The CSAE Blog

Hi all,

 So it’s been a few weeks since I’ve been optimistic about too much, but today, a Sri Lankan batsman hit a century! A good one! We would even be in a darn good position to give Australia a bit of a hiding in the test if we hadn’t decided it was somehow against our interests to turn the lights on when the pitch got dark. So though there’s some hope, our habit of shooting ourselves in the foot maintains. Still, we have a day of Rangana Herath, Sri Lanka’s own Mr. Potato Head, bowling tomorrow, and I cannot wait.

 1.       Let’s start with Branko. He argues that the current backlash against the model of globalisation that we have been working with over the last few decades – think Brexit and the prospect of an isolationist Trump regime – reflects an underlying unease and dissatisfaction the model of capitalism that has translated this globalisation into material outcomes around the world. It’s a tour de force of political economy thinking, tying together income inequality, development economics (he argues that the future is a world of more physical investment in the infrastructure of poor economies) and immigration. He may not be right (I suspect he isn’t, at least about development), but it’s – as ever – fascinating and educational. He is one of the most relevant thinkers for the world we live in. (As an aside, the German word for unrest is the best one. Also, an X-Files reference).

2.       Behavioural economics can be a little Emperor’s-new-clothes-y, being basically a collection of psychological observations that we could easily have built into economic models or thinking without any new label or fanfare at all. Having said that, to the extent that its branding as a new discipline had made new thinkers use that collection of psychological observations in their economic analysis better, it has been a good thing. Noah Smith here looks at a new and potentially exciting ensemble that the emperor is wearing, a macroeconomic theory that builds on psychological insights to more realistically model the effect of things like changes in fiscal or monetary policy on economic outcomes. I don’t see how this is substantially more radical than Avinash Dixit’s model of hysteresis in investment behaviour from 1992, but I like it anyway.

3.       This completely cracked me up: Nintendo got a massive stock market bump because of the success of Pokemon Go, and had to issue a statement pointing out they didn’t really come up with it, and own only a tiny part of it. This is basically the investors version of ‘all you guys look the same to me’, isn’t it?

4.       Here’s some economics we can all get behind: getting our money back. Planet Money talk about how we get our money back, and I’ll be honest – I didn’t think it was very good until I got to the third section, which is all about bonds with negative interest rates, so I suggest you just read the transcript and skip to that bit. It seems counterintuitive, that people might pay the bank to hold a big chunk of their money for a long time, but it’s got a logic to it. In fact, Tyler Cowen think it might even be a good thing.

5.       Two pieces on violence: first Dietz Vollrath makes a welcome return to the blogs by being himself and giving a very precise, ordered analysis of a controversial paper on the origins of conflict in Africa. He’s brilliant at explaining economic methods of modelling and measurement in a way that is accessible to non-economists. And secondly, a WaPo piece on how women do well in some post-conflict places, because the men have been so busy fighting that they’ve been able to seize more responsibilities and organise. This may also be true in places where men migrate outward en masse.

6.       Amazing, amazing, amazing. The birdwatcher, the geek (yes, they’re separate), the humanist and the anthropomorphist in me all love this NYT piece about the relationship between Honeyguides and certain tribes in Tanzania. The Honeyguides lead people to the beehives, and wait patiently for them to smoke the bees out, being rewarded with the beeswax while the people get the honey (there is footage of this in The Life of Birds, the Attenborough documentary, if my memory serves). “When assisted by honeyguides, Yao hunters found beehives 54 percent of the time, compared with just 17 percent when unaided.” Amazing, did I say that already?

7.       Lastly, this is my life. Giles Wilkes talks about trying to read everything in the economics blogosphere and slowly – eventually – falling in love with it. “There ought to be an ugly Germanic word for it, the anxiety at not having read enough” – and if anyone finds it, please let me know. He also says: “This is what the intellectual world looks like with no entry barriers, and much respectable opinion recoils from it.” My opinion is rarely respectable (it’s much like my appearance in that sense), but this is what I love about the breadth of reading available on the internet. I have discovered writers of brilliance in their subjects I would never have otherwise known: Jessa Crispin, Jack Slack, Kirk Goldsberry are just a few. The thirty minutes I spend disseminating some of their work every week is a small way of trying to pay them all back in kind.

 Have a great weekend, everyone!

