Economics & Marginalia: February 16, 2024

Hi all,

Last week’s promise to saw the legs off the bed has yet to be implemented. Three immediate constraints presented themselves: first, I need to buy a saw (I wasn’t kidding when I said DIY isn’t my thing); then the little one fell ill, and it seemed cruel to chop the bed down while he was still in it; and finally England started playing India in the third test. Of the three constraints, only one has resolved: the boy has recovered from his illness and is now causing an incredible amount of mayhem around the house. He has discovered that he can open the stepladder in my office and now scampers up it to take down all the books (laboriously organized by subject, then height and then author, the only civilised system) to build his ‘train track’ which he then sends his toys down at incredible velocity. As I write he’s on the third rung, categorising books into one I’ve read and ‘others’. Both categories are being piled into what can best be described as a chaos, mixing vertical, horizontal, open and closed books. If the links are late it will likely be because I could no longer bear to watch him devastate the system.

1. There’s an Arrested Development meme that I think about at least once a month. Tobias and Lindsay are talking, and she asks him, “did it work for those people?”, and Tobias replies: “No, it never does… these people delude themselves into thinking that it might, but…. But it might just work for us.”. That meme captures more truth about policymaking in international development (and developing countries) than entire academic articles. And I’m not going to lie: it popped into my head when I read Ken Opalo say “this time is different. The current regional economic slowdown is unlikely to precipitate the sort of disastrous outcomes witnessed in the 1980s and early 1990s.” But Ken isn’t Tobias; his feeling that this time is different is rooted in data and careful analysis, and he makes a fairly convincing case that African economic prospects (to the—very limited—extent you can lump so many different economies together) are better than they look. He is probably right, though I’m old enough to remember previous cycles of optimism petering out. But the best part of this blog is the third section, on the information problem in many African economies. He is exactly right here. There is such a shortage of good, codified information about policy, policy implementation and economic conditions for firms in most places. There are people who know (there always are), but that knowledge is hard to come by and carefully guarded, and it really raises the entry costs for investors.

2. Speaking of African economic conditions, the economics discipline is in a strange place when investments to improve business infrastructure are—potentially—under provided because we don’t have adequately well identified studies that prove that better business infrastructure is good for economies. Nevertheless, we may be in that place; but at least Justice Tei Mensah and Nouhoum Traore have a paper that documents dramatically improved internet access was good for FDI in Africa, using the staggered rollout of submarine fibre optic internet cables to identify the effects.  As someone who spent four years in Malawi at a time when unreliable dial-up was the only internet connection we had, this one fits my priors like a glove.

3. I link to the Planet Money valentine’s day show every year, but this one was always going to get a good showing in the links when Emma Peaslee’s valentine was Caitlin Clark, the Iowa State college hoops superstar. The reason is one close to my heart; Clark is not an efficient player by most conventional metrics, but she seems to be extremely valuable to her team. Peaslee’s explanation for her success is that efficiency is not always the only way to add value towards winning. My take is slightly different: Clark takes inefficient shots but makes them at a better than average rate. She’s efficient at inefficient stuff. So when the game is at a stage that all the best shots have been eliminated by a dialled in defence, she’s an incredibly valuable weapon (transcript).

4. Good news everyone: your vote is not pointless and very likely has positive value. Andrew Gelman quotes Toby Ord and lays out the explanation here. And certainly, in the UK, I can think of many good reasons to exercise one’s vote when the time comes.

5. One of the great things about a training in economics is that we learn, from an early stage, about mechanisms that affect behaviour in an extremely direct and powerful way: prices, profits and incentives. At a time when there seems to be so much polarization in how people feel about the big issues we face (climate change, equality and so on), the power of these mechanisms can be really reassuring. We know that attitudes about climate change are quite partisan, at least in the US. We also know, from research, that tweaks in how we talk about climate change don’t matter that much in influencing these attitudes. That might make you feel a little hopeless, but you shouldn’t. We don’t need people to hold opinions about climate change that are consistent with the science. We just need the prices to incentivise them to act in ways that support action against it. Hannah Ritchie looks into the numbers and finds that it’s the red states that are doing this in the US, despite the views of many who live in them. Why? Because green energy is profitable; and they tend to regulate building less than blue states, so prices and profits work their magic.

6. If you’re of a certain vintage of development nerd, you’ll remember the golden aid of development blogging: when Chris Blattman blogged every few days, Lee Crawfurd was sending dispatches from South Sudan, Kate Cronin-Furman and Amanda Taub were both funny and informative about human rights abuses (not to mention, ahem, Aid Thoughts which yours truly went on some truly epic rants on, with Matt Collin). One of the things that we all seemed to be very annoyed about in 2008 was ‘poverty p*rn’ (censored so this doesn’t fall prey to email filters): the use of photos of crying kids from poor countries to illustrate basically every development story, and the broader othering of all the people international development is supposed to be about. Duncan Green (one of the last holdouts of that era of blogging) hosts a piece by Jess Crombie on whether poverty p*rn has truly disappeared. He conclusion? Not quite, though it has become a little softer.

7. I was telling a colleague recently that I used to watch all sorts of deep, meaningful and worthy movies. I would look down upon a film unless it included a six minute, fixed-camera shot of an elderly person contemplating a field of flowers in black and white. I thought Jim Jarmusch sold out when his films suddenly started having plots. Anyway, all of that changed when my job became more stressful and more emotionally draining and the last vestiges of serious cinema were removed when I became a sleep-deprived parent of a demanding infant. All of which is by way of preamble to explain that I am SO FRIGGING EXCITED to watch Madam Web. It looks absolutely terrible. The trailer is a masterpiece of incoherent trash; the reviews are asking questions like “did they mean to make it that bad?”; and Dakota Johnson is travelling the world babbling complete nonsense to journalists. The uber-nepo-baby already stars in my ideal plane movie (How to Be Single: stupid enough that you don’t need to listen to the dialogue and can sleep through it, but ridiculous enough that it can distract you from the fact that you’re trapped in a metal tube with 300 strangers). Madam Web looks bad enough to dethrone it.

Have a great weekend, everyone!

R