Exciting, Boring, and Non-Existent Skylines: Vertical Building Gaps in Global Perspective

September 2022

Remi Jedwab (George Washington University)
Jason Barr (Rutgers University-Newark)

IIEP working paper 2022-11

Abstract: Despite the widespread prevalence and economic importance of tall buildings, little is known about how their patterns vary across space and time. We focus on vertical real estate, aiming to quantify differences across major world regions over time (1950-2020). To do so, we exploit a novel database on the location, height (above 55 meters), and year of construction of nearly all tall buildings in the world. We propose a new methodology to estimate the extent to which some world regions build up more than others given similar economic and geographic conditions, city size distributions, and other features. Our analyses reveal that many skylines may visually appear more prominent than they really are once one includes all tall buildings and core controls, which alters how regions are ranked in terms of tall building stocks. Using results by city size, centrality, height of buildings, and building function, we classify world regions into different groups, finding that international tall building stocks are driven by mostly boring skylines of residential high-rises, and to a lesser extent exciting skylines of skyscrapers and office supertall towers. Finally, land-use regulations and preferences, not historical preservation nor dispersed ownership, likely account for most observed differences.

JEL Codes: R14; R30; R38; R31; R33

Key Words: Buildings Heights; Skyscrapers; Global Real Estate; Housing Supply

A Missed Opportunity to Further Build Trust in AI: A Landscape Analysis of OECD.AI

September 2022

Susan Ariel Aaronson (George Washington University)

IIEP working paper 2022-10

Abstract: OECD.AI is the world’s best source for information on public policies dedicated to AI, trustworthy AI and international efforts to advance cooperation in AI. However, the web site is also a missed opportunity to ascertain best practice and to build trust in AI not just for citizens of reporting nations but for the world. The author came to that conclusion after examining the documentation that nations placed online at OECD.AI. website. She utilized a landscape analysis to group these policies reported to the OECD by country and type, whether the initiative was evaluated or reported on, and whether it provided new insights about best practice trust, in AI, and/or trustworthy AI. Some 61 countries and the EU reported to the OECD on their AI initiatives (for a total of 62). Although the members of the OECD are generally high and high-middle income nations, the 62 governments providing information to OECD.AI represent a mix of AI capacity, income level, economic system, and location. Some 814 initiatives placed on the website as of August 2022, but 4 were duplicative and some 30 were blank, leaving 780. Of these, countries claimed that 48 of these initiatives were evaluated. However, we actually found only four evaluations (and one in progress) with a clear evaluative methodology. Two initiatives were labeled evaluations but did not include a methodology. Many of the other 42 were reports rather than evaluations. In addition, only a small percentage (41 initiatives or 5% of all initiatives) were designed to build trust in AI or to create trustworthy AI systems. National policymakers and not the OECD Secretariat decide what each of the 62 governments choose to put on the site. These officials don’t list every initiative their country implements to foster AI. But their choices reveal their priorities. Most of the documentation focuses on what they are doing to build domestic AI capacity and a supportive governance context for AI. We also found relatively few efforts to build international cooperation on AI, or to strengthen other countries’ AI capacity. Taken in sum, these efforts are important but reveal little effort to build international trust in AI.

JEL Codes: A1, 034, 032, 038, 057

Key Words: AI (artificial intelligence) trust, trustworthy, policies, innovation

Wicked Problems Might Inspire Greater Data Sharing

September 2022

Susan Ariel Aaronson (George Washington University)

IIEP working paper 2022-09

Abstract: Global public goods are goods and services with benefits and costs that potentially extend to all countries, people, and generations. Global data sharing can also help solve what scholars call wicked problems-problems so complex that they require innovative, cost effective and global mitigating strategies. Wicked problems are problems that no one knows how to solve without creating further problems. Hence, policymakers must find ways to encourage greater data sharing among entities that hold large troves of various types of data, while protecting that data from theft, manipulation etc. Many factors impede global data sharing for public good purposes; this analysis focuses on two. First, policymakers generally don’t think about data as a global public good; they view data as a commercial asset that they should nurture and control. While they may understand that data can serve the public interest, they are more concerned with using data to serve their country’s economic interest. Secondly, many leaders of civil society and business see the data they have collected as proprietary data. So far many leaders of private entities with troves of data are not convinced that their organization will benefit from such sharing. At the same time, companies voluntarily share some data for social good purposes. However, data cannot meet its public good purpose if data is not shared among societal entities. Moreover, if data as a sovereign asset, policymakers are unlikely to encourage data sharing across borders oriented towards addressing shared problems. Consequently, society will be less able to use data as both a commercial asset and as a resource to enhance human welfare. This paper discusses why the world has made so little progress encouraging a vision of data as a global public good. As UNCTAD noted, data generated in one country can also provide social value in other countries, which would call for sharing of data at the international level through a set of shared and accountable rules (UNCTAD: 2021). Moreover, the world is drowning in data, yet much of that data remains hidden and underutilized. But guilt is a great motivator. The author suggests a new agency, the Wicked Problems Agency, to act as a counterweight to that opacity and to create a demand and a market for data sharing in the public good.

