Finding my religion

A lifelong atheist, I went to church again last Sunday, for about the fourth or fifth time, which I think is enough times that I’ll probably stick with it (and enough that I feel confident talking about it in public without worrying that I’ve accidentally joined a cult).

So despite not believing, I’ve always been curious about religion. Clearly most human beings do believe in something supernatural, which is interesting and worthy of some thought. I was struck a few years ago by Alain de Botton’s book “The Consolations of Philosophy” how my modern liberal ethics and values are not in fact rootless, but deeply rooted in centuries of philosophy, and how us modern liberals are missing something that the church provides - people who’s job it is to be a kind of very practical applied philosopher, translating all this history and helping people to live better and cope with difficulty (Alain then made this argument himself explicitly in a follow-up book “Religion for Atheists”). I’ve also been struck by the economics research on happiness, which finds that people who practice religion tend to be on average happier, and that this is probably partly due simply to turning up to the same place every week with the same group of people, and partly something to do with the actual content - the consolation of the philosophy.

So my very rational calculating mind has turned further and further away from my earlier extremist Dawkins-ist atheism-ism (I don’t like religion because too many religious teachings are homophobic) towards greater curiosity with things like de Botton's "School of Life”, "the Sunday Assembly”, and modern Stoicism. My granddad actually even had a “humanist” funeral (I knew he was not religious but had no idea that he was so actively committed to non-religion), so this strain of thinking clearly runs in the family.

Then one day a couple of months ago I walked past the sign outside the church on Newington Green near where I live, proclaiming itself “The Birthplace of Feminism”, and remembered to look it up when I got home. And so as it turns out, this is the church that Mary Wollstonecraft attended in 1792 when she published “A Vindication of the Rights of Woman”, one of the first works of feminist philosophy, well over a century before the Suffragettes campaigned for votes for women. Pretty cool. And then it turns out, the current Minister of the church, Andy Pakula, is an atheist. An atheist with a PhD in biology from MIT who loves science. He writes: "As a scientist, I would not entertain any ideas that could not be proven in a well-designed, objective experiment.” This is a church that stopped carrying out marriages in 2008 on principle until all couples had equal marriage rights.

And so, living 5 minutes walk away, I really had no excuse not to go. And it’s great, a place of “radical inclusivity”, where you are "welcome whether you are female, male, or other”, or anything else, and people come together to sing and listen to readings and share personal struggles and sit in silence.

This last Sunday before Christmas we had a very appropriately themed set of nativity stories (about weary travellers being told that there’s no room at the inn), seamlessly mixed with a heavy dose of amazing current stories, from a member of the congregation who just got back from spending a week helping and welcoming refugees landing on a Greek island, and from the church's charity of the month, which is a social club named Akwaaba (Twi for “welcome") in Hackey, for refugees, asylum seekers, and migrants. We’ve actually got loads of room at the inn (in fact the inn is facing a massive aging population crisis such that we need millions of working aged people to come live in the inn if we’re going to have any hope of paying for all those pensions), so it’s nice to be around people who appreciate that too.

So to conclude; research suggests that participating in an organised religion makes you happier, and if you’re a woolly secular liberal like me, then there are churches out there that are secular, actively pro- gay rights, pro- migrant rights, and radically inclusive.

Happy Christmas.

If you fancy taking a look, New Unity has a blog, a livestream on Sunday mornings, and a Youtube channel, but obviously none of these compare to being there in person, and there’s also a whole worldwide Unitarian/Universalist church movement (though it’s possible that not all the other churches will have atheist and MIT-trained scientist Ministers).

Do Books “Work”?

It might seem obvious to some of you reading this that it might be possible to learn something from a book. But as a recent review for RISE by Paul Glewwe and Karthik Muralidharan found, researchers have actually so far failed to show rigorously that there is any improvement in test scores in developing countries after handing out textbooks to schools. There have now been four different Randomized Controlled Trials showing no improvement (and for four different reasons).

So when might books “work”? A new paper from the World Bank proclaims to answer just this question: “When Do In-service Teacher Training and Books Improve Student Achievement? Experimental Evidence from Mongolia.”

Their answer, somewhat disappointingly, seems to be “when it happens in Mongolia”. More constructively, though books alone seem to work, they work better when combined with teacher training, reinforcing Glewwe and Muralidharan’s conclusion about the importance of complementarities.

But that “there are complementarities” isn’t a very satisfying conclusion by itself. The more comprehensive hypothesis being developed for RISE by Lant Pritchett is: “when there is an accountability framework which is coherent for learning” – that is, when all of the relevant actors are held accountable for common goals through clear delegation of those goals, and have the resources to accomplish them. We’re hoping that this accountability coherency system diagnostic can be a useful tool for thinking through systematically what it is about specific contexts that mean that interventions work in some places and not others. What is it about Mongolia which means that providing books alone can be enough, in contrast to those other studies in Kenya and Sierra Leone? It just might be a coherent accountability system.

This post was first published on the RISE blog

No, Rwanda didn't "fiddle" its poverty stats

A couple of weeks ago, France24 ran a story featuring accusations by Belgian Professor Filip Reyntjens that the Government of Rwanda had manipulated its poverty statistics. The truth, to my relief*, is somewhat less exciting.

What seems to have actually happened, is that Rwanda quite resonably decided to update the methodology for calculating what the poverty line should be, but then found that the new methodology led to an implausibly high poverty line, and so decided to (slightly arbitrarily) “adjust” the new methodology, resulting in the final poverty line being almost exactly what you would have expected it to be had you simply updated the original poverty line for inflation.

It took me a while to figure all this out, as the original criticism and rebuttal by NISR weren’t entirely clear, and it was only in Filip’s reaction to NISR’s rebuttal that I grasped his (mistaken) point (here’s also the Rwanda EICV4 Report and EICV3 Report).

How is poverty measured?

