In the normal run of things, scoring a match-sealing century and captaining your team to victory in a Test is pretty much as good as it gets for an England captain, used as they are to painful drubbings overseas, badly punning newspaper headlines calling for them to be sacked and the odd teammate being arrested for some description of drunken idiocy. This week, though, it’s all overshadowed by Joe Root demonstrating a much more important kind of leadership. When an opposing player used a homophobic insult on the pitch, Root, unaware that he was being picked up on a microphone, gave him a very well-worded piece of his mind. This probably all seems very normal for people about ten years younger than me, but if you’re my age you probably remember a time when people routinely used casual intolerance in conversation, and the vast majority of people just accepted it. We didn’t have many examples like this to demonstrate how easy – and helpful – it would be to object. I’m reminded of when Ron Atkinson was sacked after a horrific racist outburst on TV: ITV acted quickly in getting rid of him, but as one of my friends pointed out: “Isn’t it interesting that the microphones didn’t pick up anyone objecting?”. Anyway, this week I’m in the unusual position of being proud of the England cricket team.
- One of the most impressive talks I’ve ever attended was given by Kaushik Basu in DFID a few years ago, though I didn’t realise quite how much I took from it at first. He’s not a bombastic speaker at all, quiet and measured, and he didn’t have any slides or research to present. What was striking, though, was quite how carefully he understood things. He seemed to really dig into the mechanisms underlying the things he observed or thought to be important and wound up explaining things that ought to have been obvious, but somehow weren’t – a sign of a special thinker. This VoxDev interview has these characteristics: he talks about his new book, The Republic of Beliefs (about the law and economic behaviour), and in just two minutes demonstrates the same clarity of thought and ability to draw out the salient characteristics of a problem that so impressed me back then. It’s rocketed the book up my to-buy list.
- Is it possible that the very things that lead girls to outperform boys in school contribute to their slower rate of advancement in work? This largely speculative piece in the NYT by a psychologist suggests that girls feel less able to blag their way through life, which results in overworking in school (with resultingly good, if inefficiently achieved, grades) and a sense of under-preparedness later in life with a corresponding anxiety or lack of confidence. As a result, boys who are equally underprepared are more likely to demand promotions, pay rises and responsibility, simply because they don’t let their lack of preparation bother them too much. I have no idea if there’s any merit to this at all (I rather suspect not much), but it’s an interesting idea.
- I feel a little dirty after linking to psychological speculation, so to make up for it, here’s David Evans summarising a huge body of actual research on gender and development.
- I was sent this a few weeks ago by a friend, but completely forgot to post it: The Bank of Jamaica have won economics. In a series of reggae videos and brilliantly conceived tweets, they are trying to improve communication to the public, essentially doing what Mark Carney does when he holds his (brilliant, and occasionally darkly hilarious) press conferences. This kind of communication is one of the most important functions of a central bank, since their policy influence depends fundamentally on the public believing what they say and behaving accordingly. Planet Money also pay homage to the Bank of Jamaica – and how MMA teaches us about monopsony, among other things – here (transcript).
- Speaking of communicating economics clearly, Tim Harford has a story for you. He describes how he reduced his addiction to his phone using behavioural economics.
- And lastly, I’ve had an idea to deal with climate denialism: have you heard about the Russian town that has been besieged by polar bears? They’re coming into apartments, swarming playgrounds, walking the streets (btw – I have no idea how anyone managed to film this stuff: if I see a polar bear anywhere near my flat, I’m screaming and running the other way). My idea: let’s do a house-swap. Residents of Polarbearhellski and the climate deniers swap places for a few weeks. One way or another, average beliefs about climate change will converge towards the scientific consensus.
Have a great weekend, everyone!
It’s nice to be able to start the links without some reference to sporting humiliation. Granted, this has mainly been because neither England nor Sri Lanka have been playing test cricket this week, but still: I will take what respite I get when I get it. Speaking of respite, do you follow Eric Barker? His blog is full of the worst kind of click-bait titles, the kind of thing that you see in the sponsored adverts at the bottom of bad news website (“You’ll never guess what happened three seconds after this photo was taken!”), but the content is actually very serious: he draws on proper research from across the (social) sciences to draw up actually practical advice about how to make your life better. The titles always overclaim, but these do actually seem like decent ways of making your life better. Actually, another thing that would make my life better is if the couple having the ostentatious PDA at the table next to me tone things down a bit.
