Economists in International Development Policy Making Stefan Dercon - PowerPoint PPT Presentation

Economists in International Development Policy Making Stefan Dercon

ECONOMISTS AS THE LOYAL SERVANTS

An interesting man… • 3

With an interesting interview technique… • 4

The economist as the servant of the gut: exemplification The environment the economist works

The dangers of exemplification Distribution of success and failure 100 % Extent of success 6

ECONOMISTS AS THE SOLUTION PROVIDERS

The international development and aid narrative The dream …. The reality ? Development narratives tend to dream of building Sweden – inclusive, fair, politically moderate, with a strong welfare state and even a golden thread (as on its flag)… John Berryman “Swedes don’t exist, Scandinavians in general don’t exist, take it from there.” (Dream Song #31 )

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ECONOMISTS AND THE INCENTIVES OF THE POLITICAL ELITE

Fundamental challenge to external validity of policy prescriptions and their likely impact.

ECONOMISTS AS BIASED HUMANS

Example of finding: confirmation bias Figure 1: The effect of framing on data interpretation Randomly offered different Do development professionals interpret data subjectively? framing .649682 Results from a careful impact .6 evaluation… Number Number .481419 Treatment 1: skin cream and better same .4 impact on skin Treatmen 223 75 .2 t Treatment 2: minimum wage and impact on incomes of No 107 21 0 poor treatment Framing of the data Wage vignette Skin Cream vignette (and randomisation of all labels of Source: DFID attitudes and behaviour survey Note: Participants were randomised into 4 groups, each of which recieved a different context, or 'frame'. Two groups recieved contexts on table and order of numbers) the effect of minimum wages on poverty, and two groups recieved contexts on the effectiveness of skin cream. All participants were presented with identical sets of data, and asked to interpret the data in the context they had recieved. Particiapnts were given two statements to select from, one which was consistent with the data presented, and one which was not. Participants had to identify the statement consistent with the data they had seen.

So what’s next 1. More scientific humility and integrity – W e can’t all be right – We work in highly politicised environments trusting ideology and gut-feeling 2. Encourage rigorous synthesis work, rather than economics as a debating and point scoring science. 3. Empower economists across civil services across the world in navigating politics – Encourage them to use the power of economic thinking about incentives and trade-offs to understand their political masters too