Big Bag of Monday

The last several weeks I have been concentrating on finishing the last proofs for our textbook, getting out job applications, and overcoming a Thanksgiving-week stomach flu so that despite increasing work hours 50%, the something that gives is what - let's face it - matters less: this blog. So without even worrying about catching up, this week will just feature some links to other people's interesting thoughts and I'll leave it at that.

Yglesias on TSA: But don’t ask yourself “what amount of hassle and expenditure is worth paying to prevent terrorist attacks,” ask yourself “what amount of hassle and expenditure is worth paying to shift terrorist attacks off airplanes and onto buses”? Much of the resources currently spent on “security” measures would be much better spent on having more police officers.

Wronging Rights on rethinking areas of state failure: I'm struggling to think of any country in history where the police haven't ever effectively ceded large chunks of territory to violent criminal gangs. (Frankly, the list of places where they aren't doing that at the moment is pretty short.) ... In wealthy, developed countries, we expect the police to enforce laws, investigate crimes, and come when someone calls for help. But in places without the rule of law - where the state doesn't have a monopoly on violence, and the state's use of violence isn't constrained by law - that's just not the role they play. There, the police are just another group that uses violence on behalf of the powerful.

Sumner on the monetary union: I get frustrated when I read people arguing the Eurozone problem is that the ECB can’t come up with a one-size-fits-all policy stance.  ... Actually money is even tighter in Europe than in the US.  It’s too tight for every single Eurozone member.   Nominal GDP is well below the levels of early 2008.

Marron notes that housing price decreases make core inflation look lower than it would otherwise ... but it's still respectably low at 1.3% if you take housing out. It's just not as spectacularly low. As I argued earlier, the question is what kind of inflation we are worried about. Changes in food, fuel, and housing prices are important for human welfare, but are not necessarily indicative of the effects of  Federal Reserve engineered increases in the money supply.

Marron on business uncertainty in Afghanistan being a greater concern for businessmen than physical uncertainty.

Cafe Hayek on the double imported "all-American" turkey's Mexican heritage. Speaking of animals, The Economist notes that pets and non-livestock near humans have been growing heavier and more obese over the last several decades as well.

A Thanksgiving Reminder

In the words of Dave Barry (2004):

But Thanksgiving is also a spiritual time of quiet reflection - a time when we pause to remember, as generations have remembered before us, that an improperly cooked turkey is - in the words of the U.S. Department of Agriculture - "a ticking Meat Bomb of Death."

Please be sure to cook your Thanksgiving dinner thoroughly. The USDA's actual quote is that means 165 degrees measured with a meat thermometer.

Food safety website Barfblog's recommendations: avoid Whole Foods turkey "For the past couple of weeks, Whole Foods has been pushing their turkeys like some form of food porn crack..." Chapman and Powell's advice for a safe Thanksgiving turkey here. The thing we are going to be most pressed to accomplish: "Refrigerate leftover turkey within 2 hours of taking it out of the oven."

This Month in Food News

Rodrik notes how most development groups are a very dismal bunch: low food prices are bad for the poor and so are high food prices ... just for different groups of poor people. He argues that this accentuating the negative and living off bad news makes for bad public policy. Oxfam retorts that while they do point out who suffers from whatever is currently happening, this hasn't changed their policy recommendations. World Food Prize winner Pinstrup-Andersen, who has just begun blogging, also speaks out on the culture of negativity in a new post on Food Apocalypse Fatigue.

The Political Economy of Cheese

As many other blogs [e.g. Wilde 1 and 2, Marron, M. Nestle] have reminded us since the NYT story two weeks ago (boy, I'm behind!) the FDA has multiple constituents to satisfy. The arm working for citizen health tells us to avoid high fat but the arm helping dairy farmers subsidizes and promotes the consumption of cheese. The two combine in some programs, like WIC (Women, Infants, Children) which directly subsidizes milk products for young mothers and their children [aka many of my friends at church].

WIC is one of the things that would change if we managed to split the FDA pieces up. If what we really want is a supplemental nutrition assistance program run by a health department, we can subsidize fruits and vegetables rather than milk products. If what we really want is a farmer income bill, we can pass that without encouraging overproduction, dumping on foreign markets, or change market prices to support less-healthy lifestyles.

The way things are currently set up, we encourage dairy farmers to breed cows with higher milkfat. The same applies to beef - more marbled beef tastes better, so it sells better. Hog and chicken farmers, however, have seen there is real money in going the other direction and have been breeding the fat out of the animals. Hogs are leaner today than they were 40 years ago. But the regulatory system right now supports less healthy products when they come from cows. Removing or reducing these subsidies and distorting regulations is something both left and right ought to be able to get behind.

That isn't going to win elections necessarily for the good folks who represent cattle states and sit on the agricultural committees, so Congress is probably not the place to look for change here.

Can you read me now?

I got a note from a would-be reader that the last blog template wasn't very readable. Is this better? Does anyone (else) prefer the old template?

The Lighter Side: Thinking Like an Economist

Applying the tools of economics in daily life: rolling forecasts, dynamic programming, measuring progress of the Millennium Villages (well, that's what inkblot looks like to me), matching, ... and the tragic consequences.

Symposium on Cornell-India research ties

The following are notes I took at today's symposium. I had planned on tweeting them but the internet connection was less than ideal.

Kanbur – the conjucture is high growth rates, increasing inequality, and many people left behind. Ongoing Maoist insurgency in rural areas left behind - more than ¼ of India’s districts, mostly east and southeast. Focus on removing the binding constraints; on helping most efficient areas to grow and redistribute; or make growth more equitable (foregoing some growth) – All 3 in India makes for interesting research prospects.

Hawkes (Food distribution) – Supermarket penetration rising with per capita income [would look linear if they had done income in logs] (USDA 2002). Very little sold through modern retail food stores in India. If I am a single-brand retail, I can open in India; if I am a multi-brand retail I can only own 50% of any firm I open there. Cities aren’t built to handle and efficiently distribute food. Lots of product loss in transport (as much as 40%). ~12 million small shops for food retail – about 10x as many stores per person as US.

