Institutional Persistence in Eastern Europe: Economic and Political Legacies of Empires and Communism

This dissertation seeks to advance our understanding of the roles that institutions play in economic development. How do institutions evolve? What mechanisms are responsible for their persistence? What effects do they have on economic development?

I address these questions using historical and contemporary data from Eastern Europe and Russia. This area is relatively understudied by development economists. It also has a very interesting history. For one thing, for several centuries it was divided between different empires. For another, it experienced wars and socialism in the 20th century. I use some of these exogenous shocks as quasi-natural social experiments to study the institutional transformations and its effects on economic development both in the short and long run.

This first chapter explores whether economic, social, and political institutions vary in their resistance to policies designed to remove them. The empirical context for the analysis is Romania from 1690 to the 2000s. Romania represents an excellent laboratory for studying the persistence of different types of historical institutional legacies. In the 18th and 19th centuries, Romania was split between the Habsburg and Ottoman Empires, where political and economic institutions differed. The Habsburgs imposed less extractive institutions relative to the Ottomans: stronger rule of law, a more stable and predictable state, a more developed civil society, and less corruption. In the 20th century, the Romanian Communist regime tried deliberately to homogenize the country along all relevant dimensions. It was only partially successful. Using a regression discontinuity design, I document the persistence of economic outcomes, social capital, and political attitudes. First, I document remarkable convergence in urbanization, education, unemployment, and income between the two former empires. Second, regarding social capital, no significant differences in organizational membership, trust in bureaucracy, and corruption persist today. Finally, even though the Communists tried to change all political attitudes, significant discontinuities exist in current voting behavior at the former Habsburg-Ottoman border. Using data from the parliamentary elections of 1996-2008, I find that former Habsburg rule decreases by around 6 percentage points the vote share of the major post-Communist left party and increases by around 2 and 5 percentage points the vote shares of the main anti-Communist and liberal parties, respectively.

The second chapter investigates the effects of Stalin’s mass deportations on distrust in central authority. Four deported ethnic groups were not rehabilitated after Stalin’s death; they remained in permanent exile until the disintegration of the Soviet Union. This allows one to distinguish between the effects of the groups that returned to their homelands and those of the groups that were not allowed to return. Using regional data from the 1991 referendum on the future of the Soviet Union, I find that deportations have a negative interim effect on trust in central authority in both the regions of destination and those of origin. The effect is stronger for ethnic groups that remained in permanent exile in the destination regions. Using data from the Life in Transition Survey, the chapter also documents a long-term effect of deportations in the destination regions.

The third chapter studies the short-term effect of Russian colonization of Central Asia on economic development. I use data on the regions of origin of Russian settlers and push factors to construct an instrument for Russian migration to Central Asia. This instrument allows me to interpret the outcomes causally. The main finding is that the massive influx of Russians into the region during the 1897-1926 period had a significant positive effect on indigenous literacy. The effect is stronger for men and in rural areas. Evidently, interactions between natives and Russians through the paid labor market was an important mechanism of human capital transmission in the context of colonization.

The findings of these chapters provide additional evidence that history and institutions do matter for economic development. Moreover, the dissertation also illuminates the relative persistence of institutions. In particular, political and social capital legacies of institutions might outlast economic legacies. I find that most economic differences between the former empires in Romania have disappeared. By the same token, there are significant discontinuities in political outcomes. People in former Habsburg Romania provide greater support for liberalization, privatization, and market economy, whereas voters in Ottoman Romania vote more for redistribution and government control over the economy.

In the former Soviet Union, Stalin’s deportations during World War II have a long-term negative effect on social capital. Today’s residents of the destination regions of deportations show significantly lower levels of trust in central authority. This is despite the fact that the Communist regime tried to eliminate any source of opposition and used propaganda to homogenize people’s political and social attitudes towards the authorities. In Central Asia, the influx of Russian settlers had a positive short-term effect on human capital of indigenous population by the 1920s, which also might have persisted over time.

