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Viewing all FaiV posts with topic: Migration  

Week of September 20, 2019

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: reminding seniors 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.

3. The Corrupted Economy: For those of you who were a bit tuned out during the summer, "The Corrupted Economy" is my new header for items that reveal the "great convergence" between the economy faced by the bottom 40% of the US income distribution and that faced by people in middle-income countries. I try not to include it every week just to maintain my own mental health.
Here's a new paper that encapsulates a lot of what I think about under this heading: despite supposedly random assignment, in Chicago and New York, bankruptcy lawyers are able to manipulate case assignment to the benefit of their clients (and the detriment of those who file without legal representation). The poor are different from you and me--even the rules to make sure they are treated fairly aren't fair. Or put another way, even the programs designed specifically to help them--like opportunity zones--are quickly turned into programs that benefit the wealthy.
The premise of the corrupted economy is that there are two different economies now in the United States. Here's a new report from Brookings on the two different economies and how quickly they are diverging. We've long known about the divergence between urban and rural economies (another feature in common with middle-income countries)--this analysis shows that this urban/rural divide is increasingly a Republican/Democrat divide. Over the last ten years, median household income in Democratic districts has risen by about 5%, while marginally falling in Republican districts.
Here's a new paper on another phenomena that has been oft-remarked: the school-to-prison pipeline. Using students that are plausibly exogenously moved from a low-suspension school to a high-suspension school, the authors show that being suspended increases the likelihood of future arrest and incarceration.
What can be done about the corrupted economy. Here's a new paper by Lily Batchelder and David Kamin about the real possibilities (technically, not politically) for taxing the rich.

4. Our Algorithmic Overlords: Where does the use of algorithms increase fairness and where does it mask, perpetuate and amplify unfair discrimination? Here's a Science Friday story about facial recognition in criminal justice.
What about other kinds of recognition? Perhaps we should be concerned about recognition based on medical imaging since apparently a large number of medical images are pretty easily available on the internet.
But back to the main question: Does AI reduce or increase bias? Of course, it depends on a lot of factors, but one of the largest is how the human beings and AI interact. That stretches from how the data sets that AI engines are trained on are generated (often by human beings with a lot of biases) all the way to the discretion that human beings have in following or rejecting the AI conclusions. Here's a story about how human curation is sneaking back in to fix, replace or simply be an alternative to AI recommendations. More to the point however is this paper thatcompares discrimination in face-to-face lending and via fintech platforms. Borrowers of color pay higher prices in both data sets, but the gap is smaller in the fintech data, and while the fintechs do engage in price discrimination they are much less likely to discriminate by denying loans.

5. Migration: This week I finished up the copy-edits on a paper I co-authored with Michael Clemens on rethinking the research agenda on migration and household finance. Michael and I first submitted the paper a little more than 4 years ago, but I was struck by how many of the research questions we posited back then remain quite relevant. Look for a link soon.
In the meantime, Ryan Edwards has a couple of posts reviewing the literature on "brain drain" (or more properly, the positive spillovers of migration) at the DevPolicyBlog of ANU: Part I and Part II. Samuele Giambre and David McKenzie have a new paper looking at the effects of self-employment, and particularly encouraging self-employment (otherwise known as microcredit) has on cross-border migration, finding a small, negative effect. Corina Mommaerts, Melanie Morton, Mushfiq Mobarak and Costas Meghir look at the effects of rural-to-urban migration on informal insurance in Bangladesh. I think most people's priors would be that migration reduces informal insurance arrangements--but here migration improves informal risk sharing, suggesting that benefits from migration subsidies are 40% higher due to spillovers. And bringing all this together in a Great Convergence kind of way, here's Monica Langella and Alan Manning discussing whether or not people "move to opportunity" in the UK and why regional differences persist even when people do so. In summary, there isn't enough moving far enough by the right people: young people are more likely to move and move farther than older people; poorer people are less likely to move and don't move as far. All-in-all it's highly relevant to thinking about migration and household finance in other developed and in developing countries.

On the Great Convergence and Corrupted Economy topics, here's data from the most recent Bureau of Labor Statistics data on project job growth in the US. As pointed out by  Heather Long , seven of the 10 jobs projected to grow the most in the US in the next 10 years pay less than $34,000 a year, and 6 of them less than $27,000 per year. Source:  BLS  .

On the Great Convergence and Corrupted Economy topics, here's data from the most recent Bureau of Labor Statistics data on project job growth in the US. As pointed out by Heather Long, seven of the 10 jobs projected to grow the most in the US in the next 10 years pay less than $34,000 a year, and 6 of them less than $27,000 per year. Source: BLS .

Week of March 1, 2019

The Post-Neoliberal Edition

1. Economics: The dismal science doesn't often generate positive reviews from outside the discipline, so when it does happen it's worth noting. Julia Rohrer, who in addition to having one of the best titled blogs I've ever seen, is a psychology graduate student who procrastinated on her dissertation by attending a summer program in economics. Here is her list of things she appreciated in economics as a positive contrast to her experience in psychology.
On the other hand (hah!), economists typically have a lot to say about what is wrong with economics--certainly I encounter more "friendly-fire" in the econ literature than when I dip my toes in other disciplines (though this is perhaps my favorite example of the intra-disciplinary critique). There's an ongoing discussion about the future of economics going on in the Boston Review--I don't know if that counts as friendly-fire in terms of the outlet, but the participants are economists--starting with an essay by Naidu, Rodrik and Zucman, Economics after Neoliberalism. Then there are responses from Marshall Steinbaum, who notes that "every new generation proclaims itself to have discovered empirical verification for the first time," and from Alice Evans who focuses on the nexus of economics and political power in the form of unions.
But, because it's me writing this, I have to close on a new paper in JDE, that finds that communal land tenure explains half of the cross-country agricultural productivity gap. And here's a piece about how small teams of researchers are more innovative than large teams. generate much more innovation than big teams Neo-liberalism won't go down without a fight!

2. Migration: I haven't touched on migration for a while so it felt serendipitous that Michael Clemens and Satish Chand put out an update to their paper first released in 2008(!) on the effects of migration on human capital development in Fiji. The basic story is that in the late 80's formal discrimination against Indian-Fijians increased sharply, causing the community to both increase emigration and investment in human capital to aid emigration prospects. The net effect, rather than the dreaded "brain drain," was to increase the stock of human capital in Fiji. grapes
Cross-border migration is really the only option in Fiji, but in many countries, like Indonesia, there are lots of internal migration options. Since there is typically a large gap in productivity within countries as well as between countries, internal migrationhas always been a part of the development story. Bryan and Morten have a new article in VoxDev about this process in Indonesia, looking at the productivity gains possible from removing barriers to internal migration.
Since we started off talking about Economics, here's a post from David McKenzie considering the effects of migration on economists--or more specifically, how to think about job market papers about a candidate's country-of-origin. True to his style, David goes deep, including a model, and a survey. The post was inspired by a tweet from Pablo Albarcar who later noted it was mostly a joke about "brain drain" worries.
It is surprising to me how tenacious the brain drain idea is. When I have conversations about it, I try to cite the literature like Clemens and Chand, but I rarely find that makes a dent. People can always find an objection. So I've taken to just asking people how they feel about the "destruction" of Brazilian soccer/football culture and skill due to the mass emigration of the most skilled players. Typically, that leads to several moments of silent blinking. If you're interested here's a paper about "Rodar" the circular human capital investment, migration and development among Brazilian footballers
  
3. US Poverty and Inequality: I typically try to avoid the grab-bag approach to items of interest but I'll confess this one is a bit of a grab bag with a variety of connecting threads. We'll start by connecting to a piece I included last week about tax refunds and saving. If you haven't read that, you should. I noted I was grateful for the piece because it meant I could skip the annual ritual of linking to a piece I wrote for SSIR several years ago about rethinking tax refunds. But I should have known that the zombie idea of tax refunds being bad personal finance wouldn't die so easily. Here's Neil Irwin from the NYT on how people being angry about lower refunds shows that "humans are not always rational." I'm struck by the irony that the continuing common use of "rational" in economics requires zero-cost attention, while a foundational truth of the discipline is "nothing is zero-cost." There is nothing irrational about paying a very small fee (in foregone interest) for the valuable service of helping you to save when other services are ineffective. That's especially true if you include, as you should, the cost of the tax advisors and financial advisors required to accurately calculate the proper amount of withholding and to choose the right investment/savings account in which to store those savings. So I guess that connects to the thread about economics maybe not being post-neoliberalism quite yet. And here's a column from the Washington Post's personal finance columnist withpush back on the "refunds are bad" idea from readers who explain their rational choices in their own words.  
This week a 3 year project by the National Academy of Sciences to provide a "nonpartisan, evidence-based report" on the most effective ways to reduce child poverty in the United States was released. The summary that most everyone is latching on to is that work supports are not going to get the job done. The only way to cut child poverty by at least half is direct cash support to parents. Here's the Vox overview.
If you were thinking about intergenerational poverty, you were probably also thinking about education. The last few years have seen a proliferation of videos of "poor kids" getting into elite schools. Here's a piece about a new book on what happens to the lower-income students once they arrive at elite schools. It's not so joyous--"money remains a requirement for full citizenship in college, despite institutional declarations to the contrary."
Finally, how much do financial incentives and tax rates affect the incentives to innovate and invent? Not much--exposure to innovation matters much more

4. Management: This is a last minute "swap" of an item, since David McKenziemaligned managers in his weekly links tweet this morning. As some of you know, I have a semi-secret identity ghost-writing and editing management books, with several of them specifically about Toyota and lean process and management, so I couldn't let it lie. Of course, David's quip was a joke. The piece he links to is a terrific overview of the research on how management matters, a literature that David is a significant contributor to. It is a topic that I wish the development field paid much much more attention to (I really hope this is the most clicked link of the week), and this overview is a great introduction, both in content and structure/organization. I think I'll make some of my papers look more like this in the future.
And here's a piece about how middle managers deserve more respect. In my read of the literature above, it is middle management that is the actual missing middle in development. 

5. Digital Finance: I relinked the piece on why there's no reason to trust blockchain in the notes above. Here's another reason: "Once Hailed as Unhackable, Blockchains Are Now Getting Hacked." On the other hand, here's, "Bitcoin Has Saved My Family," from a Venezuelan economist.
One of the under-examined topics in the emergence of digital finance is the shift in the organizations and organizational structures that are providing financial services. The institutions and people in telecoms are systematically different than those in finance. That's something that always strikes me as I look at the GSMA's annual report on the state of the mobile money industry. Not because of something in the report specifically, but the fact that the report is from the GSMA.
And finally, a little curiosity that may only interest me. Uganda is opening up the purchase of government debt to individuals using mobile money, on the theory that it will reduce the government's dependence on commercial banks and institutional investors. It's historically sound, but I'm skeptical. For instance, it hasn't worked as well as hoped in Kenya.  

The musing on the quality of Brazilian football in the face of mass emigration gives me an excuse to include a video in support of my argument. If you're interested in falling down the rabbit hole a bit, here's  a short documentary on the 1982 Brazil team , which is my Platonic ideal of how the game is supposed to be played. Though that could have something to do with the fact that I was 9 that summer, and it was the first World Cup I watched. I still have a visceral rage reaction any time I see the Azurri take the field.  

The musing on the quality of Brazilian football in the face of mass emigration gives me an excuse to include a video in support of my argument. If you're interested in falling down the rabbit hole a bit, here's a short documentary on the 1982 Brazil team, which is my Platonic ideal of how the game is supposed to be played. Though that could have something to do with the fact that I was 9 that summer, and it was the first World Cup I watched. I still have a visceral rage reaction any time I see the Azurri take the field.  

