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Ethical Challenges of Embedded Experimentation

Continuing our series of articles from the American Political Science Association’s Comparative Democratization Section, Newsletter, today we present the following article on the “Ethical Challenges of Embedded Experimentation” by Macartan Humphreys of Columbia University. Since posting the first article from the newsletter on Monday, I have subsequently learned that the entire newsletter is free and publicly available on the website of National Endowment for Democracy. So you can find the entire Humphreys article there in .pdf format, as well as all the other articles in the newsletter. Humphreys’ piece is part of a symposium in the newsletter on the use of experiments in studying democratization.

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Introduction

Consider a dilemma. You are collaborating with an organization that is sponsoring ads to inform voters of corrupt practices by politicians in a random sample of constituencies. The campaign is typical of ones run by activist NGOs and no consent is sought among populations as to whether they wish to have the ads placed on billboards in their neighborhoods. You learn that another NGO is planning to run a similar campaign of its own in the same area. Worse (from a research perspective) the other organization would like to target “your” control areas so that they too can make an informed decision on their elected representatives. This would destroy your study, effectively turning it from a study of the effect of political information into a study of the differences in the effects of information interventions as administered by two different NGOs. The organizations ask you whether the new group should work in the control areas (even though it undermines the research) or instead quit altogether (and in doing so, protecting the research but possibly preventing needy populations from having access to important information on their representatives). What should you advise? Should you advise anything?

Consider a tougher dilemma. You are interested in the dynamics of coordination in protest groups. You are contacted by a section of the police that is charged with deploying water cannons to disperse protesters. The police are interested in the effectiveness of water cannons and want to partner with a researcher to advise on how to vary the use of water cannons for some random set of protest events (you could for example propose a design that reduces the use of water cannons in a subset of events and examine changes to group organization). As with the first dilemma there is clearly no intention to seek consent from the subjects—in this case the protesters—as to whether they want to be shot at. Should you partner with the police and advise them on the use of water cannons in order to learn about the behavior of non-consenting subjects?

These seem like impossible choices. But choices of this form arise regularly in the context of a mode of “embedded” experimentation that has gained prominence in recent years in which experimental research is appended to independent interventions by governments, politicians, NGOs, or others, sometimes with large humanitarian consequences.

The particular problem here is that the researcher is taking actions that may have major, direct, and possibly adverse effects on the lives of others. As discussed below, in these embedded field experiments, these actions are often taken without the consent of subjects; a situation which greatly magnifies the ethical difficulties.

In this essay I discuss the merits and demerits of “embedded” experimentation of this form that is undertaken without subject consent. I compare the approach to one in which researchers create and control interventions that have research as their primary purpose and in which consent may be more easily attained (in the terminology of Harrison and List these two approaches correspond broadly to the “natural field experiment” and the “framed field experiment” approach).[1]

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Why Now? Micro Transitions and the Arab Uprisings

We are pleased to welcome the American Political Science Association’s Comparative Democratization Section as the second section to take up our offer to provide a selection of articles from their newsletter free to the public here at The Monkey Cage. (See here for past posting of articles from Section newsletters.) Over the next three days we will post articles from the current issue of the Comparative Democratization Section Newsletter; if you like these, you should consider joining the section so you can have access to the full content of the newsletter!

As these articles are longer than a typical Monkey Cage post, we will put first few paragraphs on the main page and then have a click through for the rest of the article. We will also make the article available in .pdf format. Our first article is by Ellen Lust of, Yale University[i]. The full version of the article can be downloaded here

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Events that shook the Arab world since January 2011—variously termed the Arab Awakening (al-sahwah al-arabiyya), Arab Spring (al-rabyi’ al-arabi), Arab Revolution (a-thawra al-arabiyya), or the uprising (intifada)—are unprecedented, unparalleled, and unexpected.[ii] Never before have people across the Arab world taken to the streets in such numbers, demanding the end to deep-seated, autocratic regimes. Never before has the region experienced such transformation driven from within . Whatever the immediate outcomes of these movements, citizens have witnessed the almost unthinkable become reality, in turn expanding their horizons and increasing demands. And never before have scholars and close observers of the Middle East had to confront their own failure to predict that such momentous, widespread change would be realized at dizzying speed.[iii]

The Arab awakening thus raises once again a question at the heart of the study of comparative democratization: Why now? Why has the Arab world, which appeared so resistant to change, seen such widespread unrest and transformation?  Specialists on Africa, Eastern Europe and the former Soviet Union engaged in the same soul-searching after similar transformations shook those regions. That this question animates discussions today, as it did then, reminds us that we have far to go before we understand the conditions promoting such significant ruptures in seemingly stable authoritarian regimes.

