Friday, August 26, 2016

Working Papers of the Week: August 26, 2016

By Jessica McCann

Welcome to Working Papers of the Week! Our goal is to highlight the valuable and interesting research Kennedy School faculty members are doing here and abroad by featuring new working papers recently uploaded to the site.

This week in working papers:

Loss Sequencing in Banking Networks: Threatened Banks as Strategic Dominoes 
Tran, Ngoc-Khanh, Thao Vuong, and Richard Zeckhauser, August 2016

Abstract: We demonstrate in a stylized banking network that a single large loss has the potential to leave markedly different impacts on the financial system than does a sequence of moderate losses of the same cumulative magnitude. Loss sequencing matters because banks make strategic bailout decisions based on their myopic assessment of losses, yet these decisions are highly consequential to subsequent decisions and eventual losses at other banks in the network. In particular, the network mechanism enables banks to choose to bail out their creditors after every moderate loss incurred in a sequence, while walking away from the creditors should they experience a single large loss. Government policy can force threatened banks to liquidate or sell themselves or, at the opposite pole, can bail out some such banks or overlook their threatened status. The former policy would concentrate a string of losses into a single large event; the latter could prevent a massive single loss at the expense of multiple subsequent smaller losses. As this analysis shows, either policy could prove optimal depending on identifiable circumstances. These findings have important implications for on-going policy debates that emanated from the 2008 meltdown.

To read the full working paper, click here.


Measuring Judicial Ideology Using Law Clerk Hiring
Bonica, Adam, Adam Chilton, Jacob Goldin, Kyle Rozema, and Maya Sen, July 2016
Abstract: We present a new measure of judicial ideology based on judicial hiring behavior. Specifically, we utilize the ideology of the law clerks hired by federal judges to estimate the ideology of the judges themselves. These Clerk-Based Ideology (CBI) scores complement existing measures of judicial ideology in several ways. First, CBI scores can be estimated for judges across the federal judicial hierarchy. Second, CBI scores can capture temporal changes in ideology. Third, CBI scores avoid case selection and strategic behavior concerns that plague existing vote-based measures. We illustrate the promise of CBI scores through a number of applications.


To read the full working paper, click here.


A Quantum Leap over High Hurdles to Financial Inclusion: The Mobile Banking Revolution in Kenya 
Rosengard, Jay K., June 2016
Abstract: A powerful tool to achieve equitable development is promotion of economic empowerment for marginalized citizens by increasing formal financial services access and utilization. The provision of these services via mobile phones has shown great promise in overcoming geographic, demographic, and institutional constraints to financial inclusion, especially in Africa and led by the mobile banking revolution in Kenya. This is exemplified by the extraordinary success since 2007 of Safaricom’s M-PESA, a mobile phone-based money transfer, payment, and banking service: as of June 2015, Safaricom had more than 22 million M-PESA subscribers served by over 90,000 M-PESA agents. The confluence of several factors have contributed to M-PESA's success, including Kenya's political and economic context, demographics, telecommunications sector structure, lack of affordable consumer options, and enabling regulatory policies. Equally important have been Safaricom's internal astute management and marketing of M-PESA. But M-PESA is now facing a strong new rival in Airtel Money, offered by Equity Bank, Kenya's third largest bank. Now two different models for mobile financial services are competing vigorously in Kenya: Safaricom, an example of telecom-led mobile banking and Equity Bank, an example of bank-led mobile banking. There are three key challenges in Kenya to further promotion of financial inclusion via development of mobile financial services: facilitation of increased competition; transformation of non-digital microfinance institutions; and enactment of greater consumer protection. Where Kenya’s success factors might be present, many of Kenya’s lessons can be adapted. Where conditions are significantly different, the challenge becomes how best to nurture home-grown innovative solutions to address specific local constraints.


To read the full working paper, click here.



Don’t miss out on our faculty members' other recent working papers! Browse our latest faculty working papers by number or follow RAO on Twitter at @HKS_Research to stay in the loop.

Thursday, August 18, 2016

‘Does This Have to Go through the IRB?’


The Chronicle of Higher Education
Patricia Aufderheide
August 17, 2016

I hear both colleagues and students ask this question in a tone of dread: "Does this have to go through the IRB?" Except for the ones who ask it with a sense of grievance. They all hate the idea that an institutional review board gets to decide whether their research plan is good enough to proceed.
 
