More on the apparently *transient* effects of unconditional cash transfers

Berk Ozler over at Development Impact has a follow up post on GiveDirectly’s three-year impacts. The post looks at multiple papers analyzing results from the same cash transfer RCT in southwestern Kenya:

First, on the initial studies:

On October, 31, 2015, after the release of the HS (16) working paper in 2013, but before the eventual journal publication of HS (16), Haushofer, Reisinger, and Shapiro released a working paper titled “Your Gain is My Pain.”  In it, they find large negative spillovers on life satisfaction (a component of the psychological wellbeing index reported in HS 16) and smaller, but statistically significant negative spillovers on assets and consumption. The negative spillover effects on life satisfaction, at -0.33 SD and larger than the average benefit on beneficiaries, imply a net decrease in life satisfaction in treated villages. Furthermore, the treatment (ITT) effects are consistent with HS (16), but the spillover effects are not. For example, the spillover effect on the psychological wellbeing index in Table III of HS (16) is approximately +0.1, while Table 1 in HRS (15) implies an average spillover effect of about -0.175 (my calculations: -0.05 * (354/100)). There appear to be similar discrepancies on the spillovers implied for assets and consumption in the HRS (15) paper and HS (16). I am not sure what to make of this, as HRS (15) is an unpublished paper – there must [be] a good explanation that I am missing. Regardless, however, these findings of negative spillovers foreshadow the three-year findings in HS (18), which I discuss next.

Then on the three-year findings:

As I discussed earlier this week, HS (18) find that if they define ITT=T-S, virtually all the effects they found at the 9-month follow-up are still there. However, if ITT is defined in the more standard manner of being across villages, i.e. ITT=T-C, then, there is only an effect on assets and nothing else.

… As you can see, things have now changed: there are spillover effects, so the condition for ITT=T-S being unbiased no longer holds. This is not a condition that you establish once in an earlier follow-up and stick with: it has to hold at every follow-up. Otherwise, you need to use the unbiased estimator defined across villages, ITT=T-C.

To nitpick with the authors here, I don’t buy that [….] lower power is responsible for the finding of no significant treatment effects across villages. Sure, as in HS (16), the standard errors are somewhat larger for across-village estimates than the same within-village estimates. But, the big difference between the short- and the longer-term impacts is the gap between the respective point estimates in HS (18), while they were very stable (due to no/small spillovers) in HS (16). Compare Table 5 in HS (18) with Appendix Table 38 and you will see. The treatment effects disappeared, mainly because the differences between T and C are much smaller now, and even negative, than they were at the nine-month follow-up.

And then this:

If we’re trying to say something about treatment effects, which is what the GiveDirectly blog seems to be trying to do, we already have the estimates we want – unbiased and with decent power: ITT=T-C. HS (18) already established a proper counterfactual in C, so just use that. Doesn’t matter if there are spillovers or not: there are no treatment effects to see here, other than the sole one on assets. Spillover estimation is just playing defense here – a smoke screen for the reader who doesn’t have the time to assess the veracity of the claims about sustained effects.

Chris has a twitter thread on the same questions.

Bottom line: we need more research on UCTs, which GiveDirectly is already doing with a (hopefully) better-implemented really long-term study.

 

 

Are researchers scared of bursting the unconditional cash transfers bubble?

This is from Berk Ozler over at Development Impact (which you should all be reading religiously, btw):

……. An increasing number of studies show short-term effects of cash transfers dissipating over time, at varying speeds of decay. But, more on that below… What did surprise me is that I had to read the transcript of the interview to find out about this new finding (no working paper yet, it seems, but here is an abstract). No one was tweeting about the massive four-year effects disappearing: remember that women almost doubled their income compared to the control group five years earlier. It’s not news that these effects are gone?

