Rachel Glennerster Profile picture
Jan 3 16 tweets 4 min read
While at DFID I would provide new Sec of State an "Introduction to Development". By touching on evolution of diff approaches to development I sought to explain the need for diff parts of DFID & inoculate against claims of simple fixes. Thread 1/n
Yesterday I turned that slide deck into a lecture for undergrads at @UChicago. By showing how development has fallen foul of 1 dimensional fads my aim is to explain why we will cover both macro & micro, understanding what works in improving how teachers teach & how IMF works 2/n
So with some trepidation (I am simplifying massively & miss important development approaches in my overview and nuances in those I do describe), here is the basic thrust of the argument. I am sure #econtwitter can help me improve this. Aim is to show how diff approaches link 3/n
An initial view of development focused on capital: poor countries were poor because they lacked money, or capital (K) esp heavy industry which was hallmark of "developed econ". Soviet Union, China with GLF, India 5 yr plan and World Bank lending all took this view 4/n
One difference was that Soviet Union, China and India sought to finance more capital by driving up savings rates domestically (taking the Solow Growth model literally), while World Bank provided some foreign savings to finance increase in capital. 5/n
While L&MIC did grow, the results were disappointing. Skilled labor (L) was needed to complement and utilize the fancy new capital, SKorea, HK etc illustrated the benefits of more ed workforce, & squeezing individuals to produce more steel created misery 6/n
I see human capital theory, endogenous growth theory, & Sens capabilities all as reaction against obsession with K. Dev focused more on ed & health b/c it helps ppl achieve their capabilities, complements K with higher quality L, and is what fast growth EA economies did 7/n
And yes, I recognize that Sen's capabilities was much more than human capital. It involved autonomy, rights, voice ie power. But what moved forwards as the consensus in development was the intersection of 3 different critiques ie human capital. Power to the poor is way harder 8/n
But as dev was shifting away from obsession with K, the debt crisis hits, partly b/c of all the foreign borrowing to finance K, partly the distorted prices needed to support industry for which countries had no comparative advantage 9/n
I wont discuss merits/demerits of structural adjustment here. But out of this crisis came conviction that *policies* were the key to development. It wasn't the quantity of K or L that mattered as much as the policies that incentivized their efficient production & allocation. 10/n
There are huge arguments about what are the right policies. We need policies that allow market signals to efficiently allocate K but we also want policies that reflect externalities, promote public goods, redistribute. But this argument hides the imp shift to dev as policies 11/n
Then two, seemingly diametrically opposed, trends in academic development hit. Work showing long run impact on current development outcomes of history (eg slave trade and colonization) and RCTs that measure the effectiveness of specific interventions. 12/n
The "institutions" view of development is fascinating but depressing. If I know that ethnic groups who lived in parts of Africa where the TseTse fly prevented the use of draft animals and the plow are still disadvantaged today, what do I do about it? 13/n
In contrast, RCTs provide concrete solutions but are criticized as answering only "small" questions (runningres.com/blog/2016/5/27…). I see them as helping solve probs the poor care about, generating knowledge to inform policies ssir.org/articles/entry…
& improving human capital. 14/n
I've spent much my research career doing RCTs on institutions, so I dont see institutions approach to development and RCTs as at odds. Eg my work with Kate Casey @tedmiguel and others on how to practically change institutions, increase trust, democracy, voice of women etc 15/n
So what do we learn from this history of dev? Avoid silver bullet thinking. Improving lives is the goal. K & L, human capital & policies are all important. We should work on what we can practically fix b/c evid shows gains can be achieved even under bad policies & conditions END

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More from @rglenner

Feb 13
I just finished preparing my undergraduate lecture on the economics of women's empowerment and it reminded me just how radical economics is.

Thread 1/n
Objective is maximizing utility, not income, or education or anything others want you to want. Imp therefore that everyone has the opportunity, information, and capabilities to pursue what they think is important. Ie, economics and empowerment closely aligned. 2/n
Concept of diminishing marginal utility (of income, leisure etc) means its *efficient* to focus attention and resources on those who have less money or power or opportunity because any gains for them will have larger impact on utility. 3/n
Read 5 tweets
Dec 29, 2021
This fall I taught a course for grad students @UChicago on the practicalities of running randomized evaluations, based in part on my book with Kudzai Takavarasha but with updates (eg machine learning in RCTs) press.princeton.edu/books/paperbac…
Some thoughts on what I learned.. 1/n
We need more courses in universities that teach how to take the ideas we are teaching and apply them to practical issues. Many students could ace the problem sets but the final project where they had to design an RCT showed who could work through practical issues involved 2/n
Most challenging part for many was that there was no right answer to many design choices. "Its a tradeoff" I said repeatedly (eg between more representative sample vs a sample with more take up and thus power). "I want you to explain why you chose the trade off you chose." 3/n
Read 11 tweets
Jul 5, 2020
In March we forecast indirect impacts of C-19 on developing countries through 3 channels:
1. global economic (eg commodity prices, capital flows);
2. containment's impact on livelihoods;
3. other secondary impacts (eg school closures).
What does the data say now? Thread.
Global demand and trade have fallen substantially. The IMF forecasts a contraction of 4.9% in GDP while WTO projects a fall in world trade of between 13 and 32% in 2020. Commodity producing emerging markets are forecast to do particularly badly.
This decline in GDP would translate into an increase in extreme poverty of 70 million if the previous relationship of GDP to poverty applied. The below estimates are from @DFID_UK internal model but are very similar to those from the @wb_research.
Read 15 tweets
Apr 19, 2020
Developing countries face extremely difficult but critically important choices about how best to respond to COVID-19 in a way that is adapted to their environment. These decisions are made harder by lack of good data. Proud that @DFID_UK is helping fill the data gap. Thread (1/8)
. @PEDL_CEPR & @CDCgroup have a call to fund data collection/studies on:
-Disruption to supply chains, especially in critical sectors (e.g. food, export sectors with continued demand)
-Income transfers to labour and firms
-Disruption to markets (2/8)
. @UNUWIDER is part of an international consortium running a large international survey on the economic & social consequences of COVID-19. The citizens science project will examine issues such as mental health and the changing nature of the state (3/8)
Read 8 tweets
Nov 9, 2019
Just read Abhijit Banerjee and Esther Duflo's new book: "Good Economics for Hard Times."
While they seek "better answers to our biggest problems": climate change, AI etc I was struck by their humility. They dont claim there are simple big solutions but I still come away hopeful.
Economists, they point out, are widely distrusted, partly because we have got a lot wrong. For example, we have focused too much on income vs dignity. Our work is trial and error.
"To make progess, we have to constantly go back to the facts, acknowledge our errors, and move on."
The best economics is constantly testing, checking, iterating but too often it is the strident, confident voices with simple answers that get heard.

As in "Poor Economics" they seek to tell the more nuanced story in clear accessible language drawing on the work of many others.
Read 8 tweets
Aug 4, 2019
Climate change will hurt the poorest hardest because the poor live in hotter places & have fewer resources to protect themselves. @DFID_UK is therefore increasing its climate investments--both mitigation & adaptation. But what are the most effective ways to do that? Thread (1/n)
In particular, what investments are good at addressing climate change AND reducing poverty? Here are some e.g.s with strong evidence. What are your favorites? (2/n)
1. Energy policy reform. Fossil fuel subsidies hurt the climate & take resources from public services. Fossil fuels (especially coal) cause particulate pollution which is the biggest cause of early mortality, with 6+ years of life lost in much of Asia. aqli.epic.uchicago.edu/the-index/ 3/n
Read 6 tweets

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