Quick PSA before I start in earnest: there will be no links
next week, as I will be off work and away from my laptop, definitely not
reading everything on the internet with an almost compulsive dedication as is
my normal life. In an odd twist, I’m almost hoping that my son will wake me up
at four am, as I’ll be able to take him to the living room to watch the
cricket, and potentially still catch up on sleep later in the day. Every day I
have a little bit more optimism that this year is going to become gradually
more normal. Some things have continued just as they left off: LeBron James is still the King; Pakistan
are still completely
unpredictable; and Marvel are still threatening to slowly takeover the
entire pop culture universe with its
gathering expansion. Maybe by the time he’s old enough to enjoy it, Test
cricket will be back at Lord’s and I can take him to the real thing, in all
it’s ludicrous glory.
- I’m not the only one hoping for some normality this year, and in seeing some green shoots that I want to believe in, I have good company. Tim Harford sets out some of the signs that might portend our much delayed spring of 2020 – and invokes Hemingway to describe the pattern he expects: everything will happen slowly, until it happens suddenly. In 2020 I was one of many people who failed to understand the importance of exponential spread early enough (though fortunately, my failure was quickly picked up and corrected by friends and colleagues). I wonder if exponential improvement might also take us by surprise, at least in the UK. Of course, as many have pointed out, it’s not over till it’s over everywhere and on that front we are not doing well enough at all.
- Literally ever other week I learn something jaw-dropping about how messed up criminal justice system in the US is (on the other weeks, I learn something about how messed up the healthcare system is). This week it was this astonishing piece on NPR, which documents the scandalous extent to which charges and fines completely unrelated to the crime a person has been convicted of can be levied against them, and how much local Government depends on these fines to provide services (transcript). This is about as appalling a set of perverse incentives as you can design, and it’s widespread. If you want to take a foul mood and make it worse, read this paper by Bocar Ba and co-authors which documents how race and policing interact in Chicago – where the ethnicity of the officer on the beat has a large effect on the likelihood that they will make arrests in majority-black or Hispanic neighbourhoods, or use force, especially against black civilians. I mean, yes, cat lawyers are funny (when they’re not abusing their power to harass their ex-girlfriends), but the system is a deep pit of dysfunction.
- While we’re all in a vile mood, here’s the IGM panel of economists on the likely effect of Brexit, with the majority agreeing with the statement that the UK’s economy will be several percentage points smaller as a result of this particular piece of self-flagellation-by-policy than we would otherwise have been by 2030.
- I thought this write-up in VoxDev was great: Ama Baafra Abeberese on how cross-subsidisation of household and agricultural electricity in India reduces firm output and productivity growth in industry. Trade-offs are everywhere. Related: a cool experiment from Mexico which looks at the effect of information at different levels of specificity, coupled with a grant, affected agricultural productivity. Two interesting findings – the less specific information was actually the more cost-effective policy (costing less and having the same impact), and unrestricted grants had the same effect on purchase of agricultural subsidies as restricted ones, which might be because people associated the money with that purpose or simply that in that context, it proved to be the best use of the cash.
- On the subject of excellent paper summaries: two more from Development Impact. First, Berk Ozler and P. Facundo Cuevas write up amazing new findings that discovers that a cash transfer programme that stimulated widespread reallocation of school-aged children among households in the treatment area, with the result that the programme had effects on both treated families and widespread benefits on those who were not eligible. I’m going to need to read the full paper, because this is remarkable. There are reflections on the technical challenges this behaviour posed for the research team, but these take second billing to that amazing mechanism. And secondly, Markus breaks down a methods paper that provides a new approach to measuring women’s agency in his typically clear, careful style.
- I found this piece of techno-pessimism from Dani Rodrik really interesting: large firms in manufacturing sectors in Ethiopia and Tanzania are using much more capital-intensive methods of production than you would expect given the relative cost of labour in those countries. He suggests this might be because manufacturing processes in these industries are globally so automated that you can’t actually do them in a labour intensive fashion anymore. He describes this as dilemma for them, and it might be. Increasingly I am drawn to Doug Gollin’s argument that we need to obsess less about sector and more about characteristics of production when thinking about structural transformation. As with most things, I think Doug is right.
- Imagine your job being to slowly train a pig to play Pac Man – and then getting a journal article out of it. This, apparently, seems to be the life of scientists publishing in Frontier Psychology. I’m not sure what exactly the motivation for the paper was (“there has been increasing concern that barnyard animals have been excluded from online multiplayer gaming systems…”), or if it’s building on an extensive literature of other animals playing compute games, but it is getting in the media, so perhaps this is what I should pivot my work towards… In animal news I’m much more taken by, here’s a thread of all the version of Big Bird around the world, including the absolutely terrifying Brazilian Big Bird Garibaldi, who looks like he’d eat you and bury the bones somewhere they’ll never be found.
Have a great weekend, everyone!
on free TV again! Yes, it starts at 4 am, but what on earth are you doing
at 4am that’s better than watching Joe Root rack up a century or Jasprit
Bumrah’s action? It’s
certainly not sleep for me, with my son having unilaterally decided that play
time can be instigated at any time, day or night, with the right amount of
laughter. I’d like to say that I’m using this extra time productively, but that
would require an expansive definition of productivity which includes
zombie-like staring into the middle-distance while trying to convince a small
person that rocking him to sleep is not, in fact, the most exciting game ever
devised. If you’re thinking of making the obvious joke, that turning his
attention to the cricket will guarantee a nap, don’t: that doesn’t work until
you’re old enough to drink and to wear
a bacon-and-egg blazer without self-consciousness. It’s hugely comforting
to look at cricinfo today: you can almost pretend things are normal again. Pakistan
are alternating feast and famine with both bat and ball, Bangladesh appear
to be fielding
a team of 19 barely-distinguishable spinners and England are getting our
hopes up before the inevitable fall.
