Are undergraduates lazy?

Economic Logician has some unkind words for today's undergraduates:

"I find it quite frustrating to teach undergraduates, as they seem to have difficulties grasping simple concepts and often exhibit a disturbing lack of drive to learn. I may say this is due to my teaching, but my sentiment has been echoed by many colleagues, at my place and elsewhere. In addition, this frustration is fueled by the difference I see between undergraduates today and those from my times as a student. That view may very well be biased, as I was a rather good student, thus I am looking forward to some objective measures of student effort and performance.

Philip S. Babcock and Mindy Marks use time use surveys of students in 1961 and 2003. They notice that the time spent studying has been reduced from 40 hours a week to 27. This is not a small change. And this cannot be explained by any composition effect, as it appears no matter how you slice the data. There is some non-measurable way in which students are different."

I would defend the students here. For one thing, a lot of this has to do with grade inflation. If students don't have to work as hard to get an A as they used to, wouldn't we expect them to put in less time studying? And we do not have grade inflation because students are lazy, we have grade inflation because that is equilibrium outcome given the incentives facing professors (the optimal strategy is almost always, "give slightly better grades than the norm.")

Also some of the things that students spend more of their time on these days compared to when I was in school are things like student organizations, volunteering, and studying abroad. I would argue that this is very wise. These kinds of activities build the skills that students will need in their careers. And unlike when people like Economic Logician and I went to college, the job market is a lot more competitive these days. College enrollment rates continue to increase, and just having a degree isn't worth as as much. As a result, college can't be a time when students focus on learning just for the sake of it, much as we might all like it to be- they have to be conscious about what's going to happen next.

Finally, I would argue that most people, most of the time make their behavior choices relative to some mean. The students who study a lot do so because they want to think of themselves as studious. And this isn't defined in absolute terms- "studious" means you study x standard deviations more than the people around you. This is how it works now, and this is how it worked when Economic Logician and I were in school too. The mean that students are defining themselves relative to has changed, but this is more because the incentives facing the students have changed, rather than that the students themselves have changed.

Personally, as a relatively new assistant professor, I find myself wondering more why the students don't study less than they actually do, rather than being frustrated that they don't study more.

Suits, signalling, and social norms

I used to work at a place where people dressed relatively formally, but there was no official dress code. There were some interesting things about the way different people, particularly men, dressed. It was acceptable for more junior people to dress down slightly- you could get away with not wearing a jacket, and also with occaisonally not wearing a tie. It was never acceptable for higher-ups to do that- people above a certain level were never seen without ties, and almost never seen without jackets either. A suit is thus a marker of status- anyone above a certain level needs to be wearing one. Note that it's not that people are just choosing to do this, as any senior person who didn't wear a suit would be violating the norm and hence look the ridiculous- that's just how the norm takes shape.

The social norm about suits in most places in Africa that I've been is that Africans in any kind of high status job (say, any job that would require a university degree) always wear either suits or (sometimes traditional clothes). If you're a foreigner, though, the norm is to dress very informally. Why might this be? Well, particularly if you're a foreigner, it's very hot and uncomfortable to wear a suit. And there's already a rather obvious marker of your status- i.e., you're white- so the suit doesn't convey any extra information about you. Again, it's not that people make a conscious decision based on these factors; these are just some incentives that might explain why the norm evolved that way.

There are two instances I can think of where I've seen a much more flexible norm about wearing suits- one is in Burkina Faso, where I am now. For whatever reason, the norm is that even very important Burkinabe are often dressed casually. Yet, some of the locals wear suits anyway, even though it's very hot (it was about 103 this afternoon). My guess would be, the suit-wearing norm evolves in the kinds of jobs where you are both operating from an insecure position, and you have to impress foreigners (like sales, or trying attract foreign investors). The suit wearing-norm may have been subverted among the Burkinabe somehow, but wearing a suit is still a way to signal to foreigners about your status.

The other situation with flexible suit norm is among coaches of European soccer teams. Some wear track suits, while others are dressed to the nines. I have no idea what it says about if you're a suit-wearing soccer coach.

Hypocrisy

Robin Hanson has some interesting thoughts about why people are so darned hypocritical:

"Food isn’t about Nutrition
Clothes aren’t about Comfort
Bedrooms aren’t about Sleep
Marriage isn’t about Romance
Talk isn’t about Info
Laughter isn’t about Jokes
Charity isn’t about Helping
Church isn’t about God
Art isn’t about Insight
Medicine isn’t about Health
Consulting isn’t about Advice
School isn’t about Learning
Research isn’t about Progress
Politics isn’t about Policy

“X is not about Y,” … mean[s] that while Y is the function commonly said to drive most X behavior, in fact some other function Z drives X … more. … Many are well aware of this but say we are better off pretending X is about Y..."

"I’ve argued that much of our behavior is poorly explained by the reasons we give, and better explained as ways to signal abilities, loyalties, etc. But if so, why do we act so astoundingly ignorant? Why don’t we know about, and explicitly acknowledge, these functions? Yes, it can look bad to brag, or to be consciously strategic about loyalties, and some observers may be usefully fooled by our idealistic stories. But are these really enough to explain our incredible ignorance?

Man the sly rule bender offers a more satisfying explanation: we evolved to overtly and consciously embrace social norms against bragging, dominance, and sub-band coalitions, while covertly and subconsciously signaling our abilities, and loyalties...

It looks bad to brag and to be consciously strategic about loyalties not just because those can in general look bad, but because they violate strong forager norms. We signal covertly and unconsciously because our ancestors were strongly punished for overt and conscious signals...

...the main reason we have huge brains is to hypocritically bend rules"

I'm still thinking about this (and I think Robin is too). It's certainly true that people have a tendency to ascribe loftier motivations to their own behavior than often seems to be the case, not only to others but also in their own minds. I'm not sure I buy the explanation here, though.

Esther Duflo wins the John Bates Clark Medal

Esther Duflo has won the John Bates Clark Medal, which is the most prestigious award in economics other than the Nobel. She is best known for her work at J-PAL in advancing the cause of randomized control trials (RCTs) to evaluate policies and interventions, a topic I have written about here before. I met Esther at a conference recently, she's also a very nice person.

What does it mean? Well, it's good to see a development economist get the award, particularly since development tends to be rather maligned. Hopefully, this award also signals an increase in the emphasis on real-world, policy relevant research within the profession. Some people are worried that this will increase the dominance of RCTs as the approach in development economics. Personally, I don't think it will make much of a difference- the emphasis on RCTs has gone about as far as it can go.

Poverty and vulnerability to risk

Very interesting EconTalk podcast with a sociologist named Katherine Newman. The interview is about her book called Chutes and Ladders: Navigating the Low-Wage Job Market. The book is in essence a set of case studies that follow a group of working poor in the US over a relatively long period of time to look at how they fare and why. An interesting issue that she highlighted in the interview was the capacity to use social capital to mitigate risks. The example she used was having someone to call if your kid gets sick when you have to go to work, vs. having to take off work to take care of the kid. The people with someone to call tend to do a lot better in the long run than the people who don't. This issue comes up a lot in development economics (the great Portfolios of the Poor talks about it quite a bit), I wouldn't have thought it would be so important in the US.

Zam-Rock

Just, wow.

New York City does away with its Conditional Cash Transfer Program

So much for that:

"An unusual and much-heralded program that gave poor families cash to encourage good behavior and self-sufficiency has so far had only modest effects on their lives and economic situation, according to an analysis the Bloomberg administration released on Tuesday.

