November 2007

<em>One Economics, Many Recipes </em>elicited multiple reactions from this reader. As someone who’s had to review development books for a public audience over the past few years, I found Rodrik’s book to be well worth the read. As a political scientist, there were times when my wife asked me, “why are you yelling at the book?” [click to continue…]

In his new book Dani Rodrik argues that the primary question facing both scholars and policy makers in the area of economic development should be “how should the institutions of economic globalization be designed to provide maximal support for national development goals?” In the course of answering this question in a challenging and highly engaging way, he continually pushes the idea that “when it comes to industrial policy, specifying the process is more important than specifying the outcome.” Quite appropriately he acknowledges that despite all of our efforts there is still a great deal that we do not know about the relationship between political and economic institutions on the one hand and economic growth on the other. And thus Rodrik recommends that we employ processes of experimentation as a way of developing a better understanding of which institutions might best facilitate growth in different contexts. In this regard he suggests that democracy might serve as a metainstitution for structuring this type of experimentation.
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Rather as Galileo and Newton used to make sure to profess allegiance to the doctrines of the Holy Church, “One Economics, Many Recipes” asserts firmly in its introduction that the book is firmly in the neoclassical tradition and that although substantial use is made of case studies, the author is a believer in the catchechism of econometrics – the validity of cross-sectional regressions as a means of extracting underlying structural facts. In actual fact, however, the first cross-sectional regression does not appear until page 170, and when it does it really does throw into sharp relief the weakness of cross sectional regressions relative to case studies (it’s a regression which uses one of those Freedom House indices as if it were an unproblematic proxy for “democratic institutions”) [click to continue…]

From his title on, Dani Rodrik is at pains to identify himself as a neoclassical economist, bred in the bone. He writes, “If I often depart from the consensus that ‘mainstream economists’ have reached in matters of development policy, this has less to do with different modes of analysis than with different readings of the evidence and with different evaluations of the ‘political economy’ of developing nations.” Not to start an argument, if the book were about professional cooking, he might have called it One Chemistry, Many Recipes (and Plenty of Chefs). True, economics is not very much like chemistry, but the reason for Rodrik’s emphasis on the primacy of theory, I think, has less to do with the presence of economics’ many competitors in the development game – political scientists, sociologists, lawyers, business executives, savants of all sorts — than with what happened in mainstream economics itself in the twenty-five years since he began his career.
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A good way to start thinking about Dani Rodrik’s genuinely excellent new book is to contrast its statement of objectives with a programmatic statement from another new book on international economics, Roberto Unger’s _Free Trade Reimagined_.

First of all, Rodrik:

First, this book is strictly grounded in neo-classical economic analysis. At the core of neoclassical economics lies the following methodological predisposition: social phenomena can best be understood by considering them to be an aggregation of purposeful behavior by individuals – in their roles as consumer, producer, investor, politician, and so on – interacting with each other and acting under the constraints that their environment imposes. This I find to be not just a powerful discipline for organizing our thoughts on economic affairs, but the only sensible way of thinking about them. If I often depart from the consensus that “mainstream” economists have reached in matters of development policy, this has less to do with different modes of analysis than with different readings of the evidence and with different evaluations of the “political economy” of developing nations. The economics that the graduate student picks up in the seminar room – abstract as it is and riddled with a wide variety of market failures – admits an almost unlimited range of policy recommendations, depending on the specific assumptions the analyst is prepared to make … the tendency of many economists to offer advice based on simple rules of thumb, regardless of context (privatize this, liberalize that), is a derogation rather than a proper application of neoclassical economic principals

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Dani Rodrik’s book opens with a discussion of the policy approach that dominated the development debate for much of the 1990s, and to some extent still does. The term ‘Washington consensus’ was coined by John Williamson of the IIE, to described the views of Washington-based institutions (IMF, World Bank and US Treasury in the 1980s, but escaped from its creator and came to encompass a program of dogmatic adherence to a revived version of 19th century economic orthodoxy, commonly referred to as neoliberalism.

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Dani Rodrik’s new book, <em>One Economics, Many Recipes: Globalization, Institutions, and Economic Growth</em> takes on a problem of fundamental importance, how to stimulate and sustain economic growth in underdeveloped countries and lift people out of poverty.

