Author’s note: This column was written in a rush and under stressful conditions. We apologise for omissions and errors. In the spirit of Alberto’s drafts and emails, this column may have typos.
Few economists have had the gigantic impact on our discipline that Alberto Alesina had. Quite a few economists write great and important papers. Only a few write path-breaking and field-changing ones. And only a handful establish new fields. Alberto, the founder of the modern political economy, did just that.
Alberto’s reach was boundless. Taking a genuinely interdisciplinary approach that combined economics with political science, sociology, history, and even cultural anthropology, he transformed economics for the better. He also had a profound impact on political science, paving the way for both more game-theoretic approaches and sound empirical research.
But Alberto was not just one of the world’s finest economists. To us, and to many others, he was among the funniest, with a great sense of self-deprecating humour and a fantastic wit. Working with him was not only intellectually stimulating and rewarding; it was fun.
In the 1980s, while macroeconomists were working on sophisticated, elaborate, dynamic paradigms of the macroeconomy, Alberto had a key realisation: “politics” – i.e. the process through which economic policies are enacted – was missing from these frameworks. He went on to establish the modern political economy field, alongside Guido Tabellini and Torsten Persson, making a plethora of essential contributions.
In independent work, as well as with Howard Rosenthal, Allan Drazen, Roberto Perotti, and Guido Tabellini, Alberto developed a theory of political cycles in democracies and other regimes, studying the interconnections between electoral, budget, and business cycles, and carefully incorporating politicians’ and bureaucrats’ incentives. He also crucially advanced the ‘public choice’ paradigm, thinking about the role of ideology in political polarisation (evident today, but far from clear back then). By modelling the government and its agents carefully, thinking about the electoral process, voter heterogeneity, and politicians’ dynamic incentives, this line of research allowed for a less ideological, more balanced, and more realistic view of economic policy. In his analysis, Alberto used the tools of dynamic macroeconomic modelling and game theory and initiated their adoption in political science.
One of his most well-known papers in this line of research is with Larry Summers and shows that inflation is lower when the central bank has more independence (Alesina and Summers 1993). Inflation, then, is perhaps not always a monetary phenomenon, as Milton Friedman said, and not even a fiscal phenomenon, as some Keynesians argue. It may be a political phenomenon. This work was instrumental in the movement towards central bank independence.
Alberto’s most discussed work relates to the impact of fiscal consolidation programmes on the economy and the electoral consequences of austerity. In a paper written just before the 2007-2009 crisis, Alberto and Silvia Ardagna showed that consolidation programmes focusing on expenditure cuts are more ‘successful’ growth-wise than programmes leaning on tax increases. This research led to a controversial debate with other influential economists during the Great Recession and the subsequent austerity in the UK and the euro area. Some labelled Alberto a ‘conservative hawk’, since he showed that some austerity programmes associated with expenditure cuts and depreciation might be successful. To us, this was an unfair characterisation of his open-minded, creative, and liberal (in the true meaning of the word) thinking. But the criticism did not stop him. In subsequent work with Carlo Favero and Francecso Giavazzi, he tackled the critique and comments head-on, expanded the data, and provided a panoramic view of dozens of fiscal consolidation programs, highlighting the parts that did work and those that did not. Their recent book, Austerity: When it Works and When it Doesn’t (Alesina et al. 2019), is sine qua non reading for policymakers across the world.
Inequality and development
In joint work with Dani Rodrik (Alesina and Rodrik 1994), Alberto was among the first to think about the interlinkages between inequality, politics, and economic growth, echoing independent work published at the same time by Torsten Persson and Guido Tabellini. As Guido Tabellini rightly notes, this reflected his childhood experience in the Italy of the 1970s, “a period of stark ideological and political conflicts, with extreme polarization leading to frequent strikes, left-wing terrorism, capital flight”.1 His insight was that inequality may deter investment and growth by spurring political strife. Despite being a believer in free markets, Alberto worried about rising inequality and declining opportunity. These would be recurrent themes of his research. In joint work, for example, we would look at inequalities across ethnic lines (Alesina et al. 2016b) and intergenerational mobility in the US (Alesina et al. 2018a), as well as Africa (Alesina et al. 2020a).
