Three LSE academics receive European Research Council Starting Grants

European Research Council (ERC) Starting Grants have been awarded to three LSE academics within the Department of Economics, STICERD, the Centre for Economic Performance and the Department of Government.

Assistant Professors Clare Balboni, Isabela Manelici and Carl Müller-Crepon have all been awarded the prestigious grants which aim to help researchers at the beginning of their careers to launch their own projects, build research teams and pursue their most promising ideas.

With a total funding of €761 million awarded to 478 early-career researchers across Europe, ERC Starting Grants are highly sought-after and are estimated to create up to 3,000 jobs within the teams of the new grantees.

Assistant Professor Clare Balboni of the Department of Economics and STICERD will receive her award for her project: Managing local and global externalities from growth.

Assistant Professor Balboni said: “I am delighted and hugely grateful to have received this support from the ERC to advance a research agenda focused on how developing countries can manage the consequences of the externalities associated with their growth. In order to balance the benefits of growth and its attendant externalities, there is a vital need for progress in accurate measurement of these externalities, analysis of how they affect economic decision-making and outcomes, and feeding these estimates into policy design. These aims will be at the centre of the research supported by this grant, which I am very excited to take forward.”

Project summary: The burden of local and global externalities from growth - such as pollution, congestion and climate change - falls mainly on the poorest across and within countries. This research agenda aims to inform the key question of how developing countries can manage the consequences of the local and global externalities associated with their growth. It will offer novel insights into the magnitude and distribution of these externalities in low-income countries, and the design of policies that balance the dual imperatives of shielding vulnerable populations and continued growth. A first theme will consider how local externalities alter assessments of the aggregate and distributional impacts of trade facilitation, which is key for the design of transport and trade policies. The second theme studies how vulnerable populations respond to the global externalities from climate change and how policy can support these adaptive adjustments.

Assistant Professor Isabela Manelici of the Department of Economics and Centre for Economic Performance will receive her award for her project: Can Multinational Linkages Be Leveraged for Development (LINK4DEV)?

Assistant Professor Manelici said: “I am excited about this opportunity to pursue a frontier research agenda aimed at closing critical knowledge gaps on the potential and risks of multinational linkages for development.”

Project summary: Less developed countries compete to attract multinational corporations (MNCs), often seen as growth engines. Meanwhile, domestic firms, workers, and consumers express concerns that MNCs may offer weak trickle-down benefits while increasing their vulnerability to global shocks. This tension is not new: the debate on the trade-offs associated with MNC-led development strategies is long-standing yet unresolved.

LINK4DEV will break new ground in three ways. First, the program will examine the impact of MNCs and their linkages on development through a wide (inside-the-firm) micro to (cross-country) macro lens. Second, it will combine “big data” and causal-inference methods with novel theory. Third, it will partner with governments from four continents, maximizing cross-country learning and impact.

LINK4DEV consists of four interconnected projects. Project 1 will examine whether MNCs foster linkages with local firms or operate in silos, increasing inequality. It will provide a first-time anatomy of MNC linkages in the production networks of four economies at different development stages: Uganda, Costa Rica, Turkey and Belgium. Project 2 will examine whether technology transfers from MNCs to local suppliers are socially optimal in the same four economies. It will then estimate the associated aggregate economic gains and identify policies to increase them. Project 3 will study why MNCs source a large share of inputs globally, focusing on the role of centralized decision-making in MNCs. Attracting MNCs with global sourcing undermines efforts to promote local linkages. This project will merge detailed transaction records from Costa Rica with global supplier and survey data for MNCs. Project 4 will assess how far-reaching the effects of an international trade shock are and how central MNCs are to these effects. It will leverage a cyberattack on Costa Rica’s customs system and a new economy-wide mapping of all firm-to-firm, firm-to-worker, and firm-to-consumer interactions.

Assistant Professor Carl Müller-Crepon of the Department of Government will receive his award for his project: Border Change and Local Development in Europe and Beyond

Assistant Professor Carl Müller-Crepon said: “I am very excited to be working together with my research team on understanding how changing state borders affected and still affect local development in Europe and across the world.”

Project summary: Europe’s history over the past 200 years has seen frequent border change that created the states we live in. Still today in Europe and across the world, revisionists contest borders. Yet, despite the importance of border change, we know relatively little about its consequences for the lives and livelihoods of affected populations. BORDERS therefore develops a theory of the impact of border change on socio-economic development and its underlying economic, demographic, and political mechanisms. After collecting new, spatially disaggregated data on historical local development, the research team will empirically examine the mechanisms driving the effects of border changes in Europe since 1815 and globally since 1945. In times of renewed border contestation, BORDERS informs debates on the developmental impacts of border change and state formation more generally. Its innovations in measurement and empirical methods will contribute to the social sciences more generally.

President of the European Research Council Professor Maria Leptin said: “All these bright minds and the plethora of brilliant ideas that they will go after really inspire me, and so does their scientific creativity. It also gives hope that Europe empowers them and backs them. Yet, we could do more! Only 12% of all proposals in this competition are being funded, even if many more are excellent. More investment in this type of science is needed for Europe to reach its full potential.”

Read the ERC’s full press release here.