New Economist

The new intellectuals?

Rumours of the ‘death of the intellectual’ have been circulating for years. But Richard Reeves, writing in the latest RSA Journal, thinks they're exaggerated. Rather, our great thinkers are coming under ever greater pressure to be all things to all people: the new intellectuals.

The real problem with the media, though, is not trivialisation but polemicisation. There is still plenty of space for intellectuals to opine; indeed, the increase in the size of publications and the expanding column inches of opinion have, if anything, made this market bigger. But the need to be provocative in order to secure a slot has increased.

The desire for a ‘strong line’, controversy and easily understood standpoints, even in the serious media, militates against thoughtful discussion. “There is a real fear of being distorted,” says Swift. “So sometimes you just don’t bother.” The pressure to strike a pose is almost irresistible. Polemics, postures and soundbites are what the media wants, and so a person or institution that wants a media profile has to deliver. Meanwhile the culture of academia, based on slowly produced, carefully peer-reviewed journals, is going in the opposite direction.

...The risk in these conditions is that barriers to entry are lowered, so that even if the prevalence and status of intellectuals remains unchanged, the quality of their product diminishes. ...But if we need to hold intellectuals to high standards, we should also lower our expectations – not about the quality of their work, but about the ability of any one person, however brilliant, to act as a one-stop solution for our problems.

TS Eliot suggested that: “It is perhaps too much to expect of any man to possess both specialised scientific power and wisdom.” In fact, it is too much to expect anyone to possess wisdom at all, especially with regard to some of our most intractable public issues. Climate change is an area of public concern requiring specialist knowledge in international law, business, macroeconomics, microeconomics, anthropology, psychology, meteorology and oceanography. Similar lists can be drawn up for international migration, intellectual property and pension reform. Being wise in all these areas is beyond the power of mortal individuals.

Some obvious paralells to blogging, it seems. But as the barriers to entry are so much lower, what does this predict for the average quality of blog posts?!

In praise of John Stuart Mill

British philosopher John Stuart Mill left no systematic legacy -  there is no "Millism." But 200 years after his birth, his liberalism is still relevant. And Britain's greatest ever public intellectual was often surprisingly contrarian. Richard Reeves writes about Mill's legacy in the June issue of Prospect magazine.

For those who want more on Mill, papers from the John Stuart Mill Bicentennial Conference held in London earlier this month are now available online.

The joys of averaging

The social sciences often deal with attitudes that are difficult to measure in a robust and consistent way; voting choice, for example, or party identification. One possible solution, offered in a new paper by MIT political scientists Stephen Ansolabehere, Jonathan Rodden and James M. Snyder, is to average large number of survey items. Here is the abstract for the paper, Issue Preferences and Measurement Error (PDF):

We show that averaging a large number of survey items on the same broadly-defined issue area - e.g., government involvement in the economy, or moral issues  eliminates a large amount of measurement error and reveals issue preferences that are well structured. Averaging produces issues scales that are stable over time, and with enough items, these scales are often as stable as party identification.

The scales also exhibit within-survey stability when we construct scales made from disjoint subsets of survey items. Moreover, this intertemporal and within-survey stability increases steadily, and in a manner consistent with a standard common measurement error model, as the number of survey items used increases. Also, when we estimate Converse's "black-white" model, we find that at most 20-25 percent of respondents can be classified as "pure guessers", and 75-80 percent have stable attitudes over issue areas, the reverse of Converse's conclusion.

Finally, in regressions predicting presidential vote choice, the issue scales appear to have much more explanatory power - relatively large coefficients and much larger t-values - than any of the individual survey items used in constructing the scales.

This is an important paper, with uses well beyond political science. After reading it I came across a long post by Andrew Gelman about the paper: Political attitudes look more stable over time if measured by averaging responses to several issue questions. Gelman comments:

This seems like an important paper to me in getting closer to understanding issue attitudes and polarization. It seems that you get a lot by combining questions...

I think this paper is important for substantive reasons (it's interesting that voters are more issue-consistent than researchers have thought), but also statistically-- I'm always trying to make the point to students and collaborators that it's a good idea to combine questions into "scores," and it's nice to have this example. Sometimes items can be combined using factor analysis, but often simple averages are effective (as Robyn Dawes and others have pointed out in the context of psychological measurement).

Good governments make you happy

Or to be more precise, a new study by John Helliwell and Haifang Huang has found cross-country evidence linking the quality of government with measures of life satisfaction. This follows last year's paper by the two authors on well-being in the workplace, which found many workers want trust, not money.