Nations and political economy
Economists, political scientists, and the public take countries’ existence, size, and composition as given. Going against the mainstream, Alberto stressed the endogeneity of nations. In important work with his students, Romain Wacziarg and Enrico Spolaore, he modelled the trade-offs stemming from country size, ethnolinguistic fragmentation, and public goods provision in the creation, size, and capacity of nations (Alesina and Spolaore 1997). The research blended insights from the classical political economy with modern theoretical tools and empirical analysis to study questions such as the impact of trade on development in countries of varying sizes and the role of fragmentation on countries’ cohesion and public goods (Alesina and Spolaore 2005a). As often in his research, the insights were simple but powerful. Big countries benefit from a large domestic market and by sharing the high fixed costs of public goods, but there are losses from higher levels of ethno-linguistic fragmentation. Small countries benefit the most from international trade. Alberto and Enrico Spolaore wrote a book summarising and extending this important work (Alesina and Spolaore 2005a). In more recent work with Paola Giuliano, Brynony Reich, and Alessandro Ribboni, Alberto explored nation-building policies, such as the expansion of compulsory education or foreign wars (Alesina et al. 2017a), carefully distinguishing between their roles in democracies and autocracies (Alesina et al. 2018b).
In subsequent work, Alberto used this theoretical approach to understand the trade-offs involved in building international unions such as the EU (Alesina et al. 2005a). Countries considering forming a union need to think of the benefits stemming from the centralisation of policies and public goods and the losses from coordination and one-size-fits-all policies. His approach allows thinking about flexible rules, discretionary policies, and countries’ similarities, which are the core issues that the EU and other international organisations face. His 2000 article, titled “Economic Integration and Political Disintegration” (Alesina et al. 2000) was prophetic and is still highly relevant today. Likewise his early work on optimal currency areas (Alesina et al. 2003a) with Robert Barro and Silvana Tenreyro, another student, is still relevant, going well beyond the classic Mundellian framework. While most were doing cost-benefit economic calculations for the EU, Alberto was thinking about the political risks, the benefits of centralisation, and the likely socio-political vulnerabilities.
In a series of papers (with Ed Glaeser, Bruce Sacerdote, and George-Marios Angeletos, among others), Alberto studied the role of ethnic homogeneity and trust on transatlantic differences on fairness in shaping preferences for redistribution (Alesina and Angeletos 2005), the welfare state (Alesina et al. 2001), trust, work-leisure patterns (Alesina et al. 2005b), and taxation. This was pioneering work, as few economists paid much attention to trust, social capital, and civic values, or to their impact on welfare state policies.
In fundamental work with a global viewpoint, Alberto explored the implications of fractionalisation on institutions, democracy, conflict, public goods, and development. In this research he collaborated with former students, including Elianna La Ferrara, Katia Zhuravskaya, and Romain Wacziarg, and colleagues including Bill Easterly.
As was typical of his approach, he would first dig into the data to understand the core empirical patterns. The first contribution of this agenda was providing new country-level statistics on ethnic, linguistic, and religious fragmentation and polarization (Alesina et al. 2003b); measures of state artificiality (Alesina et al. 2011) based on how straight or wiggly national borders are and whether they separated territories inhabited by different ethnic groups; indicators of segregation (Alesina and Zhuravskaya 2011) based on the clustering of ethnic and religious groups across space; and proxies of ethnic inequality (Alesina et al. 2016) using satellite images of light density at night across linguistic homelands. Hundreds of scholars have used, expanded on, and further processed the newly compiled statistics – not only in economics but also in sociology and political science.
Second, he would then develop simple models, formalising some intuitive idea, to interpret the data. Excellent applications of this approach are his paper with Eliana La Ferrara on racial diversity and political participation across US localities (Alesina and La Ferrara 2000) and his paper with Reza Baqir and Caroline Hoxby on racial fragmentation and inequality on schooling across the US (Alesina et al. 2004). In an article with Philippe Aghion and Francecso Trebbi, Alberto endogenises countries’ institutional capacity, linking it to societal composition, the size of the minority group, and fragmentation (Aghion et al. 2004).