In this essay, I suggest the answer lies in shifting our focus from a search for immediate causal factors to a greater recognition of micro- and meso-level transitions—that is, gradual, interrelated changes in political, economic and social spheres that, like slowly moving tectonic plates, eventually create the conditions conducive to earth-shattering events. The point is not simply to recognize the incrementalism of change or unintended consequences of social, economic and political reforms that have often been implemented in the region, but to urge us to pay greater attention to the “shifting web of conditions that define the terrain on which new institutions and actors arise, old actors activate or change their claims, and all pursue iterative contests.”[iv] Attention to these factors does not pinpoint precisely the emergence of uprisings across the Arab world, but it certainly makes them less surprising.

The essay begins by exploring how gradual, interrelated changes in political, economic, and social spheres contributed to the current uprisings. Given space constraints, it cannot provide an exhaustive discussion of the dynamics at play or delineate in detail important differences in the on-going struggles across the region.  Rather, by sketching the broad outlines of these changes, it demonstrates how focusing on interrelated transitions can contribute to a better understanding of the current uprisings and, as discussed in the conclusion, of comparative democratization more generally.

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From the Political Economy Newsletter: Earthquake Mortality and Damage

Continuing our relationship with the Political Economy Section of the American Political Science Association, here is an article from the Section’s most recent newsletter, preceded by a short note from the editors of the newsletter. Please note that I am happy to set up this kind of relationship with any section newsletter – and indeed, we should be starting a similar arrangement with the Comparative Democratization shortly – so please feel free to contact me directly if you are interested.

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As editors of The Political Economist, the newsletter of APSA’s Section on Political Economy, we are happy to continue our relationship with the Monkey Cage to make select newsletter content available to readers who are not section members. The current issue of the Political Economist focuses on the political economy of natural disasters, with essays by Daniel Aldrich (“The March 2011 Earthquake, Tsunami, and Nuclear Crisis in Japan: A Political-Economy Perspective”) and Thomas Plümper and Eric Neumayer (“Earthquake Mortality and Damage”). David Victor adds a column on “What to Read on Natural Disasters: Some Insights from the Literature on Natural Resources.” Plümper and Neumayer’s essay is available at the jump. Members of the section may log in to APSA Connect to download the full newsletter.

Scott Gehlbach
Lisa Martin

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Earthquake Mortality and Damage

Thomas Plümper and Eric Neumayer

Since the turn of the century, at least four earthquakes have occurred that have entered the collective disaster memory: the March 2011 quake-cum-tsunami in Japan that overtook Hurricane Katrina as the costliest natural disaster ever, the February 2010 quake in Chile for its strength of 8.8 on the Richter scale (and possibly the absence of many fatalities), the December 2004 quake-cum-tsunami in Indonesia (for it was the first major tsunami of the media age and the high number of fatalities), and the January 2010 quake in Haiti (for the vast devastation of a major city and the very large number of fatalities). For lack of extensive film coverage, a fifth disaster is often ignored but it certainly qualifies as major disaster: the May 2008 Sichuan earthquake, which killed almost 90,000 people.

Most earthquakes go largely unnoticed, however. We know of them because we have installed sensitive instruments that capture the tremor emanating from earthquakes and other activity (e.g., the test of a nuclear bomb). These instruments report the occurrence of approximately 50 earthquakes per day, most of them far too weak to cause noticeable damage on the earth’s surface. However, about 250 earthquakes per year reach a magnitude of 6.0 or above on the Richter scale. These earthquakes are dangerous if they take place close to inhabited areas or if they trigger a tsunami. They may kill human beings by making buildings collapse, by triggering landslides and destroying dams, by bursting gas pipes and oil tanks and thus causing fire etc. On average, about 10 earthquakes per year take place that have fatalities, and even more cause significant economic damage. What explains the large variation in disaster fatality and disaster loss?