From a development perspective, these findings stress the importance of institutions for future paths of development. Even if past institutional differences are not apparent for a certain period of time, as was the case with the former Communist countries, they can polarize society later on, hampering economic development in the long run. Different institutions in the past, which do not exist anymore, can thus contribute to current political instability and animosity.

Bayesian Emulation for Sequential Modeling, Inference and Decision Analysis

The advances in three related areas of state-space modeling, sequential Bayesian learning, and decision analysis are addressed, with the statistical challenges of scalability and associated dynamic sparsity. The key theme that ties the three areas is Bayesian model emulation: solving challenging analysis/computational problems using creative model emulators. This idea defines theoretical and applied advances in non-linear, non-Gaussian state-space modeling, dynamic sparsity, decision analysis and statistical computation, across linked contexts of multivariate time series and dynamic networks studies. Examples and applications in financial time series and portfolio analysis, macroeconomics and internet studies from computational advertising demonstrate the utility of the core methodological innovations.

Chapter 1 summarizes the three areas/problems and the key idea of emulating in those areas. Chapter 2 discusses the sequential analysis of latent threshold models with use of emulating models that allows for analytical filtering to enhance the efficiency of posterior sampling. Chapter 3 examines the emulator model in decision analysis, or the synthetic model, that is equivalent to the loss function in the original minimization problem, and shows its performance in the context of sequential portfolio optimization. Chapter 4 describes the method for modeling the steaming data of counts observed on a large network that relies on emulating the whole, dependent network model by independent, conjugate sub-models customized to each set of flow. Chapter 5 reviews those advances and makes the concluding remarks.

Auriculotherapy for pain management: a systematic review and meta-analysis of randomized controlled trials.

OBJECTIVES: Side-effects of standard pain medications can limit their use. Therefore, nonpharmacologic pain relief techniques such as auriculotherapy may play an important role in pain management. Our aim was to conduct a systematic review and meta-analysis of studies evaluating auriculotherapy for pain management. DESIGN: MEDLINE,(®) ISI Web of Science, CINAHL, AMED, and Cochrane Library were searched through December 2008. Randomized trials comparing auriculotherapy to sham, placebo, or standard-of-care control were included that measured outcomes of pain or medication use and were published in English. Two (2) reviewers independently assessed trial eligibility, quality, and abstracted data to a standardized form. Standardized mean differences (SMD) were calculated for studies using a pain score or analgesic requirement as a primary outcome. RESULTS: Seventeen (17) studies met inclusion criteria (8 perioperative, 4 acute, and 5 chronic pain). Auriculotherapy was superior to controls for studies evaluating pain intensity (SMD, 1.56 [95% confidence interval (CI): 0.85, 2.26]; 8 studies). For perioperative pain, auriculotherapy reduced analgesic use (SMD, 0.54 [95% CI: 0.30, 0.77]; 5 studies). For acute pain and chronic pain, auriculotherapy reduced pain intensity (SMD for acute pain, 1.35 [95% CI: 0.08, 2.64], 2 studies; SMD for chronic pain, 1.84 [95% CI: 0.60, 3.07], 5 studies). Removal of poor quality studies did not alter the conclusions. Significant heterogeneity existed among studies of acute and chronic pain, but not perioperative pain. CONCLUSIONS: Auriculotherapy may be effective for the treatment of a variety of types of pain, especially postoperative pain. However, a more accurate estimate of the effect will require further large, well-designed trials.

Cost-effectiveness analysis of the diagnosis of meniscus tears.