Third, Alberto would expand these analyses, bringing in ideas from other areas and domains. For example, in follow-up work with Philippe Aghion and Franceso Trebbi (Alesina et al. 2008), he would show that democracies promote entry and thus exert a disproportionally positive effect on productivity growth of more advanced sectors. With Francesco Trebbi and Guido Tabellini, Alberto blended insights from this line of research with his earlier work on international unions to study the evolution of heterogeneity in beliefs, trust, and values across EU countries as contrasted with the US (Alesina et al. 2017a). The EU looks quite fragmented, but most of the differences are within, not across countries. The media and commentators stress differences between, say, Italians and Germans on trust, values, and attitudes, but the most striking heterogeneity of beliefs is in fact within Germany and within Italy. Interestingly, the US is not very different: within-state heterogeneity dwarfs cross-state variation.
Alberto was one of the founders of modern research on culture and economics. For decades, economics had set aside issues related to trust, moral values, beliefs, and norms. Alberto was marked by the large differences in beliefs and values between the North and South of his native and beloved Italy. He firmly believed in the profession’s need to understand how culture forms, how it transmits, and how it affects politics and the economy. Together with Paola Giuliano, Yann Algan, and Piere Cahuc, among others, he studied the role of family ties in institutions, the welfare state, competition, and political preferences (Alesina and Giuliano 2014). For example, he showed how strong family ties rationally lead to sclerotic labour market regulation and institutions, which could amplify unemployment and lead to lower wages (Alesina et al. 2014). In another paper with Nicola Fuchs-Schündeln, he showed how communism affects individual preferences and values, long after the fall of the Iron Curtain (Alesina and Fuchs-Schündeln 2007). In fascinating studies, Alberto, Paola Giuliano, and Nathan Nunn connected the use of the agricultural plough in pre-industrial times to differences in the role of women and preferences for boys over girls (Alesina et al. 2018c).
Facts and realities
Over the past years, we had been working together on projects that aim to map and understand the sizable differences between realities and people’s perceptions, for instance, about intergenerational mobility and immigration. In a series of papers, we leveraged newly designed large-scale surveys in several countries to document how people think about redistribution, social mobility and the American Dream (Alesina et al. 2018d), and immigration (Alesina et al. 2018e). We also showed how misperceptions in all these domains correlate with political orientation and ideology. In particular, Americans are not only polarised in their views of policy, but even in their perception of ‘reality’, i.e. basic facts (Alesina et al. 2020b). We showed that Americans are too optimistic about the ‘American dream’ while Europeans are too pessimistic, and that those who believe in more intergenerational mobility demand less redistribution (Alesina et al. 2018d). We explored how people’s beliefs about immigrants across Europe and the US are systematically misguided and overly negative, and that merely providing facts does not change views much (Alesina et al. 2018e).. Experimentally, we showed that even just making people think about immigrants generates less support for redistribution and provides a simple conceptual framework to capture the interplay between beliefs and preferences when it comes to diversity, immigration, and minorities (Alesina and Stantcheva 2020).
Alberto was also working on social mobility in frontier economies. In joint work with Stelios Michalopoulos and Sebastian Hohmann, we provide new measures of intergenerational mobility across and within African countries, uncovering vast regional disparities in opportunity and further demonstrating the causal impact of regions (Alesina et al. 2020a). In the past days, we have been revisiting our companion papers on the role of religion and ethnicity in shaping mobility in Africa. Alberto had also been working on intergenerational mobility in China (Alesina et al. 2020c). His research builds again on an intriguing observation. Despite the Cultural Revolution and the Great Leap Forward that almost eliminated income disparities, there is significant persistence in mobility in China, as today’s income relates to families’ education before these bold policies. This work is not only fascinating, documenting persistence even in this extreme case, but it will surely go on to have non-negligible policy implications in China.
Alberto was so prolific that we could go on and on. The breadth of topics he covered is exemplified by his 2002 paper on foreign aid and corruption with Beatrice Weder di Mauro, his 2014 work on racial bias in capital sentence in the US with Eliana La Ferrara, or his more recent research on stereotypes with Michela Carlana, Elianna La Ferrara, and Paolo Pinotti (Alesina et al. 2018f).