A naive, apolitical view looks for geological and simple economic determinants. Such a view is correct in that these determinants do matter, but flawed in that they overlook the political economy behind preventing (or failing to prevent) quake mortality and loss. First, and most obvious, the strength of an earthquake matters. An earthquake of magnitude 8.0 unleashes 32 times the energy of an earthquake of magnitude 7.0, 1024 times the energy of an earthquake of magnitude 6.0 and 32,768 times the energy of an earthquake of magnitude 5.0 on the Richter scale. The latter, a magnitude 5.0 quake, dispenses roughly the same amount of energy as the Hiroshima bomb. The March 2011 Tōhoku earthquake off the shore of Sendai in North-East Japan thus unleashed almost 35,000 times the energy of the Hiroshima bomb.

Second, the strength of an earthquake causes more damage if the quake is located directly under the earth’s surface. Accordingly, relatively minor quakes can cause significant damage if their focal depth is low. For example, the February 2011 Christchurch quake struck only 5 kilometers below the surface and though the quake had a magnitude of only 6.3 many buildings collapsed and 181 people died. Similarly, the May 2011 earthquake in the Spanish city of Lorca had a magnitude of only 5.1. Most quakes of this magnitude are hardly felt, but this particular quake had an extremely shallow focal depth of only 1.0 kilometer and thus killed nine people and caused damage estimated at 100 million US dollars. In contrast, the Chilean earthquake of 2010 had a magnitude of 8.8 but a focal depth of 35 kilometers. It killed 562 people while the economic damage has been estimated to lie between 15 and 30 billion US dollars.

Third, the location of an earthquake determines the population density and wealth concentration above the quake and along the fault line. Everything else equal, an earthquake kills more people and causes more economic damage if the ground above and around its epicenter is more densely populated and has more valuable buildings standing on it. Such a high population density in combination with a shallow depth and considerable quake strength seem to be the main determinants of relatively high mortality rates of typical quakes in China.

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Is This Time Different?

As promised yesterday, here is the first of two publically available articles from The Political Economist, this one by Professor David Andrew Singer of MIT.

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Political scientists across a wide range of theoretical and methodological perspectives have embraced and subsequently misinterpreted the conclusions in the recent book by Carmen Reinhart and Kenneth Rogoff (hereafter “R&R”) ironically titled This Time Is Different. The book examines all financial crises over the past 800 years and catalogs their common characteristics. The authors’ main conclusion—that “we’ve been here before”—emerges from the simple observation that large current account deficits, asset price bubbles, and excessive sovereign borrowing are common precursors of crises across countries and throughout time. The treasure trove of data presented in the book reveals that the macroeconomic status of the U.S. in 2007 was reminiscent of other countries on the verge of financial meltdowns, such as Mexico in 1994, Argentina in 2001, and the East Asian economies in the late 1990s.

Financial crises happen regularly throughout history; indeed, R&R’s analysis makes the enduring pattern of boom and bust perfectly clear. However, the book explains very little about the patterns it presents. The authors “select on the dependent variable” by examining only cases of countries in crisis, and as a result they are unable to make causal inferences. Are large capital inflows the root cause of the current financial crisis, and did they cause earlier crises throughout history? With no variation in the dependent variable, we cannot discern whether the alleged macroeconomic triggers are the real culprits, or whether other factors are at work. Examinations of past financial crises tell us little about whether or when current account deficits lead to financial instability, or about the political and institutional factors that might militate against systemic market failures.

Focusing on the present period, a casual glance at balance of payments statistics around the world raises further questions. Several developed countries have current account deficits (and corresponding capital inflows) that are greater than that of the U.S. (when scaled to GDP). Some of these countries, including Ireland and the U.K., have clearly endured great hardship over the past two years, while others, such as Australia and New Zealand, are touted as paragons of stability. Spain, which also has a greater current account deficit than the U.S., is experiencing a severe recession, but its multinational banks are considered to be among the strongest in the world. Capital inflows alone appear to be an unreliable predictor of financial instability. This assertion is underscored by a related study by Reinhart and Reinhart (2008), mentioned briefly in R&R, which finds that “capital flow bonanzas” are not statistically significant predictors of financial crises when the analysis is limited to developed countries.

An additional challenge for political scientists who argue that history is repeating itself is that the financial crisis in the U.S. defies historical analogies. Large capital inflows were the norm for years, helping to fuel the dot.com bubble in the late 1990s; when the bubble burst in 2000-2001, it wiped out approximately $5 trillion in market capitalization without triggering broader financial instability. When the financial crisis finally hit in 2007, it was not characterized by the defining feature of past financial crises: a sudden stop of capital inflows. On the contrary, investors flocked to the U.S.—the center of the storm—as a safe haven.

