The inadequacy of individual informed consent
This week, an Australian college student noticed how data from Strava, a fitness-tracking app, can be used to discover the locations of military bases. Many outlets covered the news and its implications, including Wired and the Guardian. In the New York Times, Zeynep Tufekci’s editorial was characteristically insightful:
“Data privacy is not like a consumer good, where you click ‘I accept’ and all is well. Data privacy is more like air quality or safe drinking water, a public good that cannot be effectively regulated by trusting in the wisdom of millions of individual choices. A more collective response is needed.”
Samson Esayas considers the collective nature of data privacy from a legal perspective:
"This article applies lessons from the concept of ‘emergent properties’ in systems thinking to data privacy law. This concept, rooted in the Aristotelian dictum ‘the whole is more than the sum of its parts’, where the ‘whole’ represents the ‘emergent property’, allows systems engineers to look beyond the properties of individual components of a system and understand the system as a single complex... Informed by the discussion about emergent property, the article calls for a holistic approach with enhanced responsibility for certain actors based on the totality of the processing activities and data aggregation practices."
- A Twitter note on Strava from Sean Brooks: “So who at Strava was supposed to foresee this? Whose job was it to prevent this? Answer is almost certainly no one…I’ve always hated the ‘data is the new oil’ metaphor, but here it seems disturbingly accurate. And ironically, organizations with something to hide (military, IC, corporate R&D) have the resource curse. They want to benefit from the extraction, but they also have the most to lose.” Link.
- We mentioned Glen Weyl last week as a noteworthy economist engaging with ethical issues (see Beatrice Cherrier’s Twitter thread). A speculative paper he co-wrote on "data as labor" imagines a world in which companies paid users for their data. (We find the framing "data as labor" slightly misleading—Weyl's larger point seems to be about data as assets—the product of labor.) Link. ht Chris Kanich for bringing the two threads together on Twitter.
- This Economist article also covers Weyl's paper: “Still, the paper contains essential insights which should frame discussion of data’s role in the economy. One concerns the imbalance of power in the market for data. That stems partly from concentration among big internet firms. But it is also because, though data may be extremely valuable in aggregate, an individual’s personal data typically are not.” Link.
- A potentially exciting aspect of the GDPR is the right to data portability: "A free portability of personal data from one controller to another can be a strong tool for data subjects in order to foster competition of digital services and interoperability of platforms and in order to enhance controllership of individuals on their own data." Link.
"Up until now, there's been no shortage of discussion about individual rights around data: privacy, the 'right to be forgotten,' and ownership. But Esayas, Brooks, and Tufekci are latching onto an aspect of data ethics that's only beginning to be explored. Individual-level data—collected and processed by governments, interest groups, and companies like Strava—enables the discovery of information that goes far beyond the contents of any individual's personal data; in many machine-learning contexts, that's the whole point. Information that’s inconsequential at the individual level may be momentous when aggregated. As a result, individual-level consent (and rights-based constraints more broadly) may be an inadequate safeguard for the use of data at scale.
"Interestingly, this problem would in fact be exacerbated by suggestions (a la Weyl) to treat individual data as an individual asset. If individuals have a financial incentive to release data, this sets up a classic collective-action problem: the rational choice for each individual (release data they don't care about in exchange for money) may lead to a socially suboptimal result."
GREASE AND SAND
Is corruption an impediment to development?
“Corruption was characteristic of everything that was in place until the end of the nineteenth century.… There was a lot of misuse of state money and it worked as a way to make political alliances, although it was seen as illegal and morally wrong.”
From a thread (in Portuguese) by THIAGO KRAUSE, bemoaning “platitudes” about corruption hampering development.
- Krause cites several general interest histories to support his position: a study on anti-corruption efforts from antiquity to the modern era; on America during Reconstruction and the Gilded Age; and on state formation in 18th century Britain. (Link, link, link.) From the latter: “Corrupt payments advanced the public service, and thus… ‘corruption’ was as much a dispute over ends as means.”
- Extending this argument to present international development context, in a post from 2012, Chris Blattman calls the focus on corruption an “Anglo-American fetish… far out of proportion to its impact on poverty alleviation and economic growth.” Link. (Acemoglu and Robinson offer accompanying thoughts on this angle.)
- Relatedly, two papers on the connection between the Perceived Corruption Index and international investment. Link, link. ht Sidhya
- A 2010 paper examines the relationship between economic development and institution building, looking at “state capability traps” and the “techniques of failure” in global development schema. Link. Along similar lines, a 2015 study on corruption and democracy makes the claim: “Income is key.” Link.
- Branko Milanovic, in a post on the FIFA corruption scandal, offers a two-item menu: “dirty devolution of power or (seemingly) clean oligarchy.” Link.
- A review of studies on corruption finds neither grease nor sand. Link. Ricardo Hausmann does a similar overview, finding that "if the control of corruption does not deliver a more effective government, it is likely to be bad for growth.” Link.
- A book that takes up Douglas North’s work favors a long theory of change and the coevolution of institutions and development. Link. (An interview with one of its authors here.) And a new book, referenced in the above Twitter conversation, applies a coevolutionary approach to the history of development in China. Link.
State legistlative power may not impact well-being at all
“…Do political coalitions actually have the power to influence the performance metrics used for retrospection on the timeline introduced by elections? In this paper, we use difference-in-difference and regression discontinuity techniques to explore whether states governed by Democrats or those governed by Republicans offer better returns on economic, education, crime, family, social, environmental, and health outcomes on the timeline introduced by elections. We find that states controlled by Democrats perform equally to states controlled by Republicans. Our results suggest that voters may struggle to truly hold government coalitions accountable, as objective performance metrics appear to be largely out of the immediate control of political parties.”
Working paper by JOHN HOLBEIN and ADAM DYNES here.
- Holbein explains key findings on Twitter here, and writes: “If one is troubled by citizens’ voting decisions seemingly being influenced by sporting outcomes, the weather, shark attacks, or other ‘irrelevant’ factors, then they should probably also be concerned about citizens voting on the economy.”
- “There is really only one meaningful conclusion: we have no idea how many jobs will actually be lost to the march of technological progress.” Link. ht Lauren
- In a follow-up to a post we linked to last week, an exchange between Dani Rodrik and Peter Hall on the distinction between ideas and interests. Link.
- A new paper on the declining large firm wage premium, written up at the Institute for New Economic Thinking. Link. ht Anki
- In synchronicity with Sean Brook’s tweets above, Nicolas Berggruen also uses an oil analogy in his editorial about using the blockchain for universal basic capital: “Digital wealth can be thought of as the oil of the 21stcentury — except now it is possible to generate this wealth everywhere, not just where the minerals happen to be underground.” Link. ht Bobby
- A related 2017 longread from Nick Szabo: “Without institutional and technological innovations of the past, participation in shared human endeavors would usually be limited to at most about 150 people – the famous “Dunbar number”. In the Internet era, new innovations continue to scale our social capabilities. In this article I will discuss how blockchains, and in particular public blockchains that implement cryptocurrencies, increase social scalability, even at a dreadful reduction in computational efficiency and scalability.” Link. ht Lauren
- “This study provides the first experimental evidence of a positive effect of online civility on social trust. While exposure to civil online interaction induced a significant increase in people’s trust, the opposite condition, i.e. online incivility, seemed to be considered ‘business as usual’ and thus did not produce any effect on trust, with respect to the control treatment.” Link.
- Using artificial intelligence to decipher one of the world’s most mysterious manuscripts. Link.
- Just for fun: A 53-second video of Milton Friedman predicting cryptocurrency. Link.