Foreign Policy’s Think Tank Index is Flawed

Foreign Policy magazine just put out a ranking of the world’s think tanks.   The methodology that FP used was a survey of “hundreds of scholars and experts.”

The problem with this type of ranking is that it is more of a popularity measure than a measure of resource efficiency.  A think tank with a lot of money is going to do a lot of work, some of it presumably of high quality and some that will in turn have impact on its agenda.  But how do we determine which of these institutions is good at using resources to turn them into influence?  David Roodman of the 15th-ranked Center for Global Development points out that if the rankings were based on productivity, his outfit would do even better.

So are the higher ranked outfits more productive or is it just name recognition?

Using the data from Foreign Policy I created a scatterplot with the Y-axis as the rank and the X-axis as the last annual budget in millions.  IF (big IF!) we accept that the survey of the experts is a legitimate way of ranking policy impact AND that the difference in impact between each rank is linear, then we can measure resource efficiency in generating impact.

In this first scatterplot we include RAND which has a huge budget.

The graph outlines that bigger budgets bring you a higher rank.  The trendline is negative because a higher rank is actually a lower number (e.g. the highest rank is 1, the lowest 15.)  Relative to RAND, places like Brookings, Carnegie, and CFR look pretty resource efficient in that they get significant acclaim at a much lower cost.  Unfortunately, the linear regression has a terrible fit (low R-squared) and annual budget is a statistically insignificant coefficient.  The bottom line is that RAND is such a quirky and important outlier, that you can’t really say the comparison yields any reliable insight.

If we exclude RAND given its unique military ties and projects, we get a much more insightful outcome to the linear regression.

While the equation does not explain a majority of the differences in how the think tanks were ranked, it has much higher r-squared and the annual budget coefficient is statistically significant (p-value of 0.01 through Excel.)  Without RAND, Brookings and most of the think tanks exhibit similar resource efficiency.  The bigger their budgets, the higher their rank.  Thus, they are all mostly equally efficient at translating monetary resources into a good ranking.  Carnegie stands out as having a very high ranking at a noticeably lower cost.  On the other extreme, the National Bureau of Economic Research and Human Rights Watch appear inefficient.  Ro0dman’s CGD is about where you’d expect given the data set.

There are obviously MANY MANY flaws to this way of analyzing efficiency. My intent is to demonstrate how to think about efficiency in the social sector and particularly in the policy advocacy space.  I agree with Roodman that we need to take productivity into account when ranking think tanks and also agree that we need to start prototyping approaches to figuring that out.

Municipal Executives are not always turned up to 11

This piece in the Atlantic speaks to the perils of our type of Executive Branch and offers some incremental reforms.  Yglesias says something wise:

The American public and political class are both strangely complacent about institutional issues. There’s a tendency to become really unhappy about political outcomes and processes, but to give almost no thought to the idea that changing the rules that govern our institutions might be a potent way to relieve this unhappiness. Instead, we believe that a change of personnel will eliminate our unease—that George W. Bush will “change the tone” or Barack Obama will restore hope. Obviously, it really does matter a great deal who occupies our public offices. But on another level, if you want to change things you do need to look at the system in which people are operating.

Interestingly, at the municipal level you do see some experimentation with strong city councils, city managers, and the stripping of certain duties out of the executive.  Sometimes this is really bad for communities in that it creates gridlock.  But at least there is a willingness to experiment.  Some local charters – like the one in New Haven – actuall have a self-examination clause that force the local community to go through a process of re-adopting the charter.  Obviously, this makes it less political to suggest changes.  If the Founding Fathers had put such a clause in the original document, it might seem un-patriotic to not wonder out loud how to make the framework better.

I am optimistic that Americans can become more open to optimizing the federal level, but I am not sure of where the policy entrepreneurs that will advocate that will come from.

Obama 1, Krugman 1, Effective Stimulus 0

Krugman says that the stimulus is not big enough and provides the numbers. He scores.

Obama says he needs specifics from Krugman of how to make it bigger, not just abstraction. He scores.

Krugman says he doesn’t have enough staff to figure out the specifics.