Alberto was the founding director of the National Bureau of Economic Research’s Political Economy working group. As an amazing and energetic leader, he has worked tirelessly to expand the group’s breadth and depth. In the early days, the group members were mostly scholars from Europe and Latin America. As time went by, the group grew and the questions discussed in the meetings became very diverse, reflecting Alberto’s hunger to learn more and explore new topics. Alberto was instrumental in the growing international outreach of the NBER. Thanks to him, papers also covered the EU, which was evolving from a free trade area into a monetary union, Latin America, Asia, even Africa. Remarkably, Alberto has done work relevant for all these continents.
Alberto was also a force in the remarkable opening of the NBER. The field could not have hoped for a more open-minded leader. His mantra was on the question. As long as it was interesting, controversial, and novel, the methodology was of secondary importance. He would select papers of all sorts – empirical, applied, theoretical, structural, or descriptive. The breadth of topics represented is also astounding: media economics; populism; perceptions and beliefs; African ethnic politics; historical development in America, Africa, and Asia; intergenerational mobility in the US, China, Europe, and Africa; unified growth theory; slavery; banking regulation; the Ottoman administration of Egypt; the indigenous American reserves; culture and nutrition in India; the role of narratives; and so on.
His insights during the presentations were invaluable and often combined with jokes and laughs. Ilyana Kuziemko fondly remembers that he would emphatically announce that only clarifying questions were allowed during the presentation, only to shortly after use his “organiser privilege” to “break the rules” and ask a conceptual question.
In 2010, Alberto helped Alberto Bisin and Paola Giuliano to start an “Economics of Culture and Institutions” spring meeting within the Political Economic group to cover research on the interactions between culture, institutions, and development (for Alberto’s overview, see Alesina and Giuliano 2015).
Ironically, in a recent meeting, he was remembering the early years of the Political Economy group. He concluded by arguing how proud he was that this network had grown so large, making significant contributions to the profession and to all of its members.
A team player
For leaders to make impactful changes, they need to bring people together, form a team, and focus constructively on the positives. Alberto did precisely that. In addition to working with many established scholars, Alberto worked and nurtured many fantastic young economists, who are now leading voices in the field. What made him a great mentor was his ability to let his younger co-authors and collaborators pursue their interests. He was always interested in everything and was eager to learn about things he did not know. He would also take pride in his students, whose research evolved into areas relatively far from his, for example, into macroeconomics or development, areas very close to his heart. Over the years, he invited dozens of young doctoral students from many European schools to spend a year or a semester at Harvard, attending courses and seminars, and pursuing their – rather than his – agenda. He would focus on the question, motivation, and drive exhibited by the student, rather than on grades or lengthy reference letters.
Bocconi, CEPR, and Europe
Alberto spent almost all his professional life at Harvard. He was Assistant Professor for two years at Carnegie Mellon. But he remained deeply connected to Italy and Europe. He would visit Bocconi University multiple times every year to collaborate with co-authors, colleagues, and students. He enjoyed the most teaching and interacting with the students. He was an inspiration for hundreds of students in Italy and Europe to pursue their research paths and dreams. On many occasions when we have been presenting at seminars or conferences across Europe, young doctoral students and assistant professors would tell us “we have spoken with Alberto, your co-author, talked about our paper and he suggested x, y, z.” His passing is a tremendous blow to young aspiring scholars. They have lost a voice of encouragement, wisdom, advice, and passion that is so crucial in our profession. The profession and any young scholar should take from him the astounding work ethic, the focus on the important big questions, the blend of economics with politics, history, and culture, his ever-ending curiosity and willingness to learn.
Alberto Alesina also played an instrumental role at CEPR. His appointment as a CEPR Research Fellow in 1987 came during his first year as assistant professor. This was exceptional, as all CEPR Research Fellows at the time were tenured. Richard Portes puts it succinctly: “It was clear that he was indeed exceptional - why wait?” Alberto contributed significantly to CEPR over his career. He drafted important conference volume papers on public debt and was a major figure in CEPR’s activities on European monetary integration in the early years and in the Centre’s work on political economy within its International Macroeconomics programme.
He was passionate about real-world economic problems and reaching broad audiences. He contributed profusely to Italian and European economic policy debates with his writings in Corriere della Serra and for VoxEU, for which he wrote almost 40 columns. Some favourites are his 2007 VoxEU column on “Why the left should learn to love liberalism”, his prophesy on “Italy’s Economic Denial Status”, and his 2006 book, Europe’s Future: Reform or Decline, all joint with Francesco Giavazzi, his dear friend.
