Explaining worker exploitation through an economics PhD

Life after graduate research: Dr Shashi Karunanethy

Economist Dr Shashi Karunanethy took a break from industry to pursue a PhD. Inspired by a Nobel Prize-winning economist, he sought to understand why worker exploitation persists even after institutions like slavery have been abolished.  His PhD has changed how he manages his team.

The University of Melbourne supports PhD researchers to take creative risks

“Through the masters, the Faculty of Business and Economics members knew I was very focused on what I wanted to do. They encouraged me to pursue it in a way that I don't think any other university in Australia would have done,” Dr Karunanethy says.

Many economics PhDs involve testing a pre-determined theory or hypothesis. Dr Karunanethy’s PhD was historical and archival.

“It was three years of finding, collating and digitising hidden and long-forgotten historical datasets,” he says.

“It’s completely unclear if the data exists. Then you need to ask, ‘What kind of research can I do with this?’ It was a huge risk on the faculty’s part as much as it was on mine.”

Dr Karunanethy worked with librarians around the world. They helped him find colonial documentation hidden in the UK, the US and interior regions of India. He worked with researchers across environment, geography, sociology and economics. And he worked with translators to translate historical documents in Hindi.

Together, they sourced archival data that had never been analysed before.

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Why does worker exploitation endure after coercive labour institutions are abolished?

“There's growing evidence of how good institutions don’t necessarily arise from human ideals, but more often from political compromises between bad actors,” Dr Karunanethy says.

His research aimed to understand the long-term effects of coercive labour institutions even after they are abolished.

Dr Karunanethy was inspired by the research of Nobel Prize in Economic Sciences winner Professor Abhijit Banerjee. Professor Banerjee was the PhD supervisor of Dr Karunanethy’s PhD supervisor, Professor Tom Wilkening.

“He, along with Lakshmi Iyer, proved that these institutions can have negative long-term effects in the context of India,” Dr Karunanethy says.

Dr Karunanethy wanted to understand why. He compared a native-ruled Indian regional area that wasn’t exposed to British rule to an area that was. Both regions had a native Indigenous population that were subjected to coercive labour institutions.

“But what happened in the native-ruled region was that the ruling elites were divided after independence. This infighting resulted in an agreement to set up good institutions, primarily to constrain each others’ power,” Dr Karunanethy says.

In British-ruled areas, local political elites had a monopoly on power in village institutions. Following independence, they sustained these monopolies and undermined reform efforts.

As a result, the landless labourer class is still larger in these regions. The regions also have poorer development outcomes.

Expertise earned through a PhD opens doors in consultancy

Dr Karunanethy received a Research Training Program scholarship through the University of Melbourne to support his studies. But he also continued to consult for the United Nations Development Programme as well as federal, state and local government entities across Australia.

“One example was Indigenous economic development. I, through the University research and development programs, was able to work with Torres Strait and northern Australian Indigenous communities and advocate on their behalf for equity in government funding programs," Dr Karunanethy says.

Once he graduated, Dr Karunanethy returned to industry. He became Chief Economist at Geografia, an Australian urban planning and economic advisory firm.

The rigour of his PhD program has given Dr Karunanethy experience as a researching economist.

“Through the PhD, I recognised that we can be true experts in our own domain. That gives you the courage to contribute,” he says.

The PhD apprenticeship model has also changed how Dr Karunanethy manages people who work in his team.

“I treat them as apprentices in economics. It is a field that is nurtured and crafted and you become an expert in, and where you must continue to learn and improve as you age. That has informed the way I am as a chief economist.”

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