Decolonising the South African economics curriculum

This week I attended the ‘Scholarship of Teaching and Learning (SOTL) in the South‘ conference hosted by the University of Johannesburg, where I presented a paper entitled: “What would an (South) African economics curriculum look like?”. (A project I have gestured at previously when commenting on discussions around UCT’s economics curriculum – here, here – and promised to do a follow-up on).

The paper can be found in the published conference proceedings here [pdf]. The short slide presentation can be downloaded from here [pdf].

The conference itself was interesting and included a number of different perspectives, and opinions, on the question of  ‘decolonisation’. The conclusion I came to was that there are two main aspects to this issue: institutional change and disciplinary change. And in both cases we need to start talking details, because that’s where the really hard work will start and become apparent. In this context, my paper aims to make a contribution in relation to the discipline of economics.

In the end, my discussion of what should go in the curriculum is very limited. One reason is because of the word limit for contributions, but the main reason is that I found there to be many preliminary issues that required fleshing-out first. Some of the more provocative, and important, assertions I make are that:

  • Demographic transformation of faculty is important in its own right, but should not be conflated or confused with substantive transformation of the curriculum
  • Changing content by introducing certain topics is important but need not lead to the imagined outcomes, it depends on the framing of those topics (e.g. North American economic history arguing that slavery was not such a bad thing)
  • The awkward reality that South African academic economics and its institutions is largely characterised by a weak attempt at imitating a lagged, conservative version of the neoclassical mainstream
  • A substantively ‘decolonised’ curriculum would be much more challenging than the standard mainstream curriculum – so concerns about ‘lowering of standards’ are misplaced in that context
  • Our biggest challenge is the massive gulf between what an ideal, decolonised curriculum looks like and what we (African economists) actually have the capacity to do.

Feedback on any and all aspects of the paper are very welcome.

I intend to get into much more detail regarding an ‘ideal curriculum’ in a second paper, hopefully with some collaborators.

 

Edit: here is the stand-alone version of my final paper submitted to the SOTL proceedings.

Phase II of pro-nuclear arguments: notes from Nuclear Power Africa 2017

On the 18th of May I attended Nuclear Power Africa, a full day programme on nuclear energy within the broader African Utility Week. I was a little surprised to be invited as a panelist given what I had written previously (here and here) and because I anticipated that an industry conference would be heavily pro-nuclear. As it turned out, I may have been the only panelist who did not have some kind of, direct or indirect, interest in large-scale nuclear procurement proceeding in South Africa. Unsurprisingly, I was also the only panelist arguing that the current case for nuclear is flawed in various respects.

Summary of my argument

I provided my graphical, one-page summary in a previous post. The basic argument is as captured in my previous articles, but let me briefly repeat it.

South Africa’s public finances are precarious, with stubbornly low economic growth, under-collection of tax revenue alongside additional tax measures, rapid growth in net liabilities (national debt and contingent liabilities such as debt guarantees to Eskom) and of course the recent downgrades – with the possibility of a potentially very damaging downgrade of local currency debt still looming on the horizon.

Liabilities_v3_blog

Meanwhile, electricity demand has not just failed to keep-up with the forecasts from the 2010 Integrated Resource Plan (IRP) on which the need for 9.6GW of nuclear was originally based, it has actually fallen. The following graph is striking:

Demand_IRPs&actual

The red dotted line is the original IRP 2010 baseline forecast, the blue dotted line represents a scenario in the IRP 2010 update (from 2013, but controversially never finalised) entitled ‘Adrift in troubled waters’, and the black line represents actual electricity distributed (based on StatsSA data).

There are, furthermore, various ‘qualitative’ concerns about the programme. Among these:

  • Nuclear power projects are particularly prone to many of the ills of ‘mega projects, including cost overruns
  • This concern is compounded by the fact that in the South African case the urgency behind the project appears to be due to rent-seeking behaviour (corruption) at the highest political levels
  • There is a danger of being locked-in to non-competitive markets (e.g. for nuclear fuel) and increasingly outdated technologies.

There is no chance that a nuclear programme will be financed without government guarantees, whether direct, through Eskom or through power-purchase agreements. This means that ultimately government will carry the associated risks. Combine that fact with the above context and I suggest the conclusion is obvious: there is no case for investing in nuclear now. At best, we could revisit the question in 3 – 5 years’ time depending on trends in economic growth and electricity demand.