And every time, I wish I could just reach over and flick that chip off their shoulders. I’m soft on the IRB, and for a reason. Ours, which primarily deals with social-science and humanities research, has been more helpful to me than I ever expected it to be.

Tuesday, August 16, 2016

The Changing Face of Scientific Collaboration

The Chronicle of Higher Education
Leonard Cassuto
August 14, 2016

Academics, it’s often said, don’t play well with others. But that cliché doesn’t apply to all of us. Humanists may derive their practices from the myth of the solitary genius laboring in the garret, but the laboratory sciences are justly known for their culture of collaboration.


Bench scientists, as they’re also called, are socialized into lab-based groups. Under the direction of a senior scientist, the staff of a university research lab — graduate students, postdocs, research assistants and other staff members, and sometimes undergraduates, too — become a team that works together on experiments.


Friday, August 12, 2016

Working Papers of the Week: August 12, 2016

By Jessica McCann

Welcome to Working Papers of the Week! Our goal is to highlight the valuable and interesting research Kennedy School faculty members are doing here and abroad by featuring new working papers recently uploaded to the site.

We've had a number of summer 2016 working papers posted to our site this week. See the abstracts and links to the full texts below.


Confronting Deep and Persistent Climate Uncertainty
Wagner, Gernot, and Richard J. Zeckhauser, August 2016

Abstract: Deep-seated, persistent uncertainty is a pernicious feature of climate change. One key parameter, equilibrium climate sensitivity, has eluded almost all attempts at pinning it down more precisely than a ‘likely’ range that has stalled at 1.5–4.5°C for over thirty-five years. The marginal damages due to temperature increase rise rapidly. Thus, uncertainty in climate sensitivity significantly raises the expected costs of climate change above what they would be if the temperature increases were known to be close to a mean value 3.0°C. The costs of this uncertainty are compounded given that the distribution of possible temperature changes is strongly skewed toward higher values.

Read the full working paper here.


The Causes of Peer Effects in Production: Evidence from a Series of Field Experiments

Horton, John J., and Richard J. Zeckhauser, June 2016 

Abstract: Workers respond to the output choices of their peers. What explains this well documented phenomenon of peer effects? Do workers value equity, fear punishment from equity-minded peers, or does output from peers teach them about employers’ expectations? We test these alternative explanations in a series of field experiments. We find clear evidence of peer effects, as have others. Workers raise their own output when exposed to high-output peers. They also punish low-output peers, even when that low output has no effect on them. They may be embracing and enforcing the employer’s expectations. (Exposure to employer-provided work samples influences output much the same as exposure to peer-provided work.) However, even when employer expectations are clearly stated, workers increase output beyond those expectations when exposed to workers producing above expectations. Overall, the evidence is strongly consistent with the notion that peer effects are mediated by workers’ sense of fairness related to relative effort.


Read the full working paper here.



Classifying Exchange Rate Regimes: 15 Years Later

Levy Yeyati, Eduardo, and Federico Sturzenegger, June 2016

Abstract: Levy Yeyati and Sturzenegger (2001, 2003, 2005) proposed an exchange rate regime classification based on cluster analysis to group countries according to the relative volatility of exchange rates and reserves, thereby shifting the focus from a de jure to de facto approach in the empirical analysis of exchange rate policy. This note extends the classification through 2014 and broadens the country sample, increasing the number of classified country-year observations from 3335 to 5616. Based on this extension, the note documents the main stylized facts in the 2000s, including the behavior of exchange rate policy around the global financial crisis, and the prevalence of floating regimes.


Read the full working paper here.



