I’ve spent much of my week knee-deep in a one-million line Excel spreadsheet which has the power to make my laptop spontaneously collapse and fray my patience until the final, tenuous strand that keeps me tethered to my sanity is inches from collapse. Honestly, despite my nine hour struggle to open the spreadsheet for long enough to update some of the data yesterday, I’ve been grateful for it as it distracts me from both the appalling (goings on in Sri Lanka, how many times does internecine violence need to repeat until it is exhausted? And how many times do I need to link this piece from Tim Harford reminding us not to reward terrorists with our terror, hatred or overreactions); and the amazing: I am going to see Endgame on Sunday and basically I’m only half aware of anything I do or say as 50% of my brain is devoted to breathless anticipation. Let’s distract ourselves with economics.
- A couple of weeks ago, Planet Money ran a fascinating two-parter on one of the odder episodes in economic history: the close association of a group of economists from the University of Chicago (including, briefly, Milton Friedman) and the Pinochet regime in Chile. You need to listen to both parts (transcript 1, transcript 2), as the first alone does not at all reflect the overall balance of the commentary. It’s quite chilling hearing some of the interviewees so neatly divorce the economic strategy they implemented from the horrific brutality and political repression that it bolstered and in turn bolstered it. As Andy Haldane said a couple of years ago, the best economist is the one with dirty shoes, and you get a sense that some of these ones never got so much as a scuff on theirs. (As a bonus, two more from PM: On the introversion earnings penalty, and working out when – rather than whether – minimum wages do harm).
- Speaking of dirty shoes, I really enjoyed this set of interviews with the enumerators working for IPA. We spend a lot of our time reading research and thinking about poverty but there are fascinating stories everywhere.
- I first became familiar with Doug Gollin’s work through his very careful paper on the agricultural productivity deficit in developing countries, which demonstrated that the gap between urban and rural productivity wasn’t so bafflingly large as we had previously thought (which was an enormous puzzle for economists, because it implied correspondingly enormous barriers to movement between sectors). His latest working paper with Chris Udry, which I first saw presented a year or two ago does a similarly careful analysis of productivity differentials across farms, again showing they are not quite so bafflingly large as we thought, with a similar implication for the barriers to land trading. The paper is dated December 2018, but for some reason it only now popped up in my RSS.
- One of my prized possessions is a copy of the 1969 classic, The Peter Principle, which posits that organisations promote people based on their ability in junior jobs, which is at best uncorrelated with their ability to do more senior jobs. We’ve all seen this: someone who is brilliant at being an analyst becoming a bad manager. It was originally written as a joke, and has never really been proven, though. Recent research suggests that there might be something to it, however, though I wouldn’t lean too heavily on these correlations…
- I envy Dietrich Vollrath’s students. His fifth post in his series on the deep roots of development, which covers geography, institutions, culture and the like and their effect on long run economic outcomes is a masterclass in clarity of thought and expression. I’m very dubious of much of the ‘deep roots’ literature, not because I don’t think there’s any truth to them, but because they tend to overclaim and oversell. I get the sense that this isn’t too far from Dietz’ position.
- Branko’s musings are equally brilliant: here he looks at the possibility that growth in the global North may be causally bad for the South through its climate effects. Branko is as sceptical as you will probably be of the econometrics here (it’s Barro all over again) but his discussion is fascinating, linking these ideas to the old literature on dependency theory (something my 18 year old self was convinced of and my 37 year old self just facepalmed over; I think the crossing over happened at around 21).
- There is more and more literature on the longer term impacts of cash transfers and they seem to be converging on a few key points: that in the longer run, many effects diminish; that certain once-and-for-all changes they induce can have long term benefits; and that even if the long term effects are minimal, the short term effects are far from trivial. Berk Ozler summarises.
- Finally, in a list with plenty to enrage and amuse, the BBC have tried to pick the 100 stories with the greatest global cultural impact. There are some oddities, which is part of what makes this kind of thing so fun: Howl outranks the Ramayana (how many of your were able to discern the story in Howl, irrespective of how iconic the first lines are). And apparently, climate change is starting to hit the Emperor penguins, so apart from the fact that they’re dressed rather ridiculously, those protesters outside have got a point.
Have a great weekend, everyone! I’m off to Hong Kong soon, so no links for the next two weeks.