Links I liked

Toussaint_L'Ouverture

Toussaint L’Ouverture, who helped to lead Haiti to independence in 1804.  France forced the new country to pay reparations for destroyed property until 1947.  (Image source)

Fall 2015 conference highlights

The omnibus conference blog post has returned!  Loads of interesting papers to report on from this fall.

indexMelissa Dell, Nathan Lane, and Pablo Querubin. “State Capacity, Local Governance, and Economic Development in Vietnam.” Presented at the Berkeley Center for Economics and Politics.

Abstract: There has been a large divergence in economic prosperity between Northeast and Southeast Asia since the mid-20th century, and the governance organizations and norms of Asian societies plausibly help explain this divergence. This study examines the impacts of dierent historical governance norms on development using Vietnam as a laboratory. Northern Vietnam (Dai Viet) was ruled by a bureaucratic state inherited from China. It governed through a centralized, competitively selected bureaucracy, and the village was the fundamental administrative unit. Southern Vietnam was a peripheral tributary of the Khmer (Cambodian) Empire. It followed a patron-client model with weaker, more personalized power relations and no village intermediation. The Khmer region was not brought under Vietnam’s control until just prior to French colonization. We use a regression discontinuity design across the Dai Viet-Khmer boundary to compare villages that had a bureaucratic state to nearby areas that had a patron-client state. We find that areas historically under the bureaucratic state have higher living standards today. Using rich data from South Vietnam and the unied Socialist Republic of Vietnam, we document that in villages with a bureaucratic historical state, citizens have been better able to organize for public goods and redistribution through stronger local governments and civil society. However, today foreign companies are less likely to invest in historically bureaucratic areas, which have a long history of being relatively closed towards outsiders. Overall the study suggests that the bureaucratic state in East Asia – deeply embedded in civil society – played a central role in this region’s growth.
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Christopher Blattman, Julian Jamison, and Margaret Sheridan. “Reducing Crime and Violence: Experimental Evidence on Adult Noncognitive Investments in Liberia.”  Presented at the Berkeley comparative politics colloquium.
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Abstract: We show self control and self image are malleable in adults, and that investments in them reduce crime and violence. We recruited criminally-engaged Liberian men and randomized half to eight weeks of group cognitive behavioral therapy, teaching self control skills and a noncriminal self-image. We also randomized $200 grants. Cash raised incomes and reduced crime in the short-run but effects dissipated within a year. Therapy increased self control and noncriminal values, and acts of crime and violence fell 20–50%. Therapy’s impacts lasted at least a year when followed by cash, likely because cash reinforced behavioral changes via prolonged practice.
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Sara Lowes, Nathan Nunn, James Robinson, and Jonathan Weigel.  “The Evolution of Culture and Institutions: Evidence from the Kuba Kingdom.”  Presented at the Berkeley comparative politics colloquium.
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Abstract: We use variation in historical state centralization to examine the impact of institutions on cultural norms. The Kuba Kingdom, established in Central Africa in the early 17th century by King Shyaam, had more developed state institutions than the other independent villages and chieftaincies in the region. It had an unwritten constitution, separation of political powers, a judicial system with courts and juries, a police force and military, taxation, and significant public goods provision. Comparing individuals from the Kuba Kingdom to those from just outside the Kingdom, we find that centralized formal institutions are associated with weaker norms of rule-following and a greater propensity to cheat for material gain.
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Abstract: What accounts for political violence in competitive electoral regimes? Why do elites instigate violence, and how does it aect voting behavior? Most theories of elite-instigated political violence make a crucial yet untested assumption: that if politicians employ violence as a tactic, then it must accord them some objective strategic benefit. Employing experimental and qualitative survey and interview data from Kenya, I argue that, in fact, violence is often the result of strategic miscalculation on the part of elites. In particular, I nd that politicians overestimate the electoral benets of violence and more crucially underestimate its costs, particularly with respect to their core voters. The same is true of heated ethnic rhetoric, which I show to be ineffective in garnering coethnic support yet an important predictor of future violence. The results highlight an important yet overlooked explanation for political violence in competitive electoral regimes and raise thought-provoking questions about when and why office-seeking politicians fail to accurately infer voter preferences over salient political issues.
