Is this the most exciting or depressing document I read all week? (Mining conglomerates edition)

The OECD has gotten mining companies together to sign an agreement on what they will and won’t do. Joan Esteban pointed me to Annex 2, on the lists of things the companies commit not to do:

  1. While sourcing from, or operating in, conflict-affected and high-risk areas, we will neither tolerate nor by any means profit from, contribute to, assist with or facilitate the commission by any party of:

    1. any forms of torture, cruel, inhuman and degrading treatment;
    2. any forms of forced or compulsory labour, which means work or service which is exacted from any person under the menace of penalty and for
      which said person has not offered himself voluntarily;
    3. the worst forms of child labour;
    4. other gross human rights violations and abuses such as widespread
      sexual violence;
    5. war crimes or other serious violations of international humanitarian
      law, crimes against humanity or genocide.
  2. We will immediately suspend or discontinue engagement with upstream suppliers where we identify a reasonable risk that they are sourcing from, or linked to, any party committing serious abuses as defined in paragraph 1.

  3. We will not tolerate any direct or indirect support to non-state armed groups through the extraction, transport, trade, handling or export of minerals. “Direct or indirect support” to non-state armed groups through the extraction, transport, trade, handling or export of minerals includes, but is not limited to, procuring minerals from, making payments to or otherwise providing logistical assistance or equipment to, non-state armed groups or their affiliates who…

The list goes on and on.

While on the one hand you might think “I’m so glad they are agreeing to this”, the other reaction is “good grief, you mean that this agreement actually still has to be negotiated and signed in 2014!?”

Also, a medium depressing afterthought: “They wouldn’t have bothered to agree if they didn’t think it was in their financial interests.”

The causes and consequences of the Ebola hysteria

Readers may recall the debate on this blog about whether or not the Ebola hysteria was indeed hysterical and counterproductive, or a necessary and sensible response to an out-of-control crisis.

Yesterday, in the New York Times, Rachel Glennerster, Herbert M’Cleod, and Tavneet Suri reflect on what the data say and should have said in Sierra Leone:

Misleading reports, speculation and poor projections from international agencies, government ministries and the media about the Ebola outbreak exacerbated the problem. The fear that was spread by the dramatic reports that accentuated the negative, undermined confidence, made it harder to encourage people to seek care, and misdirected attention away from Sierra Leone’s urban areas, where data suggest the economic effects of Ebola have been concentrated.

…Why were projections so bad? Partly because it is hard to collect good data in a crisis. But also, we believe, because dramatic headlines make for a better story. Agencies face asymmetric incentives: They are likely to face more criticism for underestimating rather than overestimating the impact of an emergency. As they scramble to raise funding for a crisis in a world grown weary of alarm calls, the temptation is to focus on the upper range of plausible estimates.

But collectively focusing on worst-case scenarios can make people fatalistic, damaging efforts to prevent the disease from spreading. It also has a negative effect on the economy and makes it harder for those seeking to raise money for future crises. Independent data sources and assessments are vital to our understanding of and response to the crisis.

You could argue that the authors are naive, and that the whole reason Ebola is under control is because of the extreme reaction. Possible, but implausible in my view. But that’s because I believe intense action doesn’t need overreaction.

Overall I think governments, the WHO, the CDC, journalists, and a good many others were unprepared and irresponsible. Liberia and Sierra Leone are digging themselves out of a deeper economic hole because of it. And that will cost real lives–conceivably more than Ebola claimed.

The full op-ed is important to read. Also see Rachel’s added blog post.

Andrew Gelman’s mistrust of behavioral economics

Gelman, a Columbia statistician and political scientist, voices his discomfort with the behavioralist research and policy attitudes of recent years:

I see a common thread in a lot of the counterintuitive, tabloid, Psychological-Science-type work out there, and that thread is a dismissal of human rationality and even human agency in the political (and, to some extent, the economic) arena. Here I’m speaking of “rationality” not in the limited sense of utility maximization but in the more general sense of thoughtful, purposeful decision making.

In the “Psychological Science” world, voters’ attitudes are determined by upper-body strength and the time of the month, their attitudes on important issues are influenced by meaningless subliminal stimuli, and their elections turn on the outcomes of late-October football games, and they flub any decisions involving uncertainty.

…Put it all together and you get a pre-cognitive conception of the citizen: not a man or woman who weighs the evidence, forms political views, and makes economic and political decisions, but a creature who is continually pushed to and fro by influences of which he or she is not even aware, an unstable product of hormones and the manipulators of political and social marketers, a sort of particle in the water being jostled by invisible Brownian forces.

Let me repeat that the evidence for many of these claims is weak, indeed I have the feeling that a lot of people want to believe in these things so they grab on to whatever “p less than .05″ comparisons they find, and take them as representative of the general population, as scientific truth. On the other hand, I perhaps am coming from the opposite direction.

