Wednesday, December 21, 2016

'Blueprint 2017' Warns of Dangers to Civil Society

Philanthropy News Digest
December 15, 2016

The "big ideas that matter" for 2017 include the need for clearer boundaries between philanthropic and political activities and a larger role for civil society in shaping digital systems and technologies, leading philanthropy scholar Lucy Bernholz argues in Philanthropy and the Social Economy: Blueprint 2017 (40 pages, PDF).
Published by GrantCraft, a service of Foundation Center, the eighth edition of Bernholz's annual forecast highlights two trends that civil society will need to address in the new year — the blurring of boundaries between politics and philanthropy, as the civil-society norms of privacy and anonymity are used to hide political activity; and the threat to free expression and association posed by the commercial ownership and government surveillance of the digital infrastructure on which civil society heavily depends.
Read More…

Tuesday, December 20, 2016

As the Drive to Share Data Intensifies, Can Standards Keep Up?

The Chronicle of Higher Education
Paul Basken
December 20, 2016

Patrick J. Curran struggles with the problem when studying alcoholism in families. Quynh C. Nguyen sees it when analyzing housing-voucher programs. And the Nobel laureate Harold E. Varmus encounters it while developing genomic databases for cancer patients.

Their trouble isn’t with sharing their data — all three professors are eager participants in the open-data revolution.

Instead, the problem is confidently sharing and interpreting data — huge amounts of it — with relevance and accuracy.
Read More…

Friday, December 16, 2016

After Trump’s Election, Political Scientists Feel New Urgency

The Chronicle of Higher Education
Fernanda Zamudio-Suaréz
December 16, 2016

Since Donald J. Trump was elected president, Yascha Mounk, a lecturer in political theory at Harvard University, has fielded calls from reporters, government officials, and think tanks.

Some callers are interested in the factors that fueled Mr. Trump’s victory, but most have a more existential concern: Is liberal democracy under threat?
Read More…

Thursday, December 15, 2016

Strategies for Success in Working with a Foundation

The Chronicle of Higher Education
Kathryn Masterson
December 11, 2016


Before You Approach a Foundation
Do your homework. Research foundations. Read their guidelines, and stay current, as they change over time, with new board members or shifts in mission. The guidelines will often detail what the foundation does and does not support. The Arthur Vining Davis Foundations, for example, will not invite a college to apply for a grant if that college’s president has been in office less than a year.

Focus one person on foundations. If you can, structure your development office so that one person concentrates on this work. That person can keep up on guidelines, look for opportunities to meet foundation officers, and lead the stewardship of grants. Nancy J. Cable, who worked in senior administration posts at several colleges and is now president of the Arthur Vining Davis Foundations, says, "It’s worth paying staff to do that. It increases your chances of getting grant funding."
Read More…

Wednesday, December 14, 2016

How to Court a Foundation

The Chronicle of Higher Education
Kathryn Masterson
December 11, 2016

The grant that will help Emory University experiment with a new model of doctoral education started with a conversation over dinner two years earlier.

Lisa A. Tedesco, dean of Emory’s graduate school, and David Nugent, a professor of anthropology and director of Emory’s master’s program in development practice, had been chewing over a big question. In a time when a growing number of students are not finding jobs in academe, how could they make graduate education more relevant? Specifically, could they prepare graduate students to use their knowledge in a more practical way, to combine theory and practice to help solve some of the world’s problems?
Read More…

Tuesday, December 13, 2016

Letting Researchers Choose Their Peer Reviewers Gets Another Shot

The Chronicle of Higher Education
Paul Basken
December 12, 2016

Seven years after a widely mocked paper about caterpillars and butterflies raised doubts about allowing authors to take shortcuts in the peer-review process, another prominent publisher is about to give it a try.