 R

Hi all,

 Well, that was quite a week, but these links signal that it’s almost over and time for relaxation (also known as backbreaking labour in the garden) and keeping an eye on the cricket – a gratifying day, with England ticking along nicely and Mohammad Amir demonstrating that he’s still got something special in that left arm (16-3-50-2 and counting). But anyway, enough of such thrilling figures and on to the only slightly-less exciting economics.

 1.       I’ve often said that every new Nicholas Bloom paper should be welcomed by dancing in the streets and heavenly singing. This one is another blockbuster, setting out his ideas in a single coherent framework. Here’s a key sentence from the abstract: “[we find] a positive relationship between product market competition and average management quality (part of which stems from the larger covariance between management with firm size as competition strengthens)”. In plain English this means that competition is important in driving up management quality in an industry, which we already know is important in generating productivity gains; it also means that bigger firms tend to be more productive, a fact which doesn’t always hold in uncompetitive environments… both facts which are particularly important for developing countries, which often have limited competition, even protecting large, bad firms. Many of our good ideas and policies will not work without competition.

2.       Nick Lea, on holiday but unable to resist the lure of economics, sent this to me: a wonderful article from the FT about how a reliance on data alone can cause us to ignore or miss some of the most important trends. My own take on this is that everything you see is a data point, biased or not, and it should all inform your view, appropriately weighted and triangulated. Ignoring any one class of evidence entirely is rarely a good idea. Related: the ever-excellent Andrew Haldane’s speech, which prompted the article.

3.       Branko Milanovic is one of my favourite economists. Here, he talks about income inequality and welfare economics, but I think the best thing about it is the second half, where he explains his three rationales for caring about inequality. He manages the difficult trick of being both radical and sensible, and that is a real rarity.

4.       While we’re on inequalities, let me just quickly high-five Adam Silver.

5.       And still on the topic, this one might be a bit controversial – but the evidence is pretty consistent that men tend to be more risk-loving than women, at least in the cultures which have spawned most of the research. The finding is replicated in a sporting context here. Obviously, nothing about this is inevitable and is likely the product of gender roles and identities constructed from youth. I would like more research on the why now that the fact is reasonably well attested (apparently).

6.       Two related posts: Chris Blattman on why ‘what works’ is the wrong question to ask (he gave this talk at DFID, but I had to leave early – a combination of a clashing meeting and the room being so hot that I was convinced I would be cooked in my seat if I remained); and Michael Woolcock on how qualitative evidence can help answer the better question ‘why did this work in this place it worked in?’ (Michael is under-read by professional economists, I find). As an aside, Chris Cramer made the same point Blattman does in a talk to DFID a few weeks ago as well.

7.       In every country I move to, my one irrational piece of chattel that never gets left behind is my massive hardback edition of the complete Calvin and Hobbes, which weighs about five kilos and takes up half a suitcase. I love it and never get tired of reading it – and I’m not the only one. Here’s LitHub on why Calvin and Hobbes is great literature.

 Have a great weekend, everyone!

 R

Hi all,

I’m on a day of much-needed annual leave, but England just took the last wicket and I was logging on to check my e-mails anyway, so I thought I should deliver your weekly shot of marginalia in any case. It’s been (another) eventful week in the UK, and looking out onto the random world of internet geekery is as good a respite as any.

1.       I can’t believe I missed this, and though it’s got nothing to do with either development or economics, here is The Economist making the case for LeBron James being the greatest basketball player ever. These kinds of comparison exercises are always little more than pub-conversation fodder, but what I like about it is the way it uses both stats and narrative to make its case.

2.       Back to development for a moment – I’ve made this point before, but the World Bank’s country income classifications (lower income, lower middle income and so on) are somewhat arbitrary and a little bit odd. They might be the best we have now, but Lindsey Dolan at CGD breaks down some of the complexities nicely here.

3.       How often do you get an article about cash transfers that opens with a 19^th Century painting? Damien de Walque does it, though, with a good discussion of the level of detail that we need to consider when deciding whether a cash transfer should go to a mother or a father: “While giving cash to mothers seems slightly, but not significantly, better for education outcomes, giving cash to fathers leads to significantly better nutritional outcomes during years when the harvest has been poor.” As ever, the standard wisdom masks a lot of nuance.

4.       This is very interesting: Tim Harford takes Brexit as a starting point to consider how best to influence public discourse with analysis and facts, drawing on behavioural economics and the research of a Yale law professor. Highly recommended, key sentence: “Ultimately, there is no substitute for sustained public engagement — a lesson scientists have learnt the hard way.”

