What economics PhD graduates wish they knew when they started

Sussex assigned me to a mentoring circle, and our homework from the first meeting was to ask people we know who have recently completed PhDs for what they wish they knew when they started, to share with the group. Here is the really excellent advice I got from a couple of friends, both with recently(ish) finished economics PhDs and now with great jobs in applied policy research. Further tips gratefully received!

From G:

My views are far from standard, but here's two ideas;

First, be McKinsey about it, never forget about what the deliverable is. Project manage yourself. Get 2-3 finished PhDs from the library and work out exactly what you need to do over the next 3-4 years (choose book style or three papers), get a really good feel for the what the end product looks like. Even if your three ideas are only slowly becoming specific enough you could work out the headings and sub-headings of the output, perhaps get the ball park literature review down in final format so something is already delivered. 

Second, be clear on what you want from the PhD. I'd argue it's mostly a signal. But if you can produce useful published work go for it. If not compromise and aim for one stellar output from 3 papers and then a satisficing strategy can reduce what could be enormous opportunity cost. Remember the job route or post-doc route need quite different attributes. Balance delivering the minimum output with earning, teaching, network building (work or academic), and publishing (not necessary but wonderful. A PhD only needs to be potentially publishable with more work/ a post-Doc; it's intended as research training.

And from A:

1) Use BibTex or another bibliography program to keep track of all of your papers as you download them. I did do this, and it has been a life saver. I also started a spreadsheet of all of the papers which I read, but I started that too late. It is really useful to note down things like context of study, data used, main method, key finding etc. I absolutely hate doing literature reviews and answering the question "where does your research fit into the literature", especially after I've assured myself that what I'm doing is worthwhile.

2) Read the abstracts in the top 3 or 4 journals as they come out. And also JDE, EDCC, WBER and a few other field journals, just to get an idea of what people are doing.

3) Don't lose sight of the bigger picture. You may not have this problem at Sussex, but I found X was SOOOOO obsessed with empirical identification of effects and fetishizing causality that I stopped thinking about the bigger picture and started focussing on why my paper was bad and couldn't be identified. Obviously there has to be some balance between the interesting question and the rigorous empirical identification, and in some cases these things are complementary but don't let yourself get pulled too far down that rabbit hole. 

4) Keep perspective and stay confident in your research. Obviously this is easier said than done, but so much of academic work is smoke and mirrors. People bullshit a lot and inflate how important their work. This can lead people to put down other people's work, which I think is totally unconscionable. Anyways, I don't know exactly how I would have done things differently on this point, but I never really got over the confidence thing (you can ask A about how many times he had to pick me up). I think one thing you have to do is develop a thick skin; if people are critiquing your paper, it isn't because they don't think you are a good researcher. Also, never, ever read Econ Job Market rumors. Being accepted to a PhD means you are good enough to do good quality research that people will be interested in. It may not be published in the AER or QJE and you may not get a faculty position and Harvard, but you should remember (and I should have remembered) that this isn't actually the point. 

5) Present your work early and often. This relates to the previous point. I didn't present my work soon enough and you really do get a kick out it. One of the big challenges I found was that I always felt my work was worthless and stupid, but when you present to other people they almost always see the interesting and good parts of it. This helped me a lot to stay motivated and think of new ways to approach my papers. 

6) Do not, whatever you do, lose contact with your supervisor. I had long spells where I just disappeared. As with any bad thing, I was fully aware of what I was doing, but couldn't muster the willpower to break out of it. Most often your supervisor doesn't care that you haven't done what you were going to do, but they will help you get back on track. I fell into the trap of not having done enough, so thinking "If I just spend one more week on this, it will be good enough to take to my supervisor", and then postponing my meetings. Don't do this, because every time you postpone, you build up the pressure to create or do or present something to your supervisor that is even better than what you currently have. Owning up to not having done anything and getting yourself back on track is WAY WAY WAY better than letting things slide. 

7) Check out the sites that give advice for doing PhDs, presenting and writing academic work. I really liked John Cochrane's advice, but there are many others. I found them really helpful in preparing my slides and papers. Also, if you find articles that you like, copy their model for presenting your research. I did this on a few occasions. It works. 

8) If you are doing data work, spend time figuring out the best way to store files, proper etiquette (that isn't the right word) for writing do-files. It will save you lots of time. 

9) Get involved with research projects with other people, either as an RA or as a co-author. I didn't do this enough and I really thrive off of working with other people. Being a RA also helps to get you familiar with data-sets and opens up questions based on other people's work that you might find interesting. I think A benefited a huge amount from being able to work on the Y team; not only did he have a great social group, but he also really got to know the data and develop his own ideas about what to do. 

10) Find yourself a supervisor who you will work well with. Some supervisors are hands-off, some are harsh, some are supportive, some are really anal and organized. I think this is probably a key decision (not sure why it is at the bottom of the page) but it is really important. 

11) Write down, not up. Paul Klemperer gives this advice to people. I think it is really helpful. Basically write down your ideas and models and empirical findings so they are on paper and you've expressed them (or tried to express them). But don't write up into a paper until you have the argument and outline ready to go. 

12) Keep making sure you love to do research. It is amazing to be funded to do research, so make sure you enjoy it. I loved all the other stuff around doing a DPhil: teaching, traveling, running a survey. But in retrospect, I don't think I loved the solitude and focussed effort that goes into polishing and re-polishing and being exactly right about something. Part of me thinks I should have quit early on, but I don't think I had the balls to do it. I don't know that I would have been happier, but there you have it.

UK teacher unions as legal insurance

Richard Murphy of the University of Texas confirms something that a teacher told me in person just last year - teachers in the UK only join unions because it provides legal insurance in the event of getting sued. 

This paper identifies the threat of accusation as a new source of demand for union representation and how this has increased union density in specific labour markets. Society has become increasingly litigious and this may have many repercussions on labour markets, especially those where employees have unsupervised interactions with vulnerable groups. A rational response to such changes would be an increase in demand for insurance against these risks. I model union membership as a form of private legal insurance, where the decision to join is partly determined by the perceived threat of having an allegation made against the agent. This is examined by estimating the demand for union membership amongst UK teachers, which has been increasing over the last twenty years. I use media coverage of allegations relating to local teachers as an exogenous shock to the perceived threat. I find that unionisation rates increase with media coverage of relevant litigation at the regional and national levels. Ten relevant news stories in a region increases the probability of union membership by 5 percentage points. Additionally, the size of the effect is dependent on the relevance of the story to the teacher. This paper provides a reason why the demand for union membership in this and related sectors has increased, despite the possibility of freeriding as pay and working conditions are set centrally.