In an option to be made available next month, the open-access microbiology journal mSphere will let authors choose two willing colleagues and then submit their reviews to the journal with the promise of an answer on acceptance within five days.
Read More…

Thursday, December 8, 2016

Senate Passes Landmark 21st Century Cures Act — but It Will Take Years to Implement

STAT News
Sheila Kaplan
December 8, 2016

WASHINGTON — It took nearly three years for Congress to pass the 21st Century Cures Act. The next question is: How long will it take the Food and Drug Administration to implement it?

The legislation, designed to accelerate the introduction of new medical treatments by speeding up some FDA approval processes and boosting federal funding, passed the Senate Wednesday by a 94 to 5 vote on Wednesday. The House passed it last week, and President Obama is expected to sign it into law.
Read More…

Tuesday, December 6, 2016

Research Universities Hope Trump’s Infrastructure Plans Could Be a Boon to High-Speed Communications

Chronicle of Higher Education
Paul Basken
December 6, 2016


When Donald Trump promises to rebuild U.S. infrastructure, he mostly means highways, bridges, and airports. Might he also mean better high-speed internet for research universities?

The incoming administration hasn’t yet made its plans clear, but there’s at least some hope in the research community. And a leading candidate for assistance could be Internet2, a dedicated high-speed, high-volume link serving scientists at more than 300 universities.
Read More…

Tuesday, November 29, 2016

A New Strategic Direction for Behavioral and Social Sciences Research at NIH

NIH Press Release
November 23, 2016

The Office of Behavioral and Social Sciences Research (OBSSR) at the National Institutes of Health has released a new strategic plan for 2017 through 2021. The plan focuses on scientific priorities, which reflect key research challenges that OBSSR is uniquely positioned to address. Developed with considerable input from internal and external NIH stakeholders, the plan ensures OBSSR continues to fulfill its mission.
While it is widely accepted that behavioral and social factors account for approximately half of the premature deaths in the United States, understanding how these behavioral and social factors interact with biology and can be modified to improve health requires a robust and rigorous behavioral and social sciences research agenda. Recent scientific and technological advances in the biomedical, behavioral, and social sciences are generating massive amounts of information from the molecular and genetic levels to clinical and community outcomes. NIH Director Francis S. Collins, M.D., Ph.D., and OBSSR Director William T. Riley, Ph.D., wrote an editorial published today in Science Translational Medicine that highlights some of the scientific and technological advances that are transforming the behavioral and social sciences.
Read More…

Monday, November 21, 2016

Working Papers of the Week: November 18, 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.

Last week, the following working papers were posted:

Securing Property Rights
Glaeser, Edward L., Giacomo A.M. Ponzetto, and Andrei Shleifer

A central challenge in securing property rights is the subversion of justice through legal skill, bribery, or physical force by the strong—the state or its powerful citizens—against the weak. We present evidence that the less educated and poorer citizens in many countries feel their property rights are least secure. We then present a model of a farmer and a mine which can pollute his farm in a jurisdiction where the mine can subvert law enforcement. We show that, in this model, injunctions or other forms of property rules work better than compensation for damage or liability rules. The equivalences of the Coase Theorem break down in realistic ways. The case for injunctions is even stronger when parties can invest in power. Our approach sheds light on several controversies in law and economics, but also applies to practical problems in developing countries, such as low demand for formality, law enforcement under uncertain property rights, and unresolved conflicts between environmental damage and development.

To read the full working paper, click here.


Searching for the Devil in the Details: Learning about Development Program Design
Nadel, Sara, and Lant Pritchett

Motivated by our experience in designing a particular social program, skill set signaling for new entrants to the labor market in Peru, we articulate the need for, and explore the empirical consequences of, alternative learning approaches to the design of development projects. Using a simulation, we demonstrate that even with only modest dimensioned design space and even modest “ruggedness” of the outcome with respect to design a naive iterative approach of “crawling the design space” dominates an RCT learning strategy. We suggest that the empirical results of RCTs to date are consistent with social programs having high dimensional design space and outcomes sensitive to design and hence project/program/policy design must depend on more robust learning strategies than the attempt to directly apply results from “systematic reviews” or move prematurely to an RCT.