- Economics has a generally hostile seminar culture, even compared to other academic disciplines. For some this is part of the appeal: there are no easy rides, and anyone presenting a model, a theory, a finding has to fight to prove it. It has downsides – anyone who has been in enough econ seminars has spent 20 minutes losing the will to live while the presenter and a questioner with the persistence of Fiorentino Ariza fight over the arcana of a robustness test in footnote 5 of Appendix B. Another downside is that this hostility is asymmetric, and women bear the brunt of it: an amazing new paper by Pascaline Dupas and co-authors, plus a veritable army of data coders – 97 across multiple institutions demonstrates this clearly. Women are asked more questions, and more of them are hostile or patronizing. Exhibit 23,392,191 that econ needs reform. The paper is full of gems beyond this: roughly 30-35 questions per presentation, and up to 69 (in presumably a 90 minute seminar)! A balance is needed between the kind of scrutiny that keeps methods and detail ship-shape and that which stymies any attempt to build an argument or answer the questions that matter.
- Of course, descending into the arcana is often what economists do well, and it matters for getting the right answers. I feel a bit like that Bernie Sanders meme (not the chair one, this one): I am once again asking you to read Dietz Vollrath explaining why TFP isn’t productivity and demonstrating why being an absolute expert in the data matters. He describes himself as a TFP agnostic, not because innovation doesn’t matter but because he isn’t sure that TFP tells us anything about it – or should, given what it does do. He goes into further detail here – the ultimate point being that not all progress shows up in the numbers we have; but if you don’t spend your time with that data, you may not know that. Read both to the very end.
- Everyone is wrong sometimes, but some are wrong better than others. Tim Harford tells Planet Money the story of Irving Fisher and JM Keynes, who both lost huge amounts of money in the Great Depression but Keynes rebounded and made a vast amount of money for himself and for King’s College, Cambridge (transcript). Tim’s argument here is that this is largely because Keynes approached the data with an underlying humility – a feeling that were real limits to his ability to understand it and get ahead of it, so his strategy was more humble – more long term and focusing on what he did know something about, not the underlying market dynamics over the short run, but the kind of managers who will generally be successful in keeping their firms afloat. My speculation is that something else is also at play: Keynes was born incredibly privileged and treated making money as an amusement – the challenge of the game was his motivation. For Fisher, my bet is the stakes were higher. His father died relatively young and Fisher provided for his whole family while still a student. Distance can help analysis, and maybe Keynes had more.
- While we’re on the broad subject of forecasting – Kaushik Basu predicts the three big growth superstars of this decade. I have less faith in Mexico by him, but would probably go with his take over mine…
- Meanwhile, Martin Ravallion reassesses the last growth superstar: he argues that China’s incredible growth rate is less so when you consider just how much it had hobbled itself before that – should the credit be so great when part of winning the race was simply taking off one’s blindfold? I think he’s a bit harsh by picking South Korea and Taiwan as China’s counterfactual (they were, after all, the go-to growth miracles before China really took off), but I really buy the premise – a slingshot effect from being held back is surely part of the story here. Speaking of holding yourself back, I rather liked this take on the coup in Myanmar, sent to me by a colleague working there.
- I talk a lot about academic poor practice and meaningless research here. In the future, I may just link this cartoon (via Andrew Gelman, who had a similar reaction).
- Finally, two ridiculous lists to end the week on: first an AI has attempted to put together a list of 67 books to give as a gift to a woman (list here). It’s … pretty good? Though it takes a serious points deduction for getting the title of Elizabeth Smart’s incredible By Grand Central Station I Sat Down and Wept wrong. And the Guardian select 52 comfort films, and while many fit the bill (Clueless for the win), it wouldn’t be the Graun if someone didn’t try and pretend their comfort watch was an Ozu film, no matter how brilliant.
Have a great weekend, everyone!
You know the links round-ups have had a profound cultural
influence when Rishi Sunak announces his intention to enter the market with his own
collection of Friday geekery. Well, Rishi, there’s already a
thirty-something Asian economist with too much hair and a listserv in this
town, and I’m betting on the incumbent: what I lack in billionaire in-laws I
make up for in memes
culture references. Competition with Rishi aside, this week has been
notable for new vaccines (yay! But
please, can the coverage of efficacy please improve? Those % efficacy numbers
do not mean what you think they mean, and comparing across vaccines is fraught
with problems); the Godzilla
vs. Kong trailer (the idiocy we all need after this appalling pandemic year
– sample dialogue: “Godzilla is out there hurting people, and we don’t know
why!”); and today’s release of Dinosaurs on Disney+,
the tv show that made me terrified of climate change long before I knew what a
GHG was. That makes it a good week.
- Of course, the highlight of the week was the long-awaited (don’t ask by whom) release of Paper Round, the podcast Matt and I started to replace our blog (though as David McKenzie correctly points out there may have been a flaw in our plan to overcome shorter attention spans with an hour-long pod). The conceit of the Podcast is that we take an interesting – usually recent – paper in development or economics and discuss it in detail, but also use it as a platform from which to think more broadly about important ideas in development economics and related – sometimes tangentially related – research. The first episode is on poverty traps, and specifically the brilliant Balboni et. al. paper that uncovers empirical evidence for their existence (transcript here, paper here). We talk about the idea of what a poverty trap is (are you more like Batman or Super Mario?), the production function of cattle-farming, and whether we should think again about the MVPs (of course not, hubris is still hubris, and testing stuff still matters). The next one will be about nudges and will, if anything, have even more pop culture references. Please let us know what you think, and how it could be improved!
- Of course, a podcast isn’t the only way you can do a great deep dive into a paper. One of the best things about Development Impact has always been that it’s written by a group of people who marry technical brilliance with absolute clarity of communication, and there were two particularly great examples of that this week. First David McKenzie looked at a new paper from Bertrand and Crepon which looks at the impact on employment of simply informing firms that the labour laws are less difficult to navigate than they fear. The results aren’t entirely clear cut, but David does a great job of walking us through them and how we they can be reconciled. Markus does the same with another paper that looks at one mechanism by which female entrepreneurs in Uganda bear a ‘profit penalty’: specifically that the burden of childcare (especially for children under 2) prevents them from undertaken basic, but important, business activities, such as restocking. That second paper is particularly cool. It’s not always easy to see in the data all the ways in which mothers are penalised in the labour market. Many seem obvious in retrospect, but aren’t easy to see in the first place.
