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Irma Adelman
In Memoriam

Irma Adelman

Thomas Forsyth Hunt Professor of Agricultural and Resource Economics and Economics, Emerita
Professor of the Graduate School

UC Berkeley
Irma Adelman, one of the most innovative and influential economists of the last century, was born in Chernivtsi, Romania, in March 14, 1930. Unfortunately, Irma’s family experienced firsthand the anti-Semitism and discrimination that emerged in the late 1930s. Her father foresaw the dark shadow cast all over Europe by the growing Nazi regime, so in 1939 the family immigrated to Palestine. 

Irma completed high school in Palestine and served in the Israeli War of Independence. In 1949, she immigrated to the United States and enrolled as an undergraduate business administration major at the University of California, Berkeley. Soon after her arrival to Berkeley Irma met and married her husband, Frank Adelman, an American Ph.D. candidate in physics. They decided to settle in the United States and had one son, Alex.

After her undergraduate studies, Irma enrolled in UC Berkeley’s economics doctoral program. She completed her Ph.D. in economics in 1955 and graduated at the top of her class.

She faced considerable difficulties securing a tenure-track position in academia, typical of the discrimination faced by many female academics at that time. For the remainder of the 1950s, she held various non-tenured appointments at UC Berkeley, Mills College, and at Stanford University.

From 1959 through 1961, she published her classic paper “The Dynamic Properties of the Klein-Goldberger Model,” Econometrica, 1959 (with Frank Adelman); her first book Theories of Economic Development, Stanford University Press, 1961; and her path breaking paper on hedonic pricing, “On an Index of Quality Change,” Journal of the American Statistical Association, 1961 (with Zvi Griliches), as well as many other publications in leading journals.

In 1962, Irma and her family relocated to Washington, D.C., where she obtained an associate professorship at Johns Hopkins University and met her lifelong friend and collaborator, Cynthia Taft Morris. Additionally, during her time in Washington, she became acquainted with agencies such as the United States Agency for International Development (USAID) and the World Bank.

Between 1966 to 1971, Irma was professor of economics at Northwestern University in Illinois. In 1972, she returned to D.C., joined the International Bank for Reconstruction and Development, and was appointed professor of economics at the University of Maryland.

In 1979 Irma returned to UC Berkeley, becoming a faculty member in the Department of Agricultural and Resource Economics, and was appointed Thomas Forsyth Hunt Chair in 1985. She served on a wide variety of important campus committees including those of the Berkeley Division of the Academic Senate: Academic Planning and Resource Allocation (1987–1989), Budget and Interdepartmental Relations (1983–1986), Panel of Counselors (1989–1994), and Status of Women and Ethnic Minorities (1980–1981). Irma retired in 1995 and remained a Professor of the Graduate School for the rest of her life. In 1996, she received the Berkeley Citation.

As noted in a 2002 retrospective by Shoshana Grossbard-Shechtman (“Irma Adelman: A Pioneer in the Expansion of Economics,” Feminist Economics, *(1), s002:101–106), “The more than 15,000 citations of her work makes her one of the most often cited economists at Berkeley and quite possibly the most cited woman in economics.” The hallmark of Irma’s groundbreaking research is a holistic, systematic approach to economic development. She was one of the first to realize that economic analysis, although rigorous, is partial. It may omit crucial elements and bias understanding of development processes. She therefore pioneered general equilibrium methodologies that incorporated multiple markets, institutions, and qualitative elements, such as culture. Recognizing the limitations of economic research alone, Irma was a lifelong champion of interdisciplinary approaches, borrowing ideas from sociology, psychology, anthropology, and political science. She realized that traditional econometric estimation methods may sometimes constrain the predictive capacity ­­­­­­­­of a wide range of available data, and she therefore applied variety methods, such as nonparametric factor analysis, which had not been considered before in quantifying development processes. As she concluded, “the development process is highly nonlinear, both in which noneconomic variables are significant for economic development and in how specific noneconomic facets of development interact with economic variables as development proceeds.”

Irma made both conceptual and policy breakthroughs throughout her career. Early in her career, her research emphasis was more methodological, addressing dynamic and stochastic processes. Her classic paper of 1959, mentioned above, resulted from a pioneering simulation that confirmed Ragnar Frisch’s theory of business cycles, in which basically stable economies are driven through cycles by random shocks. She also made another important contribution by developing a creative methodology to compute price indices that emphasizes sampling within categories and accounting for product quality differentials. This approach was applied to address differences in product quality and to estimate automobile prices (Adelman and Griliches, 1961). This seminal paper was the first manifestation of the notion of hedonic pricing, which was later popularized by the works of Rosen and Lancaster and would later become a mainstay of applied economics. In Society, Politics and Economic Development: A Quantitative Approach, Johns Hopkins Press (1967), Adelman and Morris championed the use of joint principal-component models to integrate a broad range of both quantitative and qualitative data on the characteristics and properties of development processes, to identify key factors affecting various countries, at different levels. This was an early application of principal-component models, quantifying the role of institutions and income distribution in development processes.