Despite the challenges of causal inference, many social scientists seem content to attribute the financial crisis to underlying macroeconomic imbalances. In my view, these arguments provide useful cover for financial regulators who might otherwise be held accountable for their rule-making. If systemic failure is the periodic and ineluctable result of global capital cycles, then there is little reason for regulators to enact tougher regulations. Why should central banks and regulatory agencies impose more stringent capital requirements and prohibitions against risky investments? If the roots of the crisis are macro-structural, regulators feel no incentive to alter the rules. How else can we explain why U.S. regulators, when facing the public or their overseers in Congress, speak of recent bank failures as if they were exogenous acts of nature? Why is it that only a precious few readers of this column can name the head of the Office of the Comptroller of the Currency (OCC), the regulator in charge of overseeing all nationally chartered banks, including many prominent institutions that collapsed or came dangerously close to failing during the crisis? After the dot.com fiasco, SEC chairman Harvey Pitt received a rather large dose of opprobrium as his tenure in Washington came to an abrupt end; but in today’s political theater, regulators appear more like fire fighters than villains. Ten years from now, we will remember a short list of prominent characters from this difficult period: Ben Bernanke, Henry Paulson, Timothy Geithner, Larry Summers, and a few others. But it is a safe prediction that John Dugan, head of the OCC from 2005-2010, will not make the list.

Political theater aside, an undue emphasis on global capital cycles has the effect of obfuscating the role of government decisions as drivers of financial crises. After all, governments make decisions about their budgets—not just about how much to spend, but what to spend on. Choices about spending on education, infrastructure, and technology have important ramifications for export competitiveness and the balance of payments; and decisions about spending and taxation determine the extent of sovereign borrowing. Political scientists, of course, are well equipped to explain these decisions. But just as important are the decisions made by policymakers and regulators regarding the manner in which capital flows are channeled through the financial system. A banking system that is required to finance mortgages exclusively through deposits will mediate capital inflows very differently from a banking system that can securitize its loans. The accumulation of government decisions regarding intermediation, capital adequacy, public ownership, lender of last resort, and financial transparency could be critical in determining whether capital inflows are channeled safely and productively, or whether they lead to another addition to R&R’s database of crises.

From a research design perspective, a reasonable way forward is to test hypotheses about the conditional impact of capital inflows on the probability of financial crises in the developed world. The scope and quality of regulation are likely contenders for inclusion in such a model. The cases of Australia and Spain suggest that large capital inflows might be less destabilizing if the banking system faces strict capital requirements and prohibitions against non-traditional banking activities. Other possible conditioning variables include, inter alia, resource endowments, partisanship, and corporate governance.

Until we conduct more rigorous tests, social scientists will remain in the uncomfortable position of offering only speculation and conjecture. The availability of hundreds of years of data on previous crises should not give us a false sense of confidence about our capacity to explain. Indeed, we simply do not know whether this time is different or not.

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Collaboration with the APSA Political Economy Newsletter

We are pleased to announce a new feature here at The Monkey Cage that we hope will serve as a model for others in the future. More specifically, we are going to collaborate with Scott Gehlbach and Lisa Martin, the new editors of the APSA Political Economy Section Newsletter, to make select articles from each issue of the newsletter – which is currently only available to memebers of the section – available to the wider public through The Monkey Cage. Scott and Lisa write:

As editors of The Political Economist, the newsletter of APSA’s Section on Political Economy, we are happy to announce a new relationship with the Monkey Cage that will make select newsletter content available to readers who are not section members. We are excited by this opportunity to further public discussion of political economy, and we hope that readers of the Monkey Cage will take the opportunity to leave comments on each issue.

The current issue of The Political Economist focuses on the global financial crisis, with essays by Jeffrey Frieden (“A Classic Foreign Debt Crisis”), David Andrew Singer (“Is This Time Different?”), and Ernesto Zedillo (“The Importance of Macroeconomic Policy Coordination”). Mark Copelovitch adds a column on “What to Read” for further information on the topic. Tomororw we will post the Singer article, and then Wednesday will we post the Copelovitch column. Members of the section may log in to APSA Connect to download the full newsletter.

If editors of other section newsletters are interested in setting up similar arrangements, please email me directly at joshua dot tucker at nyu dot edu.

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