5.       Bad science and tiny samples, via Chris Blattman. Important, and related to the previous link. Gah.

6.       Directly contradicting my first link this week, here’s FiveThirtyEight saying farewell to Tim Duncan, the greatest two-way basketball player in the modern era. I remember watching him as a teenager, many moons ago and being amazed. That feeling has never really disappeared.

7.       And finally, I love Letters of Note, and this one from EB White is particularly brilliant: “Man’s curiosity, his relentlessness, his inventiveness, his ingenuity have led him into deep trouble. We can only hope that these same traits will enable him to claw his way out.”

Have a great weekend, everyone!

R

Namaste all,

 So, I’m in sunny (and rainy, and humid) Nepal – we can call it Ranxit – so this week’s links might be a bit threadbare. It’s been back to back meetings, thinking about migration, structural transformation and state capacity, so basically like any other week, but with more samosas and dumplings. It’s an amazing place, and I’ve probably never been anywhere where migration is so central to understanding how the country functions. But straight into the links:

 1.       Okay, so I’m in Nepal, but I still can’t escape Brexit. CGD have really pulled out the stops here, and two more good pieces came out this week: first, Vijaya Ramachandran and Jennifer Richmond look at the politics underlying Brexit, and conclude that many of the policies that development economists love (like freer migration and trade) depend, politically, on the redistribution of the spoils in rich countries. Brexit shows that this is a development issue, too. Secondly, Matts Collin and Juden look at the effects of Brexit on remittances (which, incidentally, are currently at around 30% of Nepal’s GDP). It’s not good.

2.       Much of the reason for that is about the depreciating pound. But surely, this will be good for UK trade, right? Tyler Cowen suggests it might be a little bit more complicated than that. And, related to Vij’s piece linked above, Tim Harford looks at this world of winners and losers we inhabit, and what it means for and tells us about how people see the economy.

3.       Changing the subject (a phrase I find myself needing to utter more and more), Dissanayake (2015b, 2016) has argued that men are completely full of themselves and overestimate their own abilities. An article in Nature suggests that they are also more likely to cite their own research than women. I hate to say I told you so, but (Dissanayake, 2014).

4.       Very good discussion from Bloomberg about why the heck Venezuela don’t just default, as ‘Financial Hitman’ Ricardo Hausmann has suggested.

5.       David Evans does that thing where he knows about everything that has ever been researched in his field (education and learning) and shares that knowledge in bite-size chunks. He’s brilliant, and I want him to come back to DFID to present again.

6.       On the power of branding: Planet Money investigates whether a Stradivarius sounds any better than a regular violin and finds that it pretty much doesn’t, though everyone who loves violins argues with them and claims they’re just testing it wrong. I think three things are going on here: first, branding does really work; second, simply knowing something is more expensive probably makes us appreciated it more, either psychologically or physically; and third, narratives help us make sense of our lives and our interests, and powerful narratives are near-impossible to shift. (Transcript).

7.       And lastly, because I’ve got to run since I’m rudely keeping my ride home at his desk: some hope for anyone who isn’t a Warriors fan – they probably can’t make the most of signing Kevin Durant…

 Have a great weekend, everyone!

 R

Hi all,

 So… what shall we talk about?

 1.       I won’t go into my own feelings about it – you can ask me privately, but make time for a long conversation – though I will say that the vitriol I’ve noted on both sides since the result was announced is not a good look for anyone. There has been some good and measured writing on the topic (not much, but it is there). First off, Ben Casselman from FiveThirtyEight has an excellent guide to making sense of what’s going on right now in the economy. He says, and I agree, that we need to ignore the initial market reaction, which “… will tell us next to nothing about the longer-run impact a Brexit will have on markets or the broader economy.” That said, economists everywhere have basically got the popcorn out (“Have you seen gold yet?!”), because frankly, no-one knows where the new equilibrium is, including the market. Planet Money wheeled out Tim Harford for a quick podcast on it here (transcript). Alex Tabarrok spots some bad timing on google here. Owen Barder talks first about the risks and opportunities for ODA and development, and secondly, in an excellent and impassioned piece, about what he thinks it means more broadly.