JEL Codes: 024,034/032, 038, 045, C45 

Key Words: data, AI, public good, wicked problems, data-sharing

Quantifying the impact of the latest U.S. tariff sanctions on Russia – a sectoral analysis

August 2022

Simon A. B. Schropp (George Washington University)
Christian Lau (Sidley Austin LLP)
Olim Latipov (Sidley Austin LLP)
Kornel Mahlstein (Sidley Austin LLP)

IIEP working paper 2022-08

View the technical appendix here

Abstract: Following the recent G7 Summit in Germany, the United States announced a new sanction package that imposes significantly higher tariffs on products from Russia. These tariff increases concern 570 groups of products affecting more than $2 billion in imports from Russia. The declared objective of these tariff increases is to impose steep economic costs on Russia, while minimizing costs to U.S. consumers. The United States is also considering disbursement of revenues collected from these new tariffs to Ukraine.
Using a sector-specific partial-equilibrium model and the most reliable data available, this paper quantifies the welfare impact that the U.S. tariff increases will have on the Russian and the U.S. economies, respectively. We find that the new U.S. tariff sanctions will affect $2.6 billion of U.S. imports from Russia (or 8.7% of total U.S. imports from Russia). Moreover, these new tariff measures may decrease Russian welfare by $181 million per year, while imposing annual costs of $90 million on U.S. consumers. The United States can hope to collect $241 million per year in tariff revenues that may then be used to financially support Ukraine.
Our sectoral analysis shows that the U.S.’ choice of target sectors produces mixed results. On one hand, the sanctions cover dozens of sectors whose inclusion produce particularly large welfare losses to Russia and/or high welfare gains to the United States. Yet, the sanctions package also raises serious questions about its effectiveness for other sectors. For example, higher tariffs for several selected sectors result in zero harm to Russia, and/or greater harm to the United States than to Russia. These and other insights may provide guidance for the design of future tariff sanctions by G7 Members and other Allies.

JEL Codes: F02, F13, F15, F52

Key Words: International trade; Russia; economic sanctions; import tariffs; economic impact; partial equilibrium; sectoral analysis; welfare analysis; pass-through

Ask a local: Improving the public pricing of land titles in urban Tanzania

June 2022

Tanner Regan (George Washington University)
Martina Manara (London School of Economics)

IIEP working paper 2022-07

Abstract: Information on willingness-to-pay is key for public pricing and allocation of services but not easily collected. Studying land titles in Dar-es-Salaam, we ask whether local leaders know and will reveal plot owners’ willingness-to-pay. We randomly assign leaders to predict under different settings then elicit owners’ actual willingness-to-pay. Demand is substantial, but below exorbitant fees. Leaders can predict the aggregate demand curve and distinguish variation across owners. Predictions worsen when used to target subsidies, but adding cash incentives mitigates this. We demonstrate that leader-elicited information can improve the public pricing of title deeds, raising uptake while maintaining public funds.

JEL Codes: O17; H40; R21; D80

Key Words: property rights; willingness-to-pay; public pricing; local publicly provided goods

Modernizing and Reshaping the Bretton Woods Institutions for the 21st Century

September 2022

Ajay Chhibber (George Washington University)

IIEP working paper 2022-06

Abstract: This paper lays out the contours of a reformed Bretton Woods Institutions – the IMF, the World Bank Group (WBG) and the WTO – that the world needs for the 21st century. Some of the challenges the world faces today – rising inequality, growing nationalism and protection are what led to World War II from whose ruin emerged the current Bretton Woods international financial architecture. While these institutions performed well over their first 50 years – they have been struggling in more recent times as problems of rising inequality, financial instability and protectionism have re-emerged. But in addition, the threat of climate change and ecological stress, rising disasters, and a more inter-connected world with new threats like cyber-security and pandemics require a new international financial architecture. A modernized and re-invigorated set of Bretton Woods institutions to help address and mitigate these challenges, with a global remit and the mandate to monitor agreed global rules and enhanced resources not only to help individual countries but also to address global problems.

JEL Codes: F40, F60, F02, E00, Q00, G20

Key Words: Bretton Woods, IMF, WTO, World Bank

Consumption Cities vs. Production Cities: New Considerations and Evidence

June 2022

Remi Jedwab (George Washington University)
Elena Ianchovichina (The World Bank)
Federico Haslop (George Washington University)

IIEP working paper 2022-05

Abstract: Cities dramatically vary in their sectoral composition across the world, possibly lending credence to the theory that some cities are production cities with high employment shares of urban tradables while others are consumption cities with high employment shares of urban non-tradables. A model of structural change highlights three paths leading to the rise of consumption cities: resource rents from exporting fuels and mining products, agricultural exports, and premature deindustrialization. These findings appear to be corroborated using both country- and city-level data. Compared to cities in industrialized countries, cities of similar sizes in resource-rich and deindustrializing countries have lower shares of employment in manufacturing, tradable services and the formal sector, and higher shares of employment in non-tradables and the informal sector. Results on the construction of “vanitous” tall buildings provide additional evidence on the relationship between resource exports and consumption cities. Finally, the evidence suggests that having mostly consumption cities might have economic implications for a country.