Are insurance companies missing an opportunity here? Or would they face adverse selection issues?

Learning goals

Nic Spaull makes the case for one simple learning goal for South Africa:

“Every child must read and write by the end of grade three.”

I think he is absolutely right. You hear often from international education types that we must resist the simplification of goals, and account for broader objectives such as citizenship etc, but the fact remains that the majority of children in Grade 3 in South Africa, and by implication most other developing countries, can't read (and understand) a simple 30 word story such as this one below.  

I actually heard in a meeting at ODI last year that "it would be a tragedy if the post-2015 education goals were reduced to simply all children being able to read and write and do sums." On the contrary I think it would be a tragedy if we let there be any more distraction from ensuring children have the most basic and fundamental skill of being able to read to learn. 

On the political economy of education systems, Nic also posts an interview with a teacher explaining how unions in South Africa control appointments within schools. 

“When you are selecting a Head of Department (HOD) for the school there are 2 parents from the SGB and 1 teacher, the principal is there but cannot vote. In the rural Eastern Cape many of the parents are not well educated. They know nothing about laws so it is just the principal and the teachers. SADTU can very easily influence the parents through the teacher. If SADTU does not get the person that they want they will say there was an irregularity in the interview process. I once encouraged the parents to appoint a good mathematics teacher for my school and they did, but they were not SADTU’s choice so they had the teacher removed. They re-advertised the post but without subject specification because there was no SADTU member who had maths or science. I am now stuck with someone who is babysitting mathematics and my results are terrible. My ANAs are very low in mathematics. And you cannot challenge it.” [“Why can’t you challenge SADTU?”] They will go for you. They will accuse you of sexual misconduct and there must be an enquiry. They will accuse you of financial mismanagement. They will go for small things to catch you. You know you need 3 quotations if you buy something and you must write it down so that if you only have two or forgot to write it down, they will catch you. Most principals will make a small mistake. But these are honest mistakes. But they will catch you.” “The Department is listening and and the union is managing. SADTU does not want to listen, they want to lead and they want to manage.”

Why be a consultant (with Mokoro)?

"Martin Adams never set out to be a consultant, but found himself stuck in an office job and so decided to go freelance ‘in places where I wanted to be and with people I liked.’ For him, this is the most rewarding part of being a consultant. For Liz Daley, ‘consultancy enables you to be your own boss and work flexibly and independently. This is a great asset if you have other responsibilities that you are very committed to – like being a parent in my case. It gives you variety of assignments and clients, which is good for intellectual stimulation. But, the big downside, it can be very isolating. And there is constant uncertainty financially, worrying about where the next piece of work will come from.’ Catherine Dom likes the flexibility and independence that the consultancy life offers and has been fortunate to have developed long-term relationships with a number of countries and people in them. For Chris Tanner, initially ‘consultancy allowed me to get a vast depth of experience in several places far more quickly than a ‘proper job’ would have done. The strong point of being a consultant is on the technical side for sure.’ Now returning to consultancy after a long stint with FAO in Mozambique, it ‘allows me to use my experience and to work in a way that is flexible and still keep my feet under the table in Wales.’ Stephen Turner drifted into consultancy, finds it ‘stimulating and stressful, perhaps especially for a generalist like me’, but also depressing because you can work hard on a project and yet get zero feedback."

From Robin Palmer's reflections on his career. One part of my lack of blogging steam has been the takeover of twitter as a quicker way of sharing interesting snippets, but twitter is much less useful for me as a way of quickly finding the interesting clippings that I remember reading months ago and want to find again, so maybe expect more of this cutting and pasting. 

We can be (British) heroes

A reminder, whilst we are celebrating the 'British Schindler' Sir Nicolas Winton, who saved 669 mainly Jewish children from Czechoslovakia in 1939, that actually saving so many lives is entirely achievable for the average person in the modern world. Toby Ord, founder of Giving What We Can, has estimated that you can save a life for around $250. So to save 669 lives would cost you a little over £100,000, or spread over a 45 year career, £2,300 a year. Nicolas Winton has a knighthood, a statue at Prague railway station, Czechoslovakia’s highest honour (the Order of the White Lion), and a small planet named after him. 

Let them drown

3,000 people have drowned already this year trying to cross the Mediterranean to the EU, in pursuit of a better life. It is official UK government policy to not try and rescue such people, because that would only encourage others. I somehow find it hard to believe that even staunch opponents of immigration really think we should just stand by and watch people drown. 

via Duncan Stott and Phil Davis

How my economics PhD is going so far

Good news from South Sudan

Charlie Goldsmith emails with updates on the Girl's Education South Sudan project:

"Our majority-South Sudanese team are proud that South Sudan, which has been so beset by trouble in the last year, has the chance to show positive ways in which it is a world-leader. 

Charlie Goldsmith Associates have been particularly involved on design, technology for, and delivery of: 

• The South Sudan Schools Attendance Management System, through which enrolment and attendance of individual pupils – almost 900,000 of them by now – from top to bottom of the education system is recorded, with schools asked to report daily to a freephone number through SMSs from teachers’ own phones.

• Cash Transfers to individual girls in P5-S4 and their families: more than 50,000 will be made in 2014, and around half a million, to 200,000 individual girls, by 2018. In 2015, we expect payment of the majority of these to be by M-Money. 

• School capitation grants to fund investments in quality: almost 3000 schools have been approved to receive these grants, having passed hurdles including opening a bank account, and making a school development plan and budget, and there have been outstanding examples of value delivered, notably in terms of economical construction. GRSS is now looking at rolling this model of funding direct to service delivery units across to the health sector. 

• A multi-year programme of investment in knowledge, evidence and research, much of it delivered by our specialist partners Forcier Consulting and, earlier on, Education for Change, including detailed school and household surveys, learning assessments, and a major subnational PFM performance survey.

The Government of the Republic of South Sudan (GRSS) budgets to spend 60m SSP of its own money a year (roughly £12m GBP) on school capitation grants, as part of the wider Local Services Support programme, supported by among others, the ODI Budget Strengthening Initiative. It's worth highlighting that this £12m a year spent by the government of South Sudan is slightly more than the DFID project itself (£60m over five and half years - a great example of leverage and sustainability where aid money can help to increase the effectiveness of potentially much larger government spending. 

You can find some examples of practical good news that has resulted – girls with the resources to be in school, teachers paid, classrooms and latrines quickly and cost-effectively constructed - and scans of how each school has budgeted to spend its capitation grant, including detail down to the cost of a latrine in a given school, and the accountability now being returned by schools.

