I'm taking a few weeks off to volunteer with the Obama campaign. I expect little or no time for blogging, but I do want to celebrate the dedication of people like Jesse, my friend and campaign organizer in Toledo, Ohio, who has got me over there. (See here for a report on a campaign rally in Toledo - Obama even thanked Jesse personally! What cool people I know).
If you have a few days or even just a weekend, the campaign needs people to knock on doors and make calls - the more face-to-face contact the better. This has got to be one of the biggest mass social movements in history.
18 October 2008
10 October 2008
Deaton on the randomistas
Last night, Angus Deaton gave the British Academy’s annual Keynes lecture on ‘Instruments of Development?’. I expected it to be enlightening; it turned out to be witty as well.
Some questions recur in economic research again and again, without ever seeming to get closer to a resolution. “Does aid work?” is one. “Do children learn better in small classes?” is another. Frustrated by years of trying to identify ever smaller effects in ever more complicated regressions, we have resorted to two clever techniques: instrumental variables (in macro) and randomized controlled trials (in micro). Angus Deaton suggested that these apparently different techniques are closely linked and similarly flawed.
Economics, like any social science, has a problem with experiments. You can’t work out the effect of aid on development by randomly selecting one country to receive aid and another not to: even if it were moral, it wouldn’t be practical because there’s so much else going on. Instrumental variables are a clever technique to overcome this (see ‘Freakonomics’): basically, you have to find a factor that could contribute to the effect you care about (latitude helps determine prosperity) without any possibility of reverse causation (because the prosperity of a country has no effect on its latitude). Deaton argued, in short, that instrumental variables are no panacea, because they are not statistically exogenous and in any case countries differ in ways we cannot control. If economists set instrumental variables up as a gold standard, we doom ourselves to eternal methodological debates amongst ourselves and ridicule from everyone else.
Randomized controlled trials are even more popular in the micro development world. Want to know by how much a vaccination programme improves public health? Easy: just pick the counties you vaccinate at random and compare the outcomes. Leaving aside the ethical difficulties with this (who deserves to come first?), the technique only tells us the mean treatment effect; it doesn’t tell us whether the effect was distributed widely or limited to a few very special cases. Moreover, some of the randomizations are less random than they seem. Supposed you picked schoolchildren with surnames starting with A to take part in an experiment: would they really do better because of the experiment, or because they have always sat in the front row and got more attention from their teachers? Maybe, maybe not: we don’t know.
Deaton poked fun at the ‘randomistas’ (Banerjee, Duflo, Kremer and others) but was sympathetic to their quest for identification, as long as it has a theoretical foundation. He also argued we should avoid randomization to test very obvious propositions (“Do parachutes help keep people who fall out of planes alive?”) or those that pose grave ethical problems (“do HIV-positive people receiving anti-retroviral drugs live longer than those who don’t?”). Rather as with evidence-based medicine, the statistical evidence is only as good as its interpretation by the doctor, or the economist, who applies it to the patient’s condition. Randomized controlled trials, in this view, should take their place in the economist’s toolkit, as one useful tool among many rather than as the knockout argument.
I agreed with all of his points as far as economists are concerned. My worry is what the non-economists (and that’s most of us) are supposed to do. Are we really supposed to wade through umpteen regression models and meta-analysis papers? Are we supposed to get excited about some tiny coefficient that is significant at the 95% level? I fear that policymakers and donors, who might understand the finding of a random evaluation, will turn off as soon as regressions rear their head. Surely it’s better for decision-makers to have some scientific evidence than none at all. Let the economists work out the 95% answer; meanwhile the rest of us will make do with 80%.
Some questions recur in economic research again and again, without ever seeming to get closer to a resolution. “Does aid work?” is one. “Do children learn better in small classes?” is another. Frustrated by years of trying to identify ever smaller effects in ever more complicated regressions, we have resorted to two clever techniques: instrumental variables (in macro) and randomized controlled trials (in micro). Angus Deaton suggested that these apparently different techniques are closely linked and similarly flawed.
