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

tbf1family

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.

“We kill people based on metadata”

Supporters of the National Security Agency inevitably defend its sweeping collection of phone and Internet records on the ground that it is only collecting so-called “metadata”—who you call, when you call, how long you talk. Since this does not include the actual content of the communications, the threat to privacy is said to be negligible. That argument is profoundly misleading.

Of course knowing the content of a call can be crucial to establishing a particular threat. But metadata alone can provide an extremely detailed picture of a person’s most intimate associations and interests, and it’s actually much easier as a technological matter to search huge amounts of metadata than to listen to millions of phone calls. As NSA General Counsel Stewart Baker has said, “Metadata absolutely tells you everything about somebody’s life. If you have enough metadata, you don’t really need content.” When I quoted Baker at a recent debate at Johns Hopkins University, my opponent, General Michael Hayden, former director of the NSA and the CIA, called Baker’s comment “absolutely correct,” and raised him one, asserting, “We kill people based on metadata.”

That is David Cole beginning his NYRB review of the USA Freedom Act, a bill passed May 22 to rein in NSA spying on Americans (a little).

The basic message is that a decent bill was watered down to accomplish only a little. But ‘a little’ is a decent start.

I feared worse. When something is called the ‘Freedom Act’, you’d be wise to guess it’s taking freedom away. Sort of like when a country has the word “Democratic” in its official name– the first sign it’s a fascist tyranny. If it looks like a duck and quacks like a duck, you don’t usually need a flashing sign that reads “DUCK”.

This is my teaching nightmare

Professor Christensen did something “truly disruptive” in 2011, when he found himself in a room with a panoramic view of Boston Harbor. About to begin his lecture, he noticed something about the students before him. They were beautiful, he later recalled. Really beautiful.

“Oh, we’re not students,” one of them explained. “We’re models.”

They were there to look as if they were learning: to appear slightly puzzled when Professor Christensen introduced a complex concept, to nod when he clarified it, or to look fascinated if he grew a tad boring. The cameras in the classroom — actually, a rented space downtown — would capture it all for the real audience: roughly 130,000 business students at the University of Phoenix, which hired Professor Christensen to deliver lectures online.

The NY Times on Harvard Business School’s slow steps into online education.

I, stand-vangelist

A young sow grizzly bear standing up to get a better view.The scales have fallen from Emily Oster’s eyes. She is a standing desk convert.

When I am not evangelizing about cash transfer programs, I am pushing the standing desk on my friends, colleagues and blog readers. My standing desk conversion story, comments and reviews here.

Oster makes a similar case, but where I provide opinion and pictures of animals I stole off the Internet, she opts for giving actual evidence. Some excerpts:

  • …prolonged standing is associated with varicose veins and lower back pain.
  • …The combination of sitting and standing provided by such a desk seems to decrease worker-reported discomfort rather than increase it.
  • …Workers who use these desks report small reductions in back, neck and arm pain.
  • …[T]hese improvements do not seem to come at the cost of lower worker productivity.
  • …[People] don’t typically stand all day. The decrease in sitting time is on the order of 90 minutes to two hours.
  • …[One study showed] a 65 percent increase in mortality rate for [Norwegians] who sat for 10 or more hours a day compared with those who sat less than four hours a day.
  • …A large Australian study found a 40 percent increase in the risk of death from sitting more than 11 hours a day versus less than four.
  • …[A]t least one review article shows there does not seem to be any evidence of extra energy spent by the users of standing desks.

For those bored on a Friday afternoon, all my previous standing desk posts here.

“Highway to Hitler”

Some papers make pithy academic blogging easy.

The Autobahn was one of the most important projects of the Hitler government. It was intended to reduce unemployment, and was widely used for propaganda purposes.

We examine its role in increasing support for the NS regime by analyzing new data on motorway construction and the 1934 plebiscite, which gave Hitler great powers as head of state.

Our results suggest that road building was highly effective, reducing opposition to the nascent Nazi regime.

By Voightlander and Voth.

Am I a cash transfer evangelist or hypocrite?

I’m going to get off the cash transfer wagon on this blog because it’s getting boring for me and for you.

But first… am I an evangelist or hypocrite? I think the answer is both.

There is a homeless man who stands outside the grocery store in my building every day. He looks about 50. Every day he asks me for change, and every day I say, “sorry, no.” I feel badly, but I comfort myself with the thought that Jeannie and I give $100 every month to City Harvest, a network of NYC food programs.

Why do I think it’s a good idea to give cash to the poorest in Uganda, but not to the homeless of NYC?

The obvious worry is that the money will be “wasted” in that it’s spent on getting drunk or high. Possibly my money could do more harm than good.

