22 Jul 2017

How will climate change change our lives?

I'm on holiday until 7 August, but you can still think differently about water, life and climate change by:
  1. Reading Life Plus 2 Meters, vol 1 (100pp, free download)
  2. Writing a short "vision" for volume 2 (deadline 15 Sep)
Enjoy the summer!

20 Jul 2017

Review: Development Projects Observed

Albert O. Hirschman wrote this book in 1967 with the permission of his home university (Harvard), the funding of the Brookings Institution and Carnegie Institute, and the cooperation of the World Bank, which provided access to their projects in El Salvador, Ecuador, Ethiopia, India, Italy, Nigeria Pakistan, Peru, Thailand, and Uruguay.

In his preface (p xi), he notes a key finding of his research:
In the end, my argument amounted to denouncing attempts at trait-making [proposing and implementing a project that may not fit with local conditions] under certain conditions. Some narrow-latitude tasks simply go beyond the capacity of a society as presently constituted and are therefore likely to end in failure.
This passage previews what promises to be an insightful early critique of today's International Aid Community -- one that I have criticizedmany. times. It also indicates that this book is still well worth reading 50 years after its publication.

Perhaps the most important reason for reading this book is Hirschman's accessible and conversational style of connecting academic curiosity with realistic critique. You can already tell in the first few pages that you are reading the words of a man who has learned a few key lessons after seeing a lot -- as well as the words of a man who knows that his story is not the only one. Every "development project" has a unique character.

Hischman is known for coining new terms ("Exit Voice Loyalty"). Here, he coins "the hiding hand," which hides surprises that drive a project off its planned course and hides people's capacity to solve those complications. Hischman is therefore pessimistic that we know what we are doing but optimistic that we can actually achieve a lot despite that. When using this term, he is quick to contrast the bureaucrat with the entrepreneur, in that the former is more shy about taking a chance and less eager to innovate to prevent failure. These attitudes may determine the difference between bureaucratic failure and entrepreneurial success on the same project.

After introducing and discussing this idea, Hirschman has four chapters on Uncertainties, Latitudes and Disciplines, Project Design (trait taking and trait making) and Project Appraisal (the centrality of side effects).

I'm going to rush through notes for the rest of the book because (a) you should read it and (b) I'd write a LOT more if I merely described all the great insights in this book of less than 200 pages.

On Uncertainties, Hirschman warns that projects cannot be "copy pasted" when local conditions matter (e.g., irrigation schemes). From the opposite side, he suggests that projects that can happen "anywhere" are less likely to fail from unforeseen (local) conditions such as a division of labor among groups that do not talk to each other for political, religious or other subjective reasons that have nothing to do with the project. These divisions matter in any conditions but they make it much harder to "deal with the hiding hand" because groups see failure as a time to grab their share instead of look for a cooperative solution.

In Latitudes and Disciplines, he discusses how it may be useful to have "freedom to adopt" OR useful to lack that freedom, as options can facilitate compromise or make it harder to force compromise. Such situational circumstances can make or break a project, depending on its leadership. Leaders thus might work hard to help a project succeed to protect their reputation, but they may also choose a path that leads to larger harm. (This happened with the Metropolitcan Water District of Southern California when they built the Colorado Aqueduct in the 1930s and had no customers -- they supported sprawl via cheap water as a "solution" -- see my dissertation.)

Hirschman points out that corruption in construction need not lead to corruption in operation if construction and maintenance are separated. If they are both under one roof, then watch out -- especially if it's a monopoly service like energy, trains or irrigation! (He also makes the apt comparison of slums to planned communities, pointing out that slums are probably more efficient in delivering what their poor residents -- rather than planners or ideologues -- want.)

Under Project Design, he notes that a trait-taking project "takes as given" local conditions, which makes it more likely that the project will succeed by adding to those conditions, contra a "trait making" project that forces locals to fit the planners' vision. (See Scott on this issue.) He warns against projects that lack time or site constraints, as they are most likely to wander and attract corruption.

In Project Appraisal, he warns against aggregate benefit-cost analysis that ignores benefits to one group and costs to another or counts some costs but not others -- two themes I explored in this paper [pdf] on desalination projects.

Bottom Line: I give this book FIVE STARS for its interesting and entirely relevant of the process of designing and building the big projects that "develop" societies, projects that require a strong community to ensure that the commons are protected and extended for the benefit of all. I wrote this review in extreme haste, but don't let its brevity mislead. I plan to read this book again every year or so to remind myself of the big picture in human cooperation. You should too.

