Archive for the ‘Development Economics’ Category

my path to pension reform

Wednesday, June 19th, 2019

My interest in pension reform began 19 years ago, in April of the year 2000. I was at an OECD conference in Prague, listening to presentations of two World Bank economists (Estelle James and Dimitri Vittas). At that moment, it suddenly dawned on me that an ideal pension system should provide basic pensions for everyone, funded pay-as-you-go from general government revenue, allowing citizens who desire more than basic income in retirement to save in any way they please, without subsidies, tax breaks or coercion from government. This was my ‘Eureka’ moment.

When it was my turn to speak, the very next day, I spoke with excitement and enthusiasm. The conference was on private pensions, so the audience did not react warmly to my talk. Nonetheless, I presented my core ideas orally, and drafted a discussion paper (“Three Pillars of Pensions?”) immediately after the conference. (more…)

internal migration in China

Monday, May 6th, 2019

I just finished reading a delightful book written by Chinese journalist Karoline Kan. Her work is autobiographical, and more, since she writes also about the lives of a cousin, her parents, grandparents and great-uncle. The 300-page book is very readable, and, at the same time, very informative. I recommend it highly. Among other things, I learned that government control of internal migration began centuries ago, long before the Communist government came to power.

Here is a portion of the book that explains the migration controls. In her memoir, Ms Kan goes on to explain the effect these controls had on her, and on the lives of her parents and grandparents. (more…)

schooling is not learning

Tuesday, April 2nd, 2019

Many years ago I came across a book reporting an evaluation of children who completed primary school (grade five) in Pakistan (or perhaps it was Bangladesh) compared to classmates who had dropped out of school in their first or second year. The results were very clear: there was no difference between the two groups. Many students were warming seats in the classroom, but were not learning anything. Actually, the dropouts managed to out-perform graduates in mathematics. Apparently it is important for street kids to learn math, so that they can make change when selling products. I don’t recall the name or author of the book, or even what country I was in. I only remember that I read it in a library, and was unable to borrow or copy it. Sadly, I did not take notes because I was not working in the field of education at the time. Some day, I hope to find the book to refresh my memory of it.

This introduction is to explain why I was excited to discover a World Bank working paper that examines schooling in terms of what is learned (examination scores) rather than years spent warming a classroom seat. The researchers assess the effect of spending on access to schooling and learning outcomes, using the World Bank’s new measure of outcomes, known as Learning-Adjusted Years of Schooling (LAYS). Previously, it was common to rely on years of schooling, with no attempt to measure what, if anything, might have been learned. (more…)

communication technologies, from Gutenberg to Google

Saturday, February 23rd, 2019

“We must root out printing or printing will root us out,” the Vicar of Croydon told his 16th century parishioners. The cleric was responding to Gutenberg’s discovery not just as a standalone technology, but as an information network. His lament differs little from what we hear about the effects of the internet today.

In my new book, “From Gutenberg to Google,” I examine the two great network revolutions of the past—the aforementioned printing press in the 15th century, as well as the combination of the railroad and telegraph in the 19th century—to put in historical perspective the confusion and uncertainty brought about by the internet today.

Tom Wheeler, “With new technology challenges, remember we’ve been here before“, Brookings Brief, 22 February 2019.

With new technology challenges, remember we’ve been here before

The full blog is much longer. Mr Wheeler (born 1946) is an American businessman and politician. He was Chairman of the Federal Communications Commission from November 2013 to January 2017. His book was published this month by the Brookings Institution Press.

When I read Mr Wheeler’s blog today, I recalled that I drafted a paper on the same subject, for the International Symposium on Network Economy and Economic Governance, Beijing, China, 19-20 April 2001. A slightly revised, post-conference version was published in the Journal of Information Science, 28 (2) 2002, pp. 89–96, and is freely available here and here.

Here is the abstract of my paper:

The development of what one might call ‘modern’ systems of information and communication began with the Gutenberg printing press in the fifteenth century, and progressed through the pre-paid postal system, electric telegraph and telephone in the nineteenth century, radio and television broadcasting in the twentieth century, and most recently the internet. This essay focuses on the response of governments to these innovations, beginning with the printing press.