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.

Friday, November 18, 2016

Universities Report Four Years of Declining Federal Funding

NSF Press Release
November 17, 2016

Federal funding for research at higher education institutions declined for a fourth straight year, according to a new report from the National Center for Science and Engineering Statistics (NCSES).
During a peak in Fiscal Year (FY) 2011, federal funding accounted for 62.5 percent of total higher education research and development (R&D) expenditures. That figure dropped to 55.2 percent in FY 2015, the most recent year for which data are available. Overall, universities reported $68.8 billion in R&D expenditures for FY 2015; federal funding accounted for $37.9 billion of that.
Read More…

Thursday, November 10, 2016

Fearful of a Trump Administration, Many in Research Call for a ‘Tutorial’ for the President-Elect

STAT
Sharon Begley
November 9, 2016

Biomedical and public health researchers struggled Wednesday to fathom what the incoming Trump administration might mean for their fields, as they tried to separate their personal views about the election (many supported Hillary Clinton) from what’s known or expected about the president-elect’s plans.
“It’s so hard to know” what the Trump White House will do, said Dr. Eric Topol, director of the Scripps Translational Science Institute and professor of genomics at the Scripps Research Institute. One hopeful sign: Newt Gingrich, former speaker of the House of Representatives and a close Trump ally, last year called for a doubling of the National Institutes of Health budget and is a strong supporter of science research (he used to have a replica of a T. rex skull in his office).
Read More…

Friday, November 4, 2016

Older Scientists Are Touted as Offering Untapped Value

The Chronicle of Higher Education
Paul Basken
November 4, 2016

Federal funding agencies have been eager to support younger researchers, reflecting a widespread belief that nurturing the next generation is critical to ensuring the long-term success of the nation’s scientific enterprise.
A new analysis out of Northeastern University, however, is challenging the orthodoxy. Looking across a variety of fields, the study found that while a researcher’s productivity generally declines with age, creativity and impact do not.
Read More…

Wednesday, November 2, 2016

Open Data Meets a Defining Test

The Chronicle of Higher Education
Paul Basken
November 1, 2016

In a plain, brick, two-story office building near the University of Virginia, several dozen computer programmers are racing to define the future of science.
Members of the nonprofit Center for Open Science, they see a critical moment. Web-based services that researchers use to create, store, analyze, and share data are being rapidly built, bought, and sold by a handful of major publishing companies and their offspring.
If uninterrupted, the thinking goes, those cyber-consolidators could reinforce an expectation that scientific data is a private asset to be amassed and hoarded. But if redirected, they could enable a new world in which data is routinely and widely shared, speeding scientific discoveries and boosting their reliability.
Read More…

Monday, October 24, 2016

Research and Evaluation in the Nonprofit Sector: Implications for Equity, Diversity, and Inclusion

Nonprofit Quarterly
Jodi Benenson and Abby Kiesa
October 19, 2016

Research and evaluation have long influenced activities in the nonprofit sector. Nonprofit organizations are increasingly establishing or being asked to establish metrics or to conduct evaluations for a variety of reasons. Indeed, research, evaluation, and data regularly inform philanthropic and policy decisions, and vice versa. We live in a data-driven society that has furthermore become obsessed with big data, a term that describes the ability to collect and analyze data on every participant or even every transaction. Thus, instead of periodically surveying or interviewing a sample of a nonprofit’s members or employees, organizations can now create and use databases that measure every contact, activity, donation, or half hour of an employee’s time.
Organizations that use big data have an unprecedented ability to understand whole populations, track and assess particular individuals, and develop strategies that influence behavior. The use of research and evaluation so broadly and the emergence of such data interest require us not only to think about the velocity, complexity, variability, and variety of data but also about what we do with the data, because big data does not always translate to better data. There are also, of course, ethical considerations vis-à-vis how we gather data—“big” or otherwise—and what use we put them to.
Read More…

Friday, October 14, 2016

Science Group Seeks to Guide Silicon Valley Philanthropists

Nature
Erika Check Hayden
October 13, 2016

Poring over a list of the top 50 US philanthropists in 2014, physicist Marc Kastner noticed that 16 were based in California, compared with just 6 in New York, Connecticut and New Jersey combined.

