Economics & Marginalia: June 11, 2021

Hi all,

Well, if England win this test, I will eat my hat. Day 2 and New Zealand are half-way to England’s first innings total for the loss of two wickets; of course, the last time I made such a proclamation, I was trying to digest felt and wool for days after Ben Stokes sold his soul to the devil for the kind of innings that you normally associated with Brian Lara (who had a pretty important anniversary recently). But with all the change recently – I’m still processing LeBron not being in the playoffs anymore; and Loki dropped on a Wednesday which seems like a torture aimed specifically at me, forcing me to wait two days to find the time to watch Tom Hiddleston and Owen Wilson doing Marvel stuff – English mediocrity is a welcome balm. The main philosophical quandary I had mental space for this week came from this menu, making me question whether chips with a side of chips was still just chips in the way 0 plus 0 is 0 or if it becomes some new entity. I have no mental space to devote to the complications thrown up by a competent English test side.

1. If you’re anything like me, you probably don’t read enough economic history. This is true even if you read rather a lot of economic history. One of the best things I read this week (via Vijaya Ramachandran) is this excellent blog by Tom Westland, looking at the history of food prices in West Africa and Southeast Asia as an explanation for their divergent fortunes in industry. He argues that the both West Africa and Southeast Asia were characterised by abundant land and scarce labour, which meant that farmers were always able to choose to farm more land rather than work for low wages in an urban factory; but despite this being true in both regions, food prices in West Africa have historically been generally much higher than those in Southeast Asia. An aside: the historian John Iliffe invokes this ‘abundant land, scarce people’ thesis to explain why the game of choice in much of Africa is bao/mancala, in which players always occupy the same territory, but compete over ‘people’ (in this case beads). Contrast this game to chess, developed in land scarce, people-rich India, where the objective is to eliminate the people and occupy the land.
2. Working during the pandemic has been a bit of a trip, hasn’t it? I met a colleague of mine for coffee for the first time since joining CGD, and it really made me realise how much I’ve missed out by not being able to go to the office. Virtually everyone I’ve met has been in a small box on Zoom. And a very cool working paper from Michael Gibbs and co-authors suggests that this feeling reflects something real. Using data from an Asian IT company, they show that remote working has extended the workday, reduced productivity and induced a lot more time spent trying to simply talk to and engage with colleagues. It turns out video calls are an inefficient way of doing that. And speaking of video calls Planet Money have the story of how Zoom managed to corner the market, and it’s almost comically simple. Zoom decided to try and make fun possible – which led to the now-legendary cat lawyer; and decided to be easy to buy. No packages, no specific email address. Just click and go (transcript).
3. David Autor and co-authors on one aspect of gender inequality that doesn’t usually get much attention: the underperformance of boys in the US school system. The effects appear concentrated among the poorest, and largely explained by differential effects of the home environment on boys and girls.
4. Once again, I am asking you to read Michael Clemens. In Foreign Policy, he lays out the two main dynamics underlying global migration. There are long waves of migration, driven by the increasing prosperity of poorer countries, which allows more of their citizens to afford movement abroad. And there are short spikes of migration which normally respond to disasters, crime, and instability. These two dynamics are not the same: one is something to celebrate, the other a symptom of something gone very wrong; the right kind of migration policy for a rich country should aim to dampen the second dynamic, and to get the most out of the first. In both cases, a crucial part of the puzzle is the existence of sufficient regular channels for migrants, in desperately short supply at present.
5. Dani Rodrik on the G7’s proposal for a global minimum corporate tax. I’ll believe it when I see it, but it is an amazing development that I would absolutely not have predicted even three months ago.
6. I enjoyed this VoxDev write-up of research that investigates why financial incentives were not effective in inducing Brazilian doctors to work in under-served areas. Too often we assume that, at least at the margin, throwing money at people will shift their behaviour. We see it with rewards for vaccines (where it may work!), in work settings with bonuses and pay-for-performance structures of contested effectiveness and even in parenting. In this case, it didn’t work for a simple reason: money was substantially less important to many doctors than lifestyle considerations. People are complex, and motivation is too – we often forget that.
7. I’ve been reading my son a range of books recently; from the absolutely inane (Maisie makes Lemonade, which does what it says on the tin and not a single thing more) to the joyous (I would probably read Room on the Broom semi-regularly even without a child to read it to). But nothing defies categorisation quite like Where the Wild Things Are; beautiful and strange in both illustration and writing. We both find the pictures mesmerising, so LitHub unearthing rare pictures featuring Max and the Wild Things (band name!) is amazing, and worth a few minutes of your weekend. And with that…

Have a great weekend, everyone!

R