and found out that all profits go to the Leonardo DiCaprio Foundation…

and that Leonardo helps projects that support help for our planet…

which Leonardo says helps the planet.

We found out even more about how Leonardo helping the planet helps the planet…

… but after all that, we were still not totally clear. Except for the part about tigers.

It is a rare day that we former Aid Watchers congratulate the US Agency for International Development on self-imposed changes that will actually help aid benefit the poor.

Today is not that day.

That day was February 6, when USAID changed its own rules to allow itself flexibility to buy more goods and services locally. Buying and contracting locally, rather than shipping goods from the US and contracting services through American companies, can be a cheaper and more efficient use of US aid dollars.  It can also help local economies thrive, and strengthen small businesses, local governments, and NGOs.

USAID plans to increase its funds spent through local actors to 30 percent by 2015, from 11 percent in 2011. Huzzah. This small but promising change means that hundreds of local nonprofits will no longer have to go through contractor middlemen. It means that where public financial management systems are strong and representative enough, more local governments can be helped with direct support rather than through experts employed by American contractors. It also means that the American companies (the so-called “Beltway Bandits”) that earn hundreds of millions of dollars in contracts each year from USAID stand to lose a little.

Naturally, these firms have accepted the prospect of this loss in revenue with equanimity, acknowledging that the reforms will improve outcomes for the proper beneficiaries of aid, and have set about adapting their business model to the new funding environment.

Haha, that was a joke. They’ve actually gone and hired a major Washington lobbying firm to kill the reforms in Congress.  Joining forces as the Professional Services Council and the public-facing Coalition of International Development Companies (from the website: “Did You Know…that funding through international development companies offers superior accountability and transparency?”) they have employed the Podesta Group, which, according to lobbying disclosure forms, has been hard at work “promoting the work of international development companies” in Congress at PSC’s behest.

And the Podesta Group has delivered: House Oversight and Government Reform Committee Chairman Darrell Issa (R-California) has told USAID he will seek to block these reforms, just in time for the markup of the international affairs budget beginning next week.

“This agency is no longer satisfied with writing big checks to big contractors and calling it development,” thundered USAID head Raj Shah in a speech in DC last year. The Beltway Bandits and their lobbyists only want him to take out the words “no longer” and then utter the remaining sentence.

The new World Bank blog People, Spaces, Deliberation has already achieved one milestone: it covers exhaustively the field of “governance” with little or no usage of words that have historically been prominent in such discussions (see chart).

How to get these numbers: Click on one of these words in the list of “tags” and count the number of pages with search results. No tags existed on ‘consent’ or ‘liberty.’

We were inspired by the new blog to translate one historical document that is now badly out of date and frame it as a practical roadmap for further engaging civil society:

This community-driven participator is unfortunately not adhering to Governance best practices set out by the authorities.

Earlier this week, we pointed out the new wave of emigration from Portugal to its former colonies. As the number of emigrants has increased, so has the emigrants’ skill level. The new generation of migrants is no longer made up of blue-collar workers, but of teachers, advertisers, engineers and architects. “This amounts to a hemorrhaging of highly educated people—the very people [the euro zone’s weakest economies] will need if they are to take off when circumstances get better,” says Demetrios Papademetriou, president of the nonprofit Migration Policy Institute in Washington.

The specter of “brain drain” has haunted international organizations and think tanks for decades, threatening that emigration of skilled workers would leave poor countries short of the human capital needed to develop. After much research, this simplistic concept has been largely overthrown. Today, almost everyone recognizes the benefits arising from income gains to the emigrants, greater human capital in the source country, knowledge transfer and remittances. Almost everyone.

Academics got it: “The recent empirical literature shows that high-skill emigration need not deplete a country’s human capital stock and can generate positive network externalities.”

The World Bank got it: “Our results show large positive benefits of high-skilled migration for citizens of high emigration countries.” […] “The size of the net gains is so large, that these distributional impacts are likely to be of second-order in any welfare calculations.”

