Do educated politicians make for better leaders, or do they at least result in better educational outcomes? Rahul Lahoti and Soham Sahoo from the University of Goettingen examined almost decade-long data on learning outcomes for children in rural and urban areas to find if college-educated political representatives in state legislatures result in better educational outcomes for children.

The researchers found no correlation between educational levels of politicians and that of learning outcomes, enrolment, attendance, school infrastructure and funding for children in their constituencies. The finding suggests that education has no impact on the ability of a leader to empathize with the problems plaguing his or her constituency, and in turn, lobby for their redressal.

Also read: Are Educated Leaders Good for Education? Evidence from India

The recent US elections saw much debate over the influence of social media algorithms in creating echo chambers where voters’ choices were polarized by reading news from only sources that agreed with their political affiliations.

Now a paper by researchers Levi Boxell and Matthew Gentzkow, from Stanford University, and Jesse M. Shapiro, from Brown University, argues that contrary to popular belief, the internet is not a primary driver of political polarization. The authors used survey data from the American National Election Study and built an index of predicted internet use based on demographic data.

The results show that the rise in political polarization over the period 1996 to 2012 has been sharpest among the elderly, a group that is the least likely to use the internet. However, the paper does not offer any answers to the question of what is causing polarization among voters who are not internet users.

Also read: Is the Internet Causing Political Polarization? Evidence from Demographics

How can policymakers increase the spread of formal banking, given that trust in financial institutions is low among the poor? New research on a Mexican conditional cash transfer scheme suggests that debit cards could be an easy way to get poorer sections of the population to shift to banking.

The authors studied over 340,000 bank accounts of beneficiaries for four years. Beneficiaries did not save money in their bank accounts before receiving a debit card.

After about a year with the card, beneficiaries used it to check their accounts frequently, with the frequency declining as their trust in the bank rose. After a year or two, the debit cards led to a rise in the savings rate by 3-5 % of income. For policymakers looking to increase participation in formal financial institutions, debit cards may just be the solution.

Also read: Banking On Trust: How Debit Cards Enable The Poor To Save More

Ride-on-demand (RoD) services such as Uber and Ola have been praised by many for unleashing entrepreneurial in thousands of drivers and improving efficiency of the cab market.

There is a need to exercise caution while jumping to such conclusions, Indian Administrative Service (IAS) officer Gulzar Natarajan argues in a blog. Natarajan says that there is a fundamental difference between the working of such services in countries like the US and India. In the former, the RoD market is serviced mostly by part-time drivers using their cars in free time.

Cab drivers in India often use cars bought on loans. Because of this, RoD service companies have been able to attract informal sector cab drivers, rather than drastically improving efficient use of cars or drivers’ time. Natarajan also points to the hazards of the leasing model being used to provide cars to these drivers by companies, which does not look at the credit worthiness of the person.

This, Natarajan argues, could lead to misuse of governments schemes such as Mudra, which is tailored for small entrepreneurs.

Also read: The need for regulation in e-commerce

Economics Digest runs weekly, and features interesting reads from the world of economics.

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