Fortnightly links: Deaton’s Nobel, Canada votes, global poverty guesstimates, and more…

Here in academia the big development news is that development economist and empiricist extraordinaire, Angus Deaton, has won the Nobel Prize in Economics (and, yes, we know it’s not a ‘real’ Nobel — see Paul Krugman on this). There’s a good non-technical summary of Deaton’s scholarship on the Nobel website and Chris Blattman has a good piece on Deaton and his work, as does John Cassidy. Although Deaton is a careful empiricist in most areas, in his (generally excellent) book The Great Escape he devotes a chapter to anti-aid polemic. For some good debate on this see Duncan Green, with a rejoinder from Deaton. Central to Deaton’s argument against aid is his claim that aid undermines political institutions in recipient countries. Disappointingly, given Deaton’s fame as an empiricist, he offers no convincing empirical evidence in favour of his claims about aid and political development. And, ironically, just a few days prior to his win, a careful empirical paper by Sam Jones and Finn Tarp was published in the Journal of Development Economics (gated paper here; ungated working paper here) showing that… wait for it… aid’s impact on recipient country governance was, if anything, positive. Anyone who’s followed the aid/growth literature will know that cross country regressions, even when well done, are fragile, and so this finding cannot be taken as definitive. However, it’s the best evidence we currently have. Polemicists take note. [Udpate: I (Terence) forgot about to add this, very interesting, survey data based paper, which also produces findings contrary to Deaton’s arguments about aid and governance.)

Staying with Nobel Prizes, the New Scientist [gated] and The Guardian cover how a humble Chinese researcher won the Nobel Prize in medicine for her work on anti-malarial drugs based on ancient Chinese traditional medicine; work that has saved many millions of lives.

If everyone gets access to electricity, can the planet survive? In The Atlantic, Charles Kenny questions the International Energy Agency’s claims that it is possible to achieve universal ‘modern energy access’ without vastly increasing global energy demand.

The practice of female genital cutting (FGC) is usually associated with African and Middle Eastern cultures. But few people know that millions of Indonesian girls also undergo FGC, which is rarely discussed publicly in the country. Kate Walton discusses the drivers of the practice, and makes the case that FGC is incompatible with President Widodo’s vision of a modern Indonesia.

On the other side of the Pacific, Justin Trudeau and the Liberals stormed to victory in Canada’s federal election on Monday. In the lead-up to the election, Aniket Bhushan analysed where Canada was likely to be heading on international development issues based on pre-election foreign policy debates. It’s worth noting that while the Liberals decried Canada’s declining global reputation, they nevertheless had little to say on aid spending levels or the 0.7% of GNI target. Nevertheless, the substantial majority they achieved in the election could provide an opportunity to pursue an ambitious aid agenda.

Finally, the World Bank has updated its purchasing power parity data, a crucial component of the setting of global poverty lines and the calculation of global poverty numbers. For a clear discussion of what this involves and what it means for poverty lines and poverty estimates, see this World Bank blog.

If you’re interested in global poverty numbers you will also want to read Justin Sandefur taking the World Bank to task for its published 2015 poverty estimates. Unlike the carefully compiled poverty counts covered in the previously mentioned blog post (figures which were calculated for years up to 2011/2012) these are little more than guesstimates and, as Sandefur shows, they are guesstimates based on very dubious assumptions.

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Camilla Burkot

Camilla Burkot was a Research Officer at the Development Policy Centre, and Editor of the Devpolicy Blog, from 2015 to 2017. She has a background in social anthropology and holds a Master of Public Health from Columbia University, and has field experience in Eastern and Southern Africa, and PNG. She now works for the Burnet Institute.

Terence Wood

Terence Wood is a Research Fellow at the Development Policy Centre. His research focuses on political governance in Western Melanesia, and Australian and New Zealand aid.

2 Comments

  • Hi Stephen,

    I think J&T is the best available evidence because, they run a comprehensive range of regression models, including IV models, and time series analysis. And the also run a good range of robustness tests. In addition to this they use aid data data to disaggregate different types of aid flows. This seems to me more sophisticated than some approaches to date (some which have been simply theoretical, others–dubious–single case studies such as that of Somaliland, and others which have involved regression analysis but less comprehensively).

    That said, I’m still aware of the limitations of the type of analysis that J&T undertake. And perhaps their findings will be refuted in further work. (Hence, ‘best available’, rather than ‘definitive’.)

    However, in between the J&T findings and some other pretty good work on the relationship between aid and democratisation and the like (see below) my reading of the evidence is that, overall, available evidence shows positive aid/governance relationship. And that it certainly doesn’t show the negative one so central to Deaton’s arguments. Maybe this body of evidence is wrong, but, if it is, the burden of proof ought to fall on those who believe it is wrong to show that it’s wrong, before making claims about a negative aid/governance relationship.

    Also, it’s worth noting that J&T aren’t outliers with respect to their findings. Some other related papers with similar (or otherwise interesting) results:
    http://dx.doi.org/10.1016/j.worlddev.2014.11.009
    http://dx.doi.org/10.1017/S0007123413000264
    http://www.personal.psu.edu/jgw12/blogs/josephwright/Dietrich%20Wright%20OUP%20Ch3.pdf
    http://dx.doi.org/10.1111/j.1540-5907.2010.00501.x
    http://dx.doi.org/10.1017/S0020818304582073
    http://dx.doi.org/10.1016/j.worlddev.2014.05.014

    cheers

    Terence

  • Great public service. But do want to query the description of Jones and Tarp as the best available evidence on aid-governance. Better than all the other cross-country regressions on this very subject which give such contradictory results? The Sacks survey-based article looks much more promising.

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