Links round-up

Hi all,

I know I’ve said this before without being right, but I feel sure we have reached the end of days: apparently Rough Guide have listed Newcastle as the number one destination in the world in 2018. I’m aware that mocking this decision is going to invite some domestic strife, but I have a friend who’s just putting the finishing touches on a move to Fiji and I think he’s probably not regretting his decision. I’m going to be in Newcastle over Christmas and probably now need to buy some sort of disguise. In addition to about ten layers. Luckily, if we’re frozen in, there’ll be crushingly inevitable defeat in the Ashes to keep us warm.

  1. Jokes aside, I actually really like Newcastle, after extended exposure shifted my prior beliefs. I have much stronger, more hardened priors about the value of training programmes for employment and firm success – namely that there doesn’t seem to be any, at least in developing countries. That said, this Markus Goldstein piece has me questioning this. His team at the Gender Innovation Lab have found that if designed to make them accessible for girls and implemented before they make really long lasting decisions like marriage and child-bearing, the effects can be substantially larger. He also makes the oft-neglected point that men and boys are an important constituency to engage to make sure effects for women are positive. As one of my bosses once put it: men are the most obvious constraint to gender equality.
  2. A couple more good gender links: first, Planet Money’s Stacey Vanek-Smith teams up with Cardiff Garcia (still the best name ever) to investigate the evolution of sexual harassment training videos in the US, pointing out that the early, incredibly unsubtle ones made a point that modern ones neglect: that men use positions of power to get away with this crap (transcript). Secondly, Karlijn Morsink (full disclosure: an old friend) has her job market paper on the Development Impact blog, one she presented at DFID recently. The premise is really interesting and intuitive: that unless you consider the power dynamics that determine decision making, you can’t select what technology can best support women’s final outcomes. She illustrates this with data on use of male and female condoms.
  3. Grudge theory: Tim Harford coins a phrase for using nudges to further a malign intent. What he gets at is that most ‘benign’ nudges work by taking loosely held opinions and moving them relative to some decision threshold, so only people who really care take the trouble to move back to the original position. What some of the more malign examples do is different: they take a loosely held opinion and make it salient (either before or after moving it slightly) – so after the nudge, it becomes a strongly held opinion. You don’t have to look hard to find that effect in other contexts, either.
  4. A very nice new paper by Angrist and co-authors uses an experimental design implemented on Uber drivers to suggest that the famous ‘reference dependence’ theory of Camerer, Thaler and others might be illusory (the theory suggested that cab drivers work up until they meet a target daily income and no more, which Angrist finds no evidence of). He does, however, find support for a certain kind of loss aversion, so Thaler probably shouldn’t throw the Nobel in the bin just yet.
  5. Nick is going to love this: a paper on the asymmetric effects of real exchange rate movements, suggesting that currency appreciations have a worse effect on exporters than depreciations can help them. The novelty of this paper is that it accounts for the skewed distribution of firm productivity in estimating these effects – hugely relevant for developing countries.
  6. Brilliant article by Christie Aschwanden, 538’s amazing science writer, on how the inherent uncertainty of scientific results can and has been weaponised against it by vested interests. The basic plan was discovered by Big Tobacco: emphasise the doubt and ask for better research – there will never be anything completely free of uncertainty.
  7. And finally, because it’s Friday and we deserve it: Tom Cruise running. Every single time.

Hope you had a great weekend, everyone!

R

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Links round-up

Hi all,

This week has been the stuff of nightmares: scroll down to link number 7 and you’ll find the story of a lady who went to the bathroom and was attacked by a python… in her own house. Link number 2 is even scarier: a breakdown of the Alwyn Young paper on instrumental variables I mentioned last week. And that isn’t even getting into the fact that we apparently live in one of Philip K. Dick’s creations, in which the most powerful political figure in the world shares content that even the people who originated it describe as ‘hate speech’. On a scale of one to what the actual eff are you doing, that one scores pretty highly. That’s not even the scariest thing that happened this week: imagine how Dame Lillard felt when this happened to him. It’s like playing basketball against an X-Man.