Prakash (Tata-Cornell research project) – Goal to develop longitudinal survey to include dietary, economic, ag, physiological and health indicators (Barrett 2010). Existing data set: Sukhi Baliraja Initiative baseline survey (contact him or Barrett) – 7000 hhds, can be linked to census and NFHS. ~25%-40% children under 1 underweight. Extensive data on infant feeding practices, time use, weight. Study integrated child dev services and nat rural employment guarantee act (paid wages through bank account). How is it impacting ag productivity (loss of workers, growth of laziness)

Maertens (Ag tech and markets) – Majority of farmers said they prefer the more risky choice when facing non-convex asset dynamics and incomplete credit markets.

Index of Indices

Owen Barder on the UK's drop in the Commitment to Development Index (peacekeeping, naval fleets that protect trade, low arms trade, among others) - from 5th to 16th out of 22 in only 5 years. How did that happen? Arms exports. The UK exports more arms than anyone else to poor, undemocratic governments, allows in the fewest unskilled and student migrants, and research focuses on defense and IP rather than development. After the Scandinavian countries come New Zealand and Ireland, then Portugal, Canada, Spain, and the US.

On changes in the HDI (wealth + health + education) over 30 years, Nepal more than doubled its old score. Other large improvers include Tunisia, China, Egypt, Morocco, and India. Rodrik on the unsung development miracles in North Africa, crediting a willingness to experiment, particularly with gender issues.

Oh, and the US for the first time is in the HDI's Top 5 [3rd highest years of schooling, top 5 GDP, life expectancy slightly lower than most] and South Korea broke into the top 25 unexpectedly. Denmark has been losing out in life expectancy (which in the top of the distribution gets nearly all the weight), Iceland's banking crisis and Finland's double-dip recession have hit both of them heavily in GDP and both are heavily dependent on EU trade.

The Economist on corruption: changes corruption perceptions, successes from various actors. Zutt from the WB on Kenyan corruption, casting a bit of doubt on perceptions indices (nothing unusual) and that we may believe there is more corruption in Kenya because there is a free press to tell us about it. He does come around at the end to admit some of the things the government has not done to show its commitment to fighting corruption.

Newsweek credits Utah as a "promised land" and "the new economic Zion" because its ability to bring in new businesss that prosper during the recession. “Utah’s people are, indeed, an employer’s dream," the article said. "They are healthy, hard workers (pouring in 48 hours a week on average), and exceedingly stable, with the highest birthrates in the nation. The large number of young Mormons who spend two years on a conversion mission also means a huge swath of the population earned its sales stripes in hostile terrain.” Alternatively, for those living outside Utah, a ranking of Top 10 Northeastern US cities to raise an LDS family. Ithaca scores quite highly for having an educated populace and its proximity to church history sights ... but no mention of the less-welcoming cultural elements. Personally, I would recommend next door Dryden for a better fit. Nearby Elmira also scores highly.

Deplorable Harrassment of Selectees, Treatment Simply Abusive

Is anyone yet mounting a case that TSA's latest outrages are violating our Constitution rights to be "secure in [our] persons…against unreasonable searches"? It's the one shadow preventing the otherwise pleasant contemplation of traveling to visit family this Christmas.

How about a better way of doing things? Option: Follow Israel's example. They know a thing or two about security against terrorism and it sounds a great deal more effective and innocent-friendly at a fraction of the cost.

If a terrorist group calling itself the Pervert Jihad demanded that, in order to prevent them from killing 450 people a year, the US government had to subject its citizens to these policies, should/would we give in to that demand?

On sanitary napkins and screening.

Reddit recommends that CNN's twitter feeder be bombarded with: "Dear Mr. President: Would you send the First Lady and your two little girls through the TSA screening process?" (HT Mises)

On the need for training and preparation (or at least a flash mob) before you go all civil disobedience on the TSA.

Oddest idea: Napolitano is really a Libertarian in disguise, trying to disgust the American public with her organization enough that they close it down.

Update: We teach little children that they can say no. Why not adults as well?
A post arguing that preventing problems in the air is the wrong goal. We could accomplish that just by banning air travel. "The goal isn’t to stop x y or z regardless of the cost. That’s why the ban on air travel is useful. It helps you see that there are some costs not worth paying."

China vs. America rap

The rap's video and performance are a bit glaring, but it hits on a lot of the important topics.

Yglesias makes some very relevant comments, which seem all the more relevant since I finished re-editing the international trade chapter in my upcoming textbook this week by adding a section talking about this:

... any trade-related issues as a question of “China” versus “America” is always misleading. Industry employes just 27 percent of China’s workforce. Almost 40 percent of Chinese workers are laboring in agriculture, together producing only 10 percent of China’s GDP and thus being quite poor. These people do not benefit from an undervalued RMB. On the contrary, the low price of the RMB further depresses the value of their already meager earnings. The main beneficiares of the cheap yuan are the owners of China’s exporting enterprises, and the people who work at our supply those enterprises. This, however, isn’t “China” it’s a particular set of politically influential Chinee people who have a dominant voice in China’s economic policy.
America has a bizarre cotton policy. But that’s not because “America” has decided that this policy is good for “America,” it’s because cotton-growers control the relevant levers of power.

Video below the fold.

Random Acts of Development

Randomization the easy way: Fantasy Development. Pick your projects, players, books and duke it out with your colleagues to see who can develop the greatest development team.

A call to make the World Development Report a Wikipedia project so that all the (internet-connected) world can participate - also known as Development 3.0

Novel microfinance: goats replace money.

Current world population, updated every second.

Taiwan ($34,700/capita) surpasses Japan ($33,800) in PPP but not market exchange rates.
Review of a "pre-economics" book on How an Economy Grows, Libertarian style. Or, if you prefer, the account of the rise of two Indian corporate leaders "in the thick of the sweatiest corporate wrestling matches."
The first digital images of records from Ghana have been published on beta.FamilySearch.org

NAFTA gives Mexico some advantages (against China) in trading with the US, but needs to do more to take advantage of them. But the former trade minister who negotiated NAFTA "points out that the multiplier effect of exports in Mexico is unusually low. Each export dollar generates only $1.80 at home, compared with $2.30 in Brazil and $3.30 in the United States." Contrary to most trade discussions that argue that developing countries need to focus on building processing plants, the article argues Mexico needs to concentrate on building more of its own inputs so it can gain more from its exports and get access to more markets.

The effect of unconditional cash transfers on London's longest-term homeless. "Of the 13 people who engaged with the scheme, 11 have moved off the streets. ... The outlay averaged £794 ($1,277) per person ... [while] the state spends £26,000 annually on each homeless person in health, police and prison bills."

