Tirole on Open Source

Jean Tirole is the latest recipient of the Nobel prize in economics, as was announced Monday. For more background on his work, see NPR and the New Yorker. My favorite portion of Tirole’s work (and, admittedly, pretty much the only part I’ve read) is his work on open source software communities. Much of this is joint work with Josh Lerner. Below I share a few selections from his work that indicate the general theme.

open_sourceThere are two main economic puzzles to open source software. First, why would highly skilled workers who earn a substantial hourly wage contribute their time to developing a product they won’t directly sell (and how do they convince their employers, in some cases, to support this)? Second, given the scale of these projects, how do they self-govern to set priorities and direct effort?

The answer to the first question is a combination of personal reputation and the ability to develop complementary software (Lerner and Tirole, 2002, p. 215-217). Most software work is “closed source,” meaning others can see the finished product but not the underlying code. For software developers, having your code out in the open gives others (especially potential collaborators or employers) the chance to assess your abilities. This is important to ensure career mobility. Open source software is also a complement to personal or professional projects. When there are components that are common across many projects, such as an operating system (Linux) or web framework (Rails), it makes sense for many programmers to contribute their effort to build a better mousetrap. This shared component can then improve everyone’s future projects by saving them time or effort. The collaboration of many developers also helps to identify bugs that may not have been caught by any single individual. Some of Tirole’s earlier work on collective reputations is closely related, as their appears to be an “alumni effect” for developers who participated in successful projects.

Tirole and Lerner’s answer to the second question revolves around leadership. Leaders are often the founders of or early participants in the open software project. Their skills and early membership status instill trust. As the authors put it, other programmers “must believe that the leader’s objectives are sufficiently congruent with theirs and not polluted by ego-driven, commercial, or political biases. In the end, the leader’s recommendations are only meant to convey her information to the community of participants.” (Lerner and Tirole, 2002, p. 222) This relates to some of Tirole’s other work, with Roland Benabou, on informal laws and social norms.

Again, this is only a small portion of Tirole’s work, but I find it fascinating. There’s more on open source governance in the archives. This post on reputation in hacker culture or this one on the Ruby community are good places to start.

What Really Happened to Nigeria’s Economy?

You may have heard the news that the size Nigeria’s economy now stands at nearly $500 billion. Taken at face value (as many commenters have seemed all to happy to do) this means that the West African state “overtook” South Africa’s economy, which was roughly $384 billion in 2012. Nigeria’s reported GDP for that year was $262 billion, meaning it roughly doubled in a year.

How did this “growth” happen? As Bloomberg reported:

On paper, the size of the economy expanded by more than three-quarters to an estimated 80 trillion naira ($488 billion) for 2013, Yemi Kale, head of the National Bureau of Statistics, said at a news conference yesterday to release the data in the capital, Abuja….

The NBS recalculated the value of GDP based on production patterns in 2010, increasing the number of industries it measures to 46 from 33 and giving greater weighting to sectors such as telecommunications and financial services.

The actual change appears to be due almost entirely to Nigeria including figures in GDP calculation that had been excluded previously. There is nothing wrong with this, per se, but it makes comparisons completely unrealistic. This would be like measuring your height in bare feet for years, then doing it while wearing platform shoes. Your reported height would look quite different, without any real growth taking place. Similar complications arise when comparing Nigeria’s new figures to other countries’, when the others have not changed their methodology.

Nigeria’s recalculation adds another layer of complexity to the problems plaguing African development statistics. Lack of transparency (not to mention accuracy) in reporting economic activity makes decisions about foreign aid and favorable loans more difficult. For more information on these problems, see this post discussing Morten Jerven’s book Poor NumbersIf you would like to know more about GDP and other economic summaries, and how they shape our world, I would recommend Macroeconomic Patterns and Stories (somewhat technical), The Leading Indicators, and GDP: A Brief but Affectionate History.

Schneier on Data and Power

Data and Power is the tentative title of a new book, forthcoming from Bruce Schneier. Here’s more from the post describing the topic of the book:

Corporations are collecting vast dossiers on our activities on- and off-line — initially to personalize marketing efforts, but increasingly to control their customer relationships. Governments are using surveillance, censorship, and propaganda — both to protect us from harm and to protect their own power. Distributed groups — socially motivated hackers, political dissidents, criminals, communities of interest — are using the Internet to both organize and effect change. And we as individuals are becoming both more powerful and less powerful. We can’t evade surveillance, but we can post videos of police atrocities online, bypassing censors and informing the world. How long we’ll still have those capabilities is unclear….

There’s a fundamental trade-off we need to make as society. Our data is enormously valuable in aggregate, yet it’s incredibly personal. The powerful will continue to demand aggregate data, yet we have to protect its intimate details. Balancing those two conflicting values is difficult, whether it’s medical data, location data, Internet search data, or telephone metadata. But balancing them is what society needs to do, and is almost certainly the fundamental issue of the Information Age.