In addition to the CGA work, other members of the consortium are delivering really exciting things too, particularly interesting are the BBC "Our School" programmes in local languages. Since they have one programme per State per topic, and have done about 14 topics this year, it is really quite a significant library of decent resources of people saying sensible things about education, including the practicalities, not just the slogans, in their own language. In due course, the project is going to do important things on in classroom education quality too. 

Using innovative technology elsewhere

We think some of these approaches and tools are broadly applicable:

• Monitoring enrolment and attendance at an individual level, in near-real time, on a public website (data on individuals can only be accessed by permissioned login), is a step of assurance and usefulness of data that goes beyond what some EMISs offer.

• Getting funds direct into the hands of individuals and down to bank accounts of service delivery units like schools and primary health care units, gives country governments and their partners assurance that funds have reached their destination, and sets good incentives for funds to be used correctly, and the leverage and information to follow up if there is a problem. Putting funds to individuals and schools and clinics at local level stimulates the local economy, and, in particular, financial inclusion – in South Sudan, Eden Commercial Bank are opening five new branches in County towns during 2014, driven partly by the additional transaction volume provided by capitation grants and cash transfers, and other banks have set up travelling account opening services. 

• The technology approach is designed for a low-connectivity/not-always-on environment, and for users using their own mobile phones/devices.

These approaches are operationally effective, and showing promising signs of effect on retention and enrolment, in South Sudan: how much more might they achieve in an environment where there were fewer barriers to accessing public services?"

This is why I don't care about climate change

Well, not "don't care at all", but, you know, not as much as about poverty and development. Stefan Dercon puts it better than I ever have:

Poverty reduction tends to be strongly linked to economic growth, but growth impacts the environment and increases CO2 emissions. So can greener growth that is more climate-resilient and less environmentally damaging deliver large scale poverty reduction? ... We argue that there are bound to be trade-offs between emissions reductions and a greener growth on the one hand, and growth that is most effective in poverty reduction. We argue that development aid, earmarked for the poorest countries, should only selectively pay attention to climate change, and remain focused on fighting current poverty reduction, including via economic growth, not least as future resilience of these countries and their population will depend on their ability to create wealth and build up human capital now. The only use for development aid within the poorest countries for explicit climate-related investment ought to be when the investments also contribute to poverty reduction now

Value for money in technical assistance to governments

The DFID project completion report is out (here) for the South Sudan ODI fellows from 2009-2012. It's pretty good. (this doesn't include my cohort).

the fellows delivered – and exceeded - the desired outputs and the programme has achieved – and exceeded – the desired outcome, at slightly under budget. Given the minimal oversight given to this programme by DFID South Sudan, a large part of the credit must go to the project partner, ODI, at least in respect of its selection and briefing of the fellows, who were very well suited to the tasks in hand. The majority of credit must, however, go to the fellows themselves, for undertaking their work professionally and working to sustainably build colleagues’ skills and capacity. 

Taking into account all of the evidence gathered in this review it seems clear that the ODI Fellowship for the Government of Southern Sudan programme delivered very strong VFM over the review period 2009 – 2012. It is an impressively performing programme, particularly given the difficult context to deliver results in South Sudan that it managed to overcome - if anything performing better in value for money terms than the global ODI programme did in more benign environments. 

This review found that the programme was implemented to expected timelines and budgets, with strong performance by the fellows translating into very strong performance on value for money metrics. The programme over-achieved in relation to the desired outputs and outcome, while making a small cost saving.

How not to improve education in India

Some great analysis from MINT who highlight a new Government of India report, which ranks state education "outcomes".

What is odd is that the government rank has a negative correlation with the rankings of the Pratham report which directly measures learning outcomes.

So what goes into the government "outcomes" index?

- Number of teaching days
- Teacher working hours
- Enrolment rates
- Drop-out rates
- Primary-to-secondary transition rates

These are all basically inputs, with the exception of drop-outs and transition rates, which maybe say something about quality. But none of them are actually directly measuring learning at all. Yet more evidence for the Lant Pritchett case that focusing on inputs or "EMIS-visible" metrics won't get us quality learning outcomes, and measuring learning directly is critical to focusing policy attention on how to improve learning.

HT: Abhijeet Singh

Don't shit on your own doorstep

I was talking to a water and sanitation programme manager a few weeks ago, who seemed frustrated that these stupid people kept crapping everywhere. Why would you shit on your own doorstep? The programme had several "behaviour change" interventions (horrible phrase, slightly Orwellian no?), but really, how hard should it be to not shit in the open?

One of the great things about economics is that it does not assume that people are just being dumb. It treats people with respect, and assumes first that there is probably a good reason why they are doing something which might seem irrational. I don't really know enough about water and sanitation, but I was suspicious of the idea that these recalcitrant natives just couldn't figure out what was good for them.

Does this paper prove me right?

"latrine use constitutes an externality rather than a pure private gain: It is the open defecation of one’s neighbors, rather than the household’s own practice, that matters most for child survival. The gradient and mechanism we uncover have important implications for child health and mortality worldwide, since 15% of the world’s population defecates in the open. To put the results in context, we find that moving from a locality where everybody defecates in the open to a locality where nobody defecates in the open is associated with a larger difference in child mortality than moving from the bottom quintile of asset wealth to the top quintile of asset wealth."

The problem then is a "simple" collective action problem (simple in the sense of understanding the nature of the problem, not at all simple to solve). This isn't that complicated stuff.

HT: kim yi dionne

Important Research Funding Opportunities: Quantifying the economic impact of Shakira (for UNICEF)

"Shakira Mebarak, world-famous singer and songwriter, is a devoted advocate for children. The singer, known professionally as Shakira, was appointed a UNICEF Goodwill Ambassador on 24 October 2003."

Which is all very well and everything, but surely what we all really care about is exactly how valuable is she to the UNICEF marketing team? And what is it about her that makes her valuable? Are singers more or less valuable than actresses? Blondes or brunettes? Men or women? Does fundraising value depreciate over time with age? If you've always been fascinated by important research questions like these, well do UNICEF have the RFP for you (sadly I think the quantitative celebrity fundraising research and analytics team at my office is busy right now, so I'm generously passing this on. You're welcome). Thank god UNICEF is taking evidence-based decision-making seriously where it really matters.

"Quantitative Research: Identifying the Right Celebrities for UNICEF Partnerships & Public Attitudes towards Celebrity Partnerships 

The purpose of this Request for Proposal (RFP) is to seek proposals from qualified agencies to provide quantitative research (using System 1 approach) for identifying the right celebrities for UNICEF partnerships & Public Attitudes towards Celebrity Partnerships."

Why governments don't like private schools?

