Enrique is an IO and Development Economist interested in financial development and the role of government in the economy. He combines policy making experience in Mexico with an interest in theory based empirical research. His current work focuses on bancarization, government credit guarantees, and consumer financial behavior.
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My interest in development economics arose from both: my desire to help spur development of my country and an intellectual curiosity to understand why some countries and people are poor.
What got you interested in development economics?
I was born and raised in northern Mexico, and as a kid we frequently went to the United States. The difference in income across countries was striking even to a small child. From that age I always wondered why is it that the US is rich and Mexico is poor. Many years later I realized that this disparity was present for dozens of counties in the world and that this was a centuries-old question. So for me it is very personal. My interest in development economics arose from both: my desire to help spur development of my country and an intellectual curiosity to understand why some countries and people are poor.
Development economics is an exciting field that in the last two decades has undergone large changes, in terms of methodologies—like the use of randomized control trials, access to data, and of increased interest by the international community on the topics it studies. Unfortunately we still know too little of what works to further development, and it is still true that many policymakers show little interest in learning what works. We have to change this and I believe J-PAL is playing a very important role. Consistent with J-PAL’s mission and in order to disseminate knowledge and engage Mexican academics and policymakers, I helped create “Qué Funciona para el Desarrollo,” a non-profit organization that conducts and disseminates rigorous research investigating what works for development.
What is one current research project that you're particularly excited about?
I am excited about many projects, but let me mention two of them. The first is about finding ways to motivate high school students to flourish both in academic terms and in their broader personal lives by helping them develop socio-emotional skills (SES). Teenagers tend to engage in risky behaviors and frequently need guidance and examples in developing their life plan. Many of them seem to lack aspirations and role models. I am currently helping the Mexican Ministry of Education to conduct a randomized trial to evaluate “Construye T”, a program aiming to develop SES in public high school students.
A second research agenda I am pursuing is about an old question of whether finance causes growth. Mexico has a low credit-to-GDP ratio even within Latin America (about 27 percent) and also has had meager growth in the last three decades. Are these two facts causally related? The particular question I want to answer is this: To what extent are medium-sized firms in Mexico constrained in their productivity and growth by lack of credit? What (if anything) is preventing the credit market from functioning efficiently? I am currently engaging Mexican banks to set up an empirical research strategy that helps us answer these important questions.
What is your "dream evaluation"? (It doesn't have to be feasible!)
One of the questions I am interested in overlaps to some extent with the fields of political economics and political philosophy, and is about what roles government legitimacy and social trust play in engendering social cooperation and obeying the law. Economic transactions almost always involve an element of trust between agents. Successful public policies often require cooperation by citizens. Tax evasion and corruption for instance may be a function of the perceived government legitimacy. What determines the legitimacy of social arrangements? How is trust formed and to what extent is economic activity influenced by it? Ideally I would like to exogenously vary the legitimacy of government and measure how this influences compliance with the law.
What is your craziest story from the field?
Instead of describing a funny anecdote let me share a revealing story from the field. One of the projects I am working on along with coauthors is about understanding why productivity of small farmers is so low. One of the experiments involved partnering with a government ministry. The only role of the ministry was to deliver fertilizer by March or April, which they agreed to do. It is now October and they still haven’t delivered it! This is disastrous for yields.
This is not uncommon in government fertilizer programs. Why? Many bureaucrats face few incentives to perform well. I believe this highlights the importance of accountability and the power of market competition. This may also explain why there are fewer randomized controls trials with the government as an implementing partner. I am convinced that successful development policy has to carefully think through what are the incentives of politicians and bureaucrats. Pure knowledge of what works for development is necessary but not sufficient.