Perhaps Irma’s most important methodological contribution was the creation of one of the first large-scale computable general equilibrium (CGE) models. This modeling approach was the result of understanding the forces that shaped the Korean development process. The final product, Income Distribution Policy in the Developing Countries: A Case Study of Korea, Stanford University Press (1978), co-authored with Sherman Robinson, includes 3,000 endogenous variables that quantified how individual sector behavior (including noncompetitive behavior), the macro economy, income distribution, and various neoclassical and structuralist features changed the process of development. Unlike the earlier Johansen model that solved for rates of changes of key endogenous variables, the CGE model actually solved for the levels of these endogenous variables over time. The high degree of detail and specifications of the model allowed for sophisticated policy experimentation, especially with respect to alternative policies to reduce poverty. The results suggested that absolute poverty was easier to reduce than relative poverty. CGE models have evolved and have been put to wide use over time. Although the features of the Adelman-Robinson model have been streamlined, this classic model is a bedrock for modelers of general equilibrium systems that try to capture the complex interactions within the economy and society.

Adelman’s work has left an indelible mark on the thinking of development economists. She realized that, although development economics had emphasized and quantified aggregate levels of performance and rates of growth, there was little quantitative knowledge about the impact of income distribution on growth. The leading paradigm among policymakers and development economists alike, was growth before distribution. Irma’s work on Korea, as well as on other countries, demonstrated that increasing equality and the buildup of human capital among the poor can be a key feature that can lead to economic growth with equity. Irma also realized that one cannot separate economic and political processes and studied their evolution simultaneously. Economic Growth and Social Equity in Developing Countries, Stanford University Press (1973), co-authored with Taft Morris, confirmed the Kuznet’s U-hypothesis that the share of income going to the poor during a development process may decline before it partially returns, if at all. However, she also found that greater political participation resulting from the development process does not necessarily benefit the poor but benefits the middle class at the expense of both the poor and the rich.

Irma’s strength as a scholar derives from her wisdom and capacity to observe development processes on the ground. Much of her analytical and generalized insight originated from her work as a practitioner. In 1963, she was sent by USAID to Vietnam to design an income expenditure survey. She observed that the Vietnamese population was not committed to the war against the North and realized that with existing tenurial conditions the rural population had a large positive incentive to keep a low level of military activity. Due to the war, most of the landlords had left the rural areas and rents had not been collected for as much as three years. At existing rents, rural pacification would mean an indebtedness of about 1.5 years’ output (Szenberg and Ramrattan, Reflections of Eminent Economists, Edward Elgar, 2004, p. 19). This observation led her to recommend an important policy suggestion: a U.S. supported land reform policy to buy land from the owners at market prices and to redistribute it to previous tenants. This policy would help to secure the loyalty of the peasant class and would therefore help to hasten the end of the Vietnam War. Irma advocated this position to no avail. However, this policy recommendation is indicative of Irma’s keen observations.

Irma’s major policy contribution was her work in Korea, where she wrote a proposal for institutional reform and for a change in priorities. Among her recommendations were a shift toward export-led growth, a reduction of tariffs, and the doubling of interest rates to reduce inflation. This policy was incorporated into Korea’s Second Five-Year Plan and became an essential element of Korea’s upward economic growth swing. In 1972, Irma’s contribution was recognized by a presidential decoration, the Order of the Bronze Tower, from President Park Chung-hee.

The citation reads:
With deep interest in the wellbeing of the Korean people, Mrs. Irma Adelman, Professor at Northwestern University, has devoted her efforts with superb competence to the economic development of the Republic of Korea and thereby greatly contributed towards attaining the goals of economic self-sufficiency pursued by the Government of the Republic of Korea. Her valuable donation and service has gained for her the appreciation and admiration of the Korean people.
Irma’s work on growth and distribution led her to conclude that development policy should not pursue economic growth per se but should rather pursue the creation of the social and material conditions for the realization of human potential by all. She was an early advocate of the idea that development should not be growth alone but should also include poverty reduction. Although this was a minority opinion in the 1970s, it has become mainstream thinking over the years. Irma’s work as a consultant to the World Bank was crucial in making this shift in priority; as such, her words found the ear of Robert McNamara, who signaled this shift in the World Bank’s lending policy toward an emphasis on poverty alleviation in his speech at the United Nations Conference on Trade and Development (UNCTAD III) meeting in Chile in 1972 (Szenberg and Ramrattan, 2004, p. 20). As she remarked in 2002, “policy recommendations based on the assumption of “one-size-fits-all” will be misleading. This is not a trivial quibble.”

A more complete interview with her is available in: Irma Adelman, David Zilberman, and Eunice Kim, “A Conversation with Irma Adelman,” Annual Review of Resource Economics, Vol. 6, 2014:1–16.

David Zilberman
Jeffrey M. Perloff