The CSAE Blog

Hi all,

This week’s links will be leaning heavily on spellcheck and recycled wit. I’ve just “returned” from my first tranche of paternity leave, in inverted commas since my commute is around 8 feet and the baby’s nappy changing station is, at a certain angle, the background to my Zoom meetings. (I also have a new occasional officemate, one who likes staring up at me while I type and occasionally loudly passes wind to undercut whatever profound thought I’m trying to have).  I have a few observations. First: sleep is deeply, deeply underrated. Much like oxygen, it’s most appreciated when in short supply, and the effects of too little of either are liable to turn you into living version of the confused Nick Young gif. Second: a surprising number of TV shows improve for being watched on mute, at 3am, with a wailing baby being rocked back to sleep in your arms (Marvel’s Agents of S.H.I.E.L.D. in particular benefits from a lack of critical thought and, indeed, attention). On a similar note, Robelinda2 on YouTube has probably improve the welfare of parents of young children (well, at least the cricket-lovers among them) substantially enough to be on the Queen’s Birthday Honours list. Thirdly, no amount of sleep deprivation makes LeBron James any less incredible. And lastly, no matter how much you – correctly – predict about what becoming a parent will feel like, it will still feel completely unlike anything you could have imagined.

1. This week’s links are going to be a hodgepodge, as you’d expect the results of attempting to boil down around 2,500 articles from my Old Reader feed into seven pithy paragraphs on a few hours of sleep a week. But as always, I can rely on Tim Harford to write something brilliant that I barely need to summarise. His new book, How to Make the World Add Up, is out and to celebrate the occasion he summarises five lessons about statistics we should be learning from the Coronavirus pandemic. It’s all good, but one particularly important point he makes is that at times of crisis, the value of having a reliable system of collecting basic information routinely takes on an outsize importance. The UK’s Office of National Statistics produces a huge amount of basic, routine data that allows us to analyse and understand novel events with greater confidence. We can say something about who has suffered disproportionately from coronavirus in large part because we have good information on how things look in ‘normal’ times. In developing countries, this basic statistical bedrock is normally riddled with potholes or missing altogether; a strategy for building a world better able to handle the next pandemic needs to do something about that.
2. Sticking with Coronavirus for a moment, three pieces from Project Syndicate I really liked. First, Kaushik Basu (who always seems to have something simple but profound to say) demonstrates how the behavioural analysis at the heart of economics is necessary to understand how the virus spreads – and how hard it is to separate the characteristics of the virus from the behaviours of the population it’s moving in. Secondly, Nancy Birdsall’s great piece on the costs of the pandemic on that tranche of global strugglers just above the extreme poor, and the implications of the virus on their horizons – which may shape political outcomes in many places. And finally, Penny Goldberg presents an alternative path to poverty reduction in a world of (partly Covid-induced) deglobalisation, with an emphasis on regionalism and tackling domestic inequality.
3. Right before I left, the Doing Business indicators was engulfed in flames, while colleagues at CGD were very politely refraining from fanning the fire too vigorously. Vijaya Ramachandran toasts her marshmallows on the embers of the survey here, asking four basic questions that should determine whether and how the indicators should be resurrected. The depth of the problems with the project are clear from how fundamental the questions Vij is asking are: is the scientific basis for the index sound? Can its data be handled in a way that inspires trust and is impartial? Should it inform Bank operations? There’s a good case that the Bank should be thinking systematically about how the private sector functions in developing countries; there’s also a good case that it should not be like this.
4. If all that supports my priors, it’s only fair to report on something that seriously undermines them. I’ve often argued that interventions looking to train developing country enterprises are completely pointless, or at least not useful enough to be worth spending much on; it turns out I may have been rather over-egging the pudding. David McKenzie, who knows more about this than virtually anyone alive, points out that the evidence suggests that they do achieve something – just maybe not a huge amount. I still query whether this means we should do more of this (it seems like a small return for a lot of spending and design effort), but I have to now accept I have probably been too negative about these programmes in the past. Also from Development Impact, Markus summarises a paper which in turn summarises 27,000 papers – and tells us how partial research on Africa really is.
5. There was far, far too much good stuff on VoxEU while I was away to do it justice, but here’s a whistlestop tour: Abi Adams and co on how working from home has worked surprising well, but also exacerbated existing inequalities; Nick Bloom and co on how Americans are using the commuting time they’ve saved (though Twitter would like you to believe it’s all gone into sourdough, it’s mainly been spent working on their main job); Amma Panin and co. on their cool paper showing that formal insurance in Ghana crowds out religious donations; and Arun Advani and co. on how migration has shaped inequality at the top of the income distribution in the UK (a lot, and indicates that migrants are disproportionately being recruited into the very highest income occupations, doing things the domestic labour force is not supplying adequately).  
6. VoxDev wasn’t exactly quiet while I was away, either. I really liked this paper (with a genuinely brilliant bunch of co-authors) on the impact of interning in management roles on employment in Ethiopia. One thing that struck me: for the self-employed interning in better firms led to higher earnings, but there was no such effect among the wage-employed – implying that firms’ selection processes are not sophisticated enough to distinguish between candidates with more or less useful experience – which certainly chimes with a lot of recruitment I’ve seen in the UK. The other really interesting paper I spotted was Jonathan Weigel’s piece that suggests that taxation in the DRC leads to greater engagement with the state (I think I was meant to be discussant on this at the CSAE Conference before it was cancelled). It is very good. Read it right to the end, he is very careful in discussing where he expects these results to generalise to.
7. I normally end with some bit of pop culture that reveals my age and/or unhealthy obsession with 1980/90s teen comedies, but the last four weeks have seen a dramatic decline in my ability to find time for or process fun reading; so I’m afraid I’m leaving you with Planet Money – though at least it’s all about basketball. The gang meet Kirk Goldsberry – one of my favourite hoops writers since his Grantland days – an ex-Harvard professor who uses his spatial analysis for good now, analysing basketball data. It’s a good look into the data-driven revolution in basketball, but it omits one causal relationship that trumps all others: when you have LeBron James, the championship runs through you. Fun fact: his team made it to 9 of the last 10 NBA Finals (three different teams!), and in 8 of the 9 Finals series that have been completed, the series MVP was either LeBron James or the man tasked as his primary defender. The King stay the King.

