Economics & Marginalia: May 31, 2024

Hi all,

Well, that was an eventful week. We’re one week into the UK General Election campaign, which has so far been conducted with all the dignity of a Rooney family wedding. We’ve had internecine fighting, a spate of retirements, MPs mocking their own policy platforms and what can only be described as a sustained homage to Laurel and Hardy from Ed Davey. This is just in week one, mind. For the hard-of-news-reading, there are also events in the US you may wish to appraise yourself of. The democratic super-cycle coming this year is going to try everyone’s patience. But, of course, the most important events of the week were in the NBA, where the Finals match-up was confirmed last night when Luka Doncic spontaneously combusted in the first quarter and crushed the Minnesota Timberwolves like Thanos throwing a moon at Iron Man. He will now face the Boston Celtics in the finals, and while they’re definitely the favourites to win, you cannot put anything past Luka. Once he looks you in the eyes, it’s on.

1. Late entry, but one of the best: Nan Ransahoff has written a how-to guide for starting an Advance Market Commitment in Works in Progress. Nan set up Frontier, the carbon removal AMC, and is an incredibly impressive person. I first met her when Frontier was just the kernel of an idea, and it’s been amazing how fast she has moved it from concept to execution; her setting out how is an enormous public service. It also functions as an excellent introduction to broader questions about pull financing—when it is appropriate and how it works. Next week, I hope to complement this with a short note setting out the practical constraints that make it hard for donors to fund this kind of facility (looking at more than just AMCs), and proposing a solution to many of them. Keep your eyes peeled!

2. Saloni Dattani has been such a good hire for Our World in Data. She writes well, is so careful with data (as you’d expect from OWID), and consistently writes interesting things about important issues. This week, she covers polio eradication, and how we can cover the last couple of miles to finally ridding ourselves of the disease.

3. This also looks very good, though I have not read beyond the Executive Summary so far: a BII report by Paddy Carter and co-authors on when economic growth is (more strongly) associated with poverty reduction. Judging by the summary, it makes points that will be commonsensical or obvious to most economists, but I doubt I am the intended audience. Rather, I suspect the point it wants to make is that there are many ways in which growth can reduce poverty, and relatively few ways in which growth processes are possible without any effect on poverty. Consequently, how advocates should think about whether an investment or engagement in a developing country with the aim of increasing growth is ‘good’ or not should be informed by the potential pathways to (non) impact on poverty; beginning from a position of blanket scepticism is unlikely to be wise.

4. I can’t quite remember in what context I wrote it, but at some point this week, I wrote to someone that ‘when inertia gets you where you need to go, whatever you do, don’t make it weaker’, or words to that effect. I was trying to communicate the idea that sometimes natural forces move us to the right place without effort, while thrashing about impatiently and trying to outguess them can often backfire. Tim Harford has a more eloquent communication of the same idea in his piece on the stock market, with the heart of the article in this line: “investors who are trying to be clever are the most likely to fall short, while those who make the fewest possible decisions will lose out by the smallest amount.”

5. There is an absolutely jaw-dropping graph about half way down this World Bank blog on the results of the 2021 cycle of the International Comparison Program, the immense effort of global data collection that underlies the calculation of the Purchasing Power Parity adjustments we use to compare how far a person’s income goes in different places. It is a visual representation of material wellbeing by country, accounting for how much the average income purchases. It makes starkly clear exactly how far behind much of Africa is from even the middle of the pack, and how astonishingly far ahead the US is. The whole thing is good, but that graph is a banger.

6. Justin Sandefur sets out nine ideas that could make AGOA (the African Growth and Opportunity Act) in the US more effective, starting with the idea of negative tariffs. The idea is bold and potentially profoundly impactful. I hope someone digs in deep and works out exactly how it can be applied and what it would cost, because it’s a really clever idea. We know exports matter for development, and yet our toolkit to try and promote them is really primitive.

7. Finally, I lost hours of my life to this tweet and the replies: what are the load-bearing posts of our time? Twitter is very often a dystopian hellscape presided over by a clown and his imbecilic acolytes, but it has also given us some of the most fantastic short-form comedy in human history. Some of the best replies reminded me of the classics, and had me crying with laughter. The Moira tweet; walking backwards into hell; Crab Rangoon, things of that nature (which you really need to be an NBA fan to find as funny as I do, but still); will a turtle not be part of the choir?; flipping a grunt; Shiv Ramdas and the rice truck (if you haven’t come across this one yet, get some popcorn and thank me later); disabled, not werewolves; and lastly, waffles vs pancakes. And if you were able to get all of those references without clicking through on a single link, I will be the man outside your house screaming ‘log off’.

Have a great weekend, everyone!

R