Rwanda has followed a fairly typical process – set a poverty line by first defining a minimum quantity of calories needed, second working out how much it would cost a poor person to buy that many calories, third increasing that amount by 40% to account for some basic minimum non-food spending needs. Then to get your poverty rate, just calculate how many people spend less than the poverty line.

What was the disagreement about?

Rwanda’s poverty line was set in 2001 based on how much it cost then to purchase a basket of goods that poor people bought back then. You need to keep your methodology consistent over time to allow for fair comparisons, but its also reasonable to think that the minimum consumption basket is likely to change over 15 years of rapid growth.

The government of Rwanda decided to keep the minimum assumed number of calories (2,500 per day, which is pretty high), but change step 2 – the way of working out how much it costs to buy these calories. In a normal survey year, this cost is simply updated for inflation (even if prices and consumption habits have changed in the meantime). This year, Rwanda decided to make an update to the prices and consumption habits, but found something odd. Most poor people consume far fewer than the minimum number of calories – almost half. So how do you construct a hypothetical “ bare minimum" food consumption basket, that is twice as big as what people actually buy? Do you just double everything? Or do you assume that if people bought more food than they did, they might buy more of some items than others? This is where the big disagreement presumably came. Rather than choosing to simply double everything, the Rwandan stats agency made a few arguably arbitrary choices about which items to increase and which to decrease, that has a big effect on the overall price of the basket, and therefore the overall poverty line, and therefore the poverty rate.

Why is Filip Reyntjens wrong?

Filip argues, correctly, that Rwanda’s assumptions about how to scale up consumption patterns to reach their minimum calorie basket, affects the overall line. In fact, their adjustments reduce the line by 19%. But his next step is wrong. He argues that as this new methodology line has been reduced by 19%, we should also reduce the 2010/11 line by 19%, giving a substantially lower poverty rate in 2010/11, and therefore an increase in 2013/14. But he misses the intermediate step – the Rwandans didn’t just adjust the new food basket, they first also calculated a whole new food basket.

Yes, what should really happen is for the new methodology to applied retrospectively to all the old survey data to allow for truly comparable numbers, but the adjustment made to the new methodology leads you to a poverty line that is basically the same as it would have been with the old methodology anyway.

Implications for how we measure poverty?

One thing that this choice really highlights is the number of assumptions you sometimes need to make, and the fragility of the whole concept of poverty estimates.

Here's an example of another seemingly arbitrary choice of assumption with big consequences – the Indian stats agency used to measure poverty with surveys that asked people how much food they had bought in the last 30 days, longer than practice elsewhere which uses 7 day recall periods. To their great credit the stats agency decided to run a randomised control trial to test these two methods against each other. The result was that moving from a 30 day to a 7 day recall period increased measured consumption massively – and reducing poverty by 175 million people – close to half of all those in poverty (from Angus Deaton’s 2014 LSE lecture, via Nic Spaull).

The bottom line: measurement is hard, and it is possible for reasonable people to disagree, without there necessarily being any nefarious trickery.

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* Relief, because I have previously worked both for OPM as a staff member, on a project with OPM for the Rwandan Stats agency, and directly on a project for the Rwandan Ministry of Finance.

Why Germany is probably doing more for Syria than the UK

How do you compare the good that the UK is doing with its whopping 0.7% aid budget, against the good that Germany is doing by accepting large numbers of refugees? A smart (German) friend asked me if there are any numbers on the size of the remittances we might expect to see from Syrian refugees in Germany to Syria. Of course, remittances are far from the most important reason for accepting refugees, but they do allow for a nice easy cash sum with which we can make a comparison to aid flows.

The UK is spending somewhere between £200 million and £400 million on Syria this year. For comparison, whilst Germany is ramping up aid spending, it is still less than 0.4% of GDP overall.

But in terms of numbers of refugees, Germany expects to take 800,000 this year (compared to just a few thousand in the UK), though fewer than that have been documented so far, and not all will be Syrian. Let’s assume for a moment that the total will be 400,000 from Syria, and they will be quickly processed so that they are able to work. If every Syrian refugee in Germany was able to send home £1,000 to family and friends, that already equal Britain’s aid budget for Syria. Is £1,000 a realistic prospect? One way to think about this is to look at remittances from existing migrants in Germany (p33) to the middle east. There are currently around 67,000 migrants from Lebanon living in Germany, who send back to Lebanon almost $1 billion a year - that’s around £9,500 each, which seems almost implausibly large, but who knows, the Chinese and Vietnamese also send home large sums, and the Nigerians send home even more. In any case, it certainly seems plausible, even likely, that Syrian refugees to Germany, once permitted to work for even low German salaries, will be able to send home at least £1,000, if not more.

Is “technical assistance” counterproductive?

Duncan Green reviews a fascinating new AidData survey on what developing country policymakers think about donors.

One of the key findings he points to is that

"Reliance upon technical assistance undermines a development partner’s ability to shape and implement host government reform efforts. The share of official development assistance (ODA) allocated to technical assistance is negatively correlated with all three indicators of development partner performance."

Obviously alarm-bells should be ringing about such firm causal conclusions being drawn from a correlation. One of the best ways of assessing these things is with some rigorous eyeball econometrics - take a look at this chart showing the relationship driving that claim.

Looks to me like that is a pretty weak relationship, and you could just as easily have drawn a totally flat line (no relationship). And indeed, deep in the weeds, Table E.11 tell us that this is a simple correlation between these two variables with a sample size of just 44 data points (countries). It might technically pass a statistical significance test, but it doesn’t really tell us that there is a reliable correlation, let alone causality. And even if you believed the estimated negative relationship - it’s really not huge - implicitly going from 0% aid on technical assistance to a massive 50% of aid spent on technical assistance would only reduce the perceived quality of your advice by 0.55 points on a 5 point scale.

Bottom line for technical assisters - don’t give up your day job quite yet.

Why are people so opposed to immigration? #142538

As the evidence piles up that migrants don’t steal jobs (one of the implications of them being human beings is that migrants also buy stuff - so they create exactly as many new jobs as they “take”), some of the more sophisticated immigration opponents turn to the negative impacts of immigration on other things such as housing or public services instead to support their case.