- One to make you think deeper: I often complain that a lack of competition in developing country markets is stymieing welfare improvements, but Rocco Macchiavello and Ameet Morjaria have a new study that shows that even if this is true, introducing more competition can make things worse. Many things are wrong with the market, and fixing one (lack of competition) can undermine the workarounds that firms have put in place to mitigate other problems, in this case the use of relational contracts (that is, contracts that rely on well established and close relationships between the two parties rather than the legal language and force of the contract itself).
- I will freely admit to knowing far too little about Ethiopia’s political history (or present, for that matter), but this piece by Maaza Mengiste about its history of conflict and pathways to peace was really interesting and beautifully written. I’d be interested if those who know more about the situation see the same merit I do in my ignorance.
- Another excellent piece by Penny Goldberg, this time about ‘Covid convergence’, the phenomenon of global income inequality declining because of the impact of the pandemic on rich countries. As she points out this is not cause for celebration, containing within it the seeds for future distress among poor countries.
- Branko lays the smack down on the Global Health Security Index, which not only failed to predict which countries would do well in responding to Covid, it was exactly wrong: the countries with the best scores did the worst. This is a specific example of a general problem: measuring theoretical institutional capacity is insufficient to understand policy response unless we also have some information on decision-making and implementation quality. The CPIA faces a similar problem. Being able to do an medium-term expenditure framework doesn’t mean that the decision-making that determines what gets funded is any good, nor that the practicalities of allocating or disbursing money are reliable.
- Lastly, of course I was going to link to the article comparing Michael Jordan and the Dalai Lama, and it’s not because the Dalai Lama will talk trash all day long if he think it’ll get in your head. The argument is that both are preternaturally calm and serene when all around them is chaos. I’ll be honest, I don’t think the author has watched Jordan enough (there is literally a ‘Michael Jordan angry’ playlist on youtube), but I agree with the premise. I’d have chosen Somluck or Saenchai, but I guess not everyone loves Muay Thai as much as me. And in other “stuff you didn’t know you needed” news, apparently there is an *extensive* collection of Trump Administration literotica available on the kindle. The Grauniad reads it so you don’t have to. And on that pleasant note…
Have a great weekend, everyone!
Dissanayake | Policy Fellow | Center for Global Development | email@example.com | @scepticalranil
Gardens, Great College Street, London, UK SW1P 3SE
note: I do not work on Thursdays
I’m not sure what the best bit of the week has been so far –
whether the unexpectedly stirring poetry (more in the final link), the unexpectedly
stirring century by Angelo Matthews, or the fact that Seth Rogen and Ted
Cruz are having
a very high profile spat right now (mentally, I read that tweet in an
voice). But actually my favourite bit of the week has been putting the
final touches on a podcast I’ve recorded with Matt Collin (eccentric
development economist by day; eccentric development economist by night) called
Paper Round – keep an eye on twitter
for its first post next week. The idea was seeded during lockdown 1: stuck at
home with no new Marvel movies to make jokes about, Matt and I committed to
reading a paper roughly every month and talking about it on Zoom, a partial
replacement for all the casual conversations about economics we would normally
be having in our respective offices. So, for those of you feeling a gap in your
life which would normally be filled by people trying to explain economic
concepts (in episode 1, it’s poverty traps) using Batman and Trading Places,
this is for you. And with that audience-limiting pitch, it’s on to the links.
- Well, this one doesn’t half make me look silly. It turns out that the Dunning-Kruger effect – punchline of around 1/3rd of my jokes, and the only theory that ever seemed to satisfactorily explain selection into political careers – may simply be a statistical artefact and, ironically, I was not smart enough to notice it myself. (This is a real galaxy-brain one; was my failure to identify the flaw in the Dunning-Kruger effect … an example of the Dunning-Kruger effect?). I say ‘may’ here because after reading this McGill explainer of why it’s not real, I’m still not wholly satisfied as to why it appears to be a statistical anomaly rather than a real effect with a causal explanation. I think it has something to do with the fact that the original effect arises from people guessing their percentage score on a test, creating upper and lower bounds to their guesses (0 and 100). This means those nearer the bottom of the scoring charts have more ‘room’ to make mistakes that are higher scores than their real ones, and those near the top have more ‘room’ to guess lower scores than their actual one… But I would like a statistician to confirm that intuition. Now, if someone conclusively proves that The Peter Principle is a lie, I’m going to lose all my joke material, so I’m issuing a cease-and-desist on all further inquiry into the issue.
- On to more important – and depressing – issues. A new VoxEU piece looks at the impact of Covid-19 on childcare services, and by extension on female employment and finds predictably grim effects. It’s not surprising: if discrimination at some point in the chain leads to women earning less or selecting into lower-earning work, this kind of effect is predictable. It made me think about how a lot of great economic research compartmentalises problems into small, solvable pieces, but sometimes misses the stage where all these pieces are stitched together (to be clear, this is not a criticism of this, excellent, piece). A bit like a translator working word by word, creating a barely coherent sentence. The benefit of having specialists (or even generalists) then looking across all the research to put together a broader picture is immense, and under-incentivised in economics.
- And if you need more downbeat news on gender and the workplace, there’s this: evidence from the Swedish army suggests that mixed working environments have positive effects on attitudes about gender… but they don’t last long. This is not the kind of thing we’re going to nudge our way to a solution for.