We are all guilty. If the quote had been about the durability of the effects of cash transfers – even at half of the short- and medium-term levels – many of my tweeps would be shouting it from the rooftops. Why? Because, we disseminate evidence that reinforces our view of the world, but choose to ignore or rationalize away stuff that does not. That may help to keep oneself sane these days, but a good public academic it does not make. Most of us think we’re better than that but we are fooling ourselves. Yes, many of you will politely retweet one of my posts about this or that hype about cash transfers, but deep down you know what you think: unconditional cash transfers are great and there is not a thing any researcher can do about it…

Even in the most favorable interpretation of these new findings, however, the fact remains that there is no treatment effect of cash transfers on beneficiary households other than a sizeable increase in non-land assets, which are held mostly in improved roofs and livestock. This new paper and Blattman’s (forthcoming) work mentioned above join a growing list of papers finding short-term impacts of unconditional cash transfers that fade away over time: Hicks et al. (2017), Brudevold et al. (2017), Baird et al. (2018, supplemental online materials). In fact, the final slide in Hicks et al. states: “Cash effects dissipate quickly, similar to Brudevold et al. (2017), but different to Blattman et al. (2014).” If only they were presenting a couple of months later…

Cash transfers do have a lot of beneficial effects – depending on the target group, accompanying interventions, and various design parameters, but that discussion is for my next post…

Quick thoughts:

  1. Give Directly and the research agenda around their interventions have been great for showing the many ways in which targeted welfare provision can be structured to increase levels of household consumption and investment. I am curious to see the economic impact of their UBI project being rolled out in Kenya. Also, I don’t think that they would deliberately under-publicize unfavorable research findings — see here. Looking forward to the full range of research findings from their previous interventions.
  2. In addition to increasing household consumption (direct cash), we should also be thinking about ways to improve the provision of public goods and services — perhaps by doing the two together.

The other implication here (attributable to Justin Sandefur) is that may be cash transfers would work if they were part of a permanent welfare system.

But are the Malawis of this world (fiscally and politically) really ready for this? Should Malawian policymakers instead be spending their precious time worrying about agricultural productivity and getting their jobless youth into factory work?

All to say that more research is needed on cash transfers, especially with a focus on the political economy implications of such policy proposals and in conjunction with some public goods component.

Is Kenya (and Africa) splitting in two?

This is from the BBC:

Kenyan geologists content that this latest episode was the result of heavy rains washing away underground volcanic ash:

According Gladys Kianji who is GSK chairperson, the phenomena in Mai Mahiu developed after volcanic ash under the ground was washed away. The geologist said that the area affected was between Mt Longonot and Mt Suswa which had volcanic activities years back thus creating tunnels underground.

“The current situation has nothing to do with the splitting of the continent as alleged as it’s the gushing waters that are sweeping away the volcanic ash underground thus creating the fault lines,” she said.

That said, Africa’s long-term geographical integrity doesn’t look good. It will take millions of years, but geologists expect the eastern African to split from the rest of the continent (see below).

geology

The African Continent will certainly benefit from the increase in the length of its coastline. Suddenly eastern DRC and whole sections of Southern Sudan will not be super inaccessible anymore.

kenya

Cambridge Analytica and the 2017 Presidential Election in Kenyan

The underhanded involvement of Cambridge Analytica in the 2017 presidential election in Kenya was already common knowledge among high information elites in the country. But the Channel 4 News expose will certainly make the information accessible to a wider set of Kenyans.

That said, I do not expect it to have any significant effect on President Uhuru Kenyatta’s legitimacy. His recent rapprochement with Raila Odinga has massively boosted his legitimacy and (for better or worse) refocused Kenyans’ attention away from the electoral injustices and failures that occurred throughout the 2017 election cycle.

I must say that it is disappointing that the Kenyatta campaign outsourced a significant portion of their campaign messaging to a company which clearly has very little knowledge of the Kenyan context.

Such insouciance is signal evidence of Kenyan political elites’ pedestrian approach to tackling the many problems that plague the country.

How to win by a landslide in a Russian election

Alec Luhn of The Telegraph notes that Putin may have padded his total vote tally in Sunday’s election by as much as 10 million votes. The pink area in the graph shows the extra votes in the high turnout areas.

Screen Shot 2018-03-19 at 2.29.35 PM

Putin’s autocracy is fairly under-institutionalized, but insights from Magaloni’s canonical study of Mexico’s PRI can explain Putin’s desire to win big. For more on why dictators hold elections in the first place see here (Blaydes, 2011), here (Gandhi, 2008), and here (Gandhi and Lust-Okar, 2009).