- Last week, I suggested economists should read more from the theory of the firm, industrial organisation and the economics of contracting. This week, two excellent bits of research reinforce the point. In the first, Arthur Blouin and Rocco Macchiavello look at how dysfunctional contract enforcement can undermine inter-firm relations so badly that the gains from exposure to global markets can be lost. Essentially, they show that firms can exploit poor contract enforcement to renege on deals in the face of unexpected shocks (there are a lot of these in the real world), leading to the adoption of suboptimal inter-firm relationships and industry structure, eroding the gains from trade. Another piece of research, in India, focuses on the slowness of Indian courts, which also makes contract enforcement patchy and unreliable. The upshot is that firms restructure themselves and their input sourcing and trading relationships to protect themselves from risks, but at the cost of being less productive. The economics of firm organisation is a pathway to understanding so much of what’s wrong with an economy: every firm choice tells you something about the environment it has to swim (or sink) in.
- Another way of becoming a better economist would be to enrol in the University of Houston, and make sure you sign up for every talk and course delivered by Dietrich Vollrath. The third part of his course on the economics of institutions is summarised here, and it is a masterclass in how to be a good economist. Dietz has absolute conceptual clarity, disambiguating the various ideas that coalesce around ‘institutions’, which makes it easy to understand his teaching and the merits and drawbacks of the research. He has paid attention to the empirical detail, so he knows what is right and wrong with the interpretation of the data, and what it can and cannot be used for. And he has a broad enough view to then put the work in its correct context. Seriously, this is how most economics should be written and taught. He also writes so well that I would read his shopping list for literary value.
- Marginal Revolution’s online university now has a series on inspiring women in economics. I am looking forward to seeing how two dyed-in-the-wool libertarians cover Joan Robinson (who, incidentally, did not become a full Professor until a few years before her retirement, despite her canonical contributions to economic thought).
- Branko Milanovic takes an extremely fair and even handed view of the controversy between Steven Pinker and Jason Hickel about the long term trend in global poverty. Do read it, but also make sure you read the linked post by Max Roser and Joe Hassel from Our World in Data, a website you should almost certainly be using more than you do.
- I am almost always driven to fury by academics talking about ‘engaging with policymakers’ like we’re an undifferentiated mass of lemmings (I once sat through a presentation by a poverty scholar who repeatedly said “policymakers don’t care about causality”, turning me ever deeper shades of furious). Markus Goldstein avoids this trap in a nice blog which differentiates between different kinds of policymakers and the kind of interactions researchers are likely to have with them. I would emphasise Markus’s point that the categories are not mutually exclusive, but this is a much better starting point for understanding how to influence policy.
- This is absolutely one of the coolest bits of research I’ve seen for a while: Eliana La Ferrara and coauthors do an amazing piece of work looking at the effect of implicit biases among schoolteachers on migrant children’s scores. Unsurprisingly, biased teachers tend to penalise migrant kids more than is justified by their actual work. What’s really fantastic, though, is that they find that if you inform these teachers of their own implicit bias scores, that penalty starts to disappear, and migrant kids are more likely to be assessed on merit. The effect seems to be driven by those teachers who don’t explicitly endorse discriminatory views, i.e. the ones who don’t think they’re biased. My erstwhile ex-blogging partner, Matthew Collin sent me another cool piece of work: Mara Revkin uses social media and other sources to map out the tax network set up by ISIS.
- The best board game I’ve ever played is Pandemic (recommended so regularly by Tim Harford, I bought it for my niece and enjoyed it so much I bought it for myself as well). It turns out it’s not just fun, it’s pretty realistic, as this Planet Money show on disease control demonstrates (transcript).
- I normally end the links with some happy insanity, but this definitely doesn’t count: on average, American airport security staff found 12 guns a day being taken as hand luggage onto flights there, the vast majority of which were loaded. They ‘credit’ enhanced security features for this number. I blame a completely insane culture of leaving the house strapped like Neo and the worst low-level equilibrium possible.
Have a great weekend, everyone!
It was tempting to just copy and paste the intro from last week today: like a glitch in the Matrix, England have had a batting collapse, Sri Lanka are being stomped like the bad guy from The Naked Gun and you still need an electron microscope to find the funny side of the newspapers. I was going to complain about the weather, too, but then I saw that it’s so cold in Chicago that noodles are freezing in mid-air and they’re setting fire to the trainlines to keep them running and thought better of it. Into the links, which at least start a little warmer.
- Anecdote alert: when I was in secondary school, I had one particularly amazing teacher, who was clearly passionate about the subjects he taught and was always so excited to be talking about them that the excitement was contagious. He taught me both history and economics, and made economics in particular come to life as a struggle between opposing forces that shape the world. Though biology was actually my best subject, I ended up taking history and economics at university, and I’m eternally grateful: I suspect that but for him, I’d be an unhappy, third-rate scientist rather than a second-rate economist who finds actual joy in what I do. In one of those rare cases where received wisdom and research wisdom are in broad alignment, teacher quality really does matter for young people’s learning and life outcomes. Dave Evans and Tara Beteille have summarised the latest evidence on how to get the most out of teachers here, organised around five key principles. Related: Dave is leaving the World Bank to join CGD, to bolster their already excellent team of research fellows.