Notable pro-nuclear arguments and associated debates

Given the above, it was interesting to hear what proponents of nuclear were using to bolster their position.

The arguments for the urgency of nuclear procurement keep evolving, which is a bad sign: it suggests that a decision has already been taken (for other reasons) and attempts are being made to manufacture substantive arguments after the fact. So even while we engage with these arguments, the issue of motive should not be forgotten.

There are two particularly notable issues that came up at Nuclear Power Africa: the argument that policy models which fail to recommend nuclear are flawed; and, the claim that nuclear procurement will be good for the economy and an important part of industrial policy. Despite somewhat more sophistication on some dimensions, I want to suggest that these new arguments are unconvincing, the case for nuclear remains weak and therefore motivations for advocating it appear dubious.

Are planning models for electricity generation capacity wrong?

One of the most damning arguments against the plan to procure 9.6GW of nuclear energy for South Africa is that the models used to plan energy supply no longer recommend nuclear. The notion that 9.6GW of nuclear was needed came from the Department of Energy’s 2010 Integrated Resource Plan (IRP). That was based on the assumption of significant growth in energy demand, which has not happened – as shown by the second graph above. Furthermore, the cost of renewable energy in South Africa – as established by recent rounds of competitive bidding – has fallen significantly since then. When these factors are taken into account, the base model used for the IRP and similar models used by the Council for Scientific and Industrial Research (CSIR) and Energy Research Centre (ERC) do not recommend nuclear. It has been argued (by Anton Eberhard who participated in the Eskom ‘War Room’) that artificial constraints had to be placed on the model used for the draft 2016 IRP in order to produce an outcome in which nuclear is recommended.

The response to this at Nuclear Power Africa, from engineers and economists aligned to institutions pushing for nuclear, was to rubbish the models. This is evidently problematic. If you think a model of this kind has important flaws, then the correct approach is to have a debate about the model structure and parameters. Running the model then rubbishing it because the outcome doesn’t suit your pre-existing conclusion is misguided or disingenuous.

Relatedly, it is concerning that there continues to be a remarkable level of disagreement on even fairly basic technical claims. In a separate session on renewable energy, Tobias Bischoff-Niemz of the CSIR argued that their model accounts for issues like the variable availability of renewables; in the nuclear power session, Eskom’s Chief Nuclear Engineer argued the opposite. And while pro-nuclear speakers cited the example of Germany’s expensive electricity as an illustration of what would happen if South Africa increased its reliance on renewables, Bischoff-Niemz had argued that this was due to Germany investing heavily in renewables at a time when they were much more expensive. It should not be hard to objectively assess these claims.

Economic growth, economic impact and industrial policy

On the economic front, two economists who were in favour of nuclear argued that energy investment must be based on the energy demand associated with the desired level of economic growth. By contrast, I argue that building energy capacity on the basis of wishful thinking could have severe negative consequences for public finances. Rates of growth in economic activity and energy demand are far below what was used to inform the 2010 IRP. It is very unlikely that economic growth will reach the 6% annual growth aimed for in the National Development Plan (NDP) any time soon, if at all. Even the 4% Eskom assumed in its last major tariff application seems improbably optimistic. At best, if economic growth is supposed to be the basis for nuclear procurement, then we should wait a few years in order to get a better sense of the trajectory of growth and how new technologies are affecting the link between growth and the need for electricity from the national grid.

A second set of arguments was put forward by an economist for the Coega Industrial Development Zone, near to where the first nuclear plant might be located. She argued that nuclear procurement would have a significant positive impact on the economy and that even if there was over-investment in energy generation capacity this would be good for industrial development because of low electricity prices.

The economic impact argument is entirely unconvincing. If government indirectly borrows a trillion Rand, either from current or future generations, to invest in anything now that will have an initially large, positive impact on the economy. To paraphrase the famous economist John Maynard Keynes: even if the government just buried that money in the ground and let people dig it up, that would have a large positive impact. The more important question, then, is whether the expenditure is worthwhile: will it provide better social and economic value than alternative investments, and will the debt that future generations have to pay be worth it? At present the answer to both these questions for nuclear is ‘no’. And that also means that this proposal would be bad for the stability and sustainability of public finances.