Week of November 5, 2018

1. Household Finance: One of the trips keeping me busy was to Mexico City for the PRONAFIM conference. Here's a video version of my current thinking on household finance, in Spanish.  
Of course, one of the key questions in household finance is to what extent a household is a household. I've had a hard time not thinking about this recent paper from Afzal et al, which through a series of "lab in the field" experiments, shows there are a lot of schisms in the household. Let me just quote from the abstract: "Subjects are often no better at guessing their spouse's preferences than those of a stranger, and many subjects disregard what they believe or know about others' preferences when assigning them a consumption bundle." Is there some explanation there for the puzzle in the Graphic of the Week (see below?). 
In the household finance realm I often pick on financial literacy--specifically as a bellweather for evidenced-based policy (if money is going into financial literacy, evidence isn't making a dent on policy). Here's some interesting new evidence on financial literacy and why it doesn't seem to work, from Carpena and Zia. They are looking for what parts of financial education might affect behavior, and find attitudes matter more than awareness or numeracy. I feel like that connects to this new paper from Gine and Goldberg documenting endowment effects in account choice in Malawi, and that the endowment effect can be overcome with experience, but maybe not.      

2. Inequality: Teaching a class on wealth inequality and policy makes anything on the topic grab my attention just a bit more. And there is a lot out there. On the downside, there's a lot out there and my attention is drawn to all of it. Here's a handy Twitter thread guide (and in a perhaps easier to follow/read format) to the global inequality literature that I found very helpful. Here's a new paper from Ayyagari, Demirguc-Kunt and Maksimovic calling into question the idea that a group of "star" firms are pulling away from others and boosting inequality. You probably already know about this, but the Chetty team has published their Opportunity Atlas. And here's a recent paper from Card et al. on the role of school quality in transmitting economic inequality in the US during the 20th century (in digest form here). 

3. Our Algorithmic Overlords: Nothing particular profound here but I couldn't resist pairing these two pieces together: a) "China’s brightest children are being recruited to develop AI ‘killer bots’" and b) A list of artificial intelligence programs that do "what their creators specify, not what they mean." I suppose since the actions of the AI programs sound a lot like children trying to annoy their parents, China's approach seems optimal? 

4. Migration: I mentioned too much travel as one of the reasons for the occasional nature of the faiV lately. One of those trips was to Vienna to present at the OSCE's Development and Migration meeting. It was an excuse to go back and re-read a paper I co-wrote with Michael Clemens on "Migration as a Household Finance Strategy." It's good, as you should expect from something that Michael led. I'm linking it here because it lays out a research agenda that's still valid. And so I can also link this video that came out of it. I'm pretty sure it's the video that got me the invitation to Vienna. 
Meanwhile, here's a new paper from Michael debunking brain drain (again; now read that like Eliza Doolittle) and a related article from Harvard Political Review. Or try the even shorter version, a tweet from Michael with this useful fact: "In the 71 countries that grew to middle-income or higher between 1960 and 2013, 67 had a concurrent rise in the emigrant share." 
Here's a recent story from the New York Times about how Uganda is integrating refugees successfully. And here's data on the crossing from Libya to Europe--1 in 5 die or go missing. hel Glennerster examines several cases where evidence led to scaling up n?

5. Evidence-Based Policy: Who isn't interested in making research more useful to policymakers and influencing policy with research? I mean, other than tenure committees. For everyone else, the Evidence in Practice project at Yale SOM has a report on their two years of work on how evidence can be better integrated into policy and practice. Check out particularly, page 32 and the "currency of exchange" for each of the groups involved in evidence-based policy development and implementation. Maybe print it and hang it on your office wall. (Full Disclosure: I participated in one of the Evidence in Practice workshops). The recommendations align pretty well with Oxfam's lessons for influencing policy, summarized in a post by David Evans at the Development Impact Blog. In fact, point 5 could reasonably be a summary of the Evidence in Practice report (I think that's a good thing. That's good right?). But you should still print and hang page 32 because you won't be able to do point 5 without it.    

I  was chatting with Lore Vandewalle earlier this week (she's visiting at  NYU-Wagner this fall), talking about savings behavior and that led me to  look back at  an experiment she had run in India with Vincent Somville   where some people were paid cash and others were paid via deposit into a  savings account. While I had read the paper, it didn't really strike me  at the time how similar the results were to another savings  encouragement experiment-- Kast, Meier and Pomeranz in Chile .  So I show them side-by-side here. The interesting thing to me is that  balances for the treatment group rise quickly but plateau at a fairly  low level (e.g. in India it's about a week of food expenditures  according to Lore). It's consistent with using these accounts to manage  liquidity needs (buffering day-to-day or week-to-week volatility) but  not with precautionary or investment savings. But that doesn't explain  why the control groups also plateau, just at a lower level. Is there  another story I'm not thinking of? 

I was chatting with Lore Vandewalle earlier this week (she's visiting at NYU-Wagner this fall), talking about savings behavior and that led me to look back at an experiment she had run in India with Vincent Somville where some people were paid cash and others were paid via deposit into a savings account. While I had read the paper, it didn't really strike me at the time how similar the results were to another savings encouragement experiment--Kast, Meier and Pomeranz in Chile. So I show them side-by-side here. The interesting thing to me is that balances for the treatment group rise quickly but plateau at a fairly low level (e.g. in India it's about a week of food expenditures according to Lore). It's consistent with using these accounts to manage liquidity needs (buffering day-to-day or week-to-week volatility) but not with precautionary or investment savings. But that doesn't explain why the control groups also plateau, just at a lower level. Is there another story I'm not thinking of? 

Week of August 20, 2018

Editor's Note: I'm back on faiV duty. Many thanks to Alexander Berger, Jeffrey Bloem, John Thompson, and Rebecca Rouse for filling in. If you would be interested in being a guest editor of the faiV at some point, feel free to reach out.
This week, I'm casting my eye back over the many things I've been reading over the last few months. Don't worry, I'm not going to try to cover all of those in one faiV, though there will be, perhaps a bit less commentary than usual.--Tim Ogden


1. Financial Inclusion and Digital Finance: The last time I was writing the faiV, various takes on the Global Findex data were being featured prominently. So it only seems fitting to come back to that as I return. Greta Bull of CGAP has a two-part blog, part I and part II, reacting to Beth Rhyne's and Sonja Kelly's take (may I take a moment to smile at the inclusion that sentence reveals?) on the Hype vs. Reality of inclusion. Bull argues that the Findex data shows greater progress on inclusion than Rhyne and Kelly see. For what it's worth I lean to toward Bull in this debate. It would be surprising, given the incredibly rapid progress in access, if the access-use gap wasn't growing, especially in countries with relatively low levels or recent gains in access as network effects won't kick in for awhile.  
There is another concern beyond the use/access gap--does use of the available accounts make people better off. Here's a new paper from Kast and Pomeranz showing that providing free savings accounts in Chile led to lower debt burdens (and some additional evidence on rotten kin). On the other hand here's an open letter from Anup Signh to Kenyan Central Bank governor Patrick Njoroge making the case for urgent regulatory action on digital credit to protect borrowers. On the third hand (hat tip to Brad DeLong) mobile money seems to have saved lives (note no counterfactuals there, but it seems plausible) during Ebola outbreaks in Liberia and Sierra Leone during Ebola outbreaks by ensuring that response workers got paid.  
Of course, benefit depends not just on use, but on who is using the services. Microsave found that 80% of the "addressable LMI market" in India was not being served by fintechs, and, with CIIE's Bharat Inclusion Initiative, has launched a "Financial Inclusion Lab" to help Indian fintech's address that market.   

2. Our Algorithmic Overlords: If you've gotten out of the habit of reading the faiV, what better way to grab your attention back than sexbots! Here's Marina Adshade, an economist at UBC, with a thoroughly economic argument about how sexbots could make marriage better (by changing how it works and what it does). And here's Gabriel Rossman, a sociologist at UCLA, making the counterargument. Apparently he reads Justin Fox.
On a much more prosaic, and more urgent, front, there have been a raft of stories on the increasingly alarming situation in Northwest China where the tech-driven panopticon seems to be racing ahead in the service of persecution of Muslims and ethnic minorities. Here is the NYTimes "inside China's Dystopian Dreams". Here's Reuters on the "surveillance state spread[ing] quietly." MIT Technology Review asks, "who needs democracy when you have data?" And here's Foreign Affairs on the "coming competition between digital authoritarianism and liberal democracy." If I have a bone to pick it's the lack of attention to the possibility of "authoritarian democracy" that comes along with a surveillance state and AI overlords.

3. Global Development: If sexbots don't get your attention, what about hyperselectivity of migrants? I think, quite a while ago, I linked to Hicks, et al. on the systematic differences between those who migrate from rural to urban Kenya, and those who stay on the farm, finding that urban productivity is a factor of the traits of the workers who migrate. But if not, now they are in VoxDev with a great summary of the work. It's particularly interesting to read in conjunction with this new paper on the hyper-selectivity of migrants to the US--the fact that migrants to the US are both more likely to have a college degree than their compatriots, and than the US native-born population. That hyper-selectivity plays a role in second generation outcomes, but has mixed results for economic mobility of Asian, African and Latino migrants.
What to do for those who don't migrate? I really like this new paper from Beaman et al. on using Network Theory-Based targeting to determine how to deliver agricultural training. Why? Well, because I find technology adoption a particularly interesting set of questions, but mostly because they "identify methods to realize these gains at low cost to policymakers."

4. Philanthropy: There's an old saw that two data points are anecdotes, but three are a trend. It's mostly applied to journalism, but I originally heard it at my first job doing market research on the IT industry. Regardless of it's source, it definitely indicates there is a trend to looking much harder and more skeptically extreme wealth-driven philanthropy (or social investment, or impact investment, etc.). Anand Giridharadas expands a talk he gave at Aspen into a full length book called Winners Take All: The Elite Charade of Changing the World. Rob Reich, a political scientist at Stanford (who I have the temerity to call friend), has Just Giving: Why Philanthropy is Failing Democracy and How It Can Do Better, and David Callahan, founder of Inside Philanthropy, has The Givers: Wealth, Power, and Philanthropy in a New Gilded Age. None of them sound much like Philanthrocapitalism or Giving. I'm excited by all three, and I think you should buy and read them, but let's be realistic. You're much more likely to read this review of the three from Elizabeth Kolbert. The most interesting review--from a meta-perspective--though is this review in SSIR ofWinners Take All from Mark Kramer, clearly one of the targets of Giridharadas's book. Well done SSIR. 

5. US Inequality: Continuing on that theme, it's not just the billionaire philanthropists who are undermining American society and democracy, according to Matthew Stewart. If you're a US-based reader of this newsletter you are likely part of the problem. If you prefer the academic version of an argument like this, here's a new paper from Schneider, Hastings and LaBriola on income inequality and the growing, and amplifying, gap in parental investments in children. They also read Justin Fox (and enough with the cryptic link, that's a piece about sociologists engaging with the public more like economists, including making their papers open access.) Or if you prefer the academic version in summary form, here's Schneider's tweet thread. And since it's back-to-school time, here's the most depressing back-to-school news I can imagine: School districts in my area are hiring private detectives to follow kids and make sure they aren't crossing district lines in order to go to a good school. No arguing with Stewart's thesis allowed while this is how wealthy school districts are spending their money.

It's not just the US that has concerns about the influence of extreme wealth and inequality. Here's a 3 minute book preview of James Crabtree's book,  The Billionaire Raj .

