First Week of March, 2018

1. Global Development: One of the more encouraging trends in development economics as far as I'm concerned is the growth of long-term studies that report results not just once but on an on-going basis. Obviously long-term tracking like the Young Lives Project or smaller scale work like Robert Townsend's tracking of a Thai village (which continues to yield valuable insights) falls in this category, but it's now also happening with long term follow-up from experimental studies. Sometimes that takes the form of tracking down people affected by earlier studies, as Owen Ozier did with deworming in Kenya. But more often it seems, studies are maintaining contact over longer time frames. A few weeks ago I mentioned a new paper following up on Bloom et. al.'s experiment with Indian textile firms. The first paper found significant effects of management consulting in improving operations and boosting profits. The new paper sees many, but not all, of those gains persist eight years later. Another important example is the on-going follow up of the original Give Directly experiment on unconditional cash transfers. Haushofer and Shapiro have new results from a three year follow-up, finding that as above, many gains persist but not all and the comparisons unsurprisingly get a bit messier.
Although it's not quite the same, I do feel like I should include some new work following up on the Targeting the Ultra Poor studies--in this case not of long-term effects but on varying the packages and comparing different approaches as directly as possible. Here's Sedlmayr, Shah and Sulaiman on a variety of cash-plus interventions in Uganda--the full package of transfers and training, only the transfers, transfers with only a light-touch training and just attempting to boost savings. They find that cash isn't always king: the full package outperforms the alternatives.

2. Our Algorithmic Overlords: If you missed it, yesterday's special edition faiV was a review of Virginia Eubanks Automating Inequality. But there's always a slew of interesting reads on these issues, contra recent editorials that no one is paying attention. Here's NYU's AINow Institute on Algorithmic Impact Assessments as a tool for providing more accountability around the use of algorithms in public agencies. While I tend to focus this section on unintended negative consequences of AI, there is another important consideration: intended negative consequences of AI. I'm not talking about SkyNet but the use of AI to conduct cyberattacks, create fraudulent voice/video, or other criminal activities. Here's a report from a group of AI think tanks including EFF and Open AI on the malicious use of artificial intelligence.

3. Interesting Tales from Economic History: I may make this a regular item as I tend to find these things quite interesting, and based on the link clicks a number of you do too. Here's some history to revise your beliefs about the Dutch Tulip craze, a story it turns out that has been too good to fact check, at least until Anne Goldgar of King's College did so. And here's work from Judy Stephenson of Oxford doing detailed work on working hours and pay for London construction workers during the 1700s. Why is this interesting? Because it's important to understand the interaction of productivity gains, the industrial revolution, wages and welfare--something that we don't know enough about but has implications as we think about the future of work, how it pays and the economic implications for different levels of skills. And in a different vein, but interesting none-the-less, here is an epic thread from Pseudoerasmus on Steven Pinker's new book nominally about the Enlightenment.

4. Household Finance: I want you to look at two pieces that are about household finance, one from the US and one Ghana and tell me if you react to them the same or differently and whether that reaction is positive or negative. I feel like these two stories are one of the most effective rohrshach tests you could imagine to get at people's feelings about financial services for poor households. First we have a blog post from CGAP about PayGo Water--in other words, rather than paying a monthly water service bill retroactively, using digital payments to enforce payment before the water is delivered. Second, this blog post from Aaron Klein about hidden price discrimination based on what payment methods consumers use--in other words the poor pay more.

5. Social Investment: Here are a few other pieces that similarly may spark conflicting responses. Ross Douthat has an editorial on the trade-offs in the behavior of corporate America as it seems to more explicitly blend socially liberal but economic-inequality-boosting policies. Fast Company reviews the state of Social Impact Bonds, a facet of social investment that seems to have fallen out of the spotlight as people realize how complicated they (and the world) are. I'm a long-term critic of the idea that social investing has "no trade-offs." If you're getting market-rate returns you're just investing as far as I'm concerned, not social investing. But this longform critique of the "doing well by doing good" rhetoric seems to me to really be talking about making grants not investments. And finally this piece doesn't truly fit here unless you really squint and cock your head to the side, but it does induce conflicting feelings. It's about continuing large-scale discrimination against borrowers of color by US banks (and in that sense it fits fairly well with the piece above), and the stories they tell will likely leave you seething. But the evidence isn't that strong since they can only see a small portion of the data you would need to really determine creditworthiness. Don't get me wrong, I'm not saying there isn't discrimination. But it seems much more likely to me that the source of the discrimination is the pre-existing racial wealth gap and biases in credit scoring, not purposeful discrimination by the banks or loan officers.