The three-year-old pilot project, the first of its kind in the country, gave parents payments for things like going to the dentist ($100) or holding down a full-time job ($150 per month). Children were rewarded for attending school regularly ($25 to $50 per month) or passing a high school Regents exam ($600).

But city officials said Tuesday that there were no specific plans at this time to go forward with a publicly financed version of the program... elementary and middle school students who participated made no educational or attendance gains. Neither did high school students who performed below basic proficiency standards before high school."

These programs have been very successful in several developing countries, particularly Mexico's Progresa and Oportunidades programs. Somehow, it seems kind of obvious to me that a program like this would work well in a developing country but not in New York City. Yet, I can't really say why.

Quote of the day

"If people hate what they don’t understand, then that would explain my attitude towards abstract art. I see abstract art and I want to stab it in the neck. And then I begin to hate myself because my anger itself has taken a cue from the painting and expressed itself in an abstract form."

From one of my favorite blogs and certainly the one with my favorite name: "I Dance the Internet," by a Ugandan journalist named Ernest Bazanye.

Pricing and behavioral economics

I'm currently making my way through Easterly and Cohen's edited volume What Works in Development: Thinking Big and Thinking Small; all the chapters I've read have been excellent so far. One that struck me was Michael Kremer and Alaka Holla's survey of the literature on the impact of different approaches to pricing in health and education projects (ungated version here). They note that a remarkably consistent finding is that when you go from a zero to non-zero cost or reward, there is a large difference in uptake. So, for example, people are much less likely to participate in an education program or use an anti-malarial impregnated bednet if you charge them a small fee rather than giving it to them for free. That's not surprising, of course, but what is surprising is that the size of the fee tends to be much less important than whether or not there is a fee at all. This isn't what economic theory would predict- people should place a certain value on something like an anti-malarial bednet, and be willing to pay for it as long as it's offered to them at a price that's less than that. There should not be very many people who actually value it enough to use it if you give it to them, but not enough to pay even a tiny price for it. Yet, it turns out there are.

This is an example of behavioral economics, i.e., loooking at how peoples' psychological biases lead them to deviate from the standard assumptions of economic theory. Usually, research along these lines picks a particular deviation- often one that has been identified empirically, such as that people are impatient about something- and offers an ad hoc theory based on incorporating this into a model of utility maximization. This is certainly a worthwhile approach that has led to some very interesting work.

One of my half-formed, pet ideas is that it would be great to approach this from the other way around, from the standpoint of evolutionary psychology. One could build a broader theoretical framework based on evolutionary psychology that could yield more systematic predictions that could be tested empirically. This would give us a complementary and potentially useful way to look at these things in addition to narrower adaptations of economic theory in stemming from observed empirical regularities.

Bracketology

In general, I dislike the idea of making predictions about the future. After all, the future is uncertain, and if you are ever asked to make any kind of prediction you should always just pick the most likely outcome. Usually, making predictions in this sense is not a very interesting process, since people often agree on what the most likely outcome is. Who is most likely to win the World Series next year? Anyone who is knowledgable about baseball would say the Yankees. However, people like to make predictions that other teams will win the World Series- some people might pick, say, the Mets. Why? Usually not because they actually believe the Mets are more likely to win than the Yankees, but because they want to make the statement that they think other people are underrating the Mets. What they really mean by picking the Mets is something like, "most people think the Mets have a 2% chance of winning the World Series, but I think it's more like 10%." Which is a substantive and potentially interesting thing to say, so why not just say that? Because even if the Mets do win the World Series, it's not like it was inevitable, so it really doesn't even validate their opinion.

Which brings me to the topic of filling out NCAA tournament brackets. Is filling out your bracket in the office pool a similarly meaningless exercise in which you should just pick all the higher seeds to win? Actually, no- not in the same way. The reason is, that you're not trying to maximize your chance of picking the correct bracket, you're trying to maximize your chances of beating everyone else in your pool. And that can lead to very different reasoning.

For the sake of argument, say you're in a pool with 1,000,000 other people, and everyone agrees that Kansas is the favorite and has a 15% chance of winning, while Kentucky is the second favorite and has a 14% chance of winning. What if the other 999,999 people in the pool pick Kansas to go all the way? Even if you agree that Kansas is the favorite, it's not going to make sense to pick Kansas and then hope that you'll beat everyone else and be one in a million on the strength of your other picks. Rather, you should pick Kentucky, and if they make good on that 14% chance you'll be in good shape to win your pool.

What I'm curious about is, I can't think of any other area in life where this kind of reasoning applies. When else is it the case that maximizing the expected value of the decisionmaker's outcome would lead to one decision, but maximizing the probability that the value of the decisionmaker's outcome exceeds some finite group of competitors leads to a different decision, and the latter is in fact what really is the decisionmaker's goal?

RCTs and transparency

A hot topic in development economics right now is the use of randomized control trials in impact evaluation. The basic idea is to assess the impact of development projects by using a methodology similar to clinical trials of pharmaceutical drugs. So, for instance, say your project involves building 1,000 schools. The process would be to choose 2,000 suitable locations for the schools, and then randomly divide them into treatment and control groups, so that you can compare the outcomes in the locations that got schools with those that did not.

While pretty much all development economists agree that this is a good way to do impact evaluation, opinions vary dramatically on just how good it is- some go so far as to argue that RCTs are the only way we really know anything about development, while others see RCTs as very limited and only appropriate in certain cases. I won't rehash the whole debate over the pros and cons, but a good overview is here.

One argument that I haven't heard raised before in favor of RCTs relates to transparency. When I used to work in development, I went to a presentation of some non-RCT research results at the World Bank with a relatively high-up practitioner colleague who was bright, but not quantitatively minded. The discussion at the seminar inevitably revolved around the technical details, with some people questioning the vailidity of the presenter's use of instrumental variables and results, the presenter defending them, etc.

After the seminar, my colleague explained that what we had seen was the reason why he didn't pay much attention to development economics research. He understood that the results can depend on econometric assumptions and choice of techniques in important ways- but without being able to even begin to understand how, he felt it was safer to just ignore it than to actually let it influence any decisions he made.

I think he was exactly right, and a major advantage of RCTs is that they avoid this problem. My colleague, and others like him, are in no position to have an opinion about, say, the validity of the instruments used in a particularly study or the debate over how IV results should be interpreted, for example. You might argue that this means he should just listen to an economist about this stuff. But he knows that different economists are going to tell him different things, and without some basis for wrapping his head around the underlying issues, it's a pretty risky move to just blindly follow their advice. By contrast, my colleague could certainly grasp a typical RCT analysis- how to interpret the results, how to evaluate external validity concerns, etc.

Obviously, research results that are easy for policymakers and donors to understand are going to have more influence over policy than those that aren't. But perhaps less obviously, the spread of RCTs could actually expand the influence of quantitative analysis in a more indirect way. People like my colleague don't pay much attention to development economics research, and with good reason. But if more of the research used a comprehensible methodology like RCTs, I think people like my colleague might start paying a lot more attention.

Farm aid from space

Another very good piece of development micreconomics journalism from Jina Moore, this one on livestock insurance in rural Kenya. For many poor people in developing countries, the potential benefits of insurance against the risks they face are enormous. As the recent book Portfolios of the Poor illustrates, people with very low incomes also tend to have very uncertain incomes as well- think of casual laborers who cannot rely on steady work, small-scale farmers who are vulnerable to uncertain weather conditions, or informal business owners who have good days and bad days. As a result, one of the biggest concerns these people have is managing their irregular cash flows, so that when things are going badly they can still afford to survive. In fact, it turns out that even very poor people are often willing to pay substantially for mechanisms that help them do this.