BACKGROUND: Diagnostic imaging represents the fastest growing segment of costs in the US health system. This study investigated the cost-effectiveness of alternative diagnostic approaches to meniscus tears of the knee, a highly prevalent disease that traditionally relies on MRI as part of the diagnostic strategy. PURPOSE: To identify the most efficient strategy for the diagnosis of meniscus tears. STUDY DESIGN: Economic and decision analysis; Level of evidence, 1. METHODS: A simple-decision model run as a cost-utility analysis was constructed to assess the value added by MRI in various combinations with patient history and physical examination (H&P). The model examined traumatic and degenerative tears in 2 distinct settings: primary care and orthopaedic sports medicine clinic. Strategies were compared using the incremental cost-effectiveness ratio (ICER). RESULTS: In both practice settings, H&P alone was widely preferred for degenerative meniscus tears. Performing MRI to confirm a positive H&P was preferred for traumatic tears in both practice settings, with a willingness to pay of less than US$50,000 per quality-adjusted life-year. Performing an MRI for all patients was not preferred in any reasonable clinical scenario. The prevalence of a meniscus tear in a clinician's patient population was influential. For traumatic tears, MRI to confirm a positive H&P was preferred when prevalence was less than 46.7%, with H&P preferred above that. For degenerative tears, H&P was preferred until the prevalence reaches 74.2%, and then MRI to confirm a negative was the preferred strategy. In both settings, MRI to confirm positive physical examination led to more than a 10-fold lower rate of unnecessary surgeries than did any other strategy, while MRI to confirm negative physical examination led to a 2.08 and 2.26 higher rate than H&P alone in primary care and orthopaedic clinics, respectively. CONCLUSION: For all practitioners, H&P is the preferred strategy for the suspected degenerative meniscus tear. An MRI to confirm a positive H&P is preferred for traumatic tears for all practitioners. Consideration should be given to implementing alternative diagnostic strategies as well as enhancing provider education in physical examination skills to improve the reliability of H&P as a diagnostic test. CLINICAL RELEVANCE: Alternative diagnostic strategies that do not include the use of MRI may result in decreased health care costs without harm to the patient and could possibly reduce unnecessary procedures.

Integrated pathway and epistasis analysis reveals interactive effect of genetic variants at TERF1 and AFAP1L2 loci on melanoma risk.

Genome-wide association studies (GWASs) have characterized 13 loci associated with melanoma, which only account for a small part of melanoma risk. To identify new genes with too small an effect to be detected individually but which collectively influence melanoma risk and/or show interactive effects, we used a two-step analysis strategy including pathway analysis of genome-wide SNP data, in a first step, and epistasis analysis within significant pathways, in a second step. Pathway analysis, using the gene-set enrichment analysis (GSEA) approach and the gene ontology (GO) database, was applied to the outcomes of MELARISK (3,976 subjects) and MDACC (2,827 subjects) GWASs. Cross-gene SNP-SNP interaction analysis within melanoma-associated GOs was performed using the INTERSNP software. Five GO categories were significantly enriched in genes associated with melanoma (false discovery rate ≤ 5% in both studies): response to light stimulus, regulation of mitotic cell cycle, induction of programmed cell death, cytokine activity and oxidative phosphorylation. Epistasis analysis, within each of the five significant GOs, showed significant evidence for interaction for one SNP pair at TERF1 and AFAP1L2 loci (pmeta-int  = 2.0 × 10(-7) , which met both the pathway and overall multiple-testing corrected thresholds that are equal to 9.8 × 10(-7) and 2.0 × 10(-7) , respectively) and suggestive evidence for another pair involving correlated SNPs at the same loci (pmeta-int  = 3.6 × 10(-6) ). This interaction has important biological relevance given the key role of TERF1 in telomere biology and the reported physical interaction between TERF1 and AFAP1L2 proteins. This finding brings a novel piece of evidence for the emerging role of telomere dysfunction into melanoma development.

Economic and social upgrading in global production networks: A new paradigm for a changing world

A key challenge in promoting decent work worldwide is how to improve the position of both firms and workers in value chains and global production networks driven by lead firms. This article develops a framework for analysing the linkages between the economic upgrading of firms and the social upgrading of workers. Drawing on studies which indicate that firm upgrading does not necessarily lead to improvements for workers, with a particular focus on the Moroccan garment industry, it outlines different trajectories and scenarios to provide a better understanding of the relationship between economic and social upgrading. The authors 2011 Journal compilation © International Labour Organization 2011.