19 Jul 2017

Links of interest

  1. The billionaire-financed rise of the thought leader (and decline of the public-financed public intellectual) combined with the continued decline in access to academic research and the rise of high-tech (low labor) additive manufacturing may favor Europe over the US (or China).
  2. Magical warfare technologies help "irrational" people win
  3. Economics of the populist backlash
  4. "The Photographic electronic Narrative (PeN) project shares photographs taken by current and ex-offenders on placement at LandWorks: an independent charity which provides a supported route back into the community for people in or recently released from prison"
  5. The hightech war on scientific fraud in the place that's had troubles: The Netherlands
  6. Trump and Pruitt appear not to care about the environment people who live in environments (kinda everyone)
  7. A poetic 1970 essay California water management from Joan Didion
  8. A contemporary plea for mercy from Venezuela
  9. An economist brings realism to the discussion of human behavior (spoiler: math doesnt' hack it)
H/T to DL

18 Jul 2017

Trickle down economics just doesn't work

I wrote this on reddit, but it's worth repeating:

The premise of "trickle down" is that wealth for the rich will result in (some) wealth for the poor. More important, it assumes that the government should get involved by making the rich richer. (This is why the term is considered derogatory.)

So... how do the rich get richer?
(1a) The government gives them wealth ("rents") via a contract, corrupion, or other "neoliberal" policy (I hate that term as often confuses markets and politics); or
(1b) They make themselves rich.

For (1a), see "cheap oil royalties", patent trolls, defense contractors et al. For (1b), see "Bill Gates"

Now, how can it "trickle down"?
(2a) The government taxes the wealth and transfers the $ to the poor. That's kinda counter productive for (1a) (why not just give the royalties to the poor?), but makes sense with 1b.
(2b) The poor somehow benefit from rich people being richer (see Fable of the Bees).

Both of these make no real sense compared to the real source of prosperity for the masses, i.e.,
(3a) Cheap access to education and health care
(3b) Competitive markets (reducing rents)
(3c) Taxes on wealth that pay for (3a)

So, next time you hear ANYONE say "trickle down" just walk away. It's bullshit. A government that wants efficiency and equity will do 3a-c, which is compatible with basic income, carbon taxes, property taxes, etc., btw...

13 Jul 2017

Did you leave the water running?

That's what Cornelia asked me on the phone when she got home one day.

I had left the house with headphones on, so I didn't hear that I had left the water running in the kitchen.

Luckily (?), we pay a flat rate for water as we have no meter, so my mistake -- leaving the tap open for 2 hrs and thus wasting about 0.73 m3 of water ( 120*6liters/min = 720 liters) -- cost nothing. Had we paid the price of metered water (about €1.50/m^3), it would have cost about €1-2, but it would have FELT far more painful (like dropping a coin in the canal).

Anyway, the point of this post is that meters make people think different about water consumption, but so do some other things. I got a plumber to repair a leaking toilet last year (cost about €100) because we were renting out to Airbnb people and a leaking toilet is annoying. The cost was far greater than the water lost (ignoring that I don't pay for that), but it's been nice to have a quiet toilet :)

Bottom Line: Nobody wants to "waste" water, but meters (price incentives) will encourage them to take actions to waste less.

Links of interest

  1. A detailed chronology of Trump's ties with Russia (as of May) and a great podcast on Trump, mining your social media and fake news propaganda
  2. "Hot weather is getting deadlier due to climate change"
  3. Don't like ads and targeting? Use this widget to click them all, thereby destroying the value of the data
  4. Bad idea: "Damming the Rivers of the Amazon Basin"
  5. Tanzanian civil servants focus on new projects instead of maintaining existing water projects
  6. "China's growing water scarcity challenge"
  7. "Micro-irrigation in India: An assessment of bottlenecks and realities"
  8. "the Dutch are likely to become undone by their own progressivism"
  9. The first useful description of "what makes a great wine" that I've ever read
  10. Two military strategists explain how the US is wasting lives and money on war
  11. "Economic theory" needs to be understood as "economic perspective"

12 Jul 2017

Internet-wide day of action to save net neutrality


To learn more, read this.

To receive more information, go here.

To see who supports net neutrality go here (and read others' comments).

11 Jul 2017

More on carbon taxes...