JEL Codes: O11; E24; E26; O13; O14; O18; R1; R12

Key Words: Structural Change; Urbanization; Consumption Cities; Macro-Development Economics; Industrialization; Natural Resources; Deindustrialization; Construction

The Occupations of Free Women and Substitution with Enslaved Workers in the Antebellum United States

March 2022

Barry Chiswick (George Washington University)
RaeAnn Robinson (George Washington University)

IIEP working paper 2022-04

Abstract: This paper analyzes the occupational status and distribution of free women in the antebellum United States. It considers both their reported and unreported (imputed) occupations, using the 1/100 IPUMS files from the 1860 Census of Population. After developing and testing the model based on economic and demographic variables used to explain whether a free woman has an occupation, analyses are conducted comparing their occupational distribution to free men, along with analyses among women by nativity, urbanization, and region of the country. While foreign-born and illiterate women were more likely to report having an occupation compared to their native-born and literate counterparts, they were equally likely to be working when unreported family workers are included. In the analysis limited to the slave-holding states, it is shown that the greater the slave-intensity of the county, the less likely were free women to report having an occupation, particularly as private household workers, suggesting substitution in the labor market between free women and enslaved labor.

JEL Codes: N31, J16, J21, J82

Key Words: Women, Labor Force Participation, Occupational Distribution, Unreported Family Workers, Enslaved Workers, Immigrants, 1860 Census of Population

Economic Planning in India: Did We Throw the Baby Out with the Bathwater?

February 2022

Ajay Chhibber (George Washington University)

IIEP working paper 2022-03

Abstract: India has a long and a somewhat checkered history of planning – with some success but also many failures. Despite India’s federal structure India’s approach to planning has been top-down with the union government controlling many levers – financial and otherwise to determine the direction of the economy and social programs. India has tried 3 different types of planning – “directed planning”, “indicative planning” and now just a “strategy but no planning”. India needed to replace the Planning Commission but not give up on planning altogether. Just as the rest of the world was going back to a “new planning” surge to handle climate change and the desire to meet the SDG’s India abolished planning altogether. The successor to the planning commission – the Niti Aayog needs to get back to “new planning”, that is now being adopted by many countries with stronger leadership, a legitimized authorizing environment and effective use to plan for helping India achieve the SDGs by 2030 and become a prosperous country by 2047.

JEL Codes: O1, O2

Key Words: Economic Planning, Niti Aayog, Planning Commission, SDG’s

Scars of Pandemics from Lost Schooling and Experience: Aggregate Implications and Gender Differences Through the Lens of COVID-19

January 2022

Remi Jedwab  (George Washington University)
Roberto Samaniego (George Washington University)
Paul Romer (NYU Stern)
Asif M. Islam (World Bank)

IIEP working paper 2022-02

Abstract: Pandemic shocks disrupt human capital accumulation through schooling and work experience. This study quantifies the long-term economic impact of these disruptions in the case of COVID-19, focusing on countries at different levels of development and using returns to education and experience by college status that are globally estimated using 1,084 household surveys across 145 countries. The results show that both lost schooling and experience contribute to significant losses in global learning and output. Developed countries incur greater losses than developing countries, because they have more schooling to start with and higher returns to experience. The returns to education and experience are also separately estimated for men and women, to explore the differential effects by gender of the COVID-19 pandemic. Surprisingly, while we uncover gender differences in returns to education and schooling, gender differences in the impact of COVID-19 are small and short-lived, with a loss in female relative income of only $2.5$ percent or less mainly due to the greater severity of the employment shock on impact. These findings might challenge some of the ongoing narratives in policy circles. The methodology employed in this study is easily implementable for future pandemics.

JEL Codes: O11; O12; O15; E24; J11; J16; J17; J31

Key Words: Pandemics; Human Capital; Returns to Education; Returns to Experience; Gender; Female Relative Income; Labor Markets; Development Accounting; COVID-19

Killer Cities and Industrious Cities? New Data and Evidence on 250 Years of Urban Growth

January 2022

Remi Jedwab (George Washington University)
Marina Gindelsky (Bureau of Economic Analysis)

IIEP working paper 2022-01

Abstract: In the historical literature, cities of the Industrial Revolution are portrayed as having a demographic penalty: killer cities with high death rates and industrious cities with low birth rates. To econometrically test this, we construct a novel data set of almost 2,000 crude demographic rates for 142 large cities in 35 countries for 1700-1950. Mortality actually decreased faster than fertility during the Industrial Revolution era and rates of natural increase rose in the cities of industrializing countries, especially large cities. This implies a declining, not rising, demographic penalty thanks to the Industrial Revolution. To explain the puzzle, we posit that negative health and industriousness effects of industrial urbanization might have been outweighed by positive effects of increased income and life expectancy.

JEL Codes: N90, N30, N10, R00, J10

Key Words: Urban Demographic Penalty, Killer Cities, Industrious Cities, Mortality, Fertility, Natural Increase, Industrial Revolution, Urban Growth