The difference between quantity education and quality education in Uganda. Private educators are perceived as offering a much better product: 90% of university students were privately educated [students - find the selection bias in that sentence]. The interviewee believes universal education was still a good idea just for getting the culture to believe in universal education and the policy is being followed up with universal secondary education. By way of comparison: building a school in Ethiopia.

Fair Trade Waylaid

Supermarket | United Kingdom

Customer: “Excuse me, where is the tea?”
Me: “Right this way.”
Customer: “Do you have any tea that isn’t fair trade?”
Me: “Excuse me?”
Customer: “Do you have any tea that isn’t fair trade? It’s more expensive!”
Me: “I’m sorry, but I think you are missing the point.”
Customer: “It’s more expensive! That isn’t very fair to me!”

Big Bag of US Politics, post election

What CGD expects for development and ODA in the upcoming Congress.

Government service provision capacity in a digital world: 85% impressed and 15% terrified.
Local knowledge in ... the Midwest. The post that started the firestorm.
A fascinating reason to vote no on re-election if you are an uninformed voter: if you were pivotal, it must be that a lot of people are worried.
Where the rest of the money for political attack ads comes from ... and it's a lot.
Hayek felt environmental regulation was inevitable and, though regrettable, needed ... and that in the Road to Serfdom, no less.
Telephone directories as precursors of the internet.
On the economics of law schools and oversupply.
Pres. Obama's lack of contrition.
and Charlie Rangel following suit: "somewhere along the line, he began believing his own press. He was too important to bother with details like taxes or rent laws or the House rules."

Different Views of Our World

My ongoing series of interesting maps. Maps below the fold:

Country names that sound like band names (Doghouse Diaries)
Size of Africa compared to other countries and continents
Size of Africa's economy compared to the rest of the world: as large as Chicago + Atlanta
It's not red states vs. blue states, but red states vs. blue cities
A unbiased measure of countries where you can find "mostly good people."
Color-coded US map showing where people say "soda" vs. "pop" vs "Coke" - very true for myself and the Lovely and Gracious.
World poverty
and a map based on the names of countries (my favorite: Ca-Nada)

The African Food System

The African Food System and Its Interaction with Human Health and Nutrition is a collaborative, multi-disciplinary research effort between researchers at Cornell University, United Nations University, and other eminent scholars and policymakers worldwide under the direction of Per Pinstrup-Andersen. It is the first in a series discussing the gaps in knowledge that prevent governments in Sub-Saharan Africa from accomplishing the Millennium Development Goals. The research is targeted at a broad audience and does not assume specific technical knowledge to make use of the insights from the chapters.

Topics include: economics; nutrition; politics; poverty traps; malaria; AIDS; livestock; environment; food aid; population; gender studies


I am very happy to see the book come out as it is my first publication (I am the lead author on chapter 2 on nutrition). There will be a book launching event November 23 at Cornell University G10 Biotech Building from 4:30-6:30pm. There will be short presentations by those authors who can make it followed by a reception and book signing.


The chapters are as follows:

Well if you're going to put it That way...

(in case the video isn't loading, you can find it here)

The Lovely and Gracious listened in when I heard this and asked when I am going to apply to work for "the Goldman Sachs. I mean, everyone else gets a piece..." For myself, I couldn't stop laughing.

Update: As I hoped, Sumner responded.

A couple easy corrections below the fold:

Scissors Beat Paper

Happy Veterans' Day

Adventures in Protectionism

This is the kind of ignorance we're up against.

Pride Goeth Before A Deal

Call Center | Edmonton, AB, Canada

(I work at a call center in Canada dealing with American cell customers. This is a call from a customer in Seattle.)
Me: “Hello, thanks for calling [Company Name]. How may I help you?”
Caller: “Does your company outsource to India?”
Me: “I don’t know for sure, but I know it does hire companies out of the USA.”
Caller: “I’d like to cancel my service, then.”
Me: “I can do that for you. May I ask why you’d like to cancel?”
Caller: “I don’t support companies that don’t support America. If they’re hiring out of America, then I don’t want to support them.”
Me: “Alright, I’ll process that cancellation for you.”
Caller: “Am I calling to India?!”
Me: “No. I’m actually in Canada.”
Caller: “Oh, I love Canada! I do all my shopping there. Everything is so much cheaper!”

So tell me, Watson, would you be happier if he recognized that Canada is not part of the USA and didn't want "our" jobs to go to a bunch of Canucks?

I don't think consistency is really what I'm worried about, Holmes. Educating this person that Canada is not part of the US might actually make his effective protectionism worse instead of better. A little more education can also be a dangerous thing.

Overreacting to Fictionally Frightening Sentences

"Should there be a government task-force delegated with the duty of allocating superhero resources to the citizens of the United States?"

This question is based on wondering how rational and socially optimal Superman's decision making system is for deciding which of the many suffering citizens of Metropolis to save. There are so many things wrong with the premise of the government doing a better job telling Superman where he should concentrate his efforts that it's hard to know where to start.

1) One commenter points out the speed issue. How is the government going to a) hear about, b) make a decision, and c) give Superman orders before two people at opposite ends of the city have met their demise? Is this going to be a 24-hour emergency hotline panel?

2) Have we completely forgotten how often these cities' or the nation's government are captured by villains? Do you really want the Green Goblin allocating superhero resources? If not, do we want to create a government where that situation could happen?

3) Even when the government isn't being run or influenced by the enemy, what happened to public choice theory? Politicians want to stay elected while Superman (and several other, but not all supers) acts from a Kantian or utilitarian ethic that follows a sense of duty. Would the additional layer really be an improvement?

3B) So you think Superman saves Lois Lane a bit too much compared to other people. Do you imagine that the people close to the governing commission aren't going to get similar favorable treatment instead?

4) If we are going to form a high-minded commission of the great and good whose selection is somehow immune from public choice theory, does Superman get any say about his own preferences?

5) What is the government going to do if Superman refuses to play ball? Tax him for each time he saves Lois Lane instead of the media mogul who contributed to the reelection fund? Jail time for actually working at his day job or sleeping when their sense of priorities differ from his? (Basically all principal-agent theory)

6) Rather than being punitive, let's say we offer the superheroes subsidies to get them to provide more services. A) How are you going to determine if a super receives the subsidy? Ecocomics have often pointed out the problem of so many supers these days that it's hard for them to make a name for themselves. Shall we have small business super subsidies? Or shall we create a superhero monopoly/union to the detriment of outside supers?