Have a great weekend, everyone!

R

Hi all,

It’s all change heading into this long weekend. As we emerge on the other end of it, DFID will no longer exist, being replaced by the new Foreign, Commonwealth, and Development Office. I’ve vented my feelings about that change in previous editions of the links, and have taken a more constructive and forward looking approach in my day job (here, and here). There hasn’t been much public writing that sets out concretely what a separate development agency changed about how the UK does aid, and the international landscape, beyond this piece from Bond. If I had to pick one thing I think we got from a separate agency devoted to development, it would be an appreciation of deep expertise and facility with evidence. Certainly, it was uneven, and not always followed, and we could always do better. But having an organisation with a simple, well-defined vision meant that there was an expectation that people develop deep knowledge. That must be protected, and nurtured.

It’s not the only big change I’m gearing up for (it’s been a disorienting week – for the first time in my life, I was glad there was no basketball) – we’re expecting a baby imminently, and this is likely to be the last links email for around four weeks. I had considered keeping them going through the first portion of my paternity leave, but have been reliably informed it would descend to incoherent gibberish and discussions about the bowel movements of a tiny human, so the break is for the best. Wish us luck!

1. For the second week in a row, I’m going to have to use the “he’s already dead gif”: the Doing Busines survey took an absolute beating this week. The World Bank announced that the DB survey was being suspended while ‘irregularities’ in the methodology of the rankings it produces; it turns out that the rankings were manipulated to favour certain countries (Saudi Arabia have been named in this WSJ report) for political reasons – Justin Sandefur explains for those behind the paywall here. This is not even the first time evidence of such manipulation has been uncovered, as Justin explains in this thread (I have no idea how he’s resisted gloating, given that his scholarly takedown of the indicators resulted in his being branded a ‘Marxist’ by a then-Bank economist). And to make matters worse, even without any methodological manipulations, the methodology underpinning the indicators reveals an anti-tax, anti-regulation bias that doesn’t square with World Bank operations in many of the countries covered, as alluded to in the last paragraph of the coverage from the FT. Add this to the already-established empirical reality that the indicator scores bear virtually no relation to actual practice in the countries they purportedly rate, and it’s this must surely sound the death knell for them. Even Wolverine would struggle to get up after that.
2. Some good practice, as an antidote. I recently praised Andrew Haldane’s skills as an economic communicator, but he has absolutely nothing on the Bank of Jamaica. If we don’t get a musical video from Andrew Bailey soon, I’m going to be sorely disappointed.
3. This interview of Jason Furman by Tyler Cowen is absolutely superb: Cowen starts with some important, difficult questions and basically never lets up; Furman totally rises to the challenge. I loved this sentence: “I think the China shock literature is a fantastic contribution to labor economics and is less important in thinking about trade.” What he’s talking about is the (excellent) research that shows that China’s rapid entry and dominance in certain sectors of the global economy had lasting negative consequences for workers in richer countries who worked in the same sectors. Furman, correctly in my opinion, identifies this finding as telling us more about the failure of developed countries to protect workers, their skills and their ability to cope with a changing economy, than about the deleterious effects of trade. That was a policy choice, not a deus ex machina. The problem is that much of the disinvestment in protection for the vulnerable (see also legal aid in the UK) takes time to really undermine our structural resilience. The costs are borne later, when it’s too late to fix.
4. Over the last couple of years, I’ve been becoming more and more interested in biases that affect the way we think about statistics and probabilities – initially I wanted to research them, but have settled into trying to understand them better, and to spot them in my own behaviour. This BBC piece on the Gambler’s fallacy (the belief that the odds of a coin coming up tails is somehow higher after a sequence of five heads than after a mixed sequence) is excellent, demonstrating how pervasive it is. The thing about biases that people often struggle to understand is that knowing about them does not really make one less prone to them. They’re buried in deep. Related: the last edition of the Planet Money Summer School, on risk (transcript).
5. Working alongside Dave Evans and Charles Kenny is a bit running laps on the track as Kenenisa Bekele. You’ve just finished stretching and they’re on the fourth lap: in this case, Charles’s prolific streak (is it a streak if it’s decades-long?) continues with this piece on how the FCDO should approach global public goods. Read it. I agree with virtually every word.
6. And I couldn’t go into paternity leave without leaving you with some Tim Harford to read, could I? This piece on self-fulfilling prophecies is full of his typically vivid stories and sharp analysis. But remember: some things are so big that no amount of visualisation or wishful thinking can make them go away.
7. And a bit more reading for you all: the CGD summer reading list. While vanity nudges me to suggest you check out my recommendation, the one that I have begun to act on is from Nancy Birdsall, Zora Neale Hurston. Let’s see how much of that I get through with the baby. If I get a chapter read in the next month, I’ll be happy (and this is from someone who averages between two and four books a month…). If the books don’t work out with the baby, I’ve got a backup: the Ringer has inspired me to create a collection of every great teen movie of the last 60 years, including the greatest of them all, one of the few greats that isn’t based on a literary classic. And just to end on an on-brand note, the numbers behind them have been crunched: the average “teenager” in Grease was played by a 29 year old; Friday the 13^th 7, though, clocks in at just 26 years old, the whippersnappers.