Here are a few excerpts from the new textbook delivered to millions of primary school children in Venezuela:

1. The first page of each [book] starts with the words “Hugo Chavez: Supreme Commander of the Bolivarian Revolution.”  

2. They describe Chavez as the man who liberated Venezuela from tyranny, at times making him appear more important than 19th century founding father Simon Bolivar.  

3. The books present a 2002 coup that briefly toppled Chavez as an insurrection planned by Washington while playing down the role of massive opposition protests in this deeply divided country.

via Robin Grier

Does growth always depend on natural resources?

George Monbiot writes:

"Economic growth is an artefact of the use of fossil fuels."

Is this right? Actually most economists think that growth is driven by ideas and innovation not raw inputs. This 3 minute video by Deidre McCloskey provides a short economic history of growth since the beginning of time.

Can this really be true? Below are two charts showing energy consumption and GDP per capita from 1970 to 2012. In the UK, whilst our per capita GDP has doubled, our energy consumption has barely moved, and actually slightly decreased.

Of course there is a caveat to this story, and its a pretty big caveat. Whilst growth at the technological frontier (in advanced economies) can only be driven by innovation, in developing countries further away from the frontier, catch-up growth is possible by pure investment and copying existing technologies (such as, er coal-fired power plants). So whilst rich countries don't necessarily need to increase their overall energy consumption to grow, developing countries almost certainly do.

So the question for rich environmentalists is: was there one rule for us and another for everyone else? Or is it actually incumbent on us to invent some better technologies for the world to copy, rather than expecting them to choose between polluting the environment (like we did) or continuing to live on $3 a day for the rest of their lives?

DevBalls - Exposing the absurdities of the aid industry

Someone at DFID seems to have had enough.

"DevBalls is an online space for comment on the international development aid industry. 

DevBalls is here because the aid industry has – functionally and morally – lost its way. And those who should hold it to account - the media, researchers, politicians - don’t. DevBalls is here because aid can only become better when its absurdities and hypocrisies are open to view. 

DevBalls is compiled by a group of aid professionals who control its content. We welcome relevant contributions sent to DevBalls1@gmail.com. Anonymity is guaranteed."

The blogosphere has been pretty light on cyncial scorn since the demise of Bill Easterly's AidWatch, so DevBalls looks like one to watch. Won't be comfortable reading for DFID or ODI or ASI.

The origins of "the dismal science"

"This viewpoint infuriates some critics of economics, to the extent that it earned the famous nickname of “the dismal science”. Too few people know the context in which Thomas Carlyle hurled that epithet: it was in a proslavery article, first published in 1849, a few years after slavery had been abolished in the British empire. Carlyle attacked the idea that “black men” might simply be induced to work for pay, according to what he sneeringly termed the “science of supply and demand”. Scorning the liberal views of economists, he believed Africans should be put to work by force."

That's Tim Harford.

Wikipedia has more:

"However, the full phrase "the dismal science" first occurs in Carlyle's 1849 tract entitled Occasional Discourse on the Negro Question, in which he was arguing for the reintroduction of slavery as a means to regulate the labor market in the West Indies: 

Not a "gay science," I should say, like some we have heard of; no, a dreary, desolate and, indeed, quite abject and distressing one; what we might call, by way of eminence, the dismal science. 

It was "dismal" in "find[ing] the secret of this Universe in 'supply and demand,' and reducing the duty of human governors to that of letting men alone." Instead, the "idle Black man in the West Indies" should be "compelled to work as he was fit, and to do the Maker's will who had constructed him."[4]"

In which case I'm proud to be dismal.  

Do teachers skip class because of low pay?

Teacher absenteeism is a huge problem in developing countries, wasting up to a quarter of all spending on primary education in developing countries.

The 2014 Education for All Global Monitoring Report, which was launched in London last week, puts the problem mainly down to the low pay and poor working conditions of teachers.

"While teacher absenteeism and engagement in private tuition are real problems, policy-makers often ignore underlying reasons such as low pay and a lack of career opportunities. ...  Policy-makers need to understand why teachers miss school. In some countries, teachers are absent because their pay is extremely low, in others because working conditions are poor. In Malawi, where teachers’ pay is low and payment often erratic, 1 in 10 teachers stated that they were frequently absent from school in connection with financial concerns, such as travelling to collect salaries or dealing with loan payments. High rates of HIV/AIDS can take their toll on teacher attendance."

The report includes this chart, showing that in a handful of countries teachers earn below $10 a day (which they have decided is not enough to live on).

Which seems jarring when the same week there was a conference on the economics of education in developing countries, where much of the literature is focused exactly on this issue of teacher absenteeism, and finds very little evidence that low pay is the main factor (as opposed to, say, weak or non-existent systems of accountability). In India it is well documented that whereas absenteeism is roughly similar in public and private schools, teachers in public schools are paid more than 5 times as much as private school teachers.

(See for example this chart from data from Singh 2013, or similar from Kremer et al 2005, Alcazar et al 2006 in Peru, or African data here)

Harry Patrinos of the World Bank writes:

"There is very little evidence that higher salaries lead to better attendance, however. Contract teachers have the same or higher absence rates. Compared to public school teachers, though, private school teachers are absent less, even though contract and private school teachers alike take home much less pay than their regular civil service public school teacher counterparts."

As little as teachers might make in some countries, they are still doing well relative to most other people. In many countries public primary school teachers are the 1%.

I thought I'd take a quick look at the data presented in the GMR and see what those teacher salaries are presented as a % of GDP. In OECD countries, average teacher salary is roughly around the same level as GDP per capita. In African countries, the average teacher salary is 3 - 4 times GDP per capita.

Karthik Muralidharan summarised the state of public schools in India as facing two problems; governance and pedagogy. This probably generalises to much of the developing world. What this GMR comes across as doing is focusing almost entirely on the pedagogy problem, and sweeping the governance problem under the carpet (receiving roughly 10 pages attention out of a 300 page report). Perhaps this is a welcome counterbalance to prominent World Bank research which focuses much more on the governance problem. But really shouldn't a major flagship state of the sector report aspire to properly tackle both? Of course fixing the pedagogy problem means working with teachers to improve their capabilities and not demonising them or calling them all lazy slackers. But neither can we just ignore the reality of skiving on a massive scale (or: Don't hate the player, hate the game). 

You won't believe these 8,000 children who are actually going to starve to death today

I'm trying to write a pithy summary or pick a smart quote from Abhijeet Singh's new blog about malnutrition up on Ideas for India but it's hard not to just be deeply depressed when thinking about malnutrition. We apparently live in the 21st Century where flying robots and self-driving cars are real things, yet we aren't collectively bothered enough to do anything about the 8,000 children who starve to death every single day (three million a year). And that's partly because as humans we're more interested in what is interesting than what is true or what is important. 8,000 children starving to death everyday is just something that happens. It isn't new or counterintuitive or surprising.