Economics, like any social science, has a problem with experiments. You can’t work out the effect of aid on development by randomly selecting one country to receive aid and another not to: even if it were moral, it wouldn’t be practical because there’s so much else going on. Instrumental variables are a clever technique to overcome this (see ‘Freakonomics’): basically, you have to find a factor that could contribute to the effect you care about (latitude helps determine prosperity) without any possibility of reverse causation (because the prosperity of a country has no effect on its latitude). Deaton argued, in short, that instrumental variables are no panacea, because they are not statistically exogenous and in any case countries differ in ways we cannot control. If economists set instrumental variables up as a gold standard, we doom ourselves to eternal methodological debates amongst ourselves and ridicule from everyone else.
Randomized controlled trials are even more popular in the micro development world. Want to know by how much a vaccination programme improves public health? Easy: just pick the counties you vaccinate at random and compare the outcomes. Leaving aside the ethical difficulties with this (who deserves to come first?), the technique only tells us the mean treatment effect; it doesn’t tell us whether the effect was distributed widely or limited to a few very special cases. Moreover, some of the randomizations are less random than they seem. Supposed you picked schoolchildren with surnames starting with A to take part in an experiment: would they really do better because of the experiment, or because they have always sat in the front row and got more attention from their teachers? Maybe, maybe not: we don’t know.
Deaton poked fun at the ‘randomistas’ (Banerjee, Duflo, Kremer and others) but was sympathetic to their quest for identification, as long as it has a theoretical foundation. He also argued we should avoid randomization to test very obvious propositions (“Do parachutes help keep people who fall out of planes alive?”) or those that pose grave ethical problems (“do HIV-positive people receiving anti-retroviral drugs live longer than those who don’t?”). Rather as with evidence-based medicine, the statistical evidence is only as good as its interpretation by the doctor, or the economist, who applies it to the patient’s condition. Randomized controlled trials, in this view, should take their place in the economist’s toolkit, as one useful tool among many rather than as the knockout argument.
I agreed with all of his points as far as economists are concerned. My worry is what the non-economists (and that’s most of us) are supposed to do. Are we really supposed to wade through umpteen regression models and meta-analysis papers? Are we supposed to get excited about some tiny coefficient that is significant at the 95% level? I fear that policymakers and donors, who might understand the finding of a random evaluation, will turn off as soon as regressions rear their head. Surely it’s better for decision-makers to have some scientific evidence than none at all. Let the economists work out the 95% answer; meanwhile the rest of us will make do with 80%.
07 October 2008
Nicholas Stern on a global deal on climate change
The publication of the Stern review two years ago helped shift the climate change debate from science to economics. Climate change sceptics can no longer argue that global warming is a myth or within natural variation: instead, their argument is that it is too expensive to do anything about it right now. Not exactly "wait and see", more "wait until it's cheaper".
Nicholas (now Lord) Stern addressed some of these issues yesterday in a public lecture at the London School of Economics. His timely message was that the current financial crisis is small compared to the havoc that serious climate change will wreak. What havoc? Many things, but the main effects are "all about water". A 5 degree warming (quite possible by 2100 under a 'business as usual scenario') is in the same order of magnitude as the difference between the middle of the last Ice Age and now. The combined effects of rising sea levels and retreating glaciers could force half the world's population to move. Apparently, India is already building a border fence around Bangladesh.
The main focus of the speech was on what a 'global deal' looks like and how we might get there. Stern suggested six components:
1. To stabilise carbon dioxide concentrations at a reasonably 'safe' level of 500ppm, a 50% reduction in greenhouse gas emissions (compared to 1990 levels) by 2050. This probably means an 80% reduction in developed countries and more in the USA.
2. By 2050, 8 billion of the world's 9 billion people will live in developing countries. So developing countries must lead the deal, because it will be their world. We cannot force them to cut emissions: they should be forcing us to show them how.
3. Markets and carbon trading will be essential to get reductions at the lowest possible cuts. There will be some exceptions at first to bring people on board (steel? aviation?) but we should aim to phase them out.