- One thing I absolutely love about Andrew Gelman’s blog is the amount of time he and his co-bloggers spend talking about how best to communicate statistics. Two great examples: the comments on this blog are great (quite possibly the first time anyone has ever written that sentence), in response to a question about how medical doctors should communicate probabilities and risks. There are a lot of people thinking about how we compute and act on probabilities, and sometimes its good just to go down the rabbit hold and learn a bit from their work. And second: this piece looking at a different way of visualising distributions. Possibly just for the completists, but reading this blog has made me much more aware of how I try and communicate data, and how people might be responding to it.
- I’ve spoken to a surprising number of people who are hesitant about taking vaccines recently (even in my little bubble, extremely skewed towards overeducated geeks as it is), and I remain completely befuddled as to why anti-vaccine sentiment arises. I cannot for the life of me understand how the vast majority of people who share anti-vax sentiments get any benefit from this movement (perhaps I’m being naïve?), which makes me think there must be some returns to just talking about this much more and answering questions and responding to doubts people express much more openly and regularly. FiveThirtyEight has the scoop on the small army of people doing just that on Facebook now.
- There has been far too little coverage of the practicalities of how East Asia has tackled the Covid-19 pandemic so much more successfully than the rest of the world (talking to family and friends in Hong Kong is always a little painful in that respect), so I was very glad for this piece on Duncan Green’s blog going into it in a little more depth. I had always thought that if SARS had happened in the UK we’d have dealt with it just as well – I now have no doubt we wouldn’t have.
- Everyone has been talking about Amanda Gorman this week – and with good reason. Not only was her poem amazing, and uplifting, it was also a relatively rare event: few Presidents have poets read at their inauguration. LitHub have them all here, starting with Robert Frost in 1961 – a poem with a great story to it. He arrived with a new poem in his pocket, but discovered that he couldn’t read it in the light of the podium and instead recited one he knew by heart. For what it’s worth, my favourite is Elizabeth Alexander’s Praise Song for the Day, Obama’s choice the first time around: “We cross dirt roads and highways that mark/ the will of some one and then others, who said/ I need to see what’s on the other side. I know there’s something better down the road.” And on that note…
Have a great
In the search for silver linings to this car crash of a
pandemic (and pandemic response), till this week I had found only one:
additional time spent with my son while working from home (I don’t dislike
commuting itself, as it’s a guaranteed 90 minutes of reading time a day, and I
like working in the office, surrounded by colleagues). This week, another has
emerged: I have extremely limited face-to-face exposure to anyone who watches
cricket, and can thus blissfully pretend that there isn’t a series going on in
Sri Lanka, and that our means have not been so diminished by retirement and
mismanagement that our bowling attack has an average closer to forty than my
age. Instead I can watch clips
of the glory days and pretend we aren’t heading for an innings defeat – in
Galle of all places, the sheer shame of it, where Mahela
Jayawardene would hit a century every time picked up his bat – to an
England team whose line-up you could easily mistake for a thesaurus entry for
‘uninspiring’. It’s been a grim couple of days.
- It’s now been a bit more than a week since the absolute scenes in Washington, DC and I’m still sorting through the sheer range of emotions it brought up, and I’m clearly not the only one. Branko Milanovic wrote a reflection on his ‘ideological education’ that really resonated with me – three stories from his life about moments when he realised that ideas he believed impossible to take hold among sensible people were, in fact, widely adopted. I’ve had a number of such moments, realisations that the people who believe things that seem absurd to me are not crazy, fringe cranks but the kind of people I interact with regularly, but too shallowly to realise it. Reading the backstories of some of the insurrectionists in DC reinforced that, but at least it seems to have inspired a (perhaps far too limited) reaction: Trump’s approval rating has plummeted, hopefully signalling that the events in DC do not in fact represent even most of the country. And secondly, as much as it seems like closing the barn door after the horse has bolted, actions taken to reduce the reach of inflammatory rhetoric does seem to have an effect, not least by partly cutting down on its ability to infect those as yet unaffected by it.
- I really liked this piece on the benefits of using financial diaries, by Sandrine N’Simire and co-authors on Duncan Green’s blog. I’m also a fan of using financial diaries – indeed they were one of the first things I looked at when I was interested in the early effects of Covid lockdowns in developing countries.
- The latest in Dietrich Vollrath’s investigations into the productivity slowdown in the US is worth reading in full (he dates the slowdown to the mid-1960s, and blames it on the labour force effects of the baby boom), but there’s I was specifically interested in one idea he floats: could there be a fundamental asymmetry in the productivity effects of expanding and shrinking labour forces? I think there’s something to this: an economy can absorb a lot of workers and find work for them that could have been done by fewer (by introducing redundancy in production processes for example); but could find it very difficult to reverse this process again when it needs to make do with fewer workers. I can think of a few reasons why this might be possible, but I’ve never seen it modelled before.
- Most misinformation isn’t shared because the sharers are credulous idiots (some is), but because they simply haven’t taken a moment to examine the claims they’re propagating before hitting that retweet button. Tim Harford points out that many cognitive traps share this basic characteristic: they aren’t hard to avoid when time and care is taken, but time and care are taken far too rarely. This is true regardless of how well educated one is: I saw professors sharing tweets about the Capitol Hill events that turned out to be misleading, even if the ultimate narrative they were propagating was right. His Planet Money show on pandemic statistics is also worth a listen (transcript)
- If you’ve worked with me before, you’ve probably heard me rant about the millions of pounds wasted on bad training programmes that don’t teach people things that they probably wouldn’t use even if they learnt it. Well, few people have know more about how and why training programmes work (or don’t work) than David McKenzie, and his new research with Steve Anderson comes up with a much more promising approach to improving business practices. Instead of teaching a business owner how to be a bad accountant in three days painful to both student and teacher, introduce her to someone who does accounts well and does it for a living. Insourcing or outsourcing professional services has a much larger effect on the quality of business practices than trying to teach those already in the firm. This shouldn’t be a surprise – just because I’ve got a good idea and a bit of entrepreneurial drive does not mean I’m likely to have any aptitude at all to do the accounts.
