I develop a model that introduces optimal taxation theory to the decision of armed groups to form states, and argue that the returns to such decision hinge on their ability to tax the local population. A sharp, exogenous rise in the price of a bulky commodity used in the video-game industry, coltan, leads armed groups to impose a “monopoly of violence” in coltan villages. A later increase in the price of gold, easier to conceal and hence more difficult to tax, does not. Results based on two alternative identification strategies are also consistent with the model. The findings support the hypothesis that the expected revenue from taxation, in particular tax base elasticity, is a determinant of state formation.
He is on the econ job market. Look at him closely.
Besides this being one of the most interesting political economy papers I’ve seen (and some seriously mind-blowing data collection) I’d rank it probably one of the 2-3 best empirical papers on conflict I’ve ever read.
In the last few years, most of the exciting political economy of development has been to understand how states move from warlord rule to high-capacity fiscal and bureaucratic systems. Just a few examples: Besley and Persson, Acemoglu and Robinson, North and Weingast. But politics and political economy doesn’t begin with warlords. It begins with much more primitive states and anarchy. What this paper does so marvelously well is introduce the logic of public finance to explain rebel governance and the emergence of primitive states.
The Obama administration… has publicly rebuked U.N. staff in New York and Geneva for recently spending nearly three-quarters of their air travel budget on business class fare.
I think I see a new Millennium Development Goal.
That is an article in DevEx, which goes on to note even the World Bank is cutting back a little.
Not enough, in my opinion. I started my tirade against Business several years ago, and have been meaning to beat the drum again.
I invite arguments for business class i the comments, where I will in turns counter-argue or concede.
A note: any argument for business class in the UN or the Bank ought to consider first why most humanitarian organizations have survived for years without it.
In the meantime, my favorite quote from the article:
“I systematically asked the travel office to downgrade my flights to economy … At the time, I was told that I was the only person in the entire NY office — and we are talking hundreds of people — who ever asked to be downgraded to economy,” lamented Massimo Lowicki-Zucca, a former program specialist with UNICEF.
I love that line. Coincidentally, Massimo is a dear friend from my northern Uganda days. It must be in the water there.
Update: Several people remind me that the UK’s DFID–among the most effective large aid organizations in the world–has dramatically clawed back business class.
I think this is a first, and very important. And it’s a job market paper from one of my collaborators, Nathan Fiala.
He starts with a pool of very small business owners in Uganda who said they wanted to expand their businesses. They were randomly allocated either loans, cash grants, business skills training, or a combination of each.
I find that six and nine months after the interventions, men with access to loans with training report 54% greater profits. This effect increases slightly over time and is driven by men with higher baseline profits and ability. The loan-only intervention had some initial impact, but this is gone by the nine month follow-up. I find no impacts from the unconditional grant interventions. Markedly, there are no effects for women from any of the interventions.
Cashonistas of the world: pause and reflect? Granted, these are short-term results only, but there are many reasons to pause and reflect, not least the fact that so few microfinance interventions show evidence of investment and earnings growth. I am still thinking deeply about the implications.
Family pressure on women appears to have significantly negative effects on business investment decisions: married women with family living nearby perform worse than those in the control group in a number of the interventions. Men instead benefit from close family proximity and demand labor from the household. The results suggest that highly motivated and skilled male-owned microenterprises can grow through finance, but the current finance model does not work for female-owned enterprises.
Nathan elaborates in a guest post on the World Bank development impact blog.
Everything you need to know in one volume, by JPAL’s Rachel Glennerster and Kudzai Takavarasha.
Basically this is a how-to guide for the practitioner, or researchers who are new to RCTs and want a checklist and how-to guide to avoid common pitfalls. I certainly wish I’d had it a few years ago.
For veterans it’s a useful reminder and checklist. And teaching tool. I’ll use it for undergraduate and graduate classes.
For the more technically-minded, good pairings are Mostly Harmless Econometrics (by Angrist and Psicke) and Field Experiments (by Gerber and Green. Both are required reading for any serious field empiricist. Deaton’s Analysis of Household Surveys is also free online, or you can buy a paper copy.
I wish there were a good handbook like this on data collection in developing countries. Any reader suggestions? I bought several copies of an old Casley and Lury book, now out of print and out of date.
Update: Was just alerted to Overseas Research: A Practical Guide, which I have not read but looks promising for new researchers.
Lauren Prather, Stanford PhD student, runs a survey experiment with 1000 Americans.
Subjects were told a news story about a government hunger relief program. Half were told poor people were given cash relief, while half were told food. Cutting across this, half were told the hungry people were Americans, while half were told it was foreigners.
Should the government should cut the program?
Cash or food to foreigners? Who cares! Roughly 56% said cut em off, cash or food.
What about to poor Americans? 28% said cut food, and 42% said cut cash.
I usually hate survey experiments, but I simply love this one.
Also, depressed. That more than half would cut food aid to starving foreigners makes me profoundly sad.
h/t Mathilde Emeriau.
Source. Hat tip to @muribec
Related: one of my most read posts ever, “How to email your professors and employers“
children have taken to a schoolyard game called, “Cops and Rob Ford.”
Sad to see Jane Jacobs’ “city that works” fall so far.
I’m teaching a Political Economy of Development course at both the undergraduate and graduate level (SIPA) this spring.
The unofficial subtitle for both courses is “Why are some countries poor, violent, and unfree, and what (if anything) can the West do about it?”