  1. Job market season is so much fun (well, for everyone except those on the job market), particularly because the Development Impact blog does so well in picking up good summaries of the most interesting papers. I really liked this write up of Stefano Caria’s research with Girum Abebe and Estebean Ortiz-Ospina. He shows that the cost of applying for jobs creates conditions in which poor workers with high ability are especially disadvantaged, and that this leads to firms winding up with a lower-ability workforce than is available. There’s a lot going on here (more than I realised the first time I saw it presented) and lessons could generalise to a number of contexts.
  2. For those of you who lacked the time to work through Alwyn Young’s paper, Marc Bellemare summarises. I’m not a strong enough econometrician to fully assess how valid the conclusions are, but they are startling: between a third and half of all 2SLS estimates covered are falsely declared significant. That said, I was explaining the logic behind the empirical methods economists use to a historian friend last night and pointed out that we know there are no watertight results: luck plays a role, and the quality of the concepts you’re using (and what you can measure), the data and the techniques are all imperfect. At some level, even policymakers who don’t think in detail about econometric choices get this, which is why we like results which have been proven from lots of different angles, or which accord conceptually with lots of literatures. Every paper is fallible but what the discipline knows is much greater than what any of its members can prove.
  3. Being more optimistic for a moment: Elon Musk succeeded in creating renewable storage at an unprecedented scale and pace in South Australia. This is pretty amazing.
  4. Also, I hadn’t realised that Pandas are now off the endangered list (which makes me feel better about skipping the chance to see them on a recent trip to Chengdu – it was them or a visit to the wholesale spice market, and the chillies win every time). I also hadn’t realised that this success was basically entirely due to one enormously horny bear named Pan Pan.
  5. Planet Money are so cool. When they discovered Paul Manafort was charged with money laundering they did what seemed obvious to them: asked an expert money launderer if he was any good at it (transcript).
  6. In one of those ‘economists shocked by events that all other humans expect’ moments, a new paper (yes it’s political science, but why spoil a good joke?) shows that politicians sometimes make enormous blunders. Using multiple sources to try and find those instances where politicians either miscalculated based on known information or had too little information, Daniel Treisman finds that many autocratic regimes become more democratic due to blunder, not design.
  7. Lastly, just to leave you with the worst nightmares possible for the weekend: snakes are everywhere, and Samuel L. Jackson isn’t.

Have a great weekend, everyone!

R

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Links round-up

Hi all,

Normally, this week’s links would open with the Ashes (and before I abandon the issue, my most vivid-ever Ashes moments in Australia: Mitchell Johnson at the absolute peak of his powers, and Glenn McGrath’s ‘old man’ celebration). This week, though I’ve had something other than cricket on my mind: a colleague pointed out that for all of my talk about gender and the difficulties women face in economics, from a quick scan (3 editions), I linked to women in only 7 out of 28 overall links. So, what’s going on? I’m pretty confident in ruling out conscious bias, but that still leaves a few unpalatable possibilities. It could be that I’ve got an unconscious bias and link to women too little for how often they appear in my reading. Or it could be that I select ‘male’ subjects and so the gender balance is rigged against women. Or perhaps women write disproportionately little in economics, basketball and cricket, and the selection that makes it here is a fair reflection of what’s out there. Am I missing a possibility? And ideas how to work out which one it is?