- A new paper from Cristina Belles-Obrero and Maria Lombardi shows legal reform in Mexico banning child marriage had no effect on its negative consequences since cohabitation was considered an acceptable alternative: kids didn’t get married, but they still formed relationships, dropped out of school and had children early.
- Finally, as a birder with a real soft spot for virtually all wild animals, it can be very easy to fall into the trap of sharing only videos and pictures of the cute, adorable side of nature. So as a public service, I am here to remind you that animals are horrifying, even the cute ones, and if you need evidence, this is what the inside of a penguin’s mouth looks like. Enjoy your nightmares. Even more horrifying, apparently macaques are evolving into an even more invasive species: economists. They have learnt how to judge the value of tourist items in order to steal the most valuable of them, and are learning ransom techniques. It’s only a matter of time before a macaque wins the Nobel for work formalising the game theoretic structure of ransom demands.
Have a great weekend, everyone!
Six days. That’s how long it took 2021 to plumb depths that
even 2020 thought were too tacky and over-the-top. Like a sequel that decided
that the only way to top the original was to forego all sense of shame and cast Willem Dafoe to spend
the whole movie doing bug-eyes and putting leeches on his body (yes, I’m
looking at you, Speed 2)
2021 decided that after a global pandemic, the death of Diego Maradona and the
interminable delay of the Black Widow movie, the only place to go was an
what appears to be a dead groundhog and some bison horns on his head trying
to stage a coup. But let’s not make light of it. There were a number of
complete spanners on show there, but the implications are incredibly serious. I
thought 2021 would give us at least a few weeks to enjoy the good news glow
from the vaccine rollout, but instead it’s left me with that familiar feeling
of being simultaneously outraged, slightly scared about where we’re going and
cycling through funny-but-not-really comments about the absolute clown show
readers in the US and UK are living through (with sincere apologies to the
World Clown Association who do not deserve this comparison.) A massive
sinkhole just opened up in Naples, too. At least it wasn’t filled
with rats this time. At least that’s one way 2021 is improving on it’s
- Shall we start with something uplifting? I think we need to. I really, really liked Duncan Green’s comments to recently graduated MSc students at the LSE. He discusses the mountains behind the mountain they have just scaled and suggests four excellent rules for making the world a better place: evidence-based humility, permanent curiosity, reflexivity and pluralism. Both as a student of decision-making and a sometime decision-maker, I couldn’t agree more with these rules and especially the second. It’s the characteristic I most prize in friends, colleagues, and myself. Never stop asking why, how and why not.
- That kind of curiosity leads you to unexpected places: thinking carefully about a pencil can lead you through to the wonders of globalisation; a toaster can make you appreciate the value of specialisation. But I read the examples in Tim Harford’s blog and see not just a paean to the free market but the invisible hand of the Government, whose policies, subsidies, taxes and protections make such everyday economic miracles possible. And I see a tale of such deep interdependence that the idea of [insert nation here] First is not just risible but incoherent. Maybe 2021 will start unravelling this, but I wouldn’t hold my breath.
- Back to the crazy we saw earlier this week: Maggie Koerth at 538 digs into the much-discussed asymmetry of police response to the (primarily white) rioters at Capitol Hill and the typical response to Black Lives Matter protests. It turns out that ACLED have started collecting data in the US and the data show what the smell test suggests: there is a marked disparity in how they are policed, epitomised by this tweet. Before the year turned, they also ran this great collection of their best graphs of the year – some of them are brilliant.
- Something else I missed in my end-of-year internet abstinence (spent reading The Book of Why by Judea Pearl and Dana Mackenzie and Cloudstreet by Tim Winton, in-between cleaning baby vomit from every item of clothing I own; both are excellent, btw) was Andrew Gelman comprehensively dunking on regression discontinuities again. One line I particularly liked was this: “If you want to make a big claim and convince me that you have evidence for it, I need that trail of breadcrumbs connecting data, model, and theory.” This is exactly right, but its important to note that the theory thing isn’t just a mathematically consistent model – it’s got to be something plausible and triangulated with much more than your starting assumptions and (usually rather small) field experiment. Does it fit with what we know about the world from other sources of knowledge? If not, you really need to work hard to convince us.
- Another pair of excellent year-end reviews, both from the Development Impact crew: first their pick of the best papers of the year – a typically excellent and varied selection; and secondly their summary of their brilliant job market papers series.
- I very much like this piece by Mariana Mazzucato and Simon Sharpe about the importance of dynamic analysis in government decision-making, arguing that the returns to a decision should take into account its impact on the future path of decisions it sets up as well as its static values. I have two objections: one, that good cost-benefit analysis can and should do this, and two, that this opens up so many possible future paths of benefit that it may become either impossible or meaningless to genuinely analyse the expected payoff of different decisions, which is still necessary.
- With the cricket resuming (Australia and India playing out a hugely entertaining series and Monty Panesar on the Christmas University Challenge, the latter being more unexpected than the former, not to mention the forthcoming Sri Lanka tour), I was tempted to fill the last slot with cricket videos, but I’ll restrain myself. Instead two pieces of marginalia, one very serious and one not so much: first we need to occupy Disney+ until they liberate the hundreds of hours of Muppets content they are denying us. This is essentially a global human rights abuse and my DVDs and old VHS tapes are nearly worn out. My son needs to have his supply of Muppetry secured! And in less Deadly-serious news, apparently people have been trying to cook chicken by slapping it. I thought this was a smutty euphemism until I opened the link. It’s literal. 2021.
Have a great weekend, and happy new year, everyone!
2020 is on it’s last legs, and like Usain Bolt looking over
his shoulder at Justin Gatlin, I will be happy to see it behind me. For all the
good things that happened this year, my son being by far the best (along with the
seven-letter word on a triple word score that preceded him), humanity took
an L this year. We got dunked
on by a virus, by wildfires and by ourselves. The last
part was the really hard bit – we constantly made things worse for ourselves
with impatience, intolerance, stupidity and garden-variety selfishness. Still,
not everyone sucks, and there was some really good writing throughout the year
– some about how we fix this year’s problems, and some about how we fix more
well-established ones. I normally do a sort of best-of-the-year list in the
links, but this year Susannah
Hares and I have written something on the CGD blog instead – some of our
favourite writing of the year. Take solace that even in a terrible year, good
things get written.