It's not just the US that has concerns about the influence of extreme wealth and inequality. Here's a 3 minute book preview of James Crabtree's book, The Billionaire Raj.

Week of July 16, 2018

A Very Rouse-ing Edition

Editor's Note: As mentioned in the last faiV, I'm taking some time away from weekly newsletter writing to work on some other writing projects. This week's edition is guest-edited by Rebecca Rouse, director of IPA's Financial Inclusion Program, which partners with researchers, FSPs and governments to design and test financial products and consumer protection policies.--Tim Ogden

1. Women's Empowerment: Our friends at JPAL released their long-anticipated Practical Guide to Measuring Women’s and Girls’ Empowerment in Impact Evaluations. It comes with a set of questionnaires and examples of non-survey tools that can be more effective at capturing the useful and reliable data. This new study from the U.S. Census Bureau is timely, showing that when a woman earns more than her husband they both tend to exaggerate the husband’s earnings and diminish the wife’s on their Census responses. Gender norms still shape survey responses, no matter where you are. Seems like a good time to revisit IPA’s discussions on mixed methods approaches to women’s empowerment measurement with Nicola Jones and with Sarah Baird from last year. Finally, the US House passed the Women’s Entrepreneurship and Economic Empowerment Act of 2018 this week. The bill seeks to improve USAID’s work on women’s access to finance, and is notable first because of its attention to some (not all) non-financial gender-norms constraints that impact women’s prosperity, and also because it calls for improvements to outcome measurement methods.  


2. Migration: The first ever Global Compact for Migration was approved by all 193 member states of the UN last week except for the United States (Hungary is now saying it won’t sign the final document), and one of its 23 high-level objectives is to “promote faster, safer and cheaper transfer of remittances and foster financial inclusion of migrants.” A lot of the language in here sounds like the same old story on remittances, and I am skeptical of the laser-sharp focus on reducing prices (it calls to eliminate remittance corridors with costs higher than 5% by 2030), promoting financial education, and investing in consumer product comparison tools that aren’t based on evidence. Dean Yang’s 2016 study on financial education for Filipino migrants failed to find any positive impact on financial product take-up or usage, for example.

3. Remittances: What about looking to the behavioral econ world to enhance the positive effects of remittances? Behavioral nudges that can leverage digital finance look promising – Harvard Business Review had a nice piece last month on Blumenstock, Callen, and Ghani’s test of mobile money defaults to save in Afghanistan. This experiment is exciting because it shows that, with the right tools, successful interventions from the developed world, like Thaler and Benartzi’s Save More Tomorrow, can achieve similar results in other contexts.  Linking remittance transfers to digital finance in the receiving country can create additional opportunities to enhance impact beyond savings, for example using data for credit scoring. Here’s an op-ed from Rafe Mazer and FSD Africa on the opportunities and risks surrounding data sharing models in emerging markets.

4. Nudges: Abraham, Filiz-Ozbay, Ozbay, and Turner have a new working paper on the impact of income-based student loan repayment plans on employment decisions in the United States. They find that limiting the repayment plan options that borrowers are offered can lead them to pursue riskier careers and thereby raise their expected incomes in the long run. By only offering income-based repayment plans, which protects them from defaults by linking payment amounts to earned income, students were unburdened from fears of regret and of making the wrong choice. And lastly, Bernheim and Taubinsky summarize the use of behavioral economics in public policy, including an entire section on policies that target personal saving. 

5. Mobile Money: Finally, from Kenya, some experimental evidence on the impact of mobile money on school enrollment in a new working paper by Billy Jack and James Habyarimana at Georgetown. Parents who received a mobile money savings wallet via M-PESA, regardless of whether it incorporated a commitment mechanism or not, increased savings by three to four times, and were 5-6 percentage points more likely to enroll their children in high school. It’s interesting that the commitment savings option wasn’t more or less impactful than just the offer of any mobile wallet, and you can read a new interview with the authors discussing the results on the IPA blog. 


Thanks for the chance to take over the faiV this week! - Rebecca

From a new report by the Urban Institute: “By 2020, the federal government is projected to spend more on interest payments on the debt than on children." Source:  Urban Institute

From a new report by the Urban Institute: “By 2020, the federal government is projected to spend more on interest payments on the debt than on children." Source: Urban Institute

Week of June 18, 2018

The Do U Care Edition

1. Migration: If you don't get the "edition" reference, I think I envy you. But I care, and in the absence of other specific ways to oppose cruelty and barbarism, I'll spend some time here sharing some useful information about migration. Such as the fact that the US has become a "low-migration" country. I think this is as significant a change to the nature of the country as the closing of the frontier, especially since so many people don't seem to realize how much migration, whether within the US or to the US from other countries, has dropped.
On to that other crucial fact about migration: it's very very good for the people migrating and doesn't harm the people who are already there. Here's the newly officially published in AER paper by Clemens, Lewis and Postel studying the effect of the end of the Bracero program which led to 1/2 a million Mexican workers leaving the country, without any detectable benefits for native workers (employers simply invested in labor-replacing technology it appears). Here's a new NBER paper on the forced migration of Poles after World War II finding that migrants invested more in human capital for three generations. That's consistent with other work that shows long-term positive, sustained effects for people who move, even those who don't have full choice. Here's a story about how migrants fleeing the US to Canada are finding employment and thriving.
If you're interested in the big picture on global migration, the 2018 OECD International Migration Outlook is out.


2. Banking: I talk a lot about the overlaps between US and global financial inclusion issues--from household finance to consumer protection to business models to regulation. So I think both of these next two items are relevant well-beyond the countries they are focused on.
First, here's New America with a new report on how local and community banks systematically charge people-of-color more for their accounts (here's the OpEd version), which doesn't exactly encourage these historically excluded populations to join the banking mainstream. Oh, and the consumer protection regulatory system is being undermined in more ways than you might realize. Not only is there direct deregulation, but recently the Supreme Court ruled that the way the SEC carries out many of its "trials" for investment fraud are unconstitutional--and the CFPB is too. Here's Arjan Schutte writing about being fired from the CFPB's consumer advisory board which, y'know, at least he's not being unconstitutional now.
On the other hand, in India, the RBI is working to turn urban cooperative banks into "small finance banks." This piece explains a bit about the history of Indian urban cooperative banks and the regulatory issues involved--it's not all good. It's worth reading for anyone thinking about productive ways forward for more inclusive banking systems.

3. Digital Finance: In most of the countries where digital financial services have made inroads among poor households, agents are playing a big role. But those agents are often basically the same folks we see running microenterprises that we can't figure out how to improve. And that probably means that their growth is being limited by the quality of services offered and decisions made by those agents. Here's a paper from Acimovic, Parker, Drake and Balasubramanian who attempt to help mobile money agents in Tanzania (way to go including the country in the paper title guys!) improve their business practices. Specifically not be plagued so much by "stock-outs" that mean they can't serve customers either trying to deposit or withdraw cash ("stock" can be either mobile money or cash depending on the transaction). They find what I would term the "heavy paternalism" approach works best--showing up in person to train and then giving specific direction via text each day. It reminds me a lot of the "mind the change" paper of a few years ago, and the Kenyan enterpreneur mentor paper from last year. Overall it seems that an important dimension for improving microenterprise profitability is inventory management.
Another big piece of the digital financial services equation is designing services that are helpful to the customers you are trying to serve and that they actually want. That's a new report from ProsperityNow focused on low-income US consumers, but you already know that I think such things are globally relevant.

4. Methods etc.: Here's an idea for experiment design: don't substantially and repeatedly mislead people for decades about your experimental design. Forget everything you think you know about the Stanford Prison Experiment, a staple in pop culture and social psychology, because almost everything published about it is an inaccurate representation of what actually happened. Given the horrors happening around us, it's hard to get too riled up about this but it really is stunning reading as a famous researcher repeatedly denies specific accusations until evidence from the archives of the experiment force him to acknowledge what really happened. 
On a more positive note, here's a clever little interactive game to explain concepts of "network science" or more simply, how social connections influence perceptions and behavior, or more complicatedly, how to think in a bit more structured way about spillovers from treatments that have an informational component. 
And here's David Evans sharing a provocative statement from Karthik Muralidharan at the RISE Conference--paraphrased, when working on a large scale experiments run by governments you might be better off not doing a baseline survey--and various reactions, which lead to a very good discussion. 

5. Consumer Behavior/Social Enterprise: So this one makes most sense in light of what is coming after, but bear with me. What happens when you get parents involved in improving teaching practices in Ghanaian preschools? Bad, bad stuff. Well at least counterproductive stuff.
So keep that in mind as we move finally to an interesting experiment on how much influence customers can have on corporate behavior (via Ray Fisman). A key part of the social enterprise movement is the idea that just behavior will resonate with customers and lead to, if not higher sales, than at least loyal customers. But it turns out customers have a hard time remembering who the good and bad actors are when it comes time to make purchases. So while there may be some loyal customers out there, it's going to be hard to get the mass consumer to get on board with shifting corporate behavior via their spending. Which ultimately is a pretty good argument for Just Capital's approach of building an index that socially-conscious consumers of stocks at least can get what they want without having to remember any of the details. 

I'm always a sucker for Twitter threads with interesting data, and twists and turns. This one is about the  curious case of rising opioid deaths in the US in states that did or did not expand Medicaid . 

I'm always a sucker for Twitter threads with interesting data, and twists and turns. This one is about the curious case of rising opioid deaths in the US in states that did or did not expand Medicaid

Week of October 16, 2017

1. The Search for Truth: The New York Times Magazine has a long piece about Amy Cuddy, the social psychologist of "power posing" fame, and the messy process by which her research has been popularized and then discredited. The piece suggests that Cuddy (though it by no means holds her out as blameless) has been uniquely and personally targeted as the face of unreplicable and bad social science in an era of changing research practices and expectations, perhaps because she is a woman. More broadly it ponders whether the process and social conventions of communication around challenging social science research may do more harm than good. It points specifically to Uri Simonsohn, Joseph Simmons and Andrew Gelman and their roles in both calling out bad social science and in specifically highlighting Cuddy's power posing paper as an example.
It's well worth the long read, careful consideration but also some critical evaluation. The piece comes at a very interesting time, with the Weinstein saga, #MeToo, and more specifically the push back about Econ Job Market Rumors and bad behavior in economics. It's important to read the piece in the context of such things as EJMR and this anecdote from Rohini Pande (in an interview with David McKenzie this week) relating how a "senior male World Bank economist wrote to our senior male colleagues at MIT and Yale asking that they review our work and correct our mistakes" in one of her early papers (with Esther Duflo; see question 4 in the link, but read the whole thing, it's very good on a lot of topics).
But on reflection, I don't think the idea that Cuddy was uniquely targeted or treated more harshly than others holds water. It only appears so to a New York Times reporter because Cuddy's works is the kind that gets broad attention. Remember when Ben Goldacre kicked off "Worm Wars" with an amazingly condescending piece asking people not to point and laugh at Miguel and Kremer for the supposed "errors" in their Worms paper because they shared their data? Or the language and dudgeon around Reinhart and Rogoff's Excel error? Or the intemperate words flowing around the failure to replicate John Bargh's priming work? From another field, here's some pointed language challenging a recent result on gene editing alleging some pretty basic errors. 
Of course, the commonality of bad behavior in academic circles doesn't excuse it. But that cuts both ways. Cuddy has also been using this faulty logic in her own defense. As far as I can tell, her main defense has always been "everyone was engaging in bad research practices, so it's not my fault", and that's definitely the implication that the NYT article gives. I don't see much distance between that and people excusing sexual harassment because they were "raised in the '60s and '70s."
Could the practice of social science be better? There's no question, but it's also not clear exactly how, other than the obvious avoidance of misogyny, ad hominem and personal attacks. But that line is difficult to see sometimes because the nature of social science research requires a great deal of personal investment. It's hard not to feel attacked when one's research, quite literally one's life's work, is criticized.
To me, the most thought-provoking part of the NYT piece is when Simmons, reviewing an email he sent to Cuddy about follow-up work on whether the power posing research was reliable, says "that email was too polite" given how serious he thought the problems were. And there is a lot of bad science that needs to be called out. This week, there's yet another update to the Brian Wansink saga--several papers flat out misrepresent who the study participants were (e.g. a paper claiming participants were 8-11 when they were 4-5). Not calling bad science out, I think, is a real contributor to real world problems, like Chief Justice John Roberts being able to call good political science research "sociological gobbledygook."
Here's a Chris Blattman thread on his reactions. Here's Andrew Gelman's response to the NYT piece and for the sake of this topic it is one of the few posts anywhere on the internet where you should read the comments. Someone in one of the Twitter threads wondered about the responsibility of Gelman and other bloggers like Tyler Cowen to police their comments. I'm sympathetic to this idea, but I'm old enough to remember policing comments on my own blog. It's an incredibly time-consuming and soul sucking affair with lots of trade-offs. The "business model" of blogging just doesn't allow it. In fact, in some ways it was the business model required to police commentary, also known as paid journalism, that led to blogging: the gatekeepers of commentary shut out too many voices who should be heard. Science, and the pursuit of truth, is hard. 