The argument relating to industrial development is similarly problematic. The positive view that once existed of the extremely low electricity prices South Africa had in the 1990s has been revised. Those low prices were the result of poor management of infrastructure investment: overinvestment in earlier periods followed by a failure of tariffs to include the costs of future investment requirements. But worse still, there is little evidence that the resultant low cost of electricity had any sustainably positive effect on industrial development. The energy-intensive industries that benefitted most are not the most employment-intensive, and have become less so since then. Diverting scarce resources to such industries through an inefficient energy subsidy is a poor argument for nuclear and a bad strategy for Eskom as a state-owned enterprise.

Overall, then, while the arguments for nuclear may be becoming marginally more diverse and sophisticated, but they remain profoundly unconvincing.

The issue of energy generation and industrial policy is, however, a very interesting one on its own regardless of the nuclear debate. Somewhat serendipitously, the Trade and Industrial Policy Strategies (TIPS) Annual Forum happening this week, on the 13th and 14th of June, is on the related topic of “Industrialisation and sustainable growth“.

Some thoughts on the Finance Minister’s adviser and his critics

The debate around the new Finance Minister Malusi Gigaba’s new adviser, Chris Malikane, has gone beyond the deeply flawed proposals he has made, to claims about his academic credentials and integrity. I want to agree that the proposals are flawed, but that some of the attacks on Malikane are as well. Furthermore, they draw attention to some serious issues in South African academic economics that require mature discussion.

Most of the 8-page ‘manifesto’ published, and extensively publicised in various articles and interviews by Malikane, is not worthy of serious analysis. (Although one effort to take it seriously, by Charles Simkins, is worth reading – as is the more acerbic piece by Richard Poplak). It is primarily a political document and contains no substantive content relating to economic policy and public finance. There’s a crude Marxist analysis of class, and a shopping list of things that should be nationalised and services that should be provided. The only interesting assertion is that the working class should throw their weight behind those black South Africans who have become an elite through corrupt government tenders, rather than through credit-based black empowerment schemes. Like the other assertions, no serious justification is provided. But it certainly explains why Malikane’s radicalism has found favour with Gigaba, whose predecessor appeared to be successfully blocking a range of efforts at tender-related corruption by individuals associated either with the President or the Gupta family. The thinking from Gigaba – a man better known by some for tabloid stories, tailored suits, expensive ties and appearances on Top Billing – may have been that Malikane would provide some solidity to the fig leaf of ‘radical economic transformation’, while Malikane – who has otherwise been quietly exerting influence in left-wing, or trade union movements for some time – clearly thought that his revolutionary moment had arrived.

Some have attempted to defend Malikane on the basis of his academic credentials – to the point of also insisting that his evidently wrong-headed proposals (such as ‘expropriating banks’) cannot be criticised except through detailed academic analysis. At which point it is useful to invoke a phrase attributed to the Italian computer programmer Alberto Brandolini: “The amount of energy needed to refute bullshit is an order of magnitude bigger than to produce it”. Just because the minister’s adviser has published some academic papers on other subjects does not mean we must presume that his manifesto carries additional weight. Indeed, the primary disappointment for many who had  reasonably high opinion of Malikane up to this point is quite how threadbare his analysis and proposals are.

Where things are getting messy, however, is in attacks on Malikane’s academic credentials. These in fact open-up a big can of worms regarding the state of South African academic economics. (One reason I have been delayed in writing a comment on the Malikane’s saga is that I had been drafting a conference paper on what ‘decolonisation of the curriculum’ might mean for South African economics).

Understanding Peer Review in Economics

It turns out that the issue of decolonising economics is closely related to some of the misguided aspects of attacks on Malikane. The first, by Stuart Theobald, starts off well enough by noting that Malikane’s published, peer-reviewed work either has relatively little relation to his recent arguments or even – in some cases – seems to contradict those arguments. This is a particularly useful point to make for those who, naively, argue that Malikane’s arguments must be substantive because he has published some academic papers. Where Theobald strays into dangerous territory is in his inferences about Malikane’s integrity and assertions about the wonders of academic peer review.

Theobald’s characterisation of peer review in economics makes me suspect that he has never published anything in the discipline. Very few academics I have come across or read, including Nobel prize winners, have such a rosy view of the peer review process; in practice it is far from the notional ideal of a meritocratic system in which originality and quality are what determine publication. And any problems – of cronyism, bias toward researchers in certain institutions, ideological influences and so forth – are amplified if the basic thrust of your work is critical of, or very different to, the dominant narrative. It does not surprise me that Theobald, given his demographic, views on economic policy and his area of work (banking and finance), might not be able to appreciate this.