In response to So what would a carbon tax really cost?, Stefano Carattini wrote:

We have recently published an advanced review article tackling some of the points that you mention.
From the abstract: Here, we present the main arguments for carbon pricing, to stimulate a fair and well-informed discussion about it. These include considerations that have received little attention so far. We stress that a main reason to use carbon pricing is environmental effectiveness at a relatively low cost, which in turn contributes to enhance social and political acceptability of climate policy
Lobbying definitely plays a key role here, but unfortunately under standard circumstances the general public is not much more open to the idea of a carbon tax (see for instance this).
From the abstract: We examine the determinants of voting and find that distributional and competitiveness concerns reduced the acceptability of energy taxes, along with the perception of ineffectiveness. Most people would have preferred tax revenues to be allocated for environmental purposes... [Given the inefficiency of this choice...] providing information on the expected environmental effectiveness of carbon taxes reduces the demand for environmental earmarking.
I then asked Stefano: Do you think that a series of national carbon taxes (with funds reallocated domestically) is better than an international (but more efficient) tax system? I think that cap and trade is defacto dead as a policy due to its complexity but — worse — its design of shipping money to foreigners. Thus, I think that a national carbon tax (even without border adjustments, but I like that idea of refunding the border adjustment to the exporting country!) is a definite second best…

To which he replied: The question that you ask is a tough one, but I would say that yes, starting with domestic carbon taxes is probably the most feasible solution. The number of countries implementing carbon taxes has been slowly but steadily rising in the last few years. I know of several initiatives trying to tackle the unpopularity of carbon taxes, with the aim to push for (acceptable) national carbon taxes in different countries. For instance, Citizens’ Climate Lobby is also pushing in several countries (starting from the US) the idea of a carbon fee-and-dividend, a carbon tax whose revenues are redistributed through lump-sum transfers (advertised as “checks”). Their plan does include carbon motivated border tax adjustments, as also did the recent initiative by a group of prominent republicans. At some point, British Columbia actually had a serious plan to implement an original version of a border tax adjustment, by taxing carbon-intensive imports.*

The wind may be slowly changing. Firms are also realizing that carbon pricing may be advantageous for them, of course depending on the design, as long as the status-quo is no longer an option.

* DZ: According to this summary, the border tax has not been implemented, perhaps due to the plan to tax carbon across Canada in 2018.

6 Jul 2017

Masters of Useless

NB: I originally wrote this for The Guardian's Academics Anonymous, but they passed. I am publishing it now because our students are graduating today, and they may want to think about incentives before they rush into masters programs. My thoughts here have nothing to do with official policy or perspective at Leiden University.

Millennials (born 1985-2005) should pay attention to 2002 and 2007. The first year coincides with implementation of Europe's Bologna Accords harmonizing higher education standards into three-year bachelors and one- or two-year masters programs. For some European countries, this meant chopping their traditional, longer programs for first university degrees into separate bachelors and masters degrees. Future students would be encouraged to take one degree in one university and their second -- should they not take a job -- at another university. This reform promised students a greater diversity in their education as well as graduate titles more familiar to North American academics and employers.

The year 2007 is important as the first year of the Great Recession, a time of falling housing prices, market panics, and political turmoil. For Millennials, the Great Recession has been a true disaster: under-25 unemployment rose faster than already intolerable average unemployment rates. Young graduates got to choose among unpaid internships, zero-hour temporary contracts, and staying home. Many bachelors graduates faced competition from masters graduates for the same jobs. Even worse, their parents -- the ones who had earned traditional, "rigorous" 6-year degrees -- didn't respect their training or ability.

You can see how going back for a masters looked like a good choice. It is thus unfortunate that these students may have getting a worse education than the university's promised or they expected.

The Bologna process meant that bachelors programs needed to recruit two cohorts of students every 6 years to maintain their budgets. This pressure meant that over-worked staff are more likely to promise what they cannot deliver. They could let bachelors students have an easy pass, since "the masters program is where you really finish your qualification."

Masters programs, likewise, needed to accept many applicants to pay for their programs -- and they  had to recruit an entire student body every year or two. Would they make sure that masters students worked hard and earned their degrees? Not if they were trying to fill seats. It was easier to let the students pass (even award them honors!) because every -- and any -- graduate provided revenue. So they started more and more masters (over 1,000 in the Netherlands), each promising a bold, keyword-laden future.

Who is responsible for who when reciprocation is unclear?
In the past, it had made sense to invest in relationships, training and reputation because the university and student worked as partners. The addition of a third wheel added well-known friction to those dynamics.

Turning from the administration, how did students and professors respond to the reforms?

For students, the logic was easy. They needed masters degrees and they were being praised for "excellent work." Some of them wanted to make sure they got a good education that would lead to good job, but how would they know? Their inexperience works against them.

Professors might have had more perspective on these changes, but they carried their own burdens. Some had to raise more funding, others needed to do more marketing of the school (or themselves). Everyone needed more (often worse) publications. The only students worth their time where PhD students (with funding!), so teaching took the hit. Could they do more to help their students find jobs? Maybe, but perhaps that was someone else's job? Their divided priorities mean lower quality teaching.