2. Our Algorithmic Overlords: This isn't as much of a pivot as it might seem. Here's a fairly intemperate piece critiquing the "digital humanities." There's a good bit of whining but it's worth reading because much of the critique applies to the big data and machine learning movement in economics. And the critique is more palatable because it's not directly about those fields, and so no one, in those fields at least, will feel personally attacked. The bottom line is the same as above: even with shiny new tools, big data and algorithms the pursuit of truth is hard.
Now here's a pivot. The New Yorker has a long story (this is apparently the long reads week) about the evolving nature of factory jobs and "robot overlords." I couldn't help thinking about the distinction made in that piece about "premium mediocre" a few weeks ago: employment is bifurcating into jobs where you tell the robot what to do, or jobs where the robot tells you what to do. Still, the most compelling piece about the changing nature of jobs and employment this week isn't about robot overlords, it's this story of a worker in a ball bearing plant in Indiana losing her job. Highly, highly recommended.
Back to our algorithmic overlords. Here's some more in-depth reporting on the creation of a complete surveillance state, including AI, in China's Xinjiang province. They're not just monitoring phone and digital money use, as I noted a few weeks ago. There are now facial recognition cameras at gas pumps.
And finally, here's a chance to change your priors. Remember those papers that said that note-taking on laptops leads to less learning and poor student performance? Here's a paper that rigorously randomizes note-taking technology and finds that there isn't a difference between taking notes by hand and on a laptop, suggesting the earlier findings were primarily selection effects. And we're back to the theme of science being hard.  

3. Household Finance: OK, let's take a break from the long reads, but stay with the "quality of research" matters sub-theme. I continue to think financial literacy is the bellwether for whether "evidence-based" policy is making an impact. And apparently it's not. Betsy DeVos, the US Secretary of Education, officially announced this week that financial literacy taught in schools is number 4 of 11 priorities for the department. If only we didn't have good evidence that teaching math has an impact on financial outcomes, but financial literacy doesn't. Or how about some new work from Xavi Gine and colleagues that presenting key facts about financial products helps consumers make better choices than financial literacy does?
Here's some worthwhile reading for how households are dealing with their finances, that should sour anyone on the current financial literacy curricula. Check out these two reviews (one and two) of financial services providers in Google Maps. Remember how distributing food stamps twice a month cuts down on shoplifting in grocery stores? Less spiky delivery of benefits also changes how people spend the money they receive in a positive way. Unlikely that financial literacy in the classroom would have changed this person's perspective on money. Check out some insights from EARN on their users financial challenges and saving behavior.
Of course the most important read on household finance is The Financial Diaries. Here's a new review from Beth Rhyne of that book and Lisa Servon's Unbanking of America.

4. Digital Finance: Now let's tie these last two themes together. China is not only building a panopticon in Xinjiang, it's also ramping up it's efforts to track deadbeat borrowers with a national database and public shaming. I'm sure that's going to go well.
In other credit access news, I've long been a champion of Entrepreneurial Finance Lab, which uses psychometrics to assess credit-worthiness of small business owners, allowing more of them to get access to credit. At the same time, I've long been very wary of Lenddo, which uses alternative data, like social media connections, to assess credit-worthiness of individual borrowers. I've called it, I believe, "a tax on poor people's family ties." I've been able to avoid the cognitive dissonance of these two perspectives until this week. Lenddo and EFL announced that they are merging. Now I really don't know how to feel.
Finally, here's a story about the Gates Foundation funding fintech infrastructure software for interoperability of mobile money platforms? The one thing that's clear here is that the reporter doesn't understand the topic.

5. Global Development: To close us out, and hopefully make you feel slightly better about the state of research, here's a model of reasoned argument and debate on an important topic: will Africa experience a manufacturing boom, as wages creep up in former low-wage countries like Vietnam and Bangladesh. CGD has a paper that says no, because labor costs in many African countries are actually relatively high. That led to a lively debate which CGD has helpfully collated here. And here's a helpful overview of living standards in African cities and rural areas, that has some relevance.

I mentioned that I thought this week would be really off-topic. That's because there were a number of really terrific reads this week that are not within the traditional domain of the faiV. But you should read each of these. First,  a review of new research that shows bacteria communicating with each other via electrical signals .

I mentioned that I thought this week would be really off-topic. That's because there were a number of really terrific reads this week that are not within the traditional domain of the faiV. But you should read each of these.
First, a review of new research that shows bacteria communicating with each other via electrical signals.

A  bonkers story about how the mattress industry works . Never believe anything you read on the internet.

A bonkers story about how the mattress industry works. Never believe anything you read on the internet.

A long read about a Jewish refugee settlement in the Dominican Republic, one of the only places that was willing to welcome Jews fleeing Nazi Germany.  It didn't go particularly well .

A long read about a Jewish refugee settlement in the Dominican Republic, one of the only places that was willing to welcome Jews fleeing Nazi Germany. It didn't go particularly well.

Week of October 9, 2017

The Weah-dition

Editor's Note: This is one of those weeks that you get to learn a little more about me. The "Weah-dition" is a way of bringing together the sound that I, and many other of that rare species of die-hard American men's national soccer team fans, made as the US men were eliminated from the World Cup; the fact that famous footballer George Weah is leading the Liberian presidential elections; and to tie into one of our common themes on migration and labor mobility, that George Weah's son, Timothy, is currently in India starring for the US U-17 men's national team (while under contract for Paris St. Germain). You'll see these themes return in the items below.

1. Evidence-Based Policy: Yesterday I was at a workshop hosted at Yale SOM and funded by the Hewlett Foundation on how to better connect evidence to policy. The workshop was part of a bigger project and a series of reports are coming that I will share when they are available. There was a lot of good discussion, but I thought I would share two thoughts that I find to be missing appropriate weight in evidence-based policy discussions. First, there is often discussion of a mismatch in the time horizons of researchers, implementers and policy makers. While this is no doubt true, the mismatch between those groups is trivial in comparison to the mismatch all those groups have with the amount of time it takes for change that people can feel to occur. Deworming's important effects--on earnings, not school attendance--are only felt decades after treatment. Moving to Opportunity similarly has a decade-scale effect. Few if any of the researchers, implementers or policymakers are still going to be around when the world really is undeniably different because of them.
Which brings me to the second point. The enterprise of evidence-based policy is grounded in marginal improvements across large groups of people--and that's a good thing! I'm a big believer in the value of marginal improvements (QED). But people have a really, really hard time noticing or caring about marginal improvements. Human beings prefer stories about big changes for a few people with unclear causality a lot more than they do about marginal gains with sound causal inference. I'm more and more convinced (because of evidence!) that hope is a key ingredient for even marginal impact, but hope comes from Queen of Katwe, not from 1/10 a standard deviation improvement in average test scores. So the unanswered question for me in this conversation is, "How do we manage the tension between the policies that are good for people and the policies that people want?"
In other evidence-based policy news, here's a rumination on the difficulty of applying research to practice in democratization (specifically Myanmar). And here's Andrew Gelman on not waiting for peer review, particularly in Economics, to start putting evidence into practice.


2. Evidence-Based Operations: OK, so there's one more thought: the gap between policy and research, and operations. But rather than a long discussion on that topic, here's a very good new piece on the operational choices of front-line social workers and the gap between policy (whether evidence-based or not) and practice. The challenge in the spotlight is not the Marxist-style view of workers dissociated from their work by rules but workers dissociated because of having too many morally-fraught choices. More light-heartedly, here's a piece that illustrates how hard it is to go from evidence to operational choices, as reflected through the failure of the US men's soccer team (I told you it would return). There is growing attention to front-line staff and the "product" as actually experienced by the beneficiary in impact evaluations, but much more is needed as far as I'm concerned. 

3. Our Algorithmic Overlords: Speaking of operations, one of the areas where more attention is needed is the way that operations are being instantiated into algorithms that are opaque or entirely invisible. Ruben Mancha and Haslina Ali argue that that the unexamined algorithm is not worth using. Of course, they are arguing from ethics, not from business profits, where it's abundantly clear that unexamined algorithms are worth using.
Here's a piece about technology-related predictions from Gartner, a tech industry research and advisory company. Skip the first three to see some striking predictions about AI-generated false information, such as that people in "mature economies will consume more false information than true information." There's a threat to advancing evidence-based policy that definitely wasn't on the agenda yesterday. I started my career at Gartner way back in 1995 and I remember one of the first things we were given to read was an an article in Scientific American about the coming age of fake photography and video. Apparently that future has finally arrived. 

4. American (and other) Inequality: I've been meaning for awhile to mention Richard Reeves' newish book, Dream Hoarders (the thesis is that the upper middle class is passively and actively working to close the door to upward mobility for those below them). I'm finally getting around to it via a few recent pieces. First here's a look at the persistence of the American upper middle class, specifically how white it remains. And here's a piece about the perhaps surprising upward mobility in rural counties. Back to Dream Hoarders specifically, here's a review from Noah Smith that dwells on the "don't focus on how the pie is split, grow the pie" critique. I find I'm much more persuaded that the best way to grow the pie in America today is to change the way it's split.
Meanwhile, here's Eduardo Porter on the growing gap between big cities and small cities.
And moving beyond the US, but definitely applicable, here's the IMF(!) on using fiscal policy for redistribution and reducing inequality.


5. Migration: In an attempt to wrap everything up, here's a piece about Syrian refugees in Turkey, which paints a remarkably positive picture of business creation, job creation and economic growth. The Turkish economy and Turkish workers seem to be seeing substantial gains both in the short- and long-term from the presence of Syrian refugees. In fact, you could argue that changing the way the pie is split between the Syrians and Turks in terms of access to safety (and access to safety, by the way, is one of the things that the upper middle class in America is hoarding) is growing the pie for everyone. It's also similar to the benefits that George Weah's ability to flee violence in Liberia is benefiting America's soccer team and PSG over the long-term. Of course, most of the polity in both cases is focused on the short-term costs rather than the longer-term average marginal gains. 

Urban - racial wealth.png
Returning to the theme of inequality, the  Urban Institute  has updated it's 9 charts about wealth inequality in America.