2.       An interesting side-debate has been about the polling. It’s now three major UK political events in a row that the polls have got wrong, and there are two interpretations to this. One is that there is something different about the way people are making decisions about, responding to and reporting their preferences about political and economic events that our sampling models and questions have yet to capture. The second, more scary, interpretation is that politics are simply fundamentally less predictable. Andrew Gelman, who literally wrote the book about this, leans towards interpretation one and does a good job of explaining this. As an aside, it’s also made many American commentators reassess their models dealing with events they deem unlikely – like a win for Trump. Nate Silver has predicted a slightly less than 20% chance of President Trump, but also points out that this does not mean we should bank on Hillary yet.

3.       Last thing on this topic: economists weren’t an influential voice in this debate, it seems. Tyler Cowen has been thinking about why economics isn’t taught from a younger age to more people here and here.  It’s something to ponder, though I have little idea what the ‘right’ answer is.

4.       Changing the subject, as hard as it seems to be for everyone out here at the moment, here’s something I would have included last week: a fantastically interesting study of whether small ‘situational’ nudges can change people’s behaviour. The intervention is simple: a fridge full of drinks, with a chit in front so you can tally up how much you took in order to repay at a later date. The ‘treatment’ is whether a pen is left hanging in front of the chit, and the ‘control’ is no pen. Depressingly, it seems that honesty in reporting is significantly increased by the presence of a pen. This doesn’t so much imply that people are dishonest as that the presence of even a tiny cost to honesty (finding a pen) is enough to change their behaviour. Perhaps, though, the willingness to ‘pay’ for honesty will increase as the consequences of dishonesty increase. Perhaps.

5.       The American Economic Association notes that Democratic presidents have a much better growth record than Republicans, and asks why this might be. Interesting, though ultimately insufficiently convincing to me.

6.       Venezuela is completely falling apart – and 538 have a good idea why: oil, and a catastrophic failure of investment policy.

7.       I really dislike some of Cass Sunstein’s (apparent) views, but this is a really interesting and entertaining conversation between him and Tyler Cowen. “Proponent of judicial minimalism and libertarian economist have good-natured love-in” isn’t exactly a headline, but there’s a huge amount of interest here, and Cowen remains an absolutely brilliant interviewer.

8.       Lastly, because I want to end on something that makes me smile, here’s my favourite stat of the week. 99.8% of Iceland’s TV sets were tuned to their match against England in the Euros. Presumably, the rest of them were TVs left on by the 10% of the population in France to see it live, or the people who could hear the Icelandic commentator going nuts without the need for a television. What a moment.

 Have a great weekend, everyone!

 R

Hi all,

 Skipping all the usual jokes, I’m just going straight into a rant here: when we turn our politics into a series of vitriolic attacks on those who don’t share our views, demonise and dehumanise those who don’t share our language or (proximate) origins, and treat dissent and political discourse as a battleground rather than an exchange of ideas and evidence (not stats, not numbers, not claims, but evidence), then we’ll always run the risk of winding up where we did yesterday. I’ve been guilty of this before, and only a couple of days ago got a (fully deserved) dressing down from a colleague for talking down about people who don’t share a particular political view I hold – I hope I take that to heart. There have been various lovely tributes to Jo Cox, including a number on my Facebook feed, as she was known and loved by many people who worked in DFID and development. I particularly like this one from Andrew Mitchell. It’s all very distressing. And disappointing.

 1.       Staying on UK affairs for a moment, here’s Ben Casselman at FiveThirtyEight on what Brexit could mean for the economy. It’s balanced and accounts for the views of both sides of the debate. The spread betting on the outcome of the referendum remains razor thin so if you have views on this, get out and vote next week, come rain or shine. If you think it won’t affect you – read more about it. It will, so be as well informed as you can be.

2.       Dan Honig at John Hopkins sent an e-mail to Matt Collin (CGD) and I last week, about the relative merits of evaluating development projects using ex ante, pre-determined criteria vs. using an observational approach that decides what to consider after the fact, setting off a geeky, ranty back-forth-and-back-again between the three of us, which Matt then published. While the discussion of economic evaluation is riveting (of course it is, given how handsome and brilliant the three protagonists are), the most notable point made in the discussion is when I turn my prognosticative skills to the basketball, and declare “[the] Cavs might still push it to 6, and if they do, Lebron is perfectly capable of turning in two monster performances in a row”. Here’s the first of the two – Sunday night, we’ll find out if the second materialises…

3.       David Evans was at DFID earlier this week giving a brilliant presentation on one of his recent projects, looking at management capacity and quality of healthcare in rural Nigeria. Earlier in the week he attended the Annual Bank Conference on Africa in Oxford, which had an urbanisation theme, and together with Markus Goldstein (who also organised a great presentation here a few months ago) wrote a summary of every paper presented there. Strongly encouraged for all economists, particularly those working on economic transformation. Some of this research is fantastic, and providing new insights into how cities can impel or impede development.