  1. Despite that navel-gazing, I’m still starting with coverage of an argument between two men: Branko Milanovic slaps “Degrowth theory” in the face, hard. And Jason Hickel responds, before getting the smack laid down on him again. Branko says the only way we could halt growth now without condemning a substantial chunk of the world to permanent poverty and deprivation is to dramatically reduce GDP per capita in the West: a hard, fast and aggressive nominal decline. Hickel suggests that this wouldn’t be much of an issue, because Costa Ricans are poorer than Americans and metrics show they’re just as happy. Talk about cherry picking. Look at the Our World in Data page on Happiness and Life Satisfaction: there is an incredibly strong correlation between GDP per capita and happiness. Suggesting that countries can shrink and avoid a change in happiness (without even getting into reference-dependent preferences) seems a stretch. It’s important to want to change the world, but a strong grip on reality might help.
  2. The Development Impact job market paper series is running again this year, and it starts with a couple of crackers: one on taxation in the DRC and its effects on political participation and one looking at whether simply reminding parents of the value of attending school can improve their children’s outcomes.
  3. I loved this: Oliver Roeder links God, the normal distribution, Central Limit Theorem and Laplace’s Demon in a glorious article inspired by a trashy US game show.
  4. Claudia Sahm argues Claudia Goldin’s claim that ‘time demands’ can explain much of the gender pay gap is economically incoherent. She says time demands are endogenous, meaning that they are part of the system and can be changed. I buy this, but only partly: there are jobs where an individual client relationship matters; and this often means insanely long hours (and extremely high pay). The solution might be in changing the client-provider relationship, but it’s certainly not simple. Related, another amazing job market paper using Google Maps, mobile phone apps and a survey to show that women go to worse colleges in order to have a safer route to school in India. I’ve not got beyond the abstract yet, but what a headline finding.
  5. So, research into bureaucracy is getting better and better, and touching on increasingly interesting topics. Lee Crawfurd dons his David Evans mask and offers an excellent round-up of the latest research presented at the recent World Bank symposium.
  6. Two goodbyes to end. First, and more happily, Mugabe’s exit prompted this piece in the Guardian, suggesting that a bunch of other illiberal leaders’ days are numbered because… well, it’s virtually impossible to work out why the author thinks this. One comment: anyone with a cursory knowledge of history should recognise the need to see how this shakes out before the celebrations become too wholehearted. Cutting off the head does not necessarily make this a much more tractable polity to steer towards good outcomes.
  7. And lastly, Malcolm Young died last week; if you had fun in the 1980s or early 1990s, the odds were he provided at least part of the soundtrack. Angus might have been the icon, and Bon might have the live fast, die young obituary, but Malcolm wrote this. And this. And this. And (maybe my favourite) this. The good news is wherever he winds up, he’ll find something to like.

Have a great weekend everyone!

R

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Links round-up

Hi all,

I’m trying very hard not to get my hopes up: Sri Lanka have managed to reduce India to 74/5. Back in the day, I’d be rubbing my hands with glee in anticipation of the last five wickets falling to our bug-eyed genius, but recent experience has taught me that Pujara and Jadeja will put on a quintuple-century stand and we’re going to be crushed underfoot like a dried-out locust. Either that or it’s going to rain for the next four days. On the plus side, however, my adopted son Joel Embiid  has this week both atomised the self-respect of the Clippers and dominated the Lakers so completely that Lonzo Ball is probably in hiding. He’s playing so well I literally googled ‘Whose soul did Joel Embiid eat for breakfast today?’ yesterday. Anyway, enough inanity.

  1. A while ago, Sarah O’Connor wrote a great piece in the FT, with the title The Best Economist is the one with Dirty Shoes, arguing that economists who get out into the real world learn things that the theories of their discipline cannot teach them. Angrist and co-authors have a really nice paper exploring a similar idea in the intellectual terrain economists travel. They show that economists increasingly cite the work of other disciplines in their papers; and that this intellectual curiosity is mutual. They also show that empirical work is becoming more influential within the discipline (and with others), a sign that economists are looking outwards, and getting their shoes dirtier. This can only be good for the discipline, so long as we learn from what others do, rather than sally forth and ‘do economics’ to them, as they sometimes complain.
  2. Claudia Goldin’s recent NYT piece on the economics of the gender pay gap is brilliant: she’s not afraid of exploring the complexity of its genesis, and of the solutions, and isn’t shy of acknowledging where there are trade-offs. It does no-one any favours to pretend that it is just discrimination and nothing more: real solutions require we think more deeply.
  3. I’ve never been much of a fan of instrumental variables. I’m not enough of an econometrician to formalise my doubts enough, but they’re either complex and lack transparency (so interpreting the coefficients is very difficult) or they seem to capture much more (or less) than is purported (is there anything rainfall doesn’t instrument for?). Alwyn Young, whose genome sequence presumably spells out ‘attention to detail’ takes a hatchet to them here, though from a very different perspective. Related, a good read on replicability and good scientific practice in economics. The David Evans summary would be: we’re getting better but far from fixed, and haven’t got the incentives right yet.
  4. The ODI Fellowship applications are open until 1 December. As an ex-Fellow, I’m biased, but I think the scheme is brilliant, and unlike any other exposure to policymaking in developing countries that a development person will ever otherwise have.
  5. Everyone in DFID should already have internalised this, but here’s our Deputy Chief Economist Nick Lea making the case for tradable-based growth. Not all tradables are equal, of course, and non-tradables can matter too – but the underlying logic here is strong and important.
  6. This totally fits all my priors: Jennifer Aliz-Garcia, Sarah Walker an Anne Bartlett on the economic benefits of refugee camps. Confirmation bias aside, though – I do wonder about the validity of calibrating night lights and consumption from a period prior to the advent of the camps and using this to guesstimate consumption effects of the camps – could the relationship have changed due to impact of the camps? Related: Planet Money go to South Sudan and explore the effect of the civil war on the financial asset most of those in the camps used: cows (transcript).
  7. Finally, and by far the most important article of the week: The Ringer ranks the fifty best superhero movies ever, and confirms that everyone must bow down before Heath Ledger.

