Economics & Marginalia: October 21, 2022

Hi all,

When Liz Truss was elected leader of the Tory party, and thus slid into the empty role of Prime Minister, some friends I have a group chat with took bets on how long she’d last. Two of us, myself included, said she’d be out by December (though the rest all picked dates well before the expected general election in 2024 or 2025—they had all worked with her). Even I, famous for punchy political bets, didn’t dream of picking a date in October, but here we are. It took her 44 days to cause so much chaos, from market turmoil to fights in the House of Commons, to resign. This makes her—by a considerable distance—the shortest-serving Prime Minister in history, and the distant second is a dude who died of TB, and I’m still pretty sure he had a better last few weeks than Truss did. The UK went from a livestream of a queue to a livestream of a lettuce, one  locked in combat with the Prime Minister, to see which would fail first. The lettuce won, but not before it was almost upstaged by tofu, which did for the Home Secretary not 24 hours after she coined the ridiculous phrase ‘the tofu-eating wokerati’. It’s tempting to make light of it all, and indeed, the jokes have been coming thick and fast, but don’t forget just how appalling some of their policies were. The thankfully departed Home Secretary’s short tenure was noted for her attempt to be a less-empathetic and more performatively cruel and unpleasant person that Priti Patel (which basically means trying to be Chucky), talking about her ‘dream’ of deporting refugees fleeing conflict. Truss and her even-shorter lived Chancellor Kwasi Kwarteng decided to bully through a bunch of ideologically-motivated tax and spending cuts at a time that was almost uniquely unsuited to them, and showed casual indifference to the very real and acute suffering the poor would have pay for these cuts with, both in Britain and abroad (given the freeze of the aid budget). They may have been comically incompetent, but there was nothing comic about the agenda they pursued. And now there’s a real possibility Boris Johnson will be back, mere weeks before he may be thrown out of Parliament altogether for misconduct. We’ll make jokes on twitter, but there is so much that needs fixing in this country and—to the very real limits of our ability—abroad, that wasting time on clowns isn’t an amusing diversion. It’s deadly.

1. Michael Clemens recently announced that he will be joining George Mason University as a Professor in the Department of Economics in January, and he’s leaving CGD in the manner he’s spent his entire, extraordinary, tenure here: with a flurry of brilliant, policy-relevant research and analysis. First, he has a new paper out looking at the role of cash transfers in deterring migration; he finds, in line with his own previous work, that very often they have the exact opposite effect, because many cash transfers are conditional on some kind of investment, for example in one’s own education. Such investments tend to both raise the aspiration to migrate, and provide the means by which to do so. Second, he summarises recent research on refugee integration, with clear, concrete recommendations to do better, and an overarching lesson Suella Braverman should listen to: if you think of refugees as a burden, you will treat them as such; and by treating them as such, you force them to behave as burdens, rather than empower them to be the gift to your economy and society they can be. The thread is also very worth reading. And thirdly, he provides advance notice that he has a new paper coming out on Monday, so there’s no excuse not to be blocking time in your calendar to read it now. Michael’s work is so good and so useful (a much rarer combination than you would hope), that every release is appointment reading. I’ll write a proper appreciation of the intellectual debt so many of us owe to his time at CGD in due course, but in the meantime, take advantage of the work still coming.
2. I thought this piece by Dave Pilling on Africa and climate change, ahead of the forthcoming COP, was very good. He points out that Africa matters rather more for climate change than many calculations allow; but that—unless we plan to force it into poverty forever—it will and should dramatically expand its energy use. It’s on the West to provide the money and technology to make Africa’s best bet to do that cleaner; if it fails the problem is ours. I’d add one point, that my colleague Charles Kenny makes very often: If this means more money, it cannot come from the meagre pot we use to support work against poverty, for education, for health.
3. Branko Milanovic argues that the recent intellectual attempts to make the case for ‘friendshoring’ and other approaches to direct investment and trade to ‘friendly’ states and away from those we dislike is really a barely disguised form of mercantilism. The basic point is simple: the case for free trade was that it would be—net—a good for everyone; there was never a clause that said if others gained more than the West, it should be curtailed. Doing so now is hypocrisy, which is not in itself surprising, but that doesn’t mean we should buy in to the cloak of respectability some try to give it.
4. Andrew Gelman visualises and puts clearly something that has been bothering me a lot recently: a tendency I’ve noticed (more in casual conversation, even with incredibly smart people, than research) to treat continuous variables as binary. I like the way he classifies the fallacies at work here, but there’s one obvious explanation I think he misses: very often, we aren’t trying to be very precisely correct in what we say, just broadly correct. For the latter, collapsing complex data into simple categories is much, much easier, even if it increases loses much of the nuance that really matters.
5. The Development Impact Job Market Paper series is open again, and if you’re on the market and reading this, consider submitting a blog. It’s consistently the best series of development econ blogging every year, and I’ve discovered some absolutely brilliant scholars and papers from the series. I first came across Guo Xu’s work on bureaucracies from this series, and Girjia Borker’s fantastic paper on how Indian women choose worse universities to avoid unsafe traveling routes, while men are unaffected.
6. Nice VoxDev write-up of a new AER paper by Federico Rossi on the productivity of highly-skilled workers across countries.
7. A couple of links ago I mentioned the ever-expanding world of academic research on bureaucracies; this thread of photographs of bureaucrats from around the world is fantastic. And if that doesn’t send you into the weekend in a good mood, the NBA is back, and the it’s already amazing: the Lakers continue to find ways to waste LeBron James! Ben Simmons returns to basketball and makes as much impact as he did during his year off! And Russell Westbrook continues to lay enough bricks to warrant his own personal hod carrier! The politics might be a disaster, but at least there’s some distraction again (we’re not going to talk about Sri Lanka losing to Namibia in the T20 World Cup, thankyouverymuch).

Have a great weekend, everyone!

R