Returning to the theme of inequality, the Urban Institute has updated it's 9 charts about wealth inequality in America.

Week of September 25, 2017

1. Basic Income: I haven't touched on basic income in what seems like months, but that's because there was little to report. This week Planet Money has an episode (adapted from 99% Invisible) on the details of what basic income is and how it might be delivered. And apparently last week, Y Combinator announced some more details of their US Basic Income study. If details matter to you, you'll be pleased to know that the work in Oakland that received a lot of attention last year was a feasibility study and now they are planning an RCT with 3000 individuals in two different states.

2. Methods and More: My next book of interviews is about big data and machine learning (If you have a better name than "Dated Conversations," let me know). Susan Athey is the first person I interviewed for the new book this past spring (I hope to have some excerpts of that interview available soon) in part because of some things Athey had written on how machine learning will change the field of economics. There's a new version of a (preliminary) paper on the topic. It has details.
More specifically on details and methods, here's a new paper on the use of randomization to study network effects, a quite tricky prospect. But when it comes to methods and details mattering, two items this week really hit the nail on the head. First, Buzzfeed of all places has a lengthy piece examining the myriad problems that have emerged as people examine the details of studies published by Brian Wansink's Food and Brand Lab at Cornell. Missing data, mis-described studies, statistical errors, it's stunning. This week also saw publication of what is many ways the exact opposite of what appears to be have happened at the Food and Brand Lab: David Roodman's incredibly detailed review and replication of the research on the relationship between incarceration (or decarceration) and crime rates for the Open Philanthropy Project. The starkest contrast for me isn't actually the attention to detail but the philosophy. The Wansink saga began with a blog post that indicated that the Lab was torturing data until it said what they wanted; the Roodman review and replication was done because they were concerned that their beliefs were wrong.


3. Microfinance, US and Global: My expertise and knowledge is definitely concentrated in global microfinance rather than microfinance in the US, but because of the work on the US Financial Diaries I'm learning a lot more about the US. This week for instance I got to hang around the outskirts of the Opportunity Finance Network meeting. There are no links here but a couple of things have really struck me and so I wanted to note them, and invite you to tell me what you think/have seen, etc.
First, I was really surprised about how open the US microfinance community is about the presence of and need for subsidy. Globally I see an almost totemic adherence to the idea of self-sustainability, even in the presence of compelling evidence of the prevalence of subsidy. I'm sure that's a consequence of how those industries have evolved but I'm curious about any ideas about the details of the US microfinance history that led to this.
Second, two parallel conversations really struck me. One was about "community investment" in order to create "quality jobs." The second was about how to use technology to cut down costs of making loans, costs that are mostly about staffing--or in other words, how to expand microfinance by lowering the need for quality employees in the lenders. I bring this up not to point fingers about hypocrisy, but to raise the inevitable trade-offs for MFIs everywhere about reach and cost. The tension doesn't seem to exactly be on the surface in the US but it is more apparent than in global conversations, where the value of the jobs created by the global microfinance movement seem to be ignored, especially in the rush to digital finance services.
Finally, I was quite surprised at the contrast in attention to borrower outcomes. Again, I'm a novice here, but whereas in international conversations I feel that everyone is talking about "impact" in terms of household incomes and consumption, in the US conversations I've been a part of, the focus seems to be much more operational--in other words, does the business continue to exist, repay and take another loan. That may be a consequence of starting from a more "antibiotic" theory of change and serving existing businesses with documented troubles accessing capital, but again I'm interested in any other perspectives.

4. US Inequality: The release of the Republican "tax plan" this week was the inspiration for the title of this week's edition but since there really is nothing there I'm not going to link to it. My go-to for keeping track of the details and what effect they will have is Lily Batchelder (NYU Law and former tax counsel for the Senate Finance Committee). Just scroll through her Twitter timeline to understand which details matter and how much.
If you are interested in details of Americans' financial situation, there are two notable reports this week. The Consumer Financial Protection Board published the first "Financial Well-Being in America" report. There's lots to digest but a broad summary might be: there are big racial and gender gaps in financial well-being, but also big gaps within groups so that no particular feature is a reliable predictor of well-being. The Fed released the 2016 Survey of Consumer Finances this week as well. Details galore, but here and here are some overviews which boil down to: "the biggest gains continue to flow to the richest Americans." And here is a bizarre misreading of the details from the Washington Post. It's as if no one had ever said "correlation is not causation."
Finally, here is a heartbreaking story about how the poisoning of Flint, MI's water system led to a huge spike in fetal deaths. Of course, the story is by the same person who did the "if you want to be wealthy, buy a house" story.

5. Education: Finally, in detailed reports released this week, the 2018 World Development Report (yes, the same week as the 2016 SCF, the actual year of publication is apparently a detail that doesn't matter) is out with a focus on education, particularly on the need to focus on learning rather than measures of schooling. Make sure to congratulate David Evans. My favorite take on the new WDR is from Justin Sandefur, who in this tweet stream points out that "all sides seem to embrace the learning crisis and still find justification for their previously chosen policies" (with linked examples). You'll have to check the details to see if you agree.

Frederica Frangapane and Alex Piacentini have created a site to visualize the stories of 6 migrants who arrived in Italy from four different countries in 2016, called  The Stories Behind a Line .

Frederica Frangapane and Alex Piacentini have created a site to visualize the stories of 6 migrants who arrived in Italy from four different countries in 2016, called The Stories Behind a Line.

Week of June 12, 2017

1. St. Monday, American Inequality and Class Struggle: One of my favorite things about writing the faiV is when I get the chance to point readers to something they would likely never come across otherwise. So how about a blog post from a woodworking tool vendor about 19th century labor practices, craft unions and the gig economy? Once you read that, you'll want to remind yourself about this piece from Sendhil Mullainathan about employment as a commitment device (paper here), and this paper from Dupas, Robinson and Saavedra on Kenyan bike taxi drivers' version of St. Monday.

Back to modern America, here's Matt Bruenig on class struggle and wealth inequality through the lens of American Airlines, Thomas Picketty and Suresh Naidu. I feel a particular affinity for this item this week having watched American Airlines employees for a solid 12 hours try to do their jobs while simultaneously giving up the pretense that they have any idea what is going on. 


2. Our Algorithmic Overlords: Facebook is investing a lot in machine learning and artificial intelligence. Sometimes that work isn't about getting you to spend more time on Facebook...or is it? With researchers at Georgia Tech, Facebook has been working on teaching machines to negotiate by "watching" human negotiations. One of the first things the machines learned was to "deceive." I use quotes here because while it's the word the researchers use, I'm not sure you can use the word deceive in this context. And that's not the only part of the description that seems overly anthropomorphic.

Meanwhile, Lant Pritchett has a new post at CGD that ties together Silicon Valley, robots, labor unions, migration and development. And probably some other things as well. If I read Lant correctly, he would approve of Facebook's negotiating 'bots since negotiation is a scarce and expensive resource (though outsourcing negotiation is filled with principal-agent problems). I guess that means a world where robots are negotiating labor contracts for low- and mid-skill workers would be a better one than the one we're currently in? 

3. Statistics, Research Quality and External Validity: Here's another piece from Lant on external validity and multi-dimensional considerations when trying to systematize education evidence. A simpler way to put it: He's got some intriguing 3-dimensional charts that allow for thinking a bit more carefully about likely outcomes of interventions, given multiple factors influence how much a child learns in school. It closely parallels some early conversations I've had for my next book with Susan Athey and Guido Imbens, so I'm paying close attention. And if you can't get enough Lant, you could always check out my current book. Yes, both of those sentences are shameless plugs.

4. Household Finance: If you read the faiV regularly you know I think about household finance a lot and how little we really know about household finance decisions. Viviana Zelizer is a sociologist who opened a lot of vistas on household finance--particularly on the importance of understanding that money has meaning. Money isn't just a store of value, it's a store of values. Here's Zelizer on new research into how households use money (which may mention a recent project I've been a part of) from the LA Review of Books. Here's a very different, but complementary, view on issues of household finance and values: how much should someone save for retirement. I usually hate pieces like this, but this one does a great job of showing how each of the standard pieces of advice could be wrong. And here's another form of values impinging on household finance: The "marriageable male" effect is breaking down.


5. Digital Finance: Ignacio Mas can't be digitized. At least not yet (I'm sure Facebook is working on it). And that's a problem that ultimately comes back to financial regulations, scale and the reasons that the poor are often shut out of quality financial services. Serving poor customers is expensive relative to the profits that can be generated, unless you can scale, which means standardization, which often equates to poor service because poor customers are not uniform.

And for something completely different, but definitely relevant to digital financial services and regulation, here's a story about pressures on Uber to allow repressive governments access to their data in return for access to markets. Hmmm...I wonder what other data repressive governments might want to have access to?

 

Billy Bragg and the Blokes performing St. Monday. Have a good weekend.

Week of May 22, 2017

1. The Value of Management: If you pay any attention to the development economics world, you were probably already aware that there was unrest at the World Bank since Paul Romer became Chief Economist. Yesterday that unrest came out into full public view with stories about Romer being relieved of management responsibilities for the Development Economics Group. The news stories make everyone look bad, and don't reflect my experience with the parties involved (which is admittedly quite limited). But rather than adjudicate any of the issues, I'm going to pivot to my ongoing amazement that economists of all people seem to have so little appreciation of the value of management and specifically specialization in management. It's a learned skill! The idea that someone should be managing a department of more than 600 people because they happen to be a leading economist is bonkers.

Just look at what a little bit of management training for school principals can do for schools and test scores. Or what professional management training can do for quality of care in hospitals. That's right, management can save lives! Here's hoping that skilled management will advance the very legitimate goals of clear and useful communication in Bank reports. I can't be the only one glancing through the stories about the gender studies hoax paper and thinking it wouldn't be that hard to do the same thing for a World Bank research report.

In closing, I'm not good enough of a person to avoid noting that "and" is 16% of the World Bank's actual name and linking to Ryan Briggs' Drunk World Bank twitter account.


2. Immigration: If you weren't distracted by counting the number of "and"s in your latest piece of writing, you may have seen another controversy bubbling up in social media: Michael Clemens and Jennifer Hunt have a new paper suggesting that Borjas' finding of losses for low-wage workers from the Mariel boatlift are actually a result of a change in the composition of wage survey samples. Borjas responded first by accusing Clemens and Hunt of being tools of Silicon Valley open border enthusiasts--and essentially saying that no grant-supported research can be trusted--and only later with an attempt to defend his results with data. That attempt looks plausible until you realize that he ends up charting the outcomes for less than 20 people. David Roodman--whose earlier work on this specific issue Borjas also managed to slander by calling it "fake news"--weighs in with some typically substantive and clear points (maybe he could do some coaching for World Bank writers?). The major one from my perspective being: Borjas already had to pick through data to find a narrow slice of the population that might have been negatively affected by sudden mass immigration, and can only defend that result with a sample better suited to a local news broadcast than serious economic inquiry.

If this kind of thing fascinates you, rather than tires you, Borjas has an additional reply that is more substantive and ultimately arrives at a useful point. But the process to get there remains bizarre.

In other immigration news, here's a look at the effect of differing state approaches to immigration law enforcement, and here's an animation of Mushfiq Mobarrak making the case for the gains from migration.

3. The Precariat: The precariat is term for people in developed countries who are increasingly having to deal with volatility and instability with less protection. While I've obviously been more focused on issues related to volatility in the US because of the US Financial Diaries, the precariat is by no means confined to the United States. Here are some musings about the precariat in the UK and the implications there. Here's a piece about TD Bank/Ipsos finding substantial income volatility in Canada (which I have to note, makes no mention of the fact that they are replicating the work of USFD, Pew and/or JP Morgan Chase Institute).

