Search results for: “”

Context

• The 2019 Nobel Prize in Economic Sciences was awarded to three economists for their pioneering research into the use of experimental approaches to fight global poverty.
• The new Nobel laureates are considered to be instrumental in using randomized controlled trials to test the effectiveness of various policy interventions to alleviate poverty.

Why have Banerjee, Duflo, and Kremer won the Nobel Prize?

• The research conducted by this year’s Laureates has considerably improved our ability to fight global poverty, the Nobel citation says.
• Their new experiment-based approach has transformed development economics.
• In Poor Economics, Banerjee and Duflo bemoaned how the debates on poverty “tend to be fixated on the ‘big questions’: What is the ultimate cause of poverty? How much faith should we place in free markets? Is democracy good for the poor? Does foreign aid have a role to play? And so on”.
• Banerjee, Duflo and Kremer, who have been working together since the mid 1990s, are different in that they do not get stuck with the “big questions”.
• Instead, they break down a problem, study its different aspects, conduct various experiments and, based on such “evidence”, decide what needs to be done.

Randomized Controlled Trial

• A RCT is an experiment that is designed to isolate the influence that a certain intervention or variable has on an outcome or event.
• A social science researcher who wants to find the effect that employing more teachers in schools has on children’s learning outcomes, for instance, can conduct a randomized controlled trial to find the answer.
• The Nobel laureates’ trio applied RCT to the field of economics beginning in the 1990s.
• Kremer first used the technique to study the impact that free meals and books had on learning in Kenyan schools.
• Banerjee and Ms. Duflo later conducted similar experiments in India and further popularized RCTs through their book Poor Economics, published in 2011.

A small testimony

• Esther Duflo, along with Raghav Chattopadhyay, did an outstanding study of India’s decision to reserve some of the leadership of local governments — village panchayats — for women.
• Since the choice of which seats are to be reserved for women is done by lottery in India, since 1993, following a constitutional amendment, this turned out to be a perfect setting for studying how the election of women leaders could affect economic well-being in the locality.
• By studying a massive data set from West Bengal and Rajasthan, they proved that the provision of local public goods, like water supply, improves in statistically significant ways in villages where women are elected to lead.
• Likewise, Michael Kremer’s research, done with Ted Miguel, on what de-worming in schools in Kenya could do for child health and absenteeism of school students was quite remarkable.
• By doing a massive randomised controlled study, they showed that benefits of deworming could be staggering, way beyond the costs of such an intervention.

How does this approach work in practice?

• Breaking down the poverty problem and focussing on the smaller issues such as “how best to fix diarrhoea or dengue” yielded some very surprising results.
• For instance, it is often believed that many poor countries (like India) do not have the resources to adequately provide education, and that this resource crunch is the reason why school-going children do not learn more.
• But their field experiments showed that lack of resources is not the primary problem.
• In fact, studies showed that neither providing more textbooks nor free school meals improved learning outcomes.
• Instead, as was brought out in schools in Mumbai and Vadodara, the biggest problem is that teaching is not sufficiently adapted to the pupils’ needs.
• In other words, providing teaching assistants to the weakest students was a far more effective way of improving education in the short to medium term.
• Similarly, on tackling teacher absenteeism, what worked better was to employ them on short-term contracts (which could be extended if they showed good results) instead of having fewer students per “permanent” teacher, in order to reduce the burden on teachers and incentivise them to teach.

Why is RCT so popular?

• At any point in time, there are multiple factors that work in tandem to influence various social events.
• RCTs allow economists and other social science researchers to isolate the individual impact that a certain factor alone has on the overall event.
• For instance, to measure the impact that hiring more teachers can have on children’s learning, researchers must control for the effect that other factors such as intelligence, nutrition, climate, economic and social status etc., which may also influence learning outcomes to various degrees, have on the final event.
• RCTs promise to overcome this problem through the use of randomly picked samples.

Significance

• Many development economists believe that RCTs can help governments to find, in a thoroughly scientific way, the most potent policy measures that could help end poverty rapidly.
• Research done by Abhijit, Esther and Michael has transformed the way development economics is practised nowadays, not just in United States but the world over.

