Quote of the Day
“If there are three kinds of people—those who make things happen, those who watch things happen, and those who never knew what hit them — neoliberals belong to the first category and most progressives to the latter two. The left remained complacent until, suddenly, it was too late.”
- Susan George, “How to Win the War of Ideas: Lessons of the Gramscian Right”. #
Correlation vs causation and the sudden departure of the World Bank’s Chief Economist
Well, well. This from the Economist:
When autocratic, oil-rich nations enjoy a windfall from higher crude prices, where does the money go? One place to look is Swiss bank accounts. Sure enough, an increase in oil prices is followed by a spike in deposits held by these countries in financial havens, according to a 2017 paper by Jorgen Juel Andersen of bi Norwegian Business School, Niels Johannesen of the University of Copenhagen and their co-authors.
When Mr Johannesen presented this result at the World Bank in 2015, the audience included Bob Rijkers, a member of the bank’s research group. The two of them joined forces with Mr Andersen to investigate if something similar happened after another kind of windfall: infusions of aid from foreign donors. Their conclusion was dispiriting. World Bank payouts to 22 aid-dependent countries during 1990-2010 were followed by a jump in their deposits in foreign financial havens. The leaks averaged about 5% of the bank’s aid to these countries.
Rijkers reports to the Bank’s Chief Economist, Penny Goldberg. Normally these kinds of working papers are published. But this particular one hasn’t been — yet. And there are rumours that it has been held back because it is, well, embarrassing to find that 5% of the Bank’s aid might be going to the Swiss bank accounts of corrupt politicians. After all, correlation doesn’t mean causation. But now Ms Goldberg is leaving and going back to Yale. Correlation or causation?
Could the Coronavirus Help Make China More Free?
Intriguing paradoxes about China raised by Tyler Cowen in his Bloomberg column. On the one hand, being an authoritarian state means it can take decisive action — like quarantining 11m people. But what if public opinion as expressed on social media gets so torrential that it overpowers the capacity of the censors?