A stimulus package that can get the job done remains undefined.

Obama Recession Debunked

Yesterday, CNBC had a front page blog post claiming an Obama victory would cut the price of oil $40 a barrel. No substantive model or explanation was offered. Today, they feature a post by a Kudlowite claiming that the market is – get this – tumbling because of Obama’s anticipated victory. This gentleman also claims that the market turmoil is not tied to the credit crunch and that there is no recession.

As “evidence,” he offers the following chart:

I don’t know about you, but my optometrist doesn’t offer lenses that give me the mutant power to interpret busy images with insightful certainty or to directly communicate with electronic databases through the pores of my skin. All I see is are a bunch of lines going up and down – sometimes at the same time, sometimes not. Maybe this guy is secretly Forge.

But since he is probably not, I took it upon myself to actually see if daily shifts in McCain’s Intrade share value track with changes in the Dow Jones. I looked at the the past year from today’s market close. I didn’t choose the DJI – the Forge wannabe did – I would have gone S&P, but whatever. When we actually run this, we find out that the market doesn’t seem to care whatsoever about how McCain is doing on Intrade. It doesn’t wake up to trade depending on whether McCain is up or down. He’s no oil futures. He’s just noise.

It’s better to be ahead

Yglesias posits that Gallup is being scurrilous. And my quick little linear regression indicates that indeed they are. I look at the July polling margin and the actual margin for the popular vote victor in the past fifteen elections.

The low r-square value indicates that the July poll is not the greatest explainer of variation. But the p-value on the regression is statistically significant (0.02) so the direction of the equation (positive) is in all likelihood correct, though the stats nerds will rightfully crucify the small sample size.

Bottom line: it’s better to be ahead in July, but not all that great unless you have a commanding lead.

Obama win cuts oil risk $40!=how we got into this mess.

This FRONT PAGE post on CNBC argues that oil will go down $40 a barrel if Obama wins because of the political risk premium currently being placed on oil due to Israel-Iran tension. But does the article provide any explanation of where this number came from? No. It just outlines how Obama’s soothing rhetoric might undermine the case for risk being priced in. But why not $25 or $100 for that matter? The $40 dollar figure makes appearances all the time…BUT SHOW ME THE MODEL! Is it really as simple as price divergence between oil quotes in dollars and other currencies? If a person is motivated enough to read an economists blog post on CNBC about geopolitics’ impact on oil prices, they probably can handle a cursory explanation of the model that got you to $40.

In general, I think we are all experiencing an explosion in content but it is getting harder to get insight. Models are not always explained. We can quickly access a lot of opinions through the internet, but we don’t always see through to the building blocks of those opinions. I hate surrendering my judgment by not being able to see the building blocks. And you have to wonder if seemingly unrelated messes like sub-prime and global warming aren’t being compounded by the fact that cotidian use of web-based information is habitualizing us as information aggregators of topline insight. “Hey, if the ratings agencies say its good, how bad could these mortgages be?” or “Well, some nerds say warming is happening, some say it isn’t? Who to believe?” seems eerily familiar to the personal decision-making that people make in this era of the internet search.

Ponch! How Could You?!?

Erik Estrada, the actor known as “Ponch” from the TV show CHiPs, has endorsed John McCain. I loved both the show and the character as a kid. Though for some reason the show left this impression that California had an unusually warm climate, which I found out is not the case once I visited as a teen. Darn, I wish we had Ponch on the Obama side.

Apparently, Mr. Estrada is now a full-time law enforcement official. That only makes me want him on our side more. Obviously, you can’t reduce a person’s political preferences to their line of work. But I would think a law enforcement professional would prefer the party with a track-record of supporting law enforcement where it counts: the COPS grant, youth development spending, support of public unions, and correctional reform. Hmmm.

Por Fin! Obama and Latino Dems

Democratic Hispanics have tipped for Obama in the latest Gallup Poll, per Ambinder’s find. Por Fin!

A lot of my facebook “friends” kept prodding me about Latino support for Obama during the Texas Democratic primary and caucus. “What’s up with your peeps? They are going to ruin the election for Barack,” was a common joke (Ha! Ha ! So funny.) I know some of my other Mexican-American friends also got this prod.