But then this is the very myth I and others have looked into and dispelled–at least in poor countries. (David Evans has a very nice blog post and paper looking at 44 studies. 42 say that the poor don’t spend cash on booze or cigarettes.)

You might suspect (and I do) that the poorest in NYC are different. The average person in Uganda or Liberia is very poor, and the average person does just fine with cash. But a homeless person in NYC is not average (at least not the ones who stand outside my grocery store for years). The poorest of the poor in developed and developing countries might be different.

That would be easier to believe if I didn’t have a cash transfer experiment (stay tuned) where we gave cash to the poorest men in the urban slums of Liberia. We sought out men who, as often as not, made their living through theft or drug dealing, were often homeless, and were rampant users of alcohol, marijuana, and sometimes harder stuff. (We even specifically recruited the guys hanging out in front of grocery stores begging.)

As best we can tell, they saved and invested most of their money, and spent little on “bads”.

I am curious: can anyone suggest reports or studies on the homeless in urban America? Are there agencies that give cash to the poorest and most hardcore homeless in the US? Particularly good program evaluations?

 

What does political gerrymandering look like?

I have a deeply held conviction that gerrymandering is the fundamental political problem facing the United States. This conviction is more or less uninformed by actual theory, evidence, or firsthand knowledge of American politics. For, like many economists and political scientists, I only use evidence to inform my opinions of my professional work.

Nonetheless, I am delighted by this quiz from John Sides over at Monkey Cage. Which Louisiana maps illustrate the most and the least gerrymandered system? louisiana_districtsThe answer is not what you expect.

As it happens, Justice Stevens agrees with me about gerrymandering, going so far as to suggest a constitutional amendment to inhibit it. (Technically, of course, it might be more accurate to say I agree with Justice Stevens.) Pointers to other literature welcome.

 

Yes, even the poorest of the poor can be entrepreneurs (or, further adventures in my cash transfer fetish)

It only took me and my coauthors seven years, but we now have a paper describing what happens when you give cash grants to the poorest of the poor women in Uganda.

In poor countries, especially rural areas, there usually aren’t big businesses, and so most employment is self-employment, like farming or trading. There’s now a gamut of evidence that the poor lack capital and can’t borrow it, and this is one of the main barriers to expanding businesses.

The policy implication: anti-poverty programs should focus on improving financial markets or simply handing out capital or cash.

But it’s not clear whether the same is true for the most marginalized and “ultra-poor” people—the people who have the very lowest incomes, almost no capital or business, and limited social networks.

On the one hand, the first chunk of capital could have the highest return, helping people to start new businesses, meaning returns could be higher than among the “regular poor”.

On the other hand, we often worry that the poorest people lack other important inputs or face other frictions and constraints. They might lack basic education or business skills. They could make impulsive decisions with the money. They might also lack the social networks that, in peasant societies, are main sources of advice, public goods, and finance.

When it comes to the marginalized, especially women, traditional social norms could also pressure them to share capital or earnings, or hinder their business growth. Also, husbands might try to relieve women of their capital or earnings.

This is one reason that aid program offer cash seldom, and when they do, they offer conditions, supervision, training, or make people form groups. Some of these things are expensive to provide–often more expensive than the cash or capital. Are they worth it?

In a nutshell, not if they are expensive.

We randomized a package of interventions and also turned some of the components randomly on and off over three years, testing their cost-effectiveness (and the theories underlying them).

We find that given $150, five days of training, and intensive supervision, ultra-poor women double their business ownership and their incomes. The supervision doesn’t add much in terms of earnings, however, even though it’s much more expensive than the grant.

We also encourage some women to form groups. Interestingly, this is easy–simple encouragement and a little training lead these formally marginalized people to start and stick with groups, where they save and cooperatively farm together. By some measures this boosts their earnings.

It’s a nice lesson: the ultra-poor (at least these ones) know what to do with cash and put it to terrific use, and expensive and heavy supervision doesn’t change how they spend their money. But social networks and capital are easy to stimulate (more cheaply too), at least among the excluded, and this seems to have real impacts on their financial life.

Full paper is here, with Eric Green, Julian Jamison, and Jeannie Annan.

I now know what my first book cover is going to be…

Apparently the publishing industry has rules if you are going to publish anything on Africa:bnciztviqaauiaw

We’re obliged to Simon Stevens, a reader who put together the picture above and pointed out that whoever you are, wherever you’re from, whatever kind of writing you do, if you write a novel “about Africa,” chances are you’re going to get the acacia tree treatment. And the orange sky.

From Africa Is A Country. So good.