So Abhijeet's paper is interesting and tells us something different, which should be applauded really just for finding a new angle to bring some attention to one of the most important but dull outrageous injustices there are. The conventional wisdom is that stunting in the first thousand days of life is irreversible. Abhijeet presents evidence to the contrary that giving children a meal every day at age 5 can fully make up for malnutrition due to a drought at age 1. So the policy conclusion is what - don't write-off malnourished children after a thousand days? Or how about maybe how on earth are we still letting children starve in the first place? Enjoy your lunch.

What do (cutting-edge, leading, academic) development economists do?

Apparently not what developing country policy-makers want to know about. Jeffrey Hammer has a fairly damning report from the recent IGC conference in Lahore on the World Bank blog. The IGC funds research by many of the world's top development economists, and apparently none of them are answering the kind of policy questions that were posed at the conference by the Chief Minister of Punjab, Pakistan (a state of more than 100 million people). He wanted to know about how to allocate resources across sectors (which requires value for money and cost-benefit analysis, not just impact evaluation), and how to raise more revenues. What he got was precisely identified studies on the impact of policy tweaks, without any costing. 

"The Chief Minister posed serious questions that have traditionally been the bread and butter of the economics profession. Unfortunately, we are not even trying to answer them any more. The specific question was “Should I put more money into transport? Infrastructure (power, roads, water)? Law and order? Social services? Or what? And where am I going to get the money?” What questions could be more solidly part of the core of economics than these? Unfortunately none of these were even remotely the focus of the “evidence-based” policy making discussed. 

Almost all of the cases analyzed were single, simple policy “tweaks” that were, first of all, isolated from the broader market context in which they occurred and, second, had no conception of opportunity cost – what we would have to give up to pursue these things?"

What do development economists do?

A series of youtube interviews profiling the careers of 6 development economists; Angela Ambroz (IGC, former ODI fellow & JPAL), Luca Pellerano (OPM and IFS), Peter D'Souza (DFID), Sarah Lilley (Save the Children), Henry Mphwanthe (ODI fellow), and Aarushi Bhatnagar (Phd student and World Bank consultant).

The new childcare subsidy in the UK

The IFS:

"Today’s announcements indicate that the Government’s main motive is to help parents move into work. As we pointed out in the IFS 2014 Green Budget, we know remarkably little about the impact of the policies to support childcare that have been introduced in England in recent years. And there is no consistent evidence from other countries that childcare support has large effects on parental labour supply. While today’s announcements bring welcome simplifications to the new Tax-Free Childcare scheme, and an increase in generosity that will certainly be welcomed by families on Universal Credit using childcare, and better-off families who spend more than £6,000 a year on childcare, the extent to which it will deliver its intended goals is essentially unknown."

and Chris Dillow:

"It's fitting that Nick Clegg should have announced an increase in the state subsidy for childcare, because the policy is a sanctimonious front for something that is inegalitarian and economically illiterate."

What should DFID do internationally (i.e. not in client countries)?

From the Development Studies Association:

DFID is discussing what their priority international actions should be over the next 2-5 years and beyond. By international actions they mean actions that use their spending, effort and influence to cause something to happen outside the borders of the intended beneficiary countries, but which indirectly benefits them. This broad definition includes global public goods, such as international financial regulations or a global climate deal; but also spending to alleviate problems with high spillover effects across many poor countries such as via peacekeeping efforts or communicable disease; or actions which improve the actions functioning of global markets. In short, they aim to refresh their possible international policy agenda with new or better ideas. 

Stefan Dercon has been asked to lead an initial consultation both within and outside DFID to set up a focused set of priorities and to ensure that DFID concentrates on those international actions that are both the most important for poverty reduction and where DFID could have the most impact.Please download a short note that sets out the task and the context.

Development as... a better postal service

Francis from Oregon writes:

"I am a young postcard collector working on a geography project. For this project, I would really love a postcard from Sudan or South Sudan. 

Do you know of anyone who would be happy to send me one? I would be so happy and grateful for your help. 

Of course in return I would be more than happy to send the sender a beautiful postcard (or anything else they might need) from Oregon in the U.S. 

Francis from Oregon http://the-geo-nerd.blogspot.com"

So if anyone in South Sudan wants a penfriend, there you go. All I can offer is some post-related development marginalia.

First, the speed and reliability with which post services deliver letters is a reasonably reliable indicator of state capacity more generally. Countries which are members of the International Postal Union agree to return any misaddressed letters to the sending country within 30 days. So a team of economists sent letters from the US to fictitious addresses in 159 countries (10 letters per country), to see how fast they came back. The results tally pretty well with expectation, Finland and Norway sent them all back, Sudan and Somalia sent back none. And the time it took correlates with other measures of government capacity. They go on to make an important point:

"we used these measures to argue that an important reason for poor government in developing countries is not corruption or patronage, but rather the same basic low productivity that plagues the private sector in these countries as well.   Such low productivity is related to inputs and technology, but also to management.    In some ways, it is not surprising that a measure of the quality of government constructed to be free of political influences in fact correlates with standard determinants of productivity; yet it is still important to recognize that not all bad government is caused by politics."

In addition to furthering our understanding of governance and state capacity, post offices play an important immediate role in providing financial access in many countries, particularly for the poor, the less educated, those not working for a wage, and those living in rural areas.

Coach Zoran and his African Tigers

A new documentary, about the first ever manager of the first ever South Sudanese national football team. His name is Zoran, and he swears like a trooper. It's an entertaining story, filmed in 2012 and set against the backdrop of some beautiful footage of Juba amidst the excitement and optimism of independence (in 2011). Particularly poignant due to the recent return to conflict.

It's available on the BBC iPlayer for the next month, watch it while you can (there are free VPN solutions for those not in the UK).

The political economy of why flights are so expensive in Africa

Andrea Goldstein of the OECD emails an old but very interesting paper (ungated here) in response to my post on the AfDB blog about African Airlines.

He makes two points and offers two recommendations

First, in the experience of OECD countries, "liberalisation delivers in terms of quantity, quality, and cost of air transport."

Second, what allowed liberalisation to take place was a political dynamic, driven by interest groups (trade associations and organised consumers) pushing for reform.

So what can or should the OECD do to support policy reform?

One, establish an international authority capable of enforcing safety standards (the ICAO is an obvious candidate).

Two, aid could be used to accelerate the restructuring and privatisation of African airlines.

Neither of these address the issue of opening the skies, which is down to African governments, and African consumers and trade groups to lobby for.