African Country Names Explained

placenames.png

The etymology of Kenya is still being resolved. Indeed even the pronunciation isn’t clear. Most people I know say “Kenya.” But others (like my dad and older Kenyans) say “Key-nya.”

A friend of the blog writes on twitter:

[N]ot sure whether ‘White’ is a solid translation of ‘nyaga’. Not unreasonable to choose ‘shining’ or ‘shimmering’ or similar. (*My* preferred translation is ‘Lord of Brightness’ for ‘Mwene Nyaga’ — a reasonable compromise, or so I like to think.)

H/T Rachel Strohm.

 

 

Tyler Cowen Interviews Chris Blattman

Listen to the entire interview here.

Some interesting observations from Chris:

On cash transfers:

What we found is, the initial result after two and four years was like other places seeing big advances in incomes. People get cash. They’re poor. They couldn’t invest in some of their ideas, but they had good ideas, and so they take off.

Now what we’ve seen is, essentially, they’ve converged with the people who didn’t get the cash. The people who didn’t get the cash have caught up because they saved and accumulated slowly and got up to the point where they have the same levels of success.

They converged to a good level. But this means that cash transfers are much more of a temporary acceleration than they are some sort of permanent solution to poverty.

On Botswana’s economic growth miracle:

There’s a few pat stories that say, “Well, they idiosyncratically established a parliamentary government before they discovered their diamonds and, through some magical set of circumstances, maintained this good governance. And the diamonds fed growth and prosperity.”

But that doesn’t seem very persuasive. There’s another story that’s waiting to be told, and I don’t know the answer to it.

On the correlation between stateness and development:

First, my personal experience, whether it’s the little regression I get to run by working in places as diverse as Liberia and Uganda, in Ethiopia and Colombia, that correlation is more apparent than any other correlation.

Why do I think it’s there? I think it’s there because partly it’s a proxy for a general level of social organization that we, as a society, have figured out a way to solve certain collective action problems, that we’ve figured out a way to make certain types of collective decisions in a way that does not have to devolve into conflict. And as a result, we’re able to, on some sense, do everything more effectively — it’s like a general-purpose technology.

Conversational Chris comes off as a much broader thinker than some of his famous papers let on. He is also genuinely committed to knowing the contexts within which he works — which, in my view, is the key reason why his works on violence stand out in the literature.

I hope he is still considering writing a book.

Is Ethiopia in the midst of a green revolution?

This is from Bachewe and co-authors in World Development:

Screen Shot 2018-03-14 at 8.34.44 AMDespite significant efforts, Africa has struggled to imitate the rapid agricultural growth that took place in Asia in the 1960s and 1970s. As a rare but important exception, Ethiopia’s agriculture sector recorded remarkable rapid growth during 2004–14. This paper explores this rapid change in the agriculture sector of this important country – the second most populous in Africa. We review the evidence on agricultural growth and decompose the contributions of modern inputs to growth using an adjusted Solow decomposition model.Screen Shot 2018-03-14 at 8.35.03 AM We also highlight the key pathways Ethiopia followed to achieve its agricultural growth. We find that land and labor use expanded significantly and total factor productivity grew by about 2.3% per year over the study period. Moreover, modern input use more than doubled, explaining some of this growth. The expansion in modern input use appears to have been driven by high government expenditures on the agriculture sector, including agricultural extension, but also by an improved road network, higher rural education levels, and favorable international and local price incentives.

The improvement in agricultural productivity was driven, in part, by deliberate state investment in agriculture:

Ethiopia is one of only four African countries to have implemented the CAADP agreement of a 10% target of annual government expenditures going to agriculture over the 2003–2013 period.

… The GoE has for a long time put agriculture at the center of its national policy priorities. The Agriculture Development Led Industrialization (ADLI) strategy was formulated in the mid-1990s to serve as a roadmap to transform smallholder agriculture in the country. Rural education and health, infrastructure, extension services, and strengthening of public agricultural research were among its top priorities.

These gains are remarkable (if we can trust the state statistical agency data used in the analysis). They are also likely not replicable in other countries across the Continent on account of the high variance in state capacity in the region.