Which brings us to the issue of whether Malikane is dishonest for publishing work with conclusions he does not agree with. My short answer: no. It might be inadvisable, and it is something I personally try to avoid doing (at some cost), but the system is structured in such a way that it can self-sabotaging to only publish what you believe rather than what you can do. (Some have suggested that there should be betting markets in which economists show their confidence in their empirical claims by putting money on it). Either you will publish in journals not recognised by your peers, or your career will stall at a junior level – and the associated administration and teaching burdens limiting the very time you need for that ‘against the current’ research that is so good it breaks into the mainstream. When co-authors are involved this is even more difficult. These challenges are essentially what Malikane is gesturing at when he says, quoted by Theobald:

Don’t confuse my academic writing and what I believe to be true…you know the business of publishing is so ideologically poisoned that what is published is not necessarily scientific…we sometimes write in order to simply play in the publishing game…not necessarily because we think what we publish is correct…there is heavy ideological repression in academia…

Theobald paints this as sinister and possibly an “act of intellectual dishonesty”. He softens that with a few acknowledgements that Malikane is basically right, but then returns to a naive notion of academic publishing.

Finally, Theobald makes the important point that we should not try and judge Malikane the person but rather “whether he has good evidence and reasoning for his claims”. Unfortunately, he then goes completely off the rails by saying that: “until [Malikane] publishes them in a way that involves assessment by his peers, we must assume he does not”. Which peers? In what journal? I doubt Malikane would have trouble publishing in the Review of African Political Economy, but would Theobald accept that as adequate? (Leaving aside that he is not an academic economist, so it’s not clear what basis he would use).

Regardless, as an academic economist who has also worked in the public sector, I would never accept a policy claim just because someone had managed to publish a paper on it; the idea that successful peer review in economics shows that a claim is ’right’ is completely misguided, and any economist who advised a minister on that basis should also be fired.

There Are Many Flavours of ‘Bogus Economist’

This usefully brings us to the even more problematic contribution by Co-Pierre Georg. Let me start by saying that I was interested, albeit surprised to see – in Georg’s somewhat crudely-stated concern about ‘white male patriarchs’ – channelling critiques I myself have made in the past of untransformed gerontocracies and academics behaving like rent seekers. I have, also, for some time been politely raising concerns with various role players about such dynamics at an organisation where Georg has been an associate for some time; I hope Georg is as vocal on such matters of principle within his institutions, and even when it is personally inconvenient.

The basic assertion of Georg’s article is that people should not trust ‘bogus economists’. Hard to disagree with, but the devil is in the detail. In my draft conference paper on decolonisation, I made some similar critiques of the quality of the local academic economics to those discussed by Georg. Beyond that, though, we are again in swampy terrain. Georg’s assertion basically translates as: ‘people should not trust economists I think are bogus, which obviously doesn’t include me, my co-authors, patrons, friends, etc’. It’s not a new trick, including for fake radicals in economics. In a recent comment an otherwise respected senior scholar in macroeconomics (Paul Romer) published a rather disgraceful attack on various other economists for what he calls ‘mathiness’. Among these was one of the most famous female economists of the 20th century, Joan Robinson, who by virtue of her gender, left-wing views, and being dead, was perhaps an obvious target for Romer. Critiques of excessive or inappropriate use of mathematics in economics are as old as the modern version of the discipline itself. But a close reading of Romer’s critique reveals a petty, self-serving definition of the crime: when economists he doesn’t like use mathematics they are guilty of mathiness, whereas when economists he does like (obviously including himself) use mathematics then it’s done properly. Georg’s argument boils down to a similarly crude skeleton. (Romer, incidentally, was then appointed chief economist at the World Bank – illustrating how dysfunctional economics can be in other places).

Furthermore, Georg peddles a version of how economics can inform policy that is popular with certain types of academic economists, but bears little relation to reality. In this model, people who can write the most complex mathematical equations, estimate the most complex econometric models and get published in high-ranked journals are best-positioned to advise on policy. This might be funny if it were not so misguided and, in its own way, dangerous. There are some individuals who have managed to make the transition from producing cutting-edge academic work (by mainstream standards) to giving good policy advice, but it is the exception rather than the norm. The last thing a finance minister needs is some social incompetent who thinks he can figure-out a policy solution by writing down an equation, running a model or looking for a ‘peer-reviewed solution’. If you need an academic perspective, your adviser talks to a deputy director general who gets someone in the research cluster to do it, or outsources it to an academic like Georg.