4. Whatever targets we set for emissions reduction, we need to stop deforestation quickly. There are lots of ancillary benefits to this (flood control, biodiversity) but it will have to be combined with development. "Climate change and development are deeply linked - if we fail on one, we fail on the other".
5. Technology: nothing should be ruled out, including carbon capture and storage (CCS) and nuclear power. This was controversial with the audience at LSE, but Stern held his ground: we need to try everything, fast, to figure out what works.
6. Adaptation: poor countries will be hit first and hardest. We urgently need to work out how to get low-carbon development in an increasingly hostile natural environment.
The rest of the speech concerned how to put together this global deal and the research programme needed to support it (this is a university, after all). "Surely the global financial crisis shows us what happens if we become aware of a serious risk and don't deal with it".
Some of Lord Stern's targets are being adopted by politicians. Barack Obama has spoken of an 80% reduction in greenhouse gas emissions by 2050; Gordon Brown has committed the UK to doing the same (though he's trying to wriggle out by excluding aviation - see here). What about the developing world? "Attitudes in China and India have changed a lot in the last 2 years, though there is still justified anger at the hypocrisy of the 'rich countries'."
It seems it always requires a disaster (Katrina? Lehman Brothers?) to shake politicians into action. Sadly, at the current rate we are going to need a few more disasters before the key players, China or the USA, take serious action on climate change.
Nicholas (now Lord) Stern addressed some of these issues yesterday in a public lecture at the London School of Economics. His timely message was that the current financial crisis is small compared to the havoc that serious climate change will wreak. What havoc? Many things, but the main effects are "all about water". A 5 degree warming (quite possible by 2100 under a 'business as usual scenario') is in the same order of magnitude as the difference between the middle of the last Ice Age and now. The combined effects of rising sea levels and retreating glaciers could force half the world's population to move. Apparently, India is already building a border fence around Bangladesh.
The main focus of the speech was on what a 'global deal' looks like and how we might get there. Stern suggested six components:
1. To stabilise carbon dioxide concentrations at a reasonably 'safe' level of 500ppm, a 50% reduction in greenhouse gas emissions (compared to 1990 levels) by 2050. This probably means an 80% reduction in developed countries and more in the USA.
2. By 2050, 8 billion of the world's 9 billion people will live in developing countries. So developing countries must lead the deal, because it will be their world. We cannot force them to cut emissions: they should be forcing us to show them how.
3. Markets and carbon trading will be essential to get reductions at the lowest possible cuts. There will be some exceptions at first to bring people on board (steel? aviation?) but we should aim to phase them out.
4. Whatever targets we set for emissions reduction, we need to stop deforestation quickly. There are lots of ancillary benefits to this (flood control, biodiversity) but it will have to be combined with development. "Climate change and development are deeply linked - if we fail on one, we fail on the other".
5. Technology: nothing should be ruled out, including carbon capture and storage (CCS) and nuclear power. This was controversial with the audience at LSE, but Stern held his ground: we need to try everything, fast, to figure out what works.
6. Adaptation: poor countries will be hit first and hardest. We urgently need to work out how to get low-carbon development in an increasingly hostile natural environment.
The rest of the speech concerned how to put together this global deal and the research programme needed to support it (this is a university, after all). "Surely the global financial crisis shows us what happens if we become aware of a serious risk and don't deal with it".
Some of Lord Stern's targets are being adopted by politicians. Barack Obama has spoken of an 80% reduction in greenhouse gas emissions by 2050; Gordon Brown has committed the UK to doing the same (though he's trying to wriggle out by excluding aviation - see here). What about the developing world? "Attitudes in China and India have changed a lot in the last 2 years, though there is still justified anger at the hypocrisy of the 'rich countries'."
It seems it always requires a disaster (Katrina? Lehman Brothers?) to shake politicians into action. Sadly, at the current rate we are going to need a few more disasters before the key players, China or the USA, take serious action on climate change.
