Links round-up

Hi all,

 Sorry about the radio silence last week. In typically dedicated civil servant fashion, I completely forgot it was Easter until it was right upon us and so forgot to warn you all I’d be offline. I’d like to think you all missed it, but if you’re anything like me (and I accept this is a remote possibility unless you, too, are a cricket-obsessed birdwatcher with a weakness for gifs of face-melting dunks and children overreacting to things [note: this is the best thing on the internet]), you were probably too busy enjoying the now even-more-efficient 24-hour-Summer England has patented. It’s gloomy outside, a general election has been called (which reliably brings out the worst in… oh, just about everything) and so I’m going straight to the economics.

 1.       Election season doesn’t seem to be a fashionable time for evidence or logic, but let’s try some, shall we? There is vanishingly little evidence that reducing the rate of migration will make things better for local-born workers. It’s a very difficult area to research, but Michael Clemens, Ethan Lewis and Hannah Postel have had a go by looking at data from the exclusion of Mexican workers in the US agricultural sector, the Braceros, in the 1960s. Their results are fascinating. Essentially, what happened was farms faced with the deficit of Mexican workers did not turn to hiring new workers from other countries or local workers – they mechanised their production instead. This shouldn’t be a surprise: faced with a change in the relative price of inputs, any private sector entity will seek to reorient production processes away from the relatively more expensive one. I’ve linked to this work before, but it bears repeating. Evidence won’t trump emotion, but it can’t hurt to have.

2.       From migration to inequality: first, FiveThirtyEight reports on health and mortality inequalities in the US, and demonstrates that the places with the worst outcomes are incredibly easily predicted from a map drawn in the 1860s – one which shades each county by the number of slaves at the time. While Deaton and Case got a lot of attention for their finding that mortality among older white males may be rising, 538 point out the reason why black people weren’t included in that graph: their mortality rates are so high they would be literally off the chart. Also, Tyler Cowen reports on a paper that argues that fairness matters more than inequality. This may be the case, but there’s a deeper problem he has always ignored: unfairness can be intergenerational, and what may look ‘merely’ like inequality today becomes much closer to unfairness when you look back a decade or two. What is the half-life or unfairness?

3.       Rodrik gets into the whole fairness vs. inequality issue, and argues that people see losing out due to trade as ‘unfair’, but losing out due to domestic competition as ‘fair’. I’m not sure I buy this.

4.       What Superpower would you choose? And how would you use it? An ingenious paper uses these questions to discover how fundamentally altruistic people are, and comes up with predictably depressing results. [And also, super-eyesight and birdwatching, respectively. Birdwatching is a altruistic, because I can then tell you about what birds there are outside].

5.       Tyler Cowen thinks that people are becoming more complacent: they move less between jobs and locations; Tim Harford suggests that there are other explanations for this phenomenon. They both see it as a pity, and I very much agree with Harford: being forced out of your comfort zone is a good thing, one that we all undervalue.

6.       Everything David Evans writes is worth reading, which is an enormous compliment because he writes more than virtually any other development blogger out there. This piece is about scaling up successful programmes, and like most of his work is directly relevant to making aid work better. Also from Development Impact, Markus gets into the weeds on agricultural yield measurement – this is absolutely brilliant, and gets towards solving something that has puzzled me for years.

7.       Finally, I would never have guessed William Burroughs was a cat-lover, but so it appears. And also from LitHub, ten writers whose first work was also their masterpiece. It could have gone on for many more than ten . If you haven’t yet read The Heart is a Lonely Hunter, it’s a good thing I’m ending the links here, because you can start immediately.

 Have a great weekend, everyone!

 R

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Mining and Growth in Africa

By Sambit Bhattacharyya, Nemera Mamo, Alexander Moradi – University of Sussex

Living standards appear to have improved in Sub-Saharan Africa over the last two decades, mainly riding on the back of relatively high global commodity prices. For example, Figure 2 panels A and B below reveal that mineral extraction and mineral discovery lead to significant improvements in economic activity measured by night-time lights. Panel A zooms into Zabre District in the Boulgou Region of Burkina Faso. Zabre has produced her first mineral commodity, gold, in 2008. The change in the economic fortunes of Zabre is visually apparent here via the satellite images of night-time lights before and after gold production. In 2007 before gold production, the mean pixel value of night-time lights in Zabre is 0.00577. But, in 2008, the mean pixel value increased to 0.3056. The following year, 2009, Zabre again experienced an increase in night-time lights. So much for night-time lights, what about population? In 2007, the Socioeconomic Data and Applications Centre estimates Zabre’s population to be 135,582 and the population five years later in 2012 is estimated to be 160,150. Again, an 18 percent increase. Panel B reveals a similar story before and after the discovery of a Sapphire mine in 1998 in the town of Ilakaka in the Ihosy district of Madagascar. The town Ilakaka did not exist before 1998.

These positive case studies notwithstanding, very little is known about their durability and potential spillovers to other districts. In a recent CSAE working paper, Mamo et al. (2017) examines the effect of mining on development in Sub-Saharan Africa at different levels of spatial stratification. In particular, they analyse the effect of mining expansion at the intensive (production expansion in existing mines) and extensive (new production and discovery) margins on development measured by nightlights. Using spatial econometrics and GIS, they also analyse the extent of spillovers from a mine.