Have a great weekend, everyone!

R

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Links round-up

Hi all,

So, it’s been a fairly eventful week, so I’ve been more or less glued to the news. This has had the welcome effect of helping me notice all sorts of fantastic stories (like the woman who responded to a politician’s sexist joke by running against him – and winning, and the guy who forced a plane to make an emergency landing because of his infidelity), but at the cost of bringing so much to my attention that this week’s links could easily be thirty bullets long. I’ll try and spare you that particular form of torture, but I make no promises: of all the failings that I’ve been accused of in the past, brevity is notably absent.

  1. This is basically my perfect paper: an RCT about using cricket to investigate the effects of collaboration and competition on discrimination. Matt Lowe randomly assigned Indian men into mixed-caste or same-caste cricket teams, and then randomly assigned opponents and finds that collaborative cross-caste contact increases cross-caste friendship and reduces caste-favouritism when allocating rewards. What’s more, this has effects on efficiency and leads to better teammate selection in future matches. I was having a conversation recently about how seemingly trivial topics can generate important findings – this could potentially be one (or I’m just massively over-weighting the importance of these results because cricket is obviously more important than life itself).
  2. Another Matt, Collin, here considers some of the implications of machine learning for replication and research transparency.
  3. This didn’t get much coverage that I saw, but is really worrying: Zitto Kabwe, a Tanzanian politician and former chair of the Public Accounts Committee was arrested for presenting economic analysis that questioned the Bank of Tanzania’s growth figures. I have no idea if Zitto’s analysis is right (I haven’t seen it), but it’s pretty terrifying if questioning official statistics can get you arrested – when I lived in Tz, it would have made me a criminal on a near daily basis. Justin Sandefur goes into the details of Zitto’s analysis, here. As an aside, Chris Adam points out the importance of keeping an eye on domestic credit to the private sector, one of my go-to indicators on the economic health of a country, in a quote Justin includes.
  4. Gabriel Zucman makes the case for a world financial registry in the Grauniad. He’s one of the best researchers on inequality out there, and well worth reading.
  5. I really liked this: Martin Williams (at the Blavatnik School of Government) summarises his research into why so many public sector projects in Ghana remain unfinished. He shows that corruption is probably not the main reason: firms tend to do more of the work than they’re paid for, not less. Rather, he points the blame at the changeable nature of political decisions – as the political alliances underlying a project unravel, the money allocated to it runs the risk of be siphoned away to start a project with better political backing, but which may itself be subject to the same effect in the future. The paper is underpinned by an amazing data set, too.
  6. David Evans reads 147 development papers and summarises them in one sentence each. It seems like a magic trick, but he does this kind of thing regularly. It’s incredible – click, read, comment and thank him. It’s an extraordinary public good. Related: he examines the geographic coverage of these papers here.
  7. Lastly, two food links: First an amazing Reuters investigation into North Korea’s food markets (some of the food designed out of necessity looks amazing!); and second, an economist teaches about international trade using goulash. And with that, I’m going to have lunch.

Have a great weekend, everyone!