And not only is not having to worry about starving its own reward, but being insured can also help people get out of poverty by enabling them to take risks. A person who is insured can plant a crop that has a higher yield but fails once in a while, whereas a person who is not insured might be stuck planting a lower-yielding but more reliable crop (this has been observed in the tradeoff between planting millet and sorghum in West Africa, for instance). If you can cope with the ups and downs, you can own your own rickshaw and keep the profits, if not you might be better off working for a lower wage for someone who owns a rickshaw company. And so on.

Despite the huge potential, insurance projects has a bad rep among people who do development work- they're perceived as not working very well. This is primarily because, as Jina points out, in order to have insurance against losses someone needs to be there to verify the loss:

"For the cattle, camel, and goat herders in Marsabit, a dry part of Kenya that shares a border with Ethiopia, animals are assets. Their sale can bring the income a family needs to survive, and a big herd, like a big house, is a store of wealth that can be useful collateral for credit, which analysts often say is key to pulling people out of poverty. At minimum, losing a cow is a devastating financial blow.

That's the kind of risk that insurance can defray, but insurance agents aren't going to travel to Marsabit to verify cattle deaths."

Jina reports on clever approach to getting around this problem by offering people insurance indexed to rainfall rather than insurance against actual cattle deaths or crop failures:

"Enter weather-indexed insurance, which changes the way the damage is verified for everything from cattle to crops.

"The idea with an index is, instead of providing a payout based on crop loss, you provide a payout based on something you can measure independently," says Dan Osgood, associate research scientist at the International Research Institute for Climate and Society at Columbia University."

A key to these kinds of things from a project design point of view is that what might make sense in theory doesn't necessarily make sense to a livestock owner in rural Kenya- I looked at one case in another context where a logically designed insurance product failed because the farmers didn't understand what they were being offered. This involves not only education and outreach, but flexbility to design the products that make sense to the people who are getting them, rather than just making actuarial sense on paper.

Depression is good for you

Last week's New York Times magazine had an interesting evolutionary psychology article about the debate over whether propensity for depression might in fact be an adaptive trait. If you've never thought about evolutionary psychology before, it's a good introduction. The premise of the article is that a large proportion of the population appears to be prone to depression- yet, depression would seem to interfere with our ability to survive and reproduce, so why did we evolve this way? The main argument is that depression may serve an evolutionary purpose as a mechanism to get us to think deeply about our problems and learn from our mistakes. An important feature of depression is "rumination-" obsessing over negative thoughts to the exclusion of anything else, and maybe that process helps depressed people make better decisions in the future.

I was a bit unconvinced by that- as the article points out elsewhere, there's more to depression than just rumination, much of which seems obviously maladaptive. More intriguing I thought was the argument that the evolutionary explanation for depression might have to do with avoiding conflict over social status. The idea being, depression protects people with low status from themselves by making them sit around and mope all day, intstead of trying to gain status by opposing high-status people and potentially getting killed in the process.

Related to that, I wonder if the evolutionary function of depression might be to regulate our perceptions of our own self-worth according to circumstances. Most people, most of the time, seem to have inflated views of their own capabilities. Whereas, depressed people are the opposite. From an evolutionary standpoint, holding an inflated view of one's own capabilities might be useful in that it helps with signalling to potential mates. The more you believe in yourself, the more you can convince other people how great you are and the more you can reproduce. But, there's a countervailing cost in terms of survival risk. Overestimating your own ability can lead you into a miscalculation that gets you killed- say, by believing that you can successfully challenge someone who is in fact much more capable than you are.

So which wins out? Is having an inflated view of your own capabilities adaptive (i.e., are people with inflated views of themselves more likely to survive and reproduce than people with more accurate views) or not? Maybe the answer is, "sometimes." Under normal circumstances, the evolutionary pros of being overconfident outweigh the cons. But if things aren't going your way- for example, if you end up with low status, or your environment places you under constant threat- then the dangers of miscalculating outweigh the reproductive benefits. Depression is how our brains tell us that it's time to start being more realistic about coping with potential dangers, and to stop trying to puff ourselves up to attract babes.

More broadly, it would seem to make a lot of sense if people have the capability of assuming either high social status roles or low social status roles as circumstances warrant, rather than social status being completely determined by inherent traits. The overconfidence/depression combination might be a way of maintaining that flexibility- depression makes someone who would ordinarily seek high status to accepts a low status role.

EconTalk

Speaking of which, if you haven't heard it the EconTalk podcast is awesome. It has literally revolutionized my life as a commuter. Each episode is an hour long conversation between George Mason University professor Russ Roberts and a guest, often someone who has recently written a book. The guests are often economists, but also include a wide range of people talking about lots of different things- psychologists talking about education, legal scholars, etc. Development is a frequent topic, and Roberts gets some pretty big names on the show- people like William Easterly, Paul Collier, and Michael Spence, as well as lesser known people and sometimes even practioners. Roberts is a smart and thoughtful guy who asks good questions, and his genial manner has earned him the nickname "Uncle Russ" (at least to me). He's been doing this for years, so the archives are huge. In addition to the development stuff, I highly recommend the one with Robin Hanson on signalling if you want something that will blow your mind.

Marglin's The Dismal Science: How Thinking Like an Economist Undermines Community

The premise of The Dismal Science: How Thinking Like an Economist Undermines Community sounds very intriguing. Stephen Marglin is a guy who got tenure in the economics department at Harvard in the 1960s and promptly outed himself as a radical leftist who has devoted the majority of his career to criticizing mainstream economics. The central thesis of the book is that under the guise of scientific objectivity, the discipline of economics priveleges a peculiar view of human nature. Marglin contends that economics promotes the primacy of the needs of the individual over those of the community, and that this perspective is not rooted in science as economists claim but is in fact the artifact of a particular strain of philosophical thought that has emerged to legitimize the inequalities inherent in capitalism.

This was a book I had been really looking forward to- I enjoyed Marglin's appearance on the excellent EconTalk podcast, and of course the central idea has a lot of relevance for development. Like Marglin, I too am skeptical about a lot of things that economists are up to (though my criticism of the discipline would have less to do with some fundamental flaw in the tools of mainstream economcis and more to do with how those tools tend to be applied). Unfortunately, though, I found The Dismal Science disappointing- ultimately, there was very little here that I had any difficulty disagreeing with. The book spends far too little time trying to convice the reader of its central thesis, and far too much time on an unfocused, scattershot attack against a straw man version of "economics" that I don't recognize much at all. For example, Marglin keeps arguing that economics denies the community and allows only the individual or the state as the relevant unit of analysis. Yet, some of my own work focuses on the effects of HIV/AIDS mortality on community cooperation, and though other economists may take issue with various aspects of it one criticism I have never heard is that the community isn't a relevant focus. I would have enjoyed a thorough and balanced exploration of the idea that economics undermines community, but this book felt a lot more like a broadside.

Post-coup etiquette

Via Jina Moore, a Powerpoint presentation by an international consultant to the Guinean military on how to not violate human rights here. Too funny.

I thought the use of exclamation points was very effective- personally, whenever I see a sentence without an exclamation point at the end I always think, "If they really mean it, why no exclamation point?" I do have one suggestion though- I think the presentation would have been improved by taking a "Goofus and Gallant" kind of approach. For example,

• Nice Nelson's army always respects human rights!
• Bad Bashir's army thinks it's OK to ignore the Geneva Convention if no one is looking!