“That made it pretty clear where I should be,” says Kastner, who established the offices of the Science Philanthropy Alliance in Palo Alto, California, when he was named the organization’s first president in February 2015. The alliance is made up of philanthropic organizations that encourage funding in basic research and advise other philanthropists — especially new ones — on how to go about it.

Read More…

Tuesday, October 11, 2016

As Concerns Grow About Using Data to Measure Faculty, a Company Changes Its Message

The Chronicle of Higher Education
Paul Basken
October 11, 2016

Just a few years ago, Academic Analytics, an upstart company providing data on faculty productivity, talked of helping cash-strapped universities save as much as $2 billion by identifying their lowest-performing professors.

At many universities, "an awful lot of the scholarly work is being carried by a relatively small proportion of all of the people," said a company founder, Lawrence B. Martin, back in 2013. The value of stanching such waste could be "staggering," Mr. Martin said.

Read More…

Friday, October 7, 2016

Working Papers of the Week: October 7, 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:

Liquidity Risk in Sequential Trading Networks
Kariv, Shachar, Maciej Kotowski, and C. Matthew Leister

This paper develops a model of intermediated exchange with budget-constrained traders who are embedded in a trading network. An experimental investigation confirms the theory’s baseline predictions. Traders adopt monotone strategies with higher-budget intermediaries offering to pay more for tradable assets. Traders closer to the final consumer in the network experience systematically greater payoffs due to lessened strategic uncertainty. While private budget constraints inject uncertainty into the trading environment, they also serve as a behavioral speed-bump, preventing traders from experiencing excessive losses due to overbidding.

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.

Friday, September 30, 2016

Working Papers of the Week: September 30, 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:

Does Online Delivery Increase Access to Education? 
Goodman, Joshua, Julia Melkers, and Amanda Pallais

Though online technology has generated excitement about its potential to increase access to education, most research has focused on comparing student performance across online and in-person formats. We provide the first evidence that online education affects the number of people pursuing formal education. We study Georgia Tech’s Online M.S. in Computer Science, the earliest model to combine the inexpensive nature of online education with a highly regarded degree program. Regression discontinuity estimates exploiting an admissions threshold unknown to applicants show that access to this online option substantially increases overall enrollment in formal education, expanding the pool of students rather than substituting for existing educational options. Demand for the online option is driven by mid-career Americans. By satisfying large, previously unmet demand for mid-career training, this single program will boost annual production of American computer science master’s degrees by about eight percent. More generally, these results suggest that low cost, high quality online options may open opportunities for populations who would not otherwise pursue education.

To read the full working paper, click here.


Microfinance: Points of Promise
Field, Erica, Abraham Holland, and Rohini Pande

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.


Research and Impacts of Digital Financial Services 
Pande, Rohini, Dean Karlan, Jake Kendall, Rebecca Mann, Tavneet Suri, and Jonathan Zinman

A growing body of rigorous research shows that financial services innovations can have important positive impacts on wellbeing, but also that many do not. We first describe the latest evidence on what works in financial inclusion. Second, we summarize research on key financial market failures and on products and innovations that address specific mechanisms underlying them. We conclude by highlighting open areas for future work.

To read the full working paper, click here.