The title of the paper is “Government policies toward information and communication technologies: a historical perspective”.

universal vs targeted transfers

Sunday, November 11th, 2018

Two Boston economists, Rema Hanna from Harvard and Benjamin A. Olken from MIT, have drafted a paper on basic incomes for the Journal of Economic Perspectives, a publication of the American Economic Association. They argue that, though a universal basic income (UBI) might be appropriate for wealthy countries, it is not appropriate for developing countries.

The paper is well-written, but fails to support their thesis. In fact, drawing on a phrase from William Shakespeare’s play Hamlet, they “hoist themselves with their own petard”.  A “petard” is a small bomb. Shakespeare, writing in the singular, referred to a case in which a bomb-maker is blown up (“hoisted”) with his own bomb. The phrase came to be used more generally, to indicate ironic reversal or poetic justice.

My point is simple: the text of the paper provides abundant evidence that universal incomes should be preferred to transfers that are limited to the poor. (more…)

air conditioning and global warming

Friday, August 24th, 2018

Air-conditioning has been a godsend for hot countries, and hot regions of otherwise temperate countries, but it comes with a huge environmental cost: the electricity needed to power these machines fuels global warming. A leader in this week’s Economist magazine argues that more needs to be done to make these machines more energy efficient, and that buildings, even entire cities, should be designed so that less air-conditioning is required. Here is a self-explanatory excerpt, with a link to the full article. (more…)

map of the day: China’s high-speed rail tracks

Tuesday, August 14th, 2018

This is amazing. In December 2009, China inaugurated its first long-distance high-speed rail service, moving trains 1,100km between the cities of Guangzhou and Wuhan in just three hours. Today, two-thirds of the world’s HSR tracks have been laid in China.

Critics point out that the rail construction has been financed with debt, and the interest costs of this debt exceeds the operating revenue of China Railway. I am not worried. It takes time to attract riders, and travel by electric rail is better for the environment than travel by air, provided electricity is not produced by burning coal or other fossil fuels.

For more information, see Tom Mitchell and Xinning Liu, “China’s high-speed rail and fears of fast track to debt“, Financial Times, 14 August 2018.

 

robots and jobs

Friday, July 6th, 2018

Tim Harford, the FT’s ‘undercover economist’ has written a superb column explaining why it makes no sense to tax ‘robots’. In part this is because robots do not exist, at least not yet. What threatens employment is automation of specific tasks, not whole jobs. Should we, then, tax automation, which drives increases in productivity? Mr Harford thinks that this is a bad idea, though he acknowledges “In a world of mass technological unemployment we are certainly going to need to tax something other than labour income alone”.

He illustrates his point brilliantly with the example of spreadsheets, an accounting process that a few decades ago was very labour-intensive. (more…)

China’s view of the world

Tuesday, May 1st, 2018

FT columnist Martin Wolf recently participated in an international conference convened by the Tsinghua University Academic Center for Chinese Economic Practice and Thinking. He describes it as “franker than any I have participated in during the 25 years I have been visiting China”, and lists seven propositions that the Chinese elite expressed to their foreign guests:

1. China needs strong central rule.
2. Western models are discredited.
3. China does not want to run the world.
4. China is under attack by the US.
5. US goals in the trade talks are incomprehensible.
6. China will survive these attacks.
7. This will be a testing year.

Martin simply describes these seven propositions, without criticism. I assume that he agrees with them, but perhaps he will express disagreement in a future column. Or, perhaps not. In the meantime, I pass along to you his description of proposition number two, which I found most interesting, and most disturbing for western states: (more…)

the rise of China

Wednesday, April 11th, 2018

FT columnist Martin Wolf has a long essay in today’s Financial Times on China as an emerging superpower and the potential for destructive clashes with the USA. It is balanced and well-written, exceeding even the high standards I have come to expect from Martin. (more…)