“Star Spangled Scapegoat”

I just read a great op-ed by Tim Padgett called “Without The U.S. To Scapegoat, Latin America Discovers Its Inner Godzillas.” Padgett argues that President Maduro is running out of scapegoats to blame for the debacle that is currently the Venezuelan economy:

“When a U.S. president is eating ropa vieja in Havana and dancing tango in Buenos Aires, Latin American leaders can’t seem to find their handy Star-Spangled Scapegoat anywhere in their desk drawers. Instead, from the Río Grande to the Río de la Plata, Washington’s new and less imperialista engagement with Latin America has helped expose the region’s inner Godzillas.”

As for the region’s “inner Godzillas,” Padgett is referring to a recent meme about Venezuela’s electricity crisis.  Here is his description:

“A new Internet meme offers him a culprit: Godzilla! It shows the slimy monster destroying Venezuela’s power lines under a caption that reads: “Government Finds Out Who’s to Blame For Power Outages.” And in case you don’t believe this, it adds: ‘The National Guardsmen in charge of protecting power plants took this photo!'”


Replacing one bad idea with another

The BBC has an interesting report on ambulance services in Beijing.  Up until now, ambulance drivers could decide themselves how much to charge people for their services.  I’m assuming these weren’t listed or known beforehand either.  This seems ripe for abuse given that the patient will be desperately wanting to get to the hospital and in no state for bargaining.  According to the article, most Chinese on social media didn’t even know that ambulances charge at all.  That must come as a big shock then when they get hit up by the driver.

So what did authorities decide to do?  Decree that ambulances “be fitted with taxi-style meters in an effort to allay public concerns about overcharging.”  Hmm, this doesn’t seem to be the most incentive compatible policy either.  As one social media cynic (read: realist) pointed out, “Don’t rule out ambulances taking a detour when using the meter.”  At least when you’re in the backseat of a cab, you can watch where the driver is going.  In the back of an ambulance in an emergency situation, that’s not going to be very feasible!  Don’t get me wrong, I’m in no way advocating free ambulance services, but there has to be a better policy than this.

One more such victory and we are lost

The drive for universal primary enrollment is over. The battle has been won.  The war however, is not going so well. As CG friend Lant Pritchett bluntly puts it, “Schooling ain’t Learning”.

By that he means that the enrollment growth hasn’t been anywhere close to matched by increases in the number of students able to do basic math or read. The goal was to get ’em in a school with not nearly enough thought about what happens inside the building once the kids are there.

Which is why I was dismayed to learn that apparently, the message isn’t getting through to the UN, as they seem to still be focussed on schooling goals rather than learning goals, just now kicked up a notch to universal secondary enrollment!

Screenshot 2016-04-22 08.03.51

People, I am not a fan of declaring victory in a war that you have not come close to winning and then opening a second front where you are going to use the same false metric to judge victory.

Hat tip to @justinsandefur. The chart appears in an overall sensible Brookings report that is aware of the gap between schooling and learning


EU Aid: where development goes to die

The Telegraph has a great piece lambasting the spending of the European Development Fund, an entity “managed by the notoriously spendthrift EuropeAid and has – it is fair to say – not covered itself in glory.”

Here are some of the projects that European tax money supported:

“Officials at the EDF have somehow contrived to spend thousands of pounds on trapeze lessons, a study on the development of the Pacific Coconut, flying a gamut of officials from across Oceania to a renewable energy conference in Aruba (no, really), supporting the work of the EU’s press operation in Jamaica, and a study into the ‘youth perceptions, attitudes and views towards EU development policy’ in Zimbabwe.”

Well, at least the last study on the list seems vital.  Pushing back the frontiers of science…


Great Britain has also done its fair share of funding questionable aid projects. Here are some of my favorites:

  1. “£13,500 on measuring the carbon footprint of the Dakar off-road rally in Bolivia
  2. £4,757 to promote Moldova fashion industry
  3. £970 to promote ‘safe and responsible use of Facebook’
  4. £6,000.72 on anti-littering campaign in Jordan
  5. £3,400 to help find female mates for endangered fish in Madagascar”

Obviously not huge sums of money,  but it does make you wonder how well they are spending the rest of their budgets.  The Telegraph article is titled “Britain spends on foreign aid like a drunk at closing time” and notes that “in a Government supposedly wracked by austerity, officials at the Department for International Development (Dfid) had to spend £3.7 billion in just eight weeks.”

Hoisted from the Comments: Lim Kim Sam fanboy edition

Unsatisfied CG reader 7elev3n writes:

“I think your arguments relating to Singapore are biased, and frankly do not reflect well on the sanity of your blog.” 

Agreed. Full stop.

“Men who have done good deeds deserve credit where it is due, in the form that it is due. Sure, a children’s book is overkill, but having a book at all is not. Lim Kim San designed plans for housing that turned Singapore into a much more developed society.”

Again. Agreed. If there is one thing history has shown us, it’s that the private sector absolutely cannot produce housing. If it weren’t for LKS, Singaporeans would still be living in caves and under crudely fashioned lean-tos.

