Economics & Marginalia: June 28, 2024

Hi all,

The CGD summer Fridays are a great boon to my productivity and mental health (nothing cheers you up like a day monster-hunting and bird watching with a three-year-old), but it does cause side effects, notably an incredible backlog of good writing to try and whittle down to a few bullet points in the weekly Marginalia, and a huge amount of current affairs to make passing reference to in the introduction. Where to start with the world since 14 June? With the incredibly, mind-alteringly, depression-inducing state of politics around the globe? The ‘democratic supercycle’ hasn’t just saturated my timeline with political hot takes and polls, it’s exposed me to the incredibly low calibre of political talent in much of the world (with some very notable exceptions, who I won’t name on the website of a non-partisan think tank). And it’s not just the politics that’s grim: The Mavs got absolutely thumped by the Celtics, which was unsurprising but nevertheless depressing (I grew up a Lakers fan, thanks to Showtime-era Magic); England got absolutely thuuuumped by India in the T20 world cup semi-final (equally unsurprising though less depressing to me); and in the football, England have been just as uninspired (though I should admit to watching very little of it). The only glimpses of joy on the horizon are that we are just two months out from Season 4 of Only Murders in the Building and season 3 of The Bear has just been released. Let it rip.

1. Anyone who has followed the links for a little while will know that the line from research and evidence to better policymaking is one of my main interests. The line is rarely straight and unbroken; it looks more like Charlie’s Pepe Silva board on It’s Always Sunny than a neat connector, and, while there are an increasing number of RCTs that look at how policymakers process or act on evidence under quite specific circumstances, there aren’t a huge number that look at how they engage with evidence under ‘normal’ conditions, in the everyday run of their jobs. Alix Bonargent’s VoxDev write-up of her research looking at how IGC research affects policy is a rare, and excellent, exception to this rule. She finds that co-creation of research agendas is associated with higher policy impact, highlighting the importance of engaging policymakers early on in the research process; that research projects initiated early in an election cycle have a greater chance of impact; and that more prestigious affiliations matter for policy impact. It’s a great piece of work, and a really important contribution.

2. Also on VoxDev, two pieces with important gender implications. First, Yutong Chen show how the algorithms used by an online platform exacerbate existing gender biases of consumers in healthcare services (with male physicians getting more business and able to charge more); and Fabiola Alba-Vivar shows how improving transport links in Lima increases women’s likelihood of enrolling in colleges, but the effects aren’t straightforward. While enrolment increases, the impact of easier commuting has different effects on men and women and may increase gender gaps in other respects, with men traveling wider and further in pursuit of better colleges, while women do not.

3. Ken Opalo is bullish on Nigeria, though you may be forgiven for missing that in the first part of this piece on why and how some of Nigeria’s foreign investors appear to be abandoning the market. It is, of course, very good, and this line is a standout: “if a beer maker cannot make money in Nigeria, who can?” It’s not just a joke; he uses it as a way in to discussing the specific difficulties of doing business and selling goods in Nigeria, and the possibility that bad periods for oil prices are in fact the best time to push and implement policy reforms (though recent attempts have been, not to put too fine a point on it, cack-handed). This is the kind of piece I find myself wishing more good scholars would write: a serious look at a messy economic environment, connecting lots of different problems, rather than a deep and very precise dive on a fine detail that loses the shape of the forest in exchange for the DNA sequence of a leaf.

4. I always say that I have a very good memory, but reading this piece by Tim Harford did cause me to do a double-take: some people construct vivid memories of things that never happened. I’m almost certain I’ve done this before; and it immediately reminded me of this Vox piece from ages ago about a whole community of people who remember watching a movie that does not exist (I did double check that the Vox article existed, and I wasn’t remembering an imaginary blog).

5. I really enjoyed this piece by Branko Milanovic about Keynes, which gets at something that I find is missing in a lot of contemporary economics and (more so) economic commentary. Branko discusses how, for Keynes, the economy was always a means to an end, with the end being about an idea of ‘the good life’ that economic abundance helped us towards. I’m not one of those people who caricature economics as a discipline obsessed with creating more stuff (it does so much more than this), but I do think this philosophical idea of what a good life is has gone a bit missing from the discipline. It’s his ability to keep this in mind that helped make Keynes influential with such a wide range of people (and also, incidentally, probably explains some of his more famous misses, like his assertion that as productivity increased we would eventually reduce our hours of work by an enormous amount).

6. This one was enraging: an NPR report on the economics of telephone calls in American prisons. It’s an economic structure designed perfectly to exploit a captive (literally) market; with sky-high prices reflecting an appalling market structure more than anything about the good provided. It seems a clear case where regulation can force the market to a much better outcome (transcript).

7. As a Sri Lankan who has grown up eating food from across Asia, chillies are an important part of my diet, and even identity; I make my own chill oils, and fermented chilli sauces and fiery curries that can cause serious damage to the unprepared (but which my three-year-old will happily dip a flat bread into like its tomato ketchup). So this BBC News article, about the Danish food safety agency recalling shipments of completely standard Korean instant noodles on the grounds of being too spicy really felt like the end of Western civilisation to me. Imagine being defeated by instant noodles (incidentally, my lunch today). I mean, food can be too spicy: I’ve eaten things in Thailand that have made my eyes water and my stomach turn from heat; but instant noodles? My god.

Have a great weekend, everyone!

R