Economics & Marginalia: January 12, 2024

Hi all,

Happy new year! I crossed midnight and rang in 2024 being forced to watch The Holiday (my one line review: Cameron Diaz cannot convincingly play a human being, and poor Kate Winslet) and reading Paul Auster’s new book, Baumgartner when the film became too much to watch (one line review: Paul Auster is great at writing people missing people, but not so good at them actually liking and connecting with each other). I have to say, 2024 hasn’t felt hugely different to 2023 yet: it began with a new Marvel show that threatens to underwhelm (though one episode in, it’s clear Echo cannot possibly be as bad as Secret Invasion); I start with a huge backlog of work to do; and the Lakers are still bafflingly terrible. Still, if it’s drama I’m after, the series of elections slated for this year will certainly provide it. The US Presidential election is as high-stakes as any I can remember, the UK’s general election looks set to deliver some change into an increasingly stagnant and diseased political ecosystem. With any luck I’ll start the first links of 2025 in slightly more optimistic spirits.

1. Shall we start the year off with some big-picture stuff? Dani Rodrik picks four challenges that will define the global economy in 2024. First up is  climate change, and his take is that uncoordinated, but broadly positive action is the best we can do right now. After another disappointing COP, does anyone have an advance on that? I think he’s right. The second he picks is inequality and the need for good jobs. He argues that the erosion of the middle class cannot be solved with social transfers alone: that good jobs are important in and of themselves, not just for the money they make people. I think he’s almost certainly right about the last part, but I do wonder if the ‘death of the middle’ will not turn out to be a mirage in the data. His third, related, challenge is stagnation of economic development in poor countries. On this one, his culprit is premature deindustrialization, but I wonder if he isn’t missing a trick here. As Charles Kenny, Brian Webster and I wrote, there are other paths to prosperity, even if they represent a new public policy challenge. And lastly he thinks that a new model of globalization, one which is less rigid, will emerge. I think this is inevitable, but I am actually less certain that it will be softer or fairer in the end.
2. Ken Opalo also opened the year with a look ahead at 2024, https://kenopalo.substack.com/p/africa-in-2024 this one being Africa specific. This is excellent, with a good mix of realistic pessimism (I particularly liked this section: “the multilaterals preach apolitical technical fixes and haven’t figured out how to anchor specific reforms in domestic political economies and institutional processes… It’s a no-brainer that when it comes to the politics of reform implementation, African governments pick and choose the bits that are politically feasible.”) and a surprising (to me) note of optimism about Tanzania’s prospects, a real turnaround from when I last spent serious time there, a decade ago. As a bonus, two more great pieces from Ken: his look back at 2023, and his piece on the prospect of Ethiopia recognising Somaliland).
3. This one is worth a slow and careful read, perhaps over a coffee. Noam Angrist and Rachael Meager write up their new work looking at the extent to which implementation affects the size of treatment effects in education programmes. They find that much of the variation in the impact of the specific type of education intervention they look at is down to how the interventions is implemented—both in design feature and then in ‘implementation fidelity’. It’s really worth reading the blog to see how they build this result up, step by step (it’s a beautifully argued piece). This implies that understanding implementation is critical for understanding which things work, and why. One key point though: implementation variation isn’t trivial. In some cases there may not be any good and simple way to standardise implementation, and there may be little way of knowing in advance who will be able to execute the implementation well.  
4. Also on VoxDev, Stefan Dercon explains his new work looking at how policy advisers should behave (and what kind of advice they should offer) in different contexts. This (and the paper underlying it) is really nice: not just a clearly made economic argument, but also drawing on many years of experience doing exactly this.
5. This was good: Tim Harford starts the year thinking about forecasts. He talks about speaking to people warned about a pandemic in 2019, who nevertheless failed to make any adjustments in preparation for it. Were they just idiots? They might have been, but the forecaster is also to blame: a concrete forecast, with scenarios rather than one specific prediction and aimed at the right people, who can make decisions and know what things to change up and vary if certain warning signs show is much more useful than being told there is a high probability of event X. I’ve always like scenario planning because it shows you what changes in different scenarios, and it’s for the changing parts that you need to be prepared.
6. Planet Money covers the GiveDirectly UBI scheme and speaks to Abhijeet Banerjee about what they learnt from evaluating it. Highly recommended: one of the most interesting points is that though the experiment was set up to compare people getting small monthly payments and people getting large one-off lump sums, the recipients banded together and found clever ways of generating large lump sums even if they were in the monthly income groups—an implementation ‘failure’ that reflects what the recipients wanted, not weakness in the implementer (transcript).
7. Finally, Ustad Rashid Khan died early this year, far too young at 55. He was an Indian classical singer, whose voice is just absolutely extraordinary. If you never encountered him, listen to this; 16 minutes of genius. Sorry to end the first links of the year on a sad note, but let’s hope the coming months provide a lot more happy frivolity to close with.

Have a great weekend, everyone!

R