kitchen table math, the sequel: transparency

Friday, February 20, 2009


from The White Man's Burden by William Easterly:
Other evidence on what works has come from cross-country comparisons of country practices and certain outcomes.... James Barth of Auburn, Gerard Caprio of Williams College, and Ross Levine of Brown University found a strong association between banking regulations that force banks to disclose accurate, timely, comparable information on their finances and the level of banking development in a country. They controlled for possible reverse causality and found that the result still held. Contrary to the widespread view that tough official bank supervision is needed to protect savers from rogue banks, they found a negative relationship between powers of bank supervisors and development of a healthy banking industry (also controlling for possible reverse causality). If you want to promote healthy banking, which is an ingredient in enabling the poor to help themselves through credit, then these statistical associations point you in the direction of regulating information disclosure rather than having powerful official bank supervisors.

p. 375

I'm keen to know what effects real transparency would have on public education (if any).

Suppose parents knew exactly where their kids stood in relation to their peers in Europe and Asia.

Would that make folks less inclined to take no for an answer?

The fact that ed schools never, ever call a spade a spade tells me they fear the answer to that question is 'yes.'

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