“Let them eat cash”: Some post-op reflections

Lately, my research and others have suggested that simple cash handouts might be one of the most effective anti-poverty strategies in the world. Is it time to bring it home?

Today I have an Op-Ed in the NY Times on cash for New York’s homeless.

You might also worry that the poorest of New York are different. The average person in Uganda is impoverished; it’s easy to believe he would make good decisions with cash. But a homeless person in New York is not average. Substance abuse is pervasive. Maybe panhandlers here are different from the global poor.

I used to believe this. Now I’m not sure. A few years ago, I started working in Liberia’s urban slums. My colleagues and I sought out men who were homeless or made their living dealing drugs or stealing. Many abused alcohol and drugs. We tested different programs in a randomized trial of a thousand men. One thing we tried was giving out $200 in cash.

The short story: An eccentric Chinese millionaire tried to give cash to the NYC homeless last week, and an NGO put a stop to it.

The original article is equal parts fascinating and infuriating. Mostly infuriating. First, the millionaire. He took out a full page ad to announce the $90,000 giveaway. The ad probably cost more. So it was mainly an exercise in self-aggrandizement.

Then there was this:

Mr. Chen addressed the audience and then uncorked the news the crowd had been waiting for: “I will give $300 for every participant today.”

The homeless men and women shot to their feet, whooping and applauding.

“No he won’t,” Michelle Tolson, the mission’s director of public relations, said. “The police will shut him down.”

Officials from the Rescue Mission quickly brokered a deal with Mr. Chen’s assistants, allowing him to hand $300 to several chosen homeless clients in a symbolic gesture. The clients, however, would have to return the money.

I can understand Rescue Mission’s concerns. The Op-Ed was accepted Friday night. Saturday I walked by the same two homeless people that have been on my corner since I moved here two years ago. They are not in great shape. “Really?” I thought to myself, “Did I just tell New Yorkers they should hand out big bills to these people?”

Admittedly we had our worries in Liberia too. This is why we started on a small scale–a few dozen men on the streets, with innumerable safeguards and interventions a-ready–before scaling up to the full evaluation of 1000. In the following year, most of what I believed about homeless men, drugs, and petty criminals in Liberia was turned on its head. Even though I’d already spent more than a year with many of the men. So experimentation and testing your prejudices is important.

(Aside: if you’re interested in hearing more about the Liberia project, there is this NPR Planet Money podcast. Also this Foreign Affairs piece. The working paper will be out soon.)

Even so, I worry I’m wrong, and I worry about bad consequences. At the end of the day, I advocate taking chances and experimenting because I believe (indeed I’ve seen) the cost of ignorance is greater. That doesn’t mean it’s not morally troubling.

A book that help change the way I think about politics in developing countries

In the 1990s, the average country tipped from unapologetic dictatorship to holding elections. Many nations let parties compete, the free press criticize, and so forth. This has to be one of the most monumental events to happen in my lifetime–one of the few things a history book 500 years from now will probably mention.

This week I read what was, for me, an important book: Museveni’s Uganda: Paradoxes of Power in a Hybrid Regime, by Aili Mari Tripp. This is the essential book on Ugandan politics and development.

Since that’s a niche audience, I’ll say this on top: I think the book is a perfect window into the perverse logic of the quasi-democracies that dominate most of the world. Most of the time we misunderstand them. Case studies like this one start to make things clearer.

Some things I take away from the book (and some other recent readings on authoritarianism, a new interest of mine):

  • It’s a mistake to think of regimes in most underdeveloped counties as coherent governments. Rather, most are delicate and shifting alliances of influential groups and elites. The strongman who sits atop this look and act like Presidents (and many have a tremendous amount of power) but their first priority is to manage this shifting network of alliances. This overrides everything else.
  • If you want to be crude, the strongman has three tools to keep control (and peace): patronage, repression, and “nation-building”. The last category is a ridiculously cluttered one, where I mix national identity with independent and capable bureaucracies, among other things. These are the things that make governments coherent, accountable and effective. Most nations are working on them and improving, but it takes decades.
  • In the meantime, if you limit patronage, you leave the options of repression or some kind of political instability.
  • Meanwhile, things that look like a move ahead, such as letting many parties form and compete, can also be a way to divide the opposition and entrench power while showing the world a facade of democracy.
  • “Good policy” gets filtered and perverted by this system. It’s silly and dangerous to give aid or recommend a policy reform without some appreciation of the elite alliances, the ritual of democracy, and the incentives faced by leaders. Yet that’s what most aid and reform does.