Yet Georg goes even further, offering to define for us what a ‘proper academic’ is. But the best he can do in this regard, like Theobald, is to refer to ‘peer review’. I have already made clear that this is a naïve, and in Georg’s case arguably self-serving, use of the notion of peer review. One can tell that Georg, like Theobald, is not exactly familiar with the challenges of swimming against the current. Or, in fact, advising on broad economic policy in the complex South African terrain.

A Necessary Debate

 In some ways, the great tragedy of the Malikane saga is that, in principle, he should have been in a position to be a very good adviser – albeit one with strong left-wing views. While the likes of Theobald and Georg might be good advisors at lower levels of the hierarchy on specific issues relating to banking and finance, Malikane’s broad credentials should have made him a better choice for a general adviser to a minister. Given that, fortunately, it looks like his manifesto will have no impact whatsoever – with various politicians suddenly realising that talking-up radical economic transformation is a bad idea if it means emptying the fiscus you had planned on appropriating – the most harm done is to Malikane himself. But he has also damaged the possibility of more open discussions about economic and fiscal policy, which means that in fact those who should be most angry with him are economists (including myself) who believe such a conversation is sorely needed.

The bigger picture that Theobald and Georg’s misplaced attacks draw attention to is the state of South African academic economics. Some time ago as a student I witnessed the destructive consequences of the failure by some, otherwise very respectable, academics to reconcile tensions within the local discipline. The result, I think, has been for many to bury their heads in the sand and hope for the best. Or, less innocently, to set-up fiefdoms in which they can propagate their own views and agendas without the inconvenience of differing views.

To be fair to economists, similar behaviour happens in a range of other South African academic disciplines. However, besides the fact that this is an unhealthy state of affairs, legitimate calls for transformation and decolonisation (appropriately defined) will only ratchet-up these tensions and it would be best to address them openly and as maturely as we can. The position I have come to is in some ways rather obvious: we need to raise standards, but we also need a wide diversity of views and therefore should be pluralist in our approach to defining who is a competent economist (academic or otherwise). In that context, we would be advised to avoid doing things like accusing a fellow academic of not being a ‘proper economist’ or being ‘intellectually dishonest’, when they have a PhD from a very reputable North American institution, some competent publications, and extensive engagement and knowledge of South African civil society. When the institutional winds change, you may find that the knives are in your own back. These are surely not the kind of dynamics we want to encourage.

Reshuffles, downgrades and South Africa’s public finance drama

The last week has been tumultuous for many South Africans, not least if you are an economist concerned with public finances and the associated political economy dynamics. I had predicted that the President would make another attempt at a finance ministry-targeted reshuffle some time from the end of March onwards. The basis for that prediction was the timing of Parliament’s recess period, as I discuss in greater detail in this article.

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Zapiro: “Shift happens”

The new Minister has been brought in on the back of the President’s (empty) rhetoric about ‘radical economic transformation’ to benefit the majority of poor, black South Africans, but he is known more for his snappy dressing than radicalism; if the FT is correct about his favoured brand, then two of his many ties would equate to the proposed new monthly minimum wage. The combination of supposedly radical rhetoric with personal profligacy is on its own questionable, but there are many more reasons to be concerned.

It was therefore not a great surprise to many analysts when S&P downgraded South Africa’s foreign currency sovereign debt rating to sub-investment grade (‘junk’). After the downgrade by S&P, which I had also expected having paid close attention to presentations at their one-day conference in Johannesburg only a couple of weeks earlier, I provided some commentary with an emphasis on the reasons for the downgrade and possible economics and public finance implications. One of these interviews, with Ayabonga Cawe at PowerFM, is available here. In the first interview I did, on KayaFM, I made a deliberate point of stating that we should not allow anyone to mystify the obvious: that Gordhan has been removed for similar reasons to Nene, implying ‘capture of the state’ (as per the Public Protector’s report). In that context, the new finance minister simply lacks credibility and any statements made about continuity and protecting the fiscus will likely be taken with a pinch of salt.