- Jeremy Singer-Vine’s Data is Plural (well worth subscribing to) threw up a gem earlier this week: a free, online data source that measures the ethno-nationalism of political competition in Europe. I haven’t looked at the data properly yet, but it will be interesting to see if the ‘eye-test’ of increasing nationalism across the party spectrum in Europe is borne out by the data. Even taking the narrow lens of economics, nationalism that reduces the role of outsiders is short-sighted: this VoxEU piece shows how the presence of multinational firms drives productivity improvements in even domestic firms in the same sector, an effect driven by both within-firm improvements and (possibly) sharper competition across firms.
- How to improve tax revenues in countries where there is chronic under-reporting of incomes and under-filing of returns? This seems like a deeply difficult question, full of complicated politics and technical problems, but it turns out one solution is as simple as imaginable: just ask. An intervention in Costa Rica literally just sent e-mails to firms (ok, the e-mails themselves were carefully sculpted) and it had a significant and lasting impact on returns.
- David King’s e-mail today reminded me that I missed this in the links last week – our Chief Economist, Rachel, summarises the seven things she’s learnt in her first year on the job.
- Vox are running a series of pieces that summarise some of the key ideas of recently-deceased economists. They cover Harold Demsetz here, a pioneer in the economics of organisation and industrial economics (both areas I have a keen interest in). I highly recommend reading it. Despite something like four Nobel wins in this field, at least two of which have been awarded in the last 20 years, it’s an area that a lot of professional economists have a relatively shallow knowledge of. It offers deep insights to a range of economic questions (especially in developing countries, where industrial organisation is pretty dysfunctional thanks to failures of contracting, dispute resolution and generally high transactions costs).
- My own interests sit somewhere between the economics of organisation and economics of decision-making. A lot of the economics of decision-making focuses on behavioural biases or systematic ways in which people are wrong about thing. But increasingly, I wonder whether non-systematic ways of being wrong are more important in practice – this NBER paper (via Tyler Cowen) takes one approach to this question.
- Of course, the perfect setting for examining decision making would be the New York Knicks. They might be biased, or they might just be garden-variety imbecilic, but there’s no question that they consistently do very stupid things. Take yesterday: they traded a Latvian unicorn for a bag of week-old bread, a packet of instant noodles and the husk of DeAndre Jordan. The only upside is that Porzingis might be the first player to make fans cry both when he was acquired and when he was discarded.
Have a great weekend, everyone!
I’m not a miserable person, honestly. I actually smile quite a lot and find the funny side of most of life (well, about most things – you’d need an electron microscope to find the funny side of the impending political ructions here). Yet these weekly e-mails seem to start far too often with the two grim certainties of life: death and humiliating defeats in the cricket. While England and Sri Lanka compete to demonstrate the greatest lack of spine in sports (for those paying attention, England are currently the more amoebic), we’ve also lost two literary giants in the last couple of days. Diana Athill, editor to some of the greatest novelists of them all (VS Naipaul, Jean Rhys, John Updike) and brilliant author in her own right managed to make her century, while Hugh McIlvaney fell a little short. If you’ve never come across him, I highly recommend spending a few hours scouring the Observer archives for his writing on boxing. It’s filled with little bits of poetry, as when he said of Johnny Owen, the near-mute Welsh bantamweight who died in the ring: ‘It is his tragedy that he found himself articulate in such a dangerous language.’.
- Economics isn’t a dangerous language (though I have annoyed more than one anthropologist to the brink of physical violence in the past), but it can sometimes induce a kind of mania in researchers. In that vein, let David McKenzie talk you through the dos and don’ts of setting up your own business for the purposes of running a randomised control trial. And in case you think this is a concern for highly funded researchers with the kind of track record that makes Usain Bolt blush, one of the examples he cites is a work in progress from two DPhil students from Stanford, examining how gender profit gaps arise. Related, David apparently read Angus Deaton’s book on the Analysis of Household Surveys several times from cover to cover as a student(if you’ve noted how careful he is with data, this shouldn’t surprise you at all). It’s now been released with a new preface for free online.
- Research on monopsony isn’t nearly as cool as setting up your own firm, but it’s one of the more important and under-studied aspects of the economy. This excellent VoxEU piece looks at monopsony power by sector and region in the UK to understand when labour has relatively little power compared to the firms that hire them, and what the consequences are. It’s really interesting: within sectors, monopsony varied dramatically by region, with parts of the North faring particularly badly; but even within individual regions, workers can face extremely different power dynamics with their employers depending on the sector they’re in. This has real implications for wages, job stability and precarity. I wish there was more work like this.