Have a great few weeks, everyone! I will eventually emerge, bleary-eyed, armed with more economics, but till then, take care.

R

Hi all,

I’ve just set up a little office in our new flat, in a concession to the new balance between home and office working the lucky among us are facing. Previously, my wife and I were engaged in a constant turf war over the dining table, which I would inevitably lose, ending up banished to take my meetings while sitting in bed, usually ensconced in her (unexpectedly comfortable) pregnancy pillow – such is my professional façade during coronavirus. I’d expected a burst of productivity (perhaps I’d finish a new note today?); sadly, Zak Crawley’s maiden test century, this great Economist long read on Jimmy Anderson, an empirical analysis of swearing in the NBA, and the discovery that CJ McCollum is my spirit animal have rather put paid to such dreams. Still it’s nice to have a little working space: Woolridge and Edwin Hutchins are an arms’ length away, and I finally know where the pens are. What else do I need here? As a home-office novice, I’m taking any and all suggestions.

1. One thing everyone needs more of in their life is Michael Clemens on migration; his two new papers (one with Mariapia Mendola) confirm this is no hyperbole. I know something about migration, it being a central part of my own life and my family history, and having worked on it from the policy side, on and off, for many years. Despite this, there is a *lot* I have been wrong about. I was always sceptical of the ‘migration life cycle’, the idea that emigration increases as countries become richer, before eventually falling. Surely – surely! – as things are getting better, people are less likely to leave? A great paper is one that not only puts you right, but helps you understand why you weren’t right before and guides you towards something closer to the truth. That’s what Michael and Mariapia manage here: they not only document the empirical reality of the migration life cycle both across countries and within countries over time; they also identify the cognitive trap I was falling into: Simpson’s Paradox. It turns out that for both the low- and high-education groups within a country, migration doesn’t really increase with income; what’s happening is that development moves people from the first group – who emigrate more rarely – to the second, who emigrate more regularly, so what happens at the country level is different to what happens for each group within it. It really is a wonderful paper, and comes with further reading: a companion paper, an excellent summary blog, and a beautiful discussion relating Simpson’s Paradox to causality by Judea Pearl.
2. Mark Twain probably didn’t say “history doesn’t repeat itself, but it often rhymes”, but whoever falsely attributed the quote to him to add some instant credibility to it had a point. Last week I talked about how research shows that the process of truly understanding and taking advantage of an innovation takes time; this week, the same principle is discussed in action with respect to women’s suffrage, celebrating it’s centenary in the US this year. Though an enormous step forward for democracy, it didn’t exert a substantial sway on electoral politics for, perhaps, sixty years. Of course, sometimes technological change burns fast and dies out – or at least that is how Robert Gordon thinks ICT has entered the productivity statistics (Solow would, of course, disagree).
3. I really liked this study by Jing Cai and co-authors – it investigates insurance among farmers in China, and demonstrates that for farmers with low levels of financial literacy, the benefits of insurance only become salient when they actually see payouts during a bad year – whether to themselves or their peers. This shouldn’t be surprising – virtually everyone I know (myself included) makes bad – and inconsistent – decisions about the insurance they purchase, and mostly never realise it, because most of the time, it isn’t needed.
4. I grew up in Hong Kong, and have always found it mystifying that London doesn’t have more skyscrapers, or less ugly ones; clearly, economics needs a better theory of skyscrapers, and it starts here.
5. This is an uncharacteristically literary Links round-up; I misquoted Mark Twain earlier, and I shall now misquote Hesiod: instead of rent-seeking, it is more virtuous to compete and generate wealth through ingenuity and toil. Hesiod worked this out in the 8^th Century BC (as Planet Money discuss here, with transcript); a couple of thousand years later, it’s still true that the worst among us violate his advice.
6. To annoy Matt (if you don’t follow him on Twitter – why not? Stop wasting your online life!), with whom I’ll be – one day – launching a new podcast, VoxEU rank programming languages for economics. Apparently the hours I spent over the summer learning R were well spent. I did a control-F, Matt – not a mention of Stata anywhere.
7. Let’s keep to the literary theme to close the links: this is best discussion of what it’s like to have loved The Catcher in The Rye as a teenager I’ve read. It perfectly captures that defensiveness that seizes on one when someone (rightly) points out that Holden Caulfield was a bit of a spanner; my own kid (eventually maybe kids) might one day read it, and loathe him. And finally, speaking of loathing, did you know Jennifer Grey and Patrick Swayze loathed each other? (and if you don’t get that reference, I’m afraid you’re a young person). The Ringer has the inside scoop on this and many other movie-set feuds.

Have a great weekend, everyone!

R

Hi all,

I’d say that I sit here in the kitchen sink, but it’s more accurate to say that I’ve no idea where the kitchen sink is; I’m surrounded by boxes of books, (so, so many books), multiple packs of playing cards, several editions of Pandemic and a tsunami of clothes. I moved house earlier this week, and the links are going to reflect their environment: chaotic, half-thought-through and absolutely rammed with reading material. For those interested, I can confirm that moving house during an unprecedented heatwave, with an 8-month pregnant wife, during a global pandemic is not a walk in the park. It’s a recipe for chaos only slightly less pronounced than this Pakistan side, or the A-level results. Anyway, to the links:

1. A quick diversion before we start. The A-levels chaos has inspired a lot of very, very bad coverage from all angles, but I liked this piece: a concerned father dug into the algorithm (ahead of time) and predicted what would happen. He explains very clearly why the statistical adjustment can be unfair, even if based on reasonable assumptions. The analogies he uses to explain it are really good, much better than most of the journalists have come up with.
2. The best thing about Tyler Cowen’s Conversations series is, when he’s not asking gimmicky questions about whether satsumas are underrated or overrated, his habit of really pushing his interviewees to explain the ‘why’ behind all their research: why things happen the way they do, why some alternative explanation isn’t true, why it’s taken so long to work something out. It brings out the best in some of his interviewees, and I think it does with Nick Bloom here. He pushes Bloom hard on why productivity among scientists seems to be falling, and what the value of a management consultant (“someone who borrows your watch to tell you the time”) is. I’m particularly taken by Bloom’s suggestion that much of what appears obvious ex post isn’t beforehand. I’ve seen a version of this many times with friends: people who are very smart and frustrated that others don’t notice things they consider obvious. It’s a constant battle to remember that we’ve all noticed different things, and what seems obvious to one of us may be a complete blind spot for the rest.
3. Related: Dietz Vollrath on Silicon Valley and innovation, pointing out the limitations of the ‘great man’ theory of innovation, and the importance of pre-existing networks of collaborators and thinkers; and this very good VoxEU piece on the pace of technological adoption. The essential point seems to be that after an innovation is made, it takes a long time to work out how best to take advantage of it, even when it’s something as concrete and obvious as a new machine for production – you still have to work out how to structure your factory around this new production process.
4. This has been a bad week for immigration coverage, with the TV channels chasing after people risking their lives in the channel for a cheap bit of Farage-lite coverage. I’m not going to link that gutter journalism, but instead, here’s an antidote: Matt Yglesias on Kamala Harris as an example of the contribution of migration to US life (both her parents were academics who came to the US to study and become researchers). And on the subject of the US elections, here’s FiveThirtyEight’s model, which – rather worryingly – gives Biden the same chance it gave Clinton last time – and that’s not factoring in the gaming going on.
5. Penny Goldberg continues to live her best life post-World Bank, with another really interesting piece: in an era of deglobalisation, developing countries need to do much more redistribution to create internal markets capable of sustaining poverty reduction. One the points I tried to make in every country I ever visited while in the Chief Economist’s Office in DFID was that a big reason why most firms in developing countries struggle was simply that there was hardly anyone to sell much to. Penny says it rather more convincingly.
6. Next time someone says economic assumptions are unrealistic, show them this: classical economic theory with rational actors near-perfectly predicts price movements in a series of lab experiments. I’ve helped run one of these myself and it works, almost like magic. As Tabarrok says, the market works whether or not the people in it understand it.
7. There comes a point in life when even re-watching classic episodes of the Simpsons (like Flaming Moe’s or Lisa’s Rival) loses its lustre; even the gifs become tired. But there is always a deeper rabbit hole to go down, as this New Yorker article shows. Pop culture may be the last link to normalcy we still have, which explains why I’m still reading articles about Scott Pilgrim vs. The World, published for no reason other than just needing a break from coronavirus, political idiocy and 2020.

Have a great weekend, everyone!

R

Hi all,

What do you do in weather like this? Today is a day for lying in the park, under a shady tree, with a good book (or links round-up) and a cold glass of something crisp and refreshing (pandemic allowing, of course).Of course best of all would be sitting in the stands of Old Trafford, watching Pakistan work their magic, weaving a spell around the England batsmen with the latest of their conveyor belt of brilliant and exciting quicks and leg-spinners. I can’t remember a single Pakistan test team that didn’t have at least one thrilling bowler; this one seems to have at least three. What a team. Totally incompatible with productivity in work, but some sacrifices have to be made. The return of sports has made this summer so much better; life has that little bit less savour without cricket or Giannis politely explaining his bad intentions to a referee.

1. If you read just one thing this week, let it be this absolutely superb interview of Amartya Sen by Angus Deaton and Tim Besley. Sen’s life as an economist has been just extraordinary. His peers, sparring partners and collaborators are a who’s who of foundational figures in the discipline: supervised by Joan Robinson (with whom he had some profound disagreements), encounters with Maurice Dobbs, AE Pigou, Piero Sraffa… all brilliant thinkers, many of whom have been sadly forgotten. What is really striking about the interview, and Sen’s recollections of a life of economic arguments is how involved he and his peers were with the intellectual and philosophical foundations of economics as a discipline, something which has largely disappeared from economic discourse. He cites the (sadly departed) Tony Atkinson as the author of the last really interesting piece on welfare theory, one which bemoans its disappearance from economics. These aren’t idle discussions to have while we’re working out how to change the world; they are the basis on which we change it. Neglecting what development is, and means, and what progress is, and how to think about welfare makes the discipline that much weaker.
2. Most economists of my vintage (and earlier) owe an intellectual debt to both Sen and Deaton, which doesn’t mean you need to keep agreeing with them today. There’s been a lot of pearl-clutching on Twitter at Deaton’s latest paper criticising the practice of using RCTs in economics. I recommend reading the whole thing. There are sections I very much disagree with – especially on ethics and ‘big vs. small’ (as Rachel G once said to me, “there is nothing small about problems like maternal healthcare or education”). But other parts are important: section 2 on statistical inference is a must-read. Randomisation does not absolve you from good statistical practice. Similarly, the section on external validity is also very good; identification is not a substitute for a theory of causality that generates an understanding of why and how things work – a causal framework. Good studies that use RCTs pay attention to these things. In a sense, the real fight he wants to have is not downgrading RCTs, but upgrading other kinds of careful research. Being an RCT is not a headstart to quality, just a different starting point.
3. Speaking of which, I really, really liked this study by Bachas, Gadenne and Jensen on indirect (consumption) taxes in developing countries. It’s very good. It makes a careful and convincing case for the use of consumption taxes as part of a progressive and effective taxation regime in countries with large informal sectors – so long as richer people prefer to shop in the formal sector rather than buy equivalent goods in the informal sector (i.e. that Engels curves are downward sloping).
4. This was excellent too: Euan Ritchie runs the CDI with a million different permutations and shows that the findings are pretty consistent – and not an artefact of the weights selected. And while I’m linking to CGD stuff – I rather liked this paper Stefan and I wrote about the impending merger: borrowing some more woodland animals from Isaiah Berlin’s brilliant essay about Tolstoy.
5. “The truth is paywalled, but the lies are free”. I liked this essay, which starts from this insight, but I was disappointed that it didn’t really go deep into the economics of this statement. The truth is paywalled because it’s a public good that it is inappropriate for the state to be sole funder of. The benefits of the truth being common currency are widely shared, which means those that take the effort to find it and report it find it do not benefit (expect intrinsically) from it unless it’s restricted in supply and they get paid for its use. On the other hand, the lies are private goods: the investment in generating them is repaid by their role in advancing an agenda that benefits their progenitor, which increases with their circulation. It thus makes sense to produce it at a cost and then circulate it as widely as possible, for free, to maximise take-up. The political economy of bullsh*t is important, and I’m not convinced anyone has nailed it yet.
6. Raghu Rajan takes the contrarian view that we should not be spending like crazy to keep the economy afloat. I’m not sure I agree with his welfare analysis in its entirety, but it makes serious arguments that should be taken seriously.
7. Finally, via Huw, it has finally happened: Taylor Swift has become an economics meme. Apparently, she has been studying a fairly advanced economics course and has taken to coordinating her outfits with the most recent textbook she’s read (yes, yes I know this is a thing). And if that doesn’t make you happy, try Curbside Larry – the greatest advert for a public library in history.