With the inconvenient oversight of Minister Gordhan removed, the South African Revenue Services announced its final revenue collection figures for 2016/17 in a chummy press conference with the new Minister. This attempted to paint a R30bn revenue undercollection (relative to the revenue forecast in the 2016 Budget) as a success, because it exceeded the 2017 Budget forecast (i.e. the one revised down by R30bn) by R0.0003bn… Unfortunately, many journalists reporting on that event were taken in by the claims of success. I had already dealt with much of this in an article in the Finance Mail. In fact, given concerns about SARS delaying refunds to inflate collection figures, and given inadequate data submitted to Parliament, I have submitted a formal request for more detailed data to SARS and hope to follow-up on that in due course.

Needless to say, the capture of the Finance Ministry makes Parliament’s oversight role even more critical. But as I have argued in some detail (here and here), and ventilated in my CCMA case, the Parliamentary Budget Office is neither equipped, nor inclined, to provide the robust analytical support expected of it under the Money Bills Act (2009). I will have more to say about this in due course.

After the decision by S&P, Fitch has now also downgraded South Africa’s foreign and local currency sovereign debt rating: setting the stage for more dramatic consequences if another agency also downgrades local currency debt to ‘junk’.

These are dangerous times for the South African fiscus, economy and society at large.

Placeholder: A South African economics curriculum

In some previous posts [here and here] I discussed my experience of, and thoughts about, the University of Cape Town (UCT)’s undergraduate economics curriculum. I committed to writing a final, constructive post on what I think a South African economics curriculum (not particularly limited to UCT, or undergraduates) should look like.

That intention was partly overtaken by events and time constraints, but mainly I decided that the question deserved more lengthy treatment than just a blog post. So I am drafting a paper, which I hope to present at a few, relevant conferences/workshops, and once that draft is completed I will post a summary here.

Economics: scientists and plumbers, or bullshit and mathiness?

On the 6th of January 2017 the Annual American Economic Association conference is scheduled to host a plenary address entitled The Economist as Plumber: Large Scale Experiments to Inform the Details of Policy Making. The speaker is the academic economist Esther Duflo, widely-acclaimed for popularising the use of randomised control trials (RCTs).

Given my PhD work in economics on external validity of RCTs and implications for policy, and parallel work in philosophy, I have a few thoughts on this subject. In a draft paper (first presented in 2015) entitled When is Economics Bullshit? I argue that practitioners promoting RCTs have systematically overstated the policy-relevance of results and thereby produced ‘bullshit’ (as defined in the famous essay by philosopher Harry Frankfurt).

A consistent problem in critiquing so-called ‘randomistas’ is that the goalposts have been constantly shifted. Early advocacy for RCTs within economics reflected a ‘missionary zeal’ (Bardhan). It has been suggested that experimental methods have led to a ‘credibility revolution‘: giving credibility to applied microeconomic work that apparently did not exist before. One recipient of the Bates Clarke medal argued that the introduction of RCTs indisputably rendered economics ‘a science’. In the policy domain I, along with other economists, have come across much grander and/or more extreme claims. But when challenged, proselytisers scale back the claims and deny ever overclaiming. So from missionary zeal, revolution and science we now have plumbing….

I look forward to reading Duflo’s speech/paper, but my own view of the methodology and philosophy of economics and RCTs suggests that plumbing is a very poor analogy.

In my own paper, motivated in part by claims that RCTs render economics ‘a science’, I tackle the question of scientific status head on. Using a revival of the so-called demarcation question (basically: how do we demarcate science from non-science or pseudoscience?) in philosophy, I argue that economics cannot (yet) be classified as a science, may never be classifiable as such and in the way it is used by some economists too-often verges on pseudoscience and/or bullshit.

The similarities between this very critical view and that of Romer’s recent critique of macroeconomics (which was made public later) are interesting. Romer focuses more on the use of mathematical modelling whereas my focus is on empirical methods. I will write a detailed comment on Romer’s piece later this year; I agree with some aspects but strongly disagree with others.

In its two presentations so far, my paper on bullshit has been relatively well-received by philosophers of science but not so well-received by philosophers of economics. There is good reason for this: the paper is even more an indictment of the current trend in philosophy of economics than it is of economics itself. The paper notes that in the absence of sufficient technical training and understanding of economics, philosophers in this area have increasingly taken the safer route of becoming apologists for the discipline. In effect, they compete to provide explanations of why economists are correct in their approach. (Exceptions to this, such as Nancy Cartwright – who has collaborated with Angus Deaton in providing important and influential critiques of RCTs – arguably prove the rule: Cartwright’s reputation was already established in philosophy of physics, causality and metaphysics).