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Abstract: The Islamic insurgency in the Sahel followed different trajectories and led to varying outcomes: in Mali a powerful Islamic insurgency emerged and lead to the collapse of the state whereas in Mauritania the state was able to defeat the insurgency, and in Niger no cells of Islamic insurgents emerged at all. This variation of trajectories and outcomes constitutes the puzzle of this paper. The paper makes three major claims: first, the root causes of the Islamic insurgency in the Sahel can be traced in the sociopolitical and religious transformations that resulted from the democratization process (1990-2012). Second, after 20 years of democratization, the growing discontent vis-à-vis the state combined with a rising religiosity and ethno-racial tensions created a fertile ground for the incidence of Islamic insurgency in all of Mali, Mauritania, and Niger. Yet Islamic insurgency emerged only in Mali and Mauritania where greater political and strategic opportunities incentivized jihadist leaders to frame a discourse that collectivized the grievance of the masses. Success of the insurgency in Mali and its failure in Mauritania were determined by the level of popular support and the state repressive capacity in each of those two countries. Third, state capacity, particularly repressive capacity, is to a greater extend the determinant of the onset as well as the success of an Islamic insurgency.
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Alexandra Minnis, Evan vanDommelen-Gonzalez, Ellen Luecke, William Dow, Sergio Bautista-Arredondo, and Nancy Padian.  “Yo Puedo – a conditional cash transfer and life skills intervention to promote adolescent sexual health.”  Presented at the Berkeley Population Center.
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Abstract: We designed and evaluated for feasibility an intervention – Yo Puedo – that addresses social network influences and socioeconomic opportunities in a neighborhood with substantial gang exposure and early childbearing.  Yo Puedo combined conditional cash transfers for completion of educational and reproductive health wellness goals with life skills sessions, and targeted youth 16 to 21 years old and same-aged members of their social network. We conducted a 2-arm study with social networks randomized to the intervention or a standard services control arm. We evaluated intervention uptake, adherence and safety; and assessed evidence of effects on behavioral outcomes associated with unintended pregnancy and STI risk.  Seventy-two social networks comprised of 162 youth enrolled, with 92% retention over six months. Seventy-two percent of youth randomized to the intervention participated in intervention activities: 53% received at least one CCT payment; and 66% came to at least one life skills session. We found no evidence that cash payments financed illicit or high-risk behavior. At six months, intervention participants, compared to controls, had a lower odds of hanging out on the street frequently (OR = 0.54, p = 0.10) and a lower odds of reporting their close friends had been incarcerated (OR = 0.6, p=0.12). They reported less regular alcohol use (OR = 0.54, p=0.04) and a lower odds of having sex (OR = 0.50, p = 0.04).  The feasibility evaluation of Yo Puedo demonstrated its promise; a larger evaluation of effects on pregnancy and sustained behavioral changes is warranted.
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Abstract: Property rights are important for economic exchange, but in much of the world they are not publicly provided. Private market organizations can fill this gap by providing an institutional structure to enforce agreements, but with this power comes the ability to extort from the group’s members. Under what circumstances will private organizations provide a stable environment for economic activity? Using original survey data collected from 1,900 randomly sampled traders across 292 markets, 68 market leaders, and 55 government revenue collectors across 57 local governments in Lagos, Nigeria, along with market case studies, I find that strong markets maintain sophisticated institutions to support trade not in the absence of government, but rather as a response to active interference. I argue that market organizations develop and enforce pro-trade institutions when threatened by politicians they perceive as predatory, and when the organization can respond with threats of its own. Under such a balance of power, the organization will not extort because it needs the support of the traders it represents in order to keep threats credible.
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Abstract: Both Benin and Ghana are amongst Africa’s most celebrated examples of democratic success, but there is growing divergence in the capacity of their state institutions to act as effective agents of development. Why? This dissertation argues that modes of party financing are integral to understanding patterns of patronage-based recruitment to public office, and that these patronage practices have consequences for the broader developmental capacities of the state.  The first part of the dissertation shows that leaders use political patronage not only as a means of “buying” votes, but more fundamentally as a means of exerting control over the state’s resources. How leaders choose to access and control these resources depends on the size of the private sector and the strength of party organizations, both of which vary considerably across African countries. Where party organizations are strong and the private sector large, patronage is likely to be concentrated primarily at the elite level to facilitate the exchange of contracts for financial support to the party [as seen in Ghana]. Conversely, where private capital is more scarce, leaders will concentrate patronage at the public service level, enabling political supporters to access state revenue and rents for their party [as seen in Benin].  These varying patronage practices have consequences for the broader developmental capacities of the state. Elite level patronage leads to more stability and cohesion in the executive which, among other things, strengthens commitment to development programs over time even in the face of serious implementation challenges. High levels of public service patronage, by contrast, heighten organizational problems including technical deficiencies amongst public personnel, the frequent disappearance of state resources for political use and excessive control over bureaucratic agencies. This latter environment is particularly challenging for the implementation of development programs.
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The ethics of cash transfer targeting