- For economists of a certain vintage, ‘industrial policy’ is a bit like Masterchef – one of those things you know you’re not meant to like, but you secretly have some affection for. Very slowly, and unlike Masterchef (do any of them every begin to look less smug?), it may be being rehabilitated. Dani Rodrik stans hard for it (industrial policy, not Masterchef) over at VoxDev.
- I briefly toyed with a new year’s resolution to shout ‘FAKE NEWS’ at people more often, but I desisted after a few trial runs ended in unpleasantness. Anyway, a new paper in Science digs into the phenomenon with more panache, and discovers that fake news is actually pretty tightly contained: 0.1% of twitter users shared 80% of fake news, and only 1% of users were exposed to 80% of the fake news. I’ll leave you to judge if the Links are in the 99% or not…
- Ted Miguel and co. lay the smack down on rural electrification. Their policy conclusion is that it’s not cost effective.
- Planet Money do a piece on the impact of the China-US trade war on farmers. It’s really great: they talk to a farmer who has been hit hard, and whose community is doing worse – yet still supports Trump’s policies. Transcript here.
- Lastly, new s**t has come to light (by the way, if I ever write a paper about the effects of providing new information on decision-making, that’s what I’m calling it and none of you are allowed to steal it): Jeff Bridges has tweeted a tantalising 15 second clip that suggests that a sequel to The Big Lebowski might be on the way. The Guardian, however, crush my hopes and dreams by suggesting that it’s just an advert featuring the Dude that’s forthcoming. Well, you know, that’s just, like, their opinion, man.
Have a great weekend, everyone!
The benefit of being away for three weeks (apart, that is, from being somewhere sunny and reasonably even-keeled for a while) is that it gives me ample opportunity to ignore any unpleasant cricketing events that occur during the links hiatus, though try as I might, I haven’t been able to ignore all the other unpleasant events going on, ad infinitum, elsewhere. Returning brings a few downsides, ranging from the near total-absence of warmth and daylight to an RSS feed so over-stuffed with information I’m fairly sure a portion of my brain exploded trying to clear it. My original plan was to do a sort of best-of-2018 round-up to kick off the year, but then I remembered what 2018 was like and realised it was akin to having a list of the best times I ran face-first into a wall. I just home my go-to 2019 gif isn’t this.
- Planet Money had the right idea, though – their end-of-year bash was an awards show for the lowlights of the year (transcript), ranging from sexist Doritos to Elon Musk’s late-night tweeting habits. Amazingly, they manage to avoid giving awards to any policy makers. I can only assume they were exempt from the competition this year. That provides a nice segue into one of my favourite annual traditions, the 538 ‘What I Got Wrong this Year’ piece, in which their main forecaster looks at what predictions didn’t pan out, and why. On a slightly more cheerful note, they also list their 45 best graphs of the year, with my favourite being the graphical summary of the sexual adventures of Mr. Prospector the horse who begat virtually every horse in this year’s Kentucky Derby. And ending this link on a positive note, the Development Impact crew pick their favourite papers of the year and Pinelopi Goldberg, their Chief Economist, does the same (that they did not extensively cover separately), an excellent starting point for good things you might have missed in 2018.
- The first half or two-thirds of this interview with Daniel Kahneman is fantastic: because Kahneman is acutely aware that he might be wrong about anything, he’s both extremely precise about what he does know and extremely honest about the limits to the various ideas he’s made his name on. He has begun researching the same kind of questions about organisations that I’m interested in, which is both great and terrifying. The last third goes off the rails a bit as Cowen, who has never met a speculation he wasn’t willing to make, discovers that Kahneman just doesn’t go in for wild connections.
- There was a late slew of economics on equality to close the year (increasingly, I find the most interesting research in economics is on questions of attitudes and behaviour, both of which are crucial for understanding gendered outcomes). First, Markus summarises Seema Jayachandran’s new paper on changing attitudes towards gender among adolescents (related: at the AEA annual meeting this year, gender was high on the agenda). Then the Economist ran an article on the growth implications of increased equality (I’m not 100% convinced about all of the underlying research, and even less convinced that the way to motivate working on equality is because it makes us richer). And lastly, a VoxEU piece summarising research suggesting that same-race teachers can improve the outcomes of minority students, though it doesn’t really isolate why. They speculate that role model effects are important, but another possibility is that it’s simply the absence of bias against minority students among minority staff.
- Branko Milanovic summarises the ways in which Marx has helped him better understand the world, and to be a better economist. Like Branko, I think Marx is particularly important when you work on economies that, while private and market-based, aren’t fully capitalist.