6B) Solely from an ethics standpoint, suppose we use subsidies to nudge Superman to save the people we want him to. Do we really want to replace his own ethics with monetary incentives? Monetary incentives have been known to undermine social norms and ethics-based incentive structures. Imagine a world where supers save people because it pays them to! How far are we then from supers who cause problems in order to resolve them to get the stipends? We could be subsidizing supervillainy! ... or the next Spiderman issue where Parker debates causing a little mischief so he can get his aunt a needed surgery....

Bad idea. Really bad idea.

PS - While the current system might be private, it's not market-based either. I think markets for supers would also be worse overall. I doubt that the binding constraint on making the fictional world a better place is a lack of high-powered monetary incentives for supers. While we might nudge some supervillains over to more socially optimal activities, the chance for abuse is the same as in the subsidies case above.

APPAM Panel: SNAP caseload and food pantries

Klerman and Danielson -- If SNAP had never changed or AFDC-TANF never happened or if economy stayed same, how would food stamp caseload and composition changed? The economy does not change composition of caseload but the caseload would have been smaller without the recession. SNAP and TANF policies change caseload (SNAP increases, TANF decreases) and composition (both do the same thing: less welfare). These three explain half of the change in composition and increased caseload.

Dickert-Conlin, Fitzpatrick, Tiehen -- advertising's effect on SNAP caseload. Radio advertising increased caseload 2.6% ... but not if you include state fixed effects. Spanish TV advertisements lowered caseload (9%), as did online applications (4%). The interaction term Spanish ads * percent Spanish speakers is initially positive, but then goes negative again (at about 1/4 Spanish).

DW (and discussant) - Could it be positive in areas where there are few Spanish-speakers but in areas with a large Hispanic population there are already policies in place to reach out to them so there is little to no effect? Discussant's version relies on network effects.

North Carolina Hunger Project -- Relative to overall population, minorities over-represented in food pantry clients. Food pantry visitors more likely to be female, more likely to have a long-term relationship if on food stamps than if not, and to visit more often if on food stamps than if not. They followed a cohort and found people who get food stamps are likely to have a longer relationship than others (3 months), African Americans have longer relationships (6 mo) and less long if Hispanic (10 mo). Once you enter as an elderly person, you never leave.

Lighter Side: What Not to Eat

How about Bacon Soda? In other bacon-related news, robot identifies human hand as bacon.

And why does it all matter?

APPAM Panel: Community Development

Lewis & Knapp (Maryland) -- A study of housing renovation in Baltimore, whose population has been declining steadily for decades. The renovation program does increase likelihood of renovation, but not much (0.3%).

Schuetz, Kolko, Meltzer (USC) -- Is the 'shop around the corner' a luxury or a nuisance? -- How is income correlated with retail density? As income increases, density of retail and drugstores increases. Higher income doesn't affect supermarkets, clothing, or food services. Overall, high income neighborhoods have low density, but if you hold population density fixed, higher income increases the number and size of retail outlets. Mostly they are (supermarket and drugstore) chain stores catering to the rich while independents are not wanted. The idea is chain supermarkets and drugstores are higher quality and range. In other categories, chain or independent is not a signal of quality. Poor areas already have mom and pop shops but very few chains or supermarkets.

Aubourg and Good (IMFI) -- Do capital inflows contribute to capital formation, transfer of abatement technology, or encourage pollution haven behavior? The Environmental Kuznets Curve acts like a black box. Once you control for GDP, most types of capital inflows do not affects CO2 levels, but remittances and technical aid lower SO2. Portfolio aid is bad for both CO2 and SO2.

And then I snuck next door to where my friend, Paul Heaton, was presenting on the effects of repealing blue laws on crime in Virginia. In 2004, a handful of VA counties mostly near DC were permitted to sell packaged liquor on Sundays. Using dif-in-dif and triple-dif estimators, he found that low level crime (drunk and disorderly) increased 10% and high level crime increased 5%. Just counting the justice system costs of these crimes came to about the level of the state revenues from alcohol sales and taxes. DUI did not change appreciatively.

APPAM Panel: Cost-Benefit Analysis and Values

Bardach (Berkley) -- What does policy analysis have to say about Community Identity issues? -- public art, memorials, rituals, place names, "official" animals etc, policy issues to answer the questions "who are we?" and "What do we stand for?" (aside from 'tolerance'). Policy analysis should have nothing to say about "what are our values?" Tolerance and civility are not necessarily the same thing. The majority behaves on the basis of tolerance, but the minority should behave toward gift givers with civility. Don't push too far. Policy analysis could help in crafting not compromise, but ameliorative deals that make the losing side less aggrieved. Partial privatization, parallel symbolism, play off of ambiguity (Vietnam Veterans Memorial - it's about the fallen rather than the war), not all or nothing.

Andrews, Hay, Myers -- Can Governance Indicators be fair and effective? Wants to focus on specific outcomes rather than processes (compare under 5 mortality rate to cost). Wants to only compare within their income group (US does worse than average and spends a lot of money doing so). Putting together deviation from the mean in outcome and cost shows a very different picture. Rather than high income = good governance, there are effective and ineffective governments in all income brackets. Do certain models of service delivery work better in various income contexts?

Discussant -- The issue is that the US tries to save every infant and goes to extreme lengths to do so. It's not a governance or technical problem, but a moral question.

Mendeloff (Pittsburgh) -- Cost of lives saved from regulation. Over time, do standards save fewer lives at higher cost? In the 60s when it was started, it cost about $300,000 to prevent fatality equivalents. Cost increased from $200-500k to $1900-6300k now. Doubled 1974-1990, 1990-2000. Much of the cost is in resolving legal challenges.

Spin vs. Science: McDonald's Burgers

The internet has been reminding us regularly of late that small, plain McDonald's burgers don't rot if you leave them out. The standard conclusions people draw from this are obvious. Lopez-Alt decided to test that hypothesis by comparing the (lack of) decomposition of a McD's burger with a home-ground burger using 9 different samples and trials. The costs of science included sleeping on the sofa for over two weeks after debating the wisdom of this particular trial

The results are in and a home-ground burger of the same size also doesn't rot.
If you leave out the salt, it still doesn't rot.
If you make it bigger, then it rots.