This could have been a book about Afghanistan, or Guatemala, or early modern France, and I could have drawn similar insights. The more stable and successful autocracies are the ones that (among other things) depersonalize and institutionalize parties and power. China might be an example. I say all this, of course, knowing exactly zero about Afghanistan, Guatemala, early modern France, and China. There’s a reason this blog is free.

I don’t say any of this to impel people not to act. Or to indict all aid. Only to say that this view of politics is rare. Foreigners fall for the ritual of democracy. I did for a long while in Uganda.

Obviously, I recommend the book.

What’s your summer reading list?

I’m building my list. I’m curious what you’re reading or read and loved.

I have a few below, some obvious (in that a couple are trendy bestsellers) but I welcome suggestions. We will be in Spain (specifically, the Pyrenees) for three weeks in August, after swapping houses with a professor there. So Spain-related history or really anything is welcome. (Keeping in mind that they’d need to be in English, since my Spanish can only barely get me through a newspaper.)

  1. All Our Names, by Dinaw Mengestu. I loved his first novel, was lukewarm on the second, have enjoyed his short fiction in The New Yorker a lot. All in all I think he’s one of the freshest current fiction writers.
  2. The Discovery of France, by Graham Robb. France was mostly uncharted, disunited, and decided not “French” until the early 20th century. This is a history of the discovery and conquering of France. I would enjoy analogous books about Spain. This one is (so far) refreshingly well written and short, as history goes. Too many brilliant books are longwinded.
  3. Silkworm, by “Robert Galbraith”. Crime fiction by J.K. Rowling, reputed to be quite good. I enjoyed reading The Cuckoo’s Calling.
  4. Africa Must Be Modern, by Olúfémi Táíwò. A Nigerian philospher calls for a culture shift in Africa. I bought it after reading Gregg Zachary’s review.
  5. Peaceland, by Severine Autesserre. An ethnography of the humanitarian crisis/peacekeeping/conflict expat crowd by my favorite Congo expert. I am partway through and will try to find time to blog about it soon.
  6. The Goldfinch, by Donna Tartt. I know nothing about this book other than a lot of people talk about it and it won the Pulitzer. That is not usually enough to get me to buy a book but it’s so easy to hit that little “send to Kindle” button.
  7. So Long Been Dreaming: Postcolonial Science Fiction & Fantasy, by various authors. A collection of science fiction short stories by minority and formerly colonized writers.
  8. The Golden Hour, by Todd Moss. A development scholar and former State Dept official (who is also my friend) has written a thriller about an academic who gets appointed to the State Dept to use his conflict scholarship to save the world and get the girl. I mean how can I not read this?

What do we know about poverty and violence?

I gave a talk to USAID on Monday, focusing on “the micro level”. This is an obtuse way of saying “why men rebel”.

My short answer: the usual economic incentives matter. But just because you can get a statistically significant estimate doesn’t mean it matters. Economic variables don’t explain most of the variation in violence, in my opinion. We only have fragments of evidence what does. I discuss one or two.

Here are my slides and speaking notes. It was 12 minutes, so forgive the lack of detail and footnotes. I’m pondering an article or book. Here is what I thought five years ago if you are burning for references.

Links I liked

  1. You are more likely to be bitten by Luis Suarez (1 in 2,000) than a shark (1 in 3,700,000)
  2. U.S. Scientist Offers $10,000 to Anyone Who Can Disprove Manmade Climate Change
  3. Rich country policymakers who hope that aid will reduce immigration will be saddened
  4. But development might deter men from crime and rebellion (a short policy note on my ex-combatants work in Liberia)
  5. As with aid, with coffee. Bill Easterly does Yelp reviews of NYC coffee shops. All his ratings are either 5 or 1 star.

A development economist’s guide to decide what team to root for in the World Cup

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Link.

The basic principle is simple, drawn from utilitarian principles: Root for the outcome that will produce the largest aggregate increase in happiness. So I came up with a simple index, calculated by a country’s passion for soccer multiplied by its average level of poverty multiplied by its population. It’s perhaps a bit crude, simply to multiply these factors by each other, but the exercise highlights some important truths about the world.

…I incorporate poverty into the score for several reasons. First, happiness and wealth are correlated, and all else being equal, a utilitarian would prefer to help the person who is worst off. Second, the wealthy have more outlets for dealing with sports disappointments — such as going out to a nice meal — and can bounce back faster.