• Nice Nelson is having a fun time at the big conference- all the other leaders want to see his international human rights award!
• Bad Bashir has to stay home by himself and watch TV- he didn't even get invited to the big conference!

OK, rats or monkeys maybe- but pigeons?!?

Via Marginal Revolution, this totally blows my mind:

"Are birds smarter than mathematicians? Pigeons (Columba livia) perform optimally on a version of the Monty Hall Dilemma

Walter Herbranson & Julia Schroeder
Journal of Comparative Psychology, February 2010, Pages 1-13

Abstract: The “Monty Hall Dilemma” (MHD) is a well known probability puzzle in which a player tries to guess which of three doors conceals a desirable prize."

If you aren't familiar with it, the Monty Hall problem comes from the game show "Let's Make a Deal." In the game, contestants are presented with three numbered doors. A desirable prize is behind one of the doors, while behind the other two doors are undesirable booby prizes like a goat, a bale of hay, etc. The contestant chooses one of the three doors. Monty Hall, the host of the show, then opens one of the remaining two doors to reveal one of the booby prizes, leaving the constestant's chosen door and one other door. The contestant is then given the option of switching to their choice to the other closed door, or sticking with their original choice. Most people incorrectly reason that it makes no difference. In fact, if you stick with your original door your chance of getting the desirable prize is 1 in 3, whereas if you switch it's 1 in 2 (the key is that the door Monty picks to open is always one that has a booby prize behind it). I took a statsitics class with one of the smartest people I've met in which this example was presented. She was completely fooled by it and actually stayed after class to argue with the instructor. I certainly had a hard time wrapping my head around it the first time I saw it. And yet apparently, pigeons are not fooled:

"... a series of experiments investigated whether pigeons (Columba livia), like most humans, would fail to maximize their expected winnings in a version of the MHD. Birds completed multiple trials of a standard MHD, with the three response keys in an operant chamber serving as the three doors and access to mixed grain as the prize. Across experiments, the probability of gaining reinforcement for switching and staying was manipulated, and birds adjusted their probability of switching and staying to approximate the optimal strategy. Replication of the procedure with human participants showed that humans failed to adopt optimal strategies, even with extensive training."

Why are documentaries that deal with economic issues so lousy?

Documentary films that tackle economic issues are ovewhelmingly oversimplified, one-sided polemics, usually (but not always) from a far-left kind of perspective. Rarely is any attempt made to present the issues in anything resembling an objective way, or to let the audences make up their own minds about things. The filmmakers have a clear message that they are advocating- usually something along the lines of, "______ is really, really bad!"- and the film is an attempt to hammer home that message. Examples include Roger & Me, Life and Debt and The Corporation . That's not to say that these films don't have any merit at all- I actually like Roger & Me quite a bit, and Life and Debt is certainly worth watching- but there's no denying that the perspectives are one-sided and polemical.


Why is this? You might argue that these films have to be that way because audiences are stupid and they don't like things to be complicated. But that doesn't really explain it, because there's another more popular genre of documentaries where the norm is exactly the opposite. I'm thinking of character studies, like Tyson, Crumb, or Grizzly Man. The intention is these films is quite clearly to unpack the complexity of their subjects in a way that often seems to conciously promote ambiguity- a film like Errol Morris' The Fog of War, for example, wants you to see the different sides of Robert McNamara, appreciate the context and significance of his actions, etc. It's not trying to convince you that McNamara is "good" or "bad," in fact sometimes it feels like it's trying to prevent you from drawing too strong of a conclusion one way or the other.

All else being equal, you'd think the audience for documentaries about economic issues would be at least as smart as the audience for character study type documentaries- so why are the ones about economic issues so much more simplistic?

My only theory is that there may be some sort of path dependence. There are only a limited number of movies that are going to get made, so the outcome is not going to look like a competitive market. It may be that audiences have just come to expect movies that deal with these kinds of issues are going to be lefty polemics, and a film that took a different approach would have to struggle to overcome this perception.

Bayesian Learning

I'm a huge fan of Bayesian learning. I don't try to figure out the right answers, I try to figure out what all the possible answers and assign probabilities to each one. When I get new information, I update my probabilities based on how credible the information is, and how strong my prior beliefs were. For example, a while ago I did some reading about how laws that allow people to carry concealed handguns affect violent crime. Beforehand, I would have said there's about a 5% chance that concealed carry laws reduce violent crime, a 60% chance that these laws increase crime, and a 35% chance that it doesn't make any difference.

The stuff I was reading was at Econ Journal Watch, which was neat because it allows the authors of various studies that contradict one another to go back and forth; I looked at some other things as well. In any case, I found one (gated, unfortunately) paper that presented what it claimed was strong evidence that concealed carry laws reduce crime, and then a bunch of other papers that poked holes in it. Much of the hole-poking was legitimate, but it was the sort of hole-poking that suggests that maybe the coefficients were smaller or less significant, rather than the sort of hole-poking that suggests fatal flaws. It would be very difficult to convince me that concealed carry laws really do reduce crime, but what I read was enough for me to update my beliefs substantially. I'd now say there's about 10% chance that concealed carry laws reduce crime, a 15% chance that they increase crime, and a 75% chance that it doesn't make any difference. My priors updated and my Bayesian learning for the day complete, I happily resumed my regularly scheduled activities.

But some people would approach this kind of thing in a very different way- from what we could call a "Working Hypothesis" perspective. Such a person with similar underlying views as mine were at the beginning would instead take as the starting point, "I believe concealed carry laws reduce crime," and then they would act as though this hypothesis were true. When presented with new evidence, they would either a) interpret the evidence as not strong enough to overturn their working hypothesis and reject the evidence, or b) interpret the evidence as strong enough to overturn their working hypothesis in which case they would switch their belief to "I believe concealed carry laws increase crime" and proceed to go through life as though that hypothesis were true.

It's fairly obvious how in many instances a Bayesian Learning perspective would lead to better decisions than a Working Hypothesis perspective. But my question is, is there any circumstance under which a Working Hypothesis perspective might actually be preferable? Or is it just plain worse?

New website

My new website with info about my work and other stuff is here.

Also if anyone is looking for help designing a similar type of site I would highly recommend Dan Dumitrescu, the freelancer I used for mine. He's reasonably priced, fast and reliable, and does nice work, you can contact him at dtdumitrescu@gmail.com

While you were out...

... apparently there was a coup in Niger.

The international community responds by suspending aid; The Center for Global Development's Jenny Aker argues that might not be the best idea:

"There are both legal and theoretical reasons for cutting off aid after political instability. Legally, the U.S. State Department is bound to suspend aid if a coup occurs... but reality is quite complex. After drought and pest infestations last year, Niger is currently in the midst of a potential severe food crisis... If the military does remove Tandja from power, it will take some time for them to set up elections; in 1999, elections took place six months after the April coup. But the people of Niger can’t wait six months."

I agree in the main, and would also point to the question of what cutting off aid really accomplishes. Is the threat of all halting donor-funded development projects really supposed to hit the coup plotters where it hurts, or deter coups is other places in the future? Or is it just an empty way of putting an exclamation point on the international community's collective expression of disapproval?

Niger has entered into a couple of high profile oil and uranium deals with the Chinese government and a French parastatal recently. Instead of suspending development projects until they hold elections, how about banning mineral imports from Niger instead?