Economic and Social Upgrading in Global Value Chains and Industrial Clusters: Why Governance Matters

© 2014, Springer Science+Business Media Dordrecht.The burgeoning literature on global value chains (GVCs) has recast our understanding of how industrial clusters are shaped by their ties to the international economy, but within this context, the role played by corporate social responsibility (CSR) continues to evolve. New research in the past decade allows us to better understand how CSR is linked to industrial clusters and GVCs. With geographic production and trade patterns in many industries becoming concentrated in the global South, lead firms in GVCs have been under growing pressure to link economic and social upgrading in more integrated forms of CSR. This is leading to a confluence of “private governance” (corporate codes of conduct and monitoring), “social governance” (civil society pressure on business from labor organizations and non-governmental organizations), and “public governance” (government policies to support gains by labor groups and environmental activists). This new form of “synergistic governance” is illustrated with evidence from recent studies of GVCs and industrial clusters, as well as advances in theorizing about new patterns of governance in GVCs and clusters.

The effectiveness of low-level laser therapy for nonspecific chronic low back pain: a systematic review and meta-analysis.

BACKGROUND: In recent decades, low-level laser therapy (LLLT) has been widely used to relieve pain caused by different musculoskeletal disorders. Though widely used, its reported therapeutic outcomes are varied and conflicting. Results similarly conflict regarding its usage in patients with nonspecific chronic low back pain (NSCLBP). This study investigated the efficacy of low-level laser therapy (LLLT) for the treatment of NSCLBP by a systematic literature search with meta-analyses on selected studies. METHOD: MEDLINE, EMBASE, ISI Web of Science and Cochrane Library were systematically searched from January 2000 to November 2014. Included studies were randomized controlled trials (RCTs) written in English that compared LLLT with placebo treatment in NSCLBP patients. The efficacy effect size was estimated by the weighted mean difference (WMD). Standard random-effects meta-analysis was used, and inconsistency was evaluated by the I-squared index (I(2)). RESULTS: Of 221 studies, seven RCTs (one triple-blind, four double-blind, one single-blind, one not mentioning blinding, totaling 394 patients) met the criteria for inclusion. Based on five studies, the WMD in visual analog scale (VAS) pain outcome score after treatment was significantly lower in the LLLT group compared with placebo (WMD = -13.57 [95 % CI = -17.42, -9.72], I(2) = 0 %). No significant treatment effect was identified for disability scores or spinal range of motion outcomes. CONCLUSIONS: Our findings indicate that LLLT is an effective method for relieving pain in NSCLBP patients. However, there is still a lack of evidence supporting its effect on function.

Global value Chains, rising power firms and economic and social upgrading

© Emerald Group Publishing Limited.Purpose – The purpose of this paper is to introduce the global value chain (GVC) approach to understand the relationship between multinational enterprises (MNEs) and the changing patterns of global trade, investment and production, and its impact on economic and social upgrading. It aims to illuminate how GVCs can advance our understanding about MNEs and rising power (RP) firms and their impact on economic and social upgrading in fragmented and dispersed global production systems. Design/methodology/approach – The paper reviews theGVCliterature focusing on two conceptual elements of the GVC approach, governance and upgrading, and highlights three key recent developments in GVCs: concentration, regionalization and synergistic governance. Findings – The paper underscores the complicated role of GVCs in shaping economic and social upgrading for emerging economies, RP firms and developing country firms in general. Rising geographic and organizational concentration in GVCs leads to the uneven distribution of upgrading opportunities in favor of RP firms, and yet economic upgrading may be elusive even for the most established suppliers because of power asymmetry with global buyers. Shifting end markets and the regionalization of value chains can benefit RP firms by presenting alternative markets for upgrading. Yet, without further upgrading, such benefits may be achieved at the expense of social downgrading. Finally, the ineffectiveness of private standards to achieve social upgrading has led to calls for synergistic governance through the cooperation of private, public and social actors, both global and local. Originality/value – The paper illuminates how the GVC approach and its key concepts can contribute to the critical international business and RP firms literature by examining the latest dynamics in GVCs and their impacts on economic and social development in developing countries.