Past attempts to solve this problem can, for the most part, be identified with one of two polar extremes, solutions that involve pervasive and persistent government intervention, and solutions that rely upon extreme <em>laissez faire</em> market-oriented policies. Neither of these approaches has been very successful, and the book argues for a different approach that combines these extremes and allows market forces to operate in an environment shaped by government policy. Under this combination approach the government in partnership with the private sector uses industrial policy and institutional change to strategically kick-start, coordinate, and sustain economic activity.
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Josh Glenn has a great little slideshow for you, in the Boston Globe. His worthy theme: Winsor McCay’s classic early comic strip, “Dream of a Rarebit Fiend” [1904-1913]. (McCay is more famous for Little Nemo. You’ve certainly heard of that one.) The occasion: a lavish new edition, The Complete Dream of the Rarebit Fiend, all the strips reprinted for the first time at full size; edited and annotated by some fanatic by the name of Ullrich Merkl. Here’s the book page. You can download substantial samples (PDF). Looks nice, though pricey. (Older editions [amazon] are in print as well.)

As I was saying: Josh’s little slideshow – with voiceover – documents the influence of “Rarebit Fiend” on five later films: L’Age D’Or, King Kong, Dumbo, Mary Poppins, Tim Burton’s Charlie and the Chocolate Factory. I guess Glenn is taking his cue from Merkl’s work. I deem it well worth 3 minutes and 31 seconds of your time.

Speaking of the shift from print cartooning to film, Winsor McCay, if you don’t know, is pretty much the God-Grandfather of the animated cartoon. He was one of the very first (the very first?), and hand-drew every damn frame, apparently. (With an occasional assistant.) And he did these vaudeville tours in which he lectured and interacted with the films. Obviously the joke is to synchronize your patter with the film itself. YouTube has it all: “Little Nemo” (1911) (but you have to wait until, like, 8:30 minutes in for the actual animation to start.) “Gertie the Dinosaur” (1914); and “Gertie on Tour” (1921); “How a Mosquito Operates” (1912); and some other stuff, too. Gertie the Dinosaur has the distinction of being the first made-for-animation character, I believe.

Last but not least, Josh Glenn himself has a fun new book out: Taking Things Seriously [amazon] – I’ll get around to reviewing that one. Basically, he invited people to submit their objects. And so they did.

From the Dept of People Who Will Be First Against The Wall When The Revolution Comes: the recurring case of business travelers who think they are being so _frequent flyer sharp_ by using the Disabled/Family restroom instead of the regular one. Example: me this afternoon in O’Hare, near the H gates, standing for several minutes with my increasingly upset three year old daughter outside the door marked with a Parent & Child icon and labeled “Family and Assisted Care Restroom.” Spacious restrooms for unaccompanied men and women are provided on either side. O’Hare even has self-cleaning toilet seats that extrude a fresh plastic cover after every use. Eventually, and inevitably, Mr Cheap _Big & Tall Warehouse_ Suit emerges with his rolly bag. He looks down at me. “Hey mate,” I say, “Did you just flush your kid away in there? Or your wheelchair maybe?” He goggles. I go in.

As norm enforcement this was probably ineffective, not least because the guy was five or six inches taller than me and weighted about 280lbs. He didn’t look as though he was inclined to take orders from anyone, except maybe his regional widget distribution manager. But then again there can be a payoff in satisfaction to even ineffective sanctioning.

While looking for something entirely different (research on the Italian mafia), I just came across this absolutely fascinating new “paper”:http://www.nuff.ox.ac.uk/users/gambetta/Engineers%20of%20Jihad.pdf (pdf) by Diego Gambetta and Steffen Hertog on engineers and Islamic terrorism. There’s been a lot of speculation about the visible elective affinity between education in certain technical disciplines and propensity to join Al-Qaeda and other terrorist groups, none of which has stopped “some loons”:https://crookedtimber.org/2005/02/03/an-ugly-hypothesis-slain-by-an-unbeautiful-fact/ from claiming that the jihadists were led astray by trendy leftist post-modernist academics in the humanities and social sciences. Gambetta and Hertog use a combination of illustrative statistics, qualitative data and logistic regression to show not only that there _is_ a strong relationship between an engineering background and involvement in a variety of Islamic terrorist groups, but to arrive at a plausible hypothesis as to why this relationship pertains.