So what does the research evidence say about the impacts of immigration on public services? Really very little actually. The University of Oxford’s Migration Observatory says that there is “no systematic data or analysis.” In health, we know that many healthcare providers are immigrants, but it’s hard to know the impact of migrants as users of health services as (rightly) nobody records people’s migration status when they go to the doctor.

Using household survey data, Jonathan Wadsworth at Royal Holloway found that (shock!) immigrants tend to use GP services and hospitals at roughly the same rate as natives (via Ferdinando Giugliano in the FT).

Taking another approach, a new paper by Osea Giuntella from the Blavatnik School of Government at Oxford, combines household survey data with administrative data on NHS waiting times. Do you need to wait longer for a referral or in A&E in places where there are more immigrants? Come find out at the CGD Europe research seminar on Weds 18 Nov (there will be sandwiches).

First RISE Working Papers

The first set of working papers from RISE (Research on Improving Systems of Education) are out.

Paul Glewwe and Karthik Muralidharan have an updated review of everything we know about rigorous evaluations of interventions to improve learning in developing countries (paper here, my comment on the RISE blog here).

Rukmini Banerji describes how a disruptive pedagogical innovation spread (and didn’t) in Bihar, and Kara Hanson tell us what education can learn from health systems research.

Mari Oye also has a blogpost up about the UN Myworld survey and the SDGs.

Coming soon, Lant’s consolidated explanation of what an Education System actually is, grand general theory of why some things work sometimes but not all the time, and tentative framework for diagnosing systems for constraints and prioritising action. Watch this space.

We have no idea what countries are spending on education

Listen to some international education people and you get the impression that the education problem is mostly solved if we could just spend more money. The story goes something like “Poor countries spend X on education, if they could 1.5X then all the kids could get a good education, they can’t afford 1.5X, so we should fill the gap with aid."

The reality is, even if it was the case that just filling the gap would solve the problem (which is dubious to say the least) , we don’t really even know what the gap is.

This is Silvia Montoya, Director of the UNESCO Institute for Statistics:

"governments need detailed and disaggregated data to ensure that their resources are allocated equitably and effectively within their education systems. At the same time, donors need the data to better evaluate whether the aid they provide is an incentive for governments to increase spending commitments or if they are crowding-out domestic resources.

For the moment, the availability and completeness of education finance data is unfit for these purposes, with less than one-half of countries able to regularly report key information, such as total government expenditure on education” (my emphasis)

Nevermind the purpose of accountability and transparency to the citizens of developing countries...

Good luck to the new Commission on Financing Global Education!

Does foreign aid harm political institutions?

Good news for reflective aid business -types who like agonising about what the point of it all is and sometimes wondering whether we’re even making things worse (err... talking about a friend... not me...). Also even good news for developing countries I suppose.

A new paper in the Journal of Development Economics by Sam Jones & Finn Tarp* using new data on aid (from aiddata.org) and institutions (from the Quality of Government Institute) finds no evidence that aid has undermined institutions on average, if anything there seems to be a positive relationship. I’m less confident in the positive findings than reassured that in *none* of their various different approaches is the relationship negative.

Now you’re probably thinking “what about the 2006 CGD review paper by Todd Moss, Gunilla Pettersson & Nicolas Van de Walle, described by Blattman as "the best summary I know of the evidence”, which concluded that aid could have a harmful effect on institutional development”? Well the word “could” is important there - that conclusion was somewhat speculative, and this new evidence from Jones & Tarp fills an important gap in terms of systematic quantitative evidence on this topic, and should probably shift your priors at least a little in that direction.

I wonder what Angus Deaton would say?

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* Thanks to UNU-WIDER the paper is open-access, which is great for what it is, but obviously having public institutions pay private journal owners something greater than the cost of production isn’t an ideal long-run equilibrium, and we really need something that fundamentally shifts the whole publishing industry.

The State of the Humanitarian Aid System 2015

“ALNAP” launched today the 2015 “State of the Humanitarian Aid System” Report.

One of the key findings highlighted in their fancy infographics:

"44% of aid recipients surveyed were not consulted on their needs by aid agencies prior to the start of their programmes”.

In totally unrelated news, the DFID-ODI-CGD High Level Panel on Humanitarian Cash Transfers chaired by Owen Barder published it’s report a few weeks ago, arguing that much more use should be made of cash transfers, because most of the time they are more cost effective than giving out stuff.

In further totally unrelated news, DFID published two press releases today highlighting substantial non-cash aid in response to humanitarian crises in the Central African Republic and Malawi.

In Owen’s words: "the questions should always be asked: “Why not cash? And, if not now, when?”"

Is rescuing migrants from the Med good value for money?

Thousands of people die each year trying to cross the Mediterranean to seek asylum in Europe. Christopher and Regina Catrambone, American and Italian entrepreneurs, decided to take matters into their own hands and set up their own private rescue mission.

Naturally when I read that

"a fundraising drive by the activist organisation Avaaz reached $500,000, slightly less than a month’s costs”,

I started wondering about cost effectiveness. Elsewhere the Guardian article states

"Setting up Moas was not cheap, with monthly operating costs of up to €600,000"

and

"The Phoenix rescued 1,462 people in 10 weeks"

So let’s go with the higher figure of €600,000 per month - over 10 weeks (2.3 months) that is a total cost of €1.4m (roughly $1.6m or £1m). And to save 1,462 people, that is a cost of £700 (~ $1000) per death averted.

Is that a lot or a little? As Owen has pointed out, the UK NHS considers anything less than £100,000 per death averted to be good value for money.

At the other extreme, childhood vaccinations, "long recognized as among the most cost-effective uses of limited health resources in low-income countries” (Disease Control Priorities) cost $275 per death averted.

At face value, Catrambone’s "Migrant Offshore Aid Station" (MOAS) looks like a pretty good value for money philanthropic bet.