Alberto served as Chair of Harvard’s Department of Economics between 2003 and 2006 and was widely respected in this role. He was also a phenomenal, punctual, and fair Editor at the Quarterly Journal of Economics between 1999 and 2004.
Alberto adored his wonderful wife Susan. Susan admired Alberto deeply. She would tell us stories about his hard work, passion, and never-ending drive. Alberto was also very close to his mother and his sister. Our hearts are with them. We hope they find some comfort in the knowledge that Alberto has been such an inspiration for so many. Susan and Alberto often took adventurous trips, hiking and skiing, from Alaska to Japan, through their retreat in Courmayeur. He claimed his best ideas came to him “on the slopes” or “in the ski lift”. He joked that “if the weather is bad for skiing,” then it would be “good for our paper”.
Stefanie: Before Alberto left for his hike on Saturday, we were exchanging emails about one of our current joint papers on “Race and Redistribution” for which we had been collecting new survey data. He was very excited about the first set of results, firing emails at a vertiginous speed, and signed off on the note that we would “talk more” on Monday. I am heartbroken that Monday will never come. But I have had the incredible luck to witness Alberto’s brilliance and kindness from very close for many years. I have our joint work to cherish and our enriching and stimulating interactions to draw inspiration from. Thank you, Alberto, for all you have done for me and the world.
Elias: Over the past weeks, we had been working on our project on “Social Mobility in Africa.” A minute after resubmitting our paper on intergenerational mobility across African countries last month, Alberto immediately started revisiting our companion papers on the role of religion and ethnic affiliation in educational mobility. His drive was endless. I keep many fond memories. His cryptic short emails, often in Ancient Greek that he thought Stelios and I knew (and he did know). Our political debates, in half of which I was the “communist” and he the “neo-liberal,” and in the other half the roles were reversed. His jokes often about himself. His emails after sending us the very final draft to submit that he had forgotten to spell-check. Every time we met, he would ask: Is Hariklia still married to you? Our discussions in half-English, half-Italian, half-Ancient Greek. At some point, Stelios and I disagreed about some aspect of our paper. We both turn to him. So, what do you think? His reply: “You both have a point. I enjoy watching you fight! Now let’s write the paper!” Setting aside the fun part, I will retain from Alberto his pathos, collaborative spirit, can-do attitude, emphasis on the positives, stick-to-the-goal orientation, and endless curiosity.
Stefanie and Elias: To the world, Alberto Alesina was the engaged, prolific economist improving the policy debate. To economics, he was a giant and driving force of political economy, which grew under his lead to become an important interdisciplinary field. To us, he was our brilliant, warm, funny, close co-author, and friend. We will miss him terribly.
Aghion, P, A Alesina and F Trebbi (2004), “Endogenous Political Institutions”, The Quarterly Journal of Economics 119(2): 565–611.
Alesina, A, and G-M Angeletos (2005), "Fairness and Redistribution", American Economic Review 95(4): 960-980.
Alesina, A and N Fuchs-Schündeln (2007), “Good-Bye Lenin (or Not?): The Effect of Communism on People’s Preferences”.
Alesina, A and F Giavazzi (2006), The Future of Europe: Reform or Decline, The MIT Press.
Alesina, A and P Giuliano (2014), “Family Ties”, in P Aghion and S N Durlauf (eds), Handbook of Economic Growth, North Holland.
Alesina, A, and P Giuliano (2015), "Culture and Institutions", Journal of Economic Literature 53(4): 898-944.
Alesina, A and E La Ferrara (2000), “Participation in Heterogeneous Communities”, The Quarterly Journal of Economics 115(3): 847–904.
Alesina, A and E La Ferrara (2014), “A Test of Racial Bias in Capital Sentencing”, American Economic Review 104(11): 3397–3433.
Alesina, A and D Rodrik (1994), “Distributive Politics and Economic Growth”, The Quarterly Journal of Economics 109(2): 465-490.
Alesina, A and E Spolaore (1997), “On the Number and Size of Nations”, The Quarterly Journal of Economics 112(47): 1027-1056.
