In Tanzania, where opening a bank account requires years of administrative paperwork and hoop-jumping, the efficient simplicity and of these accounts is taking the country (world?) by storm. [Actually, The Economist thinks regulators are holding back the storm in India and China].
Mobile money services, like M-PESA and Airtel Money, are revolutionizing financial transactions all over Tanzania. With a photo ID (just to register), a cell phone line (which many people, and most households, already have) and a password, a person can send money to a sick relative, pay electricity bills, buying phone credit, pay taxes, buy internet time and have a safer mattress under which to store her living stipend. In Kenya (where M-PESA originated) mobile money services are used by 70% of the adult population and around 25% of Kenya's GNP flows through it.
In Tanzania, where opening a bank account requires years of administrative paperwork and hoop-jumping, the efficient simplicity and of these accounts is taking the country (world?) by storm. [Actually, The Economist thinks regulators are holding back the storm in India and China].
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I just started macroeconomic theory at my notably freshwater (Hayekian) institution. The first few days have been interesting, to say the least. I anticipate more quotable insights from this renowned and stately professor.
Caroline Theoharides and co-authors ask whether "Dubai gets more Filipino migrants when its economy is booming relative to other countries in the world, and whether it pays them more when its economy is booming." One of their main findings, posted on the World Bank development impact blog, includes the fact that: a 1% increase in GDP at destination leads to 1.5% more migrants, which implies that workers both have an opportunity for substantial wage gains via migration, but also that migrant numbers will be very vulnerable to GDP shocks at destination. To some degree, this answer seems completely intuitive. In the US, the narrative has been that numbers of foreign-born workers dropped significantly during the recession. However (and Caroline can correct me on this), my impression is that finding empirical evidence to support this story (as with many stories of migration) is a major challenge, especially in the US where many migrants are working illegally. However, the Migration Policy Institute does have good research on estimates of foreign-born workers using CPS data. And this graph, which comes from a policy paper on the impact of financial collapse in Caroline et al's references, hypothesizes the following numbers of foreign-born workers in the US: The pink circle is the estimated drop in expected foreign born population during the recession. It seems to me that Caroline et al look hard at the pink circle and use Filipino migration data to find solid evidence in support of the influence of destination-country GDP on that pink circle.
More conference comments from the Midwest International Economic Development Conference.
At the migration session, Marieke Kleemans presented a thoughtful paper on labor market changes in response to immigration, using weather shocks as an instrument for internal migration in Indonesia. Her discussant, Michael Clemens from the CGD gave some insightful comments in return, including one that posited that weather stations (the source of her climate data) might actually be located somewhere between the source town and the destination city that drives migration. This called into question the exogeneity of her instrumental variable, and potentially the entire identification. It also led to the appropriately sarcastic exclamation from a frustrated economist: "Great. Even rainfall isn't exogenous anymore." And this leads me to frustration number three: the elusive quest for exogeneity. In order to be able to discuss the causal effect of X on Y, it is imperative that you ensure both a) that Y doesn't cause X and b) that unobservable factors don't affect both X and Y systematically. Exogeneity is crucial to identifying an unbiased causal effect. However, my concern is that the exogeneity bar (likely due to the gold standard of randomized controlled trials) has been raised so high that our focus on exogeneity as the primary objective can consequently side-line development research objectives. It certainly isn't the case that research with a great exogenous variable necessarily overlooks development altogether, but my fear is that switching the objective of the research to exogeneity limits the set of development questions we might even ask. Additionally, my concern does not go so far as to call into question the legitimacy and effectiveness of using randomized controlled trials to study development, although Angus Deaton has written about this (a fantastic video summarizing his views through a review of Poor Economics is available here). However, I do want to re-emphasize that the objective of good economic development research should be informing and shedding light on development. It seems to me that an obvious source of good development questions is from practitioners working in developing countries and communities of stakeholders, but this is actually fairly uncommon in economics research. In a nice World Bank working paper, "Evaluation in the Practice of Development," Martin Ravallion point out that "Academic researchers draw the bulk of their ideas from the work of other academic researchers. To be useful, evaluative research [in development] needs to draw more heavily on inputs from non-researchers actively involved in making and thinking about policy in developing countries." Also interestingly, Ravallion will be the keynote speaker next year at the Midwest International Economic Development Conference in Madison, WI. Last week, Dean Yang, gave a talk at at our APEC Development Seminar on experimental results in Malawi of updating prior savings choices. Since he does a lot of migration research (where the exogeneity challenge is ever present), I asked him about this. And although he said that he would officially place himself in a camp of high value on identification, that the concern of limiting the set of research to causally identifiable effects is an important and potentially controversial meta-level question. And he added that, in terms of publication, research on correlations (that bypass problem of exogeneity) are still relevant and important, especially if you bring a policy-relevant and unique dependent variable to the table. Perhaps 'unique dependent variable' is an economists way of cautiously saying: tell me why I should care. Hat tips: ALD, DY, CBT More conference comments from the Midwest International Economic Development Conference.