Effective Altruism, RCTs, NGOs, & the Government End-Game

Good Ventures just gave a $25 million unrestricted grant to Give Directly on the advice of Givewell. That’s a lot of good news in one sentence, but it’s not even the best part. Givewell buried the lede when they mention around paragraph 20 that;

"GiveDirectly plans to discuss partnerships with the following types of institutions:

- Donor aid agencies
- Developing country governments (national and local). (For example, several governors in Kenya have already approached GiveDirectly about running cash transfer programs in their counties.)"

That’s what it’s all about. To really get sustainability and scale in social policy you need government involvement - that’s why the best NGOs combine a mixture of immediate direct service delivery in places where government just doesn’t have the capacity to deliver, with support to interested governments to build that capacity for the longer-term, often at the local level where administrators struggle to actually implement well-designed central policy documents, and with innovation in new models of service delivery, that governments might later adopt, of which GiveDirectly is clearly a strong example. Similarly whilst Innovations for Poverty Action and J-PAL may have started off following that recently infamous Kremer-Miguel deworming study by working on service delivery through small NGOs, their focus is on things that can work at scale, and having built a reputation through working with NGOs have been able to transition to working with governments (for example in Ghana and Peru).

As Jessica Brass writes,

"Government and NGOs learn from each other to improve what they do. In particular, many government agencies notice the successes achieved by NGOs and, whether intentionally or not, mimic their actions"

So yes, maybe some of the effective altruists can be accused of being philosophers not development wonks, and potentially even naive about politics, but for every anecdote-backed theoretical case for how aid might undermine the process of building citizen-state accountability, I can come up with an anecdote-backed theoretical case for how aid can support improved governance through innovation in service delivery models, and until we get some quantitative evidence on the issue, I don’t see how else we’re going to resolve the debate.

Did I miss anything?

New education economics papers

A few papers caught my eye from last month's repec new education economics papers feed. All from developed countries, but such is economics, a lot of the interesting new research happens on rich countries where the researchers are more likely to know about interesting policies and institutional features to study, and where there is better data (both problems which RISE is seeking to address, by encouraging collaborations between developing country-based researchers and leading academics based at top universities in rich countries, and also by funding new data collection in developing countries).

"Quantifying the Supply Response of Private Schools to Public Policies” by Michael Dinerstein and Troy Smith looks at a reform in New York which increased the budget for some public schools, finding an increase in enrolment at these schools, and that nearby private schools lost business and were slightly more likely to shut down. In an interesting twist, whilst the reform improved quality at the public schools that received extra money, the movement of some students from higher quality private schools to lower quality public schools meant that overall outcomes from the school system were not improved. All of which reminds me of the recent story from Rwanda that some private schools seem to be going out of business by the growth of public schools. What is that shift doing to the overall quality mix?

“The Information Value of Central School Exams” by Guido Schwerdt & Ludger Woessmann compares students in Germany who graduated from states which use a centralized common school-leaving exam to those with a local school-set leaving exam. Better grades are roughly three times more valuable in the labour market when they come from centralized exams than from school-set exams. In Lagos, private school associations are currently in the process of joining together to put their students through common school leaving exams for partly this reason.

Nicola Bianchi’s Job Market Paper looks at "The General Equilibrium Effects of Educational Expansion” - when Italy expanded STEM higher education in 1961, enrolment increased by 200%. However - those students who enrolled didn’t earn any more than they would have had they not enrolled, because the massive increase in the supply of qualified students reduced the labour market premium for that qualification, as well as the quality of education suffering due to congestion and peer effects. Which of course should remind you of Lant’s classic “Where has all the education gone?"

How much does the new deworming replication matter for Effective Altruists?

It doesn’t at all, as far as I can tell. As Calum points out, what matters is the systematic review of evidence not one study. And the new Cochrane systematic review doesn’t seem to have responded to the criticism from Duflo et al to their 2012 review, that it ignores quasi-experimental and long-term evidence on positive impacts of deworming (specifically Bleakley 2004, Ozier, and Baird et al).

A replication of the famous Miguel and Kremer deworming paper that launched the whole RCT in development economics movement, is published in the Journal of International Epidemiology today (along with comment from Hicks, Kremer, and Miguel, and reply from the replication authors), with coverage in the Guardian and by Ben Goldacre for Buzzfeed.

You may remember Berk Ozler's review of the draft of the replication paper back in January - concluding

"Bottom line: Based on what I have seen in the reanalysis study by DAHH and the response by HKM, my view of the original study is more or less unchanged."

You can probably expect to see more on the replication coming from @cblatts, which I’m not going to get into, but back in 2012, Givewell were convinced that the Cochrane review shoudn’t change their recommendation to donate to the Schistosomiasis Control Initiative or Deworm the World.

The ambiguity does make me a little queasy, and pushes me more in the direction of GiveDirectly (I see basically zero risk that giving $1000 to someone on a very low income can really be totally wasted, in the way that an ineffective drug could theoretically have zero impact).

Migration fact of the day

"Today, approximately 7 million Indians work in six GCC countries, which is more than 50% of estimated 13 million foreign workers present in the GCC. The Indian workers in GCC remit about US$40 billion i.e. around 57% of the total remittances, i.e. US$70 billion India receives annually. Besides contributing significantly to the national forex reserves, the remittances received directly by the workers’ families help in poverty alleviation, support local business, promote entrepreneurship and generate employment."

That’s Zakir Hussain on the World Bank blog. Worth remembering this context next time you read a scandal about the poor treatment of Indian workers in the Gulf.

Calling Education Researchers…

I just got back from the fourth of seven events being held around the world drumming up interest in bidding for the RISE “Research on Systems of Education” project. There is £21 million of DFID money to be split between 5 country research teams (with a preference for bids from Ethiopia, Nigeria, Ghana Pakistan, India, Indonesia, Vietnam, or other DFID focus countries) to study reforms that are happening to education systems that might credibly have a big impact of student learning. EOIs due 23rd August. 

strong turnout for Abuja @riseprogramme meeting and #educationsystems reform discussion! @LeeCrawfurd pic.twitter.com/GV3gsNQQvX

— Mari Oye (@marimoye) July 13, 2015

There is plenty more information on the CGD website and the new RISE website,  but to make things really easy, here are a few key links about the project and how to bid (very helpfully put together by Mari).

