I drink your milkshake

blood

The Ethiopians appear to be close to finalizing construction of a large hydroelectric dam on the Omo river, primarily to generate power but also to support local irrigation efforts.  Over the past five years the project has received substantial foreign financing and investment by China and indirectly by the World Bank. However, there appears to have been little consideration of the potential downstream impacts: the Omo river feeds Lake Turkana, which is a source of livelihood for a large number of communities in northern Kenya. The possibility that the lake may be partially drained is obviously upsetting a lot of people, although it does not seem that the Kenyan government is making a big fuss over the project.

This is a typical problem of negative externalities: the Ethiopians aren’t factoring in the welfare of Kenyan Turkana residents in the decision to build the dam. There’s actually some research showing that this is a common problem. From a recent World Bank paper by Sheila Olmstead and Hilary Sigman:

This paper examines whether countries consider the welfare of other nations when they make water development decisions. The paper estimates econometric models of the location of major dams around the world as a function of the degree of international sharing of rivers. The analysis finds that dams are more prevalent in areas of river basins upstream of foreign countries, supporting the view that countries free ride in exploiting water resources. There is weak evidence that international water management institutions reduce the extent of such free-riding.

By their very nature dams generate inequality in the flow of water between upstream and downstream areas. It is easier to pay the cost of hurting downstream communities when they are are in a different country (hey, they don’t vote for you). Ergo, countries are more likely to build dams when the costs are external.

It would be interesting to see what mitigates these effects – it is possible that Kenya’s relative indifference is due to lack of political power on the part of the northern tribes. Are dams with substantial cross-border costs less likely in areas where the proximate ethnic group is quite powerful?

afri_river

LaTeX Wars Episode V: The Word Users Strike Back

Of course I edit all my documents using the original Nintendo Power Glove

Of course I edit all my documents using the original Nintendo Power Glove

Throughout the mid-90s, my father used a DOS-based typesetting program called PC-Write to produce his books and journal articles. In stark contrast to more-popular word processing programs, PC-Write relied on a what-you-get-is-what-you-mean approach to typesetting: dad would indicate his formatting preferences as he wrote, but he would be forced to print out a page in order to see his formatting options being applied. By contrast, I grew up working with Microsoft Word and so with each passing year I found my father’s system to be increasingly archaic. Eventually, after a substantial amount of healthy mockery from his son, he migrated over to Word and hasn’t looked back since.

However, by the time I arrived in grad school an increasing number of other (economics) students were using LaTeX, a typesetting language that was much closer in design to the old-fashioned PC-Write than to the what-you-see-is-what-you-get format of Word. Although I suspected that LaTeX was another manifestation of the academic economist’s tendency to choose overly-complex methods and technical mastery over user-friendliness, I eventually became a convert. Somehow, I found my preferences begun to mirror Dad’s original love of PC-Write.

If you ever feel like experiencing a wonderfully-arbitrary argument, ask a group of economists if they prefer LaTeX or Word. Within the profession there is a pretty serious division between those who prefer the look and workflow of the former  and those who prefer the accessibility of the latter. While there are some of us who are comfortable working in both formats, each camp has its stalwarts who find members of the other camp to be bizarrely inefficient.

The two sides appeared to be in a stable stalemate until recently, when a new study comparing the efficiency and error rates among LaTeX and Word users appeared in PLOS One. The headline result: Word users work faster AND make less errors than LaTeX users.

journal.pone.0115069.g004

Ooof – I hear the sound of a thousand co-authors crying out with righteous indignation. The Word camp was quick to seize upon this study as clear evidence that LaTeX users were probably deluding themselves and that now would be a good time for everyone to get off of their high horse. The authors of report  even went as far to suggest that LaTeX users were wasting public resources and that journals should consider not accepting manuscripts written up using LaTex:

Given these numbers it remains an open question to determine the amount of taxpayer money that is spent worldwide for researchers to use LaTeX over a more efficient document preparation system, which would free up their time to advance their respective field. Some publishers may save a significant amount of money by requesting or allowing LaTeX submissions because a well-formed LaTeX document complying with a well-designed class file (template) is much easier to bring into their publication workflow. However, this is at the expense of the researchers’ labor time and effort. We therefore suggest that leading scientific journals should consider accepting submissions in LaTeX only if this is justified by the level of mathematics presented in the paper.

Pretty damning, eh? Not so fast! There are several reasons we should doubt the headline result.

