What was I saying about the King staying the King? In basketball, 35 is old; not just old, but pants pulled up to your chest, suspenders, and shaking-your-fist-at-a-cloud old. To not just be good, but at the pinnacle of your profession at that age is remarkable. It’s quite different in economics. Most of the time, it isn’t apparent that a paper will be important until several years after its publication – it might be interesting, and several people might recognise that it captures a brilliant idea but to really influence the discipline – or even the world – takes years. This year’s Nobel went to Paul Milgrom and James Wilson for work that in auction theory that took years to fully realise its – now outsize- influence. More than most years, I saw a lot of dissent about this award. Some saw it as an award for economics-as-a-friend-of-business (including some of the same people who criticised last year’s award as being about outsiders patronising the poor – you can’t please some people). Others complained that it wasn’t a ‘big picture’ Nobel. I think they’re all wrong. Milgrom and Wilson’s work is about social value, and some of its greatest applications have been in public procurement – an area of economics with the worst sexiness-to-importance ratio, with huge importance to social welfare and none of the cache. It’s well worth reading this excellent (though a little technical) appreciation of their work to get a better sense of this.
- I’m going to talk a bit about inequality this week, but I want to start with an unusual example: the importation of caste discrimination to the US via Silicon Valley. The import of Indian workers into silicon valley has brought a lot of excellent stuff: brilliant people, new ideas, mutually beneficial business and personal connections for those who moved and those at home, as well as their co-workers. With a little lag, it also appears to have brought caste discrimination, as Planet Money cover (transcript). Discrimination according to caste is by no means universal in India (indeed, Mulk Raj Anand wrote brilliant novels excoriating the caste system in the 1930s – Untouchable, and Coolie), but it’s widespread enough to have been imported along with the new ideas. It also poses a real challenge to US (and the UK) since caste is not explicitly named in most legal protections. Fascinating, if depressing listening.
- While I’m depressing you all, a few more good pieces on inequality, prompted by the deeply uneven impact of the Covid pandemic. First, an excellent FT long read on how the existing regional inequities in the UK have been exacerbated – by the virus, the policy response and by media coverage endlessly ignore the variation and complexities within ‘the North’ as it’s inevitably reduced to. Planet Money look at inequality in the US, identifying four dimensions across which Covid has deepened it (transcript). It’s good that people are thinking about this now, because the lessons from history about the impact of pandemics on inequality are largely grim.
- In happier news: I saw Kate Orkin present this paper about how skills certificates can improve labour market outcomes a couple of years ago, and this write up in VoxDev is fantastic – a really clear explanation of how much the certificates helped, why and how they worked and for whom. They also calculate and report the cost-benefit ratio for the programme. Beyond this, like David McKenzie, I was hugely impressed by this detailed guide to actually designing and implementing this programme. It’s really brilliant – too often, papers report that an intervention improved some outcome, but the details of how the intervention was practically organised amount to less than a page of vague text in an otherwise impenetrable paper. The team are planning to do more of these implementation guides. If you have comments about how they can be improved, or which parts are most useful, get in touch with Kate (e-mail at the link).
- For the wonks: I’ve recently started to switch my data analysis from Stata to R, mainly because I find producing nice figures vastly easier, but whichever side of the R/Stata debate you’re on (and I know Matt is currently burning my contact details right now) this guide from the Development Impact team is going to make your life much easier. Also from the same group: how to rescue your difference-in-difference design when the parallel trends assumption is that little bit too heroic.
- Justin Sandefur’s face must be on at least a few dartboards at the World Bank, but my goodness do he and his co-authors do them a favour here. They scrape data on Bank operations to make it possible to actually track the Bank’s progress towards its pledges to support developing countries through the inevitable Covid shock. It’s not looking good, despite the promises being less ambitious than they originally thought. And as this thread points out, the US is not offering any support to raise that ambition closer to where it’s needed.
- So, remember how some people had a knee-jerk anti-globalisation response to the onset of the pandemic? Well, not only is closing borders a really costly, ineffective way of slowing the spread of the disease, it’s also a bad way to pursue economic resilience: it turns out that more globally connected firms have been more resilient to the economic damage of the pandemic. I’m not sure who this should surprise, but it feels important to provide evidence for.
- When I was kid, quicksand was a killer – in virtually every action movie I saw, someone fell into a pit and waved their arms about like a maniac. Quicksand has disappeared from our screens, and Slate investigate. They find that in the 1960s, fully 3% of all films released included a quicksand-peril scene; this has been declining precipitously ever since (much like the strategy much beloved of bad guys of tying a hero to an incredibly slow and inefficient killing machine). I love the idea of the journalist pitching this piece at the weekly editorial meeting. “Boss, remember quicksand? I want to write a 10,000 word piece about how it’s sunk into [eyebrows raise]… the quicksand.”
Have a great weekend, everyone!