Charles Kenny

Superfast: Is It Really Worth a Subsidy?

Suerpfast: Is It Worth A Subsidy? is a working paper written with my brother, Robert Kenny, at Communications Chambers.  Governments around the world are investing multiple billions to support the roll-out of fiber. These subsidies are based on the premise that fiber to the home brings substantial externalities.  However, the evidence that basic broadband has contributed significantly to economic growth is decidedly mixed, and points to low returns for (expensive) superfast upgrades.  This is especially the case given that many of the applications used to emphasize the supposed benefits of fiber to the home can be delivered by basic broadband or by superfast to business and government rather than to homes.  In addition, other high speed broadband infrastructures are often simply ignored when making the case for fiber, and fiber rollout is credited with bringing benefits that would in fact require major systems and social change in other parts of the economy.  Given the benefits of fiber have been considerably overstated, governments should think very hard indeed before supporting fiber rollout to the home.  The paper casued a bit of excitement in Australia, and attracted some critics.  Here is our response.  The paper was published in info  (vol 13, No. 11).  We published a short version in The Journal of the Institute of Telecommunications Professionals (gated, here).

We Don't Need No Universal Education?

We Don't Need No Universal Education? was published online by the Harvard International Review.  The piece notes that there are multiple links in the chain between building schools and an economic impact to education, and argues that some of those links are often very weak, indeed.  It concludes that we might want to spend more time on improving the quality of education before we worry overmuch about its universal extent.

What Does the Eastern European Growth Experience Tell Us About the Policy and Convergence Debates?

What Does the Eastern European Growth Experience Tell Us About the Policy and Convergence Debates? is an unpublished paper. While the human costs of communism in Eastern Europe were incalculably large, the impact on regional income growth may have been comparatively minor. Despite common perceptions of the efficacy of communism as a system for promoting growth, it appears that the region’s performance was better than any developing country group with the exception of the Asian miracle countries. The region would have grown faster if it had been part of a broader European ‘convergence club,’ however, and the paper discusses how much communism is to be blamed for Eastern Europe not being part of such a grouping –suggesting that this depends on the country.  The paper concludes with a look at what these results might mean for the growth and convergence debates.

What Do We Know About Economic Growth, Redux

What Do We Know About Economic Growth, Redux is an unpublished short paper.  It revisits the cross-country growth literature six years after What Do We Know About Economic Growth Or, Why Don't we Know Very Much?  Since then, even more evidence has piled up that growth is a complex, context-dependent process difficult to explain using linear growth models.  We do know that the best way to be rich today is to have been rich yesterday, however. That result has led some researchers to revisit Nineteenth Century explanations including God and superior breeding as the ultimate determinants of wealth.  But the 'truly ultimate' answer may as well turn out to be geography.

Why Globalizers Should be Depressed by Regional Economics

Why Globalizers Should be Depressed by Regional Economics is an unpublished short paper.  Most countries have (internal) free movement of goods, money and people --they are microcosms of a perfectly globalized world.  But within-country regional inequality remains very large.  Furthermore, the most powerful force for within-country income convergence is the ability of people to move from declining regions to prosperous areas --and this is the part of globalization which is least advanced.  These twin facts suggest the world remains anything but flat. 

Is Anywhere Stuck in a Malthusian Trap?

Is Anywhere Stuck in a Malthusian Trap? is an unpublished short paper.  The key features of the Malthusian model are that (i) income determines population growth, with rising wages increasing survival rates and (ii) there is a vital factor of production (land) which is fixed, implying decreased returns to scale for all other factors. The equilibrium state in such a model is a population living on subsistence incomes. The analysis in this paper suggests that (i) the link between income and population growth is (almost) everywhere broken and (ii) there is little evidence of declining returns to scale because of constraints imposed by land carrying capacity at the macro level anywhere. Population dynamics are being driven by non-income factors in a manner that is reducing population growth rates everywhere. At the same time, output is increasing everywhere, in a manner inconsistent with significantly declining returns to scale based on land being a vital factor of production.

What Do We Know About Economic Growth

What Do We Know About Economic Growth Or, why don't we know very much? was published in World Development 29, 1, 2001, co-authored with David Williams.  The last 10 years has seen an explosion in cross country econometric studies of growth, driven by two factors---new mathematical models of the growth process that lend themselves to econometric testing, and new data sets that make such testing possible. This paper looks at a selective review of these studies. It concludes that the results are disappointing in that no model has proven robust to trial by repeated regression. The paper suggests some reasons for this---including that the tested models tend to be ahistorical and over-simple in terms of their causal accounts. It concludes with possible lessons for econometric work in this area.

Some of the ideas in the paper are recycled for an article for The Globalist published January 2005, Do we Know How to Develop?

Why Aren't Countries Rich?

Why Aren't Countries Rich? Weak States and Bad Neighbourhoods was published in The Journal of Development Studies 35, 5, 1999.  This article challenges a common viewpoint that the policy choices made by state leaders are central to explanations of economic growth. It argues that there are two possible flaws in this viewpoint. First, that state leaders have a free choice in policy decisions; second, that it is policies that in large part determine growth rates. Using a set of variables designed to capture the weakness of the policy autonomy of the state and possible non-policy influences on growth rates, the article concludes that initial conditions are a better determinant of wealth and growth than free policy choice.

Reprinted in M. Seligson and J. Passe-Smith Development and Under-Development: The Political Economy of Global Inequality Boulder: Rienner (2003).

Senegal and the Entropy Theory of Development

Senegal and the Entropy Theory of Development was published in the European Journal of Development Research, 10, 1, 1998.  This analysis uses Senegal as a test case to study the assumptions made by the governance agenda.  After briefly charting the growth of the governance model and the theoretical assumptions on which it rests, the study outlines an alternative view of state action based on legitimacy and survival.  The bulk of the study examines the economic reform process in Senegal, and argues that the governance model of development cannot account for the timing or nature of economic reform efforts there.   Instead, the actions of the state in Senegal were dictated by the need to respond to a continuing lack of legitimacy despite 'correct' formal institutional structures.  The study concludes that the economic reform process --such as it was in Senegal-- was driven from the outside, and that institutional reform was either irrelevant or harmful to that process.