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

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

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

1.       By far the best thing I read this week is Lant Pritchett’s polemic about what development should be about over at CGD. I’ve linked to various versions of this basic argument in the past, but it remains relevant: by defining success in development as the movement of people from below an arbitrary and penuriously low poverty line to just above it, we’ve set ourselves such a low standard that ‘success’ could still mean the vast majority of people in a country living in abject conditions. Lant’s right – the most important questions about development are unrelated to the World Bank’s poverty line, instead being about how economies, states and societies function and generate prosperity sustainably. But one of the reasons the dollar-a-day poverty line has been so successful is that it’s been incredibly useful for researchers, who have built entire careers from the ability to cleanly estimate the number of people above and below the line. A vaguer but better definition of development would lose some its research bite – this is at least one reason why, as Chris Blattman says, we know much more about how to respond to low-bar poverty than to do development.

2.       Speaking of which, a new paper by Cailtlin Brown, Dominique van der Walle and Martin Ravallion about the relative merits of different approaches to identifying people living below the poverty line. They make the good point that within households, some members are quite possibly living in poverty while others aren’t – not something we’re well equipped to know at present.

3.       This is great: Nick Bloom has written a long, but accessible article about one of his most inventive pieces of research, the paper that demonstrated that most inequality now seems to be driven by differences between pay scales across firms, rather than the gap between the highest and lowest paid workers within them. I love this paper, and think it has extraordinarily important implications for political organisation, some of which he goes into here. Related – Piketty, Saez and Zucman have constructed a new dataset on inequality and present some early results.

4.       And while we’re on the subject of firms, a really nice summary of recent research on firm size and success by Elwyn Davies at CSAE. He covers, among other papers, Francis Teal’s latest work on Ghana which looks (as ever) very careful and very interesting. Francis celebrates the 1% (of firms) in Ghana – saying that without them virtually all productivity in the private sector would disappear

5.       Andrew Jackson was an economic populist who became President of the United States on a platform of policies that sounded very much like ‘drain the swamp’. Unlike Trump, though, he actually tried to do so by undermining the US banking system. It didn’t end well (transcript).

6.       Simon Maxwell on the need to reimagine the case for aid.

7.       And lastly, because I’m seeing him on Tuesday (thanks, Tom!) Baloji bemoaning the state of the DRC in Siku ya Badaaye.

Have a great weekend, all!


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