R

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The technological foundations of income inequality: a demand side perspective

Guest Author: Andreas Chai, Griffith University
contact: a.chai@griffith.edu.au

How has technological progress impacted income inequality? The usual answer is that technological progress fosters greater income inequality via changes on the supply side. Technological progress will drive up inequality because of robots stealing jobs, accelerating the rise of the service economy, stimulating global migration. One may be sorely tempted to conclude that rising income inequality is an inevitable outcome of ongoing technological progress.

Yet technological progress also has a lesser known and more positive impact on household living standards. In developing countries, the diffusion and adoption of new technologies has without doubt lowered the cost of everyday household tasks, such as cooking food, gathering firewood, and household chores, particularly in the rural areas of developing countries.

A famous case is the impact of mobile phones in Africa, which had a large impact on everything from banking, getting goods to market, and improving the efficiency of local markets. The problem here is that these effects are much harder to observe due to a lack of data on the characteristics of goods consumed and how they impact everyday life.

Moreover, in terms of how to accurately gauge household welfare levels, a better measure of household living standards beyond income is how much households consume. This approach recognizes that households may have other sources of wealth not captured by income and that income is only as valuable as the amount of goods and services that can be purchased with it. Here a study by Roger Fouquet and Peter Pearson underlines how technological progress has driven immense improvements in the quality of goods consumed over time, thereby effectively raising the purchasing power of households.

In a recent paper, headed by Maneka Jayasinghe (Griffith University), we examined how the adoption of technologies can have direct implications for measuring poverty via the equivalence scales used in calculating the income distribution (draft version available here). When measuring income inequality, equivalence scales are used to effectively deflate the observed income/welfare levels of larger households by making assumptions about the per capita costs of having more people living in the same household. These equivalence scales effectively make assumptions about the degree to which households achieve economies of scale in the sense that large households face lower per capita living costs than smaller households.

An easy way to examine the impact of technology on household economies of scale is via the consumption of electricity. The use of new technologies such as mobile phones, white goods and entertainment goods generally involve consuming more electricity. Moreover, there has been a tremendous growth in the number of households who have access to electricity in the developing world. In Sri Lanka, for example, access to electricity has risen from 29% to 85% between 1990 and 2010.  By enabling households to use a wider range of goods, this will have an important impact on the living standards and the distribution of poverty.

Using electricity consumption as a proxy for the extent to which households adopt technologies, we found that households that used more electricity realized greater economies of scale. The more electricity a household consumed, the lower their per capita living costs (proxied by per capita expenditure on food). The estimates suggest a 10% increase in electricity consumption generated a 6.92% decline in these living costs. Though relatively small, when equivalence scales are adjusted to take this effect into account, the overall number of households falling below the poverty line declined by over 60% nationally in Sri Lanka.

Here it is interesting to note that the changes in income inequality were uneven. For starters, small households benefit less from economies of scale in consumption than large households. So large households tend to make greater gains in welfare relative to small households. Moreover, households in urban areas, where electricity access is better, tended to be among those who made the greatest gains in estimated welfare. Finally, estimated income inequality grew when considering the differences between these households and their rural counterparts who have less access to electricity.

In terms of policy implications, these results highlight the need for poverty alleviation programs to enhance household access to technologies and electricity. In addition, more research is needed to understand precisely which electrified goods contribute to economies of scale and the extent to which income inequality & poverty estimates in other regions exhibit the same pattern.

In the long run, a deeper issue that scholars and policymakers need to face is whether the widespread use of ‘base neutral’ equivalence scales is sensible.  This involves the assumption that the economies of scale realized by households is independent of their income. It seems intuitive that differences in household income will generate differences in the extent to which households are both able to and willing to economize on per capita costs. Think of the range of goods and services rich households can afford to buy relative to low-income households.  The interesting thing here is whether rich households actually do realize greater economies of scale even if they have the greater potential to do so.

Moreover, given that technologies change over time, this suggests that economies of scale realized by households will also evolve over time and thus so too should the equivalence scales used in estimating income inequality. This is particularly important when considering changes in income inequality over long periods of time, which has become a very hot topic. Considering that the characteristics of goods and services used by households has altered dramatically, long run comparisons of income inequality should be treated with great care.