Have a great weekend, everyone!

R

Hi all,

You’ll have to forgive the links for being so late today. I was going to send them earlier, but I was busy melting into a puddle of sweat and tea; we really do have to get a grip on this climate change thing. I’ve not been in a room so hot, and so ill-equipped for heat, since I lived through a summer-long power cut in Zanzibar a decade ago. I’d have hit the beach, pool, or literally any other cooler place were it not for the raging pandemic around me. 2020, amirite? Still there are some small mercies in the middle of this weirdest year (and it really is the weirdest year – “worrying about Britney Spears’s suffrage” was not one of my January predictions); continuity is still available if you know where to look. LeBron James, aged 921, is still dominating a league made up of just about the greatest athletes in history, because robots don’t age. The NBA is back, and even without fans, it’s amazing. One day will find a thesaurus comprehensive enough to save me from repetition in describing his brilliance. For now, it’s enough just to be able to watch, even if the NBA bubble set-up feels like an early iteration of The Running Man.

1. Fair warning: the links are going to be depressing before they get optimistic. During the lockdown in the UK, I talked a lot to my wife about how we thought other people were experiencing the pandemic. Though it was difficult (note: try not to go through a pregnancy during a raging pandemic), we knew we were lucky – both to still have jobs (I even changed jobs during it!) and able to have groceries delivered and the like. Not everyone was lucky: this great piece by Kathryn Beegle looks at the impact of lockdown on domestic violence in India. They are large and positive, and incredibly depressing. The impact of the pandemic has been asymmetric in many, many ways. Policy, too, has helped it punch down. FiveThirtyEight look at the disjunction between jobs restarting and returning to in-person performance and childcare, and speculate that the pandemic, and its policy response, may push a generation of mothers out of the labour force. More generally, Tim Harford speculates on which scars from the pandemic will mark us permanently. And if you want still more miserable reading, Claudia Sahm’s takedown of the economics profession.
2. Okay, that first link was a massive downer, so if you need a breather, here’s Gore Vidal being interviewed by Ali G, and somehow keeping enough patience to explain that he was not, in fact Vidal Sassoon. Still not as good as Boutros Boutros Boutros Ghali rapping with him (Ali G, that is, not Gore Vidal).
3. So people are generally terrible, but they do often get better over time. As a reminder of this, it’s edifying to look at this survey from 1969, which straight up asked whether homosexuals were ‘better or worse’ than doctors who basically killed their patients.
4. In VoxDev Erica Bosio and co-authors look at the strength of legal restrictions on public procurement and find that stronger legal restrictions on procurement processes are positively correlated with the quality of product procured in lower-capacity countries, they’re negatively associated with performance in higher capacity countries, presumably because there’s some sort of raise-the-floor, lower-the-ceiling effect going on. That said, what rules we do have seem pretty important. Otherwise you might, I dunno, buy a satellite from a company that make pencils or something.
5. In a kind of sequel of sorts to his chat with Melissa Dell, Tyler Cowen talks persistence with Nathan Nunn. Two good bits: Nunn talks about Morgan Kelly’s excellent paper The Standard Errors of Persistence, which picks a bone with much of the literature on historical persistence; and when Nunn picks countries for success on the basis of the things the persistence literature might prize. It gives you an idea of how much else also matters that his choices include the DRC and Zanzibar.  
6. And just to continue this week’s theme of everything being terrible: a piece on VoxEU suggests that while outright racism is stigmatised enough to disincentivise people from expressing outright racist views, all they need is a tiny bit of camouflage before they’re back out there talking about them furriners stealing *our* jobs.
7. Ok – so that was a massive downer of a links round-up, blame the pandemic and stifling heat. To send you all into the weekend on a more cheerful note, two completely pointless lists that are nevertheless brilliant. First, a list of the 26 best pop culture babies, which underrates Baby Yoda, Maggie Simpson and the baby on the cover of Nevermind, and completely omits the Muppet Babies… so actually maybe it will just enrage you? And to make up for that misfire, an actually good list of the greatest 40 AC/DC songs. Angus Young once complained that people were being disrespectful when they complained that ‘DC had released eleven albums that all sounded the same. “We’ve released twelve albums”, he explained.