My overarching goal is to make you skeptical, critical and cynical about development, without crushing your idealism, optimism, or desire to serve humanity. Something in the middle.
I have not finalized the spring lectures and readings yet but last year’s graduate (SIPA) syllabus is close to what both the undergraduate and SIPA classes will look like. I hope to have fresh syllabi in a few weeks.
Some important details if you are deciding on the course:
Rema Hanna and Shing-Yi Wang give us evidence from India:
we demonstrate that university students who cheat on a simple task in a laboratory setting are more likely to state a preference for entering public service.
…we also show that cheating on this task is predictive of corrupt behavior by real government workers
A hypothesis for their next study: The university students who change the rules so that their cheating is not technically illegal? They go into finance.
Across all nine presidential administrations, infant mortality rates were below trend when the President was a Democrat and above trend when the President was a Republican.
This was true for overall, neonatal, and postneonatal mortality, with effects larger for postneonatal compared to neonatal mortality rates.
Regression estimates show that, relative to trend, Republican administrations were characterized by infant mortality rates that were, on average, three percent higher than Democratic administrations.
In proportional terms, effect size is similar for US whites and blacks. US black rates are more than twice as high as white, implying substantially larger absolute effects for blacks.
A new paper titled, “US Infant Mortality and the President’s Party“. I like my title better.
Fun exercise: imagine a SecState or NSC Advisor referring to “studies” — i.e., the literature — as much as Yellen has in Cong. testimony.
This is partly a problem of “senior policy officials don’t read research”, or even try to keep up through staffers.
Also at issue is that an immense amount of what the best political scientists are doing is irrelevant to what State or the NSC does, and what is relevant is often of mediocre quality. I think this is improving but I’m not very sure.
A new paper from Bill Easterly and Ross Levine:
Although a large literature argues that European settlement outside of Europe shaped institutional, educational, technological, cultural, and economic outcomes, researchers have been unable to directly assess these predictions because of an absence of data on colonial European settlement.
…we construct a new database on the European share of the population during the early stages of colonization and examine its association with the level of economic development today.
We find: (1) a strong and uniformly positive relationship between colonial European settlement and development, (2) a stronger relationship between colonial European settlement and economic development today than between development today and the proportion of the population of European descent today; and (3) no evidence that the positive relationship between colonial European settlement and economic development diminishes or becomes negative at very low levels of colonial European settlement, contradicting a large literature that focuses on the enduring adverse effects of small European settlements.
Our findings are most consistent with human capital playing a central role in the way that colonial European settlement affects development today.
The provocative post title comes from a tweet of Bill’s. He likes to provoke.
I think the wrong way to interpret their finding is that colonialism causes development.
I think the right way to think about it is to remember that modern economic growth is a product of ideas, skills, and the organization of society and firms. If you don’t have much of that stuff and add people that do–even colonists–growth is more likely.
What’s amazing is that there are other ways to get ideas and skills and social organization than colonialism. You would think, by now, these other paths would have swamped out the effects of early settlement. What I did not see in my quick reading of the paper is a sense of proportion–is the statistically significant result substantive? Less lazy readers than me: please chime in.
Countries that, as of 2012, did not use the metric system:
In 2013, breaking news:
Myanmar is preparing to adopt the metric system or the International System of Units (SI System) as the country’s official system of measurement, according to the Ministry of Commerce.
That’s right folks, the US and its former quasi-colony are the last hold-outs — and one of those two didn’t have a functioning government for most of the last three decades.
(The saddest part of that last statement is that it’s not obvious I am referring to Liberia.)
After living here 13 years I’m still getting accustomed. I now manage to think in miles as easily as kilometers, and I only seldom feel the need to convert Fahrenheit to Celsius in my head (though that’s partly because I’m bad at multiplying stuff by 5/9).
Even so, just last week I was trying to order large Ziploc bags on Amazon, thinking to myself “What exactly is a quart again? Sounds big. Sure, why not get the four-box pack?” *Click* Today I am awash in large-ish sandwich bags.
I’m curious what the political stakes are. Tragically, I suspect the average House member is convinced that such Obametrics are the fast path to socialism.
Your propeller-head stats paper of the day:
The statistical and econometrics literature on causality is more focused on “effects of causes” than on “causes of effects.” That is, in the standard approach it is natural to study the effect of a treatment, but it is not in general possible to define the causes of any particular outcome. This has led some researchers to dismiss the search for causes as “cocktail party chatter” that is outside the realm of science. We argue here that the search for causes can be understood within traditional statistical frameworks as a part of model checking and hypothesis generation. We argue that it can make sense to ask questions about the causes of effects, but the answers to these questions will be in terms of effects of causes.
By two guys who know what they are talking about: Andy Gelman and Guido Imbens.
That’s what some colleagues and I tested in Liberia. I figured I wasn’t stressed out enough already, so why not study harder-to-track, more volatile populations in more expensive-to-survey countries than I already do?
We just collected our last data point, and so it’s far too soon to hand out hard results. But with all the GiveDirectly cash transfers hubbub in the press, I ended up spilling the beans (a little) to NPR Planet Money. Listen to the excellent episode. Some preliminary results to come after Christmas, I expect. The more interesting results, arguably, will come from attempts at behavioral therapy. Stay tuned.
Yesterday I mentioned the NYC “future of cash transfers” Salon on Nov 21st 830-1030am without the RSVP link. Apologies and thanks to readers for pointing this out.