The issue is that when the burger is small enough, the moisture evaporates from it before the mold has a chance to grow. Quarter pounders, whether home-ground or McDonald's style, do rot. And if you put the smaller burger in a sealable plastic bag so that the moisture can't escape ... it rots.

So stop picking on the poor, helpless multi-billion dollar corporation, or at least stick to scientifically accurate outrage. McDonald's deserves a break today.

My dear Watson in Boston

Directly across from the boycotted Hyatt in Boston where APPAM is meeting is the following noteworthy marker:

Bell's journal, now at the Library of Congress, contains the following entry for March 10, 1876:

I then shouted into M [the mouthpiece] the following sentence: "Mr. Watson, come here -- I want to see you." To my delight he came and declared that he had heard and understood what I said. ... 

Watson's journal, however, says the famous quote was: "Mr. Watson come here I want you."  Read More 

Not much of a difference. From a job market perspective, what a difference between a school that merely wants to see me and one that wants me!

APPAM Panel: 2010 Midterm Election

One of the panelists (Mayhew) has provided us with a table showing each time since the 1930s when the party not holding the White House won a gain of more than 2% of the popular vote in a midterm election. This week saw the largest increase in popular vote ever: 9.6% and about 63 seats, the second largest seat gain. 1938 FDR saw a 7.7% Republican gain and 80 seats during sitdown strikes. There were ten other smaller episodes in (ranked by size) 1946 Truman, 1966 Johnson, 1994 Clinton, 1974 Ford, 2006 Bush 43, 1942 FDR, 1982 Reagan, 1958 Eisenhower, 1970 Nixon, and 1950 Truman.

Mayhew (Yale) -- Democrats lucked out in that the senate candidates were largely Republican. They would have lost a lot more seats otherwise. Why has this happened? 1) Dems had won by such a large margin last time, so there was a lot to lose. They had gained 6.8%, but lost 9.6% so they lost half again as much. 2) Bad economy. 3) Policy blowback. 4) Public offput by Washington in general.

Galston (Brookings) -- Dems have tried to frame the election as a choice, but it was a referendum. This was driven by economics, but not exclusively. There was policy blowback. The only legislative "accomplishment" that enjoyed majority support last week was financial regulatory reform; everything else held majorities or supermajorities in opposition. Republicans hold their highest share of state legislatures since 1928. If you're going to lose big, don't lose big in a year ending in 0, and particularly not in states that are gaining or losing House seats. The change of boundaries will affect the next decade's elections powerfully. Dems can lose the South, but cannot lose Midwest. Dem weakness in Midwest was the biggest issue. Tea Party probably helped Republicans in House, but not in Senate. This is a more conservative country than it was in 2000.

Skocpol (Harvard) -- Anyone who thinks Tea Party is "just" against government is wrong. They are not against their entitlement programs. Their concern is government spending and taxes for benefits that go to younger people and immigrants whom they view as not as responsible. Obama knows how to push their buttons. The seat loss was ~20 seats more than we would have expected simply based on mean reversion. The Midwest is doing the worst, so that's why so much has happened there. This economy a blow to American psyche and hope leading to anger and despair. There will be a LOT of political theater in the next two years. Even though the Tea Party was a mixed bag this election, it is a loose coalition sending in money and moderates are under notice.

Q (from George Mason): We have heard very little about spending and deficits. We need more research on what policies don't work and can be cut.
A: Galston, I published a 10 year budget last month with lots of things to cut.

Q (Fisk, journalist): Do we have a disfunctional political system? (Discusses 24 hour news cycle etc as reasons)
A: Skocpal - So many of the Tea Partyers only get their news from Fox and Beck. They don't want compromise, making doing politics less likely.
A: Galston - The "center" as defined by the ovarlap between the most conservative Democrat and the most liberal Republican has disappeared. In 90s, the electorate was watching closely when they shut the government down and the party who guessed their reaction wrong had to come to the table. If the new House is not willing to shut the government down, Obama may be in a very strong position.

Galston - The Tea Party might be a renewal of the Goldwater movement and we could be seeing a new movement through the political landscape.
Mayhew - Or it could be a renewal of the Perot movement.

APPAM Panel: Interest Groups

Scott and Gitterman (UNC) -- Lobbyists and Medicare -- A network analysis of connections between lobbyists and between interest groups. Interest groups have become more connected (same lobbyists) since 1999. Used to be 30% of interest groups were connected, now 50%. Lobbyists differ in how long and how intensely they are engaged - hospitals and AMA engaged for the long haul while others only intervene when particular policies are up for debate. There are really about 10-20 law and lobby firms that are consistently active.

Discussant: The measure is based on only registered lobbyists, but registration is a choice. When Congress makes noises about the importance of registration, numbers go up (as they did in 2003 and 07). 

Derthick (Virginia) -- Tobacco lobbying -- Started out bipartisan until 1990s. Republicans taking over in the south meant Democrats were free to oppose tobacco. The 15 years between 94 and 09 were spent on an adversarial court battle with tobacco that wore down Philip Morris. Once Morris was ready to deal with Congress, could turn to a Congressional rather than courts solution.

Discussant: Why have we focused so much on court systems? Patients bill of rights that can be enforced in courts rather than regulation of the industry. Same with tobacco and managed care.

A: Because the most anti-tobacconists wanted heads of companies to be declared criminals. They wanted to do to tobacco what had been done to asbestos.

Jochim (Washington) -- When politics become more partisan, a lot of costs go up (costs to come to agreement raise, costs of research, cognitive costs for going against ideology). Less partisan issues have smaller, incremental policy changes while very partisan issues only move less often by leaps.

Discussant: What does polarized politics mean? In 60s, the polarization was within the Democratic party between northern liberals and the south. Now it looks like Dem/Rep. There is a really difficult causality story: does partisanship make issues volatile, or are volatile issues more likely to become partisan? Hard to convince. It's not parties on the one hand and interest groups on the other. They are the same people! Lobbyists become politicians, party figures, or department appointments and vice versa. Michael Steele, RNC chair, is a banking lobbyist.

Ghana no longer in the poor country category

A tweet from Todd Moss: "Ghana suddenly no longer poor. GDP rebase puts per cap GDP at >$1300. Bye-Bye IDA. http://bit.ly/cni0K4"

Basically, they adjusted the prices and weights assigned various sectors of the economy. The weights hadn't changed since 1993, but banking and ICT have become much more important parts of the economy since. As a result of the changed weights, GDP per capita is now calculated at $1,318 while the old weighting said it was only $753. Ghana's loans have already gotten cheaper.

