It’s always hard to open the links when a Sri Lanka ODI is
still at that point where we might win, if sufficient miracles occur, rather
than at the point where I can simply make darkly comic jokes about the pits of
human despair (a place new parents with teething children are well-acquainted).
Speaking of the pits of despair, the news in the UK all week has been
horrifying; the weather is doing its best to follow suit. Little sunshine comes
in the links, but read them anyway.
- “In times of plenty, anyone can afford to be generous. True generosity is revealed in times of scarcity.” So begins a brilliant and cutting piece by my colleague Gyude Moore, arguing – more or less indisputably – that there has been a huge moral failure in the global pandemic response: vaccine export bans, hoarding PPE and the like showing up the hollow promises of ‘values-based’ foreign policy. But his point goes deeper than this. He argues that the distasteful war metaphors that have been so popular with a particular brand of macho world leader hinted at a better way of approaching the pandemic. Drawing on Bush’s rhetoric justifying his war on terror, Gyude points out that if the same full-throated approach was applied to saving lives as to ending them, the global response would be much fairer, much more coordinated and much more effective. Really highly recommended.
- I googled hubris today, to check I was using the word correctly, and discovered that Google’s go to definition is basically ‘that thing that economists are prone to’. Dani Rodrik largely concurs, and this really excellent piece looks at both the abandon with which economists march into other scholars’ domains and to hold forth and the limitations that the economic conception of causality imposes upon their insights. He argues that forward causality (when I change X, this happens to Y) has more limited value for many disciplines than reverse causal inference (Y changed and it was caused by X, Y, and Z). It’s a lively and interesting discussion, but perhaps incomplete. I read The Book of Why by Judea Pearl and Dana Mackenzie recently, and the discussion of reverse causal inference there was much richer than I’ve seen in general in economics, and provides a bridge from our discipline to the world.
- Penny Goldberg and co-authors summarise their new paper using modelling and data on firms and workers to look at the effects of trade openness on both the formal and informal sectors. The whole thing is worth reading, but one point that I found particularly compelling is that while trade openness can lead to an increase in inequality in the tradable sector (due to the diverging fortunes of exporters and non-exporters), it may result in an overall decrease in inequality because it also leads to increased incomes in the informal sector. The mechanism seems to essentially be the Balassa-Samuelson effect, which fits so neatly on my priors it looks like a new winter coat.
- I really enjoyed John Cochrane’s turn on Conversations with Tyler; for all that he holds very different views to me, I always find that I learn something reading him. His description of his childhood dinner table conversations are very familiar to me (not because I had dinner with his family, because they sound very much like mine), and I laughed out loud at this section: “my wife, Beth Fama, did the same thing at age 12. Looked up at that dinner table full of finance people and said, ‘Dad, what’s arbitrage?’”
- Maggie Koerth at 538 is my favourite science writer by a long distance, and this piece on the pandemic and cognitive load is extremely relatable: the constant pressure of decisions that have no clear right answer, the thousands of small and large choices you have to make where the unknowns swamp the knowns, and yet the stakes remain resolutely- on aggregate at least – high. It’s brilliant, personal and universal.
- One for the techies: two takes on study designs. First David McKenzie talks through what makes him relatively more confidence in a difference-in-difference design; and then Andrew Gelman explains how he would approach a discontinuity design. And at the end of both of these I thank my lucky stars I’m not working on one right now.
- So while Sri Lanka hurtle to yet another humiliation (miracles stubbornly not forthcoming), I’ll leave you with yet more Muppet content: did it ever occur to you that there was someone picking out outfits for every muppet in every scene? The muppet costume designer explains why it was easy to make Kermit look good and why Gonzo was a disaster. And if that doesn’t set you right for the weekend, my son’s favourite song right now: the Muppets do Jungle Boogie.
Have a great weekend, everyone!
Last week I opened the links with a review of the week’s
carnage in cricket, which prompted a friend to send this in response,
which… is actually quite an accurate reflection of what cricket looks like to
most people. But at the risk of losing my audience in the intro again, what the
fresh hell happened this week? First, England
folded like an accordion yet again (no surprise there), then Rishabh Pant
decided to casually *reverse sweep* Jimmy Anderson, bowling with a ball less
than 5 overs old. And to top it all, Kieran Pollard joined Garfield Sobers as
the second Windian to
hit six sixes in a single over. For those with a taste for history, here is the footage of
Sobers achieving the same feat in 1968, in a county match. Watch carefully
– you can see him turn back to the wicketkeeper and flash his dazzling smile
just before the fifth six. The sixth wound up on a nearby residential street,
presumably scaring the bejesus out of a pedestrian.