Alesina, A and E Spolaore (2005a), “War, peace, and the size of countries”, Journal of Public Economics 89: 1333–1354.
Alesina, A and E Spolaore (2005b), The Size of Nations, MIT Press.
Alesina, A and S Stantcheva (2020), “Immigration and assimilation: Diversity, Immigration, and Redistribution”, AEA Papers and Proceedings 110: 329–334.
Alesina, A, and L Summers (1993), “Central Bank Independence and Macroeconomic Performance: Some Comparative Evidence”, Journal of Money, Credit and Banking 25: 151-62.
Alesina, A and B Weder di Mauro (2002), “Do Corrupt Governments Receive Less Foreign Aid?”, The American Economic Review 92(4): 1126-1137.
Alesina, A, and E Zhuravskaya (2011), "Segregation and the Quality of Government in a Cross Section of Countries." American Economic Review 101(5): 1872-1911.
Alesina, A, E Spolaore and R Wacziarg (2000), “Economic Integration and Political Disintegration”.
Alesina, A, E Glaeser and B Sacerdote (2001), “Why Doesn't the US Have a European-Style Welfare System?”, NBER Working Paper No. 8524.
Alesina, A, R J Barro and S Tenreyro (2003a), “Optimal Currency Areas”, NBER Macroeconomics Annual 2002, Volume 17.
Alesina, A, A Devleeschauwer, W Easterly, S Kurlat, and R Wacziarg (2003b), “Fractionalization”, Journal of Economic Growth 8: 155-94.
Alesina, A, R Baqir and C Hoxby (2004), "Political Jurisdictions in Heterogeneous Communities," Journal of Political Economy 112(2): 348-396.
Alesina, A, I Angeloni, and F Etro (2005a), "International Unions", American Economic Review 95(3): 602-615.
Alesina, A, E Glaeser and B Sacerdote (2005b), “Work and leisure in the U.S. and Europe: Why so different?”.
Alesina, A, P Aghion, F Trebbi, and E Helpman (2008), “Democracy, Technology and Growth”, in Institutions and Economic Performance, Harvard University Press, pp. 511-543.
Alesina, A, W Easterly and J Matuszeski (2011), “Artificial states”, Journal of the European Economic Association 9(2): 246-277.
Alesina, A, Y Algan, P Cahuc and P Giuliano (2014), “Family Values and the Regulation of Labor”.
Alesina, A, S Michalopoulos, and E Papaioannou (2016a), "Ethnic Inequality," Journal of Political Economy 124(2): 428-488.
Alesina, A, S Michalopoulos, and E Papaioannou (2016b), "Ethnic Inequality," Journal of Political Economy 124(2): 428-488.
Alesina, A, B Reich and A Roboni (2017a), “Nation-Building, Nationalism, and Wars”.
Alesina, A, G Tabellini, and F Trebbi (2017b) “Is Europe an Optimal Political Area?”.
Alesina, A, S Stantcheva, and E Teso (2018a), "Intergenerational Mobility and Preferences for Redistribution", American Economic Review 108(2): 521-54.
Alesina, A, P Giuliano and B Reich (2018b), “Nation-Building and Education”.
Alesina A, P Giuliano and N Nunn (2018c), “Traditional agricultural practices and the sex ratio today”, PLoS ONE 13(1).
Alesina, A, S Stantcheva, and E Teso (2018d), “Intergenerational Mobility and Preferences for Redistribution”, American Economic Review 108(2): 521–554.
Alesina, A, A Miano and S Stantcheva (2018e), “Immigration and Redistribution”, NBER Working Paper 24733.
Alesina, A, M Carlana, E La Ferrara and P Pinotti (2018f), “Revealing Stereotypes: Evidence from Immigrants in Schools”.
Alesina, A, Carlo Favero, and F Giavazzi (2019), Austerity: When It Works and When It Doesn't, Princeton University Press.
Alesina, A, S Hohmann, S Michalopoulos and E Papaioannou (2020a), “Intergenerational Mobility in Africa”.
Alesina, A, A Miano and S Stantcheva (2020b), “The Polarization of Reality”, AEA Papers and Proceedings 110: 324–328
Alesina, A, M Seror, D Y Yang, Y You and W Zeng (2020c), “Persistence through Revolutions”.