south africa

Monday assorted links

1. “Field-specific training is not relevant among the most talented PhDs because the performance gap between economics or finance PhDs and other PhDs disappears among published PhDs.

2. An extensive and pretty devastating article on the testing fail of the CDC.  Again, our regulatory state has been failing us.  And coverage from the NYT.

3. At the margin: “Results show that informants were given approximately 70 East German marks worth of rewards more per year in the areas that had access to WGTV, as compared with areas with no reception—ironically an amount roughly equivalent to the cost of an annual East German TV subscription.”

4. “Bars and Restaurants Peel Cash From Walls to Help Idled Workers” (NYT).

5. Scott Sumner watch the islands.  This piece seems to imply that in-migration is a major source of heterogeneity.  I’ve also been receiving some emails from Xavier suggested tourist inflow is a major cause of heterogeneity, due to an ever fresh supply of hard to trace cases.  No rigorous test yet of that one, but it is certainly in the running as a hypothesis.  And if true, it suggests many parts of Africa may not be hit that hard.

6. Karlson, Stern, and Klein on Sweden.

7. South Africa and HIV/AIDS: will the latter have been good training for Covid-19? (Economist)

8. The danger of “herd immunity overshoot.”

9. Singapore government and the Virus Vanguard.

10. Beloit University moves to more flexible two-course module system.  For now at least.

Public health is no longer an O-Ring production function

In the bad old days, health care in poor countries was just terrible. It wasn’t only the poverty, lack of hospitals and pharmaceuticals, and unsanitary conditions.  In addition, doctors gave very bad advice and they also didn’t work very hard, as outlined in this paper.  Citizens suffered accordingly.

Those conditions have improved somewhat, but actual health outcomes have improved a lot.  You still can’t trust the local medical advice in Tanzania, but guess what?  You have much better vaccines, greater access to antibiotics, more NGOs running health clinics, and better health care information, sometimes through the internet.  If your kid has diarrhea, let the kid drink water, even unclean water!  As for antibiotics (NYT):

Two doses a year of an antibiotic can sharply cut death rates among infants in poor countries, perhaps by as much as 25 percent among the very young, researchers reported on Wednesday.

In other words, the quality of the most important part of health care treatments bypassed the rest of the problems in poor economies and grew rapidly, even in countries with only so-so economic growth.  The rate of reduction in child mortality has tripled in many countries since the 1990s, and by no means are those locales major economic winners as say Singapore and South Korea were.

Therein lies one of the most important (and under-reported) global changes in the last twenty years.  It is now possible to have a decent public health system in a country with poor or mediocre political and economic institutions.

In other words, public health is no longer such an O-Ring service, an O-Ring service being one where everything has to go right for the service to be of decent quality.  And advances are much, much easier when the O-Ring structure no longer rules.

The O-Ring citation is to a famous Michael Kremer paper — a trip to the moon is definitely an O-Ring process, because if one step is off the whole mission probably is a failure.  But tasty fish curry is not — you can get a splendid version in some pretty dumpy countries, maybe even a better version in poorer places.

Electricity, however, it seems is still an O-Ring service, as evidenced by the recent power blackouts in South Africa.

What else is likely to become less of an O-Ring good or service in the next few decades to come?  And what can we do to hasten such progress?  Is there any chance of quality software production making that same kind of transition?  Or might some goods and services return to a greater connection with the O-Ring model?

For this post I am very much indebted to a conversation with Garett Jones.

Not your grandpa’s talent show

Hosted by Alibaba’s founder Jack Ma, the four-hour entrepreneurial talent show had all the production values of The Apprentice.

