This week we featured research on industrial policy, AI, migration and more!
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In this week’s episode of Ideas in Development, we were joined by Umar Saif, a computer scientist by training, former minister of Science and Technology, and IT, in Pakistan. We discussed what he learned from his time in government, why the rush towards sovereign AI capacity may be a costly distraction, his worries for the future, and where he is optimistic.
And this week on VoxDevTalks, Diego Veracossio discusses the findings from a recent report on the rapid shift from cash to digital payments across Latin America and the Caribbean. He explains how digital transactions have surged, what this means for individuals and firms, and the lessons policymakers elsewhere can draw.
Reda Cherif and Fuad Hasanov distil three key principles of successful industrial policy of the ‘Asian Miracles’ – a group of countries that within a short time reached high-income status: (1) fostering sophisticated sectors, (2) pushing firms to innovate early, compete domestically, and export, and (3) ensuring accountability for public support received. A common institutional setup these countries adopted supported policy implementation and continuity.
Generative AI is reshaping education, but whether it strengthens learning or undermines it may depend on how it is used. In a randomised controlled trial in nine public secondary schools in Edo State, Nigeria, Martín De Simone and Federico Tiberti tested a six-week after-school programme where students worked in pairs using GPT-4 under teacher supervision and with prompts designed to promote reasoning rather than shortcuts. Students offered the programme achieved large learning gains in English and also performed better on end-of-year exams, suggesting that LLMs can deliver tutoring-like benefits at scale – if embedded in structured routines with clear pedagogical guardrails, active facilitation, and monitoring to prevent over-reliance.
In a recent field experiment in Guinea, Giacomo Battiston, Lucia Corno, and Eliana La Ferrara examine whether providing accurate information about migration risks and outcomes can influence young people’s beliefs and migration choices. Their findings suggest that information, particularly about the risks of the journey, can reduce the intention to migrate and risky migration. Importantly, it does so by discouraging irregular migration, not migration overall.
In Mexico, Sara Castellanos, Diego Jiménez-Hernández, Aprajit Mahajan, Eduardo Alcaraz Prous, and Enrique Seira worked with one of the largest banks to analyse a nationwide randomised experiment, conducted between 2007 and 2009. They find that job loss and employment instability – rather than high interest rates or minimum payment rules – are more important drivers of credit card default among new borrowers, suggesting that social protection may be more effective than contract regulation in promoting financial stability.
In Pakistan, Oriana Bandiera, Amen Jalal, and Nina Roussille find that encouraging women to apply for jobs immediately after graduation significantly improves their likelihood of working by enabling them to enter the labour market before marriage pressures intensify. Results are driven by the women who misperceive how quickly these constraints will limit their employment opportunities.
Frontier markets have significant potential for future growth and job creation, due to their large and rapidly growing populations, improving human capital, and increasing integration into international financial markets. However, their economic performance over the past 25 years has been uneven. Realising their potential will depend on carefully advancing financial development and integration, bolstering macroeconomic stability, and catalysing investment and productivity growth. Tommy Chrimes and Rafaela Martinho Henriques discuss.
In Lesotho, Jan-Walter De Neve, Ramaele Moshoeshoe, and Jacob Bor show that starting primary school at older ages has large and lasting effects – not only on education, but on occupation, family formation, HIV infection among men, and the survival of the next generation. They suggest three potential mechanisms for these large effects: more time in preschool, faster skill growth, and higher opportunity costs and dropout.
On the blog:
- Managing Editor Oliver Hanney provides an update on the latest AI-related thinking and research that is relevant to low- and middle-income countries.
- Interested in research on gender but don’t know where get started? Deputy Managing Editor Emaan Siddique outlines 36 insights on the challenges faced by women across 18 developing countries.
And elsewhere in development, there was a lot to read:
- A great new comprehensive review by Ana Margarida Fernandes and Tristan Reed: Industrial Policy for Development: Approaches in the 21st Century.
- Karthik Tadepalli on how Taiwan implemented one of the most successful industrial policy programs of all time.
- From field experiments to policy interventions at scale: Imran Rasul
- Daniel Björkegren, Andrew Bredenkamp and Han Sheng Chia outline their Roadmap for AI That Speaks the World’s Languages.
- Paul Goldsmith-Pinkham on research in the AI age.
- Mushfiq Mobarak on the Consequences of the Iran War for the Developing World.
- Ken Opalo on a similar theme: African policymakers should be clear-eyed about the short and medium term impacts of the U.S./Israel-Iran war.
- Noam Angrist, Penny Morton, Andrew Leigh, Filemon Ray Javier and Eleanor Williams on the science of scale: what works to implement effective education programs?
- Frontier Graph is a cool new project by Prashant Garg which organises open questions in economics.
- And Marcos Vera Hernández has this nice blog: ¿Cómo podemos hacer que la investigación en economía tenga impacto en las políticas públicas?