So, in cricket news, shortly after talking about how Sri Lanka’s performance in the second test was making me cheerful, they went and collapsed to 101 all out. I await the Lord’s test with such fear and trembling I may need to call in sick (note to my line manager: if I actually do call in sick on those days, it’s a complete coincidence and I actually am sick. Either that or Sri Lanka are actually in a position to win the test and I’m attempting to scale the outside wall in St. John’s Wood to get a glimpse of the winning runs, in which case it’s entirely excusable). Right, with that potentially career-limiting preamble out the way, on to the economics.
1. This isn’t really economics (ok, it isn’t economics at all), but it does involve some very nifty statistics. With LeBron James very unlikely to win his third championship this year it’s worth remembering: victory is quite a blunt proxy for brilliance. In dragging what have sometimes been frankly mediocre teams into the finals of the NBA Playoffs, and sometimes putting up historically brilliant performances in losing causes, he may have already made the case for being one of the greatest players ever. Of course, we’re not going to appreciate this until at least ten years too late.
2. Two perspectives on the evolution of the IMF. Ostry and co-authors, all economists within the Fund, do something very brave here, arguing that the neoliberal dream sold by the Fund in the 80s and 90s was oversold and that even in its great success, Chile – might not have been the fundamental reason for success. This is all part of a general trend in the Fund of rowing back on neoliberalism and conditionality in programme lending, at least in rhetoric. However, three political scientists and sociologists argue that that’s all this was: a rhetorical flourish, showing a marked increase in conditionality after 2008, bringing it right back up to its historical high-water point. I find this criticism underwhelming. Firstly, I can’t be the only person who can think of an event in 2008 that might have something to do with the need for a lot of mandated structural reform (hint: it rhymes with ‘Brobal Binancial Brisis’). Secondly, their argument that countries need the flexibility of policy making in order to recover from crises misses the point – in many places, political capture and rent-seeking have led to the establishment of terrible economic institutions that might require an external actor to remove. There are plenty of reasons and ways to criticise the blanket application of conditionality and neoliberal orthodoxy, but the worst is to do so with the blanket (unspoken, but present) assumption that they’re always wrong.
3. I love it when Branko Milanovic goes off on philosophical tangents about the meaning of economic or pseudo-economic terms, like ‘perfectly unproductive labour’, as he does here. In doing so, he takes us on a fascinating trip around the history of economic thought, here touching on Marx and Adam Smith. I love that Branko both understands Marx intimately and isn’t afraid to discuss him completely seriously, risky business for economists these days.
4. Chris Blattman reproduces this brilliant graphic from Stefano DellaVigna and Devin Pope, summarising the results of their investigation into the effects on effort of encouragement and financial incentives (write-up). They find that substantial financial remuneration, linked to performance stimulates much higher performance. But before you despair that we’re all greedy rationalists, here’s a wrinkle: the task they set the people they experimented on was perfectly menial (unproductive?) work – cross-country regression analysis (just kidding, it was typing ‘a’ and ‘b’ repeatedly in alternation). I suspect that the results would be very different for work which has strong intrinsic motivation, like economics. Or cricket.
5. The rise of renewables have made the existing grid infrastructure for energy provision in most of the developed world somewhere between ‘slightly’ and ‘hopelessly’ out of date. The Western part of the US is closer to the ‘hopelessly’ side of this spectrum. Vox investigates. One of the very exciting possibilities in development is that someone will properly fund an absolutely cutting edge energy provision grid in a developing country, one of the rare occasions where a poor country can immediately leap to the technology frontier.
6. The basic income referendum in Switzerland is scheduled to a resounding ‘no’.
7. And finally – I would consider any of these popular wedding playlist songs grounds for an instant annulment, except number 7, though I wonder if all the people playing Billie Jean at their wedding have ever listened to the lyrics. “The kid is not my son” has to be close to the top of the list of things you should never say at a wedding. Via Tom Coward, he’s a better song than most of these, with an amazing video. From the DRC: Karibu ya Bintou (again – not a wedding song…)
Have a great weekend, everyone!