For one, rather than randomly assigning participants to Word or LaTex, the researchers decided to allow participants to self-select into their respective groups. On one hand, this makes the result even more damning: even basic Word users outperformed expert LaTeX users. The authors themselves admit that preference for the two typesetting programs varied wildly across disciplines (e.g. computer scientists love LaTeX and health researchers prefer Word). It’s perfectly possible that the types of people that select into more math-based disciplines are inherently less efficient at performing the sort of formatting tasks set by the researchers. Indeed, the researchers found that LaTeX users actually outperformed Word users when it came to more complex operations such as formatting equations.

Furthermore, the researchers only evaluated these typesetting programs along two basic dimensions: formatting speed and error-rates, ignoring other advantages that LaTeX might have over Word. As an empirical researcher, I find it enormously easier to link LaTeX documents to automated data output from programs like Stata, making it simple to update results in a document without having to copy and paste all the time. Word can also do this, but it has always been far clunkier.

So, in short, the jury is still out. Feel free to return to your respective camps and let the war continue.

Troubling aspirations

"On second thought, I think I'll keep the ring and become a lawyer."

“On second thought, I think I’ll keep the ring and become a lawyer.”

From a new paper in the Journal of Development Economics:

This paper sheds light on the relationship between oil rent and the allocation of talent, toward rent-seeking versus more productive activities, conditional on the quality of institutions. Using a sample of 69 developing countries, we demonstrate that oil resources orient university students toward specializations that provide better future access to rents when institutions are weak. The results are robust to various specifications, datasets on governance quality and estimation methods. Oil affects the demand for each profession through a technological effect, indicating complementarity between oil and engineering, manufacturing and construction; however, it also increases the ‘size of the cake’. Therefore, when institutions are weak, oil increases the incentive to opt for professions with better access to rents (law, business, and the social sciences), rather than careers in engineering, creating a deviation from the optimal allocation between the two types of specialization.

In plain speak, the authors posit that when there are large windfalls from natural resources, people will choose careers (and the necessary education) which will allow them to reap the benefits from those windfalls. Normally this involves choosing careers associated with oil extraction, like engineering. However, in weak states where it’s possible to gain access to oil rents in a less-than-legitimate manner, people choose to go into careers which better allow them to get access to those rents, like law or business. Hence talent is `misallocated’ in developing countries with weak institutions and oil booms, as the possibility of getting access to oil rents sends people into careers which they are less fit for.

I would not despair so quickly – the empirical results in the paper are more suggestive than definitive, dependent on a handful of mainly cross-country regressions. Still, the results are disconcerting – the authors do not investigate further, but the prospect of societies re-orienting themselves into a structure better suited for rent-seeking likely means that true institutional reform becomes all the more difficult.

Protected by randomness

tdh2

From fusion.net:

The Random Darknet Shopper, an automated online shopping bot with a budget of $100 a week in Bitcoin, is programmed to do a very specific task: go to one particular marketplace on the Deep Web and make one random purchase a week with the provided allowance. The purchases have all been compiled for an art show in Zurich, Switzerland titled The Darknet: From Memes to Onionland, which runs through January 11.
The concept would be all gravy if not for one thing: the programmers came home one day to find a shipment of 10 ecstasy pills, followed by an apparently very legit falsified Hungarian passport– developments which have left some observers of the bot’s blog a little uneasy.

The title of the piece (Robots are starting to break the law and nobody knows what to do about it) elicits worries of AIs gone amok, but the basic conundrum of this piece and others about the Random Darknet Shopper is more complex: if I design an AI which takes a random, blind action in a space which is largely – but not uniformly – illicit, am I legally culpable?

Take this thought experiment: imagine going around your office with a ten dollar bill, offering to buy whatever your colleagues would be willing to sell to you at that price, but under the condition that you do not see the item until the transaction has taken place. If one of your colleagues slipped you some cocaine, who would be at fault? What if you chose to repeat the experiment in an area of town infamous for drug-deals, are you suddenly more culpable?

When I was young, I used to order what they called “Grab Bag” comic packs, where I would pay a set amount of money for an unknown, random assortment of comic books. If someone had slipped a pornographic comic into my grab bag, it’s hard to see how I would be at fault. But where I choose to make my blind transactions seems to augment how we perceive culpability.

Several years ago I wrote a piece about how randomness can complicate our standard notions of guilt. The intersection of randomness, culpability and the law sounds like an area that – if someone hasn’t written about it a lot already – is ripe for further work.

The Lynchian Randomization

"We're going to estimate treatment effects via an ancient rock-throwing technique."

“We’re going to estimate treatment effects via an ancient rock-throwing technique.”