Elaine Liu from University of Houston presented a paper "Fertility and Divorce Responses of Local Women Due to Influx of Foreign Brides." It sounds neutral enough, and her game theoretical approach was interesting, but the subject is an apparent phenomenon in wealthy south Asian countries where men use brokers to find wives from developing countries. According to the NYTimes, an article which she referenced, this trend is apparently due to "a surplus of bachelors, a lack of marriageable Korean partners and the rising social status of women [which] have combined to shrink the domestic market for the marriage-minded male." Here's Frustration Number Two. Although the focus of the paper wasn't at all about the rights or welfare of foreign brides, I was immediately repulsed by the talk due to the ease with which the author casually discussed her exogenous variable: "Taiwanese men buying themselves a foreign wife, guaranteed virgin." She did review the surprising trend and unique dataset on marriages, but somewhere between the hypothesis slide and the flowchart on expected payoffs, she seemed to have skipped over the fact that actually owning another human beings is usually considered slavery. Of course this is an economics conference, so the focus of her talk should be on the economics of this issue, but it blows my mind that we can talk about this pattern in a presentation without at least mentioning the much bigger problems, consequences and context. For example, the realities of human trafficking, domestic violence and the apparent cause of all this, sex-selective abortions (although sex-selection is mentioned in her paper). There is just clearly so much more going on here and the failure to address the major issues of a bizarre sexist practice but rather jump straight to the economics of the influx of foreign (purchased) brides seems both insensitive and myopic. Inherent to studying development is the fact that we study some difficult and sensitive topics (a good friend upholds a strict ratio of debriefing funny TV shows to every day spent analyzing gruesome sexual violence data). Poverty isn't ever really easy to talk about, and to some degree, we're always dealing with sensitive topics, so attaching emotional weight to a particular topic may not be the most efficient way of critically researching solutions. Ignoring the context completely makes my stomach roll with callousness, but more, it drives away collaborators from other disciplines, loses sight of the importance of the research, and calls into question the external validity of her results. Without drawing in the larger context and causes of this trend, any results specific to this particular scenario are somewhat futile to conclusively inform public policy, whether it be related to maternal health, immigration, or women's rights. Stay tuned for frustration number three: The elusive quest for exogeneity. Hat tips: TW, BLK, AP This weekend, I attended a World Health Organization task force meeting on measuring the outcomes and impacts of treating NTDs (Neglected Tropical Diseases). The new language of acronyms endemic to an international organization was both educational and entertaining. No joke, a few people said things to the effect of: "Well, the STAG for NTDs advises coordination with the MOE but they aren't completely on board with PCTs for the sake of MGDs in terms of treating NTDs." Right. But anyway, its healthy to learn the non-academic languages of development.