Have a great weekend, everyone!

R

Hi all,

If this week’s links have the tired air of a drunk trying to clean their apartment the day after a party, it’s for a reason (and no, it’s not because I’ve been tidying my apartment after a drunken party); rather, I spent about 8 hours on the road today , with the aircon on the blink, trying to follow England’s progress towards respectability in the third test (how sad when a floor for performance becomes an aspiration). The consequence is a pounding headache and an enormous craving for the glass of wine that is some seven or so paragraphs away from consoling me. Forgive me while I race through them.

1. Most of my career has been spent as a kind of professional sceptic, employed to look askance at research, funding proposals and policy, to work out why its wrong, or at least can be improved. As a result, I’ve spent a large chunk of my waking life disagreeing with people (my wife might say that this is not confined to work). I found this piece by Andrew Gelman about why frustrated negativity is better (in some senses) than positive disagreements. He argues that to agree with someone, you don’t need to put them through any scrutiny; but to say someone is wrong about something you need to be able to articulate what they’re wrong about and why.  I have a lot of sympathy with him: being the person in the corner going “Can you take me through that massive gap in your logic that you just skirted around” isn’t easy. But I think he’s wrong in one respect: if your aim is change what someone is doing (rather than simply expose their wrongness to third parties), you can’t simply go around with an arched eyebrow and a death-stare. You have to build some common ground and rapport before you can push them in uncomfortable directions.
2. Of course, sometimes the objective really is to just publicly lay the smack down on someone, as the Economist does here to Tanzania’s growth figures, which might be better suited for the fiction shelves than the World Economic Outlook. Shockingly, it turns out, the country that tried to make questioning official statistics a crime may be cooking the books a bit.
3. I’ve generally tried to avoid making this e-mail Now That’s What I Call CGD Blogging compilation tape, but some weeks you just have to bow to the inevitable. Three pieces I particularly want to highlight: first, Charles Kenny’s Manifesto for Globalization. It’s brilliant. I particularly like his point that the ‘sign’ of globalisation with respect to welfare has changed from being overwhelmingly negative to being positive for developing countries; efforts to curtail it are in some ways an attempt to bake in historical inequities, as well as being counterproductive. Charles co-wrote another piece, with Prashant Yadav and me, looking at the ways in which the attention paid to supply chains post-Covid is getting things wrong, and suggesting DFIs could be part of the answer. Charles doesn’t often say that about DFIs, and this third piece of the week, with Vijaya Ramachandran and Scott Morris makes the case for their reimagining. I used to think I was productive, before I started getting alerts every time he publishes something.
4. I mentioned Covid, so I’ll lean into it, briefly. This brilliant piece from Maggie Koerth looks at the muddy terrain of individual decision-making during Covid. There’s not much about biases, not much about how we calculate payoffs, just consideration of how it’s incredibly hard to work out what’s right and what’s not when there is so much grey and so little black and white. Also on FiveThirtyEight, because it’s not the links without some depressing facts about inequality, check out the stunning racial disparity in the availability of testing in the US.
5. This week in Planet Money’s Econ summer school: how a drug running operation teaches us about prices, market structure and organisational theory. Very The Wire, and I mean that as a deep compliment (transcript).
6. Remember aid fungibility? It was the subject of massive amounts of discussion when budget support was all the rage, and always negatively: if we fund X, then a Government can just misspend domestic funds equivalent to that and the world is no better off. A clever lab experiment suggests such fears were largely overplayed. Aid is fungible, but doesn’t wholly crowd out ‘good’ spending.
7. So, as mentioned, I’m exhausted, and I need bubblegum for my brain. Whenever I feel this way I now go World Birds on twitter, clearly the best thing the internet has ever achieved (and I’m including the Spongebob gifs). If you’re still in a bad mood after this, I can’t help you.

Have a great weekend, everyone!

R

Hi all,

It is a week for rare occurrences. At the moment, it’s taking every ounce of self-restraint I have not to jump in the car and drive straight to the Peak District, where for only the second time ever recorded in the UK, a Lammergeier has been spotted. In birding terms, this isn’t a million miles from having a tiger stroll down Regent Street – the only place I’ve seen a Lammergeier is in Ethiopia, while hiking the Simiens and trying to avoid huge herds of Geladas (who have teeth like this, despite being vegetarian, essentially making them the animal world’s equivalent of Count Duckula). It’s not just the drive that’s stopping me though, but the equally rare prospect of England managing to crack the 400 barrier in the first innings of a test. Apparently, I should have kept my mouth shut as just as I wrote that, Stokes departs for 176, with England still 5 runs away. Lest I further jinx the team, let’s go straight into the links.