Criticisms of RCT

• A popular critic of randomized controlled trials is economist Angus Deaton, who won the economics Nobel Prize in 2015.
• He has contended in his works that simply choosing samples for an RCT experiment in a random manner does not really make these samples identical in their many characteristics.
• While two randomly chosen samples might turn out to be similar in some cases, he argued, there are greater chances that most samples are not really similar to each other.
• RCTs are more suited for research in the physical sciences where it may be easier to carry out controlled experiments.
• More fundamentally, RCTs do not guarantee if something that worked in Kerala will work in Bihar, or if something that worked for a small group will also work at scale.
• This Nobel, albeit indirectly, for RCTs will likely stoke this debate again.

References

https://finshots.in/archive/abhijeet-banerjee-nobel-prize/

https://indianexpress.com/article/opinion/columns/abhijit-banerjee-nobel-prize-economics-policy-making-6069266/

https://www.civilsdaily.com/news/explained-randomized-controlled-trial-rct/

Context

• PM Modi and Chinese President Xi Jinping recently held an informal summit in the ancient coastal town of Mamallapuram or Mahabalipuram in Tamil Nadu.
• The two countries convened their first Informal Summit in central China’s Wuhan in April 2018, where they exchanged views on issues of global and bilateral significance.
• Irrespective of the rhetoric of a Wuhan spirit, the relationship is facing difficulties, reflected in a number of disputes between the two countries.

Informal Summits

• Informal Summits act as supplementary exchanges to annual Summits and other formal exchanges such as the G20 Summit, EU-India Summit and the BRICS Summit among others.
• It allows for direct, free and candid exchange of views between countries, something that may not be possible to do through formal bilateral and multilateral meetings that are agenda driven.
• Informal Summits may not take place on a fixed annual or biennial schedule; they are impromptu in the sense that they take place when a need for them is perceived by the concerned nations.

Why do we need such summits?

• Since Informal Summits allow discussion on wide-ranging issues, they are not particularly purpose-specific, and are sometimes considered to play bigger roles in diplomatic dialogue than formal exchanges.
• This is the reason is that they tend to be more in-depth, and relatively flexible in intent and the scope of discussion.
• The “institutionalization” of such Summits would help in strengthening the “strategic communication” between the countries, irrespective of the political party in power.

Why Mamallapuram?

• Mamallapuram was chosen for various reasons — historical, practical, as well as strategic. Mamallapuram was the epicenter of the relations of China with India since ancient times.
• The 2004 Saluvankuppam excavations in Kancheepuram district make it clear that Mamallapuram was a port town even during the Sangam era about 2000 years ago.
• The mighty Pallavas, whose flourishing sea port was Mamallapuram for a long time, had a relationship with China and had even sent envoys there during their rule.
• Available literature shows that the Pallava Kings had a trade and defence relationship with China.
• There was understanding that these kings would help China in keeping a check on the growth of Tibet as a powerful nation during those years.
• Chinese monk Hiuen Tsang visited Kancheepuram in the seventh Century AD and he no doubt reached the ancient port town of Mamallapuram and then continued his journey to the temple town.

Key takeaways of the summit

1) Trade

• China is one of India’s largest trading partners. the bilateral trade between the two nations reached $95.54 billion in 2018, but the trade deficit was at $53 billion in China’s favour.
• During this summit, Modi and Xi reinforced their commitment to improve trade relations.
• This was one of the key agreements of the Wuhan summit. The leaders agreed to a new set up new mechanisms to achieve this goal.

2) Working together on international issues

• India and China have many similar interests at the World Trade Organisation and at the UN.
• Both nations have been under stress because of Trump’s trade war and due to the rising tensions in West Asia.
• If they can come together and effect meaning change to resolve these issues, then other emerging economies will also stand to benefit.
• They agreed that there must be reforms that reflects the new realities of the 21st century.
• They also agreed that rules-based multilateral trading systems must be supported and strengthened.