Development as... no measurable increase in happiness

Recent Chinese economic growth has led to half a billion people being lifted out of poverty, without doubt just an amazing wonderful story. The poverty rate halved in just over a decade. Human development - measuring not just income but also health and education, has also leapt.



And happiness? Nothing. No change at all. Maybe a bit of a drop. Measured across three different surveys. Chew on that one.

Data from a new CSAE working paper by John Knight and Ramani Gunatilaka. 

Why are there so few blogs by British academic economists?

In the US, to name just a few, you have

Mankiw
Krugman
DeLong
Acemoglu/Robinson
Becker
Thoma
Cowen/Tabarrok
Easterly
Blattman
Rodrik
Landsburg
McKenzie/Ozler et al
Caplan

In the UK I count

Simon Wren-Lewis
Henry Overman
Danny Quah
Matt Collin

Hypotheses:

1. The bandwagon effect - Mankiw and Krugman are really high profile and have been blogging for years - when the leading textbook author and a Nobel prize winner are blogging then its probably ok (although this bandwagon effect could also effect UK academics)

2. Differences in administrative/teaching burdens?

3. A selection effect - in the UK terminal masters programmes are more common, so natural writers quit before then complete a phd and get sucked into academia

4. A simple quantity effect - some fixed % of academics are likely to be interested in blogging, and there are just many more top economists in the US than the UK (about 6 times more according to this list).

What am I missing?

Why voluntourism might even just do some good

When Pippa Biddle wrote last week about "the problem with little white girls," she was adding to a rich vein of development self-flagellation. I just ventured to google "why voluntourism is good," and the top 3 hits were:

"Beware the voluntourists intent on doing good"

"Is voluntourism doing any good? No!"

"Does 'voluntourism' do more harm than good?"

Pippa writes of her own experience as a voluntourist, including the wonderful story of the Tanzanians staying up all night to rebuild the wall that the white American girls messed up, so they wouldn't know what a terrible job they did.

"It would have been more cost effective, stimulative of the local economy, and efficient for the orphanage to take our money and hire locals to do the work, but there we were trying to build straight walls without a level."

But here's the thing - if Pippa had never gone to Tanzania, she would never have sent her money there. We know this. Despite the dizzying scale of global inequality, the vast majority of charitable spending by individuals in rich countries is spent in rich countries, not poor ones. In the UK just 10% goes overseas. 

And for good reasons. Why do we give? Our giving is driven by empathy. And we can't empathise with 6 billion people at the same time. There's just too much suffering to worry about it all - "we would be in a permanent emotional turmoil". And so we use filters, including critically that our familiarity with a person matters, and our similarity and identification matter.

That is why the Kristof uses "bridge characters":

"The problem that I face — my challenge as a writer — in trying to get readers to care about something like Eastern Congo, is that frankly, the moment a reader sees that I’m writing about Central Africa, for an awful lot of them, that’s the moment to turn the page. It’s very hard to get people to care about distant crises like that. 

One way of getting people to read at least a few grafs in is to have some kind of a foreign protagonist, some American who they can identify with as a bridge character. And so if this is a way I can get people to care about foreign countries, to read about them, ideally, to get a little bit more involved, then I plead guilty."

Or think about the story of Solomon Northup in 12 Years a Slave - I feel almost ashamed to admit, but it is clear that it was so harrowing because he is a middle class guy from New York - someone familiar who we can identify with.

Spending time living in or even briefly visiting a developing country can let you skip the bridge characters. You are now familiar with, and can identify with, a handful of the millions of people living in societies with such a profoundly worse set of opportunities to those of us born in rich countries. That matters. There's a sad irony that having made the empathetic leap, so many who work in development then seem to lose their empathy with the uninitiated. Having made a connection with someone living in extreme poverty, we forget how easy it was to not care before we had made that connection. I'd bet that the vast majority of development workers, even the most hardened economists, really got their passion from some form of real human interaction, not abstract analysis, and yet we pour scorn on young kids who venture out trying to have their own interactions and make their own connections, building their own cross-cultural empathy, because voluntourism is tacky. Does it really matter if it is tacky?

In terms of immediate development impact, village voluntourism is probably mostly irrelevant. We could spend time doing careful cost-benefit analysis of the value for money of having American teenagers build brick walls in Tanzania, or we could reflect on the 90% of our collective charitable impulse which goes on other rich people, the 99% of our government spending which goes on other rich people, or our narcissistic trade and immigration policies which help other rich people, and consider instead what it might take to get rich people to actually really give a fuck about global poverty, and that maybe just maybe that might come through actually living and working with people, even if just for a short time. Travel really does broaden the mind (there is even evidence, some of it randomised). If tacky white saviour marketing for a fundamentally useless project is what it takes to grab some attention away from a video of a cat on youtube, maybe that's worth it?

There is a German translation of this article on wegweiser-freiwilligenarbeit.com

More affordable housing for London?

"Affordable housing" is a phrase which needs to go on the banned list. What does it even mean? Something to do with affordability, and something to do with social (subsidised) housing. Mira Bar-Hillel of the Evening Standard notes the wikipedia definition - affordable for someone on median income - coming to a back-of-an-envelope value of around £100,000 (assuming a mortgage of 4 times a £25,000 salary).

She then seems to go off the rails a bit discussing the application of this concept to an actual development - the new central London Mt Pleasant development.

"of the 700-odd flats proposed, fewer than 50 may be for social renting. It also means that, based on current prices in the area, the private flats could easily fetch a total of over £4bn. And be mainly sold to foreign investors.

So based on those numbers (£4bn for 700 flats), each of these flats could sell for more than £5 million each. And the Evening Standard's Property and Planning correspondent thinks Britain should be selling off £5 million pieces of real estate for £100,000? Is it just me or does that sound totally insane to anyone else?

Meanwhile Labour councillors are angry about Royal Mail being "hell-bent on packing in as much private housing as possible" whilst there are "huge housing shortages in London." Does Labour want less homes in London or more homes?

Why does housing policy inspire such epic logic fails from otherwise seemingly intelligent people?

Why fight (relative) poverty?

I was a bit disappointed by Julia Unwin's new short book "Why Fight Poverty?". The subtitle on the US amazon edition is perhaps a better title: "And Why it is So Hard". The most interesting part of the book is about the emotional responses to poverty that make it it hard to get the public to care - shame, fear, disgust, difference, mistrust. She doesn't address why it is so hard to get the public to care about global poverty.