1. How much of the world do you need to explain before your explanation matters? In his interview with Melissa Dell, Tyler Cowen presses her on the limits to what her work can say, and I really like the way she frames her answers. Melissa’s work looks at how institutions and institutional capacities from deep in the past can explain patterns of economic development today, but as she points out, these explanations are necessarily partial because the world is a really complicated place. What’s more, persistence is only visible (or rather studied) in places where there hasn’t been a massive interceding disruption, which isn’t surprising, but is important for understanding and contextualising the results. The common criticism of this kind of research is that the policy implications amount to ‘have a different history’; but perhaps this points to a different response: have a revolution and break the institutions that hold you back.
2. That tees me up to go into my first proper rant of the week. Planet Money ran two really good pieces on representation this week, the first about the absolutely pitiful racial diversity of the economics profession (transcript), and the other about Hollywood (transcript). I really liked the second one, because it gets into one of the mechanisms by which diversity gets squashed, and it’s consequences. One of the reasons good film scripts were not being made was that many of the gatekeepers who decide what gets sent to the big bosses decided that they were ‘too out there’ or of niche interest to move up the chain, despite thinking they were really good scripts. A simple mechanism helped (partially) break this bad equilibrium: someone asked a bunch of junior executives to list their favourite unmade scripts, with no qualifiers about who would make it, or star in it, or fund it. And it turned out that many of the most popular scripts were not just universally highly rated, they were from Hollywood outsiders. Within three years of the list going public one of them, Juno, had won an Oscar. Diversity doesn’t just matter intrinsically, it helps find things we otherwise might not. This isn’t a new insight, it just turns out it’s really hard to act on.
3. Post-World Bank Penny Goldberg continues to be on a roll. Her latest Project Syndicate piece makes the case for removing global restrictions to trade, immigration and capital flows. If the aim is a better world, it probably isn’t complete without this.
4. I really liked this piece by David McKenzie on how to think about information interventions, and in particular his quick thought experiment near the end, which demonstrates why you should rarely expect really large effect sizes. The one quibble I have is that this is not generally a good justification for juicing up the sample size: the size of the sample should depend instead on the minimal economically important effect size, not what effect size will get you a significant result for a small effect. If an effect size isn’t big enough to matter, then does that second asterisk in your table of results really make a difference?
5. A nice study reported in VoxDev looking at how cultural similarity affects production performance. There have been a few of these studies in the Indian context, using caste; I’d be really keen to see if the results replicate in other settings, where other dimensions of identity matter much more.
6. Prospect’s list of the 50 most important thinkers in 2020 is out. It missed out Kendrick, so it’s obviously trash.
7. Lastly, if I had to make a guess as to which article this week would make me have a ‘something in my eye’ moment, I probably would have guessed it would be something about the abuse of statistics in political discourse (I know, I’m a big softy) or bad news about prospects for a coronavirus vaccine. I definitely would not have guessed that it might be a statistical analysis of sporting mascots, but then there’s something about grown-ups dressed as animals that hits a nerve sometimes. (For the avoidance of doubt, though, the best mascot is definitely the Raptors’s). And just in case Benny the Bull isn’t your jam, your regular reminder that Clueless is the best, and much much much better than Emma.

Have a great weekend, everyone!

R

Hi all,

2020 is an outlier of a year, the kind of year that will be discussed in seminars in 2154 as an economist presents the results of an Acemoglu and Robinson style regression (they will all still be using Stata) which shows that states that had relatively milder Coronavirus outbreaks in 2020 were 3 percentage points more likely to colonize Mars. But even on Mars, in a virtual stadium where genetically engineered bowlers who propel bouncers from cannons where their hands used to be, one ritual will be maintained, just as it has been maintained in this asterisk of a summer: In the first innings of every summer, the England cricket team will collapse hopelessly against a
Captain who arrives with a point to prove after being roundly patronised by the local media. Nothing has felt normal this year – I’ve moved jobs and haven’t once been to my new office or seen most of my new colleagues in the flesh. So I’m deeply grateful to the England team for keeping one thing steady: the ability to punctuate even the most anticipated moments with comical incompetence, in this case, getting bowled leaving the bowl before a run has been scored.

1. Summer is a good time for learning: those hours spent relaxing on a virtual beach needs a good book or podcast, and Planet Money have you covered. They’re running a summer school with Justin Wolfers and Betsey Stevenson, taking excerpts from their favourite episodes and explaining the economics underlying them in simple terms. The first episode tackles opportunity cost and sunk costs using online dating, marginal effects using Chicken McNuggets, and equilibria using Uber (transcript). Even for the economists reading, this is highly recommended: one thing Planet Money has always been great at is explaining economics with stories, similes and metaphors, and if you’re an economist with the ambition to talk to and convince people who aren’t, this is a skill you cannot overlook.
2. General Equilibrium modelling gets a bad rap: for all that it will rarely settle an argument, there are some questions you just can’t get to without it. I really liked this piece by Stephie Fried and David Lagakos which uses GE modelling to estimate the effects on firm entry, employment and productivity. While none of this should be much of a surprise (hey, it turns out blackouts suck for people trying to make stuff!), it’s useful for investigating how and how much they might matter, and what the distributional effects may be.
3. I couldn’t let the links pass this week without recognising my favourite discovery of the day: before he helped remake and bring to the mainstream the study of migration as a development issue and policy goal, and before he did the intellectual version of this to Jeffrey Sachs over the Millennium Village Projects, Michael Clemens played a small role in the development of the process for producing monoclonal antibodies, which may wind up being a major part of the response to Coronavirus. Typically, his thread explaining the process for developing them is extremely clear and well-worth reading.
4. Now that I’ve mentioned the C-word, I may as well lean in on it. Andy Haldane’s speeches are always worth reading (this may be my favourite speech on the subject of economics ever delivered), and his take on the economic recovery from Coronavirus is excellent. He divides the cycle into four quarters, of which we are in the second. The good news is that he interprets the signs so far as consistent with a V-shaped recovery; but that the third quarter may reinforce the recovery or spin it into a vicious, downward cycle. His thoughts on the fourth quarter, the long term effects of the crisis on the structure of the economy is typically sober, but well-reasoned. Related: The Economist on the brutal current state of the Zimbabwean economy, over which mismanagement and Coronavirus have conspired to cast a very deep shadow indeed.
5. [England are closing 99 runs behind, with 10 wickets in hand. Dom Sibley has managed to avoid a pantomime dismissal so far… perhaps they’ll make this competitive yet.] Is citizenship just a rent? At what stage of globalisation does it cease to represent something more than simply a lucky accident which determines 60% of your earnings potential? Branko Milanovic, as ever asking the deeper questions.
6. Back to the Coronapocalypse for a moment: I’ve seen some argue that opening up economies requires a level of judgement that our poor, behavioural-bias-addled brains just can’t manage, and instead we need extremely clear rules and limits to prevent a second spike, like this Atlantic article. I’m sceptical. This feels like an enormous cop-out. Am I to understand that these behavioural biases are much worse in, say England or New York than Hong Kong? Is Vietnam populated entirely by homo economicus? No. The problem is not the failure to individually assess risk, but much more collective. It’s been a failure of Government, to learn from elsewhere, and of social norms. The difference between Stoke Newington Church Street, where barely one in twenty people wears a mask, and Causeway Bay, is not our ability to process risk. It’s that a social norm has developed in one of these places. Psychology and economics too readily reads the world in these individualist frames and sometimes misses what’s glaringly obvious: we are products of a society, and this influences our behaviours.
7. Lastly, I came across a completely unexpected delight this week: Hilary Mantel’s 1988 review of Robocop. Apart from her spot on summary (“You absolutely cannot lose interest; every moment something explodes”), it made me wonder what film reviews by other famous authors would be like, or if they exist. Did Cormac McCarthy ever review Knocked Up? (“Life stirred in her. The world remained full of stupidity.”) What if JD Salinger had reviewed Steel Magnolias? (“I suppose you probably want to know if she lives or dies, but dammit, that’s not the point of it, and if you don’t understand the point, does the goddam movie even matter?”)… I am desperate to find more of these. Help!