They find that mineral production and mineral discovery significantly improve living standards at the district level in 42 sub-Saharan African countries over the period 1992 to 2012. Night-lights increase due to mining expansion at the intensive margin. However, the effects are large at the extensive margin following new production and new discoveries. In particular, night-lights expand by 55 percent on average due to mining expansion at the extensive margin as opposed to 2-4 percent at the intensive margin. They observe that the positive influence of mineral production takes effect approximately two years prior to the actual start of mineral production. This is consistent with the view that installation of mining infrastructure and worker arrival typically predates production.

In order to precisely identify the effect of mining on development, Mamo et al. (2017) exploit the exogenous variation in the discovery dates of giant and major deposits of 21 minerals. They find that the positive effect of discovery on night-time lights enter approximately six years after the first discovery. The magnitude of the effect of first discovery is 19 percent on the sixth year and continues to rise to 44 percent on the tenth year.

Mining of exhaustible resources is often transitory. Therefore, an important question is to ascertain what happens in mining districts after mine closure. They find that night-time lights after mine closure decline precipitously undoing most of the gains.

Economic development is a general equilibrium phenomenon. Therefore, analysing the extent of linkages from mines is crucial. For instance, focusing on the subnational district level data might mask the fact that mining districts gain at the expense of non-mining districts. In order to unmask such patterns, Mamo et al. (2017) estimate a spatial model. They also test the model at the level of regions and whether the economies of the capital city and the largest cities respond to mining. They do not find evidence of spillover beyond the host district.

The results attest to the theoretical ideas of an earlier literature that that mining in a developing country is typically an ‘enclave’ (Singer, 1950; Murphy et al., 1989). The lack of spillover indicates that there is very little backward and forward linkages associated with mining.

 

Figure 1: open cast mine, Ilakaka, Madagascar (creative commons: Wayne77)

Figure 2: Mining Production, Mining Discovery and Nightlights

References:

Mamo, N., S. Bhattacharyya, A. Moradi and R. Arezki (2017), “Intensive and Extensive Margins of Mining and Development: Evidence from Sub-Saharan Africa.” CSAE Working Paper Number WPS/2017-05, University of Oxford.

Murphy, Kevin M, Andrei Shleifer, and Robert W Vishny (1989), “Industrialization and the Big Push.” Journal of Political Economy, 97, 1003–1026.

Singer, H. W. (1950), “The Distribution of Gains between Investing and Borrowing Countries.” The American Economic Review, 40, 473–485.

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Links round-up

Hi all,

I’m not going to lie – this week has been pretty tepid for the normally reliable econogeekery that the internet seems to be so reliable for. Rather than spend the first day of the County Championship scouring the internet for clickbait (and miss Glamorgan being 26-6 at one point – thanks, Tom), I’m going to go rogue: instead of keeping all the general marginalia for the last link, this week most of them will be the random stuff that was actually interesting, and hopefully next week the geeks-that-be online will return to form.

1.       I’ll start with some business-as-usual, though, and open on a piece of semi-depressing development news. Owen Barder reports on what sounds like some bog-standard rent seeking, with separate arms of the same bureaucracy coming to an agreement to reduce efficiency of the development intervention they are being charged with implementing in order that each get paid. Only it’s not some hopelessly corrupt Government he’s describing, but the UN system in Syria. All donors care about attribution of results (that is, being able to prove the reach of the support they provided, as a way of accounting for their funding). But it’s pretty poor form if that imperative results in redesigning support to be less effective.

2.       I’ve seen (and linked) versions of this argument in the past: there may be a merit in doing ‘nothing’ in pursuit of achieving more. Darwin, Dickens and countless other characters of genius apparently cultivated the habit of working for relatively few hours per day, spending significant amounts of time going for leisurely walks, gardening, napping, birdwatching [I may have added this to the list without a scrap of evidence] and so on – and yet produced prodigious amounts of high quality work. Two caveats – the obvious explanation is that at the height of genius, one can spend a great deal of time goofing off without much loss in quality. And secondly, all that ‘nothing’ was probably integral to their thought process. Sometimes the best way of thinking about a problem is obliquely. Anyway, I’m going to use this as justification for my daily 3pm coffee, and I pity the fool who tries to schedule a meeting during it.

3.       This week in things I wish weren’t true: apparently reserving both sides of the escalator for standing is actually the quickest way of clearing congestion. Many people are surprised at this finding (it backs up a London underground experiment at Holborn a couple of years ago), though I’m sure it’s to do with the fact that most people don’t walk, and it could be reversed with a culture change so most people walk by default. Till then, I may have to concede that the lazy, non-walking, let-me-sit-down-for-the-30-seconds-between-Covent-Garden-and-Leicester-Square irritants are right.

4.       LeBron James is so good at basketball that one interpretation of the failure of the Eastern conference of the NBA to produce any title-challenging teams he doesn’t play for is that it might be a fool’s errand – you won’t beat him, so it’s best to keep rolling over assets to cash in the future when he one day slows down. Could he be so good that an entire half of the US basketball world just stopped trying?

