1. Evidence-Based Policy: So this may seem pretty off-topic as a way to start, but here's a story about the very slow moving revolution in soccer/football analytics, told from the perspective of attending a "bootcamp" put on by one the leading firms in the field. Why is it in the faiV? Because I think there is a lot for those of us who think about evidence-based policy to learn from watching how evidence infiltrates other domains. [Side-note: the RCT apologetics that appeal to "the way it's done in medicine" annoy me to no end, because the use of evidence in medicine is terrible.] And I think in many ways the sports world is a useful mirror to the policy world--if only because there are a lot of people who care a lot, have strong opinions but relatively little expertise. Here's a story about that specifically: what it means to be a fan, psychologically, when there is increasing distance between you and the people who are making decisions (or put another way, how does it feel to live in a technocracy?). Which also allows me to slip in Glen Weyl's recent essay, "Why I Am Not a Technocrat." I don't worry that much about the pros and cons of a technocracy as we are so far away from living in one--many of the people in positions to make decisions are still a long way away from adopting the evidence that is available, even when their job would seem to depend on listening. Of course there is another factor delaying evidence-based policy in many domains: the poor quality of the evidence. Here's a newly revised paper from Bradley Shapiro, Gunter Hitsch and Anna Tuchman about, of all things, advertising effectiveness(Twitter thread here). I find it interesting because this is a place where you would expect that there is lots of demand for high quality evidence. And yet, with really painstaking work, the authors are able to show that the published literature is quite biased, and therefore wrong. So wrong that the maxim should possibly be not that "half of my advertising budget is wasted, I just don't know which half", but "Three quarters of my budget is wasted...". Waiting for the revolution indeed. Finally, since I expressed growing skepticism about nudging last week, here's a paper that finds an effect in a place I would not have expected it at all: remindingseniors with reverse mortgages to pay their property taxes.
2. SMEs: Thanks to David McKenzie, I just learned about a relatively new "book" from the World Bank on High Growth Firms: Facts, Fiction and Policy Options for Emerging Economies. It's a terrific effort to pull together a lot of research from different countries and account for how uneven the data is. Two important evidence-based takeaways: past episodes of high growth are not predictive of future ones, and not even that predictive of survival; and, the link between high growth and productivity is really weak. The only quibble I have with it is that it is framed too much for "emerging economies." Everything I see here is relevant to the US and other developed economies as well, where the thinking on SMEs can be just as wrong. Policy prescriptions in the book include focusing on managerial skill, which I am increasingly convinced is the crux of the matter. Another is to focus on market linkages, particularly export markets. Here's a J-PAL report on helping small-scale Egyptian rugmakers connect to export markets, which boosts their profits and productivity (2017 QJE paper here). For one more aspect of SME development and policy implications, see item 5 below.