May 20, 2010

What should World Bank economists do?

Tyler Cowen is apparently giving a talk on that topic at the World Bank he asks his readers for some ideas:
If you could reallocate the effort of economists within the World Bank, what would you propose? More big picture study? More RCTs? Should they spend more time refuting the simple fallacies of the economically illiterate? Or should they invest in a stronger capacity for technical economics? Should they offer more concrete advice on how to write incentive-compatible contracts for projects? Should they calculate theories of the net bias in remaining World Bank institutions (too many contracts?) and act to counter those biases? Or should they more or less give up on the idea of development and spend their time promoting the idea of freer immigration, as Michael Clemens does?
A lot of the comments refer to the uselessness of economists. One suggests we should tell them all to resign, effective immediately, and use their salaries to fund locals' start-ups in Africa and Haiti…Not a bad idea...

I think way too many useless papers get written at the WB. No one reads them. Their job should be to make sure new WB projects are not based on old ideas that don't work. In other words, spread the word about the latest research about what works and what doesn't. To do so, blogs are definetely a good start. A Vox EU type blog focus on development could be good. They could also write "Economics Focus" type columns (as in The Economist) about existing research and how it applies to WB projects. These could be published in "The World Bank Economist", a magazine focused on development theories and empirical tests. If the WB staff doesn't end up reading it, it should be dropped.

Papers evaluating World Bank projects should also be a priority. We need more of those. They should also promote RCTs, and suggest precise policy ideas and defend them, rather then use the word incentives without any idea in mind.

Last but not least, focus on quality data gathering and dissemination. The recent partnership with Google to make all data accessible online is great. So is the Doing Business database, the governance indicators, the debate about poverty numbers. This should be the number one priority.

All in all, forget about writing too many useless papers, academics are there for that.

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