Social engineering in the Congo

Do participatory development projects make local politics more democratic? A new paper by Humphreys, Sanchez de la Sierra, and Van der Windt:

Since the 1990s, participatory development has become a favored model for delivering international aid. The huge growth of the model reflects two broad trends. First, a conviction that participatory approaches to development yield better results than traditional top-down approaches. Second, that international aid can have a transformative effect and yield not just stronger welfare gains but also alter the way political decisions are made at the most local level, rendering local decision making processes more inclusive and more democratic.

Community Driven Reconstruction (CDR) projects are quintessential of this approach, representing a model for delivering post-conflict reconstruction aid in a way that not only builds infrastructure but also recreates communities and refashions governance structures.

This paper exploits exogenous variation from a large CDR project, in which development aid was made available to 1,250 randomly selected villages in the Democratic Republic of Congo (DRC), to learn whether international actors are indeed able to use aid to transform societies in this way.

Short answer: it does not. Here is a freely downloadable book by Mansuri and Rao finding much the same thing across many, many similar programs financed by the World Bank.

One takeaway: social engineering usually fails.

A better takeaway: social engineering sometimes works and sometimes fails, and most of the time we have no idea what to expect. I remain amazed that a local justice and dispute resolution program I evaluated did so well.

Social engineering is quite complicated, governments and NGOs try it all the time, and they’re basically fumbling about in the dark. I would suggest an agenda for pushing knowledge ahead, but I’m rather worried what would happen if states got better at this.

“It’s raining men! Hallelujah?”

That’s the title of a new paper by Pauline Grosjean and Rose Khattar, arguing that conservative gender norms persist:

We document the implications of missing women in the short and long run. We exploit a natural historical experiment, which sent large numbers of male convicts and far fewer female convicts to Australia in the 18th and 19th century.

In areas with higher gender imbalance, women historically married more, worked less, and were less likely to occupy high-rank occupations.

Today, people living in those areas have more conservative attitudes towards women working and women are still less likely to have high-ranking occupations.

We document the role of vertical cultural transmission and of homogamy in the marriage market in sustaining cultural persistence.

Under what circumstances would your Google-driven car choose to kill you?

In 1967, the philosopher Philippa Foot posed what became known at “The Trolley Problem”.  Suppose you are the driver of a runaway tram (or “trolley car”) and you can only steer from one narrow track on to another; five men are working on the track you are on, and there is one man on the other; anyone on the track that the tram enters is bound to be killed. Should you allow the tram to continue on its current track and plough into the five people, or do you deliberately steer the tram onto the other track, so leading to the certain death of the other man?

This gives rise to an interesting philosophical challenge. Somewhere in Mountain View, programmers are grappling with writing the algorithms that will determine the behaviour of these cars. These algorithms will decide what the car will do when the lives of the passengers in the car, pedestrians and other road users are at risk.

That is Owen Barder on how Google is going to have to get a little more philosophically specific than “don’t be evil”.

Will car buyers get to choose their car’s philosophy from a menu? It’s either them, Google, the manufacturer, or the Department of Transportation.

“Knowledge is to information as art is to kitsch”

In the digital universe, knowledge is reduced to the status of information. Who will any longer remember that knowledge is to information as art is to kitschthat information is the most inferior kind of knowledge, because it is the most external?

A great Jewish thinker of the early Middle Ages wondered why God, if He wanted us to know the truth about everything, did not simply tell us the truth about everything. His wise answer was that if we were merely told what we need to know, we would not, strictly speaking, know it.

Knowledge can be acquired only over time and only by method. And the devices that we carry like addicts in our hands are disfiguring our mental lives also in other ways: for example, they generate a hitherto unimaginable number of numbers, numbers about everything under the sun, and so they are transforming us into a culture of data, into a cult of data, in which no human activity and no human expression is immune to quantification, in which happiness is a fit subject for economists, in which the ordeals of the human heart are inappropriately translated into mathematical expressions, leaving us with new illusions of clarity and new illusions of control.  

An except from The New Republic‘s literary editor, Leon Wieseltier, speaking at Brandeis.

His plea is for the study of literature and languages and art and music and philosophy and religion and history, and for encounters with art and literature.

I’ll admit that the volumes of information at hand are staggering and often distracting. And it would be a shame if people let data completely displace art or expression from their lives. It’s good to be reminded of this, some of us more than others.