Just a note – this is the last links until early January.
I’m taking a break for a couple of weeks to try unwind from one of the most
personally and professionally intense years imaginable. Perhaps I’ll be less
grumpy on my return, but I wouldn’t bet on it.
- We need to talk about
Doing Business again.
I know. Every time I bring it up, it’s to lay the smack down on it again,
but sometimes the smack just needs to be laid down. After its suspension
earlier this year for ‘data irregularities’ (on top of the fact that
it, y’know, doesn’t
measure anything), the Bank undertook a thorough audit of the index,
and the report is a *doozy*. The press
release is rather understated, but a
bit like Flerken, a pretty dramatic creature emerges from its quiet
exterior. The full
report seems to confirm that World Bank management pressured staff to
fiddle the numbers to favour specific countries – and that almost all of
them complied. This is actually even worse than I had expected when
this all kicked off, and I don’t see how the Index can possibly recover. Justin
Sandefur has the thread for those who like it tweet-sized.
- I need something
wholesome after that. Here’s a Slate piece about how
the betting markets are making bank bank bank from Trump supporters.
When people said they were confused by the difference between election
modelling and the betting markets, they forgot there was selection bias in
both polling and the betting.
- Tim Harford is singing
my song with this
piece about the importance of redundancy in systems. The number of times I
find myself one step away from doing something stupid is amazing. Having
simple not-strictly-necessary checks can improve system performance
substantially, even at the cost of a per-transaction inefficiency.
Most of the time, we don’t make mistakes and consider it an inconvenience.
But when mistakes are disproportionately costly, the redundancy proves
highly valuable. One of my favourite examples is something civil servants
will recall: when you send an email from a Government account a little pop
up appears, asking you to check your security marking (or used to, at any
rate). I often found myself taking advantage of that pop up to reword a
sentence or check that I hadn’t said the quiet part out loud when
responding to something I thought insane.
- This is great: Katherine
Stapleton and Michael Webb on the
effects of automation in Spanish firms on their supply chain engagement
with firms in developing countries. They find that contrary to common
fears, automation does not induce net reshoring. Rather, its effect on
productivity result in the expansion of supply chain relationships with developing
countries. As so often, there is an income effect as well as a price
effect, and they work in opposite directions. In this case, the increased
income from better production induces more transactions and hence more
supply-chain engagement, including by firms that were previously not
productive enough to afford the fixed costs of off-shoring. Research:
constantly proving that your gut feeling deserves a sense check.
- In the US, Raphael
Warnock’s campaign ads in Georgia are undermining
subtle but strongly help stereotypes about black people there. I found
this one of the most shocking things I read all week, but also shockingly
better at collecting the tax you should be getting is more important than
raising your tax rates. Not surprising, necessarily, but important.
- I thought long and hard
about how to end the last links of the year. Would I do a pop
culture round-up? Something about John
Hughes movies, or why Kendrick Lamar
as great as Rakim? Or something sporting, pointing out for the
1,303,291,181,393rd time for those at the distant back of the
classroom that LeBron
James is not just historically great, he’s historically
great and being historically great. But the thing I’ve missed
the most during this year (close family apart) has been birdwatching.
You can do great stuff in London, but nothing beats going to the middle
of nowhere and seeing something truly special, like this
Scottish engineer found when he discovered that a starling murmuration
was the cause of rolling blackouts out there. The video is stunning.
But as much as I love birds, I don’t love them as much as this crazy
person, who spent
two years living as a wild turkey. That takes it to another level.
Have a great break everyone!
There’s an oft-quoted line in the classic 1995
mystery/heist/Benicio Del Toro mumbling movie The Usual Suspect: “The greatest trick the devil
ever pulled was convincing the world he didn’t exist.” I was thinking about
that today. With Brexit lurking around the corner like Keyser Soze, it’s marked
primarily by the many guises it’s worn since 52 percent of the population voted
for… something, not quite defined. We’ve gone from “of course we won’t leave
the single market” to “we’ll do a trade deal over a cup of coffee” to “no deal
is going to be wonderful”
(if you’re Boris Johnson) or “we’ll survive”
(if you’re Oliver Dowden) to this, if
you’re me. How did that happen with so little fanfare? One of the most damaging
things about 2020 for the UK has been the way Covid so dominated the public
attention that it completely distracted us from the Brexit negotiations. Would
a clearer, less fatigued public mind have put more pressure on the Government
to achieve a deal? Perhaps not: I’ve been predicting no deal since 2016, but my
goodness if it comes to pass we’ll be wondering about it in a few years’ time.
One of my friends exports goods to the UK, and he’s describing a state of
absolute panic among the people moving his goods in the UK. Fun and games for
- Ok, so the intro was about as much fun as a smack in the face with a roll of quarters, but I’ll make it up to you. This interview with Michael Clemens is absolutely brilliant, and I cannot recommend it enough. In fact, if you’re short of time, just open it and ignore the rest of the links. Michael is given a proper grilling here, but answers every questions with such clarity, exposing logical and moral fallacies in the arguments around immigration while also drawing on a huge range of evidence to explain why so many stated positions about migration are drawn from faulty logical foundations and how they can be tested (and disproved) by evidence. What I liked most about the interview, though, was how Michael was able to discuss not just the fine details of US migration law, but also their genesis (as he puts it, it is of the “here’s a number I pulled from where the sun don’t shine” school of policymaking) and how different kinds of policies might offer a partial improvement – and what problems they won’t resolve. He ends on a note that is a little pessimistic and a little optimistic, quoting the classicist Jeremy McInerney: “Wisdom only comes through suffering”, which may turn out to be our verdict on Brexit, too. Bonus: a VoxEU write-up on the importance of migrants as key workers in Europe. Spoiler: it’s huge.