- Dietrich Vollrath is developing a new course on the ‘deep roots’ of economic development, covering institutions, geography, culture and more. The first of a series of posts summarising his teaching is an absolute belter. One of the problems with all of the literature on ‘deep’ development is that when the events you explore happen far in the past, it becomes increasingly difficult to even distinguish geography and institutions or culture even conceptually; and this makes it hard to interpret the results they find. Dietz does a great job of explaining this, and explaining how you still can use this research to understand the world better.
- Have you come across the Joy of Destruction game? No, it’s not NCAA basketball in the Zion Williamson era, but a lab game in which you can give up some of your own winnings in exchange for decimating another players’. In a finding that will probably not surprise anyone who reads the news these days, joining a group seems to induce a heightened appetite for destruction (and not the good kind), with groups more likely to give up winnings just to harm others.
- That seems an appropriate way to sally into 2019, if a bit downbeat. Is there anything to look forward to? Well, we’ve got Captain Marvel, Avengers: Endgame, Spiderman: Far from Home and the new season of the Punisher, so escapism is definitely on the cards. And just think, this time next year we’ll be watching Mount Zion up against Luka in the battle for the NBA’s future…
Have a great weekend, everyone!
Well, that was an eventful week. Has everyone caught their breath? I continue to alternate between abject terror and resignation. Alonzo Mourning acceptance, every day. Anyway. I’ll be taking a break over Christmas and the new year (which will, of course, involve vast quantities of street food, reading and birdwatching). That means no more links till January 11 or 18, depending on what my brain function is like when I get off the plane, which may be no bad thing: if things get bad enough, the links will probably descend into one long compilation of disaster gifs.
- This is, apparently, the season for giving (and often for giving novelty gifts that presumably live above ground for about three days before going into a drawer and being forgotten evermore), so it’s a good time to remember than actually, in spite of the fairly broad economic recovery in much of the world since 2008, there are still a huge number of people living in great economic insecurity. Planet Money investigate (transcript) and uncover some pretty shocking statistics from the US, including that more than one-fifth of all Americans expected to miss at least one bill payment in the month of the latest Fed survey, and that a stunning one-third would expect to do so in the case of an unanticipated $400 income shock (for example, needing medical treatment, or a car repair). With signs mounting that the next recession is just around the corner, none of this is good news.
- Dynastic succession in democratic politics sounds like an oxymoron, but actually, it’s the second and third generations of political leader in a family that tend to be the morons. A fantastic job market paper by Siddharth George from Harvard uses data from India to see what happens when fathers are succeeded by sons or daughters in positions of political power. He finds that, as theory would predict, politicians who think their offspring will also be in power might have a longer time horizon and thus make larger long-term investments, but their children face a moral hazard: because they have a core of voters loyal to the parent who will basically support them whatever they do, they do very little but self-enrich. The net effect is negative, a result that aligns with my priors and provides new and interesting evidence of how politics works.
- And in related, less surprising news, places where men have worse attitudes towards women tend to carry a ‘gender penalty’ in voting, whereby women are less likely to win votes. Since this is likely to be unrelated to competence, this is again, not good news.
- Not to make it too much of a pattern, but also to file under ‘not good news’: that dude who claims to have genetically engineered twins in China. How does this happen in a discipline that’s supposed to follow some pretty stringent ethical standards? As FiveThirtyEight point out, there are systems in place to stop rogue scientists, but they don’t always work. The most shocking thing about that article, btw, is the news that one research team wants to use a blast of calcium to make the sun less intense in order to mitigate climate change. This is not a good plan guys! Don’t any of you remember Morpheus? “We know it was us who scorched the sky”, anyone?
- I loved this: Hope Michelson and others demonstrate that one reason that poor farmers take up products such as fertiliser at what seem like sub-optimal rates is because they form incorrect opinions on the quality of the product, partly driven by media reporting. In news that will surprise no-one who lives in the UK, relentless media negativity can make people question the value of things that turn out to be rather quite good for them after all.
- Last year, I was given Messy for Christmas, and this year I’m giving a copy to someone else. It’s a great book, and Tim Harford distils some of the key lessons in this fantastic blog about the benefits of a space that isn’t too strictly regimented. Remember that the next time you see me working behind a huge pile of papers, with a dripping tea cradle and two books open. It’s my own personal Building 20.
- And lastly, because it does no good to end the year with links full of pessimism, let’s remind ourselves that sometimes things do work out better than expected: I have previously linked to Zion Williamson back when he was in high school, looking like a full grown man playing against infants, but against all odds, he’s actually exceeded the hype, and may be the best college player since statistics were collected. While Zion does it by basically being The Thing with a three-stroke, Luka Doncic might become a superstar without a single defined muscle on his body. If basketball can’t cheer you up, how about London trolling the New York Times’ twitter? And if that doesn’t work, here are the best memes of the year (American Chopper wins, obviously).