But the glitzy televised extravaganza, in which 10 contestants battled for $1m in prize money in front of a boisterous audience, took place neither in the US nor China. The action unfolded instead on a stage in Ghana, the first of what is set to be an Africa-wide annual contest as one of China’s best known businessmen scours the continent for younger versions of himself…

Mr Ma came up with the idea of the $1m prize — and the Africa Netpreneur television show to go with it — after meeting young Kenyan entrepreneurs on his first trip to the continent as a special adviser to the UN agency Unctad in 2017…

The Netpreneur show is due to be broadcast in mid-December on two channels with a pan-African presence, South Africa’s DStv and StarTimes, a Chinese media company. During the filming, Mr Ma sat on a raised dais next to three fellow judges: Strive Masiyiwa, the billionaire Zimbabwean founder of telecoms and media company Econet Wireless, Ibukun Awosika, chairman of First Bank of Nigeria, and Joe Tsai, executive vice-chairman of Alibaba.

Where are the Smothers Brothers?  Here is the full David Pilling FT story.

When can companies force change by standing up to foreign governments

From Jason Miklian, John E. Katsos, Benedicte Bull:

It’s easy to condemn firms for meek apologies — and to criticize the NBA and others as willing tools of the Chinese regime, “submitting to authoritarianism” to make a buck. However, our research suggests even when companies want to support global democracy and human rights, they find it much harder than anticipated and trap themselves in unenviable choices…

Our research has shown, time and again, how companies fail to live up to these lofty expectations [improving liberties and human rights]. It’s not for lack of trying. Instead, companies find the problems governments want them to solve are incredibly hard — and companies themselves suffer the political fallout when they can’t get things right.

And this:

Companies are most likely to deliver benefits when the measures they take are concrete, focused on specific goals and build on existing corporate expertise. These measures are more likely to affect change when companies join in collective actions by the business community that complement international political campaigns.

There is much more at the link, including discussions of China and South Africa.

New issue of Econ Journal Watch

Volume 16, Issue 2, September 2019

In this issue:

Let facts be submitted to a candid worldRon Michener explains the role of monetary affairs in the hardships that helped to justify the rebellion of the American colonies, and criticizes Farley Grubb’s Journal of Economic History article on the money of colonial New Jersey.

Fads and trends in OECD economic thinking: Using the frequency of terms in the OECD’s Economic SurveysThomas Barnebeck Andersen shows how policy ideas in economics changed over time, including ‘demand management,’ ‘incomes policy,’ ‘output gap,’ ‘potential GDP,’ ‘structural unemployment,’ ‘structural reform,’ ‘macroprudential,’ ‘incentives,’ ‘deregulation,’ ‘liberalisation,’ ‘privatisation,’ ‘human capital,’ ‘education,’ and ‘PISA.’

The economics of economics: Using 291 person-year observations from UCSD Econ, Yifei Lyu and Alexis Akira Toda model Econ faculty compensation on publications and citations and find, among other things, no evidence of a gender gap.

The Liberal Tradition in South Africa, 1910–2019Martin van Staden describes the unique history and current standing of classical liberalism in South Africa, including an extensive account of liberals in the nation’s politics. The article extends the Classical Liberalism in Econ, by Country series to 19 articles.

Lawrence Summers Deserves a Nobel Prize for Reviving the Theory of Secular StagnationJulius Probst makes the case, inaugurating the series on Who Should Get the Nobel Prize in Economics, and Why?

Convention defined: We reproduce by permission a large portion of David K. Lewis’s Convention: A Philosophical Study (1969), wherein he defined coordination equilibriumcoordination problemcommon knowledge, and convention.

Mizuta’s 1967 checklist of Adam Smith’s library: We reproduce by permission the 1967 checklist created by Hiroshi Mizuta of the titles that were owned by Adam Smith. This checklist (supplemented by a list of additional once-elusive titles) provides a handy means for determining whether a title was in Smith’s personal library.

EJW Audio:

Ron Michener on Why It’s Important to Get Colonial U.S. Monetary History Right

Patrick Mardini on the Political Economy of Lebanon

Ivo Welch on Critical Finance Review

From the comments, on the Coase theorem

#1 on prefiguring of the so-called Coase theorem, consider also p. 396-7 of W.H. Hutt, “Co-ordination and the Size of the Firm,” South African Journal of Economics 2(4), December 1934:

“Now, under one ownership, their relations would, given competitive institutions, be exactly the same, provided that both methods were equally efficient from the social standpoint. There is no reason why the spreading of the lines of responsibility back to several sources should lead to less effective planning than subordinacy to an authority emanating from one source, given the equal availability of relevant knowledge to the managers who devise the plans…The most important significant difference between the two cases is that, in practice, in the one case there may not be the availability of relevant knowledge that there is in the other.”