On a more general level, it is a small part of a recent explosion of research on how equivalence scales can be devised using different techniques, including life satisfaction data, as well as intra household bargaining approaches. All of these add to more detailed and realistic understanding of household welfare and ultimately better inform us about the geographic and social distribution of poverty.

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Links round-up

Hi all,

This week I have mainly been breathless with excitement about this. Seriously, it’s been a serious disruption to my ability to think coherently about work, relate to other human beings, basically to do anything apart from freak out about the fact that there’s going to be another Star Wars film, Luke’s in it, and it’s going to be amazing ohmygod. The pendulum has swung pretty far from me worrying that the Force Awakens would be rubbish because the world is a terrible place and so were the last Lucas movies. Adaptive expectations in action.

  1. Let’s start with a rant. Having good intentions does not excuse you from using evidence properly. I’ve recently come across a couple of examples of either pandering to failures of cognition among policymakers or framing evidence in misleading ways that have particularly irritated me, because the culprits seem to think their good intentions allow them to bend the rules with impunity. Maya Forstater lays the smack down on the most recent Oxfam tax justice adverts for this reason, and spares them little ire: “… the Oxfam campaign… links an estimate of $100 billion lost to tax avoidance with eight million deaths. Is this meaningful? No.” Ouch. Even if tax justice is an obviously good thing, this is not acceptable: fudging the numbers this way will only lead to money being reallocated from other good things, not from the “killing baby seals” fund such campaigners apparently believe will finance their proposals.
  2. Speaking of evidence, Duncan Green’s blog ran a piece by two of DFID’s brightest boffins on a programme looking at how evidence is actually used in the wild. I’ve seen some of the underlying research presented by Macartan Humphreys, and it’s really interesting. Definitely something to keep an eye on. Related: Matt has resurfaced at Aid Thoughts channelling his inner Gawande discussing how policymakers’ cognitive biases might affect the ways in which evidence is used, and how to improve this, an area close to my heart (and, indeed, research).
  3. While we’re talking biases, it’s unlikely that anyone has managed to miss the absolute avalanche of popular media pieces about Richard Thaler’s Nobel win, but this Planet Money show deserves a link, as no-one quite brings the subject to life as they do. As they put it, it’s like a nerd superhero origin story.” (Transcript).
  4. Two really good pieces from Development Impact this week. First, David McKenzie on new research he’s done with Anna Luisa Paffhausen on firm death. I actually think he substantially undersells the importance of this work. Firm death is an indicator that an economy is working: the right kind of firm death (i.e. that not caused by exogenous household shocks) is an indicator that competition is working, and there is some form of productivity enhancing reallocation going on – at least, unless firm survival is due to political connections. In a separate post, Markus Goldstein summarises research into worker effort, as measured by Fitbits (one of the co-authors is Pieter Serneels, who is also at DFID part time).
  5. Charles Kenny doubles down on Lant’s piece I linked to last week – bemoaning not only arbitrary poverty lines, but also arbitrary income classifications for countries. It ends with some very useful tips for how to think about poverty and income statistics, avoiding common pitfalls.
  6. Apparently, the grammar pedants are doomed to failure – on balance, probably a good thing, because they’re insufferable. On the other hand, it means I can’t resist ending the links like this;

Have a great weekend, everyone!

R

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Links round-up

Hi all,

So, I’ll be honest: I’m struggling to think of a good intro to this week’s links. I’d normally say something about the cricket, but given Sri Lanka’s performances I can’t think of anything to say that wouldn’t create a new entry into Viz’s Profanisaurus; or about the Basketball, but so far this week there have been no-dimension shifting dunks (though the Ringer are now comparing LeBron to Prometheus, which doesn’t seem too far-fetched to me); so I’ll settle for describing what Oxford looks like today: sunny and inviting, which turned out to be false advertising as I turned into an icicle on this morning’s run.

