The CSAE Blog

Hi all,

 Today’s links start, as too often recently, with an obituary. No, I’m not making veiled allusions to the local council elections, but to the passing of William Baumol. Baumol’s famous ‘cost disease’ argued that productivity increases in the tradable sector (he focused on manufacturing) led to substantial increases in the wages non-manufacturing workers despite the absence of any similar gains in productivity in those sectors. There have been many criticisms of Baumol’s theory (many of which I agree with), but the basic observation that a minority of workers in high and increasing productivity activities can have substantial effects on the livelihoods of the majority of workers elsewhere is powerful, and remains underutilised as an explanatory narrative for developing countries.

 1.       I’m going to start with something boring, but it’s boring in the best way possible: Martin Ravallion goes into detail in a discussion of the merits of a universal Basic Income Guarantee. He talks sensibly about the logic behind a basic income, about the relative merits of a universal programme compared with targeted programmes and its likely effect on incentives to work. He argues based on common sense and practical experience, acknowledges the grey areas where the basic income resembles more standard social protection, and acknowledges where trade-offs will have to be made. It’s not exciting, but it is careful. Related: Raj Chetty’s work on The Death of the American Dream also gets the VoxEU treatment here. It’s had a lot of coverage before (including here), but really is fascinating.

2.       A few papers have shown that giving money to male entrepreneurs often has higher returns than giving money to female entrepreneurs. Lots of people explain these results away, arguing that women face more barriers to success so cash is a more binding constraint for men than women. One explanation that hadn’t occurred to me is that the money has the same effect for both sexes, but for women the effect is on a household enterprise which isn’t covered in the data. This is quite plausible: in many households where a man and a woman both run an enterprise, the male may be running the enterprise with stronger growth potential. A woman receiving a cash grant maximises household income by investing the money in the male-operated enterprise. Markus Goldstein has a really good blog examining a paper which finds some (tentative, not-1000%-convincing) support for this theory.

3.       “If I told you that a school or a hospital could pass a cost-benefit test even after ignoring the benefits to the pupils or patients, you might reasonably conclude that the school and hospital were impressive organisations. You’d also tell me it was a very strange way to do cost-benefit analysis.” Tim Harford panders directly to all of my priors in a very thoughtful piece on immigration. He doesn’t belabour the point that immigrants (or expats, as we describe ourselves when we become migrants) bring economic benefits to native-born workers, even excluding the benefits to the migrant. Instead he focuses on the human aspect, showing that the mindset that we adopt when thinking about migration is strikingly absent of the most basic human test: how would I feel if I was in their place?

4.       David McKenzie wears his Grinch hat and considers the vogue for ‘transparency in science’ and sees a way of pimping up underwhelming research to improve publication prospects.

5.       I haven’t actually listened to this, but Tyler Cowen, my favourite robot, is interviewed by Cardiff Garcia, my favourite name, over at the FT. I’m going to take this opportunity to say “Cardiff Garcia” again. Cardiff Garcia.

6.       Lastly, a rambling, er… ramble, about basketball. Growing up, my favourite player was Magic Johnson. I loved everything he stood for: he was unselfish (a pass-first point guard), played the game with joy (have you ever seen him not smiling?) and was completely unconventional (a six-foot-nine point guard!). I loved him so much that I was blind to the obvious fact that he was not nearly as good as Michael Jordan, to the extent that I was unable to enjoy watching Jordan play – and I’m a complete idiot because I missed out on enjoying the greatest player ever. Something similar is happening to LeBron James. There are so many more charming and interesting players, and it blinds people to the fact that he is, by an absolutely massive distance, the greatest player of his generation, and the only one whose claim to rival Jordan wouldn’t get laughed out of court. 538 makes the case for LeBron, again; it’s astonishing anyone still has to do it.

Have a great weekend, everyone!

R

Hi all,

 In absolutely appalling news, Giannis Antetokounmpo (you can call him Giannis if that surname frightens you, but I’ll judge you and assume you’ve got no idea how to pronounce mine) has been dumped from the playoffs. This is AWFUL. I was counting on the sheer insanity of watching a man who can dunk the ball while his feet are still touching the floor to distract me from the near-constant abuse of fact and reason that the election has heralded, but alas it was not to be. At least fans of the improbable can still enjoy Misbah-ul-Haq, 63, winning test matches by biffing consecutive sixes.