Even the UNDP got it: “In migrants’ countries of origin, the impacts of movement are felt in higher incomes and consumption, better education and improved health, as well as at a broader cultural and social level. Moving generally brings benefits, most directly in the form of remittances sent to immediate family members.”

Headlines capturing the media’s alarmist take on skilled migration.

The media did not: Major outlets were quick to call the recent increase in skilled emigration “Portugal’s ‘brain drain’ dilemma” (BBC podcast). CNBC offered this pessimistic take: “Some worry that with less talent in the country there is less chance that Portugal will be able to innovate its way out of the downturn.” Other articles report that brain drain is causing alarm—though this alarm seems to be mostly in the media. (One recent exception is this piece in The Economist).

“Brain drain” will ultimately not be bad for Portugal just as it has not been bad for Africa. And just as Europe would never suggest barriers to skilled migration, Africa will certainly not consider this either.

Expect to see controls on African migration increase dramatically any time soon. Oh, and just to clarify: that’s migration TO Africa, not FROM Africa.

Portuguese, facing high unemployment and their economy plagued by austerity, are flooding the shores of Angola and Mozambique. Angola has again become Portugal’s El Dorado as unprecedented numbers of Portuguese workers have flocked to the former colony: from 2006 to 2009 alone the number of visas issued for Portuguese increased from 156 to 23,000. Some already complain about difficulties in obtaining legal permissions to stay in Angola. The number of Portuguese workers settling in Mozambique has increased by more than 30 percent over the past two years.

It’s likely just a matter of time before some African countries limit their “green cards” to prevent European immigrants from stealing Angolan and Mozambican jobs. Undoubtedly, Africans will try to protect their cultural identities by banning Port Wine from their menus, for example. Immigration officials may soon be allowed to deny pregnant Portuguese women entry into Angola or Mozambique at their discretion to avert the birth of “anchor babies”.

At least African countries don’t have to fear that Portuguese will be living off their welfare programs. Portuguese seem to find well-paying jobs: Remittances sent from Angola to Portugal have increased more than seven-fold. In 2009, they even surpassed remittances sent from the UK.

500 years after Vasco da Gama’s first landing in Mozambique and Diogo Cão’s arrival in Angola, the Portuguese are heading south again. No doubt, their greeting manners have improved. This time they’re coming with resumes, not rifles.

In thousand Euros. Source: Banco de Portugal.

In thousand Euros. Source: Banco de Portugal.

At a recent speech at DRI, Andrew Rugasira described what happened as Good African Coffee, the business he founded in Uganda’s Rwenzori mountains, began to take off. As farmers began to produce higher quality coffee and see higher prices for their crops:

Something really extraordinary began to happen.  The values that we don’t really hear about in a lot of these development reports began to manifest: entrepreneurship, business exposure, dignity, esteem, the pride in producing a product that they knew was going into a market…

While the role of beliefs and values as catalysts for economic growth may still be “underrated and underdebated,” development economists have recently begun taking a closer look.  As a new working paper by Chris Coyne and Claudia Williamson explains, higher levels of self-determination, mutual respect and trust allow impersonal market transactions to happen efficiently, and more market transactions improve economic specialization and productivity.

Since every pound of African coffee we buy in the US relies upon dozens of formal and informal contracts between farmers, packagers, exporters and retailers, the “culture of contracting” matters. And contracts rely on interpersonal trust between strangers each pursuing his or her own self-interest.

Trade sets off a positive feedback loop: In Uganda, the more local producers sell their coffee to strangers, the more they will trust new buyers. The more buyers receive good quality the more they will trust, and look for, coffee from Uganda. Trade induces more trade.

But does aid induce more trade? For Coyne and Williamson, aid flows tend to create dependency and weaken the incentives for people to engage in business and trade, economic activities that rely upon contracts. Where aid triggers rent-seeking activities like corruption or fraud, it is also likely to reduce trust among strangers.

Countries that receive more aid for every dollar of goods they trade score lower on average on the index for culture of contracting, even controlling for reverse causality. The index combines answers to survey questions on trust, respect, individual self-determination, and obedience.