  1. A few weeks ago, I mentioned that Lant Pritchett delivered the keynote speech at DFID’s annual conference for its economists. It was an absolute barnburner, incorporating basketball statistics, big ideas about what development is and about what change matters, as opposed to how it’s measured. He’s written an essay on his talk here (minus the balloons). As with everything Lant writes, he takes a strong stand – you can agree and disagree with parts because of this. But it should make you think twice about why we do what we do, because he is making an important point. Related, Lant has long taken a strong stand against defining development down to the lowest bar possible, and here reports that the World Bank will now be making it easier to define it back up. Also at CGD and also an important, big issue: Michael Clemens on Global Skills Partnerships as a way to break the impasse in global migration negotiations. He remains substantially the foremost thinker in the world on this topic, to my mind.
  2. I loved this, because it took me to very unexpected places. A five-and-half-year-old asked FiveThirtyEight what if there was no number six?’ The answer takes us into philosophy, music, and modular arithmetic.
  3. Speaking of maths, it’s not just the Supreme Court that are allergic to it: Maya Forstater is still having to point out that the ridiculous numbers bandied about for the scale of tax evasion make no sense at all. For them to be true, there would need to be enormous processing plants operating at full capacity that simply don’t exist.
  4. These ridiculous numbers are fake facts. The peddlers of them may claim they’re not doing damage to our core institutions the ways that others who use them are, but they’re wrong. They’re using numbers they know are ridiculous to shift spending decisions to their hobby horses; and usually, given the way the world works, the money isn’t being taken from some low-marginal value use, but from another important thing that supports the poor and development. So this isn’t costless, and they’re trying to pervert the systems designed to make these choices well. Tim Harford attacks the usage of fake facts while investigating their efficacy here. He has suggestions on how to combat them, too.
  5. Last week I linked to Branko describing inequality through different measures. This week he starts looking at causal mechanisms.
  6. Dietz Vollrath’s blogs are like an economic detective story. They start with a puzzle; he finds some facts around them, tests them against the various plausible theories and – sometimes – finds out what’s going on. This week he’s looking at investment, profits and growth. But I’m struggling to work out which detective he most resembles. He’s not Poirot (that’s more like Lant, with his sense of theatre), and he’s not Maigret (he’s too clear about what’s going on). Does that make him Columbo? Martin Beck?
  7. Apparently, writing is not only hard, it’s dangerous: LitHub on writers sustaining injuries on the job. So I’m going to sign off here, before my leg falls off.

Have a great weekend, everyone!

R

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Links round-up

Hi all,

My attempts to focus on anything this week have been severely undermined by the start of the NBA season (and Sri Lanka’s inability to win any ODIs, but we’ll gloss over that). Between the gruesomely broken ankles and Joel Embiid’s attempt to vaporize Jason Smith, we were also treated to Patrick Beverly putting Lonzo Ball’s soul in his back pocket and snacking on it like a candy bar. It’s been glorious (which is good, because Sri Lanka are now 129/7). Anyway, the week hasn’t all been fun and games, and I’m not only talking about my attempts to reacquaint my brain with the algebra it last met in 2003.

