In 1966, Japan experienced a sudden drop in its fertility rate—for just that year. During the 1960s, the fertility rate was about 2.0 to 2.1 children per woman, but in 1966 it dropped dramatically to 1.6 children per woman (Chart 2). The number of births in 1966 was much lower than in surrounding years, as can also be seen in Japan’s population pyramid, where there’s a big dent for people born in 1966 (the highlighted bars). This isn’t an error in the data, it’s real.
Amidst all the noise of the 24-hour news cycle and current events competing for our attention there lurks a danger that we lose sight of our mission: the fundamental issues in development that we are committed to solve remain urgent and obviously relevant. Now more than ever, the World Bank and DEC (home to the Bank’s research unit) in particular should focus on core research questions whose answers can help end poverty and improve countless lives. These questions rise above the ebb and flow of the political tide and are deeply important to the millions of people that we strive to raise up.
The typical approach to examining how workers, consumers, or governments interact with a firm has been for researchers to find a willing firm owner and convince them to run experiments. Examples include Bandiera et al. working with a UK fruit-farmer to test different payment incentives for immigrant workers; Bloom et al. working with a Chinese travel agency to test the effect of letting workers work from home; and Adhvaryu et al. working with an Indian garment firm to measure impacts of soft-skills training for workers and of introducing LED-lighting. However, finding/persuading a firm to do the experiment that a researcher would like to do can be hard, with many of these existing samples coming about through a researcher having a former student or relative who runs one of these firms.
So what should you do if you lack a connection, or you want to do something that you cannot persuade a firm to do?
Recently, a number of researchers have taken a different approach, which is to set up and run for themselves a firm in order to answer research questions. I thought I would give some examples of this work, and then discuss some of the issues that arise or things to think about when deciding about pursuing this research strategy.
Angus Deaton’s classic, The Analysis of Household Surveys: A Microeconometric Approach to Development Policy has been re-issued with a new preface by the author. The original publication has been cited more than 6,700 times. When it was first issued, one reviewer characterized it as “a rugged tour through a broad swath of author Angus Deaton’s intellectual countryside… Deaton’s prose and reasoning are uniformly sharp, and I found myself quite willing to study at length whatever he was willing to teach.”
Here are a few of Deaton’s reflections, twenty years after he first published this work.
The irony is that while these states have not contributed much to greenhouse emissions, as they produce very little, they may face some of the worst consequences.
As one of the lowest-lying countries in the world, with all its people living a few meters above sea level and over two-thirds of its critical infrastructure lying within 100 meters of the shoreline, a sea level rise of just a few meters will put the nation further at risk, endangering its relative prosperity.
Thankfully Maldives is beginning to turn the tide.
Yesterday I visited Fuvahmulah, in one of the southernmost atolls where the Mayor and the Ministry of Environment, have been working closely with local communities to manage the wetlands, critical for reducing climate change impacts.
I saw scores of young Maldivians enjoying the facilities and learning about conservation. A true win-win. Community participation has helped enhance the design and acceptability of this initiative.
Scaled up, such initiatives can have a transformational impact and it is imperative that the Government of Maldives take the lessons from this Bank supported initiative to 19 other atolls.
Creating a safer archipelago
The Indian Ocean tsunami that battered the islands in 2004 provided a glimpse of what can happen – a clear wake-up call.
The government responded by increasing its emphasis on building resilience in infrastructure and providing its people with early warnings in the event of an underwater earthquake.
Today, in the Greater Malé region, the reclaimed island of Hulhumalé is being developed with better sea defenses and elevated buildings from where people can be evacuated as needed.
The government is also raising people’s understanding of the causes and effects of natural disasters, particularly those that come on suddenly, such as tsunamis and flooding.
In many cases, the answer is: It depends on who's asking!
I once spent an entire day with a team responsible for submitting data to the education minister about how many computers were in that country's schools, and what the related student-computer ratio was. The minister wanted to promote a new policy proposing a target 'student-computer ratio', and wanted to know how practical (or outlandish) her initial thoughts in this regard might be.
Thankfully, team members did have access to pretty reliable data about how many schools the country had, and how many students were in these schools (a shocking number of countries don't have reliable data on these counts). Led by a statistician, who liked to be rather more exact about things than a number of the politicans she worked for, the team was wrestling with questions like:
- The Science of Behavior Change Repository offers a repository of measures of stress, personality, self-regulation, time preferences, etc. – with instruments for both children and adults, and information on how long the questions take to administer and where they have been validated.
- Andrew Gelman on post-hoc power calculations – “my problem is that their recommended calculations will give wrong answers because they are based on extremely noisy estimates of effect size... Suppose you have 200 patients: 100 treated and 100 control, and post-operative survival is 94 for the treated group and 90 for the controls. Then the raw estimated treatment effect is 0.04 with standard error sqrt(0.94*0.06/100 + 0.90*0.10/100) = 0.04. The estimate is just one s.e. away from zero, hence not statistically significant. And the crudely estimated post-hoc power, using the normal distribution, is approximately 16% (the probability of observing an estimate at least 2 standard errors away from zero, conditional on the true parameter value being 1 standard error away from zero). But that’s a noisy, noisy estimate! Consider that effect sizes consistent with these data could be anywhere from -0.04 to +0.12 (roughly), hence absolute effect sizes could be roughly between 0 and 3 standard errors away from zero, corresponding to power being somewhere between 5% (if the true population effect size happened to be zero) and 97.5% (if the true effect size were three standard errors from zero).”
The World Bank’s data blog uses meta-data from hosting its survey solutions tool to ask how well people plan their surveys (and read the comments for good context in interpreting the data). Some key findings:
- Surveys usually take longer than you think they will: 47% of users underestimated the amount of time they needed for the field work – and after requesting more server time, many then re-request this extension
- Spend more time piloting questionnaires before launching: 80% of users revise their surveys at least once when surveying has started, and “a surprisingly high proportion of novice users made 10 or more revisions of their questionnaires during the fieldwork”
- Another factoid of interest “An average nationally representative survey in developing countries costs about US$2M”
- On the EDI Global blog, Nkolo, Mallet, and Terenzi draw on the experiences of EDI and the recent literature to discuss how to deal with surveys on sensitive topics.
- development impact links
Download the January 2019 Global Economic Prospects report.
The informal sector — labor and business that is hidden from monetary, regulatory, and institutional authorities — accounts for about a third of GDP and 70 percent of employment (of which self-employment is more than a half) in emerging market and developing economies. While offering the advantage of employment flexibility in some economies, a large informal sector is associated with low productivity, reduced tax revenues, poor governance, excessive regulations, and poverty and income inequality.
Addressing the challenge of pervasive informality will require comprehensive policies that take into account country-specific conditions. Initiatives to boost long-term development might include measures aimed at reducing regulatory and tax burdens, expanding access to finance, improving education and other public services, and strengthening public revenue frameworks.
One-half of the world’s informal output and 95 percent of its informal employment is in emerging market and developing economies. Both informal output and employment have declined since 1990, particularly in countries with higher output growth, rapid physical capital accumulation, and larger improvements in governance and business climates.
Share of informal output and employment
A strange irony persists in today’s infrastructure investment market: private capital waiting to be deployed into the sector is at an all-time high, yet investors seem reluctant to commit. Even in developed countries, few investors are willing to partake in transactions with merchant or construction risks without taking a higher risk premium.
This can make the financing of infrastructure projects more costly—a challenge particularly acute in emerging markets where further investment risks abound.