We developmentistas often associate randomized impact evaluations solely with development interventions (I’m looking at you Eva Vivalt), so it’s easy to forget that there are other researchers out there doing some really bizarre RCTs. For example, did you know that randomzing paracetamol  is still a thing? Psychologists seem to think that it augments an individual’s emotions, in addition to the palliative effect it has on pain. In a recent Psychological Science article, several researchers wanted to observe whether paracetamol blunted our emotional responses to distressing events.

The first experiment they ran was, well, moderately distressing. There were two types of treatment: some participants were asked to write about a `placebo subject’ – something innocuous, where the treatment group was asked to write about their own death (distress! distress!). This was cross-cut with a standard double-blind randomization of paracetamol. Then the researchers recorded their outcome of interest, which was a bit….odd:

Finally, participants read a hypothetical arrest report about a prostitute and were asked to set the amount of the bail (on a scale from $0 to $999). This measure has been used in a number of other meaning-threat studies (Proulx & Heine, 2008; Proulx et al., 2010; Randles et al., 2011; Rosenblatt, Greenberg, Solomon, Pyszczynski, & Lyon, 1989). Participants are expected to increase the bond amount after experiencing a threat, because trading sex for money is both at odds with commonly held cultural views of relationships and against the law. Increasing the bond assessment provides participants an opportunity to affirm their belief that prostitution is wrong.

Um, I think we’ll probably leave that out of our next household survey, but fine.  What was the result? The average bond levels set by each treatment group was similar, except for the group which received a distressing event but not paracetamol.

bar1

The researchers claim this means that acetaminophen (paracetamol) is actually blunting people’s normal response to the emotionally-distressing task (i.e. punishing prostitutes). In the difference between the control placebo and the `mortality salience’ placebo – approximately $120 dollars more, but there appears to be no significant difference between the treatment and control groups who were not given the drug.

Now things get even a little more bizarre. The researchers want to replicate the experiment with a similar premise but a different outcome measure and a different distressing activity. So this time they made the control group watch a four minute clip of The Simpsons, where the treatment group had to watch four minutes of the David Lynch short film “Rabbits”, which is composed of creepy humanoid rabbits You can watch the entire thing here. I recommend having something lined up to cheer you up afterwards.

rabbid-6

In this case the respondents had to choose how much to fine a group of public rioters. The results were very similar to the first experiment: the treatment group which did not receive any paracetamol ended up fining the rioters substantially more, but there was little difference between the other three groups. Again the researchers argue that the paracetamol made the difference.

bar2

Before you start slipping people paracetamol before you give them bad news, there’s a number of reasons we might be very wary of these results. First, the theoretical groundwork is a bit shaky – while there are some psychology experiments that paracetamol does influence what they call “social pain,” there is no compelling physiological link, other than some inconclusive evidence cited at the beginning of the article. We should discount results more heavily when they don’t have such a strong grounding in either theory or prior evidence. We certainly shouldn’t use them for anything as headline-grabbing as “What is Tylenol Doing to Our Minds?”

 

The results also rely on what the psychologists call a meaning-maintenance model which predicts that individuals will seek compensatory affirmations of their beliefs when their expectations or `meanings’ are threatened by outside stimuli. Thus, punishing a prostitute or a rioter – the authors argue – gives the respondent a chance to affirm their belief that these practices are wrong. I don’t know enough about the subject to say whether or not the meaning-maintenance model is a sensible way of describing human behaviour, but the result seems dependent on a few too many assumptions: A) that paracetamol interacts with a part of the brain that generates these compensatory desires B) that the treatments in this experiment themselves would generate compensatory desires and C) that the outcomes of these experiment are meaningfully measuring this desire to assert one’s beliefs after a distressing event.

That said – this is why we do replications, and the researchers do well to set up two separate experiments. Plus they got to randomize David Lynch. This is awesome.

Branko Milanović and the Spam King of Development

monfort3

A few weeks ago, I received a bizarre e-mail addressed indirectly to former World Bank economist and inequality/wealth guru Branko Milanovic. An excerpt:

Marry me, CUNY Prof. Branko Milanovic. Become part of our family of Expert Dreamers. Join the Serbia Strategic Team and help us design, create, imagine a Wonderful future for Serbia, for the World and for the Sollar System.

Yes I am positive. I want to become President of the Sollar System before 2050 with you in our team. Yes I am positive. I want to contribute my best efforts, to devote my lifetime to this wonderful challenge. And I want you, CUNY Prof. Branko Milanovic, I want you to come with me, to come with us.