That is from Daniel B. Klein.  And:

For a still earlier ‘discovery’ with transaction costs and all see my former colleague Yehoshua Liebermann’s “The Coase Theorem in Jewish Law,” Journal of Legal Studies, Vol. 10, No. 2 (Jun., 1981), pp. 293-303

That is from Moshe Syrquin, link for both here.

Ideological bias and argument from authority among economists

That is the topic of a new paper by Mohsen Javdani and Ha-Joon Chang, here is part of the abstract:

Using an online randomized controlled experiment involving economists in 19 countries, we examine the effect of ideological bias on views among economists. Participants were asked to evaluate statements from prominent economists on different topics, while source attribution for each statement was randomized without participants’ knowledge. For each statement, participants either received a mainstream source, an ideologically different less-/non-mainstream source, or no source. We find that changing source attributions from mainstream to less-/non-mainstream, or removing them, significantly reduces economists’ reported agreement with statements. This contradicts the image economists have of themselves…

And from the paper:

Consistent with our overall findings, we find that for all but three statements, changing source attributions to a less/non-mainstream source significantly reduces the agreement level. The estimated reductions range from around one-tenth of a standard deviation to around half of a standard deviation.

The largest agreement reduction is for this sentence:

“Economic discourse of any sort — verbal, mathematical, econometric — is rhetoric; that is, an effort to persuade.”

You also can test which kinds of authority reassignation alter the level of agreement.  And thus:

We find that the estimated ideological bias among female economists is around 40 percent less than their male counterparts.

The countries where economists exhibit the highest ideological bias are Ireland, Japan, Australia, and Scandinavia, where for Austria, Brazil, and Italy the ideological bias is smallest.  South Africa, France, and Italy are most conformist to mainstream opinion.

It is a wordy and poorly written paper, and they don’t consider the possibility that deference to authority perhaps is the rational Bayesian move, not the contrary.  Still, it has numerous results of interest.  Here is the authors’ blog post on the paper.

Are property rights in elephants working out after all?

To understand why these reasonable-sounding proposals should be rejected, consider what has happened to elephant numbers since CITES most recently authorised some legal trade, when Botswana, Namibia and South Africa were allowed in 2007 to sell a fixed amount of ivory to Japan, as a one-off. Elephant numbers started falling again. A survey conducted in 2014-15 estimated that elephant numbers had fallen by 30% across 18 countries since 2007; another estimated a decline of over 100,000 elephants, a fifth of the total number, between 2006 and 2015. Increased poaching was at least partly to blame.

These numbers suggest that the existence of even a small legal market increases the incentive for poaching. It allows black-marketeers to pass off illegal ivory as the legal variety, and it sustains demand. The biggest market is in China. Last year the government banned domestic sales of ivory, but its customs officials seize a lot of smuggled products—notably from Japan, which licensed as a market in 2007. For the poachers, ivory is fungible. If it is hard to secure in Zambia or Botswana, another country’s elephants will be in the gun-sights. Congo, Mozambique and, especially, Tanzania, have seen sharp declines. Unfair though it is, countries with better-run conservation programmes are, in effect, paying for the failings of those with feeble institutions.

That is from The Economist.  Yet there is another twist:

In the long run technology can help make trade compatible with conservation. In better-resourced national parks, drones are used to make it easier for rangers to spot poachers. DNA testing of ivory shipments can establish where they came from, and thus whether they are legal. As prices fall and countries get richer, both technologies are likely to spread.

Developing…

Travel markets in everything

Since launching IntroverTravels in South Dakota nearly three years ago, Marek has planned a wide array of trips for his clients, from tours of Vietnam and Thailand focused on cuisine, to more adventurous wildlife-watching itineraries in South Africa and the Galapagos. “They tend to be remote places where there’s an absence of people or external stimuli. You can get back to nature, contemplate history or experience the culture of a new place,” Marek says.

