Week of September 10, 2018

The ThreeV Edition

Editor's Note: I found it very hard to even start writing this week's faiV because there's so much stuff. Yesterday alone I feel like I saw enough things to do two entire editions of the faiV, and it was the 2nd day of the week like that. I don't want to degenerate into list of "here are some more interesting links that I didn't have time for" so I'm just going to start writing and see where I get.--Tim Ogden

1. US Inequality: I talk a lot about congruence between the US and developing countries, but usually in the context of sharing lessons in the financial inclusion domain. But there are other domains where there is a lot more commonality. For instance radically corrupt policing. While this paper has been circulating for awhile, it's worth revisiting over and over again, and it's acceptance for publication is a convenient excuse. US cities and towns, when faced with budget deficits, ramp up arrests and fines of and property seizures from black and brown citizens but not white ones. Here's the easy to share Twitter thread version so you can send it to your not so economics-paper-inclined friends. To be clear, it's only second-order racism. The reason seems to be it's much easier to get away with stealing from people of color because of systemic racism.
Systemic racism like the premium that blacks pay for apartments, a premium that rises with the fraction white a neighborhood is. Lucky that the place you live has little effect on the quality of your education or your future job market opportunities. Oh, wait
The US is still deeply segregated (cool visualization klaxon) and there has been virtually no progress on that front in decades. Part of the reason is exclusionary zoning which puts a floor on home prices well above the reach of black and brown households. Apparently though, the Department of Housing and Urban Development is planning on tying future grants to cities to cutting zoning restrictions on multi-family dwellings. That would be a rare bright light in the current administration's deregulation push.
2. Cash: I haven't done anything on cash transfers, universal, conditional or otherwise in quite a while. This week we got a flood. I'm going to try to cover the landscape first, before some summary thoughts. Blattman, Fiala and Martinez have an update on their cash grants to youth clubs in Uganda paper--the one that found large gains after four years. After nine years, the controls have caught up. Chris used the analogy of "a tightly coiled spring" as an explanation for why the gains in the first four years were so surprisingly large--and that analogy may still hold. No matter how high the spring jumps, it eventually returns to baseline. Here's Chris's Twitter thread on how his thinking has changed. Here's a Vox article by Dylan Matthews. At this point, if you pay any attention at all, you should expect Berk Ozler to have some thoughts. He does.
Meanwhile, IPA pulled off the greatest unintentional (I'm told by reliable sources--hi Jeff!) mass market advertisement for the release of a development economics working paper in history when the NYTimes Fixes column ran a long-delayed piece by Marc Gunther on using cash as a benchmark for development programs on Tuesday. The paper was being released Thursday. That paper, a comparison of a Catholic Relief Services program to a cost-equivalent cash grant, and a much larger cash grant, by McIntosh and Zeitlin is here. The IPA brief is here. The Vox article is here. And Berk's thoughts (about the Vox coverage really) are here. And Tavneet Suri's. But I'll give Craig and Andrew the last word--here's their post on Development Impact on how they think about the study and the issues.
Before moving on to some thoughts of my own, here's a video clip of Felix Salmon highjacking an appearance on a Fox News show to advocate Universal Basic Income.
There's so much here to talk about--9 year follow-ups in Northern Uganda! A highly regarded charity willing to compare itself to cash! A cost-to-donor comparison between two programs! Nothing works over the long term!--but in the interest of this actually getting out today, I'm going to limit myself to only talking about one aspect of the benchmarking issues.
Marc Gunther, in his NYT piece, does a pretty great job of highlighting the difference in measuring "money that gets to the poor" from traditional charity overhead discussions, where the dividing line between program and overhead costs is utterly arbitrary and no one ever talks about how much of program costs are reaching recipients. One of the most fascinating things to watch as cash benchmarking makes waves is how it affects the overhead debate and how charities market themselves. Particularly because while there is by no means a consensus on cash, the general direction of this work is toward minimal programs (see an example in Berk's tweets). The overwhelming majority of the discussion on why considering overhead costs is wrong is that those costs are necessary to run programs well. It's not clear how to adjust that argument when the counterfactual is, "what if you didn't really run a program?" Of course, a huge chunk of those costs, whether they are classified as program costs or overhead costs are imposed by the donors (be they individuals or official aid agencies), and that's another variable in how these discussions will change.
3. Social Investing and Philanthropy: But they may not change much, because branding is everything in charity. Regardless of demographic characteristics, 50% of people in a survey asked what charity they would support if they could support only one, picked one of the largest charities.
On the other hand, giving by small and medium donors--the kind presumably most likely to go with the branding flow and pick a charity by branding--is declining. I'll quickly note that this article claims that overall giving is way up, in inflation adjusted dollars. I haven't had time to dig into that, but when I've done similar calculations before, I've found that giving has been flat for the last 20 years or so.
You may have heard that Jeff Bezos announced that he'll be giving $2 billion to organizations fighting homelessness (perhaps he should consider cash [I was going to link to a study about emergency cash grants to people that helped prevent eviction but I can't find it]? or perhaps not.) and apparently starting the world's largest Montessori franchise to serve low-income kids. There are plenty of takes out there. Here's Rob Reich interrogating. Here's Ben Soskis on how the plan doesn't fit any of the current stereotypes of ultra-wealthy/tech philanthropy.

4. and 5. The First Ever Split faiV?: Apparently I only got to 3.

Long time readers of the faiV may remember that my son Nathanael has a rare disease, the most notable symptom of which is loss of vision. He crossed the threshold of legal blindness this year. Nathanael and I raise funds for research--there's more known than ever before about this syndrome, but we're still a long way from treatments, much less cures--by riding 36 miles from our home to the Philadelphia Museum of Art, and running up the famous Rocky steps. We call it the Rocky Ride. If you'd like to contribute, in lieu of a subscription fee for the faiV, we would deeply appreciate it. And for any readers in the New York to DC corridor who would like to ride along, join us!

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