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 and pop 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!
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