I knew the book would be about UK poverty (Julia Unwin is Chief Exec of the Joseph Rowntree Foundation, which has been working on UK poverty since 1904), but maybe I hoped for a more substantial treatment of the difference between UK and international poverty. Actually to be honest I was probably just annoyed that she dismisses those (like me) who claim that we should think differently about rich world poverty and extreme poverty in poorer countries. This is the sum total of discussion about international poverty in the book:

"[many] argue that while there is real poverty in other countries, any poverty in the UK is less severe, and describing it as such is misleading and untruthful. They are right to some extent ... [but] All poverty is relative and needs to be seen in context. Needs are relative in every society and differ depending on the price of food and other goods, and social norms ... Because UK poverty is relative, it can be easier to ignore or dismiss - but it is real and affects a sizeable portion of our population."

I've written before about why I'm sceptical about the relative importance of relative poverty, but I also worry about too quickly dismissing the experiences of people living in the UK. Jack Monroe has given powerful descriptions of her own experience living with poverty and hunger in the UK.

"Poverty isn’t just having no heating, or not quite enough food, or unplugging your fridge and turning your hot water off ... Poverty is the sinking feeling when your small boy finishes his one weetabix and says ‘more mummy, bread and jam please mummy’ as you’re wondering whether to take the TV or the guitar to the pawn shop first, and how to tell him that there is no bread or jam."

And here:

"sitting across the table from your young son enviously staring down his breakfast ... it’s distressing. Depressing. Destabilising. ... Imagine those 77 days of being chased for rent that you can’t pay, ignoring the phone, ignoring the door, drawing the curtains so the bailiffs can’t see that you’re home, cradling your son to your chest and sobbing that this is where it’s all ended up. It feels endless. Hopeless. Cold. Wet."

You should read both in full. It breaks your heart. And yet... thanks to her blog, Oxfam invited Jack to Tanzania, to meet some of the people they work with. Jack concluded;

"Our experiences of hunger and poverty are different, but we need to see the similarities too."

Well yes. But let's think about those differences and similarities, and make that comparison.

Going hungry is much more common in Tanzania than it is in the UK. Maybe that makes it relatively less bad, psychologically less painful? I imagine it might. You might be less likely to imagine hunger as a personal failure in a society where it is more common. And yet... Perhaps it's time to put some numbers on this. 

Let's say that the single mother who Jack met in Tanzania - Irene - earns £200 per year. This is below the poverty line, and 15% less than the average (median) income of around £230 a year.

Let's say that someone like Jack living in poverty in the UK earns £10,000 a year. Below the poverty line, and less than half of average income of £21,000 (these numbers aren't exact, but they are realistic).

So if we agree that "poverty is relative and needs to be seen in context", that "needs are relative", well for her relative income, Jack (48% of average income) is much worse off than Irene (87% of average income). But is Jack really worse off than Irene? The same? Similar? Comparable? Remembering that in absolute terms she earns 50 times more than Irene?

What if we flipped it around. Imagine a very rich society. Perhaps it is Britain in 100 years, after 3% annual growth. Average income is now £400,000. A single mother - Abby - living in poverty, earns "just" £100,000. That is a quarter of average income. Relatively speaking, Abby is now much worse off than Jack. Do you feel sympathy for Abby, on her relative pittance of £100,000? Or does that sound silly? And yet Jack is more similar to Abby (Jack earns 10% of Abby's income) than Irene is to Jack (Irene earns just 2% of Jack's income).

Or to take another example, think about this headline from the Atlantic: "America’s 1% live in relative poverty compared to the .01%". The top 1% in America earn a measly $2 million a year, just a fraction of the $30 million that the top .01% earns. If the top 1% all decided to set up their own new country, Richland, should we suddenly start feeling sympathy for the lowly $2 million a year earners, who are on just a small fraction of the median income, and well below the relative poverty line?

The other thing to consider when what we're really interested in is some concept of wellbeing rather just cash, is what happens when we try and directly measure wellbeing? Gallup surveys have asked individuals around the world to rate their own life satisfaction on a scale of 1 to 10. If relative poverty in the UK was comparable to poverty in developing countries in terms of their lived experience rather than in terms of their income, we might expect to see some similarity in self-reports of life satisfaction. 

Well, the difference in life satisfaction is perhaps unsurprisingly much smaller than the income gap (life satisfaction is measured on a bounded 1-10 scale, but income is measured on a much wider and unbounded scale). But the surveys show that even the poorest people living in developed countries like the UK report higher levels of life satisfaction than everyone in developing countries, almost no matter what they earn. You can just about make out from the chart below; the poorest in Britain (GBR) are more satisfied with their life than the richest in Indonesia (IDN), Nigeria (NGA), India (IND), Pakistan (PAK), and South Africa (ZAF) (for more details see the Brookings briefing, based on a paper by Stevenson and Wolfers).

So. In conclusion, I suppose I remain sceptical about relative poverty.

If you are buying flowers for tomorrow, buy them from Kenya

The Mirror has an exposé looking at the shocking conditions of workers on Kenyan flower farms - some earning just £30 a month. 

What they fail to point out is that absolutely the best thing you can do for global welfare is to buy your flowers from Africa rather than Europe. Even if flower-pickers are on a low wage, it's a better wage than their alternative, your spending stimulates the Kenyan economy, and it is even good for the environment (flights from sunny places on the Equator pollute less than all the electric lights you need to grow flowers in cloudy Europe).

Yes be shocked at wage rates in Kenya. But then the best thing you can do to fix that is to do more business with Kenya and spend more money on Kenyan products. Happy Valentine's Day. 

Is it wrong to shop from places that use child labour?

I got told off recently for shopping at H&M because of some sweatshop / child labour scandal (a burden I share with Beyonce who has also been criticised for her H&M links). But is a boycott really the right individual action?

Two new(ish) papers look at the impact of government bans on child labour in India:

One economics paper by Bharadwaj, Lakdawala, and Li (via Berk Ozler) looks at the impact of India’s Child Labour (Prohibition and Regulation) Act of 1986. They find that the ban led to a decrease in child wages and an increase in child labour. This is consistent with the theory that families use child labour to reach subsistence levels - so a ban which leads to a reduction in child wages, will make families make their children work more to earn the same amount and reach that subsistence level.  

Second is a note by my colleagues (Ian MacAuslan, Valentina Barca, Yashodhan Ghorpade and Gitanjali Pande) based on qualitative fieldwork in India (150 interviews and focus groups with both children and adults). Their findings support the results of Bharadwaj et al - parents make rational trade-offs, child labour is driven by household poverty, and outright bans might be counter-productive - better to invest in social protection and improving the quality of schooling.