Their new paper (NBER Working Paper No. 11988) is entitled How's Your Government? International Evidence Linking Good Government and Well-Being. Helliwell and Huang used the World Values Survey measures of life satisfaction "as though they were direct measures of utility", to evaluate the effect of alternative features and forms of government:

We find that life satisfaction is more closely linked to several World Bank measures of the quality of government than to real per capita incomes, in simple correlations and more fully specified models explaining international differences in life satisfaction. We test for differences in the relative importance of different aspects of good government, and find a hierarchy of preferences that depends on the level of development.

The ability of governments to provide a trustworthy environment, and to deliver services honestly and efficiently, appears to be of paramount importance for countries with worse governance and lower incomes. The balance changes once acceptable levels of efficiency, trust and incomes are achieved, when more value is attached to building and maintaining the institutions of electoral democracy.

Looking at the scatter plots, the correlation between life satisfaction and quality of government is remarkably linear. One interesting and seemingly robust result is that "countries with some element of proportional voting do have higher levels of life satisfaction."

The authors conclude that "these data provide the broadest and least assumption-driven way to evaluate the quality of government". They call for more data:

If our case is accepted, at least in a provisional way, then life satisfaction data should be collected much more broadly and routinely. Since the relevant questions can be added at little or no cost to surveys being used for other purposes, there is ample scope for rapid increases in the relevant pool of data.

For those without NBER paper access, a November 2005 version of the papers is available here (PDF).

Economics of the third way?

For a concept as vague as the 'third way', one might have thought it difficult to define its economics. But Philip B Whyman from the University of Central Lancashire is up to the challenge. His new book Third Way Economics: Theory and Evaluation covers a range of economic policy areas. If chapter 1, What is the Third Way? (PDF), is any guide then it will find an audience.

Forthcoming book: The Human Security Report

The forthcoming Human Security Report is a great idea:

Modeled on the UN's Human Development Report, the Human Security Report will provide an annual mapping of the incidence, intensity, causes, and consequences of global violence and policy responses to that violence. Each report will carry a series of essays focusing on a thematic issue. The theme of the first issue will be "War in the 21st Century".

Launched a fortnight ago, but not due to be published by Oxford University Press until the end of this month, the report has been produced by Andrew Mack and his team at the Human Security Centre, based at the University of British Columbia.

Funded by five governments and three years in the making, it tracks and analyses trends in political violence around the world. Some of the findings, as reported in the press kit, may surprise. As summarised in a free 12 page Overview (PDF), the report takes issue with claims that:

° The number of armed conflicts is increasing.
° Wars are getting deadlier.
° The number of genocides is increasing.
° The gravest threat to human security is international terrorism.
° 90% of those killed in today’s wars are civilians.
° 5 million people were killed in wars in the 1990s.
° 2 million children were killed in wars during the last decade.
° 80% of refugees are women and children.
° Women are the primary victims of war.
° There are 300,000 child soldiers serving around the world today.

Not one of these claims is based on reliable data. All are suspect; some are demonstrably false. Yet they are widely believed because they reinforce popular assumptions. They flourish in the absence of official figures to contradict them, and conjure a picture of global security trends that is grossly distorted. And they often drive political agendas.

It notes the remarkable extent of change in global security since the end of the Cold War:

° The number of armed conflicts around the world has declined by more than 40% since the early 1990s (see Figure 1.1 in Part I).
° Between 1991 (the high point for the post–World War II period) and 2004, 28 armed struggles for self-determination started or restarted, while 43 were contained or ended. There were just 25 armed secessionist conflicts under way in 2004, the lowest number since 1976.
° Notwithstanding the horrors of Rwanda, Srebrenica and elsewhere, the number of genocides and politicides plummeted by 80% between the 1988 high point and 2001 (Figure 1.11).
° International crises, often harbingers of war, declined by more than 70% between 1981 and 2001 (Figure 1.5).
° The dollar value of major international arms transfers fell by 33% between 1990 and 2003 (Figure 1.10).
Global military expenditure and troop numbers declined sharply in the 1990s as well.
° The number of refugees dropped by some 45% between 1992 and 2003, as more and more wars came to an end (Figure 3.1).

Provocative, readable and well documented - this report should cause some waves. (Hat tip: Robin Varghese at 3 quarks daily).

Forthcoming book: The Political Economy of Good Government

Another forthcoming book worthy of attention, this time by Tim Besley, Director of STICERD and LSE Professor of Economics and Political Science: Principled Agents? The Political Economy of Good Government. Tim writes:

The main aim of this book has been to look at the problem of good government through the lens of modern political economy. This is an evolving field and much has still to be learned.