• RISE Research Director Lant Pritchett and Justin Sandefur presenting the research agenda (Video)
• Slides (PDF)
• Expression of Interest scoring criteria  (PDF)
• Full RISE Terms of Reference (needed for proposal due November) (PDF) 
• Frequently Asked Questions
• Online form for submitting any additional queries
• Registration for matchmaking for looking for research partners (optional) 
• Lant Pritchett's book, "The Rebirth of Education"

New evidence on (lack of) external validity

"Site selection bias" can occur when the probability that a program is adopted or evaluated is correlated with its impacts. I test for site selection bias in the context of the Opower energy conservation programs, using 111 randomized control trials involving 8.6 million households across the United States. Predictions based on rich microdata from the first 10 replications substantially overstate efficacy in the next 101 sites. Several mechanisms caused this positive selection. For example, utilities in more environmentalist areas are more likely to adopt the program, and their customers are more responsive to the treatment. Also, because utilities initially target treatment at higher-usage consumer subpopulations, efficacy drops as the program is later expanded. The results illustrate how program evaluations can still give systematically biased out-of-sample predictions, even after many replications.

H. Allcott in the QJE

Celebrating more Brits

The population of the UK has increased by 500,000 in the last year.

Unlike what you may read elsewhere, this is great news.

- British people are great - having more of us is better
- London is the best part of Britain, and not coincidentally the most populous and densely populated part
- Population growth is concentrated in cities
- Larger cities support economies of scale, more specialisation and diversification, enabling the clusters of activity and agglomeration that drive innovation
- A larger population means a greater supply of innovators
- A larger population means a greater demand for innovators, and a bigger market for producers
- A larger population means more people to share the burden of fixed costs, including national debt

Of course there are costs to crowding, and we need to plan for more infrastructure provision (not least building more housing), but that’s just part of life and really shouldn’t be beyond our wit.

Global Organ Trade

Here’s a great idea from Al Roth, the 2012 Economics Nobel Prize winner.

Al got his prize for developing his theoretical matching ideas into a computerized kidney exchange - so if you want to donate a kidney to a family member but you aren’t the right match, you can find another pair of people in the same situation from a different city and criss-cross the pairing, so both kidney transplants can go ahead.

In his new book (reviewed here by Alex Tabarrok), Al proposes extending the kidney exchange internationally.

"Mr. Roth, however, wants to go further. The larger the database, the more lifesaving exchanges can be found. So why not open U.S. transplants to the world? Imagine that A and A´ are Nigerian while B and B´ are American. Nigeria has virtually no transplant surgery or dialysis available, so in Nigeria patient A’ will die for certain. But if we offered a free transplant to him, and received a kidney for an American patient in return, two lives would be saved.

The plan sounds noble but expensive. Yet remember, Mr. Roth says, “removing an American patient from dialysis saves Medicare a quarter of a million dollars. That’s more than enough to finance two kidney transplants.” So offering a free transplant to the Nigerian patient can save money and lives. It’s hard to think of a better example of gains from trade (or a better PR coup for the U.S. on the world stage). Better matching with computerized markets is saving lives, but more than 100,000 people are still waiting for kidneys in the United States alone."

Graduate Jobs in South Sudan

Looking for your first job in international development? Charlie Goldsmith is hiring in South Sudan;

"International development work is generally best done by people of the country in question: there is no shortage of talent in and from any of Somalia, South Sudan, DRC, or any other FCAS place you might name, only the conditions in which it might be deployed and developed. 

But there is still a role in development work for people from the Global North if they have the right skills, the humility, understanding and connection to apply them well where they are sent, and hopefully the intention to continue to apply them in this work for the medium term. That doesn’t just mean water engineers and hard-bitten Treasury hands, it can also mean the high-achieving, high-potential generalists/fast-streamers that any organisation, the world over, would be glad to have. 

But for those bright young people, getting into international development is not always straightforward: it can seem unwise to set off to a fragile state with no particular fixed plan, as many of those now working in this sector first did; getting to, and staying in, some of the places we work is expensive even if you do have systems already set up, let alone if you’re doing this the first time, straight out of College. 

This Autumn, we are therefore going to be looking to hire up to six CGA Fellows to send to South Sudan, who will be either immediate or fairly recent graduates."

Innovative education financing modalities from 1862

Apparently payment by results isn’t quite so new.

"The reference here is to England’s Payment by Results school reform of 1862. According to the Revised code of the Department of Education in Britain in 1862, capitation grants to schools were reduced and payments were made to school on the basis of students passing on-site examinations given by inspectors in reading, writing and arithmetic. There has been much debate among historians about what the payment for results reform really accomplished. Mitch (2010) looks at educational performance across British counties over the 30 years of the policy and shows that during this time, inequalities across counties declined. But in the absence of data on trends prior to the reform, it is hard to establish whether this was a consequence of the reforms. In contrast, the quote here paraphrases Matthew Arnold, a poet and school inspector who returns from a trip to France and notes: “I find in English schools…..a deadness, a slackness and a discouragement….This change is certainly to be attributed to the `Payment by Results’ school legislation of 1862.”(Great Britain Privy Council 1868, Page 290)."

From a new paper by Andrabi, Das, & Khwaja

The learning crisis in Sierra Leone

"Mohammed’s father is an illiterate petty trader. Although he never got any school himself, he has always been determined that Mohammed [13] should get a good education. When Mohammed joined us, we asked him, as we ask all our students, to complete a word reading assessment. The assessment, which we administer one-to-one in the child’s home, involves reading out a list of 90 words that increase in complexity and difficulty, and from the number and difficulty of the words read correctly an inference can be drawn about the student’s reading age based on UK norms. 