Their preferred explanation lies in the combination of a particular mindset given to simplification, monistic understandings of the world and desire that existing social arrangements be preserved, with key environmental factors (most importantly, frustrated professional aspirations due to a lack of opportunities). Interestingly, Gambetta and Hertog suggest that the same mindset which drives engineers in the Islamic world to become terrorists, may lead to the marked tendency of US engineers to adhere to strongly conservative political views. This is the kind of topic that lends itself to the worst kind of uninformed pop-journalism academics, but as best as I can tell (I’m a consumer rather than a producer of the statistical literature) Gambetta and Hertog are extremely careful about their analysis, and up front about the limitations of their data. I’ve copied the piece’s abstract beneath the fold.

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“This FT article”:http://www.ft.com/cms/s/0/5b9904e4-8f1e-11dc-87ee-0000779fd2ac.html is pretty entertaining. First the shock horror headline and findings.

Cheats rife in Swedish welfare system

Swedes say they despise people who cheat the country’s generous welfare system at the same time as many do so themselves, government research has concluded.

A two-year study by the Delegation Against Benefit Fraud and Errors said 95 per cent of Swedes condemn cheating but up to a third have no problem either bending the rules, keeping unearned payments or defrauding the system.

The conclusion exposes the underbelly of one of Europe’s most successful welfare states by revealing that Swedes eagerly support their famed Nordic model while simultaneously tapping it for extra cash because “everyone else is doing it”.

Then the interesting figures:

The delegation said such activities cost the government about SKr20bn (€2.2bn, $3.2bn) last year, around 4 per cent of total social welfare payments from the country’s 60 social security systems of SKr520bn – far higher than has been estimated previously.

So 4 per cent of total social welfare payments seem to go to frauds. Isn’t this shockingly … low????? Perhaps this is enough to scandalize the Swedes (although the article hints that the public may be more upset by the fact that 10 out of 15 cabinet members in the newish right wing government have been caught cheating on taxes for their household employees), but by the standards, say, of US military subcontractors, 4% wastage doesn’t even qualify as chump change.

Simon Kuper, to my mind one of the sharpest journalists around, has “a nice review”:http://www.ft.com/cms/s/0/4cf288ba-8c13-11dc-af4d-0000779fd2ac.html of four books in the “Eurabia” genre. The general thesis originates with Bat Ye’or and has Europe sleepwalking into “dhimmi” status as the (mysteriously unified) Muslims press home their demographic advantage against natives befuddled by multiculturalism and moral relativism. Mark Steyn is the great popularizer of all this, and the “decent left” are a minor sect in the Eurabian church (as can be seen by how readily their blogs recycle this tripe). You should “read the whole thing”, as a credulous Islamophobe likes to say.

If you haven’t read Malcolm Nance’s Small Wars Journal essay, “Waterboarding is Torture … Period” – well, you should. It is a clear, cogent, forceful statement of the anti-torture position. At the bottom of that page you also get a long list of links and trackbacks, and a comment box. Here, for example, is a helpful explanation of why all the anti-torture complaints about ticking time bomb scenarios miss the point:

One need not imagine a ticking nuclear bomb, by the way. One only need imagine that they are a father who has captured a man who belongs to a pedophilia ring that managed to kidnap his 2 year old daughter. In other words, the life of the innocent need not be in direct or immediate danger, nor must there be a high number of innocents in danger. A single innocent babe in danger of being subjected to such inhuman cruelty deserves to be protected by any means necessary, provided one is certain they have collared a member of the ring. I would never ever be able to forgive myself for allowing my daughter to be degraded in that way, and believe I would sleep well and without guilty conscious should I subject such a man to the minimum force possible to rescue her.

Jesus wept. Meanwhile, another commenter earnestly wonders whether the reason there is so much resistance to torture is that leftists have been watching too much TV.

Then you get Alan “for it even while I was against it” Dershowitz. And Blackfive, on ‘the virtues of waterboarding and secret prisons’: “The reason that character is so important in choosing a President is that the Commander in Chief powers are almost unchecked.”

Sigh.

I don’t have original ideas to contribute to the ‘debate’. I’m against torture. Maybe this would have some rhetorical effect: you can’t waterboard your way to winning hearts and minds. Giving up our country’s longstanding commitments against torture means giving up any hope of winning any War on Terror we might think we are fighting.

I hereby add my humble voice to the chorus of indignation at the sorry sight of the Mukasey confirmation. What follows are my stray, semi-formulated musings about how we got to hell in this handbasket [click to continue…]

The five surviving British veterans of the first world war.