29 September 2008
Liberian cassava farmers profiled on the BBC
I love this stuff . . . and there isn't a single man to be seen, except for a motorcycle taxi driver in slide 8.
In fact, in three months spent in Liberia, I never saw a man farming cassava. Rubber, yes and sometimes rice, but cassava farming is "women's work". Notice how the men in the picture below are 'supervising' (i.e., sitting around) while the women are busy. 
Sometimes I imagine that the gender division of employment in agriculture will change as countries become more developed. But maybe not. I have been walking around rural Yorkshire in the last week, where there are a lot of sheep farms. Without exception, the farmers riding around the hills in Land Rovers and quad bikes are men. Maybe men only get involved when there are machines to play with?
In fact, in three months spent in Liberia, I never saw a man farming cassava. Rubber, yes and sometimes rice, but cassava farming is "women's work". Notice how the men in the picture below are 'supervising' (i.e., sitting around) while the women are busy. 
Sometimes I imagine that the gender division of employment in agriculture will change as countries become more developed. But maybe not. I have been walking around rural Yorkshire in the last week, where there are a lot of sheep farms. Without exception, the farmers riding around the hills in Land Rovers and quad bikes are men. Maybe men only get involved when there are machines to play with?
28 September 2008
Emily is back in Liberia
The excellent Emily Stanger has gone to work for the Ministry of Gender in Liberia. Emily, please make sure you post regularly - your fans around the world will appreciate it!
Emily is working as a Scott Fellow (with support from the Nike Foundation), part of a scheme to bring young professionals (many of them Liberian) to work in the government there for a year, sometimes more. This seems to me is the right kind of technical assistance - not just a few months of consulting (something I have done in the past, but I have decided to steer clear of for a while!), but serious engagement, for a serious period of time. I wish her and the other Scott Fellows the best of luck.
Emily is working as a Scott Fellow (with support from the Nike Foundation), part of a scheme to bring young professionals (many of them Liberian) to work in the government there for a year, sometimes more. This seems to me is the right kind of technical assistance - not just a few months of consulting (something I have done in the past, but I have decided to steer clear of for a while!), but serious engagement, for a serious period of time. I wish her and the other Scott Fellows the best of luck.
25 September 2008
With or without the US
I've been enjoying reading Bono and Jeff Sachs' FT column from New York. Bono's ramblings might work better as rock lyrics, but he comes across as well-informed and genuine at least. Sachs, meanwhile, is passionate and provocative as ever:"The UN meetings were abuzz that the US could find $700 billion for a bailout of its corrupt and errant banks but couldn’t find a small fraction of that for the world’s poor and dying. It didn’t make sense to the world community. The puzzlement was all the greater since the very banks being bailed out so generously had awarded themselves more than $30 billion in bonuses early this year, roughly the world’s entire aid budget for 800 million people in sub-Saharan Africa."
Amen. I wouldn't blame the financial crisis, entirely on the banks, but that's
not the point. What is sad is how serious development issues drop off the news agenda as soon as there is a recession or 'crisis'. The same happened at the Gleneagles summit in 2005, when a terrorist attack send the TV crews scurrying to London. If we want to advance the development agenda at an international level, we need to work out a way of doing so even when the world's attention is elsewhere.For the time being, a global financial crash is bad for emerging markets, as interest rates shoot up and 'risky' loans are called in. In the longer term, I wonder if it might be a good thing, for three reasons.
First, the USA and Europe no longer look like safe havens (OK, maybe Switzerland). A Brazilian, Russian or Chinese investor might therefore be keener to invest at home in the future.
Second, US banks and the US government are coming to depend increasingly on sovereign wealth funds, Japanese pensioners and so on for their capital. The result: the US will no longer be able to dictate terms to everyone else. The Washington consensus becomes the Dubai discussion.
Third, the reduction in US influence means we are no longer entirely dependent on US leadership in international economic matters. Not a bad thing when the world's largest economy is distracted by the election, bank bailouts and the like.