Have a great weekend, everyone!

R

Last week I mentioned the incidental tariffs discussion in Ferris Bueller’s Day Off (apparently, they chose to discuss the Smoot-Hawley act because “Smoot” sounds funny). This prompted a few people to send me other examples of economics in pop culture, from the seriously excellent (Richard Thaler and Selena Gomez in The Big Short) to the … well, also seriously excellent – Rodney Dangerfield bringing the real world to his economics class. That one really reminded me of teaching econ to a group of students from around the world at BSG: barely is a concept introduced before someone shatters its nice clean edifice against the real world of rent-seeking, messy data, bad incentives and imperfect information. Imagine being a tax economist, brought up on all the glorious clarity of optimal taxation theory and then starting work in a country where 8% of the population is registered for tax? Life comes at you fast.

1. I’m massively sceptical about the degrowth movement for many, many reasons: I don’t think the Government policy starts from the premise of maximising growth at all costs anyway, I think it’s politically a complete non-starter and I think it has never adequately addressed the problem of how to handle development within its framework. Tim Harford finds another reason to be sceptical: it wouldn’t work. Global lockdowns made a dent in emissions but nowhere enough, and at an enormous cost to welfare. In a way, degrowth is a cop out: a nominally radical change to avoid the genuinely difficult-but-achievable policy problems we should be turning our attention to – the right pricing for carbon, the right mechanisms and incentives for research and development, the right economic model for clean energy. Yes, they’re hard, but they’re the best we’ve got.
2. This week in learning about stuff that completely horrifies me: Planet Money did a show on prison labour in the US (transcript), and I advise you queue up a nice meditation for after you listen to it, because it is rage-inducing (or, you know, stay angry and do something about it). And just in case that didn’t set you off, here’s Lithub, publishing a letter from an imprisoned child thanking the Liberation Library for a book. That some see this is as a functional approach to justice is mind-boggling.
3. I spent four great years living in Malawi, one of my favourite places in the world, so I took particular pleasure in following the recent elections – you could see a movement for change from what friends were putting on social media, and the exhilaration when it came to pass. FP2P ran a good piece by Nic Cheeseman and Golden Matonga on the genesis of this moment, making the point that it had deep roots in institutional choices and structures that were put in place well before this election. The general point that many reforms can be deeply important even if they lie in disuse for long stretches of time is something we don’t always handle well in development. After all, the fact that a careful driver will very rarely be in a car crash is not a good argument against installing air bags.
4. Development Impact continues to be a fantastic resource for economists everywhere: here David McKenzie answers questions about research in his typically thoughtful and precise manner. Related: Andrew Gelman’s discussion of varying treatment effects is a great and readable piece of statistics that everyone should read. I feel like I learn things every time I open the blog, though it’s kind of terrifying how easy it is to cock up statistical analysis, even with the best intentions.  
5. Branko Milanovic’s excellent review of Yuen Yuen Ang’s new book, on corruption in China is fantastic, and really makes me want to read the book.
6. How are you finding working from home? I’ve generally been ok with it (counting my lucky stars that I’m not yet juggling parenting with work), but I’ve really struggled with two things: delineating the three parts to my existence, DPhil, job and family; and finding a comfortable place to read and take notes that isn’t in front of my distraction-machine. I cannot wait for the return of the office, and I’m not alone. Nick Bloom’s policy brief finds a number of reasons to be wary of swinging too far to one end of the WFH spectrum – from inequality to creativity, there are a few things taking a hit.
7. Finally, as basically everyone who has ever met me knows, I’m a complete sucker for sports as a vehicle for economic analysis, so this video from the NYT using the NBA as a model for what the American economy could and should look like was like catnip. It’s actually pretty good, though it conveniently ignores that even with all the socialist leaning of America’s greatest sport, the game is still shaped by a few superstars, and where LeBron goes, success tends to follow. Regardless, the NBA is a *much* better model than football; and this 538 piece (based on research done elsewhere) suggests that football commentary is rammed with coded racism; indeed, it’s not even that well coded. But let’s not end on a sour note: instead calm yourself down by watching this mesmerising video of the sun released by Nasa earlier this week.

Have a great weekend, everyone!

R