Why American Elections Are Flawed (and How to Fix Them) 
Norris, Pippa

Concern about how American elections work has risen since 2000 and has been exacerbated by events during the 2016 campaign. To understand these issues, the first section examines several major challenges facing U.S. elections, including deepening party polarization over electoral procedures, the vulnerability of electronic records to hacking, and the impact of deregulating campaign spending, compounding the lack of professional standards of electoral management. For a broader perspective, section 2 clarifies the core concept and measure of ‘electoral integrity’, the key yardstick used in this report to evaluate the performance of American contests. Section 3 compares cross-national evidence from expert surveys, finding that recent US elections have the worst performance among two-dozen Western democracies. Section 4 considers pragmatic reforms designed to strengthen U.S. electoral laws and procedures, recommending expanding secure and convenient registration and balloting facilities, improving the independence and professional standards of electoral management, monitoring performance, and strengthening impartial dispute resolution mechanisms. The conclusion summarizes the core argument and the reforms.

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, September 29, 2016

Big Money Comes to Inequality Research

The Chronicle of Higher Education
Scott Carlson
September 29, 2016

Economists like Paul Krugman see it as a drag on the nation’s economy and a barrier to innovation. Barack Obama has gone further, declaring it the "defining issue of our time." Pope Francis frames it in moral terms, calling it "the root of social evil."

They are all talking about inequality, a word that now peppers news stories and new books, and has come to describe a post-recession anxiety for policy makers, activists, philanthropists, and grant makers. The latter two, which in the past few months have awarded tens of millions of dollars for inequality research, have also made it hot in the academic world.

Read More…

Tuesday, September 20, 2016

Is Political Science Too Pessimistic?

The Chronicle of Higher Education
Marc Parry
September 20, 2016

Things are better than ever. When President Obama talks to young people, that’s the message he uses to gird them against cynicism. "If you had to choose a moment in human history to live — even if you didn’t know what gender or race, what nationality or sexual orientation you’d be — you’d choose now," he tells interns. The world is "wealthier, healthier, better educated, less violent, more tolerant, more socially conscious and more attentive to the vulnerable than it has ever been."


If those same young people study contemporary social science, they’re likely to hear a much different story, at least on the subject of race. They might read about psychological research that shows how hard it is for people to spot and overcome their own biases. They might hear how white supremacy has changed form rather than disappeared. They might encounter scholarship describing how conditions arguably got worse for black people under the administration of our first black president.

Read More…

Monday, September 19, 2016

U.S. Sees Sizable Increase in R&D Spending

NSF News
September 15, 2016

U.S. research and development (R&D) performance rose to $477.7 billion in 2014 -- an increase of $21.1 billion over the previous year -- and is estimated to hit $499.3 billion in 2015, according to a new report from the National Center for Science and Engineering Statistics (NCSES).


The NCSES report looks at two different aspects of the U.S. system: the performance of R&D by businesses, government agencies, higher education institutions and other organizations, and the funding sources used by these sectors to perform that R&D.
Read More…



Friday, September 16, 2016

Working Papers of the Week: September 16, 2016

By Jessica McCann

Welcome to Working Papers of the Week, in which we highlight the valuable and interesting research Kennedy School faculty members are doing around the world by featuring new working papers recently uploaded to the site.

