How Haiti could turn things around
I'm not suggesting that the future gains will, in moral terms, outweigh the massive loss of life and destruction, but still the future Haiti might have a higher growth rate and a higher level of gdp per capita. Here's how.
In the previous Haitian political equilibrium, the major interest groups were five or six wealthy families and also the drug trade, plus of course the government officials themselves. None had much to gain from market-oriented, competitive economic development. The wealthy families would have lost their quasi-monopolies and the drug runners would have been pushed out or lost some rents. The wealthy families are not that wealthy and their economic projects are relatively small, at least by the standards of the outside world.
Enter the rebuilding of Haiti. Contract money will be everywhere. From the World Bank, from the U.S., from the IADB, even from the DR. That contract money will be significant, relative to the financial influence of either the main families or the drug trade.
There exists (ha!) a new equilibrium. The government is still corrupt, but it is ruled by the desire to take a cut on the contracts. Ten or twenty percent on all those contracts will be more money than either the families or the drug runners can muster. The new government will want to bring in as many of these contracts as possible and it will (maybe) bypass the old interest groups. Alternatively, the old interest groups will capture the rents on these contracts but will be bought off to allow further growth and openness.
Arguably the new regime in Haiti will operate much like the federal states in Mexico. Corrupt and a mess, but oriented toward a certain kind of progress, if only to increase the returns from corruption.
You will see this in how the port of Port-Au-Prince is treated. Previously the rate of corruption was so high that the port was hardly used. If the port becomes a true open gateway into Haiti (if only to maximize contracts and returns from corruption), that means this scenario is coming true.
The surviving Haitians, in time, might be much better off. Virginia Postrel lays out some theory.
Snow Job
Economists Jonathan Zinman and Eric Zitzewitz, skiers who took offense to a fluffed-up claim, studied snow reports from 2004 to 2008 and compared them to area government weather stations. They found that ski resorts across the U.S. and Canada reported more fresh snow – 23 percent more, on average – on skier-coveted weekends than during the week. Resorts with more business to gain were the ones most likely to boast of deeper snowfalls, their study said.
Do note that the snow angle might get the headlines but what is really going on is a test of deceptive advertising. Interestingly, Zinman and Zitzewitz find that the deception declined dramatically after an iPhone app was introduced that crowd-sourced true snow levels.
Hat tip to Daniel Lippman.
Banerjee and Duflo defend RCT
The abstract is this:
Randomized experiments have become a popular tool in development economics research, and have been the subject of a number of criticisms. This paper reviews the recent literature, and discusses the strengths and limitations of this approach in theory and in practice. We argue that the main virtue of randomized experiments is that, due to the close collaboration between researchers and implementers, they allow the estimation of parameters that it would not otherwise be possible to evaluate. We discuss the concerns that have been raised regarding experiments, and generally conclude that while they are real, they are often not specific to experiments. We conclude by discussing the relationship between theory and experiments.
There are 39 additional pages, which I have yet to read. The paper is here and hat tip goes to the essential Rachel Strohm.
Watch Obama debate the Republicans
Via Brad DeLong. Who did better?
Assorted links
1. The forthcoming bailout of Greece.
2. Via Chris F. Masse, thoughts on the iPad.
3. Leonardo da Vinci's resume: a study in personal marketing.
4. Virginia Postrel, presenting material on the Chinese freshwater pearl industry.
5. Which country showed the most spending restraint during the financial meltdown?
6. Interview with the still-underrated Laura Miller.
7. Via Rachel Strohm, good advice for rebuilding Haiti.
Do Animals have Animal Spirits?
It's quite easy to see how a "real business cycle" could occur in the natural world. Imagine a pond teeming with life. One year a parasite infects the lily pads. Without the lily pads the frogs can't catch flies, the flies swarm, but the frogs go hungry and the pike have less to eat. If we measured the gross pond biota (gpb) we could see natural cycles. Indeed, if we measured different pond sectors (the frog sector, the fly sector etc.) we could trace out a whole sequence of events as each sector of the pond responds to the initial shock and to changes in every other sector (ala a vector auto regression).
Can there be a Keynesian business cycle in the pond? i.e. Could animal spirits drive a natural business cycle? It's harder for me to see exactly how this would work. We would need "money" or something similar to generate a rush to liquidity and a decline in investment. We could perhaps get a coordination type business cycle (ala Roger Farmer) with herd behavior. Interestingly, the trend in biology–as I read it at least–has been to think of herd behavior as optimal for the herd but this is not necessarily the case. We know that slime molds self-organize and aggregate during times of stress could this process be set off with no or little exogenous shock? Could a natural system provide a model for business cycle behavior? It would be odd if only people had animal spirits. Biology and economics have much to offer one another.
Who are the friendliest people on earth?
Chug points me to this latest survey, and here is the list:
1. Bahrain
2. Canada
3. Australia
4. Thailand
5. Malaysia
6. South Africa
7. Hong Kong
8. Singapore
9. Spain
10. United States
That means friendly to expats, not friendly to each other. You’ll notice that English-speaking or English-fluent countries are overrepresented, plus Thailand (ahem).
Here is a critique of the survey and mostly I concur with the criticisms (sorry Omar). More generally, unless it is a woman seeking marriage, I view “friendliness to expats” as a social strategy, often intended for internal consumption, not necessarily insincere but not reflecting true temperament either. It’s not driven by actual friendliness. By the way, how did Spain ever make it to number nine?