- A few weeks ago I liked the fabulous new Dupas et. al. paper on the gender dynamics of the seminar culture in economics; Berk Ozler has now read it in detail and written a super piece on Development Impact digging deep into the data presented in the paper. It’s a hard piece to tl;dr but what he shows is that there is a lot of nuance in the data. This doesn’t mean that there aren’t some weird gender dynamics going on, but rather that there is a lot more going on as well. It also highlights that while the effort that has gone into quantifying the seminar experience has helped make certain things clear – particularly the hostility and extra questioning women get in ‘job market’ talks (that’s the equivalent of a job interview in academic econ), there is also a lot it can’t do. The tone and content of questions carry far more information than can be easily codified, as can the decision whether to ask one or not. Does silence reflect agreement, such profound disagreement that engagement isn’t worth it, or complete apathy? Not all quiet seminars are equal. Related: Olivia Campbell in LitHub on the many forgotten, suppressed and ignored women in scientific history.
- Gyude Moore and Vijaya Ramachandran write about the absurdity of climate change policies for Africa that would undermine climate change adaption there. The central argument is simple: methods of production that will be necessary for growth in agriculture and industry that have no scalable, affordable alternative should not be denied to Africa by rules put in by countries that have taken advantage of them already.
- News that French lawmakers have voted to legislate a 0.7 target (though rather different to the UK’s approach) prompted me to reflect on how the target undermined the quality of ODA in the UK, and – more importantly – upended the political economy of aid allocation in the UK. Thread here for the short of time – reflections and disagreements always welcome. Related: another CGD piece, a rilliant blog by Jocelyn Estes, Dave Evans and Sarah Rose on how USAID’s Development Innovation Ventures does ‘evidence-based innovation’ and how this island of excellence can better link to the broader swathe of USAID’s work.
- Live footage of my priors right now: Lucie Gadenne and co-authors write up their new paper on VoxDev, arguing that in-kind transfers can outperform cash under certain conditions. Specifically, when price fluctuations affect essential commodities the value of a cash transfer falls with price rises, but the value of in-kind transfers of the commodity rises with price; as a result the in-kind transfer can act as a kind of insurance. Importantly, these conditions are not actually all that rare in developing countries. I’m not selling my stock in cash-as-default, but like all defaults, there are times to deviate from them. Gadenne et. al. document one.
- I linked to Dani Rodrik’s Project Syndicate piece about the technological challenges of African industrialisation (in short, that technologies that allow productivity upgrading are not labour intensive), and this VoxEU piece with his co-authors piece goes into more detail on how they get to that conclusion. One point: the data on which we all rely to investigate these problems isn’t great; this is definitely one that if you’re interested in you want to really dive in and get in the weeds on.
- I missed this when it came out a month ago: Ian Leslie on how to have more productive disagreements. A long read, but well worth it.
- I’ve spent much of the last couple of weeks binge-watching the Muppet Show, finally freed from the vaults and returned to TV on Disney+. I’d forgotten how central music was to it, and how great some of the performances were: Debbie Harry doing One Way or Another, Elton Joh doing Crocodile Rock and Rita Moreno’s Fever. And it wasn’t just the Muppets at it – I learnt about classical music from Looney Tunes, and this brilliant thread identifies the pieces Bugs and co were performing in some of their most famous skits. Bugs cutting Elmer Fudd’s hair to the Marriage of Figaro is as good as children’s TV gets. And if that isn’t enough nostalgia for you, the Coming to America sequel is hitting Prime today – if it’s 10% as funny as the original, that’s your weekend sorted.
Have a great weekend, everyone!
Have you ever seen a fight between two kittens?
It involves a great number of swipes at thin air, a lot of leaping around and
much complaining, but it’s over very quickly and is often the source of great
hilarity among the spectators. Such were my thoughts as I watched 21
out 30 wickets that fell in the India-England test at Ahmedabad fall to
straight balls, with even Cheteshwar Pujara – a man whose batting has all the
flair of a 1950s civil servant – forgetting how to play a straight bat. It was
all over in just two days of wild incompetence (and yes, I’m aware that only a
cricket fan could complain about a match that finishes in two days being far
too short), but at least it’s another step towards normalcy. There are fans in the
stands (I’ve no idea how bad an idea that is right now), the England team are a
complete shower, and Rohit still wins the match with a six. Happy days.