The irony, however, is that technology has made knowledge cheaper and easier to acquire than ever before, and so literature is in the hands (literally) of a higher share of human society than ever before. I’d be willing to bet that a larger number and share of people have meditated on Shakespeare, published a novel, or appreciated a painting than at any time in human history.

Here’s a thought: is Wieseltier’s worry simply about the intellectual 1%? Surely only the educated elites are threatened by a distraction from the humanities.

He’s speaking to the 1%, of course. So do I, in my teaching at least. One of the reasons I blog is that it pushes ideas a little further outside the old circles of privilege. If democratizing knowledge sacrificed a little depth for breadth, it’s one I’d willingly make. Fortunately, I’m not convinced this is a trade-off we even need to make.

Video of the day: 400 years of US territorial expansion


The music is a nice touch. Presumably it drowns out the screams of the oppressed and dying.

[My first thought: I probably shouldn't write that in a year when I'm applying for citizenship.

My second thought: Actually, I'm confident this is still a country where I can write what I want without fear of such consequences. Which is what I like most about this place. On the other hand, I am slowly and surely ensuring I will never be asked to serve in a political administration...]

Quantitative versus qualitative measurement, the contest

If you run a survey of drug use, prostitution, domestic violence, rioting, or crime, who would believe this self-reported data? No one.

If you work in one of the handful countries with reliable, available data, then you might be able to use police or hospital records. I’m looking at you, American scholars, you lucky bastards.

If you’re working in the largely evidence-free zone that is poor countries–especially fragile states–then you have to get creative. Some of my favorites: Alex Scacco randomized whether she interviewed potential Nigerian rioters behind a screen or not. After running an ethnic reconciliation program, Betsy Paluck gave out community gifts in Rwanda and looked at how they were shared out.

In one of my more self-flagellating moments, some colleagues and I decided to start a study of crime and violence-reduction among street youth in Liberia–mostly men who make their living from petty crime and drug dealing (among other things) and lead very risky lives.

The effects of the programs–behavior change therapy and cash transfers–I’ll discuss another time. In brief, a cheap and short program of cognitive therapy seems to have dropped crime, violence, and drug use by huge amounts. And the effects persisted at least a year.

There were two possibilities. One, we’d stumbled upon a miracle cure. Two, they were telling us what we wanted to hear.

What to do? Well, we said, let’s try to measure the measurement error.

I prefer to mix my quant work with serious qual work. Basically, we had two or three truly gifted Liberian research assistants who collected qualitative data full time. Transcripts of conversations in the thousands of pages that I sometimes wonder how we will ever read. We’d visit dozens of the men in the study over and over again across a year to see how their lives changed over time.

These qualitative researchers were already embedded in the communities. So, we thought, why not have them hang out with the survey respondents for four days around the time of their survey? We’d get a general sense of their lives (with full disclosure and consent), but through conversation and observation focus on figuring out the same six things about all of them–some seemingly sensitive behaviors (drug use, petty theft, gambling, and homelessness) plus for balance the use of a few common luxuries, video clubs and paid phone charging services.

The qualitative researchers had no idea what the guys had said on the survey, but just coded their own assessment, usually based on a frank admission of yes or no. Across 4000 surveys, we tried this a random 300 times.

So what happens when you compare a survey question, “did you smoke marijuana in the last two weeks?” to four days of “deep hanging out”? In our case, you basically get the same answer.

The survey and qualitative measures were the same about 75% of the time. When they differed, that difference wasn’t systematic at all. We’d get the same levels of average drug use of stealing from either method. At least for the so-called sensitive behaviors. As it turns out, these particular guys had no reservations at all about talking about crime or drugs. It was such an everyday part of their lives. So, as best we can tell, the survey reports were reasonably right, and the falls in “bad” behaviors real.

What’s interesting is that this didn’t apply to the so-called non-sensitive luxury goods. These the men underreported a little, and almost entirely in the control group. There are a few explanations, but one is that the control group wanted to appear poorer and more deserving of a future program.

The wonkier among you might be wondering: why not use list experiments? The short answer: I don’t 100% believe them, and if you tried testing them on illiterate street youth with short attention spans you’d give up too.

Actually, our deep hanging out wasn’t as hard or as expensive to do as you’d think. Tracking and surveying each person each time cost about $75 on the margin (they were hard to keep track of). The qualitative validation had roughly the same per person variable cost.

