Economics & Marginalia: September 22, 2023

Hi all,

Imagine you were undergoing a programme of uncomfortable and unpleasant, but necessary, exercise and dietary changes to improve your health and found yourself slightly ahead of schedule, though some distance from your target. You sit down with your doctors and give them the good news: I’m doing better than planned, though I still need to lower my blood pressure to healthy levels and it’s going to be tough to get there. How would you react to a doctor whose response was to crack open a pack of Malboro reds, slide a triple-cheeseburger and fries across the table and offer you a chocolate milkshake to wash that down with? I would sack the imbecile there and then; and even more so if your wellbeing depended on the collective health of a group of people of which you are only one, and most of the others are *behind* schedule. Sure, a burger would be nice, but with a life of chronic health problems at stake you’d hope that your doctor at least would be able to help you resist the short-term temptation. As those of you in the UK will have no doubt grasped: we are the patients; the imbecilic doctor is Rishi Sunak, and the triple cheeseburger is a weakening of our climate policies. He keeps saying that weakening our actions towards the outcome doesn’t reflect a weakened desire for the outcome; but that can only be true in the way that my reluctance to take guitar lessons doesn’t weaken my desire to be the next Robert Johnson. The one saving grace of the red meat he’s throwing to lunatic fringe of his party is that most of the policies he’s rolled back didn’t exist in the first place.

1. While I’m in a filthy mood at the absolutely pitiful state of political leadership in this country, let’s hear from Helen Thomas at the FT, on the British inability to build the infrastructure we need to jolt our economic vehicle out of slow-motion: “Political thumb-sucking, and disinclination to commit to steady spending over the medium to long term, are particular problems.” (You may need a subscription or to register to access this one). The gist of her argument is as follows, and rings sadly true from my decade-plus in the UK civil service: at both political and technocratic levels, the UK is incapable of articulating a medium term vision, setting a strategy to achieve it and sticking to it. A great part of the damage is done by ‘Treasury Brain’, whereby a cost saving today is pursued at the risk of an expensive accident in the future (most British fiscal policy over the last decade can be summed up as: “we saved money on a new tire, but then three years later we had to pay one hundred times more for a new car after the tyre burst and the vehicle flipped.”) The disjunction between the way the British Government talks about itself and the reality of the country it oversees is only going to grow until grown ups with  proper attention span are in charge again.

2. I haven’t quite typed my bad mood out yet, but here is something that makes me slightly more cheerful: despite the threat of a lawsuit, as reported last week, the Data Colada bloggers continue to do what they do best, forensic examination of empirical research. This time, they use legal documents made available to them as part of their lawsuit to further document the evidence of malpractice against Francesca Gino.

3. The Development Impact crew are probably best known for their writing and work using quantitative empirical methods; indeed, I often find myself referring to the blog when trying to better understand different ways of analysing data. This piece is a little different: notes from a visit to a programme being implemented in Zambia, prompting reflections on the various ways that the information the project generates that doesn’t make it into the impact evaluation can improve our understanding of what works, and why. This is not a new idea: on my desk I currently have a copy of Q-Squared, a slim volume from 2004 edited by Ravi Kanbur and featuring David Booth, Robert Chambers, Martin Ravallian, Vijayendra Rao and many others on exactly this issue. That there still isn’t a path to prominence for papers that take the approach of marrying quantitative and qualitative work is a problem. Also from DI: David McKenzie on rugby and economics.

4. Vox’s Dylan Matthews interviews Dean Karlan on how he wants to change the way USAID uses evidence. Having been involved in a number of initiatives of this sort myself, I have a LOT of views about the right way to do this, which I’ll try and put down in a CGD blog or note soon.

5. A nice write-up in VoxDev on the economic impact of increasing staffing in local courts in India. This has always struck me as something likely to be really important for firms: they spend so much time in litigation in developing countries, and the unreliability of the courts has a knock-on impact on the kind of economic transactions they undertake and the range of contractual relationships they enter. But there seems to be relatively little academic study of how improvements to the system affect firms (I recall a study by Chris Woodruff in Mexico, too). Anyway: the results here are positive, but may simply come from improvements on local credit markets by unfreezing capital. This strikes me as an topic deserving of much more study.

6. There was a time, long ago, when virtually every links round-up featured a Taylor Swift gif. Those days are long behind me, and you’re more likely to get Ron Swanson these days, but I couldn’t resist this (not a Taylor gif): on Planet Money, one of their reporters makes the case that the Taylor Swift phenomenon is fundamentally an economic issue: she breaks monopolies, revives movie theatre chains and causes inflation. I’m sure this is 98% hype, but that 2% is still pretty good going. (Transcript).

7. In a week where the Prime Minister decided to weaken our climate ambitions and we had to put up with the nauseating Russell Brand’s reappearance in the news (unsurprisingly for credible and horrific allegations of sexual assault), I have deeply struggled to find any uplifting and happy pop culture to leave you with; so I’m not going to attempt anything topical. Just two things: first, I’m finally on the brink of giving up on Twitter, given that it has degenerated into bots trying to sell me either crypto or people and I don’t intend to pay for the privilege of muting all those accounts. I’m trying Blue Sky (https://bsky.app/profile/scepticalranil.bsky.social), after failed attempts to make Mastodon and Threads work out, so if you’re on it, look for me. And finally, just to end things on a happy note relating to Blue Skies, an appropriate song with a truly joyous guitar solo.

Have a great weekend, everyone!

R