- Andrew Gelman and Aki Vehtari have a new paper out summarising what they think the most important statistical ideas of the last 50 years have been. It’s readable, fun and a super introduction to ideas that you should probably understand better than you do – I certainly should.
- It’s a great week when we get new content from both Michael and Dietz Vollrath, so take advantage of it. Dietz digs into the decline in TFP in the US, commonly thought to be a phenomenon of the last decade or two. It isn’t. TFP jumps around, and has periods both above and below trend since the 1960s, but if you took the trend from then and used it to guess productivity today, you’d be about right. It gets really interesting when he starts discussing what these findings mean for his explanations of US economic performance. Worth reading in full, including his suggestion that the brilliance of Innervisions may have led some people to the milk and honey land, where all men feel they’re truly free at last. Stevie Wonder caused the slowdown, everyone (which also explains how bad some of the later albums were).
- Hugo Slim at BSG has written an excellent blog at ODI arguing for a complete restructuring of global humanitarian operations, based around platforms built on local partnerships and delivery structures. It’s excellent, and makes the point that vaccine rollout platforms offer an opportunity to move outside the established, and sclerotic, humanitarian delivery models we’ve been reliant on to date, and can be used for future priorities, including social protection. In a similar vein my colleagues Jeremy Kondynyk and Patrick Saez argue for reform to the system here.
- Josh Angrist, David Autor and Amanda Pallais have a write-up of their new paper out about the use of financial aid to support college students; what makes it cool is not just that it’s every bit as careful and well-done as you’d expect from them, but they conclude with a proper discussion of the cost-benefit ratio of the intervention. They – correctly – argue that scholarships in the context they measure them are largely transfers, and this has profound implications for how cost effective the intervention is; it would look even better if they explicitly weighted the worst off students more highly. I love teaching CBA because there’s a lot more economics in the conceptualisation of it than there is the summing up of numbers, as they recognise.
- If you’re like me, you lost a few hours to reading the Lancet write-up of the early Astra-Zeneca results (they make me more, not less, optimistic about the vaccine) and the FDA summary of the Pfizer vaccine data. But if you want a summary of the former, this Science piece is good; even better is Karleigh Rogers on the difficulties of getting people to complete their vaccination course, and how to overcome them (she missed a trick not citing Anna Karing, though).
- And lastly, I know some of you argue that economics is divorced from the real issues that matter to people. Some of us have heard you: Stephanie Karol, for example has a new paper out modelling how households make decisions when cats are present: obviously, the finding is that cats rule the household. And another paper sets out – with examples – how to teach economics using K-Pop; as much as Blackpink might offer something here, nothing summarises the economics of conspicuous consumption like Aaye Laariye (and – even better, it turns out that Sheheryar Banuri’s sister Wajiha Navqi has an – amazing – Coke Studios song out this season!). And on that happy note…
Have a great weekend, everyone!
2020 jumped the shark today, when we CGD Europe had our work
Christmas do over Zoom; brilliantly organised and fun as it was it drove home
exactly how over this year I am. I’ve avoided pubs and restaurants for the
duration of the pandemic, ditto cafés, yoga studios and the like, knowing that
I have vulnerable people in my extended circle, and it’s been mainly a great
year – but there’s something irreplicable about the social bonds built through
physical proximity and collective action, whether that action is an escape
room, axe-throwing, mini-golf, or having just enough drinks to say that 10%
more than you’d normally reveal about yourself at work. I wonder if we – or I –
will look back at this experience and be glad we went through it, because we
built something better out of it, the way I imagine people in the UK felt with
the creation of the welfare state after 1945. Then I read stories like this
and am reminded that no – for the most part, things will be as they were
before, but a bit worse. Hoellebecq
was right, as annoying as it is to admit.
- After that little dose of sunshine, maybe I should lead with some happy stories? Well, every year the Federal Reserve in the US publishes a report, ‘The Beige Book’, which consists of little more than stories and anecdotes about the economy, and this year Planet Money trawled through it to find the happy economic stories of the year (transcript). Even the happy ones have a little hint of sadness to them, though, like the firm that started a bus service to bring workers in to work… because it’s normal workforce couldn’t come in because they lacked childcare options. And staying on the theme, these aren’t ‘just’ stories. Stories can have real economic power, the idea that Robert Shiller has been pursuing with his recent research. Again, PM have the scoop (transcript).
- Staying on things that make me happy, the Development Impact job market paper series is still on-going, and this week’s have been typically excellent. I really liked two papers that looked at the effect of crime – one on the incomes earned by workers, and the other on gender inequality (finding that violent crime reduces women’s bargaining power). I love spotting the connections between otherwise unrelated papers; and the first one has links – in a completely different context – to the Chicago Uber paper which found that women were more likely than men to avoid high crime areas, and thus their higher Uber fares.
- I’m on record as a vocal detractor of all but the best systematic reviews in economics, being unconvinced by the quality assurance that goes into paper inclusion or the pedigree of the authors of them (with exceptions, such as most of the surveys published in the Annual Review). In a blow to my priors, though, VoxDev have launched what promises to be a superb series of ‘VoxDevLits’ – literature surveys compiled by the outstanding economists in each field, and – crucially – regularly updated to include new studies as the dimensions of our knowledge expand. The first, on enterprise training has an absolute who’s who of economists who know this field intimately, and led by David McKenzie and Chris Woodruff. The full note is great, as is the summary.
- I really love this piece by Diane Coyle, who makes a point about public investment I don’t think is made often enough: that it is a form of intergenerational redistribution, or as she puts it “Investment is also an essential form of compensation to younger people, who have been one of the hardest-hit groups in the economic downturn. Many who had the bad luck to enter the job market during this crisis may find their career and lifetime earnings prospects damaged as a result.” I don’t know what Building Back Better actually means in any concrete sense yet, but I suspect Diane would have a very good programme for it.
