These are a first set of impressionistic notes taken from various sessions yesterday.
Wednesday AM: Janos Kornai: Life and Works
No real notes from this `session’ but some comments from the Q&D caught my attention:
Janos Kornai: Let me paint a dark picture: today we have become a machine for manufacturing economists. All papers are very uniform, with a very uniform style on subjects that are all in acceptable areas that are already established.
If you have a young PhD student today, very original say, with a very original paper but that isn’t really that polished. Well they could never go out into the `job market’ with that paper, they would take their standard paper in a well-establisehd area, which all the reviewers will be happy with.
To get money from Brussels, you have to be very specific about what you are going to deliver, what you are going to provide in one year time etc. But real, new, original work is not like that – you can’t say what you will exactly be producing in one or two years time.
Assar Linbeck: what has happened over the last few decades there has been a vast improvement in the level of technical training of PhDs. That is wonderful but you then you spend your whole time on technicalities, searching under the lamp-post as it were. Nowadays we have a lot of government funding and that leads to very specific funding which are all aimed at solving some big public problem (the environment etc etc). We need to be more free in our funding approaches.
Wednesday PM: Development Panel
Should do more detailed work, especially on the empirical side, to get better models of growth (which then might help us do policy stuff).
Esther Duflo: Aid Optimists and Aid Pessimists
- Deplores focus on either pure optimism (Aid can solve the development `problem’) or pure pessimism (Aid is useless)
- This is not very surprising, as public discourse has a tendency to get polarized. The attention span in the public sphere (and rock concert) rarely extends beyond one sentence.
- On the optimists side we have lots of low-hanging fruit
- But lots of rubbish in there too (look at Sachs or the World Banks list: some items with lots evidence of their effectiveness but lots with zero evidence).
- On the aid pessimist side these are OK but lack glamour
- These are modest interventions. No government or donor wants to back these.
- Let’s be modest: we are plumbers not nuclear physicists. The devil is going to be in the details. We can’t just work from models have to get our hands really dirty. Need plenty of evaluation – and this has payoffs for economic research – especially in estimating from micro-data key parameters such as returns to physical capital (De Mel et al.) returns to human capital (Thomas et al.).
Engaging, witty presentation attacking 3 main fallacies:
- We know what causes growth
- We know how Aid interacts with these causes
- We know who is the ‘we’ in the statement:
we must achieve development/growth'' (orwe must solve poverty’’ etc)
All kinds of data and info whose main message is we don’t have a lot of evidence that large scale Aid disbursements work.
[ed:] Best summary of Easterly’s arguments in recent JEL review of Sach’s latest screed (End of Poverty) which made almost exactly the same points as Duflo:
- Focus on discrete small/medium size projects for which we have good evidence they work and do small experiments to develop new ideas.
- Stay away from large projects, do not just throw Aid money at countries and avoid promising the earth (as e.g. Bono and Sachs do regarding `Ending World Poverty’).
Conclusions from talk:
- Really need to keep the Aid and Development separate. Focus on what Aid can do to help people in direct ways now and leave development as something else.
- Aid: do only what can be evaluated, and evaluate only what can be done.
- Development: don’t trust experts, focus on home-grown solutions.
Talks about some of his work particularly in relation to resource curse and accountability for revenues from natural resources.
Argues strongly that economists need to engage with policy-making more. Complains that too often now economists only address their peers (and only care about their opinions). What we write for our peers is completely incomprehensible to other to the general public. Says that nowadays regularly writes 2 versions of his research: one for the academe and one for the public.
Re-mentions the wonderful story told by George Soros about accountancy exercise there which led to publication of data on the level of oil revenue going to each subregion. This resulted in death threats for the data providers and the biggest ever daily sales of newspapers in Nigeria.