The material in this book shapes broad thinking on the competence of government. We have begun from a position that while markets have their limits in allocating resources, so do governments. It is evident that the economics profession is now providing tools to meet the challenge of deciding where the boundaries lie between public and private responsibility. There is a section of opinion that equates good government to small government.

Moreover, this has been a dominant tradition in political economy in the past. However, there is nothing in modern political economics to support this claim even if attitudes towards government intervention are more cautious than in the past. A political economy approach can also fuel optimism. If we can understand the logic of good government, then perhaps this is the first step towards creating it.

Chapter 1:  Alternative views of Government Charts only (PDF)
Chapter 2: The Anatomy of Government Failure (PDF)
Chapter 3: Political Agency and Accountability (PDF)
Chapter 4: Political Agency and Public Finance (PDF)
Chapter 5: Final Thoughts (PDF)

Press freedom and corruption

Does press freedom matter? Well for one thing it does seem to help reduce corruption. A recent GEP research paper by Sebastian Freille, M Emranul Haque and Richard Kneller, A Contribution to the Empirics of Press Freedom and Corruption, finds:

We test the relationship between aggregate press freedom and corruption performing a modified extreme bounds analysis for a 10-year panel. We also test the relation among different forms of restrictions to press freedom and corruption using the previously unexplored disaggregated data. Our results support the theoretical view that restrictions in press freedom lead to higher corruption levels.

Furthermore, we obtain that both political and economic influences on the media are strongly and robustly related to corruption, while detrimental laws and regulations influencing the media are not strongly associated to higher corruption. In all cases, there is indicative, albeit not conclusive, evidence that the direction of causation runs from a freer press to lower corruption.

Who's the most corrupt country?

Pablo at PSD Blog draws our attention to the 2005 Corruption Perceptions Index, published yesterday by Transparency International. (See the 2005 index and map). The media release states:

The 2005 Index bears witness to the double burden of poverty and corruption borne by the world’s least developed countries. “Corruption is a major cause of poverty as well as a barrier to overcoming it,” said Transparency International Chairman Peter Eigen. “The two scourges feed off each other, locking their populations in a cycle of misery. Corruption must be vigorously addressed if aid is to make a real difference in freeing people from poverty.”

Despite progress on many fronts, including the imminent entry into force of the United Nations Convention against Corruption, seventy countries - nearly half of those included in the Index - scored less than 3 on the CPI, indicating a severe corruption problem. Among the countries included in the Index, corruption is perceived as most rampant in Chad, Bangladesh, Turkmenistan, Myanmar and Haiti – also among the poorest countries in the world.

Chad and Bangladesh were equal worst this year; in 2004 it was Haiti and Bangladesh that were the most corrupt countries. Last year's least corrupt country, Finland, was edged out slightly by Iceland in this year's ranking, while New Zealand retained its status as the second least corrupt country in the world.

India's index score was unchanged from last year at a poor 2.9, while China's score deteriorated from 3.4 previously to just 3.2 (see my previous post on how Corruption threatens Chinese economy).

For more on why transparency and corruption matter for development, see Measuring transparency, fighting corruption.

Lessons from 35 years as a professional economist

Dr John Llewellyn, chief global economist at Lehman Brothers, has recently turned sixty. In the 7 August issue of The Observer he says this turning point led him to ask: "what, over the past 35 years as a professional economist, I have learnt that is of real use". Ten useful lessons for a sexagenarian is his answer. I summarise his ten points below:

1) Economic events - what economists call 'shocks' - seldom produce just one consequence. Usually the effects ripple on for years.
2) Good economic policies do not guarantee good economic performance; but bad economic policies inevitably result in bad performance.
3) It is structural, not demand-side, policies that most influence economic performance over the long term.
4) People respond powerfully to economic incentives.
5) Economic and social policies have to be considered as a whole.
6) Competition is one of the most powerful of forces that motivate the perpetual quest for more efficient ways of doing things.
7) History seldom, if ever, repeats itself precisely. Economies have the habit of producing new mixtures of circumstances that require new approaches.
8) Complicated economic policies whose rationale is hard to explain usually fail.
9) Some of the biggest, and most important, economic issues remain unresolved.
10) Just because professional economists don't always have a confident answer, it does not follow that all proffered solutions have equal validity. ...often the biggest contribution [they] ..can make is to demonstrate why the current fad or nostrum is wrong and will fail.

Remarkably, I find myself in agreement with all ten points.

Llewellyn considers the last of his ten points "perhaps the most important", but I would argue that points 4 (incentives) and 6 (competition) are the most powerful in explaining economic behaviour. To that I would add an additional point that most markets work well most of the time, subject to certain minimum conditions.