Monthly Archives: August 2016

Let’s be clear about what we mean by (substantive) theory

I’ve had a few discussions recently about how to think about substantive theory. What should we be looking for?

A proposal I like comes from a passing remark by Dixit in Lawlessness and Economics (2004, p. 22; link):

The aim of theory should be to construct a collection of models that is sufficiently small to be remembered and used, and covers a sufficiently large portion of the spectrum of facts.

This is not so different than Clark and Primo’s proposal of theory as map-like working approximations that we use for guidance in addressing particular problems (link). I like their view and it’s one that I endorse when discussing how theory and empirics interact in the recent JOP piece (link; ungated).

Personally, I don’t use the word “model” lightly, and I suspect that Dixit doesn’t either. When I use it I do in fact mean a formal model. An important benefit of a formal model, to me, is its low semantic ambiguity, at least when compared to verbally stated theories. There is nothing more frustrating than debating the internal consistency of a theory when everyone has a different interpretation of the terms. Of course, formalization does not solve the problem of relating the theory back to reality, but then this issue of operationalization is separate.

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EGAP’s funding round on taxation, publicly financed goods, and development

EGAP has just announced a new round of funding for research on taxation and publicly financed goods. You can view the call for expressions of interest here: link. Expressions of interest are due by September 15 (!).

The funding round will be an EGAP “metaketa.” This means that the projects will be aligned in terms of the interventions and outcomes that they study so as to allow for meta-analysis. A recent issue of the American Economic Journal:Applied featured studies from a similar initiative on microcredit: link. Here is a link to EGAP’s explanation of the metaketa approach: link.

Having been involved in the drafting of the request for proposals (RFP), I want to emphasize a few points. The “Focus” section of the RFP indicates,

We aim to fund research on strategies to move citizen-government relations toward responsiveness on the part of government and corresponding tax compliance on the part of citizens. Interventions of particular interest are: the provision of government-funded public goods; the empowerment of citizens vis a vis predatory tax collectors; and/or the strengthening of civil society initiatives that help citizens to comply with tax regulations, while demanding effective and responsive public action. Projects implemented in collaboration with governments and/or civil society organizations are strongly encouraged to apply.

In considering whether to apply, it is okay to use a broad definition of “taxation.” That is, it does not necessarily have to be a study about property or income taxes, say. Usage fees for publicly provided services, for example, could fall within the parameters of the RFP, so long as the proposed research looks into the reciprocal exchange between citizens, who have fee obligations, and public agencies, who have service obligations. The primary interest is in strategies to nudge society-state relations in the virtuous direction of reciprocal exchange on the basis of such obligations.

The RFP also emphasizes research in developing countries, meaning essentially countries that are not high-income by World Bank standards, although this is not a formally specified parameter.

The timeline is rather tight on this, so those applying should have a clear idea of exactly which government agencies or civil society organizations they would be able to work.

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