…I see a lot (although not all!) of this “behavioral” work as being behaviorist in the sense of being faithful to a pre-cognitive, and pre-modern conception of psychology.

The cognitive-psychology perspective, as I see it, is that we are thinking beings, and to the extent that we are influenced in irrational ways (whether by hormones, or subliminal marketing, or whatever), we mediate these influences through our thought processes.

The full post is well worth reading.

I share some of his discomfort with the literature. Every time I see a paper showing that this nudge or that piece of information or this subtle cue changed behavior X in a substantial way, I wonder: how does it all even out in the real world? If this research is right, it shows we are fickle creatures. But we are bombarded by information and cues every moment in the real world. Should we then conclude that the information and nudges all wash out in so much noise? Should I ignore any one study as irrelevant in practice?

My hunch is that yes, we are indeed fickle creatures, and yes a lot of this stuff washes out in noise. Also, like Andy, I think the fickleness reduces when the stakes are high, or when we have opportunities for careful thinking.

But I also think there are situations where people are less likely to give a decision careful thought, and the biases and mistakes could be quite profound. Entire industries are founded on this principle. One is called marketing.

Then again, I would have guessed that’s what the median behavioral economist/psychologist believes. As usual, anyone in the extreme is probably wrong.

The deal with “Serial”

I’ve been training, planing, taxi-ing, and busing around Europe for conferences and talks, which turned out to be the perfect amount of time to listen to the twelve podcast episodes. (Free!)

In case you are not sure what I mean, I will do you the favor of telling you very little in advance. No spoilers here. It is a podcast in 12 parts. At first I thought it would be fiction, and wondered what the fuss was about. But it’s basically a 12-episode long version of This American Life. About an actual murder mystery.

My verdict: slightly overhyped, but well done, and well worth listening to on travels or a commute. Far superior to what I watch on flights. Then again, for some reason, the altitude and booze on transatlantic flights make me want to watch Transformers 6. And cry at the ending.

When you finish, you may want to read this article, which summarizes developments since the final episode in December.

There is a chance that news stories about the real case will spoil the whole podcast for you, sometime in 2015. A chance. So I recommend listening sooner rather than later.

Unless of course you’re at 35000 feet, in which case I can’t recommend Transformers 11 enough.

“Why is terror Islamist?”

Stephen Fish from Berkeley asks this question in the Washington Post Monkey Cage. The core of his answer:

…the truth is, in the contemporary world, Christians won big. And the frustration and humiliation that Muslims now feel as a result can help explain terrorism. That frustration and humiliation is rooted in politics rather than sex and in modern experience rather than deep history. And it has little to do with the Koran.

I cannot agree more: this helps explain Islamist terrorism, at least in this moment. I believe that humiliation and perceived injustice are much more powerful motivators than many people believe. Though scientific evidence remains elusive.

But I’ll answer Fish’s question in slightly stronger terms: no way. Terror is not Islamist. Terror is a tool, used not only by the weak or humiliated but by the powerful.

We can quibble about definitions, but the big thing to me is the following: it is violence where the intended target is not the person hurt, but the wider audience that identifies with that victim. Terror is a weapon of mass intimidation.

From the Irish Republican Army to the military wing of the African National Congress (of Nelson Mandela fame), terror has usually been a tool of the weak or oppressed.

But look to Robert Mugabe (or any other thuggish dictator who punishes a few opposition supporters to frighten the many). Terror isn’t simple the tool of those out of power.

Colombian Marxists. Italian mafias. Joseph Kony and the Lord’s Resistance Army. Sierra Leonean rebels. They massacre and beat and mutilate to send messages. The line from acts of war to acts of terror is blurry.

And the United States military? I ask you to consider that the targets of drone strikes are not limited to those blown to smithereens.

Just say no, redux

Here’s a more extreme version of the same principle. Adopt a rule that no new task can be deferred: if accepted, it must be the new priority. Last come, first served. The immediate consequence is that no project may be taken on unless it’s worth dropping everything to work on it.

Tim Harford on the importance of saying no.

Surprisingly often, blog readers tell me they found my own “Just say no” blog post unusually influential. People do not normally go out of their way to say such things, so I notice when they do.

I am pleased to say: four years ago I said “no” to new field projects and new major papers. I stuck to it. As of a couple of months ago, I have no active field projects or people working for me anywhere in the world, other than the research manager who sits beside my office. And that is from a peak of 120 employees two years ago. Color me unstressed and relieved. Also, back spasms of stress not so common anymore. Occupational hazard.

It won’t last. Naturally I am starting new projects. But what I treasure is the time and mental energy that comes from clearing the table of old projects, giving me the time and freedom to be strategic and picky about what I do next, rather than opportunistic. Highly recommended.