Here's Carol Graham of Brookings on how the confluence of low-income and precarity lead the way to hopelessness. Here's Annie Lowery in the Atlantic examining Maine's safety net "reforms" which essentially specifically deny access to the safety net for the precariat and the poorest (making it more likely the former become the latter). Here's some wishful thinking that the Trump budget, which seeks to replicate Maine's "success" in cutting access to aid, will spur a conversation about what the safety net should look like in the age of the precariat. And of course I have to mention "The Power of Predictable Paychecks."

4. African Agriculture: You could say that there are few programs out there aimed at improving agriculture in Africa. If you were to ask the average faiV reader about issues to overcome, I think we would all rattle off a fairly similar list: lack of access to inputs, poor access to markets, limited availability of affordable credit, etc. How many of those are actually problems? Via Tavneet Suri, who is now on Twitter, here's a (wait for it) World Bank report on myths and facts about agriculture in Africa based on synthesizing a lot of recent research. As Eva Vivalt notes, it's important to think through your priors before considering new evidence (well not quite, but close enough for me) so make sure you think about your beliefs before reading.


5. Auto Audio: Since it's a holiday weekend in the US, I'm guessing that a number of readers could use something to listen to while sitting in traffic trying to get out of town. And even if you're not, here are some things worth listening to:
1) Tyler Cowen's "Conversations with Tyler" with Raj Chetty
2) Planet Money episode talking to Robert Gordon about The Rise and Fall of American Growth
3) The entire Revolutions podcast which features many fascinating hours about the American, English, French and Haitian revolutions...but let me especially recommend Series 5 on the Bolivar-led revolution in northern South America. Despite being raised in Colombia I learned for the first time the vital role Haiti played and that my great-great-great-great--more greats--grandfather funded an invasion of Venezuela in the early 1800s.

 

Week of April 3, 2017

War is Hell Edition

1. Cash vs Chickens Wars:  Within development circles, the most widely read point/counterpoint began with Chris Blattman's piece in Vox, written almost as a letter to Bill Gates. Blattman takes issue with Gates' idea to provide livestock, specifically chickens, to poor households and instead proposes a test of the benefit of just giving cash. To be clear Blattman isn't saying that cash is better, but that we don't know--and we do know that giving chickens is much more expensive (and everyone who's been involved in aid knows at least one story about how "the chickens all died")--so we should run a test and compare. Lant Pritchett responds on CGD's blog, saying in all his years in development, never once has the question of "chickens versus cash" arisen as a pressing question. One reason is that Pritchett believes the goal of development shouldn't be marginal improvements for the poorest but generating the kind of growth that has seen hundreds of millions escape poverty in China, Vietnam, Indonesia and other countries. Of course, Blattman responds and does a good job keeping the focus on what I would call the competing theories of change proposed by Chris and Lant. In fact, I have called it that, and if you're interested in a deeper dive into the issues in this debate, I know a good book you should read (or at least check out Marc Bellemare's and Jeff Bloem's review of it).

2. Mortality Wars: Those in the US policy community, on the other hand, have probably been too occupied following the "mortality wars" to even know there's a battle between cash and chickens happening next door. Here's the quick background: Anne Case and Angus Deaton have a new paper about mortality rates in the US--I would say more about their results but, of course, this wouldn't be a war if there wasn't vehement disagreement over what their results actually are. As with an earlier paper, Jonathan Auerbach and Andrew Gelman take issue particularly around the composition of Case's and Deaton's aggregate results, and provides charts decomposing mortality rates by race, gender and state. There are a lot of other critiques, including about the data visualization in Case's and Deaton's paper, but you can save yourself a lot of time by just reading Noah Smith's excellent post about the data and the debate which brings the attention squarely to where it should be: that mortality rates for white Americans stopped following the trajectory of other developed countries and a massive gap has opened up between the US and others. 
Then there's a secondary discussion of why this is happening and what it all means so here's some supplementary reading on that, courtesy of Jeff Guo at the Washington Post: An interview with Case and Deaton; "if white Americans are in crisis, what have black Americans been living through?"; and it's more than opioids. But if there's one related thing you aren't likely to read, but should, it's this article from Bloomberg on automobile manufacturing in the South.
This also seems like the best place to insert my favorite new aphorism: "Being a statistician means never having to say you are certain." (via Tim Harford)  

3. Social Enterprise and Investment Wars: So now we're progressing to the areas where there isn't so much of a war but there are some differing perspectives worth paying attention to. On the Center for Effective Philanthropy blog, Phil Buchanan has an incisive post decrying the idea of "sector agnosticism" between non-profits, for-profits and social enterprises: the legal form of an institution matters, not just its impact. For-profits have to make trade-offs that non-profits don't. In a similar vein, Miya Tokumitsu writes in the New York Times about accusations that a celebrated "social enterprise", Thinx, was treating employees in some less than socially conscious ways like substandard pay, verbal abuse and sexual harassment. What's notable about the piece is not only lines like, "[funds for social causes] will be taken from the same pool of funds from which her employees are paid," but that the writer is an art historian. The social investment world should be embarrassed that such fundamental concepts as fungibility, trade-offs and principal-agent problems seem to be better understood and articulated by non-profit executives and humanities teachers than by proponents. 
The other major news this week was the Ford Foundation's announcement that it will, over the next decade, move $1 billion from its corpus into "impact investing"--a nebulous term precisely because of the sector's general refusal to acknowledge such things as trade-offs. The funds will be specifically dedicated to affordable housing in the US and expanding access to financial services in developing countries. I have some ideas on how Ford should think about investing those international funds so that they spur innovation rather than the status quo in microfinance.

4. Migration Wars: If you've been reading the faiV for any length of time, you know I frequently include papers and related items on the benefits of migration. Like this new paper that looks at historical data and finds that areas with higher historical rates of immigration today have "higher income, less poverty, less unemployment..." and more. Or this piece on "The Case for Immigration" from Matt Yglesias. But there's also this new paper from Hamory Hicks, Kleeman, Li and Miguel that looks at longitidunal data from Indonesia and Kenya rural-to-urban migration and finds that the productivity gains from migration are primarily due to the individuals that migrate. That's a big concern. Right now I'm thinking through my Bayesian updating--in other words, I don't know yet how to think about this, other than possibly ratcheting down my own enthusiasm for migration." Also of note, here is Tyler Cowen on declining rates of migration in the United States


5. Microfinance Wars: Well at least there's something happening in Cambodia, where the government announced a new interest rate cap at 18 percent per year. Dan Rozas writes on how that will shut off access for many in rural Cambodia. I guess the format I've chosen for this week compels me to link to Milford Bateman's response in Next Billion in which he asserts that moneylenders care more about their communities than MFIs (really!) and explains the growth differences between Vietnam and Cambodia are materially a causal effect of lots of microcredit in Cambodia and much less in Vietnam (really! paging Lant Pritchett!).
Over the past month, however, I've been struck repeatedly by the lack of convergence about thinking about microfinance internationally and the credit and savings needs of lower income households in the US. I recently had a conversation with an executive at a US credit union, who said, "I'm so excited we finally have a 501(c)3 set-up so we can get into the payday lending business." Which seems like a very strange thing to say, but only in the United States. In related news, here's a story about SoFi's, short for Social Finance, Inc. (hmmmm....), a fintech heavy lender in the US, default rates rising rapidly. And here's an interesting paper following up on earlier work on a microcredit innovation detailing a potential trade-off (there's that word again!) between efficiency and equity in the operational choices of MFIs

Here's  video  of Jonathan Morduch and Rachel Schneider discussing their recently released book,  The Financial Diaries  and the research with David Leonhardt of the New York Times at the Aspen Institute's recent Summit on Opportunity and Inequality.

Here's video of Jonathan Morduch and Rachel Schneider discussing their recently released book, The Financial Diaries and the research with David Leonhardt of the New York Times at the Aspen Institute's recent Summit on Opportunity and Inequality.

Week of February 20, 2017

The Impossibility Edition

1. Ken Arrow: Ken Arrow died this week, at age 95. Arrow is the youngest economist to win a Nobel (51), and probably could have won more than once so wide-ranging was his work and influence. He won the Nobel for his work on general equilibrium, but he made foundational contributions to health economics, insurance, risk analysis, and more. Still, he was most famous for his Impossibility Theorem, showing that no majority voting system can be free of arbitrary outcomes. It was also apparently impossible to discuss a subject he wasn't well read in. Here is Tim Harford's short obituary. Here is the Monkey Cage Blog's appreciation ("Arrow proved the existence of a solution to the problem of economics and the non-existence of a solution to the problem of politics."). And here is a three part interview with Arrow from 2009.

2. A Certain Kind of Aid: Speaking of impossible, it's impossible that the combination of subject and price of this new book isn't trolling, isn't it? To be fair, aid does go in cycles, and this was the explicit strategy during colonialism. The item name is a reference to this, if you were wondering. (Hat tip: Justin Sandefur)

3. Pick Your Crisis: Is the next US financial crisis going to come from widespread default on auto loans? Americans now owe $1.16 trillion on car loans, an average of $6000+ per licensed driver. Who is loaning all that money? The car manufacturers; 3/4s of lending to subprime borrowers is underwritten by the manufacturers. Or will the next crisis be the result of the large numbers of Americans who aren't saving for retirement? New data from the US Census Bureau based on tax records finds only 41% of American workers eligible to for a workplace retirement account are using them (another reason why the idea, noted in last week's faiV to make withdrawals from retirement accounts even harder may not help very many people). Or perhaps the next crisis will be based on uncertainty. The Trump administration seems to already be mucking with government statistics. In other words, you should probably lower your expectations of new data insights coming from the Federal government.

4. Household Finance: The Zambia Financial Diaries report is now available. Microfinance Opportunities tracked 355 people for a year in four different parts of Zambia. There are lots of good details here on how households use primarily informal financial services to manage cash flows and smooth consumption. In the US, here's the story of a mother of three in Boston and her weekly financial juggling to make an upwardly-mobile lifestyle on below-local-median-income--it's a mini-financial diary.


5. Mobility and Migration: Here's a piece by Jeff Bloem and Scott Loveridge on the mobility of resettled refugees in the US. Within a year of arrival, more than 10% of the refugees resettled in the US had moved to a different community. The number of refugees in Minnesota doubled because refugees resettled in other states quickly moved again in search of jobs, services and community. They note that there are large differences in the services available state-to-state and that refugees learn this quickly and react to incentives. Which makes it all the more curious that geographic mobility in the United States in general has dropped so much--if refugees can figure out that moving is great path to opportunity in less than 12 months in the United States, why can't everyone else?

David McKenzie presents "The State of Development Journals 2017" detailing the impact, acceptance rate, and time to acceptance at 10 academic journals focused on development topics. The blog post has much more (scary) details, like the average time to acceptance for AER is almost two years. Average! My conclusion: Start citing the Journal of Development Effectiveness at every opportunity everyone! Source:  Development Impact Blog/David McKenzie

David McKenzie presents "The State of Development Journals 2017" detailing the impact, acceptance rate, and time to acceptance at 10 academic journals focused on development topics. The blog post has much more (scary) details, like the average time to acceptance for AER is almost two years. Average! My conclusion: Start citing the Journal of Development Effectiveness at every opportunity everyone! Source: Development Impact Blog/David McKenzie

Week of November 11, 2016

1. Demonetization in India: It doesn't seem like I'm the only one who's a bit confused by exactly what's happening in India and why this particular set of steps will yield the stated outcomes. Here's my current understanding: Last week, the government declared that 500 and 1000 Rupee notes would no longer be legal tender, effective immediately. Except that those notes could be exchanged for new notes until December 31 at banks and post offices. But only by people with official government ID. The purpose is to drive more of the economy into the formal sector and to clamp down on black market activity and corruption. Usually advocates of this sort of step talk about high denomination bills (which they say facilitates corruption by making it relatively easy--in terms of size and weight--to transport large sums) like $100 bills. But 1000 Rupees is roughly $15 and a new 500 Rupee note will be in use and other large denominations like 2000 Rupees will also continue to exist.