[Update as of 16 November 2015: this post has been edited to accurately reflect GiveDirectly’s role in the study.  They did not design the randomization scheme and had not seen the results before the paper was released.  Paul Niehaus from GiveDirectly has also informed me that future research with their clients will no longer involve randomization at the household level, and that they are offering cash transfers to the comparison group from the earlier study.]

Is it ethical to give cash transfers to some poor people while their equally poor neighbors get nothing?  Johannes Haushofer, James Reisinger and Jeremy Shapiro just released a new study of this program design with GiveDirectly.  They found that people who received nothing were less happy than they’d been before the program started.  Anke Hoeffler has taken them to task for this, essentially arguing that these negative effects are so predictable that it’s unethical to study them, no matter how clever the research design.

As a basic point of research ethics, I agree that a study should never be designed to knowingly decrease participants’ wellbeing.  However, this wasn’t the goal of this project.  The new paper builds on earlier work by Haushofer & Shapiro (2013), which randomized access to cash transfers at the household level in order to examine both direct effects (on recipient households) and spillover effects (on their non-recipient neighbors).  Ex ante, the expectation was that the  neighbors might still benefit from the program, as recipient households shared resources through informal insurance networks.  While the prospect that the program would create jealousy or unhappiness among the neighbors might seem obvious in one sense, other studies have indicated that transparent eligibility criteria for cash transfers can mitigate unhappiness among non-recipients, so it wasn’t clear that household-level randomization would make non-recipients either economically or psychologically worse off.  Clinical equipose still applied.

As it turned out, the 2013 study found that the spillover group didn’t see any economic benefit from the program.  This might explain part of the 2015 findings – people might be unhappy not only because their neighbors received cash grants, but also because they failed to share their resources.    Finding a negative outcome doesn’t make the research design inherently unethical, but researchers now have an additional datapoint to consider when thinking about how future studies of cash transfer programs might be designed.

Given this new evidence, could there ever be a good reason to distribute cash transfers to fewer than 100% of eligible poor people in a town (as a long-term program design rather than a short-term research project)? It’s not clear to me that there is, although not for the reasons that Hoeffler points out.  Most countries haven’t got the funding to offer a basic income guarantee to all citizens, so distributional questions are an important aspect of program design.  Say a program only has the funding to provide a certain level of grants to 50% of eligible people.  Should the grants be allocated to all the poor people in 50% of towns to avoid conflict among neighbors, perhaps at the cost of conflict between towns (c.f. Bates 1974)?  Or might it be preferable to reduce the value of the grants by 50% and provide them to all eligible people in each town, with the possibility that this makes the amount too low to make a meaningful difference?  Note that this latter solution is a formal version of what Haushofer & Shapiro believed might happen anyway – if recipient households are assumed to share their large grants with their neighbors, it’s simply a less efficient way to give everyone a small grant.  It would be fascinating to see a study comparing these two targeting schemes.

Cash transfer programs aren’t just for low income countries

Eduardo Porter had a fantastic article in the NYT last week about the myth that welfare programs make their recipients lazy and entitled.  He highlights recent research from a team of MIT and Harvard economists which finds that cash transfer programs in low income countries don’t discourage people from working, and connects this to other studies which find the same result for American welfare programs.  In particular, most of the ostensible success of the 1990s welfare reforms were attributable to the strong economy, and poverty increased again with the recessions of the 2000s.  Meanwhile, pushing people off welfare probably led to worse outcomes for children who grew up in poverty.