Following this e-mail, a slew of my colleagues and I began to receive e-mails requesting that we receive chapters for a book known as “The Monfort Plan,” a sort of grand scheme to end global poverty by assembling a team of “Expert Dreamers” to essentially act as the world’s largest peer review body. A bit like The Avengers but without all the charisma and one-liners.

The source of these e-mails was a man named  Jaime Pozuelo-Monfort – or `JP Monfort’ as he likes to call him self. JP Monfort is a professional development spammer. As described on his bio for the Huffington Post (further proof that the only binding prerequisites for bloggers at HufPo are a hindbrain and access to a keyboard), Monfort has six or seven masters degrees in a variety of economics or finance-related subjects, although he apparently has yet to learn of the concept of diminishing returns.

Monfort is infamous for his frequent spamming of university departments and research institutes, either to recruit scholars to join his team of Expert Dreamers or to rope people into reviewing his inane book chapters. This incessant behaviour has actually resulted in not one, but four entire threads dedicated to him at econjobmarketrumors.com, a website which itself will likely confirm any suspicions you might have that economics comprises a disconcertingly-large number of self-obsessed sexist, racist, socially-inept douchebags. If you’re in the mood for a little more entertainment, JP Monfort has a slew of videos online in which he mumbles through various aspects of his master plan – awkward, amateurish productions set in bizarre locations such as the side of a road or what appears to be a swimming pool shower. He also has an online site dedicated to “The Clinton Letters”, chronicling correspondence between him and Bill Clinton, which appears to amount to standard brush-off replies from the latter’s office, including a thank you for the Monfort Plan t-shirt that was sent his way.

His book is currently available on Amazon, although plagued by one-star reviews from irate academics targeted by his e-mails. One reviewer notes:

 While I can’t comment on the content of the book, if it’s anything like the vague, grandiose drivel I receive weekly in my inbox, I doubt it has anything practical to say about modern economic, social, and political problems…

Indeed, from reading the book chapters he has sent my way, it is difficult to discern whether Monfort is deluded, a scam artist, or some sort of weird meta-troll. His prose is circular and vague, nonsensical but coherent enough to pass for an NGO report. Some sections are devoted to describing – essentially paraphrasing – the of work other mainstream development experts, including Milanovic himself, Daren Acemoglu and our own Nancy Birdsall, rather than contributing anything new to the development debate.  Chapter 29 of the seemingly-never-ending, rambling book describes the role of the “Chief Dreamer” (inevitably Monfort himself) who would be in charge with leading the way in the fight against world poverty:

“The Chief Dreamer must remain awake while others sleep, must work in the interest of the developing world and propose forward-looking ideas that are realistic so that the reader find sufficient matter to employ his or her speculations for the rest of her life. The Chief Dreamer must be a twenty-first century Jules Verne who conquers through persuasion and not imposition. The Chief Dreamer must combine the qualities of George Kennan and Jean Monnet and be determined to defend the priorities of the vulnerable. The Chief Dreamer must be multilingual to address a variety of audiences in different geographies and must be multidisciplinary to understand the complex roots that drive today’s increasing inequality gap and inequality.”

The only novelty in the book is born out data generated by the sheer number of people Monfort has managed to piss off. You see, so many people have requested to be removed from the ever-growing list of Expert Dreamert that Monfort dedicates an entire segment of his book to analysing the breakdown of which academic disciplines are most likely to click unsubscribe:

I soon realized academics were overwhelmingly requesting to be removed from The Decem List. The trend was so notorious that I decided to create this subsection to express a concern. There is a subset of academia who may be reluctant to embrace a new economic paradigm, as it relies on new ideas not supported by the orthodox theories that for decades have been feeding the intellect of university professors from the world’s best universities.

expertnd

I’m curious as to what it is about Mr. Monfort’s incoherent ramblings that appeals more to anthropologists and agricultural engineers than to economists, psychologists and sociologists. Alas, it will remain one of life’s great mysteries.

Oh, by the way, Mr. Monfort could you please drop me from your mailing list?

The Twelve Days of Christmas (Aid Edition)™

It’s an oldy but a goody, and the only thing I always  repost. Go on, sing along:

On the twelfth day of Christmas my donors gave to me

twelve delayed disbursements!

eleven sketchy studies

ten consultants calling

nine economists arguing

eight mission meetings

seven worthless workshops

six gender trainings

five RCTs!

four 4x4s

three acronyms

two empty schools

and a lecture on M&E!

Still on sale.