5.       And speaking of sporting genius: an appreciation of the 16-fight winning streak, spanning almost 7 years, during which Anderson seemed not just unbeatable but invincible. If you have any tolerance for fighting sports, scroll down and watch the Forrest Griffin fight – it’s like watching Neo from the Matrix, but in real life.

6.       In which Franz Kafka goes to India: the 17 year struggle of one man to have his death stricken from the record.

7.       NASA is going to fly a satellite straight into Saturn in an attempt to get some final bits of unprecedented data from it before it becomes obsolete. If they don’t have this playing in the control centre as it enters its final descent, I’m going on strike.

Have a great weekend, everyone!

R

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Save the date for next year’s CSAE Conference: 18-20 March 2018!

This year’s CSAE Conference was a great success, with more than 445 participants from over 35 countries, 109 sessions (with three plenary sessions) and 335 papers presented. We are therefore glad to already announce next year’s edition, which will take place from 18 to 20 March 2018.

The call for papers will be sent around in July and you will be able to send in your papers between July and October 2017. Please make sure to keep an eye on our website, or check our Twitter account. Next year’s hash tag will be #OxCSAE2018.

We hope to see you next year!

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Links Round-up: what development should be about, poverty lines, firms and inequality

Every week, Ranil Dissanayake updates us on the latest interesting links and other readings he came across. Ranil is a Senior Economist at the UK Department for International Development, but the opinions expressed in his writings are entirely his own and do not represent the views of his employer.

I seem to have lost an hour today – for some reason I thought it was about an hour earlier than it actually is, so consequently this is going to be a somewhat more hastily-assembled links than usual as I’m running late to meet someone. By way of intro then, a quick tour of my usual obsessions: Pakistan’s new left arm legspinner (apparently, we’re not allowed to call it  a ‘Chinaman’ anymore, which should upset Shehan Karunatilaka); Steph Curry’s ridiculous shooting ability; and my favourite bird of the day (am working from home, one eye on the garden birds). And now to the geekery (deeper geekery?). Continue reading

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The latest on Firms: More on the (missing?) missing middle debate, firms re-visited ten years later and does non-cognitive skills training encourage entrepreneurship?

Firms were a popular topic at the CSAE Conference. While two years ago there were only four sessions dedicated to firms, this year there were a solid seven sessions dedicated to firms (overtaking Labour!). In our last round-up blog on this year’s CSAE Conference, Elwyn Davies and Muhammad Meki, both DPhil researchers at CSAE, discuss a selection of papers from these sessions. Many more were presented, which can be found in the CSAE Conference programme!

In the following we discuss Francis Teal’s take on the missing middle in Ghana (it’s missing), how firms grow and change over time, how non-cognitive skills training can encourage entrepreneurship, how identity matters for incentives and how neighbouring firms in Ghana, Togo and Benin differ in the taxes they pay. Continue reading

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Households and networks: Will your friend’s job search get you a job? Does land title registration work?

More fresh papers from the CSAE Conference! Elwyn DaviesViviana Perego, Emma Riley and Marc Witte give an overview of a selection papers on networks, households and gender. Are there spillovers from your friend’s job search? Does the language you speak matter for labour market participation? How does land title registration help with gaining access to credit? Continue reading

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The future of donor agencies in Africa: an open and honest debate

The final plenary at this year’s CSAE conference asked about ‘The future of donor agencies in Africa, and was chaired by Stefan Dercon (CSAE director, University of Oxford). The participants were Lindy Cameron (Director General, DFID), Albert Engel (Internal Director of the Africa Department, GIZ), and Matthew Spencer (Campaigns, Policy and Influencing Director, Oxfam). Marc Witte, DPhil student at the Department of Economics and CSAE, reflects on this very lively debate. Continue reading

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Does exposure to wartime sexual violence create domestic violence? The latest research on intimate partner violence

In analyses of violence, domestic violence is often neglected, even though it is one of the most common forms of violence, as was argued by Anke Hoeffler earlier on our blog. At the CSAE Conference several papers were presented looking at the causes of domestic violence as well as at the attitudes towards intimate partner violence. Claire Cullen, doctoral student at the Blavatnik School of Government, gives an overview. Continue reading

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The papers of the CSAE Conference, summarized in one sentence

Could you not attend this year’s CSAE Conference? Or were there too many interesting sessions happening at the same time?

Just like last year (part 1 and part 2) and in 2015, the World Bank team at the Development Impact blog provided a solution for this, by very neatly summarizing papers and presentations into one-sentence summaries. This year Niklas Buehren, Aletheia Donald, David Evans, Markus Goldstein, Michael O’Sullivan, Sreelakshmi Papineni, and Julia Vaillant have summarized an impressive 87 papers, from a large number of sessions. Read their one-sentence summaries on the World Bank Development Impact blog.

Over the next days, you can expect more discussions of papers by CSAE DPhil students here on the CSAE blog, among other things, about what we learnt about the economics of domestic partner violence, firms and the future of aid!

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