  1. The NYT ran a brilliant article about Amy Cuddy this week. She was one of the authors of the ‘power poses’ study, which purported to show that simply holding a pose for a few minutes could generate measurable physiological changes, and in turn have a significant impact on real-world outcomes. It was the basis of a wildly popular TED talk, but also generated a massive backlash: the experiment failed to replicate and statisticians savaged the paper for violating principles of good statistics (one of the co-authors eventually disowned the study due to these practices). The article is really worth reading, dipping into the culture of academia and how careers are made and lost. I’d also read this response by Andrew Gelman, one of the aforementioned statisticians. I think it’s disingenuous to paint this as victimisation – if the methods were so flawed that you can’t trust the result, this needs to be made clear. In a context where academics are under ever greater pressure to communicate directly with the public this is crucial: good methods and null results do not get Guardian headlines.
  2. Apparently, numbers are a bit of a problem for the Supreme Court in the US, too. John Roberts referred to statistical research presented as part of a case as ‘gobbledygook’, and this isn’t an isolated incident: FiveThirtyEight documents the long and troubled history of statistics in the Supreme Court. It amazes me how many otherwise smart people take some kind of perverse pride in failing to understand statistics.
  3. Vijaya Ramachandran and co. have a new (DFID-funded) paper out on labour costs in Sub-Saharan Africa, and whether it can become a low-cost manufacturing destination. It generated quite a few responses on Twitter, and they’ve made an attempt to address them, here. Francis Teal is the other researcher to listen to on this question, which won’t go away: why are formal sector wages so high in Africa?
  4. What does ‘capitalism with North Korean characteristics’ look like? Planet Money investigate the incipient entrepreneurs of North Korea and their surprising successes (transcript) – including the production of mobile phone software for the global market and animation that was ultimately used in a Disney movie.
  5. Income inequality 101 from Branko Milanovic. As good a summary of what different measures of global inequality tell us as you will find anywhere.
  6. Questions four and five in this interview with Rohini Pande cover her experience as a woman in economics and her research into gender in developing countries, well-worth reading. Apparently, early in their careers, Esther Duflo and Pande were subjected to a male economist asking their male colleague to ‘correct their mistakes’. He must feel like an arse and a half now.
  7. I normally end these on a note of high frivolity, but this week, the best thing I read was this article about Carson McCullers (who wrote two of my favourite books) by Patricia Lockwood. If you’ve never read her, go to the library now and find The Heart is a Lonely Hunter. And if you want to feel inadequate think about this: she wrote it when she was 22.

Have a great weekend, everyone!

R

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Links round-up

So, week two, and it’s actually looking like I’ve started to work out how to negotiate the byzantine world of this university, though I imagine there have been more than a few explorers who thought “I’m on to something here” shortly before disappearing into a pit of quicksand. It’s been a fascinating week, though some moments – usually related to algebra that has been collecting dust on a shelf in my brain for 14 years – have reawakened long dormant demons.

  1. I’m sure all of you spent Monday morning glued to your computer screens, feverishly pressing ctrl-R, until the news emerged: Richard Thaler is this year’s Nobel laureate in economics (yes, yes, it’s not a real Nobel. Change the record). Thaler is a popular choice: Tim Harford describes his work admiringly, as does Tyler Cowen here; and this appreciation is written by one of his early co-authors. It is, however, driving some round the bend that people constantly say that his work ‘proves that people are irrational’. It does not. Rather, it proves that there are limits to the accuracy of rational choice models in some contexts, and these limits can be transcended by changing some assumptions about how people behave. To get a sense of this, no better place to start than Thaler’s ‘Anomalies’ column in the Journal of Economic Perspectives.
  2. A really good paper linking firm-level inequality to exporting, summarised on VoxDev. The paper builds Bloom’s Firming Up Inequality work, linking the dispersion of wages across firms to their exporting status (the intuition is that exporting firms see revenue growth and share this bonus with their workers – something that is predicted by behavioural models of firm-worker engagement rather than standard neo-classical economics), suggesting an inverted-U relationship between exporting and inequality. When no firms export, inequality is low, as all firms are similar; differentiation is introduced as some firms begin to export; and it is removed once all firms do. Of course, even in the most advanced economies a minority of workers work in exports.
  3. A super article about James Scott, author of Seeing Like a State, a book far more people in development should read (however much you may, like me, find it more than a little one-eyed).
  4. “Arthur B. Robinson is not some lonesome crank tinkering in his garage. He’s something much more unusual: an extremely well-connected crank, with ample funding…” Fantastic long read from FiveThirtyEight about a scientist who went from working alongside Linus Pauling (a double Nobel winner) to running experiments in his backyard, with the only scientists he trusts: his family. He is one of the founders of ‘alt-science’, winning followers among the politically important in the US at the moment. My take is that this isn’t all bad, so long as the rules of scientific inquiry still govern whose theories survive.
  5. I’m going to keep going on about this: the robots are (probably) not coming to destroy the pathways for economic development in poor countries.
  6. Ian Mitchell lays out CGD’s vision for how the UK can structure its trade offer to developing countries to be even better than what the EU offers. I like the general thrust of this, but I think we now need to get very quickly into the weeds: the details of exactly what is possible and how will determine the offer, more than the grand sentiments involved.
  7. This is Joel Embiid’s world – you’re just allowed to live in it.

Have a great weekend, everyone!

R

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