- Branko has spent the week eviscerating the degrowthers, and it’s been *very* satisfying. His piece on degrowth and magical thinking is perfect. Global mean incomes are just $16 in PPP terms; any solution to global challenges that involves growth being brought to a halt will require that we either leave the global poor to rot or we somehow inspire an absolutely massive redistribution to the developing world that would require virtually every person living in richer countries to reduce their standard of living massively. It’s fine in Excel, when you can just take global GDP and divide by the population, but not so simple in the real world (though real people will not, unlike Excel, think you are proposing a date). I got into a discussion with someone on twitter, who rightly pointed out that even if this is true, and both the degrowthers and the doughnut crowd (a diagram in search of a theory of change) are being magical, it’s not like there’s a wide menu of other options being proposed by economists. Branko acknowledges that, and goes into some options here. All of them require big changes, and he is not optimistic that they will happen.
- Is blogging making a comeback, a mere month after I declared it moribund on a podcast? (That was a bad hot take, I will admit; stay tuned for more on Episode 2 of Paper Round, dropping in the next week or so). First, Matt Collin posted a great piece on his substack (no, don’t worry, he hasn’t been cancelled, he just has a substack anyway) recounting the time he tried to randomise his coffee intake and using that a launchpad for some navel gazing into the limitations of RCTs as a source of knowledge. If you want to read something that’s thoughtful and not a random collection of straw men, it’s recommended. And my ex-colleague Liz has also launched a new blog on Medium (she hasn’t been cancelled either, for avoidance of doubt), which I’m reliably told will include thoughts from other writers as well. She looks into why many South Africans are so negative about being taxed, and makes the positive case for paying them. And Heather Marquette’s latest round up of writing on governance is typically excellent, and – most importantly – ends with a plug for Marvel’s Agents of S.H.I.E.L.D, the show that got me through the first sleepless weeks of fatherhood.
- Speaking of Marvel, in a piece of economic reporting that seems to have been written directly for me, the Planet Money crew attempt to buy the rights to the world’s crappiest superhero (Doorman, who has the ability to turn into a door, in case you’re curious) from Marvel (transcript). It doesn’t work out and they make a follow-up attempt (transcript).What, exactly, is the economics at stake here? I could try very hard to sell you the idea that you’ll learn about copyright law, but … just enjoy the bad superheroes and don’t think too much about it.
- Re-engage your brain please: Michael Woolcock has written a brilliant blog on Development Impact on the new QJE paper ‘Folklore’ (you know it’s a blockbuster when the title is one word). Michael should always be listened to, and he takes you on an amazing ride, via Chris Bayly, James C. Scott and his own work with Vijayendra Rao. Give yourself some time, click through to the links, and learn something.
- This week in ‘what the hell is wrong with you, Economics’: the male skew of the economics profession isn’t just an academic phenomenon, but is seen in think tanks, among top authors, in the private sector and among large public institutions. The best ratio is in public economic institutions, where a measly 32% of economists are women. I don’t really know what more to say. Our discipline needs much, much more diversity. Planet Money cover Arthur Lewis here, but call him an unsung economist (transcript). If Lewis – an economist who deserves a full-scale gospel choir – is unsung, things really are bad.
- Andrew Gelman is like the boogieman, there to scare researchers into good behaviour. This piece about why he engages so deeply with bad research is really thoughtful, and – once again – ends with a warning we should all heed. ‘The lesson to take away from extreme cases of scientific and scholarly mispractice is not, “Hey, these dudes are horrible. Me and my friends aren’t like that!”, but rather, “Hey, these are extreme versions of things that me and my friends might do. So let’s look more carefully at our own practices!”’
- Lastly, by far the most satisfying video I’ve seen all week (and no it’s not that little dude beating the absolute crap out of a bully): a supercut of typerwriters being used on screen, featuring Barton Fink, Throw Momma from the Train, All the President’s Men and – of course – the Shining. I’m old enough to remember using my dad’s typewriter, and writing on my Logitech just isn’t as satisfying. Whack the volume up, and feel joy.
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
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 | firstname.lastname@example.org | @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!