His clients tend to be “social introverts,” people who enjoy activities but need to be alone afterward to recharge.

And:

When the group meets, Renzi has them all agree to a few specific principles, including, she says, “Honour one another’s needs and preferences for personal time and space and right to silence, and encourage one another to take personal time and skip group activities as needed. Be open to different belief systems, ways of behaving, communication styles.”

The trips are usually capped at 16 people, and many now have waiting lists. “The demand has certainly been growing,” Renzi says.

Here is the full story by Dave Mcginn, via Art Johnson.

Rhino bond markets in everything

Conservationists have started marketing a five-year rhino bond, which bankers say will be the world’s first financial instrument dedicated to protecting a species.

Investors in the $50m bond will be paid back their capital and a coupon if African black rhino populations in five sites across Kenya and South Africa increase over five years. The yield will vary depending on changes in the rhino population, which has fallen rapidly since the 1970s.

The bond is likely to have different categories of investment, with some investors taking a “first loss” position. If rhino numbers drop, those investors will lose their money depending on the scale of the decline and the terms of their investment, while investors in other categories will be repaid.

That is from John Aglionby at the FT.

Average annual change in total factor productivity between 1990 and 2014

Here are the estimates from Penn World Tables, only selected countries are presented:

Sri Lanka 2.48

China 2.40

Poland 1.70

Uruguay 1.61

Romania 1.61

United States 0.89

Brazil -0.12

South Africa -0.53

Mexico -0.82

Ukraine -1.20

A few points.  First, I still believe Sri Lanka is an undervalued development story, in spite of recent developments.  Second, the economy of Poland is not discussed enough.  Third, other sources confirm similar numbers for Mexico, arguably because misallocations of capital and labor have increased due to the growing size of the informal sector.  Fourth, there are far too many other nations in the negative column.

Those numbers are reproduced in “Productivity in Emerging-Market Economies: Slowdown or Stagnation?”, by José de Gregorio, in the new and interesting volume Facing Up To Low Productivity Growth, edited by Adam S. Posen and Jeromin Zettelmeyer.

Markets in everything those new service sector jobs

TITUSS BURGESS doesn’t like to travel and says he knows “zero” about South Africa, which would seem to make him an unlikely host for a 10-day tour of that nation, especially one that costs nearly $27,000 a head. But on a chill March night, the actor, best known for his role as Titus Andromedon on the Netflix series “Unbreakable Kimmy Schmidt,” patiently posed for selfies with travel journalists at a Manhattan wine bar to kick off Heritage Tours’ new Spotlight Series of trips. The company describes the tours as “immersive small-group experiences enhanced by the presence of expert personalities and influencers.”

…While Mr. MacMillan says that the hosts for his trips were chosen for their connection to the destinations, the link can seem tenuous. Courtney Reed, who played Princess Jasmine in Disney ’s “Aladdin” on Broadway will be hosting a trip to Spain focused on wine, fashion and food. She’s never been to Spain, but is “extra thrilled” about going. “I think my role is just to provide social ambience,” she said. “I’m a very easygoing person and I can create extra flair just having fun and appreciating our surroundings. I’m like a cheerleader….We’re going to have a blast!”

…Other travel companies are hitching their wagons to stars who don’t merely gild the travel experience, but add bona fide knowledge or expertise. “There’s only so much caviar and champagne you can give passengers, so we like to enrich their experience in an intelligent way,” said Barbara Muckermann, chief marketing officer of Silversea Cruises. The cruise line, which has at least one expert lecturer on each of its ships, invited nine artists, writers and other creative types including authors Paul Theroux, Pico Iyer and Saroo Brierley to make appearances during its 133-day World Cruise 2019. Besides giving lectures, each is contributing to a commemorative anthology that Silversea line is creating for the passengers.

There is more at the link, by Kevin Doyle at the WSJ, via the excellent Samir Varma.

Sunday assorted links

Monday assorted links