As you can imagine, when 86% of the currency in circulation by value has to be immediately exchanged, there are some problems. Of particular interest to faiV readers might be the effect on microfinance banks, which are not allowed (as of now) to accept or exchange the old notes. That apparently has caused repayment to plummet since people can't get their hands on legal notes to make their payments. There's also a surge in use of ATMs and people signing up digital finance systems. Of course, then there's the problem that roughly 30 percent of the population (a mere 300 million people) doesn't have official ID (not counting the additional millions who are short-term migrants and don't have their ID with them where they currently are). Lot's more to come on this story I'm sure.


2. Digital Payments and State Capacity: Dan Radcliffe of the Gates Foundation has a new paper (published by CGD) on the knock-on benefits of government-to-citizen digital payments infrastructure. Direct transfers have already shown significant benefits in terms of efficiency and effectiveness of social welfare programs. Radcliffe argues that other benefits also deserve attention, specifically "strengthening energy policy, food security, government transparency" and overall state capacity.    

3. Financial Inclusion for RefugeesCFI has been running a series on financial inclusion for refugees. The fourth and final installment is here, looking at the future of financial inclusion for refugees with specific advice for how donors, practitioners and governments can do better.

4. Goldman Sachs and Consumer Debt: I'm old enough to remember when Goldman Sachs was a "vampire squid" sucking the life out of the global economy. As of this week, GS is also your friendly (digital) neighborhood lender, here to help you manage life's demands and escape from credit card debt with low-interest loans. Beginning this week, GS is running ads for it's consumer lending business on Facebook and YouTube that "depict debt as an unavoidable nuisance of modern life." Given the amount of income and expense volatility documented in the US Financial Diaries, that sounds about right actually. The Goldman tagline is "Debt happens. It's how you get out that counts." I wonder if the Goldman loans will come with a "Don't Swipe the Small Stuff" sticker for credit cards?

In other consumer debt news, the former CEO of Lending Club, fired for potentially misleading investors, is already opening a new lending storefront. And here's an Urban report on how the overhang of bad credit scores from the Great Recession is continuing to hold back consumers and the US economy.


5. Obey the Evidence!: This week I happened across a review of the Milgram obedience experiments, which were conducted about 50 years ago. That led me to some more reading and research--there's a lot of recent material. Much of it is about what has been discovered by a close review of the Milgram archives and the difference between what actually happened in the experiments and what was reported--and what that means about how we should think about the results and the conclusions. It's interesting and thought-provoking reading, not only because it's about one of the foundational findings of behavioral science, but also because it should lead us to reflection on the conclusions we draw about the current generation of studies.

David Evans and Birte Snilstveit review what your paper should include so that it can be included in systematic reviews, including enough methodological details so that risks of bias can be assessed. Many papers don't. Source:  Development Impact Blog

David Evans and Birte Snilstveit review what your paper should include so that it can be included in systematic reviews, including enough methodological details so that risks of bias can be assessed. Many papers don't. Source: Development Impact Blog

NEUDC 2016 Special Edition

Editor's Note: The Northeastern Universities Development Consortium (NEUDC) conference was hosted at MIT this weekend. Over two days you get to see an enormous amount of new development research by mostly younger researchers. I held back on faiV this past week, to bring you this special edition--featuring the five papers I found most interesting (of those that are shareable) and since there are far more papers presented than any one person can take in, I recruited Jessica Goldberg, a development economist at Maryland (responsible for interesting papers like this); she in turn recruited Emily Breza (responsible for interesting papers like this) of Columbia GSB and soon of Harvard to contribute; and Lee Crawfurd (also known as Roving Bandit in the glory days of the development blogosphere) of CGD and a PhD candidate at Sussex to weigh in with their own favorites.

Here's my list of the 5 most interesting papers from the weekend:

1. Mentors for Microenterprises in Kenya: Brooks, Donovan and Johnson assign high profit microentrepreneurs to mentor newer entrants. That's a particularly interesting way to potentially change the trajectories of microfirms. The mentored firms see a significant jump in profits driven by learning how to cut costs but don't maintain the gains once mentorship stops.


2. Grants and Plans for Senegalese Farmers: Ambler, de Brauw and Godlonton give $200 grants and develop a farm management plan for smallholders. The grants boost production (by more than $200), but the gains seem to fade out, though higher stock of assets remains. Farm management plans don't have a measurable impact. I find this interesting for many of the same reasons as #1: figuring out how to boost profits of small enterprises is near the top of my list of urgent program/policy questions.    

3. Seasonal Migration in India:  Imbert and Papp use NREGA and choices about short-term migration to better understand why the large gap in earnings between rural and urban migration doesn't lead to more seasonal migration. They estimate that more than half of the income gap is consumed with higher living costs in urban areas, with the rest due to non-economic costs--like being away from home and "hard-living", (e.g. sleeping on the street). There are some interesting policy applications for the design of rural public works/income programs and the development of migration finance and support programs. 

4. Crop insurance contracts in Kenya: There's a general consensus that insurance is one of the most promising margins to help poor households, but we're a long way from figuring out to efficiently and effectively deliver an insurance product that people will take up. Casaburi and Willis study an insurance program in Kenya where farmers can delay the premium payment--noting that premia are usually due at the point where farmers are most liquidity constrained (they can delay payments because the crop is sugarcane farmed under contract so premia can be collected from harvest proceeds). They find a 67 percentage point boost in take-up, with take-up highest among poorest farmers.


5. Saving and Smoothing: One of the ways that financial services should help poor households the most is by boosting their ability to smooth consumption and to absorb shocks. But access alone isn't enough if other constraints prevent households from using the tools like savings and insurance effectively. Aker et al. look at savings nudges to help Senegalese households save and budget. They find that lockboxes and reminders don't influence spending (particularly spending on festivals) but do seem to help households plan ahead and therefore be less susceptible to other shocks. There is a lot of heterogeneity in results though.
 

Jessica Goldberg's, with an assist from Emily Breza, list of 5 most interesting papers:

1. Gambling and Saving in Uganda: Betting on sports events is common among urban Ugandan men and, for those who partake, a substantial expenditure. This paper by Sylvan Herskowitz uses variation in bet outcomes and lab-in-the-field experiments to build a case that betting is a rational strategy for asset management in an environment with low perceived returns to savings.  It’s a novel topic — while we are learning a lot about savings, credit, and even mobile money, I haven’t read anything else about sports betting in developing countries.  But neither the topic nor the approach are trivial, and taking seriously the model that would rationalize the bets is commendable.

2. Workfare and Welfare: This paper from Bhanot, Han, and Jang uses a lab-in-the-field experiment in Kenya to test various attributes of common cash transfer or public works programs, and therefore contributes to the design of such programs. While many evaluations of cash transfer or public works programs focus on outcomes like employment, income, or consumption, this paper also measures subjective wellbeing, which is improved by requiring participants to exert effort in exchange for payment. This adds an additional justification for work requirements rather than cash transfer schemes, which is important since public works can be more expensive to administer and do not always achieve self-targeting.

3. Seasonal Migration in India: [Ed. Note: same paper as above] There’s a lot written about NREGA, but it’s a massive program that not only shares features with workfare programs in many other countries, but also operates at a scale that lets us understand what might happen programs that were rationed were instead made available to more people or for longer durations. Clement and John already have one really important paper about the equilibrium effects of NREGA on private sector wages.  Now, they show that NREGA reduces seasonal migration from rural areas to the cities

4. Crop insurance contracts in Kenya: [Ed Note: same paper as above]: This paper is a nice insight into understanding the demand for insurance, even though the specific pricing structure may be hard to implement outside of a closed marketing chain.  It’s also a contribution to the literature about how the timing of financial access affects outcomes.

5. Economics of Foot Binding: Fan and Wu look at the rise and fall of foot binding in China from an economic lens, particularly noting how the practice interacted with a gender-biased meritocracy and the physical demands of women's labor.



Lee Crawfurd's list of 5 most interesting papers:

1. Football and ethnicity in Africa: When their national football teams win, Chauvin and Durante find, Africans report weaker ethnic identity. [Ed. note: I'm sure Sepp Blatter is emailing this to the Nobel committee as I write]

2. Teaching at the right level in India: Second coolest paper--Muralidharan, Singh, and Ganimian find huge effect sizes from a computer system that gives kids tests, adapts to their level, and gives feedback.

3. Vote-buying in India: Green and Vasudevan are pretty modest about reducing vote-buying by 2 *million* votes with a radio campaign.

4. Aid, hospitals, schools and violence in Afghanistan: Child finds that US health projects reduced conflict, but education projects increased conflict.

5. Trader costs in Nigeria: Startz documents and explains trade costs for market traders in Lagos. We usually focus on how developing countries can export more, but there are also big welfare gains to be had from making importing easier so consumers get cheaper and better goods.

Andreyanov, Davidson and Korovkin find suspicious bidding patterns in Russian sealed-bid electronic procurement auctions, estimating that up to 10% are affected by corruption and up to 30% by collusion among bidders. According to Jessica Goldberg, their presentation has an even more striking chart showing winning bids occurring in the last minute.  Source .

Andreyanov, Davidson and Korovkin find suspicious bidding patterns in Russian sealed-bid electronic procurement auctions, estimating that up to 10% are affected by corruption and up to 30% by collusion among bidders. According to Jessica Goldberg, their presentation has an even more striking chart showing winning bids occurring in the last minute. Source.

Week of October 24, 2016

Editor's Note: It seems like our topics this week are all perennial, the all-star topics you might say. You can always count on these topics for interesting stories.

1. The Future of Microfinance: The big news this week is the merger of two giants in the field--Grameen Foundation and Freedom from Hunger. The merger follows the relatively recent retirement of two giants of the field--the former leaders of Grameen and FFH, Alex Counts and Chris Dunford, respectively. As the announcement states there are clear ways that combining the two organizations may improve their impact, but it's also clear that consolidation is a result of the maturing of the microfinance industry, and I mean that in the Silicon Valley sense, not in the childhood development sense. Where is the industry headed? Reading between the lines of the announcement makes it clear that the combined organization sees the future as one where microfinance is just a utility, or perhaps one of a set of tools, not the center piece of anti-poverty interventions. That's probably right. 

One reason why: it's easy for microcredit to go off the rails when it is the centerpiece. Here's an update on overindebtedness in Cambodia.


2. Household Finance: How should households be managing their finances? I don't mean the basics, like choosing a lower-cost over a higher-cost loan, but managing their finances over their lifetime to achieve their goals. Almost all of the the ideas and advice we have for households in developed countries is built on the life cycle model--a household's earning power starts out low but steadily grows, peaks in late middle-age and then declines. Households then should use financial services and tools to shift their income and smooth their lifetime consumption. This piece from the WSJ about what mistakes households in the US make at each phase of their life is particularly explicit about using the life cycle model and it's implications as a standard for whether households are managing their finances correctly or not. The problem with that view, of course, is that it's increasingly clear from financial diaries and other work that the life cycle model isn't an accurate representation of the many households' situation. And we don't have good advice for households' where volatility is the norm, not a blip, and where slow and steady doesn't win the race, or even work at all.   