4.       I’m in Paris at the moment (mangling the language in my interactions with the locals) and have been at the OECD today, presenting on the need for a more thoughtful and nuanced approach to thinking about development and migration. I don’t think I would have gotten away with Chris Blattman’s latest blog…

5.       I really liked this: Owen Barder and Matt Juden dig in to the old chestnut that middle-income countries get more aid than low income countries, and find (like the t-shirt I keep wishing existed says): ‘it’s a little bit more complicated than that’. In fact, by most intuitively reasonable measures, the opposite is true.

6.       I am writing this e-mail with my feet planted on the table, leaning back in my chair, having been told that this is a ‘power pose’, albeit one that makes it very difficult to type. Tim Harford gives the idea a shoeing, while making a broader point about the reproducibility crisis in the social sciences, ending with a rule of thumb by Andrew Gelman, which is always a good idea. Somewhat related: David McKenzie points out that, numerically at least, RCTs really haven’t taken over development research.

7.       And finally, because I started the e-mail on a sombre note, let’s end it more upbeat: here is a statistical analysis of every movie The Rock has made, noting his inexorable rise and increasing awesomeness. “[He] manages to say the line ‘F**king centaurs,’ and you buy it. Do you realize how hard it is to sell the line ‘F**king centaurs’?”

 Passez un bon weekend, tout le monde!

 R

Hi all,

 Even though it’s been almost a week and Sri Lanka are playing in the cricket right now (and – dare I say it – looking pretty darn competent), this week’s preamble is all about The Greatest. Last Saturday, after hearing the news, I re-watched When We Were Kings and read all the tributes I could. LitHub did a nice summary of the best books about him and  Vox did a rundown of the best publically available writing. For the fans of the actual boxing, here’s his fight against Cleveland Williams, probably his finest performance, at the peak of his physical abilities. My own favourite story about him: When I worked in Zanzibar, a portly, middle-aged man came into my office looking for my (absent) office-mate. He introduced himself as the Manager of the Zanzibar Ports Authority, and asked me to say he had come in to say hello. I asked him what his name was, and he flashed me an enormous smile and started swiftly dancing around the office, shadowboxing with dizzying speed, before withdrawing a business card and announcing himself as Mohamed Ali. I’ve always wondered if he did that every time someone asked him his name. I’d be tempted to.

 1.       “Today on the show, we meet the man who stole my door and who gave us the hell that is the open office.” One of the great joys of working in the Chief Economist’s Office is that we occupy an odd little corner of the building which is difficult to find and relatively small. As a result, though it’s technically an open plan, it feels more like a small shared office space. Planet Money look at the invention of the open plan, and finds the architect responsible for it (transcript). Almost everyone hates the open plan (Shalom Auslander describes it as like ‘being inside a migraine’), though in some contexts it is beneficial to team-level output, but they nail the appeal: it looks cool, and it’s cheaper.

2.        I keep banging on about the importance of raising the returns to work in developing countries. The problem is not that people don’t have enough work, nor that they aren’t enterprising enough or anything like that – it’s that all the structures that allow one to do well and maximise welfare by selling or using your labour are sub-optimal. A nice new paper reinforces this deeply held prior: people in developing countries actually work more than their counterparts in rich countries, and do so for far, far lower returns. The global incomes gap is thus even larger when we account for hours worked.

3.       Speaking of the global incomes gap, here’s Branko Milanovic reviewing a book with a new(ish) explanation of the Great Divergence of the west (and specifically Britain) from the rest of the world, focusing on the role of the interventionist state. The book also goes on an eminent academic killing spree, attacking Jared Diamond, Greg Clark, Acemoglu and Robinson, Kenneth Pomeranz and David Landes. He also made me guffaw by describing Andre Gunder Frank’s ‘usual lack of nuance and overdose of self-assurance’.

