: Dirk | November 7, 2009

Latin America’s Decline – or is it NBER’s?

There is a new piece by Sebastian Edwards titled ‘Latin America’s Decline – A long historical view‘. It is argued that the period of 1945-1980 was not of exceptional growth, that inward-oriented policies like import-substitution have failed. The style of the ‘paper’ at times reminds of me of the WSJ’s front page editorial. There are almost no statistics, there is no model, no theoretical thinking. Don’t get me wrong: I like and value economic history, but this reads like a newspaper article. On page 16, Edwards ends chapter III. in this way:

After the Pinochet coup d’etat, and the diaspora of the left in the 1970s and 1980s, Chile has been able to make major institutional changes that have allowed it to become Latin America’s undisputable super star.

Proving that growth picked up under Pinochet misses the point. The question is what growth rate would have been achieved in an alternative scenario. And just by the way, Chile grows faster since Pinochet stepped back as president in 1990, as I have argued elsewhere. More important is the cost on human life. According to Edwards, there was a ‘diaspora of the left in 1970s and 1980s’. According to the Valech Report, more than 30,000 people were tortured and more than 1,000 exiled. The Rettig Report finds that more than 2,000 people were killed for political reasons or as a result of political violence. What good is economic growth if people are killed? Was Hitler’s Nazi Germany the ‘undisputed superstar of Europe’, Stalin’s Soviet Union the ‘undisputed superstar of Asia’?

On p. 26 Edwards, who was born in Santiago de Chile, has the opportunity to put some distance between him and the Pinochet government:

Through time, different United States administrations supported a succession of despots, including Anastasio Somoza in Nicaragua, Marcos Pérez Jiménez in Venezuela, Leónidas Trujillo in the Dominican Republic, and a long list of generals in Argentina and Brazil.  It was president Franklin Delano Roosevelt who, referring to Somoza in 1939, supposedly said: “He may be a son of a bitch, but he is our son of a bitch.”

He fails to do so. I wonder how NBER thinks about these things. In their own words (and with my highlighting):

Founded in 1920, the National Bureau of Economic Research is a private, nonprofit, nonpartisan research organization dedicated to promoting a greater understanding of how the economy works. The NBER is committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic community.

To conclude, I highly value NBER for its output of high quality papers that are well researched. I have referred to these papers on this blog to comment on quite often, and I think that NBER fulfills an important role in stimulating discussion in the world of (academic) economics. The article by Sebastian Edwards misses NBER standards as defined above by far. I think that it is not a scientific article but rather an opinion piece, and I sincerely hope that this is not a new development at NBER. I would be very sad if NBER degrades into ‘he said, she said’ journalism.

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