Coyne and Williamson find empirical evidence that trade and aid affect values in opposite ways. This implies it’s the business relationships—not the handouts—that help African farmers in the long run. Yet for Rugasira, getting investors and retailers to look beyond Uganda’s image as war-torn playground of Idi Amin or Joseph Kony has been incredibly difficult. He concluded, “If we treat [African people] like entrepreneurs, people with dignity and self-respect…we might find that we have a different set of results.”

A public forum allows many different minority viewpoints to be heard. Indeed, the backlash against Kim has generated its own backlash. The point of a forum is not to privilege Kim’s critics but to let both sides speak. Debates between opposite viewpoints are crucial to any democratic process, preventing “groupthink”; even when the dissidents are wrong, they force those with the right view to make their case. The CGD/Washington Post forum was transparent (the sessions with Okonjo-Iweala and Ocampo were both live-streamed and posted afterwards on the internet). Kim’s discussions with global leaders were not transparent.

Imagine a nominee with controversial environmental views or credentials were in the frame to lead America’s Environmental Protection Agency (EPA). It’s unlikely the administration would say the nominee was so busy meeting members of Congress behind closed doors that he or she had no time to consult with environmentalists.

Read the entire piece, published this afternoon, in The Guardian.

Lant Pritchett—a Professor of the Practice of International Development at the Harvard Kennedy School—has been leading a campaign against the election of Jim Kim to the World Bank presidency.   While he isn’t the only critic of Dr. Kim’s nomination, he is among the most vocal, prominent and well known.   Though his views are his own, many of them have been amplified and echoed by other leading development economists like William Easterly at New York University and several people associated with the Center for Global Development in Washington, DC.

Over the past few weeks, Pritchett has questioned Kim’s qualifications, saying a lack of training in economics and experience in world finance should disqualify him from consideration for the post. He has further suggested that the nomination is about the arrogance of American power and hegemony over the institution and that he should step aside for a merit-based election in which the Nigerian candidate for the post, Ngozi Okonjo-Iweala, a World Bank, Harvard and MIT alum and finance minister of Nigeria would sweep to victory.

A few days ago, Pritchett wrote an article in the New Republic, which finally comes clean about the real reasons for the escalating, grasping campaign of opposition to Jim Kim. The piece for the New Republic (TNR) is called Why Obama’s World Bank Pick Is Proving So Controversial.   The title again is an overreach: it should really read why Obama’s World Bank Pick Is Proving So Controversial to Me and My Friends.  Again, while Pritchett’s views are his own, his article has resonated with other development economists, including Easterly, who have circulated links to it over the past few days.  Pritchett’s piece has clearly struck a nerve among his peers.

Jim Kim has extensive support around the world for his candidacy, but it is vital for us to understand Pritchett’s objections to Dr. Kim as it all really boils down to what we think “development” is, what all of our work is about in our countries, whether we live and work in poor, middle-income or even rich nations. Pritchett in the TNR posits two kinds of development: national development and humane development.

National development “would involve the natural replication of the four-fold historical transformation of the developed nation-states: Economies would become more productive and hence support broad-based prosperity, polities would become more fully responsive to their citizens, administration would become more capable, and societies would become more equal as birth-based distinctions (such as class and caste) and divisive identities (of kith and clan) faded in favor of modern social relationships. Note that each of these was something that would happen not just to individuals but to a country.”

Pritchett goes on to define humane development as a kind of philanthropy, where people step into the breach where national development has failed, where “these idealists and the organizations they run have helped to mitigate famines, pandemics, poverty, violence, and lawlessness in some of the poorest areas in the world.”  Jim Kim is a humane development type in Pritchett’s eyes, not fit to run the Bank, which should focus on national development alone, an approach that Ngozi Okonjo-Iweala, a card-carrying economist would bring to Washington, DC.  However, Dr. Pritchett who has been a leader in the field of modern national development is deeply myopic.