For instance:

[while the] Comprehensive Africa Agriculture Development Programme (CAADP) proposed that African countries allocate 10 percent of their total annual budgets toward boosting agricultural productivity…, only 13 countries [have] signed the CAADP compact (Benin, Burundi, Cape Verde, Ethiopia, The Gambia, Ghana, Liberia, Mali, Niger, Nigeria, Rwanda, Sierra Leone, and Togo).

And out of these 13 only Cape Verde, Ethiopia, Ghana, and Rwanda seem like they have the capacity to translate state fiscal outlays into real productivity gains in agriculture.

Read the whole paper here.

The human toll of state violence in Kenya

This is from Human Rights Watch:

Human Rights Watch research since August, when the first vote was held, has found that police and armed gangs killed more than 100 people during Kenya’s prolonged elections period. Human Rights Watch and Amnesty International found in a joint report in October that at least 67 people were killed countrywide during the first round of voting in August, most of them either shot or beaten to death by police. During the second election, Human Rights Watch documented 37 more killings, most by police, in Nairobi’s Embakasi, Kawangware, Dandora, Mathare, Kibera, Kangemi, Kariobangi, and Riverside neighborhoods. Armed gangs killed some people they identified by tribe as likely opposition supporters.

Find the whole (harrowing) report here.

Police brutality has become so normalized in Kenya that a couple of days ago officers allegedly chased a university student leader into a farm and executed him in full view of witnesses. No one has resigned. The matter is under “investigation.”

 

Can fascists take over America?

Tyler Cowen thinks they can’t:

American fascism cannot happen anymore because the American government is so large and unwieldy. It is simply too hard for the fascists, or for that matter other radical groups, to seize control of. No matter who is elected, the fascists cannot control the bureaucracy, they cannot control all the branches of American government, they cannot control the judiciary, they cannot control semi-independent institutions such as the Federal Reserve, and they cannot control what is sometimes called “the deep state.” The net result is they simply can’t control enough of the modern state to steer it in a fascist direction.

This yields a new defense of Big Government, which is harder to take over, and harder to “turn bad,” than many a smaller government. Surely it ought to give us pause that the major instances of Western fascism came right after a time when government was relatively small, and not too long after the heyday of classical liberalism in Europe, namely the late 19th century. No, I am not blaming classical liberalism for Nazism, but it is simply a fact that it is easier to take over a smaller and simpler state than it is to commandeer one of today’s sprawling bureaucracies.

This argument is only moderately convincing. The bureaucratic argument is pretty weak historically. In fact, there is work that suggests that high levels of social capital and the presence of a rationalized bureaucracy made it easy for the Nazis to take over. The argument would have been stronger if Cowen focused on the ways in which the federal system and the decentralization of hard power in America provides real barriers to countrywide fascistic rule (but he is an economist, so “size of government” is a readily available metric).

The other weakness in the argument is that Cowen sounds like he has in mind “Rule of Law Fascists” (at least at the beginning). But by definition, these chaps would probably engage in a lot of extra-constitutional means of gaining and maintaining power. And at that point, the only stumbling bloc would be the hard power dispersed in the states.

American has a fairly decentralized system of internal projection of coercive capacity (police units are run by states, counties, and cities). These security units could be commandeered by would-be dissenters to challenge a fascist in Washington (states would presumably also race to control all the American military’s weaponry within their borders). America is also too culturally heterogenous to enable a quick takeover by fascists. The fascists would first have to kill a significant number of not only non-European-Americans (going by the demographics of current American fascists) but also a lot of European-Americans before they could install their rule. In the process of doing so, they would begin to undermine the very ethnic and cultural basis of their fascistic rule.

A high level of ethnic (and ideological) heterogeneity would therefore mitigate against a rapid rise and consolidation of fascist rule.

Finally, while the risk of an outright fascist takeover is remote, the likelihood of ever-spreading pockets of fascism in the American state is very real. Here, too, decentralization plays a role. Because of America’s highly decentralized coercive capacities, pockets of unchecked predatory authoritarianism (fascism-lite, if you will) continue to exist throughout the country — see here, here and here. These pockets persist, in part, because the federal government is considered to be fairly faithful to the ideals of the American constitution. So while fascists may not take over the federal government, they can certainly control local police departments, or even pockets of the federal bureaucracy.