There’s more at the link, including several other potential titles. The topic will likely interest many readers of this blog. It will likely build on his ideas of inequality and online feudalism, discussed here.

“The Impact of Leadership Removal on Mexican Drug Trafficking Organizations”

That’s the title of a new article, now online at the Journal of Quantitative Criminology. Thanks to fellow grad students Cassy Dorff and Shahryar Minhas for their feedback. Thanks also to mentors at the University of Houston (Jim Granato, Ryan Kennedy) and Duke University (Michael D. Ward, Scott de Marchi, Guillermo Trejo) for thoughtful comments. The anonymous reviewers at JQC and elsewhere were also a big help.

Here is the abstract:

Objectives

Has the Mexican government’s policy of removing drug-trafficking organization (DTO) leaders reduced or increased violence? In the first 4 years of the Calderón administration, over 34,000 drug-related murders were committed. In response, the Mexican government captured or killed 25 DTO leaders. This study analyzes changes in violence (drug-related murders) that followed those leadership removals.

Methods

The analysis consists of cross-sectional time-series negative binomial modeling of 49 months of murder counts in 32 Mexican states (including the federal district).

Results

Leadership removals are generally followed by increases in drug-related murders. A DTO’s home state experiences more subsequent violence than the state where the leader was removed. Killing leaders is associated with more violence than capturing them. However, removing leaders for whom a $30m peso bounty was offered is associated with a smaller increase than other removals.

Conclusion

DTO leadership removals in Mexico were associated with an estimated 415 additional deaths during the first 4 years of the Calderón administration. Reforming Mexican law enforcement and improving career prospects for young men are more promising counter-narcotics strategies. Further research is needed to analyze how the rank of leaders mediates the effect of their removal.

I didn’t shell out $3,000 for open access, so the article is behind a paywall. If you’d like a draft of the manuscript just email me.

Mexico Update Following Joaquin Guzmán’s Capture

As you probably know by now, the Sinaloa cartel’s leader Joaquin Guzmán was captured in Mexico last Saturday. How will violence in Mexico shift following Guzman’s removal?

(Alfredo Estrella/AFP/Getty Images)

(Alfredo Estrella/AFP/Getty Images)

I take up this question in an article forthcoming in the Journal of Quantitative Criminology. According to that research (which used negative binomial modeling on a cross-sectional time series of Mexican states from 2006 to 2010), DTO leadership removals in Mexico are generally followed by increased violence. However, capturing leaders is associated with less violence than killing them. The removal of leaders for whom a 30 million peso bounty (the highest in my dataset, which generally identified high-level leaders) been offered is also associated with less violence. The reward for Guzmán’s capture was higher than any other contemporary DTO leader: 87 million pesos. Given that Guzmán was a top-level leader and was arrested rather than killed, I would not expect a significant uptick in violence (in the next 6 months) due to his removal. This follows President Pena Nieto’s goal of reducing DTO violence.

My paper was in progress for a while, so the data is a few years old. Fortunately Brian Phillips has also taken up this question using additional data and similar methods, and his results largely corroborate mine:

Many governments kill or capture leaders of violent groups, but research on consequences of this strategy shows mixed results. Additionally, most studies have focused on political groups such as terrorists, ignoring criminal organizations – even though they can represent serious threats to security. This paper presents an argument for how criminal groups differ from political groups, and uses the framework to explain how decapitation should affect criminal groups in particular. Decapitation should weaken organizations, producing a short-term decrease in violence in the target’s territory. However, as groups fragment and newer groups emerge to address market demands, violence is likely to increase in the longer term. Hypotheses are tested with original data on Mexican drug-trafficking organizations (DTOs), 2006-2012, and results generally support the argument. The kingpin strategy is associated with a reduction of violence in the short term, but an increase in violence in the longer term. The reduction in violence is only associated with leaders arrested, not those killed.

A draft of the full paper is here.

Constitutional Forks Revisited

Around this time last year, we discussed the idea of a constitutional “fork” that occurred with the founding of the Confederate States of America. That post briefly explains how forks work in open source software and how the Confederates used the US Constitution as the basis for their own, with deliberate and meaningful differences. Putting the two documents on Github allowed us to compare their differences visually and confirm our suspicions that many of them were related to issues of states’ rights and slavery.

Caleb McDaniel, a historian at Rice who undoubtedly has a much deeper and more thorough knowledge of the period, conducted a similar exercise and also posted his results on Github. He was faced with similar decisions of where to obtain the source text and which differences to retain as meaningful (for example, he left in section numbers where I did not). My method identifies 130 additions and 119 deletions when transitioning between the USA and CSA constitutions, whereas the stats for Caleb’s repo show 382 additions and 370 deletions.

What should we draw from these projects? In Caleb’s words:

My decisions make this project an interpretive act. You are welcome to inspect the changes more closely by looking at the commit histories for the individual Constitution files, which show the initial text as I got it from Avalon as well as the changes that I made.