3. MigrationOne way households have always managed their finances and achieving their long-term goals is by migrating to better opportunities. Lant Pritchett has a new rant about the relative cost-effectiveness of development interventions versus migration: the NPV of gains from ultra-poor programs are significantly less than the gains from one year of labor in the United States for a low-skilled male migrant from any of the countries where the ultra-poor programs were evaluated. Here's Eduardo Porter reviewing a plan for reforming migration policy between the US and Mexico. Here's a piece that argues that Trump's Wall is not meaningfully different, morally, than current immigration restrictions (so why doesn't the latter produce the revulsion or incredulity that the former does?). And here's a piece from the Economist on Uganda as a model for policy toward refugees.

4. Basic Income, Cash Transfers (and not-so-cash transfers): Migration is one of the reasons that Tyler Cowen gives in this column on why he has rethought the benefits of universal basic income--he thinks adoption of UBI would lead to restrictions on immigration and naturalization, and the loss from those restrictions would more than offset the gains fro UBI. Here's an older interview of Robert Greenstein on why he thinks that universal basic income won't work in the US (for very different reasons). And here, just as a reminder, is Wydick et al's paper on the not-so-significant effects of the alternative to cash transfers--giving stuff. (Even though it looks like it, no, I'm not conflating UBI with cash transfers).


5. Behavioral Science: The UK government's Behavioral Insights Team has a new report on how behavioral science can be used to "improve opportunity" in the UK. As a reminder, here's the US government's Social and Behavioral Sciences Team's similar report from last month. Both the US and UK government have new reports on the use of behavioral science for policy. And Cass Sunstein has a new book (of course, he does; it's been at least six months since the last one) on The Ethics of Influence.

Bonus Update: A few weeks ago we featured some work on education interventions. Here's a new paper on Pratham's iterative attempts to scale up "teaching at the right level" and how they adjusted their approach through on-going testing and evaluation of impact. And here's David Evans with short descriptions of 30+ recent papers on education interventions. Remember when David Roodman's consistency in thoroughly evaluating some issue related to microfinance yielded the eponym Roodmanesque. I feel like we need a name for David's research summaries: Evansonian?

Pew's new report on the state of American jobs, as always, has lots of data to think about and puzzle over. Source:  Pew .

Pew's new report on the state of American jobs, as always, has lots of data to think about and puzzle over. Source: Pew.

Week of July 11, 2016

Editor's Note: What would you rather do in the midst of a heat wave than read about social science methodological debates?

1. Meta-Analysis of Worms: When the dust settled in last year's #wormwars it was clear that a core issue was methodological and interpretive differences between epidemiologists and economists (see Humphrey's section 5). A new meta-analysis of deworming impact studies from Croke, Hicks, Hsu, Kremer and Miguel takes that issue head-on: it's as much an argument about how to evaluate evidence as it is an argument about the evidence on deworming in particular, concluding with, "Under-powered meta-analyses are common in health research..."   

2. Police Shootings: Another raging methodological debate on an issue of even greater emotional resonance broke out this week: are African-Americans more likely to be shot by police than whites? Roland Fryer has a new working paper that answers, "No [in some cities, though they are more likely to be physically accosted during a stop]." The initial critical reactions focused primarily on the fact that this is a working paper and not enough emphasis in reporting on the paper was given to the limited context (e.g. only a limited number of cities) of the results. The larger methodological issue though is about how to treat the data in the first place. Michelle Phelps looks at how bias in who gets stopped by police can substantially bias outcomes and puts the findings in context of other research. Radley Balko looks at how the source of the data--police reports--makes it questionable whether the data can be trusted at all.


3. Charter Schools: Completing the trifecta of emotionally resonant issues, how about some controversy over how to evaluate schools? The New York Times had a front page story about "chaos" resulting from Detroit's expansion of charter schools harming students, with this curious sentence: "But half the charters perform only as well, or worse than, Detroit's traditional public schools." Jay P. Greene argues that the piece misuses the little data on charter performance that it has. Here's an old post from Alexander Berger on understanding charter performance evaluations and what they actually measure. Meanwhile, here's David Evans rounding up some recent global research on education, teachers and how to measure them.

4. Study Design: Speaking of what studies are measuring, Bruce Wydick has a new post, with specific emphasis on microcredit impact evaluations, about how infrequently development impact evaluations start with a diagnosis of a problem before prescribing a treatment--and how to design better studies based on diagnosis.   

5. Prediction Markets: Finally, everyone's (n=1) favorite prolific blogger on statistics and causal inference, Andrew Gelman, has a couple of posts about why prediction markets and polls are diverging, with prediction markets seemingly on the losing end of accuracy.

Not new, but relevant to many current conversations and largely, it seems to me, unknown.  Source: Migration Policy Institute

Not new, but relevant to many current conversations and largely, it seems to me, unknown.
Source: Migration Policy Institute

Week of June 27, 2016

Editor's Note: There won't be a FAIV next week. We'll all be on vacation or traveling.

1. LOL Nothing Replicates: Jason Collins looks back over Kahneman's Thinking Fast and Slow post-repligate, finding some distinctly uncomfortable language ("You have no choice but to accept that the major conclusions of these [priming] studies are true"). Meanwhile a new paper in PNAS suggests that fMRI studies have 70% false positive rates.  

2. Migration: There's a lot of work to be done understanding intra-household bargaining in the context of migration. A new paper tries to estimate the returns to internal migration in South Africa by looking at the effects on the migrant as well as on the households from which the migrant departs and which the migrant joins. A southern New Zealand town is trying to recruit internal migrants because it has too many jobs. Perhaps they could expand the Tongan lottery. And the New York Times magazine has a long piece on Canada's refugee sponsorship program where you can find this unexpected but lovely statement: "I can't provide refugees fast enough for all the Canadians who want to sponsor them." 


3. The Future of Microfinance: Next Billion has a terrific collection of posts on last year's sale of six microfinance banks by Opportunity International to MyBucks, a for-profit fintech firm. Dan Rozas and Gabriela Garcia provide an overview, Chuck Waterfield expresses skepticism that the transaction is good for customers and Vicki Escarra, Opportunity International Global CEO, responds. Anybody else miss the old days when this type of back and forth was common?

4. Financial Inclusion: Michael King summarizes his new co-edited volume on the state of financial inclusion in Kenya. As ever, the story is more complicated than the headlines about M-PESA and M-Shwari suggest and there is still a great deal of work to be done.  

5. Agent Banking and Gender: Some new work from MicroSave looks at looks at how banking agents differentially interact with women in Uttar Pradesh, India. Agents report a preference for serving female customers, but that preference comes from women being more "manageable", less knowledgeable and asking fewer questions.

Turns out that if you ask economists a very narrow yet vague question about a basic income policy, most will reject it. Anyone want to join a faiV experts panel where we promise to ask better (at least better written) questions?   Source:  IGM Economic Experts Panel

Turns out that if you ask economists a very narrow yet vague question about a basic income policy, most will reject it. Anyone want to join a faiV experts panel where we promise to ask better (at least better written) questions?   Source: IGM Economic Experts Panel

Week of June 20, 2016

Note: This week’s edition of the faiV was written by FAI’s Program Administrator, JoAnne Williams. After dedicating over three years toward FAI’s mission, JoAnne will be moving on to pursue her MBA at Columbia Business School, where she plans to study Finance and Social Enterprise.


1. Financial Health: How should a financial services company assess its customers' financial health? Three financial services organizations, HelloWallet, Wells Fargo, and Solutions for Progress, have developed tools and metrics to measure the financial health of their customers. NextBillion

2. Housing Segregation: Housing instability as a repercussion of income volatility has been well documented, but what about the cycle and segregation of poverty in specific neighborhoods? Matthew Desmond's Evicted: Poverty and Profit in the American City and Mitchell Dunier's Ghetto: The Invention of a Place, the History of an Idea take a look at the history and complexity of living in concentrated poverty. The Atlantic Magazine - June 2016 Edition

3. Grit in Developing Countries: Is grit a useful predictor of success in developing economies? Roving Bandit

4. Financial Inclusion: Kenya has been spotlighted regionally and globally for tremendous gains in financial inclusion, but has access to formal and informal financial services reached the ultra-poor? Heyer and King discuss this question in the book Kenya's Financial Transformation in the 21st CenturyThe World Bank - All About Finance

5. Aging Workforce: A new Pew Research Center study highlights a growing trend of Americans working well into their retirement years. When compared to previous generations, older Americans are expected to stay in the labor force longer and work longer hours. 
Pew Research Center

Migration patterns leading up to Brexit.

Migration patterns leading up to Brexit.

Week of May 23, 2016

In the US, we have a three-day weekend; what our English friends would call a bank holiday. There's a little extra time to read. So this week’s faiV is book recommendations—but not the new books that are getting all the attention. I’m also taking this opportunity to rebel against the tyranny of the new. Herewith are some books, all at least a year, if not decades, old that if you haven’t read, you should. Or at least you should read a review of them so you can mention it during your next conference call. These are almost all Kindle links since you don't have time to get the book before heading out on holiday. 

1. Entrepreneurship, Social Investment and Not-so-Social Investment: Scott Shane's The Illusion of Entrepreneurship is a great overview of entrepreneurship research in the US, a body of knowledge that is a lot more applicable to developing contexts than is generally acknowledged. For those wishing to spur social businesses, going to back to first principles of corporate finance and principal-agent problems is a good idea--check out Henry Hansmann's The Ownership of Enterprise. There's a lot of entrepreneurship in the secret spaces of the web, though its generally not what we think of when you use the word entrepreneur. Here's a guide to The Dark Net

2. Memorial Day: The reason for the holiday in the US is it's Memorial Day, to commemorate the sacrifice of those in the Armed Forces--what's usually invoked is fighting for or defending freedom. I always tend to think of The Gettysburg Address. It's not just soldier and sailors who fight for freedom and to defend rights; Letter from a Birmingham Jail is a good reminder of other fighters. Sometimes you fight for your rights by leaving--The Warmth of Other Suns is the story of the Great Migration in the United States when African-Americans pursued freedom by moving out of the South en masse (I can't quite put my finger on what present situation it makes me think of...). The use of power in pursuing virtuous ends is tricky, and something we should think about more on weekends like this, perhaps by reading Reinhold Niebuhr's The Irony of American History.

3. Global Narratives: Long weekends are designed for travel and "getting away." Some books to vividly take you to other places (and times): Behind the Beautiful Forevers (India), My Colombian War, Every Day is for the Thief (Nigeria), Notes from the Hyena's Belly (Ethiopia) or Chen Village (China)     


4. Economic Thought: Perhaps you prefer to use the vacation to bone up on some economic thought to really impress your friends, family and neighbors at the requisite Memorial Day barbecue. In that case how about Lives of the Laureates, Fifty Key Thinkers on Development or Economics Evolving.

5. Economics meets Anthropology (or at least the real world): Still not your style? Need something intellectually challenging but outside the ivory tower? Try Seeing Like a State, The Anti-Politics Machine, Give a Man a Fish or Development Projects Observed. Yes, you probably know most of these, but have you actually read them? If you read them this weekend, no one will ever have to know and one small piece of your impostor syndrome will be resolved.

Special Thanks to Joanne Williams, Jonathan Morduch, Lucy Bernholz, David Evans, Michael Clemens and Joanna Smith-Ramani for contributing recommendations. If you can match up the book to the recommender, I'll buy you all the books listed here.