We hope more people will try it out. That’s why we not only wrote up the results as a paper, but also have an appendix explaining how we did it in detail. Plus algebra!.

The whole exercise gave us a lot of confidence in our results. Frankly I don’t think any respectable journal would publish the main experiment without this confidence. If you think you’re going to try it, email and we’ll fill you in on more lessons learned and experiences.

Links I liked

  1. PhD math camp, online
  2. Arvind Subramanian’s development reading list
  3. As usual, I could just copy all David McKenzie’s links on impact evaluations
  4. A rare youth training program that worked!
  5. Dan Altman on “Why poor countries need more factory workers and fewer entrepreneurs“. I agree with this sentiment for several reasons but, from the perspective of the poor person, I think my factory versus microenterprise experiment might be proving me wrong. Final results in September.

International development, the anti-politics machine

As Gloria Steinem explained 30 years ago: “Power can be taken, but not given. The process of the taking is empowerment itself.” By washing our hands of politics, we also wash our hands of the fact that while political change is not necessarily violent, it is always predicated on pressure and an implicit threat.

That is Michael Kleinman writing in SSIR on the perils of the political blinders many have in international development.

What I find remarkable is that humans expect policy reform in other countries to happen in ways they would find laughable if they scratched out the name of the foreign country and wrote in their own. The political blinders fall off unnoticed.

If you sympathize, or if you need to be convinced, you will enjoy book number 1 on my list of books development scholars/workers seldom read but should.

And here is Michael writing less seriously on the absurdities of ex-patriates.

Five facts about informal economies

A new paper by Rafael La Porta and Andrei Shleifer:

First, it is huge, reaching about half of the total in the poorest countries.

Second, it has extremely low productivity compared to the formal economy: informal firms are typically small, inefficient, and run by poorly educated entrepreneurs.

Third, although avoidance of taxes and regulations is an important reason for informality, the productivity of informal firms is too low for them to thrive in the formal sector. Lowering registration costs neither brings many informal firms into the formal sector, nor unleashes economic growth.

Fourth, the informal economy is largely disconnected from the formal economy. Informal firms rarely transition to formality, and continue their existence, often for years or even decades, without much growth or improvement.

Fifth, as countries grow and develop, the informal economy eventually shrinks, and the formal economy comes to dominate economic life.

Did rice production create collectivism? Evidence from within China

A new study in Science. Excerpts to give you the general idea:

Two of the most common subsistence cropsrice and wheatare very different, and we argue that they lead to different cultures.

…Because rice paddies need standing water, people in rice regions build elaborate irrigation systems that require farmers to cooperate.

…Paddy rice also requires an extraordinary amount of work. …To deal with the massive labor requirements, farmers in rice villages from India to Malaysia and Japan form cooperative labor exchanges.

…In economic terms, paddy rice makes cooperation more valuable.

…the results consistently showed that [college students] from rice provinces are more holistic thinking, interdependent, and loyal/nepotistic than participants from the wheat provinces.

…China’s rice regions [also] have several markers of East Asian culture: more holistic thought, more interdependent self construals, and lower divorce rates. The wheat growing north looked more culturally similar to the West, with more analytic thought, individualism, and divorce.

Very interesting.

A few thoughts. One is that it’s hard to say whether rice production fostered cooperation or whether rice production fostered something else (e.g. states) that shape behavior.

Also, they use rice suitability estimates to instrument for rice production. This requires us to believe that the things that determine suitability (soil type, climate, temperature, etc.) only affect social and economic development through their effect on rice production. This seems like a stretch (what about disease prevalence? frequency of shocks? general agricultural productivity?) If you read an instrumental variables paper and they do not mention the words “exclusion restriction”, exercise caution. This is the most mis-used identification strategy out there, possibly worse than the cardinal sin of matching.

Also, unless I’m mistaken, Confucius was born close to the wheat-producing region

Laser-grown teeth

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A Harvard-led team just successfully used low-powered lasers to activate stem cells and stimulate the growth of teeth in rats and human dental tissue in a lab. The results were published today in the journal Science Translational Medicine.
The ability to naturally regrow dental tissue could transform dentistry, making it possible to regrow teeth instead of replacing them with a substitute like porcelain. But even more amazingly, once it’s better understood, this same technique could potentially be used to heal wounds and regenerate bone, skin, and muscle.

Source.