Your neocolonial moment for the day

The newest expatriate sport in Rwanda? Motorcycle polo.

Instead of horses, of which there are few in Rwanda, players drive and ride motorcycles, of which there are many. Along the slick roads here, in Rwanda’s capital, they are commonly used as taxis, and a growing number of young Rwandan motorcyclists turn up at competitions to show off and practice their skills.

Photo shoot and article here.

I am pretty sure the expats do not wear spurs, but perhaps it is only a matter of time.

Come to a May 15 public lecture at the University of Liberia

I’m not sure how many of my readers are in Monrovia, but if you are, please come to what I hope will be the first of several lectures at the University of Liberia.

I will speak mainly about the evidence on whether youth poverty and unemployment contribute to crime and violence, and whether employment and cash transfer programs have the potential to reduce poverty and social instability. I will also talk about some new work on conflict prediction and early warning, and the promise of local institution building and dispute resolution for bringing stability.

Location: Kofi Annan Institute for Conflict Transformation (KAICT) at the University of Liberia main Auditorium

Title: Post-conflict peacebuilding and economic recovery: Evidence from rigorous impact evaluation

Date: 15 May, 2012

Time: 3–5pm

The case for industrial policy (a paper and a rant)

A new paper, where some very good economists look at data from Chinese medium and large firms:

…sectoral policy aimed at targeting production activities to one particular sector, can enhance growth and efficiency if it made competition-friendly.

…if subsidies are allocated to competitive sectors… and allocated in such a way as to preserve or increase competition, then the net impacts of subsidies, tax holidays, and tariffs on total factor productivity levels or growth become positive and significant.

“You can’t pick winners” is the knee-jerk retort to the mention of anything that even rhymes with industrial policy. I would call it the triumph of ideology over evidence, except that even “ideology” feels like a generous term. Lazy thinking might be a more accurate description. Some have given the question a great deal of thought, but most have not.

I’m not suggesting that the paper above has the right answer (odds are, like most papers, it does not). I’m also not suggesting that governments can pick winners (probably they can’t). Nor am I forgetting that industrial policy is easily politicized and distorted (as surely it is). So what am I talking about?

I’ll make two claims. The first: industrialization is the most important and essential process of development. Everything from lower poverty, reduced inequality, and tax bases to support education and health and welfare systems will (and must) spring from high value-added production. Anything policymakers can do to hasten the process will have unparalleled benefits. The problem? We have little to no idea how to do that. And many of the tools in the current policy tool box are deeply flawed.

Some take this as evidence economists and researchers should focus on other things. This brings us to the second part of my argument, where I make the opposite claim: there is no more important or promising frontier of knowledge. The fact that we know so little, and the tools are so poor, suggests (to me) that the marginal gains from more research are huge. there is no more important place for scholars to spend their time.

As for the worry that industrial policy is too easily politicized or captured, I say: what policy is not? Again, this is simply a yet more promising opportunity for experimentation and learning.

When my students run rushing in the direction of micro-poverty programs, or randomized trials, I steer them away. Yesterday’s research and policy frontier is tomorrow’s old news. What is the next frontier? I would put money on industrial development and, with it, a new breed of industrial policy.

Some of the most interesting development research is coming from people swimming ahead of this wave: Eric Verhoogen, Nick Bloom, David Atkin, David McKenzie, Dani Rodrik, Ricardo Hausman, the authors of this post’s paper, and a slew of others. I haven’t seen the same swell in political science, but surely it will come.

Beyond Kony 2012

That is the title of a new, short e-book edited by Amanda Taub of Wronging Rights fame. I was supposed to contribute but sadly was too overwhelmed with other things.

It’s a guide by scholars and journalists and lawyers to the past and future of the conflict in Uganda, and a terrific complement to the Kony 2012 video. If you have a newfound young activist in the family, it is a terrific gift.

You can buy for $0 to $3 here (you give what you want).

Here’s a sample of the table of contents. Full contents here.

  • How Civilians Became Targets (Adam Branch)
  • Kony2012: Treat the Political Causes of the LRA, Not Just Its Violent Symptoms (Daniel Kalinaki)
  • Three Strikes and Kony’s Still There: What I Learned from Negotiations with Joseph Kony and the International Criminal Court’s Efforts to Indict Him (Alex Little)
  • Can a Military Intervention Stop the Lord’s Resistance Army? (Patrick Wegner)
  • The Power of Images: Who Gets Made Visible? (Glenna Gordon)
  • Learning From Save Darfur (Rebecca Hamilton)
  • Avoiding “Badvocacy”: How to Do No Harm While Doing Good (Laura Seay)
  • Beyond Kony2012 – Reasserting the Transformative Power of Youth Activism (Sam Menefee-Libey)

Working or shirking from home?