Standard Chartered's Razia Khan noted the re-basing would automatically make deficit and debt levels appear more benign but would also mean its tax revenue collection as a ratio of GDP would slide below the average for sub-Saharan African countries.

The rebasing also changes how we understand the structure of the Ghanian economy. Services are now more important (>50% of GDP) than agriculture (30%).

Now the big money question: does this change poverty? If poverty data is based on household surveys, no. If your poverty measure is based on GDP per capita and inequality data, yes. FAO's hunger data, for instance, is based far more on the latter approach. There have been fewer hungry people in Ghana than we believed.

On quantitative methods and best practices

Following Texas In Africa's weeklong discussion of what makes social scientists scientists and not advocates (highly recommended), Wronging Rights responds with why lawyers are not social scientists. And it's a fairly compelling case that doesn't rely on denigrating social science:

As Laura explains, social scientists are primarily concerned with using evidence to explain why certain events occurred and to predict future events. Lawyers use evidence to prove that certain events occurred and sometimes to prescribe or proscribe future action.

Consequently, lawyers (and those who employ their methodology) and social scientists are interested in patterns in evidence for very different reasons. When human rights researchers collect evidence, they are trying to provide enough support to legitimize a claim that serious violations are occurring.... The evidence-gathering methods of the human rights movement are extremely well suited to the strategy they were designed to support: advocacy for the cessation of violations of human rights laws.

Blattman (one, two) on the problem of using matching as an identification scheme. Basically, if you're matching on observable X, you aren't solving the identification problem any better than with regressions. What you are doing is reweighting the data: regression puts more weight on outliers and data points that are less well explained; matching puts more weight on similar data points and removes points that maybe shouldn't be compared. But that doesn't get rid of selection issues or unobserved variable bias.

The cardinal sin of political science dissertations? Jumping to a case and data collection before you have a research design. You should have your research design, tests for your assumptions, and a complete write-up plan before you ever collect a single variable. One of the great things about randomized control trials is not that they eliminate many sources of bias, but they force you to follow the scientific method (to a degree).

Yale's James  Scott against a life focused on peer reviewed articles. Relatedly, a call for students who want to be challenged to push back on professors who aren't challenging them.

APPAM Panel: Boundary Crossing Problems

May, Jochim, Pump -- We need convergence in attention to particular dimensions of a problem across different subsystems. Bureaucratic policymaking tends to be less on the frontburner (e.g. food safety). Anemic policymaking is the problem of getting anything done (e.g. infrastructure). You don't solve problems generally by top-down grand coalitions as typically argued, but by coalitions pushing on their representatives to effect change.

Pump -- Policymaking is messy and crossboundary problems messier: many institutions means many veto points. Information is not neutral and it must be politically processed. The fact that the Fed could have bought $600billion in assets in September but didn't is a political issue. Other things equal, the deeper the recession, the greater the partisan conflict. This slows down policy responses.

Discussant: The problem is that the argument is a lot messier and needs cleaning. Automatic stabilizers play a much larger roll now than before, as does monetary policy. Does the speed with which government respond depend on size of recession? How is failure to respond to recession different from the normal, delayed legislative process?

Moffitt and Cohen -- When does bad news about policies/programs finally have a political impact? A: when implementers lack ability to respond. Bad news can be a policy instrument. Bad news without an established infrastructure does not tell us what policy is needed. It only identifies a problem.

Discussant: All policies start with bad news. The question is which problems are worst.

Sapotichne (MSU) -- Urban policy is not dead. They are concerned about a number of problems that are highly urban, and the attention has simply shifted from "urban problems" to dealing with particular problems that are mostly in urban areas (crime, pollution, terrorist attacks). Policy change is not driven by macropolitics, but by discrete urban components of policy sectors.

DW -- Who controls the data collection and dissemination? There is an ability to hide bad news that is embarrassing and to bring out bad news that increases funding or attention to policy spheres and policy action that supports the data-collecting institution's interests. Examples include FAO on hunger data during the food price spike, climate change data, other bad news that is important to an upcoming election.

Remarkable Sentences: Monetary

Bernanke - Even absent [risks of deflation], low and falling inflation indicate that the economy has considerable spare capacity, implying that there is scope for monetary policy to support further gains in employment without risking economic overheating.

Sumner - The stock market seems like a lonely girl who laps up anything she hears from a sweet-talking guy with a very big wallet in his back pocket.

Yglesias on an unrelated issue: Many older white people in this country are in practice torn between libertarian and cranky authoritarian strains of rightwing politics, and the recession has brought out the cranky in spades.

Big Bag of Food Politics and research

The Rice Farmers Association of Nigeria is asking the government to freeze rice imports as more than 75% of production had remained unsold as of two weeks ago. A Dutch NGO, a Kenyan NGO, and the Kenyan Ministry of Livestock are working together to teach pastoralists about storing hay so they can keep their animals alive longer during the expected upcoming drought. The local food movement in Senegal.

Florida tomato workers' representatives won them a 1 penny per pound raise. "The raise will bring most workers annual salary from 10,000 to 17,000 dollars." NPR's report is pretty shocking, including successfully prosecuted episodes of slavery. In FLORIDA. The growers' association is putting pressure on growers to not provide workers the pay raise.

Cornell researchers Wansink, Just, and McKendry on kids' food choices and school lunch lines. "Children and teenagers resist heavy-handed nutritional policies — and the food that is associated with the heavy hand. No food is nutritious, after all, until it is actually eaten. ... When cafeteria workers asked each child, 'Do you want a salad?' salad sales increased by a third." Other behavioral nudges included placing of healthy foods, making kids pay cash for cookies, and adjusting the size of food containers.

On the bad combination of alcohol and caffeine. "As for caffeine, its effects when combined with alcohol are considered serious enough to merit creation of a new journal, the Journal of Caffeine Research: The International Multidisciplinary Journal of Caffeine Science. The journal will be devoting much attention to the role of caffeine in alcohol energy drinks." Michigan has banned the drinks.