The immigrant kids were particularly quick on the critical draw. You see, given that Obama is sort of like a Rorschach test, immigrant kids I run with tend to appropriate him as the son of an immigrant that also just happens to be black. Younger brown kids tend to be less into the construct of race. And we often lack Anglo names. So you can see the affinity. In any event, I tried my best to serve as my ethnic group’s ambassador to the rest of my Obama-supporting peers. “Hey, I’m phone banking folks, what are you doing!?” and “My mom’s for Obama,” I would defensively say.

On election night older Tejanos still went for Clinton big time, but the numbers improved (a little bit) amongst the young. At my precinct caucus, there were plenty of Latino votes and we even picked a Latina as one of our delegates to the state convention. I knew that there wasn’t some big problem. The reality was that a lot of Texas Latinos (especially political leaders) had very fond memories of the Clintons based on their very real actions and policies in support of the community. If Obama won I was confident that his policies, Latino surrogates, and immigrant ethos could keep cementing the solid margin Democrats have been winning amongst Latinos. But I worried that maybe there was some structural problem I couldn’t discern.

This latest data point is encouraging. Si se puede, y’all!

Will the voters step in after PA?

It’s almost time for the people of Pennsylvania to deliver a dramatic…whimper. The process has probably been very exciting for the voters and local activists in that state. As a Texan, I loved our moment in the presidential sun. And I think that the tightness of our primary popular vote and delegate win for Obama did give the junior Senator from Illinois some superdelegate momentum . But it seems that the long interval before Pennsylvania’s election and the lack of novelty to Obama’s consistent gap-closing seem to have rendered the primary a bit less dramatic and not as informative about substance.

Statewide tracking polls keep getting mentioned. New data is always treated as news, but really, is there any news there? At this point the new polls only matter if the Clinton leads are humungous enough to impact Obama’s popular vote lead. They are not. Everybody that’s paying attention knows it’s about the delegates. And as this CQ analysis points out, it presently looks like Sen. Clinton will net three more delegates.

So let’s get ready for another round of Wolfson saying that Pennsylvania really, really counts. The Obama people will point to the national scoreboard (again.) Everyone will talk about the low mathematical probability of Clinton winning but why it makes sense for her to stay.

But I am starting to think that Democratic voters themselves want to get to the main event. This PPP analysis highlights the significant number of North Carolina voters that might be looking to provide a decisive victory in order to end the primary. We might start seeing Obama surrogates start to more aggressively use this argument, especially if there is a strong North Carolina Obama win where this theme emanates from the voters themselves.

Our elitist media gladiators are entertaining us into decline

The focus on Sen. Obama’s lifting of Thomas Frank has felt like a return to the surreal nature of political coverage in the 2004 election season. So much of that year was caricature, psycho-babble and regurgitation of press releases/conference calls instead of journalism.

Sure, we need better media organizations, better media entrepreneurs, better media models, a better press corps and so on. That’s all well and good and I am for it, but seeing this spectacle has made me wonder whether the problem is not Obama’s elitism but actual media elites and their culture. The media has been reifying the elitism they are critiquing by talking incessantly about “small town blue-collar” people without featuring their actual voices. Having some Senator or Pat Buchanan or Karl Rove (or whomever) be a segment or print story’s voice of that group’s standpoint is ridiculous and utterly elitist itself. I guess they need people with titles to convey a sense of authority, but when the matter is “small town blue-collar” authenticity, doesn’t it follow that getting some actual people might be in order to report with factual authority?

And so we don’t get information that builds empathy and social solidarity because we don’t see real people. We get professional political gladiators churning out entertainment where the crowd-pleasing gore comes from passing judgment on others. I admit that sometimes I enjoy rooting for my side and awaiting the thumbs down of conventional media wisdom to devastate those I dislike. It just seems we all should have learned our lesson of what governance outcomes the stroking of such emotionally pleasing polarization produces. Our media leaders should have learned a stewardship lesson. Hopefully, this is just a momentary indulgence.