In today’s edition, we discuss the World Bank’s latest poverty numbers, why you wouldn’t do much better at being poor than the poor themselves, who should be blamed for India’s pollution crisis, whether electricity should be a right, and why women-only police stations were a failed experiment. Also, some brilliant podcasts if you have the COVID vaccine on your mind.
If you have missed any of our earlier editions, you can read them here.
It keeps getting worse
Even as vaccines begin to roll out around the world, here’s a sobering reminder that the crisis is far from over. The World Bank published further revisions to their poverty projections this month: COVID-19 pushed between 119-124 million new people into extreme poverty in 2020.
To underline just how remarkable this is, note that 2020 will be the first time in 20 years that poverty will significantly increase (chart below). The epicentre will lie in South Asia and not Sub Saharan Africa, as projected earlier.
Of course, any calculations around poverty in South Asia need to be caveated by pointing out that nobody knows what India’s poverty numbers really are.
This difference between the world’s extreme poor with and without the pandemic was estimated to be between 88 and 115 million in October 2020, 71-100 million in June, and 40-60 million in April. It isn’t like the Bank doesn’t know what it’s doing—making forecasts in this time of unprecedented uncertainty is just that hard.
What is wrong with them?
Have you ever wondered why the poor behave differently from the way you would if you were in their shoes? Why do they choose fraudulent private clinics over qualified government doctors, why won’t they open or use a simple bank account or why can’t they just show up for their next TB medication? Surely you’d do a far better job at being poor, yes?
Read this insightful article on the behavioural economics of poverty by Eldar Shafir, Sendhil Mullainathan and Marianne Bertrand. Standard policy thinking ignores psychological factors that matter more than we think.
The poor are not perfectly rational (no one is), but they aren’t deliberately deviant either.
The poor have the same weaknesses and biases as you and me—but because poverty leaves little room for error, the consequences for them are that much worse.
Read also about how poverty impedes cognitive function. You’re more likely to make poorer decisions when you’re poor, simply because poverty drains mental bandwidth. (Like how babies give you mommy brain?) There is a two-way relationship between poverty and mental health.
Finally, know that people’s self-worth and self-image interact with poverty. Working with sex workers in Kolkata, researchers found that workshops aimed at reducing their sense of shame led them to make better choices in their health and savings behaviour. This is great policy insight for those looking to make big shifts with a small pool of resources.
Who’s to blame for the air we breathe?
That India is losing lives to its air pollution is hardly news, but perhaps this will make more people sit up and take notice: What does it mean for the economy?
When you lose people, it is no surprise that you lose their working hours and their output. A Lancet study found that thanks to air pollution, India lost 1.36% of its GDP or nearly $37 billion in 2019. The highest losses were recorded by the poorest (lowest per-capita GDP) states—Uttar Pradesh, Bihar, Rajasthan, Madhya Pradesh and Chhattisgarh.
Delhi had the highest per-capita economic loss due to air pollution.
If you’re looking for someone to blame, I suggest you look inwards.
Jemyung Lee, Oliver Taherzadeh and Keiichiro Kanemoto of the Research Institute for Humanity and Nature estimate that high-expenditure or richer households in India are responsible for nearly seven times the carbon emissions than poorer households.
The good news is that if this holds, poverty-alleviating growth in India does not need to be damaging to the environment. But we do need to worry about the rich getting richer.
See also this for a very cool infographic on how Delhi’s air pollution affects people differently. Tracking a day in the lives of two of Delhi’s children, the piece is a gut-punching reminder of the brutal inequality of India’s air pollution crisis. Look this one up—and show it to the kids!
A commodity, not a right
Should access to electricity be a right? Not if you ask Robin Burgess, Michael Greenstone, Nicholas Ryan and Anant Sudarshan. Their study argues that the very belief that “everyone deserves electricity” is why developing countries struggle to give their citizens reliable power supply.
Treating electricity as a right sets off a vicious cycle where everyone begins to believe that they deserve access, whether they pay for it or not.
Theft and non-payment are widely tolerated and soon enough, power companies begin to lose money. They need to ration supply and limit output, and forced blackouts become the order of the day. Eventually, the link between power supply and payment breaks—and for consumers, it makes even less sense to pay for electricity.
If your access to electricity isn’t affected by whether you pay or steal, why bother paying?
To me, this is yet another example of how the state’s inability to implement, enforce and administer cannot be solved by merely declaring something a right. It didn’t work for education and it won’t work for electricity. Go here for an audio summary of the study, here for the full paper and here for a video (and transcript) from a conference that discussed the paper.
Read also this on how residential electrification investments may in fact be premature in the world’s poorest rural communities.
This didn’t work
Nirvikar Jassal finds that setting up all-women police stations in Haryana didn’t quite go according to plan. Instead of any substantive improvements in women’s access to justice, the creation of these “enclaves” of law enforcement allowed male officers to deflect cases of gender-based crimes, increased travel costs for victims seeking redress, and formalised the “counselling” of victims to encourage reconciliation with abusers.
It also reduced responsibilities for policewomen, removing them from “mainstream” police work and preventing them from gaining the same experience as men.
Now, the most interesting bit is this: While there is evidence and more evidence that representation for women in powerful positions can improve service delivery for female citizens and increase their comfort when dealing with the state machinery, Nirvikar’s work points out a very important distinction:
Representation can be designed based on inclusion (e.g. quotas for women in the police force) or through separation (e.g. women-only police stations). He shows that the latter can lead to segregation and not integration of gender issues.
Women-only police stations are a great example of the kind of reform politicians love—they make them look good but don’t have to deal with any of the hard bits.
All you need to know about the vaccines
Finally, you can always count on Tim Harford to give you something fab. Go here for his recommendations of the best podcasts about COVID vaccines, including Planet Money on the economics of emergency vaccination, and a two-part BBC podcast Vaccines, Money and Politics that he calls “a terrific introduction to all the issues”. Highly recommended.
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Contributing Editor, IndiaSpend