As part of our interview series, we ask renowned experts in the field about the future of research in development economics, and for their advice for young researchers. For this interview, we got the opportunity to talk to Prof. Meredith Startz.
Meredith Startz is an assistant professor in the Dartmouth economics department. Her research is at the intersection of development and trade, and focuses on how information problems shape transactions and firms in developing countries.
ETRM: Could you tell us what inspires your interest in working on research at the intersection of development and trade?
Meredith: Early on, I had a couple of ideas that related to small firms, and then I started going to the field and doing interviews, and I was just really intrigued by the things I was hearing. They were hustling so hard, and had amazing stories. And I think it snowballs from there. You hear a story, and you’re like, ‘wow, that’s 10 research questions in that one story you just told me’. For example, as soon as you start talking to firms about ‘where do you get your products’, you start getting into trade questions quickly. For me, it was just about following this chain of stories about the challenges businesses said they encountered, and that’s what led me to that development and trade intersection.
ETRM: What do you think is the most exciting frontier area in the research of development and trade?
Meredith: There is a lot you could say because this is an intersection of fields that’s really fun to be part of right now. One thing that is nice compared to when I started in grad school is that there are a lot more people working at this intersection of fields, and so you don’t feel quite so alone. You can have your group of people that you can run ideas by and talk to.
Let me highlight two general developments that I think are exciting right now. One is that people have been making a ton of progress on figuring out how to access and link together new types of data sources. Both trade and development had their own blind spots in the past that were related to the particular types of data sources they used. Trade often had trouble saying things about informal firms or even non-manufacturing firms in general, just because of the traditional data sources that it used. And for development, because it was so focused on survey-based data sources, it was often really hard to say anything about medium or large firms. What has been happening recently is that people have really been innovating around accessing different types of data and connecting those sources. Linking customs data, firm censuses, VAT data, transactions data from the private sector like banks, E-commerce or logistics companies, running new types of surveys, and bringing all these things together. That’s letting us shed light on sections of the economy that we didn’t know much about empirically before.
A second is that people have been combining the traditional methodological strengths of the two fields in really productive ways. Development in the last few decades has been very focused on causal identification. And trade has been focused on coming up with ways to make General Equilibrium (GE) models of heterogeneous agents tractable and quantifiable. What happened recently is people putting those two pieces together, and that’s what you need to get believable answers to a lot of the big policy questions around firms and markets in developing countries: bringing together that focus on causal identification with those GE modeling tools.
ETRM: You have a couple papers about the role of the middlemen in reaching remote customers and supporting supply chains. We are observing in a lot of developing settings the expansion of mobile money adoption and internet access. Do you think that these digital technologies are going to disrupt the roles of those middlemen, or will they just reshape how they work and how they create value in this market?
Meredith: I’m a little bit of a tech skeptic. When I talk to people at partner organizations or tech startups, I hear a lot of stories about amazing new technologies that are going to transform the way everyone is doing business. More often than not, they kind of sputter out, or at least, in the positive case, they take off more slowly and in different ways than proponents think they might at the outset. People are conservative and slow to change the way they are doing business and to make use of new technologies. Let me give you a couple of examples of things that I think have been less transformative than you might think. And then end with one that I think is more promising.
One is that a few years ago, we were hearing everywhere that blockchain was going to totally transform supply chains, especially the way that agricultural value chains worked in places with poor contract enforcement. At the time, I thought that sounded cool, but I didn’t quite understand exactly how it’s going to do that. As far as I can tell, the excitement around blockchain for transactions in developing countries has kind of fizzled out, at least at the moment.
On a slightly more positive note, e-commerce is growing, but slowly and in different ways everywhere, as people gradually figure out how to make the technology work to solve the problems they have. For instance, in a lot of developing countries, e-commerce has taken more the form of what some people are calling social commerce, than the organized e-commerce platforms we see in richer countries. This involves selling and buying via social media, like Facebook or WhatsApp groups or WeChat groups. Edward Wiles and Deivy Houeix have a cool new paper on this, studying people using WhatsApp groups in their business. Understanding why it seems to be taking that form in a lot of lower income countries is a super interesting question. That tells you about the barriers people are still facing and the way that technology is actually helping them solve their problems.
One thing that I am more optimistic about is that in the next five years or so, we are going to see a lot more innovation around how to use digital payments. I think now access to the technology is widespread enough that people are going to start to make those local applications that actually solve the specific problems businesses in developing countries are facing. We have an example of this with using mobile money data to do underwriting or credit scoring for people who wouldn’t otherwise have access to loans. That is an example of using a new technology but applying it a maybe unexpected way to a particular problem: people who were unbanked and there was no information about them out there that would let a lender make a decision about whether they were credit worthy. We may, in the next five or 10 years, see people figuring out analogous things for small businesses around how to use those technologies to create new financial instruments or new contracting instruments on the business-to-business transaction side.
ETRM: Some of your research (Startz, 2024; Grant & Startz, 2024) relies on data from the Lagos Trader Survey and earlier censuses of retailers in parts of Lagos. Collecting such data in dynamic and informal markets likely came with significant challenges. Could you share some of the key challenges your team faced during the data collection? For instance, how did you convince agents from the public sector to participate or share information with you?
Meredith: There are a lot of challenges. And it genuinely is different depending on who your respondents are. Are you talking to households, or students, or farmers, or small retailers? It’s also even different if you’re talking to traders in two different countries.
One of the things that we figured out early on in Lagos is that the people we really needed to get on board were the market associations . And those are not public agencies in Nigeria. We needed to go market by market. Sometimes there were multiple market associations representing different factions in the same market, and we had to get them all on board. It took us a little bit of trial and error to figure out who are really the key stakeholders in this context, and make sure that they stayed in the loop about what we were doing, and they felt that they were being respected, and their members were being respected. That was a huge help once we got over that hurdle.
As a graduate student, a lot of the reading I had done and data sets I had worked with involved rural household surveys. I learned useful things about survey methodology from that context. But there were also things that did not translate at all to doing urban commercial surveys. You have to figure out how to adjust to the context you are in. For example, I was used to seeing these 150-page long survey instruments that loop through every input to every crop grown in two different seasons by every member on every plot. And then I got to Lagos, and eight minutes into the survey, respondents were looking at their watch and saying, “I have customers now, please leave my shop.” Figuring out the difference between sitting down with a farmer for two hours and sitting with a shopkeeper where they maybe give you 30 minutes and how you needed to adjust your surveys was a big learning process for me.
ETRM: Thank you so much for having the interview with us today!