 1.       Dave Evans reads a lot, as I never tire of mentioning here. He’s also a particularly meticulous researcher. So, when he read Chimamanda Ngozi Adichie suggesting that if a child doesn’t take to reading one could pay them as an incentive, he went to the literature to see if there was any evidence to support that it’s a good idea. Michael Sandel would argue that the effectiveness is irrelevant, as it debases the deeper value of reading, but Dave doesn’t go down that route. Instead, he discovers that for some kids, payment does help – but it seems to be the kids that already want to read who benefit the most. Monetary incentives simply deepen the reading inequality. Sort of related – the books that made writers want to become writers.

2.       I’ve linked to various bits of coverage of this so many times, but an op-ed by our Chief Economist in the NYT deserves a link. Stefan and Chris Blattman did a fascinating RCT on the effect of factory jobs on the poor who take them on, expecting to discover that they were a reliable route out of poverty. Instead, they found that reliability isn’t really part of it. Industrialisation is almost certainly the path that leads an economy into higher prosperity and the wealth we all want to see developing countries achieve. But it’s a damn costly process, and as they note: “workers seem to share few of the benefits but a heavy burden of the risks — a burden borne by the desperate and the uninformed.” Chris once described this paper as ‘Radnomizing Marx’, and that’s sort of what it did – but the results provided support for another mid-19^th Century visionary, Elizabeth Gaskell, whose North and South had the same findings Blattman and Dercon did, but preceded them by around 170 years.

3.       Berk Ozler criticises a paper for inaccurate reporting of its results. In the abstract. It’s a very good blog, and also worth reading the comments. He suggests many of the difficulties of the study could have been avoided in the design stage.

4.       I really liked this: given the increasingly integrated nature of global production, shouldn’t that mean that inflation is increasingly a global phenomenon rather than a local one? This research finds some evidence to support this idea, and also reinforces my belief that a backlash against globalisation is doomed in the long run. The world economy has just changed too much to undo.

5.       Another great paper via VoxEU on the effect of migration on child height, which finds that migrating to the UK removes the effects of stunting from Indian children in a way that growth in India still hasn’t done, an oblique way of making the point that development is more than a change in incomes; it also involves a change in the entire infrastructure that informs the way we live.

6.       This week in unsurprising research results: people who took acid are more likely to be liberal, and past cocaine use has no such predictive power. Having read American Psycho, this seems completely plausible.

7.       Lastly, some stunning photos (and text!) about leukitic ravens in Canada, a population suffering from a rare genetic disorder that renders them entirely white – and ethereally beautiful.

Have a great weekend, everyone!

R

Hi all,

 Sorry about the radio silence last week. In typically dedicated civil servant fashion, I completely forgot it was Easter until it was right upon us and so forgot to warn you all I’d be offline. I’d like to think you all missed it, but if you’re anything like me (and I accept this is a remote possibility unless you, too, are a cricket-obsessed birdwatcher with a weakness for gifs of face-melting dunks and children overreacting to things [note: this is the best thing on the internet]), you were probably too busy enjoying the now even-more-efficient 24-hour-Summer England has patented. It’s gloomy outside, a general election has been called (which reliably brings out the worst in… oh, just about everything) and so I’m going straight to the economics.

 1.       Election season doesn’t seem to be a fashionable time for evidence or logic, but let’s try some, shall we? There is vanishingly little evidence that reducing the rate of migration will make things better for local-born workers. It’s a very difficult area to research, but Michael Clemens, Ethan Lewis and Hannah Postel have had a go by looking at data from the exclusion of Mexican workers in the US agricultural sector, the Braceros, in the 1960s. Their results are fascinating. Essentially, what happened was farms faced with the deficit of Mexican workers did not turn to hiring new workers from other countries or local workers – they mechanised their production instead. This shouldn’t be a surprise: faced with a change in the relative price of inputs, any private sector entity will seek to reorient production processes away from the relatively more expensive one. I’ve linked to this work before, but it bears repeating. Evidence won’t trump emotion, but it can’t hurt to have.

2.       From migration to inequality: first, FiveThirtyEight reports on health and mortality inequalities in the US, and demonstrates that the places with the worst outcomes are incredibly easily predicted from a map drawn in the 1860s – one which shades each county by the number of slaves at the time. While Deaton and Case got a lot of attention for their finding that mortality among older white males may be rising, 538 point out the reason why black people weren’t included in that graph: their mortality rates are so high they would be literally off the chart. Also, Tyler Cowen reports on a paper that argues that fairness matters more than inequality. This may be the case, but there’s a deeper problem he has always ignored: unfairness can be intergenerational, and what may look ‘merely’ like inequality today becomes much closer to unfairness when you look back a decade or two. What is the half-life or unfairness?

3.       Rodrik gets into the whole fairness vs. inequality issue, and argues that people see losing out due to trade as ‘unfair’, but losing out due to domestic competition as ‘fair’. I’m not sure I buy this.