You can take a look at both projects and conduct a difference-in-differences exploration of your own. More generally, these projects show the need for tools to visualize textual analyses, as well as the power of technology to enhance understanding of historical and political acts. Caleb’s readme file has great resources for learning more about this topic including the conversation that led him to this project, a New York Times interactive feature on the topic, and more.

Github for Government

What happens when you combine open source software, open data, and open government? For the city of Munich, the switch to open source software has been a big success:

In one of the premier open source software deployments in Europe, the city migrated from Windows NT to LiMux, its own Linux distribution. LiMux incorporates a fully open source desktop infrastructure. The city also decided to use the Open Document Format (ODF) as a standard, instead of proprietary options.

As of November last year, the city saved more than €11.7 million because of the switch. More recent figures were not immediately available, but cost savings were not the only goal of the operation. It was also done to be less dependent on manufacturers, product cycles and proprietary OSes, the council said.

We’ve talked before about how more city governments could follow the open data, open government initiatives of NYC, using tech to benefit citizens rather than (only) creating initiatives to attract tech companies to the area. This shift in emphasis, toward harnessing the power of technology for widespread gains in happiness, is likely to become even more important following recent protests against tech employees in the Bay Area.

Open data and open government will take the principles of open source and use them to make an even bigger social and political impact. One tool from open source that can be adapted for use by these newer movements is Github. We will continue to follow these trends here, and if you are interested in this trend you can also check out Github and Government for more success stories.

What Can We Learn from Games?

ImageThis holiday season I enjoyed giving, receiving, and playing several new card and board games with friends and family. These included classics such as cribbage, strategy games like Dominion and Power Grid, and the whimsical Munchkin.

Can video and board games teach us more than just strategy? What if games could teach us not to be better thinkers, but just to be… better? A while ago we discussed how monopoly was originally designed as a learning experience to promote cooperation. Lately I have learned of two other such games in a growing genre and wanted to share them here.

The first is Depression Quest by Zoe Quinn (via Jeff Atwood):

Depression Quest is an interactive fiction game where you play as someone living with depression. You are given a series of everyday life events and have to attempt to manage your illness, relationships, job, and possible treatment. This game aims to show other sufferers of depression that they are not alone in their feelings, and to illustrate to people who may not understand the illness the depths of what it can do to people.

The second is Train by Brenda Romero (via Marcus Montano) described here with spoilers:

In the game, the players read typewritten instructions. The game board is a set of train tracks with box cars, sitting on top of a window pane with broken glass. There are little yellow pegs that represent people, and the player’s job is to efficiently load those people onto the trains. A typewriter sits on one side of the board.

The game takes anywhere from a minute to two hours to play, depending on when the players make a very important discovery. At some point, they turn over a card that has a destination for the train. It says Auschwitz. At that point, for anyone who knows their history, it dawns on the player that they have been loading Jews onto box cars so they can be shipped to a World War II concentration camp and be killed in the gas showers or burned in the ovens.

The key emotion that Romero said she wanted the player to feel was “complicity.”

“People blindly follow rules,” she said. “Will they blindly follow rules that come out of a Nazi typewriter?”

I have tried creating my own board games in the past, and this gives me renewed interest and a higher standard. What is the most thought-provoking moment you have experienced playing games?

Uncle Bob on Public Policy and Software Professionalism

Software developers need to develop their own professional standard, or politicians will do it for them. That’s what “Uncle” Bob Martin argues in this interview starting about 28:00:

Healthcare.gov was awful. That’s a case where a software failure interfered with a public policy. Whether you agree with that policy or not that should scare the hell out of you, because the next public policy may be one much more important and if our software can’t cope with it we could be in a really deep, deep hole.

At some point or another, some software team is going to screw up so badly that there is a disaster of tremendous loss of life. At that point the politicians of the world will decide they have to do something about it. If we are not there with a set of minimum standards that we follow, practices that we follow, if we can’t convince those politicians that we have been behaving professionally and that this was an accident–if we can’t convince them that we weren’t being negligent–then they’ll have no choice but to regulate us. They’ll pass laws about which languages we use, what platforms we can program on, what books we have to read, and so on. It will not be a good outcome. I don’t want to be a civil servant.

The Economy That Is Stanford

Five of the six most-visited websites in the world are here, in ranked order: Facebook, Google, YouTube (which Google owns), Yahoo! and Wikipedia. (Number five is a Chinese-language site.) If corporations founded by Stanford alumni were to form an independent nation, it would be the tenth largest economy in the world, with an annual revenue of $2.7 trillion, as some professors at that university recently calculated. Another new report says: ‘If the internet was a country, its gross domestic product would eclipse all others but four within four years.’

That’s from this London Review of Books piece by Rebecca Solnit. The October, 2012, research report on which the claim is based is here, based on survey data. Solnit’s piece is interesting throughout, including a discussion of parallels and differences between the tech boom and the Gold Rush.