Have a great weekend, everyone!
Before we start, a quick PSA: I’ve been having a lot of trouble getting the links out the last couple of weeks, due to a laptop upgrade (even with the extra stress in getting the links done, it’s definitely an upgrade), so please let me know if you’ve not been getting all of the e-mails. I’m aware that sending an e-mail to check if my e-mail is working is getting to Darwin awards levels of stupidity but I’m relying on those who do receive it to hear the complaints of those who don’t and tell them to e-mail me. There are more holes in this theory of change than in Hank Williams’ bucket, but it’ll have to do. And while I’m linking great songs filled with euphemisms for drinking, pour one out for Pete Shelley of the Buzzcocks, punk superstar and writer of one of the most perfect pop songs since Teenage Kicks, Do Anything.
- In time-honoured links tradition, we dive straight in to the bad news. A portion of the US yield curve inverted yesterday [cue dramatic music: Dunn-dunn-dunn!] After a wine-fuelled refresher course in the yield curve with a friend last night I can try and explain: investors typically requires extra compensation for holding longer term bonds because they lose the opportunity to make productive investments today. When the yield curve inverts, it means that they do not need such extra compensation, a sign that they think the shorter term investments aren’t going to be profitable – i.e. they expect a recession. As an indicator for a recession, a particular form of this inversion has a 100% hit rate, but luckily we haven’t seen that form inversion quite yet. Planet Money, whose Cardiff Garcia stans hard for the yield curve, dig deeper (transcript).
- If a recession is coming, try very hard not to enter the job market for the first time during it. Tim Harford lays out the role of luck in career earnings, with one big source of that luck being whether you enter the job market in good times or bad. It shouldn’t matter, but does, because humans are hopeless at computing complicated problems.
- However, we can learn. Christie Aschwanden, one of my favourite writers on science, has been covering the extended and sometimes acrimonious replication crisis afflicting social psychology since 2015. And she comes with good news: all this pain is doing what it was meant to, and improving the standard of research in the field.
- When I wake up in the middle of the night and can’t sleep, I watch basketball highlights. Branko Milanovic, on the other hand, casually shoots off an erudite blog linking contemporary French politics, the history of violent protest and the fight over who has to suffer for the greening of our economies. He takes off from the Gilets Jaune protests to again remark on the central flaw of Kate Raeworth’s doughnut economics: that in order to comply, rich countries will either need to agree on how to distribute a net halving of our incomes (which is politically impossible) or use technology to dramatically green all our production (which renders it indistinguishable from the techno-optimism that characterises market capitalist approaches). For balance here’s Kate’s latest write-up, and as far as I can see it still cannot address Branko’s point.
- Lagarde and Ostry on the macroeconomic implications of gender diversity. This is one of the more convincing ways of setting out the macroeconomic effects of better female participation in the workforce (using a model based on complementarities arising from differences in how women and men work, which could be controversial). But still, why do we need economics for this question? Surely gender equality should be pursued for its own merits, and not for the benefits it brings the economy?
- Michael Clemens and Kate Gough on what we need to do to make a Global Skills Partnership work. In case you need convincing that this is an important thing to do (and you shouldn’t), Perry Bacon, Jr. (whose name manages to simultaneously make me hungry and nostalgic) details all the ways Trump has managed to affect migration without putting a single brick in the wall.
- Finally, to cheer ourselves up, 538 answer the important questions, like: who would win a fight between an anaconda and a Komodo dragon? Amazingly most actual academics asked got into the spirit of things and gave an answer. And one more bit of musical bliss from Pete Shelley, this time squarely on the punk side.
Have a great weekend, everyone!
It’s the last day of term, so this week’s links are simultaneously exhausted, demob happy and descending into a rabbit-hole of panic at the gap (or alternatively, gaping chasm) between where my research is and where I was hoping it would be at this point. Quickly, before I think about that too much, I’m going to distract myself with Luka Doncic and economics.
- My favourite thing this week, by a country mile, was Planet Money on the economics of the office (transcript), taking three well-known laws of bureaucratic dysfunction and examining their genesis. It starts with Goodhart’s Law, the idea that any good measure of a phenomenon ceases to be a good measure once it’s turned into a target, a law that anyone who has ever designed a set of performance indicators knows intimately (it is a close cousin of the Lebowski Theorem of Machine Superintelligence). It then considers The Peter Principle, the idea that everyone is ultimately promoted until they reach such a level that they cannot function effectively at. In equilibrium, therefore, everyone in an office is bad at their job. And it continues though to Parkinson’s Law: the idea that any task will expand to fill the time allocated to it, a law I prove every Friday with Links e-mails of varying quality. I’m always so struck by how much academic work paints offices as these dens of incompetence and iniquity. They must really hate their administrators. Alice Evans pops up at the end to propose a new law, though not one limited to the office.