So now we arrive at a rising threat to educational excellence, with students getting shunted through shoddy bachelors and masters programs by universities trying to fill seats, professors worried about other things, and parents hoping  their children would learn find jobs. What about employers and taxpayers? Employers are displeased by the need to sort through indebted, entitled, needs-a-bit-of-finish youngsters. Taxpayers surely worry that their earnings are directed to keyword-laden uselessness. But neither group is in charge of education policies or decisions.

How are the students doing? Some are blithely sailing through the wreckage, as the young can. Some are betrayed and poorer. The majority are probably complaining via memes to their social networks -- an ironic way to complain as social networks are pretty bad for organizing the collective action that the young would need to take to force educational bodies to deliver value rather than marketing.

Bottom Line: Students need to take time to find the right masters program because nobody else is going to help them make that choice. Then they need to suck all the learning and advice they can get out of that program that they can, as the programs are designed for mass consumption, not individual achievement. The penalty for poor choices is not just a bad education given to the wrong people by programs that do not deserve to exist at the expense of taxpayers, but a false start to a young life that needs all the help it can get.

5 Jul 2017

Links of interest

  1. OMICS (a fraudulent open access journal) now has a journal for climate change deniers whose logic includes "the ‘greenhouse theory’ cannot be correct because real greenhouses have glass roofs and the atmosphere does not."
  2. Looking for online videos to learn economics? Here. (Oh, and don't forget that economics is not a science!)
  3. My "thoughts on sustainable solutions" (PDF slides and 58 min MP3)
  4. Water managers are wasting money and/or harming the environment by taking too much water in California, where "water users appeared to more easily achieve the water use reductions requested by utilities during more recent droughts" and Orange Country (California) water managers consistently over-estimate demand [pdf]
  5. Circle, a blockchain-based FinTech company is offering zero cost, "bank rate" multi-currency transfers. I signed up but have not tried it yet.
  6. Bitcoin Energy Consumption Index, (premature) Ethereum Obituaries and WTF is Ethereum? (A good primer)
  7. "Writing advice to my students that would also have been good sex advice for my high school boyfriends"
  8. Not-the-Onion: Bic pens... for her. Read the reviews!
  9. Mumbai was built on a wetlandsthe origin of London's sewers and how Amsterdam invented bike sharing
  10. "Water Security and Climate Change: The Need for Adaptive Governance"
  11. How bureaucracy fails (UK edition)
H/T to TL

4 Jul 2017

The evolution of the Dutch drinking water sector

We just finished revisions of this paper to meet the deadline for a journal's special issue, BUT we would love to hear you thoughts or feedback on the paper, the sector in the Netherlands, or how these themes relate to systems you know better. We will surely have a chance to improve the paper (probably if it's accepted for the special issue and certainly if it isn't ;), so please do send comments.

The evolution of the Dutch drinking water sector <== link to download

David Zetland and Bene Colenbrander

Abstract: Dutch drinking water companies (DWCs) have brought more water of better quality to more people over the past 160 years, but their institutional environment has changed with social priorities. We divide these changes into four eras in which an initial solution leads to a new constraint that forces a change in priorities and thus DWC actions. The first era begins around 1850 when polluted common pool water attracts sellers of drinking water as a private good. Priorities changed around 1900 as the government pushed for a network expansion that would bring drinking water services to all as a public good. The third era began around 1950 as strains on common-pool budgets and water supplies shifted the focus to rationalization and efficiency. The fourth and current era began around 1970 with DWCs being asked to restore ecosystems and play a larger role in the community. These shifts demonstrate how the path towards clean, safe drinking water may twist and turn as new opportunities eclipse past successes and changing priorities shift the relative costs and benefits of different actions.

As a preview, check out the figure on infant mortality and death rates that drives our narrative:




1 Jul 2017

Yay Canada!

They have a day too...

Some gamers already live in the Matrix

From this very interesting article:

Even the most open-ended games tend to offer a sense of progress and direction, completion and commitment. In other words, they make people happy—or at least happier, serving as a buffer between the player and despair. Video games, you might say, offer a sort of universal basic income for the soul.

[snip]

The best of these games overwhelmed my capacity to think about anything else at a time when more thinking wasn't terribly beneficial. They provided distraction, but also direction, and a sense of focused calm. I wanted a job, but I couldn't find one. Instead, I played video games. They weren't as good as a job. But they were better than nothing.

[snip]

Did all those hours playing games make me feel fulfilled? Did they make me feel as if I had made good decisions in my life? Yes—and no. At times, I found video games an entertainment experience as smart and satisfying as any novel or movie or television show I have ever absorbed. At other times, I have let go of my controller late at night, overcome by existential emptiness and the realization that I have, yet again, just spent the better part of a day engaged in an activity of no practical value to me or anyone else. I enjoy games, but not without some reservation. Sometimes I go weeks without playing. And if I had to choose between gaming and work, I know I'd pick the latter.