Globalization and Chinese Growth: Ends of Trends?
Frankel, Jeffrey A., July 2016

Abstract: Two big questions look somewhat different than they did 10 or 20 years ago. First: would the long-term trend of globalization continue? Contrary to all predictions, trade growth has slowed markedly since the Global Financial Crisis of 2008-09. But the feared increase in protectionism did not materialize, so one must look elsewhere for explanations. Two likely factors behind the slowdown in trade are a maturing of global supply chains and a slowdown in trade-intensive physical investment. Second, would the rapid growth of emerging market economies (EMEs) continue, and which ones? Most EMEs recovered strongly in 2010-11, but now seem to be slowing down in a more long-lasting way. For both these issues the role of China is crucial, since it now carries so much weight in the global economy. Breathless reports in 2014 that the Chinese economy had overtaken the US economy as the world’s largest (measured by Purchasing Power Parity) were followed rapidly in 2015 by breathless reports that its economy was failing. That China has slowed down from past growth rates of 10% to a more moderate rate of 7% or lower should not have come as a surprise. It is part of a natural process of long-term convergence and involves a “rebalancing” of the economy from manufacturing into services that is desirable, even if it means a loss of export markets for some others. The open question is whether the Chinese transition to a more moderate and sustainable growth path will take the form of a hard landing or a soft landing.


Read the full working paper here.



Don’t miss out on our other faculty members' recent working papers! Browse our latest faculty working papers by number or follow RAO on Twitter at @HKS_Research to stay in the loop.

Wednesday, August 10, 2016

Donors Increasingly Blending Philanthropic and Political Giving

Philanthropy News Digest
David Callahan
August 9, 2016

As America's donor class becomes ever wealthier, major donors, conservative and liberal, are pairing their philanthropic giving with campaign contributions to advance their favorite causes, The Nation reports.

One such donor, Art Pope, a prominent conservative figure in North Carolina, gave millions in campaign contributions to conservative supporters of the state's so-called "bathroom bill" while supporting the North Carolina Family Policy Council, a leading nonprofit proponent of the legislation, with donations from the John William Pope Foundation, which he chairs. And in Minnesota, Alida Messinger, a Rockefeller heiress, has given millions of dollars to nonprofits working to advance environmental and energy issues, protect women's reproductive rights, and mobilize low-income voters — as well as to state Democratic committees, PACs, and dozens of candidates, helping to bring about a Democratic takeover of state government and the passage of progressive legislation in 2013 and 2014.

Read More…

Friday, August 5, 2016

Working Papers of the Week: August 5, 2016



By Jessica McCann

Welcome to Working Papers of the Week! Our goal is to highlight the valuable and interesting research Kennedy School faculty members are doing here and abroad by featuring new working papers recently uploaded to the site.

This week in working papers:

Trump, Brexit, and the Rise of Populism: Economic Have-Nots and Cultural Backlash
Inglehart, Ronald, and Pippa Norris, August 2016

Abstract: Rising support for populist parties has disrupted the politics of many Western societies. What explains this phenomenon? Two theories are examined here. Perhaps the most widely-held view of mass support for populism -- the economic insecurity perspective--emphasizes the consequences of profound changes transforming the workforce and society in post-industrial economies. Alternatively, the cultural backlash thesis suggests that support can be explained as a reaction against cultural changes that threaten the worldview of once-predominant sectors of the population. To consider these arguments, Part I develops the conceptual and theoretical framework. Part II of the study uses the 2014 Chapel Hill Expert Survey (CHES) to identify the ideological location of 268 political parties in 31 European countries. Part III compares the pattern of European party competition at national-level. Part IV uses the pooled European Social Survey 1-6 (2002-2014) to examine the cross-national evidence at individual level for the impact of the economic insecurity and cultural values as predictors of voting for populist parties. Part V summarizes the key findings and considers their implications. Overall, we find consistent evidence supporting the cultural backlash thesis.

To read the full working paper, click here.

Don’t miss out on our faculty members' other recent working papers! Browse our latest faculty working papers by number or follow RAO on Twitter at @HKS_Research to stay in the loop.

Thursday, August 4, 2016

Researchers Push Back Against Journals’ Demands That Medical Data Be Shared

The Chronicle of Higher Education
Paul Basken
August 4, 2016

Hundreds of university researchers pushed back on Wednesday against a proposal by editors of the world’s top medical journals to require that data from clinical trials be quickly shared. Instead, the researchers urged terms that would delay the period before data must be disclosed and provide economic and academic compensation to researchers who carry out the trials.

The plan, which was outlined in January by the International Committee of Medical Journal Editors, would require comprehensive data sharing within six months of an article’s publication. But a group of more than 300 researchers, writing in The New England Journal of Medicine, said that proposal was far too hasty.