Change.org takes issue (surprise surprise) with a new factory farm livestock operations in Oswego (a 72k cow farm) claiming they are environmentally sustainable. The companies are touting their recycling, production of biofuels from waste, and "closed-loop, integrated technology platform." Velez worries this will lead to increased cattle infections both on the farm and on others, the increased grain consumption, and resident anger. I'm a little confused from his writing whether the company is applying for permits or for subsidies.

Powell on optimal systems:

There’s good farmers and bad farmers, whatever system they’re using, and I’m more interested in making sure people don’t barf, whatever kind of food they choose. There are endless scientific reports about which system is better, but they don’t say much. A new report in the Journal of Agricultural and Food Chemistry found that organically grown onions, carrots, and potatoes generally do not have higher levels of healthful antioxidants and related substances than vegetables grown with traditional fertilizers and pesticides.

Metzenbaum on what the administration needs from policy researchers

Metzenbaum (OMB) - When you translate your research into application, please don't only translate the words, but shorten, clarify, put it in forms where we can see it when we need it. We care about useful and effective systems and programs. Train your students to come here and improve what we do. Try to understand why outliers are different: are there lessons you should be learning from them? Can they analyze and do the work? On how outcomes vary and why? On identifying meaningful correlations? On decision making under uncertainty?

More Praise for Corporations

A lot has been written lately on the role of business in development (a little more here). Mostly because this has been underused. Even the neoliberal synthesis of the last several decades focused efforts on reforming government (admittedly to improve the business environment) rather than on directly improving the opportunities for businesses in developing countries.

Multinationals are reducing gender discrimination in South Korea by hiring women who are paid less than their male counterparts. This lowers their costs relative to domestic firms, giving them a competitive advantage. The way to level the playing field? Stop domestic discrimination.

IBM is leading the way by training management for international work by organizing volunteer international service projects that are accountable to the firm for success. On the other hand, there's the difficulty of getting out of social businesses or separating the profit and not-for-profit parts.

Rojas argues that the reason contemporary classical music sounds so terrible is that it is funded by subsidy and mandate rather than as a business that has to appeal to its consumers. Fedako would like to claim that the reason India and many African countries have many cell phones and few toilets is that the former are produced by companies and the latter by government... but who says businesses can't provide toilets? or electricity? They can, they do, and it's by far not enough. Companies are better suited to providing some goods than others.

The Economist's Schumpeter addresses importance of companies doing what they do best (earn profits by providing better goods and services at lower prices, generating employment and economic growth in the process) rather than focusing on corporate social responsibility. Excerpt below the fold:

APPAM Panel: Food insecurity

Wagle (W. Michigan) -- Food stamps increase recipient incomes. Food stamps also reduce work hours supplied by families. Given that, food stamps tend to increase the likelihood of families being poor while increasing incomes. It may help non-poor families more than poor families.   "The role of FSP on food and economic security cannot be over-estimated."
Mandell (UMBC) -- "Fuzzy" regression discontinuity to estimate SNAP on food insecurity and obesity -- Virtually no one above the cut off uses SNAP, contrary to Wagle's findings. Most estimates show SNAP increasing food insecurity, with no effect on obesity.

Discussant 2 (Tufts) -- The time to consider good instrumental variables is while USDA et al are preparing their surveys. Not "what do we happen to have that could do," but "what could we create that would tell us what we want"?

From my question: Eligibility for food stamps is based on all related people living in the household, but you can report income separately for younger individuals. You can therefore have data points where a "1-member-household" has an income too high for eligibility, but the larger family unit living together does qualify. There are a lot of data points also well above the maximum benefit. Most believe that is reporting error.

Q -- At the external margin, above the income cutoff makes you eligible for a little bit of food stamp which is easier to funge as a family, so regression discontinuity may not actually get you what you're looking for. An alternate interpretation is that it's a measure of selection pattern rather than the effect of just a little bit of food stamp.

Great recommendation: look at the selection effect of people leaving SNAP instead of entering.

Discussion of the other paper on teenage pregnancy below the fold.

Big Bag of African Politics

In addition to the US midterm elections, a number of African countries are holding their own elections. An eye-witness account of peaceful goings on in Zanzibar.

Ethiopia and the UK both deny the implications of a recent Human Rights Watch report. Based on interviews with 200 people, they find that people are denied food aid, agricultural subsidies, university slots, and other government programs if they are not members of the ruling party.

Freschi reviews the review of a new book on Ethiopia's mid-1980s famine. The conclusion: totally man-made - "the direct and in all likelihood inevitable result of deliberate policies in Addis Ababa by the Stalinist government of Mengistu Haile Mariam." The post also includes this delightful picture of Ethiopia, land "where nothing ever grows/ no rain nor rivers flow."

Mauritius has accomplished most of the MDGs, an underappreciated achievement. But part of being a developmentalist is never believing amazing progress is actually progress: "Charan is worried the government will use the positive MDG figures as an excuse to ignore other social problems"

The Economist discusses Kenya's growing importance economically and politically in Africa, designs on South Sudan, and the various factions. While that piece is only cautiously optimistic, Zutt believes that Kenya's new (August 2010) constitution will do a lot of good:

It subjects the presidency to more checks and balances.  It strengthens parliamentary oversight of the executive.  It devolves power to 47 elected county governments, introducing for the first time in Kenya a meaningful decentralization.  It protects the rights of citizens, and particularly women and vulnerable groups, through an ambitious bill of rights.  It requires all sitting judges to be vetted to determine their eligibility to continue to serve.

Only 1/5 of the projects undertaken by foreign governments to grow food in Africa (aka land-grabbing) have actually started growing food and even where they have, yields have been 1/4 of expectations. Despite this, more businesses are also beginning to look at increasing African agricultural production.

Africa is a Country points out that the average age of African leaders is 76, while the average age in OECD countries is 51. Penn  notes

I am not sure what to take away from this: whether this is a representative sample, then we’re talking about different kinds of political systems (with rules about term limits or the extent of pressure from civil society groups), different ideas about the links between age and experience, various types of regimes (including life presidents and dictators for the African countries cited), and, finally,  it is not like having younger leaders have led to better policies (whether social, economic or political) in the ‘First World.’

CGD encourages the inclusion of Nigeria in the G-20 because of its large population size. The Economist is bullish on African economic growth, predicting a number of countries with more than 5% GDP growth in 2010 and 2011.