Efficient Warnings, Not “Wolf or Rabbit” Warnings

Robinson, Lisa A., W. Kip Viscusi, and Richard Zeckhauser

Abstract: Governments often require that products carry warnings to inform people about risks. The warnings approach, as opposed to the command and control approach to risk regulation, functions as a decentralized regulatory mechanism that empowers individuals to make decisions that take into account their own circumstances and preferences. Thus, individuals will be aware of the risks and the value of taking precautions, and they may avoid a product that others consume if they find the risk unacceptable. Ideally, warnings would allow individuals to assess both their personal level of risk and the benefits they will receive from another unit of consumption. Then those receiving positive expected benefits will consume more; those receiving negative net benefits will curtail their consumption. Only Pangloss would be happy with the current warning system. It fails miserably at distinguishing between large and small risks; that is to say between wolves and rabbits. Such a system is of little value, since people quickly learn to ignore a warning, given that rabbits, which pose little danger, are many times more plentiful than wolves. When a wolf is truly present, people all too often ignore the warning, having been conditioned to believe that such warnings rarely connote a serious threat. We illustrate the clumsy-discrimination issue with examples related to cigarette labeling, mercury in seafood, trans fat in food, and California’s Proposition 65. We argue that the decision to require a warning and the wording of the warning should be designed in a manner that will lead consumers to roughly assess their accurate risk level, or to at least distinguish between serious and mild risks. Empowering individuals to make appropriate risk decisions is a worthwhile goal. The present system fails to provide them with the requisite information.


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.

Friday, September 9, 2016

The Use of Social Media in Recruitment to Research: Harvard Catalyst's Guide for Investigators and IRBs

Jessica McCann
September 9, 2016


Social media has shown great promise as a research recruitment tool, allowing researchers to effectively connect with hard-to-reach populations and spread the word about open research projects quickly. However, federal regulations do not explicitly address the legal and ethical concerns associated with the use of social media in research recruitment, leaving a gray area that can prove difficult to navigate.


The Harvard Catalyst Regulatory Foundations, Ethics, & Law Program has released a guidance on the use of social media in recruitment to research. Its aim is to "provide institutions, IRBs, and investigators with the tools to evaluate the ethical and regulatory acceptability of research protocols that propose to recruit study participants through the use of social media." The guide lays out the background of the social media question, considers applicable laws and regulations, and provides checklists and other resources for researchers considering the use of social media in recruitment.


Wednesday, September 7, 2016

Better Than Impact Factor? NIH Team Claims Key Advance in Ranking Journal Articles


The Chronicle of Higher Education
Paul Basken
September 7, 2016


Universities and funding agencies typically measure the value of published research by the number of citations an article attracts or by how often the journal in which it appears is cited. Both methods have long been accepted as imperfect but necessary shorthands.

Going beyond pure citation numbers to assign value to an individual article can be both complicated and uncertain. But one leading attempt to do just that took a major leap forward on Tuesday with the formal endorsement of a team of analysts at the National Institutes of Health.

Read More…




Thursday, September 1, 2016

Young European Researchers Set Groundwork for Policy Changes


Science Magazine
Elisabeth Pain
August 30, 2016

Funding to pursue fresh research ideas and gain early independence; sustainable and transparent career trajectories; a diverse, collaborative, and ethical research environment; and a healthy work-life balance—these are all part of a wish list that a group of young scientists discussed with European policymakers last month.

Invited by the Council of the European Union, of which Slovakia is the current president, and the European Commission to voice their concerns and aspirations about their ability to pursue research careers, 10 early-career scientists from across Europe developed the document, called the Bratislava Declaration of Young Researchers. Overall, the declaration—which was discussed with the
Competitiveness Council of ministers overseeing research in the 28 EU countries and Iceland, Liechtenstein, Norway, and Switzerland and then officially presented to the press—calls for better recognition of "the special role that young researchers play" in the research enterprise, and for implementation of new measures that will help them reach their full potential. The issues are complex, the authors acknowledge in the declaration, calling on European policymakers "to sustain a dialogue with young researchers" so that they may "become an active part of policy development." The declaration is expected to be adopted by the council of research ministers at the end of November.

Tuesday, August 30, 2016

Federal Prosecutors Join Fight Against Predatory Journals

The Chronicle of Higher Education
Paul Basken
August 30, 2016


The rising number of predatory journals has become a major blight on academic publishing, deceiving authors, their institutions, and the wider scientific community.

And now the federal government is fighting back.

The U.S. Federal Trade Commission, in its first such foray into academic publishing, filed a civil complaint this month in federal court in Nevada against one of the largest publishers of online science journals, OMICS Group Inc.

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.