Our Gothic Year

The end of the year brings the curtain down on the first 8 months of our blog.

The two most popular CG posts in 2013 were by Robin:

The first was on Singapore’s comical efforts to raise birth rates, the second was on corruption.

My most read posts were on the looting of the Somali central bank by politicians, and a piece arguing that there may no longer be a policy path to income convergence for poor countries.

Thanks to our loyal readers and followers. We will try to do better in 2014!



Finally saw “Elysium” at home with Mrs. Angus. What a compassionate and unrepentantly pro-immigration movie!

“I cannot arrest a citizen of Elysium”.

It’s true that even the rich in America don’t have the healthcare and security of the residents of Elysium, but there are billions of non-citizens whose lives are much worse than the “dystopian” scenario of Los Angeles in the movie.

We need to get Lant Pritchett a brain hacking chip and Michael Clemons an exo-suit, and make a lot more people into “citizens of Elysium”.


Business Illiteracy as an Obstacle to Development

A new NBER working paper called Business Literacy and Development: Evidence from a Randomized Controlled Trial in Rural Mexico tests whether females entrepreneurs in rural Mexico are being held back by a lack of business skills.

More specifically, the authors develop a model that yields two testable hypotheses:  (1) among the treatment group, those with less entrepreneurial ability should be more likely to quit their business; and (2) those with more entrepreneurial ability should increase their profits after receiving the treatment.  They measure ability by pre-treatment business profitability and the treatment is a free, 48 hour business skills course for female entrepreneurs.

They find that “those assigned to treatment earn higher profits, have larger revenues, serve a greater number of clients, are more likely to use formal accounting techniques, and more likely to be registered with the government. “Low-quality” entrepreneurs are the most likely to quit their business post-treatment, and that the positive impacts of the treatment are increasing in entrepreneurial quality.”


“If we only get to hear Mass in Spanish, we might as well go to sleep!”

From Chiapas comes news that the Catholic Church is approving the use of indigenous languages in church services. Even though it took around 500 years and seems to be in response to the Church losing market share to other religions (phone call for Bob Tollison!), I have to tip my hat to Pope Paco for getting this done. 


EPN sees corruption everywhere but in his own house

Sure he went after La Maestra, the head of the teachers’ union after she broke from the PRI, but what about Carlos Romero Deschamps, the head of the petroleum union and PRI Senator? He is rated by Forbes as the second most corrupt person in Mexico:

“Paulina Romero, his daughter, displays onFacebook her travels around the world in private jets –accompanied by her three English bulldogs Keiko, Boli and Morgancita–  her voyages on yachts, dining in first class restaurants and sporting $12,000 Hermes luxury bags. Her brother drives a $2 million limited edition red Enzo Ferrari sport car, a gift from their father, whose trade union monthly salary is $1,864. Romero Deschamps, a federal senator, is reported to have a “cottage” in Cancun with a value close to $1.5 million. According to political analyst Denise Dresser, in 2011 he received $21.6 million for “aid to the union executive committee” and $15.3 million from union dues. My “hands are clean,” Romero Deschamps claims. The Peña Nieto administration seems to agree. He is not under investigation.”

His case is no different from that of La Maestra except that he’s remained loyal to the PRI.

It is fascinating to me that in Forbes’ list of the 10 most corrupt Mexicans, there is a serving PRI Senator and 5 PRI ex-state Governors, yet somehow the PRI is going to reform Mexico.


Score one for Jeffrey Sachs in the geography versus institutions debate

While hopefully all economists believe that both institutions and geography are important to development, there is a debate in the literature about which factor is more important.  Acemoglu, Johnson, and Robinson, for example, come down on the side of institutions, arguing that geography mattered in the past but is no longer significantly correlated with income.  I understand econometrically why they need to make this claim but it has always seemed to be relatively weak to me.  I give my students an excerpt from Ryszard Kapuscinski’s Shadow of the Sun called “Mountain of Ice.” Kapuscinski, one of my long-time favorite writers on Africa, came down with a virulent form of malaria and the description is so horrifying that it ensured I never missed a dose of my anti-malarial medicine when visiting malarial regions.

I think economists are sometimes too flippant when they downplay the effects of diseases like malaria on income.  I wonder if they would feel the same if they came down with the same strain that Kapuscinski did.

There are many difficulties with getting people in malarial regions to use bed nets effectively.  Before I read Nina Munk’s tremendous book The Idealist, I didn’t realize that people were using them to protect their livestock rather than their kids.

The company Psyop has teamed up with the Against Malaria Foundation (AMF) to try to change people’s perceptions of malaria.  To do so, they have created a 90-second animated film called “Nightmare: Malaria” “that begins as a sweet bedtime story before quickly devolving into a hallucinatory trip that paints a picture of how the disease affects a body. Symptoms such as high fever, violent convulsions, vicious sickness, and attacks on the liver and brain are rendered with psychotic energy befitting a Hunter S. Thompson tale.”  The moral of the story is that people can avoid these symptoms by using bed nets.

They have also created a video game, where “players avoid killer mosquitoes and collect teddy bear tokens amid fever-dream visuals, [which] further impresses how diabolical malaria can be.”

I was curious about who the target audience for these things are.  Surely they aren’t the people in the malarial regions themselves, given that they probably already have a good idea what malaria looks like (and probably don’t have the time or money to be watching these videos and playing the games).  It isn’t totally obvious from the article but it seems like the idea is to educate Western audiences to the horror that is malaria.  It seems to be working in that the “game was downloaded to iOS and Adroid devices over 130,000 times…[and]… has already resulted in 42,000 visits to the AMF donate page, which should translate nicely into a lot of nets.”

I like how innovative this approach is but it still needs to be paired with ways to get people in malarial zones to use the nets effectively.

Do the MDG limbo–how low can you go?

I haven’t been real impressed with the Millennium Development Goals because I feel like it encourages countries to work the system.  That is, they have incentives to put a lot of butts in the seats for education, but less incentive to do a good job of educating young people.  There seems to be a real risk of fulfilling the targets by focusing on quantity instead of quality.  So I was interested to see that Lant Pritchett and Charles Kenney have a new working paper entitled “Promoting Millennium Development Ideals: The Risks of Defining Development Down”  where they argue that the MDGs are too low of a bar for developing countries.  I’m curious about their argument and just the authors’ identities make reading the paper a no-brainer.  Here is the abstract:

The approach of 2015, the target date of the Millennium Development Goals, sets the stage for a global reengagement on the question of “what is development?” We argue that the post-2015 development framework for development should include Millennium Development Ideals which put into measurable form the high aspirations countries have for the well-being of their citizens. Standing alone, low bar targets like the existing Millennium Development Goals “define development down” and put at risk both domestic and global coalitions to support to an inclusive development agenda. Measuring development progress exclusively by low bar targets creates the illusion that specific targeted programs can be an adequate substitute for a broad national and global development agenda.