In response to the debate about how to evaluate the progress of the Millennium Villages, Blattman proposes a different baseline comparison: the Institutions and Accountability package. The increased attention caused by the MV project gets national and state governments working ... in those areas. States learn by doing and get better at delivering their public goods to everyone.

By this argument, the kind of research we need to get built around the Millennium Villages are process consultants (to learn how to deliver services better) or people who think about how policy and institutional change actually happens, so the lessons and examples can spread beyong the example villages. We also need lots of close observation so that we can see why some interventions work well together, and why some don’t.

These questions are beyond and in addition to the questions of positive externalities, whether there are results in economic levels or economic growth, and how rigorously we can identify the causal effets.

APPAM Panel: Deep Poverty, TANF

I am attending the Association of Public Policy Analysis and Management conference in Boston and am posting my notes from the various sessions. If you would like to contact me, you can find my cell phone number on my CV, linked above. I will check messages between sessions.


Kathryn Larin (GAO) - had participation in TANF [temporary assistance for needy families] not fallen off from 85% in 1995 to 40% in 2005, 800,000 children would not be in poverty during the current recession.

Julia Isaacs (Brookings) - States with lowest child poverty rates: New Hampshire (8.4%) Connecticut and Minnesota (10.9), Maryland (11.0), New Jersey (11.3), Utah (11.5). Highest rates: DC (30.9%), Mississippi (28.8), New Mexico (26.0), West Virginia (24.8), Arkansas (24.1), Alabama (23.3), Texas (22.7).  SNAP (food stamp) participation and lagged child poverty are much better predictors of child poverty than unemployment rates. Unemployment has leveled off, but food stamp need has been increasing.

Moderator 1: A lot of interesting work needs to be done on the "disconnected" - unemployed and without access to safety nets and services. A panel of economists agreed - and how rare is that! - that we will not get back to an unemployment rate of ~5.5% for 4-5 years.

Q&A: So many of the poor are not in the labor force, why use unemployment rate at all? The problem with relying only on published child poverty is that you have to wait until August to find out where child poverty was a year ago. Unemployment is available now.

Increasing the busy work to apply for TANF decreases the number of people participating to those truly in need. Good or bad? It's transparent and varies by state. There has not yet been a systematic analysis of cross-state participation.

Big Bag of US Politics

When Obama cut taxes, he used some good behavioral economics: by cutting taxes by a few dollars from each paycheck instead of sending out a large refund, it was hoped that people would spend more of the money and get a bigger bang for the buck. The downside is that people don't realize there was a tax cut, but they did notice when tax withholdings bounced back up!

From Marron, a number of economics bloggers were asked about the US economy. The adjectives they used were put into this wordle diagram (where the size of the word shows how often it was mentioned). "Among the more amusing responses from other bloggers: taupe and flirtatious."

Public What You Fund shows that there is substantial variation in aid transparency, with the World Bank being the most transparent donor, Japan the least, and the US the 6th least transparent. Hat tip Roving Bandit. Dixon points out one example of increased transparency in our local post office. Dual monitors have been installed so that customers can see what the postal worker is doing. This is not very popular with the postal workers. In similar news, Transparency International's workhorse measure of corruption (CPI) based on corruption perceptions is facing increased negative reviews that want to look at different types of corruption and one that is comparable from year to year.

The Economist sounds the call for monetary stimulus: "... the entire burden of stimulating demand falls on the Federal Reserve." And for changes to pension laws:

It would seem that countries will have to choose between two forms of default. They can break their promises to their creditors or they can break their promises to future pensioners. Some countries will do the former, either by an outright failure to repay their debts or via the more subtle approach of inflation and currency depreciation.

Following up on a topic I've blogged about before, San Francisco passed a bill restricting the types of meals fast food restaurants can package with a toy. The restrictions are not draconian, but do require servings of fruit or vegetables and limit calories and the percent of calories from fat and added sugar.


Below the fold, the oh so smart, suave, savvy audience to restore sanity was asked if Obama is a Keynesian. Their responses show an ignorance to rival the factions they mock.

Food prices and inflation

A couple weeks ago, Armstrong at the Mises Institute put out a tirade against "Helicopter Ben running his printing presses at full speed" causing 0.4% inflation. He then explained that people were not more concerned about this terrible inflation rate because "core" inflation -- everything but food and fuel -- had only gone up 0.1%. That's less than 2% a year, hardly massive inflation. Food and fuel had gone up by a little more than 0.5%.

Armstrong then made a point that was simultaneously off-base and insightful in another context. First, the off-base part. Inflation is not changes in relative prices. When the price of one group of commodities (like food) goes up relative to other prices, that isn't inflation. When the rise in food prices leads to a rise in wage prices and a rise in the price of everything, that is inflation, but it's still a one-time event. It's not ongoing, monetary inflation of the sort that would be caused by the Fed. If I have a pain in my chest, it could be a heart attack or it could be that someone punched me and as a doctor you have to look at the other symptoms to know which is the case. This is not inflation caused by the monetary authority.

The other point is exceptionally well made, however. Where people spend large amount of their income on food -- particularly poor people -- the rise in food and fuel prices matter a lot more to their well-being than core inflation. When food prices spiked in 07/08, what mattered for the world's poor was the rapid erosion of their purchasing power. The current, small spikes are not caused by Bernanke, but by Russian wildfires and predicted low US maize harvests. FAO is rather concerned about it.

The reason we separate inflation into food, fuel, and "core" is so we can look at the part that matters. If you're trying to judge whether Fed policy is excessively loose, core inflation is what you ought to look at and it says that inflation is below what the Fed is unofficially targeting. If you want to identify changes in welfare for the "average" person, you need to look at the total picture including food and fuel. For different income groups, you really ought to look at different commodity baskets that include the other resources available to the group. If the price of organic, farmers' market foods goes up, well-to-do Ithacans may spend less on food in total by buying more from WalMart (while wearing a bag over their heads... can't let my neighbors find out.) When the prices of food at WalMart go up, the less well off have few other alternatives.

This, incidentally, is one of the reasons that it is important to continue investments to help small farmers become more productive, as discussed by this year's World Food Prize winner Beckmann and Aid Thoughts' Dissanayake. A paper reassessing our success in raising smallholder, Sub-Saharan Africa agricultural productivity is here, recent FAO efforts are highlighted in Nicaragua and in Pakistan, India is considering replacing coconut harvesters with machines, and a discussion of Malawi beekeeping all make interesting case studies of the efforts underway.