Q&A with Meredith Startz, the first postdoctoral fellow at the King Center on Global Development.
Meredith Startz is the inaugural postdoctoral fellow at the Stanford King Center on Global Development, and will join the Stanford economics department as an assistant professor in Autumn 2019.
Startz's research is at the intersection of development and trade, and focuses on how contracting problems shape transactions and firms in developing countries. She is a recipient of a junior faculty research grant from the center for her project Middlemen: The Structure of Chains of Intermediation.
What has been your biggest achievement so far in your research?
One thing I am very proud of is that a large part of my work has been figuring out how to set up my own data collection process in Nigeria from the ground up. The project manager in Nigeria who works with me and my co-PI has now incorporated his own survey firm and can eventually, hopefully, take on other researchers’ projects. I’ve learned a lot from working with him and the rest of our team in Nigeria.
What are some of the opportunities that postdoc at the King Center offers that set it apart from other positions?
One of the best things about this postdoc is the opportunity to interact with people working on topics relevant to development from lots of different angles – not just the development and trade economists in the economics department, but also people at SIEPR, GSB, FSI, the medical school, and so on. It’s good to be exposed to people who think about things in different ways, and ask different questions. I’m interested in reputation and contracting, and Stanford and the Bay Area more broadly is also a center for people thinking about related issues from theory, IO, and tech approaches.
Can you share some of the projects you are working on during your time here?
I am working on a project with Matt Grant, another postdoctoral fellow, which looks at how goods get distributed from producers to consumers. We started this while talking about a surprising pattern in data I had previously collected from Nigerian importers: many of them buy from wholesalers in entrepot cities like Dubai in the United Arab Emirates and Cotonou in Benin. These importers in turn sell to downstream wholesalers based in smaller cities in Nigeria. That means that by the time goods like cell phones or shoes get to Nigerian consumers, they have often passed through the hands of at least three middlemen.
That’s a big contrast to most models in international trade, which think of goods going straight from manufacturers to consumers all over the world. We want to know why these chains of intermediaries form, and how it might affect consumers. The common wisdom is that long chains are bad, because middlemen charge mark-ups and higher prices get passed on to consumers. One of our findings is that longer chains can actually be good for consumers if the ability to buy from a closer source market increases competition by allowing more, smaller traders to supply your local market.
Another current project is with Lauren Bergquist from the University of Michigan, and focuses on quality in honey production in Ethiopia. Developing country policymakers often want to improve product quality so that they can meet the standards required to export to rich country markets. The supply chain for Ethiopian honey – like those of many agricultural products– involves lots of different players, including farmers, traders, cooperative societies, and large processing firms. We’re interested in how incentives to increase quality pass up the supply chain from those large firms all the way back to farmers.
We are partnering with the Ethiopian government to improve the product testing services available to potential exporters, but that may not be sufficient if those firms aren’t able to source high quality inputs. This can be particularly difficult for a product like honey where quality is not fully observable without laboratory equipment. So, we are trying to understand how demand for quality moves upstream through the supply chain in a context lacking access to labs, traceability systems, and information, and where there is competition from local buyers who are less concerned about quality.
What do you think is a pressing issue that can be impacted by the research in your field?
One thing that researchers working on firms in developing countries can do is to provide evidence on the appropriateness of particular institutions and technologies for a developing country context. Policymakers are often tempted – or pressured – to adopt tools or policies just because that is how things work in rich countries. But it’s not always clear that these are effective in a different environment.
For instance, the financial and legal services used by large firms to enforce agreements in international trade are too expensive and inaccessible to make sense for small importers in places like Nigeria. However, these firms have developed their own set of work-arounds based on the challenges they face and the resources they have.
Data I collected reveals that that they often find it less expensive and more effective to simply travel to the source country and transact in person than to use things like escrow or letters of credit. This suggests avenues for working on more appropriate solutions. For instance, changing regulations affecting visas and air travel by might be a surprisingly effective way to help consumers in developing countries. And, we can start thinking about how financial services like escrow can be redesigned to work in the local context.