4.       Two bits of good thinking on migration from CGD. First Hannah Post and Owen Barder carefully look at the numbers of ‘refugees’ and ‘asylum seekers’ in Europe and find that rhetoric and reality do not necessarily match; and then Lee goes on a longer version of his earlier rant against the ‘worst use of aid money ever’: “Whilst the EU apparently trusts the government of Sudan to respect the human rights of foreign refugees, the same Sudanese government is simultaneously bombarding its own citizens…”

5.       “The new approach to economics should include two different kinds of theories: normative models that characterize the optimal solution to specific problems and descriptive models that capture how humans actually behave.” Richard Thaler on the state of modern economics and the direction it needs to take, arguing that everything has a behavioural element, and that the sooner we internalise that into mainstream economics, the sooner there ceases to be a separate discipline of ‘behavioural economics’.

6.        I don’t want to be a total downer about John Oliver buying loads of debt and then forgiving it, but as Tyler Cowen might say: solve for the equilibrium. That’s not to say I think the current situation is fine, either – with vulture funds buying loads of debt cheaply to try and squeeze blood from people, I don’t think the direction those incentives push us is any better. Rather, I think that grand gestures are just that: nothing more than a gesture. The problem is financial education, understanding of risk, and the need for a really open discussion about how far we are willing to trade off risk and return among the poor, and how to mitigate or insure risks.

7.       And Lastly, after the musical end to last week’s links, someone sent me this gem: A North Korean pop group singing their great hit, Let’s Support our Supreme Commander with Arms.

 Have a great weekend everyone!

 R

Hi all,

 So, in cricket news, shortly after talking about how Sri Lanka’s performance in the second test was making me cheerful, they went and collapsed to 101 all out. I await the Lord’s test with such fear and trembling I may need to call in sick (note to my line manager: if I actually do call in sick on those days, it’s a complete coincidence and I actually am sick. Either that or Sri Lanka are actually in a position to win the test and I’m attempting to scale the outside wall in St. John’s Wood to get a glimpse of the winning runs, in which case it’s entirely excusable). Right, with that potentially career-limiting preamble out the way, on to the economics.

 1.       This isn’t really economics (ok, it isn’t economics at all), but it does involve some very nifty statistics. With LeBron James very unlikely to win his third championship this year it’s worth remembering: victory is quite a blunt proxy for brilliance. In dragging what have sometimes been frankly mediocre teams into the finals of the NBA Playoffs, and sometimes putting up historically brilliant performances in losing causes, he may have already made the case for being one of the greatest players ever. Of course, we’re not going to appreciate this until at least ten years too late.

2.       Two perspectives on the evolution of the IMF. Ostry and co-authors, all economists within the Fund, do something very brave here, arguing that the neoliberal dream sold by the Fund in the 80s and 90s was oversold and that even in its great success, Chile – might not have been the fundamental reason for success. This is all part of a general trend in the Fund of rowing back on neoliberalism and conditionality in programme lending, at least in rhetoric. However, three political scientists and sociologists argue that that’s all this was:  a rhetorical flourish, showing a marked increase in conditionality after 2008, bringing it right back up to its historical high-water point. I find this criticism underwhelming. Firstly, I can’t be the only person who can think of an event in 2008 that might have something to do with the need for a lot of mandated structural reform (hint: it rhymes with ‘Brobal Binancial Brisis’). Secondly, their argument that countries need the flexibility of policy making in order to recover from crises misses the point – in many places, political capture and rent-seeking have led to the establishment of terrible economic institutions that might require an external actor to remove. There are plenty of reasons and ways to criticise the blanket application of conditionality and neoliberal orthodoxy, but the worst is to do so with the blanket (unspoken, but present) assumption that they’re always wrong.

3.       I love it when Branko Milanovic goes off on philosophical tangents about the meaning of economic or pseudo-economic terms, like ‘perfectly unproductive labour’, as he does here. In doing so, he takes us on  a fascinating trip around the history of economic thought, here touching on Marx and Adam Smith. I love that Branko both understands Marx intimately and isn’t afraid to discuss him completely seriously, risky business for economists these days.

4.       Chris Blattman reproduces this brilliant graphic from Stefano DellaVigna and Devin Pope, summarising the results of their investigation into the effects on effort of encouragement and financial incentives (write-up). They find that substantial financial remuneration, linked to performance stimulates much higher performance. But before you despair that we’re all greedy rationalists, here’s a wrinkle: the task they set the people they experimented on was perfectly menial (unproductive?) work – cross-country regression analysis (just kidding, it was typing ‘a’ and ‘b’ repeatedly in alternation). I suspect that the results would be very different for work which has strong intrinsic motivation, like economics. Or cricket.