- This is fantastic. Exploiting a massive new dataset linking Italian firms and their employment of serving political officials Ufuk Akcigit, Salome Baslandze and Francesca Lotti demonstrate the extent to which Italian firms invest in political patronage, and also the extremely stark negative correlation between their success in attracting such patronage and their level of innovation. They attempt to build a causal story using ‘coin toss elections’ and it reinforces their analysis: politically protected firms both do better in terms of growth and do worse in terms of innovation, the implication being that the payoff to political patronage is the establishment of friendly market frictions or impediments to their competition. I dread to think what this kind of analysis would show in some of the countries DFID work in.
- And while we’re talking about buying influence: let’s check in on what happens to aid from the US when you’re on the UN Security Council.
- We are quickly approaching the point where the largest source of uncertainty in our climate models is not the science of climate change, but human behaviour. Maggie Koerth-Baker (one of 538’s army of great science writers) reports.
- More great job market papers on Development Impact: Katy Bergstrom suggests that the conditions attached to a cash transfer programme can sometimes improve targeting to the extent that it renders them superior to unconditional programmes. And a really cool paper by Faraz Uzmani which estimates the welfare impact of rural grid electrification both in the presence and the absence of a major economic opportunity which would require a large amount of reliable power. In the absence of the economic opportunity, electrification confers minimal gains, but it generates large welfare improvements with it.
- The magic of migration, episode 45,301,919: remittances to Mexico act to reduce inequality and move to protect the poor faster during economic shocks, meaning that migration is good for the migrants, good for inequality at home and are increasingly pro-poor when need is highest.
- This year marks the fifteenth anniversary of Kal Ho Naa Ho, the film that apparently introduced Bollywood to America – and Shah Rukh Khan’s particular brand of charisma, made up of equal parts dancing ability and complete lack of self-consciousness. I’d always assumed Bollywood first hit the West with Kuch Kuch Hota Hai, in which SRK plays the least convincing teenager since Steve Buscemi. I mention this for little other reason than to link to those videos, btw, but it’s the last link and we need frivolity dammit. And from Bollywood to Hollywood: The Ringer rails against the Hollywood Handshake on Bake Off, suggesting he’s one doughnut filled with more hot air than anything else…
Have a great weekend, everyone!
Am I allowed to ignore disastrous failures of judgement in the weekly links? You know, the kind of slow-motion car-crash disasters that make you despair, question your future and engage in cut-rate Kierkegaardian – massive props to autocorrect for recognising that, btw – fatalism? I am, of course, referring to the ongoing omnishambles that is the Sri Lankan cricket team, currently in the process of throwing themselves into a deep well of cricketing incompetence. Of course I was talking about the cricket. What else has been going on that fits that description?
- The annual Development Impact Job Market Papers series is pretty much the best regular thing that happens on the internet, with the exception of NBA twitter memes (Alonzo Mourning acceptance is pretty much how the I react to the front page of the papers every day now). Two really interesting papers caught my attention this week: the first, by Erin Kelley is a clever experiment that uses mobile phone tracking data to reduce informational asymmetries between the owners of Kenyan Matatus and their drivers, which also seems to sharpen incentives. The really interesting stuff from this paper isn’t the core result per se but the implications: one issue is that this appears to be at least partly a transfer of power from labour to owners, but high proportion of workers reported a better employee-employer relationship afterwards (Erin rings the external validity klaxon herself on this point, though). Also this week: Christian Meyer suggests present-bias results in reduced in-employment job-search, with the implication that workforce churn isn’t high enough in Ethiopia. I will need to read this one in detail, as it goes fully against my priors.
- Duncan Green speculates about what an Oxfam programme run entirely on experimental lines would look like. “Expensive”, is one answer. More generally, it would require a commitment to subjugate any narrative spin to a specific kind of evidence which will sometimes be contradictory – is an advocacy-heavy organisation ever going to do that? Or a politically-controlled donor? Maybe the real answer is “like J-Pal, so why not fund them instead?”