What does all of this imply for me and my new H&M jumper? I'm not really sure. I asked the question a few years ago in Juba, and further quick googling hasn't got me any closer to an answer. I suppose the theory of change is that individual boycotts could force H&M to improve their procurement and make sure no child labour is involved. But this could either lead to those children leaving the factory and going to school, or perhaps more likely and in line with these two papers, a reduction in the going wage rate for children, and an actual increase in child labour.

Any ideas? References? Once again, I'm left wishing that there existed some rigorous impartial GiveWell-style analysis for consumption decisions so I could outsource some more everyday moral dilemmas and not have to do the thinking myself.

Breaking: The country is going to the dogs

One of many bizarre things about public opinion on immigration in the UK is the divergence in opinion between impacts "on your local area" and impacts on the country at large. People are much more worried about the country than about their local area. 

Sunder Katwala, Director of British Future who commissioned a recent survey showing this fact, said to the Guardian:

"People are obviously very anxious about immigration. But I was struck by how much higher it was as a national rather than a local tension. That to me suggests that managing local tensions is obviously very important, but it is probably not the answer entirely because people have this national-level concern. 

"I think it would be wrong to say that local concerns are real and national concerns are just driven by the media, but I think what is going on there is people asking: does the system work? And I don't think anyone has any confidence as how it is managed as a system. Also there is a concern around national cohesion, identity and ability to cope with the scale of change."

Clearly he's being polite here. How on earth do people know how immigration is affecting the rest of the country except through the media? Are survey respondents travelling up and down the country carrying out their own research each weekend?

A nation is an "imagined community." In your own local area you know people. By contrast: "[A nation] is imagined because the members of even the smallest nation will never know most of their fellow-members, meet them, or even hear of them, yet in the minds of each lives the image of their communion".

So almost by definition it is true that national concerns about immigration are driven by media. 

This phenomenon is not just limited to immigration. A recent Populus survey finds that people systematically think that things are going worse "for the country as a whole" than for "you and your family". Is it even possible for things to be going well for all of us as individuals but badly "for the country as a whole"? What is the country as a whole but the aggregation of all of us individually? 

Maybe just maybe it is in fact our relentless diet of media pessimism that is giving us a distorted view of reality?

Evidence on global education: A lit review in one chart

From Stefan Dercon's presentation at the recent "Town Hall" event on funding opportunities for international education research. He explains further in this blog post. Other presentations from representatives from the World Bank, USAID, and ESRC, are available here. 

The results agenda is yet to take hold in the UK

DFID Annual Budget: £10 billion

Current (domestic) UK Government "Major projects expenditure" with no plans to evaluate impact or value for money: £49 billion (NAO 2013: Evaluation in Government)

My favourite thing about the World Bank Nairobi office

It's a pretty close tie between the Nyama Choma crisps and the statistics-packed toilet paper.

The panoramic view from the 17th floor across Nairobi isn't bad either, but somehow I didn't manage to prioritise taking any photos of that. 

Safety nets and economic growth

Stefan Dercon wrote a paper a couple of years ago about how cash transfers might boost growth - by focusing on investments in ECD, smoothing geographical mobility, or smoothing the school-to-work transition.

To those possible avenues, Harold Alderman and Ruslan Yemtsov (ungated) now add:

• improving financial markets
• improving insurance markets
• improving infrastructure (through public works programmes), and
• relaxing political barriers to policy change

I find the last one particularly interesting. So for example, Ghana recently tried to offset the removal of fuel subsidies with a doubling of the coverage of the still-small national cash transfer programme to 150,000 households - helping to avoid Nigeria-style protests. Alderman and Yemtsov note that Indonesia pulled a similar trick on subsidy reform, and Mexico's safety nets helped usher NAFTA in.

But this political point goes beyond relaxing barriers to policy change, to relaxing barriers to technological change. Otis Reid pointed out to me this paper by economic historians Avner Greif and Murat Iyigun which argues that:

"England’s premodern social institutions–specifically, the Old Poor Law (1601-1834)–contributed to her transition to the modern economy. It reduced violent, innovation-inhibiting reactions from the economic agents threatened by economic change."

To be crude - it's worth paying off the Luddites so they don't get in the way of growth-enhancing technological change.

Economists prove importance of transparency in social protection?

"We find that the mistargeting of a cash transfer program in Indonesia is significantly associated with increases in crime and declines in social capital within communities. Hence poorly administered transfer programs have a potentially large negative downside that extends beyond the pure financial costs that have been the focus of the literature to date."

A new paper by Lisa Cameron and Manisha Shah  (ungated). A similar point made by my colleagues Ian and Nils a few years ago based on some qualitative fieldwork.

Cameron and Shah conclude that:

"This study underscores the importance of targeting programs in a way that is acceptable to the a ffected communities. Program acceptance can be enhanced by improving targeting accuracy and by transparent communication of this mechanism and the program's aims to the general population."

DFID discovers "Economic Development"

Justine Greening sounded very pleased with herself this morning for discovering this thing called "economic development." Very impressive stuff from an "International Development" Minister. Actually the policy changes all sounds pretty reasonable and balanced. I like the talk of new partnerships between UK accountants, insurers, Stock Exchange folks, major retailers, and their counterparts in developing countries. Perhaps just a few things rankled:

"For the first time we have financed business projects in developing countries through returnable loans…which means our money comes back when businesses are successful."

Isn't that what the CDC has been doing since 1948?

"Smart aid can take the form of building a better tax regime, helping to reduce trade barriers, or giving entrepreneurs and small businesses an economic launchpad. 

It can also be focusing on what the Prime Minister calls the Golden Thread. In other words, helping to build the institutions, the values by which individual rights to liberty and property are safeguarded…elements that represent a green light to companies thinking about investing in a frontier economy."

I buy that aid can help improve tax regimes (look at Rwanda and Burundi) and reduce trade barriers. But build institutions? If the lesson you got from Acemoglu and Robinson is that aid can build institutions, I'm pretty sure you're reading it wrong.

"I’m acutely aware that Britain’s future economic strength depends on us increasing our global exports ... We all recognise the importance of the world’s new emerging powers ... But what about tomorrow’s BRICS and MINT countries? ... we could wait until these markets have grown, until they are less risky and the opportunities are more obvious. ... But how much better to start our relationships with these countries sooner rather than later." 

Which is basically fine in practice, but perhaps we should be careful about our language given that actually we started our relationships with most of these countries some time ago ...

(ahem: see the few countries that Britain has not invaded) 

... and that in many cases our self-interested engagement with developing countries didn't work out so well for them (see for example the mysterious case of the disappearing Indian colonial-era textile industry).

"As the Prime Minister has said, we’re in a global race and if we want to be ahead of the game, we can’t simply follow the crowd."

TOO MANY METAPHORS. And finally:

"Smart"

Does repeating the word 11 times make it so?