3) People to people contact

• To celebrate the 70th year of diplomatic relations between the two nations, the year 2020 will be designated as Year of India-China Cultural and People to People Exchanges.
• To celebrate the civilizational ties between the nations, the MEA said that the two leaders have decided to form a ‘Sister-state relationship’ between Tamil Nadu and Fujian Province.
• There is also a proposal to set up an academy to study these links.
• The focus on tourism and contact among the people of both nations will not only boost trade, but it will help in building trust between them.
• Establishing such confidence-building measures can help integrating the people by removing stereotypes.

4) Chennai connect

• Xi said that he was happy with the welcome he received and said that invited Modi for another round of discussion China next year.
• The two leaders also made a commitment to manage differences  in such a way that they would “not allow differences on any issue to become disputes”.
• The ‘Chennai connect’ sets the tone for future discussions.
• Here, the two leaders agreed to set up a new mechanism to have better cooperation in trade and defence.

5) Kashmir issue

• In August, India scrapped Article 370, which gave special status to the state.
• This irked China, which has several interests in the state (they have invested in PoK, and claim a portion of the state).
• They lent their support to their “all-weather friend” Pakistan as it is unlikely to give up on using Pakistan to balance India.
• This issue happened right before the summit, and many believed that India should raise this matter with China.  But it was not even a part of the discussion.
• The lack of Kashmir in the talks also shows that both nations are willing to look beyond, at least at the leadership level.

Xi’s 100-year plan

• Xi Jinping on Saturday declared that Beijing was pursuing an “unshakable policy” of developing close ties with India, and proposed a 100-year plan to cement ties between the two ancient civilizations.
• Xi stressed that “military security exchanges and cooperation” between the two countries must be “earnestly” improved.
• Xi also called for” fair and reasonable” solution to the “boundary problem” that is acceptable to both parties based on “Political Guiding Principles Agreement” agreed to by the two countries in 2005.

Continuing the Wuhan Spirit

• For instance, in Wuhan, both premiers discussed a range of subjects, including the India-China boundary question, bilateral trade and investment, terrorism, economic development and global peace.
• They succeeded in reaching a “broad consensus”.
• China is not the only country with which India has had an Informal Summit.
• The two leaders discussed their countries’ responsibilities towards maintaining global peace and stability, military and nuclear energy cooperation, and the movement towards an equitable world order.

Potential of such informal summits

• At the first Informal Summit between India and China held in Wuhan on April 27-18, 2018, Modi and Xi met “to exchange views on overarching issues of bilateral and global importance.
• It aimed to elaborate their respective visions and priorities for national development in the context of the current and future international situation.
• The Wuhan Summit achieved a “re-set” of the Sino-Indian relationship after the two-month long border standoff at the India-China-Bhutan tri-junction in Doklam.
• Significantly, at Wuhan, the two leaders decided to give “strategic guidance” to their military, so that issues did not escalate as in the case of the Doklam standoff.

Way Forward

• India succeeded in waking up the Chinese to the reality that this new faith-based global terror invoking Jehad, which was emanating from Pakistan, was dangerous for both India and China in the long run.
• The two nations enjoy a ‘deeper strategic communication and effective practical cooperation’.
• In a nutshell, the second informal summit is an advance over Wuhan and has established a bilateral grid that suits the security and economic strategy of India.

References:

https://www.civilsdaily.com/news/explained-modi-xi-informal-summit/

https://www.civilsdaily.com/news/china-backs-wuhan-spirit-despite-differences-on-bri/

https://www.indiatoday.in/news-analysis/story/is-there-hidden-chinese-message-narendra-modi-xi-jinping-meet-nepal-1609198-2019-10-14

https://www.thehindubusinessline.com/news/modi-xi-informal-summit-key-takeaways/article29680297.ece

https://timesofindia.indiatimes.com/blogs/toi-edit-page/modi-xi-summit-chinas-territorial-fetishism-and-why-the-road-from-wuhan-may-peter-out-at-mamallapuram/

https://www.orfonline.org/expert-speak/modi-xi-summit-a-more-balanced-china-policy/

https://www.thequint.com/videos/news-videos/modi-xi-jinping-informal-summit-mahabalipuram-explained