You just don’t get me

Timothy Taylor has an excellent write up on the behavioural economics results coming out of the recently-released 2015 World Development Report. One of the most striking findings is that World Bank staff tend to overestimate the tendency for poor people to be fatalistic. From Taylor’s post:

What do development experts think that the poor believe, and how does it compare to what the poor actually believe? For example, development experts were asked if they thought individuals in low-income countries would agree with the statement: “What happens to me in the future mostly depends on me.”  The development experts thought that maybe 20% of tthe poorest third would agree with this statment, but about 80% actually did. In fact, the share of those agreeing with the statement in the bottom third of the income distribution was much the same as for the upper two-thirds–and higher than the answer the devleopment experts gave for themselves!

A number of other bloggers have picked up on this result, albeit without too much discussion about what this implies. I think the implicit assumption here are that development professionals are out of touch with the poor. I think there’s a number of ways we can interpret these results. Here’s the graph in question:

control_wdr

So the first possibility is the implicit one, that Bank staff don’t know what the poor believe, and possibly even that they assume the poor are fatalistic, possibly to a fault. Development economics is only starting to turn its head towards the convergence of fatalism, aspirations and economic outcomes (see, for example, the recent paper by Kate Orkin and her co-authors on aspirations in Ethiopia). The story that development experts buy into this belief is an easy one to believe, but not necessarily the right one. Note that it doesn’t at all take into account what the truth is, only perceptions.

Imagine your life’s outcomes are determined by (A) your own actions and (B) everything else, including randomness. How much weight would you put on (A) vs (B)? There’s no easy answer to this, but it is perfectly possible that the world’s poor ARE poor because (B) is actually much larger than (A). When you live in a country with terrible institutions, no social safety net, frequent economic or environmental shocks, it becomes very clear that (B) dominates (A).

So the second possibility is that Bank staff aren’t assuming the poor are being fatalistic, but that they are being realistic. That they (correctly?) judge that they have little control over their own lives. If they did, then they probably wouldn’t be poor. In this case, if the responses from the above sample are genuine (we might worry that respondents would be unwilling to admit that they have little control), then it’s the poor who have it the wrong way around: they are too optimistic about how much control they have over their own lives.

The second possibility isn’t necessarily any more likely than the first, but we should be cautious about what stories eventually emerge out of the above figure – there are a number of potentially overlapping biases at play, to the extent that it is not just a straightforward story of development professionals not `getting’ the poor.

Make love, not development goals

"Son, we need to talk about your development indicators."

“Son, we need to talk about your development indicators.”

I was pleasantly  surprised to see this post by Chloe Safier on Duncan Green’s excellent blog. From her final paragraph:

Ignoring that people have – and enjoy – sex diminishes the full reality of people’s experiences and relationships. If the development and donor communities, could shift their conversations around sexual and reproductive health and rights, empowerment, and gender to include the people’s whole sexual lives, we’d all be better off.

Safier is basically making the case that a focus on reproductive rights is not enough, that the development industry also needs to start discussing how to improve people’s sex lives – not so much in a broad sense (e.g. maximizing per capita orgasms) but more of a Sen-style capabilities approach to ensure everyone has the potential for a decent sex life.

I’m not sure I can fully embrace Safier’s recommendations – that the ever-growing list of NGO/donor priorities should include sexual enjoyment, but this is more due to a general unease about NGO mission creep than about a focus on sex.That said – I am astonished by infrequently developmentistas talk about how important sex is for human welfare. At risk of sounding ageist, I suspect this because the field is still dominated by the middle-aged and older crowds, cohorts who have a pretty solid history of looking down on talking openly about sex. I don’t know whether this is purely generational, or just a fact about getting older – I’ll report back in 10 or 20 years or so.

Economists, in turn, see almost incapable about talking sensibly about sex. Last year, at a seminar in Oxford – I witnessed a group of academic economists argue over why birth rates went up in regions of Spain after outbursts of Basque separatist violence. The consensus was that violence forces people indoors, which in turn lowers the opportunity cost to sex. That is, now we are unable to go to the park, we’re more likely to stay at home and, well, get it on. Upon reaching this conclusion, the room of mainly-male academics erupted in a bout of giggling.

This may well be true – but it’s emblematic of the way that we (economists) tend to bulldoze over sex with standard Econ 101 explanations. We can, in part, thank the late Gary Becker for taking all the fun out of sex.

Or the emotion – there’s a lot of reasons we jump into each other’s arms. To take the Spanish example: extreme stress tends to drive us to do things which mitigate stress, sex being at top of that particular list.

Time for a global sexual satisfaction index? Maybe not – but it’s still refreshing to see this being discussed openly.