Economics & Marginalia: September 6, 2024

Hi all,

We’ve just come back from a week-long trip to Portugal, and if these links come off as slightly exhausted, it’s because they are. We had an amazing time, highlighted by pristine beaches, industrial quantities of clams being eaten by my son, and about 7 viewings of Madagascar, but it was bookended by a multi-hour tantrum on the first night and a night and morning of violent food poisoning on the last (I’ll leave you all to imagine who was involved in each). Holidays with toddlers are a curious mix of endurance sport and intense, concentrated happiness. Like a marathon with a break for cake, which is probably the only kind of marathon I’ll ever attempt, and even then it would have to be some cake. As always, one of the redeeming features of the return to the grind is the sheer volume of excellent stuff that keeps getting published, even over the summer. So on to the links.

1. Not long before I went on leave, I had the enormous pleasure of hosting Stefan Dercon and Laura Chappell (the IPPR’s Associate Director for International Policy) on the CGD podcast to talk about the post-election prospects of UK development policy (transcript in link). I’ve known both Laura and Stefan for more than a decade now. Laura and I were recruited to DFID at the same time, and indeed went through our assessment centre together (I recall we, together with Nick Lea, later DFID’s Deputy Chief Economist and another to-be colleague in the Department, we solved a mystery involving five strangers, each with a different tool and a clue but no pens or paper. Nick made us do it twice within the allotted time to make sure we got it right.) The full conversation was a joy: we spoke for close to 2 hours, and covered everything from whether donors can do anything about growth, how to handle the pressure to do climate work on development budgets, the political (non-)parallels between 1997 and today, and a few anecdotes that give a great flavour of the sheer vigour of the intellectual debate in DFID back in the day, including Stefan gently lampooning David Cameron’s Golden Thread in a conference presentation. The final podcast had to be edited severely down to the 45 minute run time, but—not to come off all Zack Snyder—if there’s enough demand I’ll see if I can convince the team to release a directors cut. 

2. We talked a lot about economic growth, how central it is to both prospects for development and the ambitions of local actors in developing countries (and how strongly Clare Short, DFID’s pioneering and tone-setting first leader, believed it was the central issue, at the root of sustainable poverty eradication). But it is difficult, even with reform-minded governments. Ken Opalo’s most recent substack looks at the case of Nigeria, and this sentence stood out to me (within an overall bull case for Nigeria): “…it is increasingly clear that Tinubu’s reforms have neither focus nor a clearly-articulated growth agenda.” This strikes me as immensely important. The more I read into the research about growth the more I believe that no single reform is enough to get you to take-off. That requires multiple parts being played reasonably well, rather than a virtuoso surrounded by incompetents. It’s useless being Bill Evans if you’re accompanied by Gene Frenkle. Getting some reforms right is great: but without the greater vision and direction, it’s more likely to fizzle out than catch and spread.

3. Still in the vein of  ‘you need to get lots of things right at once’, this VoxDev write-up of new research by Doug Gollin (still one of my favourite economists in the world) and co-authors is absolutely brilliant. They show that one-third of Ethiopian farmers have incorrect beliefs about what kind of seeds they are sowing at harvest time; and this leads them to invest in the wrong kind and volume of complementary inputs, affecting both their costs and their yields negatively. If increasing agricultural productivity in Africa is important (it is, and is possibly the most underrated area of in development right now), and technology is part of the solution, this is a really big problem, with direct and increasingly achievable policy implications. One point they don’t make, but which I think may be very important, is that without correcting this underlying problem investments in better seeds may underperform, because the mechanisms that generate incorrect beliefs (including informal seed sharing) can apply even once new seeds are put on the market.

4. And more from VoxDev: an interview with Pranab Bardhan based on his brilliant memoir Charaiveti, which I recently read in book form (having linked some excerpts here previously), and a very helpful summary piece by Paola Davila and Oliver Hanney showing how recent econometric advances have been used in practice by researchers.

5. Hannah Ritchie looks at the cost of different forms of transport in the UK, on the basis that if we want people to do the environmentally friendly thing we should make it easy (and cheap) for them. The UK fails dismally on this. One point she doesn’t make here, but which lurks like a shadow over the whole piece is that this is basically entirely because the carbon cost of transport does not figure into its price virtually at all. This is a global failure, in fact exacerbated by daft subsidies, that is nevertheless proving very difficult to solve. 

6. Nate Silver is currently trending on twitter because his model is forecasting a Trump win in the election, and many people are extremely annoyed that it could do such a thing (I have no idea how good the model is this year, having not followed it closely, but the idea that he’s doing it for yuks, or on the orders of a Trump-friendly financer seem unlikely to me, given his track record). Anyway, to provide some balance: Silver is, even if you hate his political takes, very good at dealing with uncertainty, and even better for the rest of us, very good at communicating about it. His new book, On the Edge is all about this, and is reviewed very positively by Andrew Gelman, another brilliant statistician with a gift for clear communication (and one who has had several previous disagreements with Nate, so his voice has weight here). I will be buying and reading it.

7. While I was on holiday, Stefan sent me a picture of a morning at the cricket, watching Sri Lanka slowly ground into the dust by a vastly superior England side, to which I was forced to reply with a photo of pristine beach. But the truth is, I was worried. Today is day one of the third and final test at the Oval, and once again Sri Lanka are being methodically ground into the dust, but this time quickly. This is particularly worrying for me: the family and I have tickets to day 3 (courtesy of another academic friend of mine). It will be the little one’s first experience of cricket (and I suspect he may spend it playing with his trains), and I would like Sri Lanka to have a respectable showing. Any tips for watching a disastrous performance with a four-year-old? Either he or I are likely to throw a tantrum at some point, so some coping mechanisms would help. And on that note:

Have a great weekend, everyone!

R