If the evidence base for cash transfers in low income countries is so strong, should we expect to see the same effects in high income countries?  My prior on this is that we should, and there seems to be an increasing amount of evidence supporting this position.  Aside from the study that Porter mentions on the Mothers’ Pension Program, which took place in the early 20th century, I’ve found two relatively more recent studies that evaluate the use of cash transfers in North America. One looks at a town in Manitoba where poor residents were given basic income grants for four years in the late 1970s.  People with no other sources of income were given grants up to 60% of the poverty line, and people with some outside income received smaller grants on a sliding scale (the precise value is not specified in the study).  Evelyn Forget analyzed administrative data from the town some years later, and found that grant recipients experienced a range of benefits.   They were less likely to be hospitalized for work-related injuries, car accidents, domestic abuse, or mental illness.  Children’s test scores increased, even as their dropout rates decreased, and more adults went back for continuing education.  While there was a small decrease in hours worked, this mostly came from mothers of young babies and teenagers, who are arguably investing in other types of human capital by raising children or staying in school.

The second study tracks a group of children in North Carolina who were members of the Eastern Band of Cherokee Indians, and whose families began receiving an extra US$4000 per capita each year after a casino was build on their land in the mid-1990s.  Researchers found that the grants lowered rates of behavioral and economic problems among treated children, and improved their relationships with their parents.  It also increased personality traits that are correlated with financial success later in life, like conscientiousness and agreeableness.  (The researchers don’t discuss the grants’ impact on children’s incomes or educational achievement in this paper, although I assume they’ll do in future work if they have the data.)

Do cash transfer programmes foster dependency?

At the FAO’s blog, Ben Davis argues that they don’t.  Some key quotes, drawing on recent research on several African projects:

Along with the increase in productive activities, the cash transfers programmes have given households more flexibility with their time. In most countries of sub-Saharan Africa, low paying casual agricultural wage labour is an activity of last resort, when households are desperate for cash.  In Zambia, women in beneficiary households reduced their participation in agricultural wage labour by 17-percentage points and 12 fewer days a year. Both men and women increased the time they spent on family agricultural and non-agricultural businesses. … As one elderly beneficiary said, “I used to be a slave to ganyu (low-paid wage labour) but now I am free.”

Cash transfer programmes also have allowed beneficiary households to better manage risk. Fieldwork in Kenya, Ghana, Lesotho, Zimbabwe, Ethiopia and Malawi has found that the programmes increased social capital and allowed beneficiaries to ’re-enter’ existing social networks and/or to strengthen informal social protection systems and risk-sharing arrangements.

One of the important points that I take from this is that the idea of “welfare dependency” as transfer-induced withdrawal from the labor market is overly simplistic.  Selecting a livelihood strategy rarely comes down to a binary decision to work or depend on the state, be it in rural sub-countries in Kenya or poor neighborhoods in Chicago.  Instead, people  choose from a portfolio of livelihood options, often combining various sources of income at the same time.  These might include agricultural production, self-employment, waged labor, salaried labor, support from family or friends, and support from the government.  Davis’ point suggests that state-provided transfers don’t substitute for all the other livelihood choices here, but rather give people enough of a buffer that they don’t have to resort to the most poorly paid or abusive options quite so often.

Do politicians substitute cash transfers for other public goods?

The results from Twaweza’s latest Sauti za Wananchi poll in Tanzania are out, and they include some interesting questions about public support for cash transfers.  There’s a good write-up at the CGD blog.  In short, people were less supportive of cash transfers than one might have expected – and the more they learned about the transfers, the more likely they were to say that they would prefer the government to spend money on other public goods.  This is all the more surprising given that the transfers provided through the Tanzania Social Action Fund have been found to have a wide range of positive social impacts.

I came across similar types of skepticism when I was speaking with people in Ghana about the LEAP program this summer.  These were informal conversations with friends and casual acquaintances, so obviously not representative of Ghanaian public opinion generally, but they still had an interesting range of variation.  A number of people voiced the standard objection that cash transfers would make recipients lazy and entitled.  When I pointed out that research in other low income countries has shown that this isn’t generally the case, they often suggested that Ghana might be the exception.  (Regardless of one’s priors on this matter, though, I’m fairly sure that receiving US$10 – 20 a month isn’t encouraging many people to drop out of the labor market.)

One reaction that I hadn’t expected was what I’ve come to think of as the public goods critique, similar to the Twaweza results.  Several people agreed that cash transfers might be useful, but suggested that this could lead to lower investment in other types of public goods.  Tony Hall at LSE has argued this explicitly in the case of Brazil.  The underlying concern here seemed to be that the current donor enthusiasm for cash transfers would give governments a way of ducking their responsibilities to provide public goods – giving poor citizens small amounts of money before sending them off to fend for themselves.  It’s certainly true that cash transfers are administratively much simpler than maintaining functioning public education or healthcare systems.  A promising area for future research, I think.