This is not what I would have predicted.

We report the results of the first randomized experiment on home-working in a 13,000 employee NASDAQ listed Chinese firm. C

…We find a 12% increase in performance from home-working, of which 8.5% is from working more minutes of per shift (fewer breaks and sick-days) and 3.5% from higher performance per minute (quieter working environment). We find no negative spillovers onto workers left in the office.

Home workers also reported substantially higher work satisfaction and psychological attitude scores, and their job attrition rates fell by 50%.

I can see this. My personal productivity is enhaced when I can work in my pajamas and eat cereal at any time of day.

See the full paper.

Innovations in property rights (theological edition)

Deities can actually own property in India, though the law treats them as minors and they must be represented by an official guardian.

From a New Yorker article on the Sri Padmanabhaswamy temple in communist Kerala. Billions in gold, jewels and antiquities were recently discovered beneath it.

Possibly one of the best lines in the article:

I asked him what he thinks Marx and Lenin would have done. The activist, shifting in his chair, replied, “When they are reincarnated, we must ask them.”

What happens when small firms formalize?

De Mel, McKenzie, and Woodruff continue their string of hugley interesting firm studies:

We conduct a field experiment in Sri Lanka providing informal firms incentives to formalize. Information about the registration process and reimbursement of direct costs has no effect. Payments equivalent to one-half to one month (alternatively, 2 months) of the median firm’s profits leads to registration of around one-fifth (alternatively, one-half) of firms. Land ownership issues are the most common reason for not registering.

Follow-up surveys 15 to 31 months later show higher mean profits, but largely in a few firms which grew rapidly. We find little evidence for other changes in behavior, but formalized firms express more trust in the state.

Subtle signs your economic policy may not be sustainable

So many nervous citizens have taken their money out of the country that Argentina’s tax agency now uses Labrador retrievers trained to detect the ink used to print dollar bills in an effort to stanch capital flight at the airports, ferry terminal and bus terminal in Buenos Aires.

The response to nationalization policy in Argentina.

What I’ve been reading

  1. The Killer Angels, by Michael Shaara: The “classic novel of the civil war”, or so they say (it’s actually now the subtitle). Three days of battle at Gettysburg. Deeply engaging. A nice complement to my US 19th century history binge.
  2. States of Credit, by David Stasavage: Why oligarchic European city-states dominated the commercial revolution, and why big territorial states eventually dominated them in turn. The short answer: technologies of borrowing. Excellent book.
  3. The Expats, by Chris Pavone: Reputedly the spy novel of the year. Imagine a John Lecarre novel about a spy turned soccer mom. That does not sound like an endorsement, but it is highly readable. I satyed up past midnight more than one evening this week.
  4. The Pseudo-Democrat’s Dilemma, by Susan Hyde: Why would thuggish regimes allow election monitors, even though it’s costly to their power? The answer: they do it precisely because it’s costly—to signal they are ready for all the international goodies.
  5. The Big Sleep, by Raymond Chandler. The original hard-boiled detective novel. I am catching up on my literary pulp, now that so much is available on Kindle. Recommended.

Frontiers in conflict prediction

RiftLand works by chewing its way through a range of data collected by charities, academics and government agencies, and uses these to predict where groups of people will go and with whom they may clash in times of drought or armed conflict.

Dr Cioffi-Revilla gives the example (though he will not name names specifically) of a tribe of nomadic herders known for sharing its notions of veterinary medicine with others. This tribe, the model predicts, will reckon it safer to cross the lands of groups who also rely on keeping their animals healthy. Another point is that tribes who own a radio or mobile phone will steer clear of roads after news reports of government atrocities against their kin. A third is that much of the movement of herdsmen can be predicted from satellite data on the condition of pasture lands, modified by knowledge of what Dr Cioffi-Revilla calls “the complex network of IOUs” between tribes: which are currently hostile to one another, and who owes whom favours.

More in the Economist.

Talks in DC April 26-27

There will be two, one of them public.

The World Bank (for Bank staff)
Thursday, April 26, 2012
“Youth Employment and Post-Conflict Peacebuilding: Lessons from Five Randomized Evaluations in Liberia and Uganda”
Room J4-044
12:30 PM – 2:00 PM
Staff can register here or do something called Livestream.

Center for Global Development (public)
Friday, April 27, 2012
“Peacebuilding and Economic Recovery: Lessons from Liberia and Uganda”
12:00pm–1:30pm
Details and RSVP here