Grading Bill and Melinda Gates’ annual letter

It’s my second year, so this makes it a tradition. I take the conceit of grading it like one of my development class exams. But this year I do it in the Washington Post’s Monkey Cage blog.

The letter makes a “big bet”, that technological breakthroughs—especially in vaccines, online education, agricultural extension, and mobile banking—will give the poor unprecedented opportunities.

An excerpt:

to preview, my overall grade is a B.

I have three reasons:

  1. Over-claiming: Making big steps sound like monumental leaps
  2. Providing solutions that will work best in the countries that will probably grow anyways
  3. Downplaying the harder barriers these breakthroughs won’t solve

In case you don’t feel like reading the whole long piece, here is the punchline: An ‘A’ grade for “what the world’s richest couple can reasonably do” but a ‘C’ for “delivers on the big bet”.

All the things we want from development–an end to extreme poverty and suffering–is synonymous with political stability, capable states, industry, and financial systems. I can’t see how a country gets from $1000 to $5000 a person (let alone $12000) without them.

The Gates’ priorities–disease eradication, online education, mobile banking, and agricultural inputs–simply don’t attack these fundamental elements of development. They take them for granted. Which means they apply to the countries already bounding ahead.

To their credit, the letter attacks the problems that an outside funder can actually achieve, and what the Gates Foundation does better than almost anyone else. This sounds like exactly what they should do. It’s why I admire them. But let’s not claim that a few new technologies can make unprecedented and fundamental changes in poverty in 15 years. They’ll make little, useful changes. That makes for a humbler, less exciting letter. But I think it’s the right one to write.

Read the full piece. And comments and corrections from the experts welcome.

What the cost of your wedding says about the chances you divorce

Specifically, the study found that women whose wedding cost more than $20,000 divorced at a rate roughly 1.6 times higher than women whose wedding cost between $5,000 and $10,000. And couples who spent $1,000 or less on their big day had a lower than average rate of divorce.

Article. As usual, I don’t quibble with causal inference when I prefer to believe the result, whether or not it is true.

I highly recommend our strategy: immediate family only. We had 13 adults and three toddlers, total. Outdoors. Then a nice dinner. The families had never met and it was the last day of a week together. We broke the $1k level, but only barely.

Yes, we would have loved to have our friends. But to get to the third circle (friends you really want to invite) you have traverse the second circle (non-immediate relatives) and reach into the fourth circle (friends you are more ambivalent about seeing).

Links I liked

  1. Russ Roberts interviews Josh Angrist, king of causality
  2. Does LaTeX lead to more paper errors than R? (I prefer LyX) (Hat tip to Development Impact blog for the last two)
  3. AEJ Applied has an astonishingly good special issue devoted to microfinance
  4. How to avoid sexism in academia, when writing recommendation letters
  5. The dog that played Toto in The Wizard of Oz was paid a salary higher than the actors who played the Munchkins 
  6. “I’ll have the tabby”: A cafe in NYC allows you to cuddle with house cats

Talks next week in London/Oxford

I’m giving some talks next week on some new, not released papers:

  1. Monday Jan 26, 1230-2pm
    • “More sweatshops for Africa? A randomized trial of industrial jobs in Ethiopia”
    • Center for Global Development Europe
    • Details and registration
  2. Tuesday Jan 27th, 1-230pm
    • “More sweatshops for Africa? A randomized trial of industrial jobs in Ethiopia”
    • Oxford University CSAE
  3. Wednesday Jan 28th, 12.45-2pm
    • “Reducing crime and violence: Experimental evidence from behaviour change therapy and cash transfers in Liberia”
    • London School of Hygiene & Tropical Medicine, John Snow Lecture Theatre


A KKK member walks up to a black man at a bar

No, this is not the beginning of the joke, but rather something more amazing. The black man in question is Daryl Davies, a well-known jazz musician.

Most people in this day and age probably would have turned and ran right out of that good ol’ boy’s bar, but not Davis. He stayed and talked with the Klansman for a long time. “At first, I thought ‘why the hell am I sitting with him?’ but we struck up a friendship and it was music that brought us together,” he says.

That friendship would lead Davis on a path almost unimaginable to most folks. Today, Davis is not only a musician, he is a person who befriends KKK members and, as a result, collects the robes and hoods of Klansmen who choose to leave the organization because of their friendship with him.

Links I liked

  1. “When Colorado legalized marijuana two years ago, nobody was quite ready for the problem of exploding houses”
  2. Innovations in trash talk
  3. Things you will probably only be able to see in NYC: A 24-hour marathon of 24 centuries of American music, sung (continuously) by a drag queen
  4. “This is what happened in what is probably the world’s first political interview conducted entirely over a service designed largely for its ability to send self-destructing images of your private parts.”
  5. Economics of Ebola
  6. When does foreign aid work?