4.       What Superpower would you choose? And how would you use it? An ingenious paper uses these questions to discover how fundamentally altruistic people are, and comes up with predictably depressing results. [And also, super-eyesight and birdwatching, respectively. Birdwatching is a altruistic, because I can then tell you about what birds there are outside].

5.       Tyler Cowen thinks that people are becoming more complacent: they move less between jobs and locations; Tim Harford suggests that there are other explanations for this phenomenon. They both see it as a pity, and I very much agree with Harford: being forced out of your comfort zone is a good thing, one that we all undervalue.

6.       Everything David Evans writes is worth reading, which is an enormous compliment because he writes more than virtually any other development blogger out there. This piece is about scaling up successful programmes, and like most of his work is directly relevant to making aid work better. Also from Development Impact, Markus gets into the weeds on agricultural yield measurement – this is absolutely brilliant, and gets towards solving something that has puzzled me for years.

7.       Finally, I would never have guessed William Burroughs was a cat-lover, but so it appears. And also from LitHub, ten writers whose first work was also their masterpiece. It could have gone on for many more than ten . If you haven’t yet read The Heart is a Lonely Hunter, it’s a good thing I’m ending the links here, because you can start immediately.

 Have a great weekend, everyone!

 R

Hi all,

I’m not going to lie – this week has been pretty tepid for the normally reliable econogeekery that the internet seems to be so reliable for. Rather than spend the first day of the County Championship scouring the internet for clickbait (and miss Glamorgan being 26-6 at one point – thanks, Tom), I’m going to go rogue: instead of keeping all the general marginalia for the last link, this week most of them will be the random stuff that was actually interesting, and hopefully next week the geeks-that-be online will return to form.

1.       I’ll start with some business-as-usual, though, and open on a piece of semi-depressing development news. Owen Barder reports on what sounds like some bog-standard rent seeking, with separate arms of the same bureaucracy coming to an agreement to reduce efficiency of the development intervention they are being charged with implementing in order that each get paid. Only it’s not some hopelessly corrupt Government he’s describing, but the UN system in Syria. All donors care about attribution of results (that is, being able to prove the reach of the support they provided, as a way of accounting for their funding). But it’s pretty poor form if that imperative results in redesigning support to be less effective.

2.       I’ve seen (and linked) versions of this argument in the past: there may be a merit in doing ‘nothing’ in pursuit of achieving more. Darwin, Dickens and countless other characters of genius apparently cultivated the habit of working for relatively few hours per day, spending significant amounts of time going for leisurely walks, gardening, napping, birdwatching [I may have added this to the list without a scrap of evidence] and so on – and yet produced prodigious amounts of high quality work. Two caveats – the obvious explanation is that at the height of genius, one can spend a great deal of time goofing off without much loss in quality. And secondly, all that ‘nothing’ was probably integral to their thought process. Sometimes the best way of thinking about a problem is obliquely. Anyway, I’m going to use this as justification for my daily 3pm coffee, and I pity the fool who tries to schedule a meeting during it.

3.       This week in things I wish weren’t true: apparently reserving both sides of the escalator for standing is actually the quickest way of clearing congestion. Many people are surprised at this finding (it backs up a London underground experiment at Holborn a couple of years ago), though I’m sure it’s to do with the fact that most people don’t walk, and it could be reversed with a culture change so most people walk by default. Till then, I may have to concede that the lazy, non-walking, let-me-sit-down-for-the-30-seconds-between-Covent-Garden-and-Leicester-Square irritants are right.

4.       LeBron James is so good at basketball that one interpretation of the failure of the Eastern conference of the NBA to produce any title-challenging teams he doesn’t play for is that it might be a fool’s errand – you won’t beat him, so it’s best to keep rolling over assets to cash in the future when he one day slows down. Could he be so good that an entire half of the US basketball world just stopped trying?

5.       And speaking of sporting genius: an appreciation of the 16-fight winning streak, spanning almost 7 years, during which Anderson seemed not just unbeatable but invincible. If you have any tolerance for fighting sports, scroll down and watch the Forrest Griffin fight – it’s like watching Neo from the Matrix, but in real life.

6.       In which Franz Kafka goes to India: the 17 year struggle of one man to have his death stricken from the record.

7.       NASA is going to fly a satellite straight into Saturn in an attempt to get some final bits of unprecedented data from it before it becomes obsolete. If they don’t have this playing in the control centre as it enters its final descent, I’m going on strike.

Have a great weekend, everyone!

R

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?). Continue reading →