Mohammed got stuck straight away. He barely made it past the first line or two – words like ‘he’, ‘she’, ‘cup’, ‘said’. Mohammed’s father couldn’t read but he could see that his son was struggling and did his best to encourage him. “Try your best Mohammed”, he said. And Mohammed did. He kept trying. But no matter how long he took he couldn’t recognise the words, and eventually we had to call time on the test. Mohammed’s father was heartbroken. “I’ve paid all this money for school,” he said, “but his head is empty.” 

Unfortunately, Mohammed’s story is far from unique."

From an essay by Paul Skidmore, CEO of the Rising Academy Network

Does spending on education increase learning?

Evidence from the Guardian UK university ranking, which scores universities both on their value-added (final exam scores minus pre-university exam scores - a measure of how much students learnt at university), spending, and student-staff ratio.

aaaand surprise surprise, spending looks totally uncorrelated with learning.

Smaller class sizes do seem to be doing something (small sample sizes, correlation not causation, yadda yadda), which makes you wonder what the high-spend, large class-size universities are spending all their money on.

National Development vs Poverty Reduction, in charts

These charts by Branko Milanovic deserve looking at again and again. A few years ago Adrian Wood told my entire economics class to print off the Angus Maddison long-run world GDP chart and stick it on our walls so we’d look at it every day. I’d suggest adding the Milanovic chart alongside it.

I was struck earlier today (whilst listening to the latest Development Drums) how these charts could be used to illustrate the comparison between anti-poverty programs and National development that Lant talks about.

Projects to increase an individual’s income in developing countries can help people get a better livelihood amongst those available in that country, but they probably aren’t going to change the overall set of opportunities facing people living in a country. If you want to earn yourself rich, you need to sell stuff to rich people - that means exporting goods or services to rich countries (trade), moving to a rich country to sell your labour (migration), or encouraging rich people to come visit your country (tourism).

Graphically, the most successful ever anti-poverty program might at best move a bunch of people from point A to point B.

By comparison, migrating lets someone move from point C to point D.

And for something truly transformative, national development, probably based on exports, allows the whole country to shift up from E to F.

Anti-poverty programs can’t solve poverty.

The philanthro-nik manifesto

"We—the philanthro-niks—want more philanthropy to be strategic. Our fundamental challenge is this: that social change is hard and calls for slow thinking, but most donors will only think fast. It therefore falls to us to do the work that Thaler describes: get the evidence, and make it easy."

Caroline Fiennes in the SSIR

The impact of voluntourism

Interesting new paper on the impact of working for Teach for America on outcomes for the teacher (with causal identification from an application discontinuity) by Will Dobbie and Roland Fryer.

Participating in TFA increases racial tolerance, makes individuals more optimistic about the life prospects of poor children, and makes them more likely to work in education

I’d love to see a study like this for voluntourism in developing countries. HT: Kevin Lewis

How to live well

Some interesting ideas from Alex Evans about the importance of building a movement

"Rich and I set out the need for a different theory of influence. Many of us who work in the fight for development, justice, and sustainability have I think been feeling the limits of theories of change that rely primarily on ‘insider lobbying’. We take that here as our starting point for asking what an alternative approach might look like: one that places much more emphasis on how we build new grassroots coalitions, transform values, and tell each other much deeper stories about where we are, how we got here, where we might choose to go next, and who we really are."

and then what those movements should do

We argue that it starts with the changes that all of us need to make in our own lives. This is partly because of the direct impact that such changes can have, of course, but we think the main issue here is something to do with the quality of intention that movements exemplify. Wherever movements not only demand but live out the change they want to see in the world, there’s a raw power there that can exert the kind of non-linear effect on politics that progressives so urgently want to see.

and from the full report

In practice, we think there are five areas that each of us needs to think about, which we describe in more detail below:

1. Live within our fair share of the world’s resources and environmental limits
2. Respond to poverty and inequality with radical generosity
3. Speak out prophetically
4. Use our power as a voter, a citizen and a consumer
5. Live restoratively and prioritise relationships

All of this is in a report for Christian Aid and supported by references to the bible rather than econ journals. Personally I’ve shifted somewhat from a Dawkins atheist to a de Botton atheist, and think there are important lessons here too for emerging secular congregations.

South Sudan: A Cartoon History

This is amazing: an actual real cartoon history of the latest round of civil war in South Sudan, words by Alex de Waal. (via Tom)

Labour Beyond Aid

The UK Labour Party has a new pamphlet out with ideas for future development policy, labelled "Beyond Aid."

How does it measure up?

CGD looks at 7 components of "Commitment to Development" in the annual index; aid, trade, migration, security, environment, technology, and finance.

Labour's pamphlet talks extensively about 2 of the 6 non-aid components of the index: the environment and security.

There is next to nothing on trade, migration, technology, and finance.

Out of 26 countries, the UK ranks 4th overall which is pretty good. Though that varies a lot between the components; Aid (4), Trade (7), Finance (2), Migration (13), Environment (11), Security (7), Technology (20).

There's more to International Development than Aid, but also more than climate change and security. 

The Emerging Middle Class in Africa

Apparently I missed this, but a book I contributed to back in 2012 along with colleagues at OPM was published by Routledge in October last year, edited by Mthuli Ncube and Charles Leyeka Lufumpa at the African Development Bank.

It's a snip on Amazon at only £27.99, or you can read it on Google Books here.

I'm not sure which is my favourite review;

"This book is uplifting, methodologically and intellectually sound, and rich in policy prescriptions. A must read for researchers, educators, policy makers, and global partners. As AERC (www.aercafrica.org) Executive Director, I am heartened by this policy and intellectually rich book"
–Lemma W. Senbet, Professor and Executive Director, African Economic Research Consortium and The William E. Mayer Chair Professor of Finance, University of Maryland, USA

or

"a timely topic, by genuine experts" –Paul Collier, University of Oxford, UK

Cheers Paul.