5.       The rise of renewables have made the existing grid infrastructure for energy provision in most of the developed world somewhere between ‘slightly’ and ‘hopelessly’ out of date. The Western part of the US is closer to the ‘hopelessly’ side of this spectrum. Vox investigates. One of the very exciting possibilities in development is that someone will properly fund an absolutely cutting edge energy provision grid in a developing country, one of the rare occasions where a poor country can immediately leap to the technology frontier.

6.       The basic income referendum in Switzerland is scheduled to a resounding ‘no’.

7.       And finally – I would consider any of these popular wedding playlist songs grounds for an instant annulment, except number 7, though I wonder if all the people playing Billie Jean at their wedding have ever listened to the lyrics. “The kid is not my son” has to be close to the top of the list of things you should never say at a wedding. Via Tom Coward, he’s a better song than most of these, with an amazing video. From the DRC: Karibu ya Bintou (again – not a wedding song…)

 Have a great weekend, everyone!

 R

Hi all,

 Though I’m technically off work today, celebrating the Queen’s birthday (I’ve spent it wearing a bejewelled hat and sitting in a gold chair, thinking about poverty), I decided to log on to write this week’s links: Sri Lanka’s not-historically-appalling start to the second test against England (anyone who mentions the first test gets cut from this mailing list – so be warned, those of you crafting clever insults) has put me in a good mood, and I’ve spent the last couple of hours in the park, lying in the sun and reading. What a day.

 1.       Since I’m in a good mood, let’s start with something happy. How often does a DFID-funded (or part-funded, I’m not hugely sure) get a glowing representation in the popular media? Well here’s Planet Money doing their thing with the YouWin! Competition in Nigeria (transcript), which has featured in these links before. To recap: David McKenzie ran an RCT giving large grants of around $50,000 to Nigerian entrepreneurs – selected largely at random – and sat back to monitor the results. They were good. How good? Chris Blattman suggested it might be the best development intervention ever (I still love David’s chuckling response to that: “ha, nooooo. That’s migration.”) The NPR guys interview David, Chris, Ngozi Okonjo-Iweala and, most importantly, one of the winners, Lariat Alhassan, and paint a glowing picture of the work (as an aside, read David’s full paper – it’s amazing).

2.       Speaking of YouWin! David has milked another brilliant paper from the data: he surveys both the competition winners and those who weren’t successful, and asks them how much additional success they think the winners got as a result of winning the competition. Interestingly, both the winners and the rest of the field dramatically overstate the gain to winning the competition. This is a nice demonstration of a broader point: firms aren’t always the best judge of what their biggest constraints are, or how constraining they are.

3.       About two weeks ago, CGD asked what the best way  to allocate refugees around the world – looking at this as an issue of equity. Tim Harford reports on a really interesting alternative approach: looking at it as a question of maximising efficiency, and reports on a really interesting idea, using matching models to allocate refugees to places. These models look at what the refugees skills and contribution might be (on an individual/family basis) and what their needs are. It then looks at what the needs and capacities of different potential locations for them are, and devises a way of matching refugees to location that maximises collective welfare. The lovely thing about this approach, as he notes, is that it is completely independent of the politically toxic question of how many to accept – and so the piece is a nice complement to Nancy et. al.

4.       So this, definitely isn’t going to end badly: an Israeli firm has come up with facial recognition software to ‘predict’ murderers, paedophiles and terrorists. I’m going to call bullshit anyway, but even if they have, I’m fairly sure a whole bunch of dystopian novels start from this premise.

5.       A really good profile of Dani Rodrik. I don’t always agree with his papers, but he consistently asks some of the most interesting questions in economics, and the profile gets it right: he’s a born dissenter, never just willing to go with popular opinion without giving it a close reading first.

6.       This week in over-sharing meets data journalism: an American blogger tracks every the time she cried over a year, noting the duration, intensity and cause of the weeping. It’s interesting in a creepy, voyeuristic kind of way.

7.       Lastly – an absolutely amazing, moving account of a Japanese translator’s mission to create a Japanese-language version of Stoner by John Williams, after being diagnosed with terminal cancer. He died after completing all but the last page. Read it.

 Have a great long weekend, everyone!

 R