- On a recommendation, I recently read Weapons of Math Destruction by Cathy O’Neil, a book that examines the use of machine learning and smart algorithms to target services and learn about markets (my review: Type 1 error matters; feedback is crucial; market power is a problem; and equity and efficiency sometimes trade off – in sum, learn economics). This piece by Monica Andini and others suggests that machine learning, while unable to generate causal policy value (i.e. proving that X causes Y, so we should/shouldn’t do it) does have predictive policy value (i.e. predicting that X will happen, so we should prepare for it). They should have read O’Neill. One of the issues with this is that we would have to limit the information used by these machines, because some of it will lead to discrimination: if race correlates with likelihood of default, should we start thinking about restricting access to student loans on that basis? If the answer seems obvious, you may be surprised by some of the algorithms in current use.
- W. Gyude Moore at CGD argues that ‘Billions to Trillions’ is more slogan than reality in Africa, and will be until a different approach is developed.
- Reasons to globalise: firms with more global networks of customers and suppliers are much less affected by natural disasters than those with a more local scope. While this should be obvious anyway, it’s nice to have evidence that the retreat from international economic exchange is perhaps a bad idea.
- And finally, because my head feels like the Incredible Hulk has been negotiating with me, two bits of marginalia that reflect my headache-induced mood: first, is this the grossest thing that happens in fast-food joints? I certainly hope so (warning for the faint-of-stomach: it involves a grilled rat). Second, are you, too, disgusted by how early Christmas stuff starts every year? Then this Ringer appreciation of Scrooged is for you. It’s made me want to go home and rewatch it, if only to see Bill Murray literally scare someone to death.
Have a great weekend, everyone!
Sri Lanka have been extremely Sri Lanka-y today. In the cricket, we’ve veered from preening brilliance and unplayable spin to dead-eyed incompetence in letting England get to what is very likely a winning position in the second test. And in the shambles that constitutes Government, MPs have been literally throwing chilli powder at each other in the middle of a punch-up. It’s ridiculous: the chilli powder is almost certainly the only thing in that room that is actually useful for its primary job, and yet it’s used as a weapon. Let’s not compare things with what’s going on closer to home, shall we?
- One point: amidst all the chest-thumping and related political machinations this week, there is a real policy issue with real impacts over which we are collecting real evidence. And by we, I mean Nick Bloom and co-authors. Worth reading.
- “The key reason that poor countries are poorer than rich countries is that they see less… use of productivity enhancing technologies.” Charles Kenny, from whom that quote comes (emphasis mine, though) is a noted optimist, author of a book called Getting Better and a cheerful and pleasant person. He is not, though a blind optimist, and in this piece called ‘What Robopocalypse?’ is entirely correct. There is very little evidence that automation has thus far been a risk to jobs, and every reason to expect a spread of high productivity technology to be good for poor countries.
- So, it should come as no surprise that the Planet Money crew love economics. But Stacey Vanek-Smith nearly loses her religion for econogeekery over the issue of the ‘pink tax’ (transcript), the higher price paid by women for certain goods (like razors). Some economists argue that this kind of price discrimination enables the market to function more efficiently, by allocating resources in a more precise fashion. I sit in Joan Robinson’s camp, though (I often do): it seems likely that market power has more to do with this, making it an inefficiency, designed to maximise rents. I do have to ask, though – if men’s razors and women’s razors are identical, and men’s razors are cheaper, why don’t women just buy the men’s one? Also on gender: estimating the effects of more liberal abortion policy using maternal mortality is likely to substantially underestimate the benefits. Much of the gain seems to be from reducing non-fatal, but nevertheless severe, health problems.
- Branko gives an update on global inequality. It seems criminal that his ability to work on this topic for lack of data, so friends in the World Bank: work out how to give him access!
- Does an extra thirty minutes of sleep substantially improve your life chances? This entry to Development Impact’s fantastic job market paper series suggests so, and my priors and baser instincts are begging me to accept it without any critical thinking.
- Are you familiar with the Lebowski Theorem of Machine Superintelligence? It posits that the true risk from AI is not that it will become supremely competent and ambitious, but rather that it will discover, as humans have, that it’s not really worth effort and instead game the system and cheat. Well, chalk one up for the Dude: Jason Kottke has found a few hilarious examples of machine sloth, including an AI that generated a population growth strategy of basically lying around having sex and eating some of the children for nourishment.
- In news that makes me feel incredibly old and incredibly nostalgic: this year marks the 25th anniversary or Nirvana’s Unplugged in New York concert, and The Ringer celebrates with an oral history of one of the greatest concerts ever. Fun fact: somebody from MTV had the bare-faced cheek to ask Kurt to go back on stage after he’d finished vomiting out his soul on Where Did You Sleep Last Night? And while that made me feel old, news that Stan Lee managed an innings of 95 reminds me there’s some way to go yet. LitHub celebrates his achievements as a storyteller and creator of characters, and Vox mashes up every film cameo he ever made.
Have a great weekend, everyone!