Never Mind Development, here's Nirvana

The biggest cash transfer programme in the world continues apace, as subsidies for fuel in India which used to be paid to fuel companies are being redirected into consumer's bank accounts.

Continuing the push to extending coverage under the Aadhaar program, targeting enrollment for 1 billion Indians; as of early February, 757 million Indians had been bio-identified and 139 [million] Aadhaar linked bank accounts created;

...

The heady prospect for the Indian economy is that, with strong investments in state capacity, that Nirvana today seems within reach. It will be a Nirvana for two reasons: the poor will be protected and provided for; and many prices in India will be liberated to perform their role of efficiently allocating resources in the economy and boosting long run growth.

From India's recently published 2014-2015 Economic Survey led by Arvind Subramanian, the government's Chief Economic Advisor (and on leave from CGD) HT: Vinayak Uppal

"I didn't come into politics to distribute money to people in the Third World!"

Justine ‘I didn’t come into politics to distribute money to people in the Third World’ Greening, the UK Development Minister, spoke at Sussex yesterday. I wanted to ask her if the above quote was true, but she over-ran the allotted 20 minutes, leaving time for only 3 questions before she was whisked off by her advisors. I also wanted to ask, given she was apparently so proud of her focus on emergencies and the UK response to Syria, why the UK has only taken in 143 Syrian refugees out of 380,000 people in need of resettlement, and whether, given her pride in cross-government collaboration, she agrees with the actual real not-taking-the-piss Foreign Office policy that it is better to let Syrian refugees drown in the Mediterranean, because rescuing them would create a "pull factor", or whether on the contrary she agrees with the churches, that this is an "abdication of moral responsibility."

 

She also seems to think that she invented the idea of economic development and that investing in ports and infrastructure might be an original idea. Did someone forget to brief the Minister about what the "WORLD BANK" has been doing for the last 50 years? Also whilst it may be important to make the case for aid to many audiences, this was not one of them. Seriously, she told us about the importance of aid for our own (UK) self interest about 3 different times (note probably at least half of IDS and I imagine the audience were not even British, and those that were are presumably firmly committed development people).

 

Snark aside, DFID gives us a lot to be proud of, we give a lot of money, and on the whole I think we give it well. It's just a bit depressing when our dear development leader looks so bored by the whole thing (or perhaps I'm just reading her as uninterested because of the alleged quote above?). Amusingly, the former accountant's eyes only really lit up when talking about a project sending folks from the Institute of Chartered Accountants to Zambia (though that is probably honestly a brilliant idea). She also clearly looked most pleased talking about the projects which involved some kind of new gadget or had some benefits for Brits - be it the aid match to double your donations to NGOs, the International Citizen Service, or school twinning. All fine ideas, but perhaps not the most transformative.

 

I should add that I didn’t think Mary Creagh’s vision was all that much more inspiring, despite Charlie’s reminder that the universal health care focus is a good one. Which is all quite odd in the context of the recent 0.7 bill. 

What I've Been Reading

Giles Wilkes (whose FT leaders really are good) nails something profound;

"I’ve been trying to work out what has been stressing me these last, ooh, 25 years and how to adjust my life accordingly. I don’t want stress, if possible. There have been obvious triggers: [insert impressive CV here]. 

But a constant thread that laces through all these eras is a pressing need to have read what I thought needed reading. I cannot actually recall a time when a nagging sense of not having read enough didn’t weigh on me. Back in the 1990s the pleasure of visiting a bookshop was always interwoven with a gnawing sense of guilt and negligence on my part, at all the unread pages around me. This was compounded by the typical style of a normal book review, which in praising or condemning its subject would usually make reference to half a dozen other authors or works. The Sunday Times Review section became a risk, adding piles to the mental “to read” list."

"That UN -- I will shut it down"

A gloriously unhinged rant from South Sudan's information Minister. It would be funny if it wasn't so sad (via: Dustin Johnson). 

In remarks yesterday, Minister of Information and Broadcasting Michael Makuei slammed not only the United Nations but also local media houses, East African ceasefire monitors, and Human Rights Watch, which he described as an organization of blood-sucking liars. 

... 

Makuei said he told [Al Jazeera correspondent] Adow that he was "lucky" not to have been imprisoned "like the man in Egypt" -- a reference to Al Jazeera correspondent Peter Greste. 

... 

"We will write to you today, officially, giving you the final warning, because this has been repeating itself -- I have been calling you, your people, your muzungus [i.e., white people] have not been reporting to me, they resist coming to me because they believe that they are UN. Huh? that UN -- I will shut it down," he said. 

... 

"These are people who must make their living by sucking the blood of others," he said of Human Rights Watch. "Mosquitos," added Cabinet Minister Martin Elia, concurring.
"Mosquitos, yes," said Makuei.

Lampedusa Update

In 2013 the deaths of 366 migrants at sea off the coast of the Italian island Lampedusa caught the headlines. Last week another 300 died. Last year, it was an estimated total of 3,500. 

European governments, including the British one, are opposed to rescue missions on the grounds that this creates a "pull-factor" encouraging more people to make the trip. How does that claim stack up? We now have the first month's data since the end of the Italian Mare Nostrum rescue mission. 

In an interview with Mark Goldberg, John Dalhuisen of Amnesty International cites UNHCR figures that there were 60% more sea arrivals in Italy in January 2015 than January 2014, despite the widely publicised ending of the sea rescue mission. John cites this as evidence that it is push factors, such as the war in Syria, that have led to the large increase in refugees and migrants attempting the crossing, not "pull factors". You might want a few more data points if you wanted to be scientific about this, but 60% is a large increase, and those data points are human lives we are standing by and letting drown. I'm not sure this particular experiment would pass an ethical review board.