- An interesting piece by Homi Kharas and co-authors on which countries should get ODA – they use measures of ‘need’ and ‘capability’ and suggest that it makes a strong case for more investment in middle income countries. It’s an interesting idea, but reading it made me think that it must be extremely sensitive to the precise metrics used – a point that Marcus Manuel demonstrates on the ODI blog.
- It’s incredibly hard to prove what many suspect, that the distribution of road infrastructure in most of Africa is hopelessly poor, and driven by other concerns than welfare maximisation of the population, but this cool piece on VoxEU has a novel approach: they find that autocratic leaders build roads that lead from the interior to the coast much more than those that connect parts of the country to each other. It’s not a total slam dunk, but a really interesting piece of research.
- I can be quite old-fashioned, and perhaps default into thinking that our cultural touchstones today are – for the most part – rather less talented and interesting than those of previous years: more Messis than Maradonas, more John Legend than Marvin Gaye. Two pieces really dug my priors in this week: first, this LitHub article about the emergence of the NBA as a spectacle reminded me that the traditional celebrity singer of the national anthem at the All-Star Game wasn’t always Fergie being totally embarrassing, but Marvin in a suit and shades being far cooler than any human being has a right to be. And the Ringer take the occasion of Dolly Parton saving humanity to run this appreciation of her, and the tl;dr is that she is just incredibly cool, and independent-minded in a way that would put her in a field of her own in today’s pop landscape. PS – really watch the Marvin video – it’s absolutely incredible.
Have a great weekend, everyone!
Well that was a week, wasn’t it? The Spending Review confirmed what was feared for the ODA budget, and then on the same day Diego Maradona (see the last link) and James Wolfensohn (link 2) died. Just when 2020 was looking like it was going to try and rescue itself from the massive suck-fest it seemed so happy being, gaslighting humanity by giving us the news the Dolly Parton might have saved humanity (again – the first time was when she released the album Jolene) and that DeAndre Hopkins catch, it turned the tables again to reveal it’s true evil nature. If 2020 was a TV character it would be Tony Soprano – violent, abusive, but occasionally just likable enough to make you let your guard down again. When 2020 says ‘we had coffee’, this is what they mean.
- So… shall we start with the obvious? I’ve always disliked the idea that the amount of good we do on development can be reduced to the amount of aid we spend in a given year, but cutting the aid budget in the middle of a global pandemic that is likely to cause the first increase in global extreme poverty in decades is… not so great. Not when the IMF’s head is penning op-eds desperately arguing to maintain a focus on the poor, if we want this crisis to ever truly end. And certainly not when you consider the quality of some of the other spending this year. That said, I’m going to break a rule and repeat a link. If we’re going to cut, cut the worst of it. I also liked this take by Mark Miller, and in particular his twitter thread. But more than anything else, I’d point out that there is everything still to fight for. Cuts can protect what UK aid does best, but require real defence, real fight. If you care about getting this right, cut your losses on the fights that have already been lost and fight the ones that remain. Until they’re lost, they’re worth fighting, and require people who believe in it, and have the knowledge to make the case for keeping the best of our work.
- James Wolfensohn, whom Justin Sandefur described as the only good President the World Bank has had, passed away. Via Dan Honig, here is a truly amazing interview he gave as part of an oral history of the World Bank. As Dan said: you can learn more here about how the Bank works than from any other source available.
- Do you find ‘left’ and ‘right’ restrictive intellectual categories? That there is a complexity to your thought that reducing it to a single region on a single axis won’t capture? Pranab Bardhan (whose work on sharecropping in India had such an impact on me when I was a student) has a lovely piece setting the ideological diversity of the academe on a more complex scale than left/right, and in the process gives you a starter for ten on so many intellectual debates that you can wormhole down at your leisure.
- Two super pieces on VoxDev this week – first Suresh de Mel and co-authors on an experiment that finds that rolling out free digital savings accounts to a cohort of poor people in Sri Lanka achieved… not much at all. Digital solutions are nice, but only once we’ve worked out the fundamental behavioural constraints to the problems we face. And another piece that finds that outsourcing of work from a parent firm leads to an increasing concentration of economic rents in the contracting firm – a finding that chimes very much with one of my favourite papers, Nick Bloom’s Firming Up Inequality.
- Two more pieces on the recent US election. First, a really sad look at the shockingly high number of Americans who report being close to no other person, and how strongly these marginalised people broke for Trump – one possibility for why polls underestimate his support so consistently. And a piece which looks at the ethnic breakdown of Trump’s support, attributing his increased popularity with some ethnic minorities in part to reversion to the mean, to the rural/urban split even within ethnic groups, and Trump’s ability to tap into the specific concerns of some minority groups.
- Because of course, Branko has written something about The Makioka Sisters, once again proving that he is a walking venn diagram, connecting unrelated topics in the mind of a single polymath again and again.
- So I didn’t say much about Diego in the intro, because I was saving the best for the last. I don’t really watch football anymore, but I idolised Maradona. In fact, my son’s first name was very close to being Diego, before it was nixed by my (half-Argentine, no less!) wife. I am just old enough to remember watching him play at his absolute apex – for Napoli and for Argentina. It was the clearest expression of genius I’ve ever seen: he was simply that much better than everyone else I have ever seen play the same sport. And it wasn’t despite his imperfections, they were very much part of him; his genius is inseparable from the mindset that led him to do so many crazy things. We could have thousands of links here, but I’ll try and be restrained: the FT on how Maradona is the perfect metaphor for monetary policy; but he wasn’t a metaphor for life – he was far more important than that, as L’Equipe understood. It comes across on the commentary of that goal, particularly the howl of “Siempre Maradona! Genio, genio, genio!”; and in his legendary Live is Life warm-up. I’m so sad he’s gone, but happy to spend hours watching this to celebrate him.
Have a great weekend, everyone!