The result, unfortunately, is that philosophy of economics currently has very little to add to economists’ critical understanding of their own discipline. Some critics, such as Skidelsky, argue that economists should read more philosophy, but while I am sympathetic to his overall stance I do not think economists would find much worth reading at present. Combining the abject failure of the ‘mainstream’ of philosophy of economics with the low quality of most economists’ reflections on methodological issues leaves us with few critical insights that could move the discipline beyond parochial or self-interested debates.

Updated reference list on external validity

My review of the external validity literature is slowly working its way through the peer review process. Parts were presented from 2011 onwards, but it was first published as a full working paper here and then updated for the Annual Bank Conference in Development Economics in 2014. A short version of one key contribution from that work has been published here.

Since these pieces, however, the reference list has been expanded in two important ways.

First, I became aware of a number of references and parallel literatures outside of economics that had either been missed in the original review, or published subsequent to the first version. Notably: in biostatistics (Elizabeth Stuart and co-authors), educational statistics (Elizabeth Tipton) and causal graphs (Elias Bareinboim and Judea Pearl).

Second, feedback through peer review questioned the omission of structural contributions to the topic – suggesting that this favoured the ‘design-based’ literature most closely associated with randomised control trials (RCTs). That was certainly not the intention. The rationale of the original review was to focus on the problem of external validity within the theoretical framework used by most RCT studies, in order to clearly delineate structuralist critiques from more fundamental external validity challenges.

I still think that it is absolutely critical to emphasise this distinction. However, there are contributions from the structural literature that propose something of a middle ground. Notably, work by Heckman, Vytlacil and co-authors argues for the merits of using the theoretical framework of Marginal Treatment Effects (MTEs). And one interesting recent, empirical contribution (by Amanda Kowalski) which has done so is forthcoming in the Journal of Economic Perspectives. Given this, I have added a number of references from that literature and expanded the review to cover this middle-ground between structural and design-based contributions.

While the paper proceeds through the publication process, I thought it would be useful to post the most recently submitted (May 2016) version of the reference list for those who may be interested. It can be found here.

The Undergraduate Economics Curriculum at the University of Cape Town: Part II

At the end of Part I of this comment on the UCT economics curriculum, I identified two further issues for immediate consideration: the nature of textbooks, and problems arising from academic incentives. The textbook issue also raises the important role of history of economic thought and economic history courses.

Continue reading “The Undergraduate Economics Curriculum at the University of Cape Town: Part II”

Links: universities&growth, good podcasts and bad philosophy of economics, external validity, etc

Papers, blogs, podcasts

Do universities cause economic growth? Anna Valero and John Van Reenen have a paper saying yes

In my past engagements with higher education policy this question has annoyed me a lot, and I’ll post more about that in future posts. I get even more annoyed when I see definitive headlines based on papers with questionable identification strategies. We need a bit more humility about empirical work.

 

In which regard, I’ve recently been catching-up on some EconTalk podcasts. I enjoyed these two:

Heckman on econometrics, with some useful comments about ‘Hayekian humility’, failures of prediction and the like.

Phillip Tetlock on ‘superforecasting’

 

Even closer to the subject of my own recent work, two interesting-looking papers relating to RCTs and external validity:

Bentley Macleod on an issue I’m interested in: performance of subjective expertise

Banerjee, Chassang and Snowberg on decision-theoretic considerations relevant to external validity

I covered aspects of this in my PhD and published working paper on external validity, but look forward to reading this contribution.

 

Chris Blattman has a useful summary of recent developments among development NGOs relating to basic income grants (an idea that was debated at some length in South Africa over a decade ago):

http://chrisblattman.com/2016/04/15/ipas-weekly-links-57/

 

Came across a truly terrible piece on experimental methods in economics and ‘economics imperialism’. The saddest part is that this is often the only kind of ‘philosophising’ tolerated in parts of the discipline.

I had similar sentiments about this related podcast with Russ Roberts.