Mahmood Mamdani on Charlie Hebdo

Western societies have worked out internal compromises over time in an endeavour to build durable political societies. …Their thrust is to call a ceasefire in struggles of great historical significance in the name of civility.

…After the Holocaust, Jews were brought into the Western political fold. It became conventional to speak of a Judeo-Christian heritage in the West, when it had been customary to speak of a longstanding conflict between Judaism and Christianity before. So, today the law in many European countries, including France, criminalises Holocaust denial. But no law criminalises the denial of colonial genocide, including widespread colonial massacres in Algeria, the country of origin of the largest number of French Muslims.

The political and social compact in Europe has been evolving historically. The state stepped in to moderate the conflict between ardent Christians and secular Christians. Jews were included in this compact after the Holocaust. Muslims have never been part of this compact. The Muslim minority in Europe is the largest in France, around 10 per cent. In the Mediterranean city of Marseille, it is roughly 30 per cent. It represents the weakest and the most disenfranchised section of French society.

…Of course, it is possible to include Muslims in the social and political compact in France. But that will take a major political, intellectual and cultural struggle. Centers of power – and people – in France will have to accept that it is possible to be French and Muslim, that it is OK for a pious Muslim woman to wear a ‘hijab’, as it is for a Catholic nun – so long as this act of piety does not banish either from participation in the public sphere. In other words, we are talking of a political struggle for meaningful citizenship.

Full interview in The Hindu.

What the Napoleonic wars tell us about infant industry protection

One of the more interesting economics job market papers this year is from Réka Juhász at LSE. In brief, she shows that Britain’s naval blockade of France protected its infant cotton industry from British manufacturing giants, stimulating the French industry for good.

I find that in the short-run regions (départements) in the French Empire which became better protected from trade with the British for exogenous reasons during the Napoleonic Wars (1803-15) increased capacity in a new technology, mechanised cotton spinning, to a larger extent than regions which remained more exposed to trade.

Temporary protection had long term effects. …I first show that the location of cotton spinning within France was persistent, and firms located in regions with higher post-war spinning capacity were more productive 30 years later.

Second, I find that after the restoration of peace, exports of cotton goods from France increased substantially, consistent with evolving comparative advantage in cottons.

Third, I show that as late as 1850, France and Belgium – both part of the French Empire prior to 1815 – had larger cotton spinning industries than other Continental European countries which were not protected from British trade during the wars; this suggests that adoption of the new technology was far from inevitable.

Before you think, “Yes! More temporary protection for infant industries in developing countries!”, I’m reminded of something I was told in grad school (I wish I remember by whom).

Trade protection is like herpes. Once you’ve got it you can never get rid of it.

Juhász found the elusive temporary herpes.

P.S. Coincidentally, I happen to be partway into Sven Beckert’s Empire of Cotton. It is very, very good so far. An early candidate for a best book of the year and essential reading for development economists/political scientists.

P.P.S. If any of you know who said the herpes quote that I would appreciate having my memory corrected. I want to say Rudi Dornbusch, but that’s only because it sounds like the kind of thing he would say.


Manufacturing a compliant Chinese generation, one textbook at a time

Propaganda works.

We study the causal effect of school curricula on students’ stated beliefs and attitudes. We exploit a major textbook reform in China that was rolled out between 2004 and 2010 with the explicit intention of shaping youths’ ideology.

To measure its effect, we present evidence from a novel survey we conducted among 2000 students at Peking University. The sharp, staggered introduction of the new curriculum across provinces allows us to identify the effects of the new educational content in a generalized difference in differences framework.

We examine government documents articulating desired consequences of the reform, and identify changes in textbook content and college entrance exams that reflect the government’s aims.

These changes were often effective: study under the new curriculum is robustly associated with changed views on political participation and democracy in China, increased trust in government officials, and a more skeptical view of free markets.

Before you disapprove: The Chinese are merely fine tuning what the Americans and Europeans have done brilliantly for decades or longer.

The paper, by Cantoni, Chen, Yang, Yuchtman, and Zhang.

I don’t know what to say about this, other than Belgian youth seem to have a lot of spare time and cash

The 24-year-old student, Victor Van Rossem, received a friend suggestion on his Facebook for 49-year-old Neal D. Retke, a person Rossem had no connection with besides a mutual acquaintance, the Daily Mail reported.

Van Rossem found Retke interesting after browsing through his photos and thought he had a diverse set of hobbies and likings.

“I became fascinated by him. He had a long beard and looked a little unusual,” Van Rossem told the Daily Mail. “He looked like someone I wanted to meet  — a very eccentric person.”

The student sent Retke a message, but the Austin resident didn’t respond. So Van Rossem made the 5,000-mile trip along with a friend to ask him in person if the two men could be friends.

They became friends. Story, including the a documentary they made.