Findings from the ISAs

I've just spend three days at the International Studies Association meetings in New Orleans. I was hoping to make some interdisciplinary buddies here so that we could do interdiscplinary activities together, such as walking and chewing gum at the same time, or perhaps creating a unified theory of the social sciences. Sadly, I was not successful in this. I believe this was because the meetings ended up not being so interdisciplinary at all, the participants were overwhelmingly political scientists. In hindsight maybe my approach was off- I think I could have generated more interest if I had pitched it as spatial recontextualizion of identities and gum at the same time.



In any case, having been at the American Economic Association meetings in the exact same hotel a couple of years ago, I have undertaken an empirical analysis and have three statistically significant findings to report:



1) Political scientists are nicer, more normal people than economists. No surprise there.

2) Political scientists dress way better than economists. This is also no surprise, but it's much, much more dramatic and pronounced than I would have expected. I had thought the majority of the populations in all academic disciplines would be sort of nerdy, but some of the panel sessions I went to, I felt like I was at the Black Cat.

3) Economists have much better presentation skills than political scientists. This surprised me, I would have expected the opposite. My working theory is that being socially maladjusted weirdoes, many economists have realized that when they just be themselves, other people tend to run in the other direction. This makes them understand that they're going to need to put significant thought and effort into their approach if they're going to communicate with others, which leads to good presentation skills. By contrast, a lot of political scientists think they can just get up there and be their well-dressed, hipster selves, and everything else will take care of itself. Often, though, it doesn't. If you don't want to give a typical Powerpoint presentation, that's fine- but at least preparing a few slides or a handout to keep your audience focused is ALWAYS a good idea. Also, reading a prepared script out loud does not make for an effective presentation. I have never seen an economist do that, but I was stunned to see several political scientists do it this week.



On a more substantive note, I was struck by just how much empirical work goes on in political science in the panel sessions I went to. Granted, those were the kind of panel sessions that I tended to gravitate towards, but still- it seems that analyzing data is not some weird, fringe-y activity in political science these days. I was also struck by what I perceived as the strengths and weaknesses of the research findings. When I go to an economics conference, I am typically impressed by the methodological tools that people are using, but pretty underwhelmed by how relevant or interesting their research questions are on the whole. I can't really point to much that's wrong with what people are doing, but I often wonder why they'd want to do it in the first place. What the political scientists were doing was exactly the opposite- all of the issues people were looking at were fascinating. But most of the empirical approaches had pretty glaring flaws, and not just because of the data or whatever, but clear methodological problems that were easy to identify. I've blogged before about the different standards in different disciplines, and the standards for what constitutes a "result" in political science is quite low relative to economics.



Ultimately it seems that there is a lot of untapped potential for collaboration between economists and people from other social sciences on this kind of stuff. If you give them a question, economists have a comparative advantage getting as much mileage towards answering the question as the data allow- your average economist is head and shoulders above your average quantitatively-minded political scientist or sociologist in this regard. But, quantitively-minded social scientists in other disciplines are asking a lot of interesting questions, and asking the interesting questions is something that I don't think the discipline of economics does very well or values as much as it ought to.

Extremely Negative Psychology

This came in the mail today, I've been giggling about it all evening. It's been a very long time since I've been this interested in any subject not related to development economics or Africa.

My current understanding of evolutionary psychology is this: our brains have evolved into finely-honed machines that are geared towards making us good at being cavemen. By good I mean, good at spreading our genes, good at surviving and reproducing. This presents us with two problems, one obvious, the other less so. The obvious problem is that we are no longer cavemen. The pace of change in human society over the past 200 years has been too rapid for our evolving brains to keep up. The sorts of traits that are desirable in modern societies are quite different from those that were desirable in pre-industrial societies, but our brains are geared towards the caveman stuff.

The less obvious problem is that being "good" isn't really what we care about after all. Instead, we care about being happy. But the unfortunate reality is that our brains have not evolved to maximize the happiness of people like us in the information age, they've evolved to maximize the fitness of cavemen. Ultimately, happiness is nothing more than a tool that our brains use to manipulate us into doing the things that allow cavemen to spread their genes. And it gets worse- the brain doesn't want us to be happy, it wants us to pursue happiness. The brain doles out pleasure and satisfaction when we increase our status, accumulate more resources to impress mates or protect our children, and punishes us with anxiety and misery when lose status, or fail to attract a mate or protect our children. But the reward is rarely as good as we think it's going to be, because our brains don't want us to rest on our laurels. They want us to go out and get more.

Anyways I am thinking of starting an academicky movement around these ideas with sinister, cult-like overtones, similar to the Postive Psychology movement. Only I'm going to call mine the "Extremely Negative Psychology" movement. My first book will be called Damn You, the Human Brain!

Any joiners out there?

Interdisciplinarity

I'm heading off the International Studies Association conference in New Orleans next week. Now, I'm a pretty interdisciplinary guy- I teach interdisciplinary classes, my job is half in an interdisciplinary program, I have interdisciplinary people I hang with. But when it's time to throw down and get rowdy, researchwise, I'm all economist, all the time. I've never actually collaborated with someone from another discipline, and the amount of stuff that I read from other disciplines is limited (though growing). As a result, my conception of People From Other Disciplines is limited to a binary classification system consisting of Good Guys, and Bad Guys. I have worked out that Good Guys are most likely to be anthropologists, though it's not necessarily the case that anthropologists are most likely to be Good Guys. In case any of you People From Other Disciplines were might be wondering which camp you fit into, I have prepared a handy list of clues; note that the list is not exhaustive, and just because a particular clue applies to you doesn't automatically make you a Good Guy or a Bad Guy:

• Good Guy clue: Your work generates substantive claims that could (in principle at least) be tested and either verified or rejected
• Bad Guy clue: Your work generates lots of new vocabulary words, which often begin with "re," "counter," or "post"
• Good Guy clue: Your work contains more references to your subject matter or related analytical concepts than it does to things other academics have written
• Bad Guy clue: You spend a lot of time refuting "alternative positions" that consist of cariacatured views that no one would ever actually hold- your formidable fangs are dripping with the blood of the strawmen you created in Section I!
• Good Guy clue: You are not afraid of quantitative data, most of your papers probably even have some in it
• Bad Guy clue: You use the words "discourse" and/or "neoliberal" alot
• Good Guy clue: A policymaker or donor who is interested in doing a good job would (or at least should, and you can claim this with straight face) be willing to pay you for your expertise
• Bad Guy clue: The only conceivable circumstances under which anyone from outside of academia would ever be willing to pay you for anything would be to make you stop talking and leave them alone.

Anyways, here's hoping I will come home from the conference with my horizons broadened and my views more nuanced... and not in a homicidal rage muttering about reconceptualizing post-colonial neoliberal discourses or something.

Public health vs. economics: disciplinary standards and political economy

Different disciplines hold themselves to different standards when it comes to how strong your empirical evidence has to be before it constitutes something that you can claim as a "result." By result I mean you can start telling everyone else about it, publish it, etc. One such distinction that intrigues me is the one between economics and public health. Relative to economics, public health has very low standards. This is particularly the case when it comes to dealing with what public health people call "confounding factors," which is part of what economists would call "endogeneity." Put simply, this is the idea that if you observe some correlation between A and B, it may be the case that there is a C that you didn't account for that is driving your results. For example, I remember reading a study one time that linked cigar smoking to cirrhosis of the liver. Someone pointed out that it was much more likely to be the case that alcoholism causes cirrhosis of the liver with a high probability, and that cigar smokers are marginally more likely to be alcoholics compared to the rest of the population, as opposed to that cigar smoking actually causes cirrhosis of the liver. But, this finding is good enough for a result that you can publish in public health. And it's not just the journals- public health results that seem very likely to have been driven by spurious correlation frequently make it into the newspaper: I read recently that coffee might prolong my life. You'd never get away with that in economics. In order to publish anything, you need to go through pretty intense statistical machinations to deal with even the merest hint of confounding factors.