I have one draft paper and a sketch of a research programme on this topic, and the coverage given here to the issue is really bad. (That’s as nicely as I can put it). Classify both as links to avoid

 

A lot’s being said about the Panama Papers. People and companies should not evade taxes. The notable absence of some countries’ citizens from this particular database, though, does raise some interesting questions about possibly selective leaks.

Events and initiatives

On the 28th of April Thandika Mkandawire is speaking in Cape Town on panel discussion entitled:

Africa and the Millennium Development Goals (MDGs): Progress, Problems and Prospects

Details here

 

In London, CEMMAP recently held a one-day conference on econometrics for public policy:

http://www.ifs.org.uk/uploads/cemmap/programmes/Econometrics%20for%20public%20policy%2C%20methods%20and%20applications%20040416.pdf

Looks like a great programme.

 

Economic Research Southern Africa has a new initiative to train academic economists in quantitative methods:

http://www.econrsa.org/call-application-skills-development-training-econometrics-0

On the one hand, this is a good idea. On the other hand, it’s a real slap in the face for those who have these skills but still can’t get academic jobs. However, it usefully supports a point I’ve been arguing for some time: in most disciplines, academics in South Africa are amongst the most protected of workers regardless of their competence or effort. (For international readers: in South Africa formalised ‘tenure’ processes don’t really exist.) Much more on both issues in future posts.

 

Forthcoming deadlines

The Campbell Collaboration annual conference is open for submissions:

http://www.campbellcollaboration.org/news_/What_Works_Global_Summit_Request_for_Submissions.php

The economics curriculum at UCT: Part I

It would be no exaggeration to say that I have taken a critical interest in UCT’s economics curriculum for over fifteen years, and some of the associated dissatisfaction has shaped my career and approach to the discipline as a whole. As an undergraduate majoring in economics I was bored stiff for the first two years by being taught how to regurgitate graphs and solve equations from American textbooks. I seriously thought of quitting – this was not what I had signed-up for. There were some useful ideas about the functioning of markets and individual behaviour, but they were so obviously crude, decontextualised and evidently infused with free-market, anti-poor (pro-rich) ideology that as a student it was not possible to separate what was useful from what was irrelevant, implausible or ideological.

For example, minimum wages were stated as definitively reducing employment (with no reference to possible effects on effort or aggregate demand), but higher taxes on the rich were stated as negatively affecting economic activity (without any reference to benefits from public expenditure or reduced inequality).

Economist readers might want to note that this was 10 years after publication of Akerlof and Yellen’s paper on efficiency wages. It was 5 years after publication of Card and Krueger’s landmark book on minimum wages, challenging the ‘conventional wisdom’ on the minimum wage in economics with empirical evidence. I had to find that book in the library on my own to get an alternative view. Scanning library shelves also led me to Thorstein Veblen’s Theory of the Leisure Class, which introduces the notion of conspicuous consumption, and JK Galbraith’s History of Economic Thought.

Our lecturers did little to assist: they were mostly graduate students, rushing to get through material that they did not have the incentive, inclination, or intellectual foundations, to critically evaluate or present differently. Only in the third year electives did I finally find a reasonable amount of intellectual stimulation, evidence of alternative views and explicit reference to the South African context.

For this reason, I am sympathetic to the recent criticism of UCT’s curriculum by Ihsaan Bassier. He notes, among other things, that:

“I find myself at the end of my undergraduate degree without the tools to interrogate the economic situation surrounding me”.

“Critical economic thinking is simply not taught during an economics undergraduate degree. The department attempts to push mathematical concepts, but only succeeds in promoting rote learning, characteristic of a production centre for ideology.”

Such concerns can be located in broader, international student movements to change the undergraduate curriculum. In general, I support those movements as well. However, they have a tendency of conflating a number of important issues: ideology, academic incentives, bureaucratic obstacles, fetishisation of quantitative methods and the problematic status of economics as a ‘science’.

Students are driven by a well-founded instinct that something is wrong, but they struggle to decipher what the causes are. In my view this is entirely understandable given that undergraduates cannot be expected to have a uniformly better understanding of the discipline than those teaching them! But muddling of issues is often used by those favouring the status quo to deflect otherwise legitimate criticism. The points I make below can be applied as much at Harvard or Oxford as at UCT, because they pertain to deep problems with economics as a discipline and universities as institutions, but I will use UCT as my working example – having studied and lectured there.

Continue reading “The economics curriculum at UCT: Part I”