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Economics & Marginalia: June 16, 2023

Hi all,

Just hours after I clicked send on the links last week, the curtain began to draw on one of the most chaotic eras of modern British politics, with Boris Johnson’s huffing and whining resignation as an MP. After discovering that we was about to be censured for lying to Parliament (a serious breach of Parliamentary rules), Johnson decided to compound his crimes by publicly divulging the contents of the report into his conduct and impugning the integrity and motives of the committee that punished him. He said they were politically motivated (never mind that the majority came from his party); he said they were making things up (never mind that their report was meticulously evidenced and argued); but ultimately, the point of the report was you simply can’t trust what he says, so none of it matters. Scott Fitzgerald must have been drunk as a lord when he wrote that there are no second acts in American lives, but it seems truer of British politics than it was in his original formulation. And so, after a near-decade of reckless, inchoate political vandalism, it appears that the bull in the Chinashop of British political values and institutions may finally have been evicted. I wouldn’t put it past him to weasel his way back, but the odds are very much against him. A sunny summer, a home Ashes series and the political defenestration of a dangerous clown: what more can you possibly ask for?

  1. Arvind Subramanian has a wonderful knack for seeing how the—very—big picture questions affect developing countries. His most recent Project Syndicate piece (register, you should be able to read it for free), is a great example of this. He considers the (partial) retreat from neo-liberalism that the US’s Inflation Reduction Act represents and considers how it could wind up doing much more good for poorer countries than the EU’s more classically liberal border carbon adjustment mechanism, while at the same time recognising the benefits that the original phase of neoliberalism it reacts against brought for at least some developing countries. It’s the rare kind of opinion piece that will have you questioning at least some of your beliefs, regardless of where you start from.
  2. What is the opposite of an opinion piece? Is it a deep-dive into the data, with equations and tables? In any case, excellent in a very different way is the latest from Dietrich Vollrath, digging into the numbers behind the European growth slowdown of the last 20 or so years. What I particularly like about this post is that Vollrath is so careful about exactly what the measures he’s using mean—and because of that, he’s able to construct a compelling story to explain why the dramatic increases in labour force participation seen  in Europe are associated with a decline in productivity (his view is that relatively less skilled workers have been entering the labour force, in a way that gets picked up by his measure of productivity rather than his measure of skill). I’m revising a paper on the basis of some excellent comments at the moment, and getting right into the measures is helping me improve it no end.
  3. While we’re on the general point of being careful with the data, two more links on that topic. On the academic side, Andrew Gelman putting the boot into the estimated effect sizes from nudge interventions once more. It’s caustic, but I also think one problem here is that the issue is systemic: better individual practice will improve things a great deal, but most studies are imperfect in some way, sometimes inevitably. With imperfect studies, unless you can publish everything you do (and we’re not all Daron Acemoglu), some form of selection bias in what gets written up and published seems really hard to avoid without systemic reform. And more concretely: Guido Núñez-Mujica, Vijaya Ramachandran and Scott Morris look at the World Bank’s climate portfolio carefully and come up scratching their heads: a bunch of it seems only tangentially related to climate change mitigation or adaptation, if at all.
  4. Everything Branko Milanovic writes about inequality is required reading (the only other scholar I would have said this about was Tony Atkinson). This, in Foreign Affairs, is excellent (you should have some free articles each month). It does two things very clearly: explains what has happened to global income inequality, specifically what has happened to the global ‘rank’ of different segments of the population in different countries; and explains how this affects their material lives in concrete terms. The first makes clear that whereas the poor in rich countries were once right at the top of the global income distribution, this is changing—they no longer sit atop the pile. They may compare themselves primarily to domestic peers, but this global reshuffling has its own consequences. As he puts it: “Many globally priced goods and experiences may become increasingly unavailable to middle-class people in the West: for example, the ability to attend international sporting or art events, vacation in exotic locations, buy the newest smartphone, or watch a new TV series may all become financially out of reach.” Highly recommended.
  5. Saad Gulzar and Muhammad Yasir Khan have written some of my favourite papers on bureaucracy over the last few year; they collaborate with co-authors here on another great one: looking at the conditions under which data on performance (in this case, just showing up for work) can affect performance. The upshot is that when a cosy relationship between political leaders and underperforming bureaucrats is allowed to develop, they enjoy protection. When there is sharper competition, however, information improves performance. This is really fascinating work.
  6. Did you ever wonder about the story behind Pam Jakiela’s in-joke for the ages on Twitter all that time back (“Development economists be like “I know a place” but it’s always Busia, Kenya.”)? Like most things RCT, it has its roots with Michael Kremer, but this NPR piece on Busia starts and finishes with one of the Busia residents who became an integral part of the infrastructure for running randomized evaluations there (transcript).
  7. If you love Africa, or literature, or especially African literature, this is for you: a fantastic Guardian long-read on Ngũgĩ wa Thiong’o by Carey Baraka. It touches on identity and its connection to language, on colonialism, on writing and on aging. It’s fantastic, and I say this as someone who has never really warmed to his writing; perhaps reading it in translation has never done it justice. Recommendations—as always—welcome!

Just a heads up—over the summer we have a few odd Fridays off, so some weeks (including next) will not feature a links round-up. Next week I’ll be taking the toddler to toddle in the fountains at Kings Cross, and all else takes second place!

Have a great weekend, everyone!

R

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