This is not a knock on public health, as there is no independent reason why a higher standard is better. You can never account for all of the potential confounding factors (or other problems); no empirical research finding is 100% iron clad. So the question is simply what constitutes "good enough," in the sense that your result is worth being considered as part of literature and included in further discussions of that topic. Too low of standard and the debate will be polluted by evidence that isn't really evidence, but too high of a standard and you will exclude important and relevant research from the discussion.

What I find strange about this is that there is no reason why public health should have a lower standard than economics. In fact, if anything it should be the other way around. The data in public health studies is often as good as data can get; you can hold that data to a higher standard. Not to mention, it seems to me that before we start telling people what's going to kill them and what's going to prolong their lives, we ought to be really sure we know what we're talking about. A spurious correlation between coffee drinking and longevity is not something that we should be putting in the newspaper.

Conversely, economics is by nature a less exact science. We know a lot less about what we're talking about than public health people do, so we need to be more open to the possibility that we're wrong in any given case. The data we work with are also much worse (particularly in development economics). It would seem to follow that a greater degree of statsitical dubiousness should be acceptable, but it's not. For example, suppose an economist came up with a finding along the lines of, "A looks like it does lead to B, but my data isn't very good and there are plenty of reasons to doubt the relationship. But if A did in fact lead to B, that would have important implications for Theory X." That would never make it into a good economics journal, let alone the newspaper. Yet, it seems to me something along those lines could be very much relevant when it comes to contributing to economists' understanding of the world.

So what explains the discrepancy? The only explanation I can think of is political economy- i.e., what's in the interests of the practitioners of the discipline? I know less about public health, but it seems that public health studies tend to have lots of money and big funders behind them. The funders want results, and they want these results publicized. A lower statistical standard gives rise to more tangible results that you can claim in order show the funders that their money is being put to good use. The practioners of the discipline on the whole benefit from a lower standard because happier funders means more grant money in the long run.

In economics, by contrast, grants are not what makes the world go round; different incentives are at work. Over time, the discipline has become more and more technical and mathematically sophisticated, which functions as a barrier to entry- a higher degree of mathematical sophistication means fewer people are willing or able to get a PhD in the subject. This barrier to entry has been very effective, as unlike almost all other academic disciplines the supply of PhD economists does not far exceed the demand for them. The unemployment rate among PhD economists is close to zero, and economics professors get paid in the neighborhood 30-40% more than people in other social science disciplines. Maintaining higher standards of statistical rigor reinforces this barrier to entry- producing a result that economists find worthwhile requires you to put your years of difficult and/or painful training in econometrics to use. Hence, economists as a whole benefit from maintaining the higher standard because it helps to keep the labor market tight.

Can anyone think of another explanation?

The African Union and the generation gap?

The Economist tells the African Union to get tough:

"The AU has done distinctly better than the OAU. It has more or less stuck to its charter forbidding countries whose leaders take power in military coups from becoming members...yet there is still a woeful reluctance in Africa to chastise, ostracise or help to oust villainous leaders... its failures go back to Africa’s age-old problem: too many of its leaders, out of a misplaced sense of post-colonial solidarity, are loth to criticise their peers, however vicious."

High hopes surrounded the AU when it was formed in 2002, and I think it's safe to say that in terms of promoting good governance most would view the results as disappointing. But I'm not sure what we could have realistically expected. That "mis-placed sense of colonial solidarity" may be a little bit more firmly entrenched than the tone of the Economist article suggests- perhaps one legacy of colonialism is a reluctance to be too heavy-handed about telling other African leaders how they ought to behave. Most of the current African leadership came of age in the wake of de-colonization, and their views are often heavily colored by thinking in terms of colonialism and independence (if you've ever had a conversation about politics with an African elite over the age of 60, you probably know what I'm talking about). So maybe it's not so surprising that an inter-governmental organization run by these guys would tend to view its mandate as limited.

In that vein, it will be fascinating to see what happens over the next 10-20 years as the next generation takes over both with the AU and more broadly. The new African elites will not be looking through the same post-colonial lens, and that could mean big changes in terms of how African countries relate to one another, and the West.

The US news media does a great job of covering Africa!

It's true!

Media coverage of Africa and development issues in general takes quite a lot of flak from bloggers, and rightly so I believe. So, let's give credit where credit is due: The Christian Science Monitor recently ran a piece by Jina Moore, entitled "Africa's Continental Divide: Land Disputes." From the standpoint of tackling complex and multifaceted issues without oversimplifying or dramatizing them, this is one of the better newspaper features I've ever seen:

"Land, at the very heart of security and survival, looms behind most of the African conflicts we've all heard of and dozens of others we have not...

Fixing the land problem may lay the foundation for fixing so many others, from poverty to famine to ethnic conflict. If farmers feel their claims to plots are sound, if social groups feel land policies are impartial and just, and if women and men have equal rights to the soil, experts say Africa's other ills will be easier to treat...

A good way to understand the roots of Africa's land dilemma is to drive through rural Sierra Leone or Liberia. Cratered dirt roads cut through what feels like limitless, untouched land: Stately palm trees and skinny rubber trees sway over miles of tall, tangled grasses. Along the road, people walk with the day's laundry or firewood on their heads – moving, one assumes, from the cluster of mud huts that make up the village just behind to the cluster just ahead. But to the left and right of the road is what the colonists called "virgin forest."

It isn't, of course. And even a stranger should know better: A husky, sharp scent wafts over the road, like burning buttery popcorn: someone deep in the forest is making palm-kernel oil. Or, just a 100-foot trudge off the road, through shoulder-high elephant grass, the sounds of what's hidden can be heard: Rice farmers splash through swampland as they harvest; cassava growers sing to themselves as they slash through last year's tangled weeds readying the ground for this year's crop. Deep in the woods that seem wild and untouched to outsiders, people live and work as they have for hundreds if not thousands of years."

My only complaint is that I don't think she adequately fleshes out the dark side of customary systems:

"ACROSS AFRICA, INDIVIDUALS... and even entire communities, are brokering their own solutions to land conflict. Sometimes those solutions require people like Elaine Kamue. A short woman with a soft voice and a blunt way of speaking, Mrs. Kamue travels from village to village in rural Liberia, educating women about the country's new land laws – and intervening to help put the laws into practice.

Without Kamue, 55-year-old Yar Gegh would be homeless and starving. For years after her brothers had left sleepy Zuluyee, a roadside market town a few hours from Liberia's border with Guinea, Ms. Gegh remained to farm the family plot and care for her dying mother. She had, she says, little choice: "Only a woman can mind her mother."

In 2005, her oldest brother, Lawrence, came back to the village and kicked her off the family land. "He say, woman didn't own land. Woman didn't get property," she recalls. "He beat me. He [insulted] me and dragged me on the ground." The abuse and insecurity became so bad, Gegh fled from Liberia to Guinea, at a time when thousands of Liberian refugees, ready to try out life under a new, democratic government, were making the opposite trip.

Mr. Gegh admits he pushed his sister off the family land: "I told her, 'I'm here now to take care of the area,' I was a soldier-man. I was a military person. I came to take charge of the post."
Four years into the dispute, they found a solution when Kamue came to town. Kamue, who works with the local Catholic Justice and Peace Commission, a chapter of an international nongovernmental organization that works on social reforms at the grass-roots level, told Gegh about the new law. She explained her conflict with her brother, and Kamue offered to mediate.