“Try doing that to children’s books written about Sir Isaac Newton instead. Frankly there isn’t much of a difference in essence. Sir Isaac Newton advanced science a great deal in his own way, and Lim Kim San did similarly in Singapore.”

Wow, this person is on a roll. Agreed yet again. Think of the brilliant insight of LKS, “much people, few lands, build….UP!!!!”  All Newton did was get in the way of a falling apple. Newton probably would have built like, 2000 2-story McMansions and called it a day.

So a thousand apologies and all hail to LKS, the inventor of the apartment building!!

Long may he reign.

The culture that is Singapore

Thanks to the always great James Crabtree (@jamescrabtree), I learned two awesome facts about Singapore this morning.

First, they have children’s books about “famous urban planners.”  I’m not sure which is funnier, the fact that there are famous urban planners or that there are children’s books extolling their virtues.  I guess this is handy for nights when your kids can’t fall asleep. Here’s a photo of one of them and a link to where you can buy it (and even read a sample):


Here’s the synopsis that’s given at the publisher’s link:

“How does a spoilt young boy and party-going dandy become the man who housed a nation? Discover the passion that drives Lim Kim San from his comfortable, carefree life into a mission that would change Singapore forever.”

This seems like the worst superhero story ever. Maybe Zac Snyder can direct it.

Second, if your kids reads the book and cannot get enough urban planning, you are in luck.  The Singapore Housing and Development Board has a treat for you.  Here is their description of the fun you can have on a tour:

Come visit the HDB Gallery and share a slice of Singapore’s public housing story through the multi-sensory and self-exploratory exhibits. You can also watch the 3D fly-through video and take a virtual tour of the different zones, or download our brochure.

I cannot recommend the “fly through” highly enough–it is a crack up and definitely worth checking out.  This saved me a 17 hour flight and thousands of dollars!

They don’t make em like they used to: Royalty Edition

People, centuries of British inbreeding have now produced a Crown Prince who is unable to absorb a handshake from a little old man!!



I get the feeling that all Brit Royals sleep in hyperbaric chambers and are injected with animal based serums cooked up in North Korean labs just to get them to be able to occasionally walk erect.


[by the way, Mrs. Angus has a different hypothesis. She believes that Modi, upon learning of this handshaking opportunity, went on an intense regime of steroids and martial arts training to strike a blow against India’s colonial oppressors. We may both be right.]

The Kinky Effects of Aid

I came across a new and interesting NBER working paper called “The Effect of Aid on Growth: Evidence from a Quasi-Experiment” by  Sebastian Galiani, Stephen Knack, Ben Zou, and Lixin Colin Xu.

Here’s the abstract:
The literature on aid and growth has not found a convincing instrumental variable to identify the causal effects of aid. This paper exploits an instrumental variable based on the fact that since 1987, eligibility for aid from the International Development Association (IDA) has been based partly on whether or not a country is below a certain threshold of per capita income. The paper finds evidence that other donors tend to reinforce rather than compensate for reductions in IDA aid following threshold crossings. Overall, aid as a share of gross national income (GNI) drops about 59 percent on average after countries cross the threshold. Focusing on the 35 countries that have crossed the income threshold from below between 1987 and 2010, a positive, statistically significant, and economically sizable effect of aid on growth is found. A one percentage point increase in the aid to GNI ratio from the sample mean raises annual real per capita growth in gross domestic product by approximately 0.35 percentage points.

I like the approach and have often wondered whether donor country thresholds make a difference. I have to say that I like my title better than theirs though!

What are the policy implications of the Chetty et al JAMA paper?

Both old media (NYT and WAPO) and new media are burning up over the new Chetty joint out in JAMA.

The paper shows a significant correlation between income and life expectancy that varies geographically across the US.

Many have been quick to use the results to advocate policies to reduce income inequality, mostly by lowering the incomes of the wealthy.

However, there is a big problem with such interpretations of the results, namely that the paper makes no attempt to use any sort of identification strategy to get at a causal interpretation of the correlations.

Hey, Raj is a MacArthur fellow. He knows this and the paper says it quite clearly:

“the relationships between income and life expectancy should not be interpreted as causal effects of having more money because income is correlated with other attributes that directly affect health.  Because of such unmeasured confounding factors, the causal effects of income on life expectancy are likely to be smaller than the associations documented in this study. In addition, the local area variation need not reflect the causal effects of living in a particular area and may be driven by differences in the characteristics of the residents of each area. Although the correlational analysis in this study cannot establish causal mechanisms, it is a step toward determining which theories for disparities in longevity deserve further consideration.”

That is to say, low income people smoke more, drink more, and have greater obesity rates than do high income people. That is also to say that there may be some other factor that is causing both the income outcome and the mortality outcome so just changing income would not change mortality.

The massive caveat quoted above is in the second to last paragraph of the piece. I guess the press and JAMA’s publicity machine didn’t get that far in their reading.

Such a lack of identification is generally a fatal flaw in top economics journals, which may well be why the paper appears in a medical journal.

So people, anyone trying to tell you that the Chetty et al paper proves that we need to do X is abusing the paper and just appealing to authority in favor of their own preferred policies.

The paper does not provide an easy answer and indeed there are not any easy answers that we can point to.