Although significantly more hierarchical than an academic conference (with a much fancier binder of conference information), it was also more participatory. We broke up into working groups, where we identified priorities and methodologies for measuring the impact of treating NTDs. In case you already forgot, that's Neglected Tropical Diseases (or as economists generalize: worms). My advisor Paul Glewwe, and his entourage of conference-attending PhD students, were all placed in the education impact group. So in other words, our goal was to identify the evidence that making people healthier effects education outcomes. The Miguel and Kremer de-worming study was a major source of evidence on this impact because they found significant increases in school attendance of both treated and nontreated kids in rural Kenya (spillover treatment effects- like a vaccination). However, they found no major impacts of the treatment on test scores (maybe because teachers are already focused healthy front-row kids anyway?). Another interesting retrospective study on the impact of worm eradication in the US belongs to UChicago's Hoyt Bleakley. Related to Bleakely, for a bit of wonderful history on the eradication of hookworm in the American South ("A lot of Southerners just don't look right... maybe they just had some sort of laziness"), listen to this entertaining Radiolab episode on parasites. I do like discussing research on the impact of a development intervention on educational outcomes, but there were moments of bureaucratic clarity where I considered the possibility that we weren't searching for research on these effects for the sake of better understanding the impact of de-worming treatments. Rather, at a couple of points, it seemed the purpose of the conference was to identify these impacts for the sake of justifying a money flow into the NTD department of the WHO. Or, in the words of one of the WHO directors "keep the wind in our sails." And its not necessarily the case that this money is flowing in the wrong direction or that the research doesn't justify the money flow to NTDs. However, it did seemed strange to shift the perspective from a strictly research-oriented to standpoint to organizational advocacy. Although this article is a couple of years old, the politicizing of analytic methodology is not out of date. It is simply imperative to both be clear about model assumptions, when we make them, and to scrutinize them when someone else does.
1. The former president of Mexico, Ernesto Zedillo, and Minnesota Economist Tim Kehoe are giving a talk on globalization tomorrow night, sponsored by the Heller-Hurwicz Economics Institute (I'm hoping some freshwater/salterwater economics comes to the surface and things get heated).
2. Census data made accessible by the wonderful Minnesota Population Center allows researchers to more accurately measure the civil war death toll. 3. World Bank presidential debate continues here. 4. And another shout-out to the MPC, the 1940 US Census will soon be available: When finished in about four years, it is expected to be the largest database of detailed information about people and their households ever made available. Hat tip: DG-S An interesting discussion of the commons dilemma by a fellow nerd, Applied Economist Justin Andrew Johnson. As a brilliant programmer-turned-economist, his website is totally superior (module integration?), better organized (multi-user controls?) and so much prettier (agent-oriented design?).
He applies the infamous tragedy of the commons to his support for the graduate student union (GSUW/UAW). It's very well articulated and part of a two-part series on the graduate student union, following a first post, ironically called "The worst place we should have a union." Interestingly, the union failed to pass during a vote last week. But that doesn't keep us from discussing it. Note that JAJ's argument in favor of supporting the institutions that uphold successful commons (ones that don't end in tragedy, that is) would require that you agree that there exist market failures and commons tragedies in the areas that the UAW supports (namely health care, environmental degradation and income inequality). In this case, supporting the UAW will uphold the institutions to mitigate the failures and result in a non-tragedy solution. JAJ is also writing about the economics of climate change and has helped us all out by providing a very brief required reading list on the subject. It looks a bit like what I imagine is the bibliography for his oral defense. By the way, the reason potluck dinners work in Minnesota is because the Minnesota-nice is a subtle institutional social norm that drives out free-riding at a friendly dinner. Last summer at a research workshop in Tanzania, my field coordinators and PIs were big proponents of using personal digital assistants (PDAs) instead of the old fashioned paper interviews. As I prepare to collect baseline data using a pretty extensive household survey (trying hard to keep it under two hours), here's some solid empirical evidence from the Journal of Development Economics in support of them.
Evidence from a randomized experiment: We find that PAPI [Pen and paper interviewing] data contain a large number of errors, which can be avoided in CAPI [computer-assisted personal interviewing]. Error counts are not randomly distributed across the sample, but are correlated with household characteristics, potentially introducing sample bias if dubious observations need to be dropped. |