"It took four hours," she recalls of the one-on-one mediation that usually takes an hour. Mr. Gegh agreed to give his sister a small plot to farm for food, and she invited him to live in a room in the house she'd built in town."

I don't think the lesson of this story is that communities are brokering their own solutions to conflicts. Rather, it's that customary systems have losers too- generally women, minorities, and migrants. One the most important justifications for interventions in tenure issues by governments, NGOs, etc. is to try to get these people a fairer shake. Yes, any formal property rights system must involve a high degree of local control and take cognizance of what's already there. But formalizing the informal system isn't always the right answer.

A minor quibble with what is overall an excellent piece.

Thanks to Texas in Africa for the pointer.

In the Loop

British political satire. The premise: the politically incompetent head of an unimportant government department is thrust into the spotlight when he says the wrong thing in a radio interview. Which department do the filmmakers pick as the emblem of unimportance? International development, of course, ha ha ha. That's about all the movie has to do with development, but it's hilarious, particularly if you've ever worked in government. The style of humor is so dry it sucks the moisture out of the air. An important takeaway for me was that someone screaming profanity in Scottish accent is almost automatically funny.

Foreign agricultural land purchases

A new UN brief discusses the recent trend towards cross-border agricultural land ownership has been raising eyebrows and hackles. Increasingly, agribusinesses and sometimes governments from wealthier countries that import food have been buying up large areas of agricultural land in poor countries, particularly in Africa, to produce food for their own markets:

The current land purchase and lease arrangements are largely about shifting land
and water uses from local farming to essentially long-distance farming to
meet home state food and energy needs. It is, in practice, purchasing
food production. This is not completely new, but the process of doing so
mainly or exclusively for home country consumption is.

Driven primarily by rising food prices and increasing water scarcity in developed countries, it's happening on a large scale:

A quantitative inventory of five African states (Ethiopia, Ghana, Madagascar,
Mali and Sudan)...documented a total of 2,492,684 hectares of approved
land acquisitions from 2004 to early 2009. That is almost half the arable
land of the United Kingdom and three times the arable land of Norway.

Is this something to worry about? Not necessarily. If foreign investment means that African farmland can be used more productively, then as long as what the foreigners are paying exceeds what the land is yielding right now- and as long as the people using the land right now are propertly identified and compensated- this can be a win-win.

The problem arises when you consider a nasty little thing called political economy. If the host country government actors are self-interested and corrupt, then these land sales are just another mechanism for them to enrich themselves at the expense of the citizenry, and potentially a very dangerous one. Looking at the major players listed above, there's an interesting mix- I wouldn't be worried about this so much in Mali or Ghana... but Sudan or Ethiopia? And it appears to be a very real concern:

An issue of critical importance is the lack of transparency that surrounds many
of the foreign investments in land and water today. To date, no investment
contracts appear to have been made available to the public, and only a very few
have been made available to intergovernmental and non-governmental organizations seeking to better understand and appraise these issues.

An interesting aspect to this is the role of the property rights system more broadly. Clearly, a system of strong and well-defined private property rights would be helpful here- the holders of property rights would only relinquish them if they felt the terms were fair, and the price they were being offered exceeded the benefit they were able to derive from the land themselves. But ironically, in some circumstances a sufficiently weak property rights system could also be helpful. Foreign investors might stay away if they have to worry about the locals making trouble or the government changing its mind about the terms of the lease, and where host country governments are corrupt scaring away would be land-buyers might actually be a good thing on balance.

A not so modest proposal

A rather strange land and property rights related offer to displaced Haitians from Senegalese president Abdoulaye Wade:

“The repeated calamities that befall Haiti prompt me to propose a radical
solution – to take measures to create somewhere in Africa . . . the conditions
for Haitians to return,” Mr Wade said...

Presidential spokesman Mamadou Bemba Ndiaye told reporters that Mr Wade had
shared his plans with senior aides, and they involved offering voluntary
repatriation and plots of land to any Haitian who wanted “to return to their
origin”.

“Senegal is ready to offer them parcels of land – even an entire
region."

Sounds like a PR move to me. I would be surprised if any Haitians end up in Senegal, and not very opitimistic about if it actually happened, though it would certainly be interesting to see what happened.

HT: Marginal Revolution

David Brooks not getting it

In Thursday's New York Times, David Brooks opines on underdevelopment in Haiti and elsewhere:

The countries that have not received much aid, like China, have seen
tremendous growth and tremendous poverty reductions. The countries that have
received aid, like Haiti, have not.
In the recent anthology “What Works in
Development?,” a group of economists try to sort out what we’ve learned. The
picture is grim. There are no policy levers that consistently correlate to
increased growth. There is nearly zero correlation between how a developing
economy does one decade and how it does the next. There is no consistently
proven way to reduce corruption. Even improving governing institutions doesn’t
seem to produce the expected results.

The chastened tone of these essays is captured by the economist Abhijit
Banerjee: “It is not clear to us that the best way to get growth is to do growth
policy of any form. Perhaps making growth happen is ultimately beyond our
control...”

We’re all supposed to politely respect each other’s cultures. But some
cultures are more progress-resistant than others, and a horrible tragedy was
just exacerbated by one of them... it’s time to promote locally led paternalism.
In this country, we first tried to tackle poverty by throwing money at it, just
as we did abroad. Then we tried microcommunity efforts, just as we did abroad.
But the programs that really work involve intrusive paternalism.
These
programs... replace parts of the local culture with a highly demanding, highly
intensive culture of achievement — involving everything from new child-rearing
practices to stricter schools to better job performance.

It’s time to take that approach abroad, too. It’s time to find
self-confident local leaders who will create No Excuses countercultures in
places like Haiti, surrounding people — maybe just in a neighborhood or a school
— with middle-class assumptions, an achievement ethos and tough, measurable
demands.

Does culture impact development? Of course it does. But the problem with this and so many other theories about development is that when you look at the reality of how developing countries have fared, you get a very wide range of outcomes. Some initially poor countries have done very well (South Korea, Botswana) and others have not (Mali, Haiti), and there is no obvious distinction that seperates them. What we learn from this as well as the "What Works in Development" findings that Brooks cites is that there is no single reason or one-sentence explanation- like "they have bad culture!"- that can tell us why some countries remain poor. Because we always need to think about why that explanation applies to some countries and not others. Did China used to have bad culture, and then it became good? What about Brazil's performance over the last half century ? Good culture, that turned bad, that then turned good again?

Not to mention, Brooks is also guilty of drawing a false analogy between poor people in the US and poor countries in the world. Both involve people being poor, but really there is absoultely no good reason why these things would have anything to do with each other. The problem of why certain people seem stuck at the bottom of the income distribution in the US has nothing to do with the problem of why whole countries fail to grow, and there's no reason to extrapolate an explanation of one to the other. It's similar to when people worry about the national debt because it makes them think about someone racking up a huge credit card bill, which is irresponsible and short-sighted. There may be reasons to worry about the national debt, but drawing the analogy between households and countries doesn't tell us why.

What's depressing is that Brooks' editorial will undoubtedly ultimately have more influence on the way people think about development than the thousands of other more intelligent and informed perspectives out there. If there's a silver lining I guess it's that the internet means at least it easier to find those perspectives than it used to be.

Escaping the natural resource curse?