Zoe Williams shows numeracy is not her strong point

Stuart Broad, the England cricketer, tweeted:

I've heard if you earn minimum wage in England you're in the top 10% earners in the World. #stay #humble 

— Stuart Broad (@StuartBroad8) January 27, 2015

which apparently provoked a backlash. Renowned economist Zoe Williams added her insightful analysis thus:

"The cricketer’s minimum wage tweet shows numeracy is not his strong point. ... Money doesn’t mean anything out of context: its value is determined by what you can buy with it. Most people figure this out by the age of about seven."

Embarrassingly for Zoe, Stuart was right. Working full-time at the minimum wage earns £13, 124 per year. Plug that into the Global Rich List calculator, which, by the way, uses "Purchasing Power Parity Dollars (PPP$) in order to take into account the difference in cost of living between countries", and you're in the top 5.84% in the world. After accounting for cost of living differences.

You carry on being outraged on behalf of the relatively low income in the UK when you think they are being belittled Zoe, and I'll carry on being outraged on behalf of the absolutely low income in the rest of the world, in places like Gabon, where life expectancy is just 63 years, and 1 in 5 people live on less than the equivalent of what you could buy here for $2 per day. Just maybe try not to make such major conceptual errors when you are mocking people who point out the magnitude of global inequality.

The Future of the UN Development System

A new book from the co-Director of the Future of the UN Development System (FUNDS) project (can't believe they didn't call it the "FUN" project). Mark Malloch-Brown (former UN deputy-secretary-general and UNDP administrator) says;

"There is no better compilation of insights about the UN’s lack of cohesion, growing turf battles, declining capacity, clumsy implementation, and cooptation by bilateral and private interests of the family of organizations that calls itself—somewhat awkwardly—the UN development system."

Ouch.

One of the inputs to the book is a global perceptions survey of the UN system, summarised thus:

Four views emerge across the survey: 

• The UN’s development functions are less crucial than such other functions as security, humanitarian action, and setting global norms with teeth. 

• The UN’s development organizations are still mostly relevant, but some are not particularly effective. 

• The World Health Organization (WHO) and UNICEF consistently receive the highest rankings among operational agencies; regional commissions receive the lowest rankings. 

• The UN faces two major institutional challenges: poor internal organization and the predominance of earmarked funding.

What the survey misses, and what is really crucial, is that what we should care about is not just the effectiveness of organisations but the cost-effectiveness, or value for money. Houses in London are "effective" at keeping people dry, but they aren't exactly great value for money from a cost per square metre perspective. 

The IMF and Ebola

The debate rumbles on at the Monkey Cage, as Blattman responds to the response by the authors of the Lancet article to his response to their article. I find the debate mostly quite infuriating. To massively oversimplify, what tends to happen when IMF intervention is required is that;

1. Poor country governments spend more than their income for too long

2. They can't find enough people to keep lending them money

3. The IMF comes in as the lender of last resort, quite reasonably tells the government "look, we aren't a commercial lender, we're only lending because we have to, you're going to have to stop spending more than you're bringing in, because that is completely unsustainable"

4. Western academics criticise the IMF for forcing poor countries to cut their spending.

It's a bit like blaming firefighters for causing fires because they are always at the scene of the fire. The IMF isn't some kind of magic money tree. It only gets involved when countries have got themselves into a crisis. 

What complicates this narrative a little is the difference between austerity at home and austerity in poor countries, which are not the same thing. The UK can very happily carry on spending more than its income quite indefinitely, because commercial lenders continue to be very happy to lend enormous amounts at very low interest rates to the UK government, unlike the governments of very small, very poor, fragile states. It is ok and entirely consistent to rail against austerity in the West, and simultaneously support fiscal discipline (not spending more than your income) in poor countries. At least, it is odd to blame the IMF for not letting poor countries spend more than their income indefinitely, when money grows on trees for neither poor country governments nor the IMF.

Standing desks

Because all the other cool development bloggers are blogging about standing desks and back-pain, I thought I would share mine here. This was a present from Abhijeet and I use it a lot - it's lightweight aluminium, just about fits in a rucksack, and if you work on a laptop like I do, allows you to easily switch between standing and sitting whenever you feel like it. I'm pretty sure everyone at OPM was very jealous, though I'm yet to show it off at Sussex or CGD. 

Green Party are "Dotty Parochial Fruitcakes"

Bagehot, the column on Britain in the Economist magazine, says the Green Party of England & Wales have no grasp of economics and are fruitcakes, "dottier than UKIP," for backing a basic income policy. The same basic income policy which has received support from those other dotty fruitcakes with no grasp of economics; Martin Wolf, Tim Harford, Sir Tony Atkinson, and the late Milton Friedman.

This is the same fine Bagehot who happily elevates political objectives ahead of economic ones when celebrating the 2014 budget for its ideological approach to shrinking the state and cutting welfare regardless of the implications for the economy or for individuals affected in the short-run. The serious economists at the IFS said describing the same budget "policy choices have increased longrun risks to the public finances."

Bagehot also tells us that the Green Party are "parochial" and "contemptibly naive" for not thinking about the rest of the world enough. One might be forgiven for thinking that on the contrary it could be described as quite naive to expect political parties to spend all that much time focusing on people who don't vote in the UK. All this whilst we have a tory and liberal government which talks as if the main point of the aid budget should be promoting British business interests overseas, and likes to make a habit of offending our trade partners by insulting their citizens if they have the audacity to think of coming to the UK to work or study, including but not limited to putting actual vans on the streets with huge threatening "Go Home" signs written on them. No, it is the pro-immigration Green Party which is "parochial". 

"The world could use an economically literate and intellectually courageous British environmental party," Bagehot writes. We could also use an economically literate and intellectually courageous Bagehot column, but it seems we can't always get what we want.

My New Year's Resolutions

All come from the School of Life:

"Any occasion to improve ourselves should be seized upon. We need resolutions: they are promises we make to our better selves. In the future, we should try to worry less, forgive more, look at things through other people’s eyes and, most of all, learn to appreciate what we have."

And, apparently, from the accompanying video; "learn about economics".

Oh - and meditate more - I've paid for the headspace app.