Useful reading list

Key Resources from Conservation International’s Economics and Planning Team.

The Borna Disease Virus Tragedy

The Robert Koch Institute in Berlin (remember Koch’s Postulates?) earlier this year cancelled its research into Borna Disease Virus (BDV). That is really regrettable, because BDV, a neurotropic virus, may cause depression and bipolar disorder. BDV may be transmitted by blood transfusions; research on this is being carried out in Australia. There may even be an effective cure; an antiviral drug, amantadine sulfate, approved for use against the common flu.

Given the prevalence of depression and bipolar disorder, you should have thought that a decent randomized trial would have been carried out. A small trial would not cost more that a couple of hundred thousand dollars. But amantadine is a 30 year old drug, no longer covered by patents. There is practically no incentive for pharmaceutical firms to finance such a study. So far there has been none. Given the potential huge benefits and the low cost, that is a tragedy.

In the meantime, German and Austrian doctors are using amantadine and reportedly getting good results. However, we still need the solid evidence we would get from a well-designed randomized controlled trial.

For background, read this article in Discovery, a more recent paper here. See also

Not another meeting?!

The 12th set of UN climate talks since 1992 is underway in Nairobi. Maybe someone should have sent the organizers of this very large (ministers from 189 countries) and very long (2 weeks) UN meeting a copy of the paper, HOW TO MAKE BETTER FORECASTS AND DECISIONS: AVOID FACE-TO-FACE MEETINGS by J. Scott Armstrong.

His conclusion:

We rely heavily on face-to-face meetings, which are more expensive than alternative approaches, even though it is difficult to find evidence that supports their use. Although evidence-based principles exist for running face-to-face meetings effectively, they are used so rarely that we must turn to more practical solutions. In fact, a pattern of evidence suggests that prediction markets, nominal groups, and virtual teams allow for a more effective use of a group’s collective wisdom. Technology has enhanced the value of these approaches.

Microcredit and Payday Loans

Microcredit loans are popular with poor people because they are payday loans to people without paychecks.

We recently received this comment on a post on microfinance,

May I suggest a few hours at http://www.microfinancegateway.org/ might help answer some of the questions you raise. Certainly credit can lead to problems. But the misuse of anything can. The people I have read and heard who have seen the changes in the lives of people who use their microcredit loans to improve their businesses strongly favor microcredit. Perhaps if you looked more closely, you would too.
John

That site describes itself as an “online resource for the microfinance industry”. An industry site may not be the best place to look for independent evaluations. Nevertheless, this interesting article can be found on the site,

The truth is that microcredit changes poor people’s lives marginally. It is a stretch to go from the modest microcredit impacts that emerge from the little serious research we do have¹¹ to suggesting as the UN’s International Year of Microcredit website does, that road side sellers of a few bananas, used clothes, a few tea bags, or even 50 kilos of rice, are budding entrepreneurs standing at the threshold of participation in the wider economy, and who play a key role in wealth creation. It’s just not so.

Microcredit loans help smooth out fluctuations in income, maintain consumption levels during lean periods, and provide buffers against sudden emergencies. As such they are extremely useful, but much more like payday loans than venture capital investments.

We don’t really know how useful microfinance is. As is usually the case in the aid industry, there is systemic failure when it come to providing rigorous, independent evaluations of costs, benefits, and impacts.

Update: See also this post on the Becker-Posner Blog.

Evidence-Based Economics

Edmund Phelps, recent Nobel Prize winner in Economics, writes about Evidence-Based Economics,

… the supply-siders jumped to the daring conclusion that a permanent cut in tax rates on labor would encourage more work permanently – with no diminution of effectiveness.

In my view, this core tenet of supply-side economics rests on a simple blunder…

We must proceed cautiously, however. In standard analyses, the tax cut brings a reduction in government purchases of goods and services, like defense. But a tax cut could instead contract the welfare state – social assistance and social insurance, which constitute social wealth. In that case, the tax cut, while gradually increasing private wealth, would decrease social wealth. The issue is an empirical one…

Neoliberals are now telling continental Europe that tax cuts on labor can dissolve high unemployment. But the effectiveness of such tax cuts would be largely, if not wholly, transitory – especially if the welfare state was spared. In two decades’ time, high unemployment would creep back. The false hopes raised by cutting taxes would have diverted policy makers away from fundamental reforms that are necessary if the Continent is to achieve the dynamism on which high rates of innovation, abundant job creation, and world-class productivity depend.