From the The Financial Times, an article about a new plan for Nigeria and other resource-rich countries to distribute revenues more equitably:

(W)hile petroleum has made Alaskans among the wealthiest people in the
world's wealthiest country, Nigeria's oil province - on which the US depends for
nearly one in every 10 barrels of crude it imports - has known little but
conflict, corruption and misery in the half-century since the first barrel was
shipped. Yet Nigeria's rulers are hoping a new policy to deliver the benefits of
oil to the local population - as Alaska does with its pioneering approach of
distributing petrodollars in cash to citizens - might help placate an insurgency
that has cut production by as much as 40 per cent...

Under government proposals... the state would hand over 10 per cent stakes
in the joint ventures that run Nigeria's biggest energy industry to "host
communities".

Sounds like a good idea, but:

Nigeria's eight oil producing states already receive an extra slice of oil
proceeds - but much of the money vanishes... Whether the new scheme can avoid
such problems is critical to its success. "It will not be like the Alaskan case,
when each individual gets his money," Mr Egbogah says. The intended option is a
system of trust funds administered at the behest of each community - bypassing
the delta's state and local governments. By receiving a share in the
proceeds of an oil industry they have long resented, delta dwellers would have
an incentive to facilitate production, Mr Egbogah reasons. But even so, critics
warn that trusts risk replicating what they say is oil companies' practice of
allocating funds to some communities in order to safeguard their own facilities,
generating resentment in less favoured settlements.

I am very skeptical. Even more so than the potential for resentments between more and less favored communities, I would worry that "communities" are often far from harmonious, with their own internal divisions, power structures, and competing interests. There are bound to be winners and losers in the process of how these communities allocate their oil revenues. To the extent that the tensions and social fault lines are already there, something like this could make things worse rather than better.

OK, so what I supposed to teach them now?

One of the courses I teach is an international economics course targeted mostly at non-majors. This semester, on the first day I decided to have the students answer some of the questions from Brian Caplan's poll in Myth of the Rational Voter. In the poll, Caplan poses a bunch of questions about various aspects of economic policy to both the general public and people with PhDs in economics in order to compare the results and try to identify biases and errors in public opinion. So for instance, one of the questions asks whether immigrants are a big problem for the economy; of course, almost all the economists say no, but a significant proportion of the general public say yes. When I gave these questions to my students, most of the answers were about what I would have expected- somewhere in between the general public view and the PhD economist view- with one glaring exception:

Generally speaking, do you think trade agreements between the US and other
countries are good for the nation’s economy, bad for the nation’s economy, or
don’t make much difference?

0- Bad, 1- Don’t make much difference, 2- Good

According to Caplan's results, the average response from the general public is 1.33, while the PhD economists are more confident, coming in at 1.87. My class, it turns out, is even more convinced about the virtues of trade agreements than the economists: none of them put "0- Bad," two of them answered "1- Don't make much difference", and the other 42 all said "2- Good," for an average score of 1.96.

Now, I thought half the point of a course like this is that I was supposed to hammer home the idea of comparative advantage and the gains from trade. But apparently it's closer to the opposite. So what am I supposed to teach them now?

Moral dilemmas

Here are three moral dilemmas, you have to read them and think about them in order:

1. A train is running at high speed when its brakes fail. The conductor sees five hikers ahead of him on the tracks who will surely be killed by the train if it reaches them. The conductor notices that the track is about the fork, and there is a single hiker on the side track. The conductor can either do nothing, in which case the train will continue on its path and kill the five hikers, or he can throw a switch that will send the train along the side track, killing the one hiker there. Is it morally permissible for the conductor to throw the switch and send the train onto the side track?

2. A train is running at high speed when its brakes fail. A man who is standing on bridge notices five hikers on the tracks ahead who will surely be killed by the train if it reaches them. However, there is a woman standing next to him on the bridge. If he pushes the woman off the bridge onto the tracks, the train will kill her, but the force of the impact will stop the train's progress and the five hikers will be spared (pretend there is no uncertainty as to the outcome). Is it morally permissible for the man to push the woman onto the tracks?

3. Five accident victims arrive at a hospital emergency room, all of them needing transplants of different organs to survive the night. There are no organs available at the hospital. Meanwhile, a healthy young man walks into the emergency room to ask for directions. Is it morally permissible for the doctor to kidnap the young man, kill him, and harvest his organs so that the other five patients can be saved (again, pretend there is no uncertainty as to the outcome)?

Apparently, the most common reaction is to say yes, unambiguously to #1, then to say no, but be slightly uncomfortable with that for #2, and then to say no unambiguously to #3.

However, some people say yes, unambiguously to #1, and then yes, unambiguously to #2, since they figure that the reasoning is the same in both cases: clearly, the action that should be taken is the one saves the most people. But then when they get to #3, they hem and haw and get flustered- obviously, it's not OK to kidnap people and harvest their organs, even though that would save the most people. So they give #3 a very uncomfortable no.

I confess to being in the second group. It seems like #1 and #2 absolutely have to be yes, and #3 has to be no. But I can't think of a good reason why #2 is has to be a yes and #3 has to be a no (can you?) In fact, I think it would be easier to convince me that #3 is a yes than it would of the more widely held view that #2 is a no.

One thing I take away from this exercise is that the more and more you sit down and think about it, the less and less it makes sense to try to tell anyone else what they "should" think is right or wrong.

This is all from Marc Hauser's book Moral Minds.

Methodological sophistication in development economics

Following up on Chris Blattman's post, here's a question for my fellow development economists out there: of the important things we know about development in the real world, are there any of them that required more than relatively simple econometrics (along with good data and possibly a clever identification strategy) to discover? In other words, is there anything important that we wouldn't know without sophisticated econometric methods (say, beyond the level of instrumental variables)?

Bryan Caplan's The Myth of the Rational Voter: Why Democracies Choose Bad Policies

Good Libertarians have long been plagued by two paradoxes: one, "How can we hate the government for interfering with the choices people are so great at making for themselves, when in a democracy the government is a product of those choices?" and two, "how can we include the people whose political ideology is limited to wanting to smoke more marijuana without having to actually hang out with them?" In The Myth of the Rational Voter, George Mason University economist Bryan Caplan sets out to resolve the first paradox. In doing so, he is heroically successful. When the day comes that Libertarians manage to vanquish government once and for all, the spontaneous order that emerges will undoubtedly include a national holiday celebrating his achievement.

Fortunately for the rest of us, Caplan has produced a fascinating and insightful book along the way. His starts with the idea that for most people, it requires discipline to think rationally and objectively. When people have nothing at stake, they prefer to hold beliefs that are emotionally satisfying, rather than beliefs that are necessarily true. The problem for democracy is that since no election comes down to a single vote, no one experiences the consequences of their own political views. For a voter, there is no incentive to go through the painful process of scrutinizing one's beliefs, since it won't impact the election anyway. When you combine that with polticians who respond to public opinion, you tend to get less-than-perfect policies. It's a compelling way to think about policymaking, and just why it is that so many otherwise intelligent people seem to hold such bizarre political views.

Most (if not all) readers will find much to disagree with in this book. Caplan is not afraid to tread on shaky analytical ground at times- some of his claims are poorly supported, and some of his arguments ultimately ring hollow. But in fact the book is far more compelling as a result of the author's willingness to reach. The approach that Caplan has taken seems to be less one of trying to convince you that everything he says is true; rather, he convinces you that his central thesis is worth thinking about, and then proceeds to stretch it as far and in as many directions as he can. It is then up to the reader how far he or she is willing to go. At one point in the book, Caplan urges his fellow economists to be less equivocal and cautious, and througout he practices what he preaches.