Are the Japanese the most or the least friendly people on earth? “Helpful” isn’t the same as “friendly.” In what country are you most likely to make real friends? Marry a native? Aren’t those two variables inversely related?
“Friendly” is one of the words most likely to arouse my deconstructive suspicions.
Favorite tweets
Sorry for not following anyone. I'm still trying to lear how to use this tool. JH
Yes, that JH is Jürgen Habermas. From the world of print, here are excerpts from Habermas. Here is a summary of Habermas on the "ideal speech situation":
In the earlier philosophy of Jürgen Habermas it is argued that an ideal speech situation is found within communication between individuals when their speech is governed by basic, but required and implied, rules. These rules of speech, Habermas suggested, are generally and tacitly accepted by both of the communicating parties, but even if they are not–perhaps in the case of one party telling a lie–the ideal speech situation nevertheless remains a more broadly required principle…Everyone is allowed to introduce any assertion whatever into the discourse.
Unless you don't know how to follow other people. Habermas is, however, meta-rational in this regard.
One paragraph plus a sentence
Mr. Salinger was controlling and sexually manipulative, Ms. Maynard wrote, and a health nut obsessed with homeopathic medicine and with his diet (frozen peas for breakfast, undercooked lamb burger for dinner). Ms. Salinger said that her father was pathologically self-centered and abusive toward her mother, and to the homeopathy and food fads she added a long list of other exotic enthusiasms: Zen Buddhism, Vedanta Hinduism, Christian Science, Scientology and acupuncture. Mr. Salinger drank his own urine, she wrote, and sat for hours in an orgone box.
But was he writing?
The rest of the Salinger obituary, interesting throughout, is here.
If he could get one idea peer-reviewed
If I could get one idea peer reviewed, it would probably be ‘What percentage of chewing gum sales are due to someone wanting change?’ All I need now is a couple of referees.
Here is the source blog. What would you pick? If I ask myself this question today, I wish for a serious study on how banning the burkha or veil would affect sexual mores and how it would alter the allocation of resources within the family, referring of course to families where such methods of dress are an issue. If such a paper already exists, please let me know and I'll wish for something else.
Who are the biggest donors to Haiti?
Here is an interesting visual, which expresses pledged support to Haiti in per capita terms. #1 is Canada, by a large margin, followed by some of the Nordic countries.
Per capita the U.S. doesn't do so well (NB: I don't think remittances are counted), with less than half of what Guyana supplies. We're also behind Estonia, Switzerland, and United Arab Emirates, among other countries. The visual is measuring earthquake aid pledged, not all foreign aid.
In absolute terms here is another visual; U.S. is #1. I don't think this is using the same metric as above.
Here's another interesting visual. Relative to per capita gdp, Ghana is the single most significant pledger of aid to Haiti.
For the pointer I thank Rahul Nabar.
Assorted links
1. Rent-seeking behavior, and another perspective on the incident. Here's the best narrative.
2. The FDIC lotto.
3. Open access publishing takes off in economics.
4. It is better when the wife is more attractive.
5. American cities with the most Haitians.
6. Are there 700,000 traumatic injuries in Haiti?
My predictions about the iPad
Jason Kottke has some observations. My theory is that Apple wants to capture a chunk of the revenue in this nation's enormous textbook market — high school, college, whatever. Why lug all those books around? The superior Apple graphics, colors, and fonts will support all of the textbook features which Kindle botches and destroys. Apple takes a chunk of the market revenue, of course, plus they sell the iPads and some AT&T contracts. There are lots of schoolkids in the world.
As Kottke says, it is a device you use sitting down. And it fails to solve the "sunlight on your reading screen" problem/ Those both point to somewhat sedentary uses.. And it doesn't seem to have a camera.
In the longer run the iPad will compete with your university, or in some ways enhance your university. It will offer homework services and instructional videos and courses, none of which can work well on the current iPhone or Kindle. The device also seems to allow for collaborative use.
Can you imagine one attached to every hospital bed or in the hands of every doctor and nurse?
It will take some business away from Kindle but that will not be the major impact. The commercial book trade just isn't that big in terms of revenue and arguably that sector will shrink with digitalization, as recorded music has been doing.
The story here is one of new markets, not cannibalization or even competition.
Most of the commentary I've read hasn't been very imaginative about what the content might be.
Addendum: Chris F. Masse, who sometimes reads my mind, sent me this article (before this post was up):
“The book will never die. But the textbook probably will,” says Inkling CEO Matt MacInnis. Inkling is working directly with textbook publishers. First, they’ll port their existing tomes onto Apple’s iPad as interactive, socialized objects. Then, they’ll create all-new learning modules – interactive, social, and mobile – that leave ink-on-paper textbooks in the dust.
Read the whole thing, it's the best piece I've seen on the iPad so far.
The incomes and professions of Haitian-Americans
The blog post is here. It's a proposal for "diaspora bonds" (I fear that excess corruption is a problem). I was more interested in this bit:
…nearly one-third of Haitian immigrants in the US belong to households that earned more than $60,000 in 2009. In comparison, less than 15% of the immigrants from Mexico, Dominican Republic and El Salvador in the US had that level of household income. A quarter of Haitian immigrants, especially women, are reportedly in the relatively higher paying health care and education sectors; only a small number of them are in the construction sector.
Hat tip goes to Whirled Citizen.
Pitchers from the South are more likely to hit batters
You might call this one "Sentences to Ponder." It only applies, however, when the batter is white.
Here are various pathways to the source article, gated in differing ways.