Indeed, Sachs praises Gordon Brown for continuing to push the MDG agenda at the United Nations. Brown doesn't have Bono's talent for PR, but if all world leaders took development as seriously as he does, we might make some progress - with or without the US.
24 September 2008
What I miss about West Africa - and what I don't
I'm spending a few weeks in northern England, preparing for a move to London. After a few days I am used to the weather again; but in other respects the UK feels quite alien. Here are a few things I have found myself missing about life in Ghana:
1. The way people dress. Wearing clean, colourful and well-tailored clothes seems to be a source of pride for Ghanaians everywhere; I am shocked at how little many Britons seem to care about their appearance, wandering around in dirty T-shirts and ill-fitting tracksuits.
2. Courtesy to strangers. In Accra, it's quite usual to greet other passengers in a share taxi or minibus with a low-key "good morning". Anyone doing so in a London bus would get embarassed looks in return and quite possibly a torrent of verbal abuse.
3. A nod and a smile. Walking down a street in Accra at night, I know I stick out. But if I walked past a group of young men, my instinct would be to nod at them, smile and maybe say hello in passing. I would expect them to reciprocate, even more so in rural areas.
Walking around parts of north London a few days ago, my instinct was quite different. I averted my gaze from passers-by and walked fast so as to indicate that I was "minding my own business". There aren't many young people hanging around on street corners, but those who are there exude an air of menace (they are usually harmless, of course - but perceptions matter).
There are other things I don't miss:
1. Tropical fruit - mangoes and papaya especially. This surprised me, because I love all tropical fruit and devour it in large quantities. But the apples and blackberries which are all over rural England in September are equally delicious.
2. Uneven streets and pavements. Walking along a typical street in Accra is an obstacle course of open drains, potholes and cracked slabs. It's worse for pedestrians than for motorists. I used to think UK pavements were shockingly uneven, but maybe they have got better, or else my standards have slipped.
3. The humidity. I'm a dry kind of guy. I like mountains and deserts. The UK isn't exactly dry, but at least I don't wake up in the morning drenched in sweat.
How long does it take to adjust? The plane from Accra to Heathrow was a mix of British, Ghanaians and British-born-but-still-partly-Ghanaians. Almost all spoke with 100% London accents. At least, they sounded a lot more authentically London than I ever will.
1. The way people dress. Wearing clean, colourful and well-tailored clothes seems to be a source of pride for Ghanaians everywhere; I am shocked at how little many Britons seem to care about their appearance, wandering around in dirty T-shirts and ill-fitting tracksuits.
2. Courtesy to strangers. In Accra, it's quite usual to greet other passengers in a share taxi or minibus with a low-key "good morning". Anyone doing so in a London bus would get embarassed looks in return and quite possibly a torrent of verbal abuse.
3. A nod and a smile. Walking down a street in Accra at night, I know I stick out. But if I walked past a group of young men, my instinct would be to nod at them, smile and maybe say hello in passing. I would expect them to reciprocate, even more so in rural areas.
Walking around parts of north London a few days ago, my instinct was quite different. I averted my gaze from passers-by and walked fast so as to indicate that I was "minding my own business". There aren't many young people hanging around on street corners, but those who are there exude an air of menace (they are usually harmless, of course - but perceptions matter).
There are other things I don't miss:
1. Tropical fruit - mangoes and papaya especially. This surprised me, because I love all tropical fruit and devour it in large quantities. But the apples and blackberries which are all over rural England in September are equally delicious.
2. Uneven streets and pavements. Walking along a typical street in Accra is an obstacle course of open drains, potholes and cracked slabs. It's worse for pedestrians than for motorists. I used to think UK pavements were shockingly uneven, but maybe they have got better, or else my standards have slipped.
3. The humidity. I'm a dry kind of guy. I like mountains and deserts. The UK isn't exactly dry, but at least I don't wake up in the morning drenched in sweat.
How long does it take to adjust? The plane from Accra to Heathrow was a mix of British, Ghanaians and British-born-but-still-partly-Ghanaians. Almost all spoke with 100% London accents. At least, they sounded a lot more authentically London than I ever will.
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