Where are the Systematic Reviews we need?

New Scientist writes (subscription necessary to read article),

If you want to know how to preserve biodiversity, do not rely on articles in conservation journals, a new study warns.

IF YOU want to know how to preserve biodiversity, don’t rely on articles in conservation journals. So says a study which argues that conservationists should follow the medical profession’s lead, and ensure that their decisions are objectively based.

“We’re about 30 years behind the medical revolution,” says Philip Roberts of the Centre for Evidence-Based Conservation at the University of Birmingham in the UK. As a standard to aspire to, Roberts and his team took the systematic reviews that are the bedrock of evidence-based medicine. These reviews start with a carefully framed question, and typically list the search terms used to find the studies to be analysed. Strict criteria are then applied to exclude poor-quality research, and finally rigorous statistical tests on the pooled results are used as the basis of an objective guide for doctors to what treatments work best.

The study referred to is Are review articles a reliable source of evidence to support conservation and environmental management? A comparison with medicine.

Abstract,

The Otis Redding Problem in Conservation

Look like nothing’s gonna change
Everything still remains the same
I can’t do what ten people tell me to do
So I guess I’ll remain the same, yes

-Otis Redding, (SITTIN’ ON) THE DOCK OF THE BAY

Why do Integrated Development and Conservation Projects (IDCPs) usually fail to deliver? The problem is what Bob Sutton calls the Otis Redding Problem. Too many objectives.

If a project in a poor country is designed to save endangered species, build local NGO capacity, fight infectious diseases, develop sustainable use of forest products, promote gender equality, and develop ecotourism, it has been designed for failure.

Why the proliferation of badly designed projects where nobody is individually responsible for doing anything for any one result?

Overly complex projects work well for intermediaries and middlemen, including the people who design and manage them. They get to spend the money. And on one hand, IDCPs are attractive to donors, who can say that they are promoting a lot of good things. On the other hand, it is virtually impossible to pin failure on any one person, so nobody will ever be held accountable.

CIAO: Customer feedback, Incentives, Accountability, and, therefore, good Outcomes

CIAO is an acronym William Easterly came up with. His concern is development aid, but his comments readily apply to conservation. He criticizes top down Millennium Development Goals (MDG, link to article in The Economist) and Poverty Reduction Strategy Papers (PRSP) plans.

His recommendation, “Get rid of Utopian goals and plans: just say no to MDGs and and PRSPs”.

He calls for independent evaluations of what works, and he criticizes projects where nobody is individually responsible for doing anything for any one result. In conservation, Integrated Conservation and Development Projects usually suffer from these problems.

You can watch his presentation, and look at his slides in a different window.

Next time you look at a project proposal, think CIAO.

How to fight global poverty

Abhijit Banerjee of MIT’s Poverty Action Lab writes in an article, Making Aid Work,

Randomized trials like these—that is, trials in which the intervention is assigned randomly—are the simplest and best way of assessing the impact of a program. They mimic the procedures used in trials of new drugs, which is one situation in which, for obvious reasons, a lot of care has gone into making sure that only the interventions that really work get approved, though of course not with complete success. In many ways social programs are very much like drugs: they have the potential to transform the life prospects of people. It seems appropriate that they should be held to the same high standards.

Here are the responses to the article. In Banerjee’s response to the comments, he writes,

I should have said more about what is probably the best argument for the experimental approach: it spurs innovation by making it easy to see what works.

(With thanks for the reference to Tyler Cowan of Marginal Revolution)

Doom, Gloom and Protected Areas

In 2003, 11.5% of all land, or 18.8 million square kilometers, were protected areas (source: UNDP-WCMC).

In their comment in Nature discussed in a previous post, Michel Loreau et al. wrote,

“Although protected areas have increased slightly during the past few decades,…”

That is just not true. Protected areas have increased dramatically during the past few decades, both in number of sites and in area.

A protected area is not a magic bullet. Is money better spent, not on new protected areas, but in other ways? On making existing protected areas work? On conservation outside protected areas? Does the very institutions designed to stimulate conservation actually create incentives for biodiversity degradation? (see e.g. this post, or Rupert Gatti et al.). We urgently need to find out. That takes research, not another international panel of experts as recommended by Loreau et al.