Keynote speaker at the 2018 Africa Meeting of the Econometric Society, Eliana La Ferrara is an Italian economist who holds the Fondazione Romeo ed Enrica Invernizzi Chair in Development Economics at Bocconi University.
What are your areas of research and what will you be focusing on at the ASE conference?
I work on micro-economic development. I try and understand household behaviour, the behaviour of communities and the role social factors play.
I’m very interested in understanding when social relations become an aid to development and when they become a constraint. For example, some of the research, I am doing right now, is on when communities are stuck in equilibrium and following social norms that might be harmful, how do you get them out of that equilibrium by manipulating their beliefs.
Other projects on which I have worked are about how we can use the media to change people’s preferences and steer their actions towards development-conducing goals.
In the plenary session, I’ll present an overview of some of the research that other people and I have done on media – in particular on the mix between education and entertainment – and how that particular mix can be used to get messages across to people who may not be very easy to reach otherwise.
What are you hoping to achieve this year through the year?
I hope to make progress in understanding the role of aspirations and how to help young people make choices and educational investments that will improve their lives and get them out of poverty.
Also, as I mentioned before, I have a few projects on the ground in Africa, one ongoing in Somalia and another one planned in Sierra Leone, where we are trying to help communities get out of equilibria with harmful norms. I hope the fieldwork will go well.
Why is Africa such a focus for you?
When I started studying development as a student, a lot of people were working on Latin America because those were the years where the problem of public debt was important.
I felt that Africa was a little neglected in terms of the materials that I could study and I wanted to help fill that gap. And then I visited Africa in my early twenties, my first trip was to the Democratic Republic of Congo, which was then called Zaire, and I just fell in love with the place. Since then I always like to come back, see new countries and make an effort to generate research that can contribute to economic policy in those countries.
Why are mathematics and statistical tools important in order to understand economic trends?
I work with data a lot, and when you work with data, you can do observational work, visit a place, get a sense with interviews of how things are evolving in that place. But if you want to draw general conclusions you need to have large amounts of data and the only way to analyse that is through statistics.
I think investing in maths and econometrics is an important way to transition from hypotheses and models to tests. We can then verify which theories hold best to the test of reality and this is what we talk about with policymakers in order to affect economic policies.
What role can the African School of Economics play in shaping global economics?
I think that institutions like the ASE are really crucial for training students so they are at the frontier of economic research.
It’s important to have a critical mass. What is hard for individual countries or cities to achieve is to get a group of highly qualified faculty and highly motivated students in the same place. And that’s why we see elite institutions around the world where this critical mass can be created.
ASE is a very good example of an effort to get both teachers and students in the same place while maintaining very high standards of quality.
Do you think institutions like the ASE will ever help change policy and the way the world looks at economics?
We know there is some scepticism on how much economists have helped, or not helped, in recent years with economic policy. I really believe research and a deeper understanding of what is happening around us is the first step we can take to improve policy.
As long as researchers are engaged and willing to talk to policymakers, I am optimistic. I don’t see why one should give up.
What’s your outlook for the African economy?
I always dream that Africa will be the winner of tomorrow just because I love its people so much. It’s a continent that has a lot of resources and a great mindset in its population. Africans are very positive, very open, maybe I shouldn’t generalise but these are the people I’ve met.
I really hope that whatever institutional or resource constraints that have held it back so far are going to be overcome. I expect that standards of living are going to improve and the role of Africa in the global economy is going to become more and more important.
What are the greatest challenges facing the African economy? And what are the positive developments happening at the moment?
That’s a broad question! Among the challenges, the political development and the ability of some of the countries to move towards more participation and more truly democratic decision-making processes are one of the obstacles we should try to overcome. The lack of state capacity and the continuing prevalence of conflict in some African states are challenges that should become priorities in the international policy agenda.
Another challenge is related to education and making sure that both access and the quality of education are widespread. Africa is still lagging behind when you look at secondary and higher levels of school enrolment and achievement tests of students at different levels, so I think it’s very important for African governments to invest in human capital.
On the positive side, several countries have been experiencing marked improvements in growth rates. It is important that this growth is distributed to the whole population.