First, while many people have been lifted out of poverty over the past century due to economic growth, inequity is pervasive and we are well on our way to creating a new transnational economic elite or rich people without borders.  The birth-based distinctions and divisive identities that Dr. Pritchett rightly decries are being replaced by class-based ones.  However, when you worry mostly about growth in the aggregate, the little people don’t matter.

Second, political responsiveness and accountability, better governance and administration have been integral to those of us who work on health and other issues that are not directly about economic growth and achieving the aims of national development can come through work on things other than economics and democratization in the abstract.  In fact, the fight against AIDS has been transformative in this regard.  As the South African journalist Jonny Steinberg has said in his book Three Letter Plague: “The idea of demanding that a drug be put on a shelf, or that a doctor arrive at his appointed time, is without precedent. The social movement to which AIDS medicine has given birth is utterly novel in this part of the world, the relationship between its members and state institutions previously unheard of.”

AIDS has been about accountability and state responsiveness, about better governance and administration. Pritchett has previously and vociferously complained about the provision of ART in the developing world as a prime example of palliative humane development, misguided philanthropy, but for those of us who have watched more closely this has all been about key aspects of national development, about “polity, administration, and society,” as Pritchett himself terms it.

For Pritchett and his peers, Jim Kim is a crazed, lefty, charity worker who pushed pills on Africa–this is why they dislike him so.  They refuse, again and again, to see what Kim did, what we all did, as critical to their own self-professed goals around democratization. The push for AIDS treatment was not charity or mitigation, but all about what governments should do for their citizens; it was about redefining citizenship and state responsibility.

Why do they have such an inability to see this? Well, because I think there is something else going on.  Over the past several decades there has been a push from those working at the highest levels of economic and social policy around the world to redefine state responsibilities downwards.  The historian Tony Judt described this well in his book Ill Fares the Land.  We’re seeing a renegotiation of the post World War Two social contract, which enshrined a system of social protections around the world, in Europe, Canada and Australia and even in the USA, which offered a safety net for the poor and the sick and saw this safety net as a core responsibility of the state.

In 1935, John Maynard Keynes said: “the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood.  Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.”

Nowadays, from Clinton’s ”welfare reform” in the 1990s, to the current, slow dismantling of the NHS in the UK by David Cameron and Nick Clegg, states are getting out of the business of helping the poor and the sick.  These political choices derive from larger intellectual frameworks constructed largely by economists where things like healthcare are not a “public good,”—they are like a loaf of bread, one eats it on one’s own—and states should only invest in what provide broad based benefits, key among them economic growth and defense.  In our brave new world, the models for national development are the states of austerity-crazed Europe and a USA in the mind of Republicans, where we are slashing social protection programs, cutting public spending, all in the appeasement of the gods of growth.

For people like Lant Pritchett and a generation of development economists like him, all heirs to Thomas Malthus, you can’t have it all or anything nearly like it.   We have to promote growth and democratization, even if it creates a new caste system based on inequities in wealth within countries or a new-class of have-nots, as in have-not healthcare, have-not education.  ”AIDS is a catastrophe,” Dr. Pritchett told the New York Times several years ago. ”And it’s not fair, if treatments exist, not to give them to all these people who are dying. But it’s also not fair that more than a third of children in Africa are malnourished. It’s not fair that maybe 140 babies in every 1,000 will die before the age of 1, and more than a third will never learn to read. All of it is unfair. Unfairness is not the test for action.” For Dr. Pritchett the test for action is about economic growth.  We wait for AIDS drugs, we wait for better schools.  It will all come along if we all just wait for growth and democratization–as they write about in the textbooks–arrives like manna from heaven.

Our work in AIDS, Jim Kim’s work in AIDS, on TB has been about transforming the world for the better, not out of some charitable impulse, sneered at by Dr. Pritchett, but because we have a vision for what the world should look like, about what governments should and should not do for their people; about what to expect from, what we can demand in terms of delivery of public services; about our role as active citizens, not waiting for experts or politicians to come and save us.  This is national development, about polity, administration, and society.   But it really doesn’t matter to Dr. Pritchett—we have all made a cardinal sin, which was to ask too much of our leaders, to question whether some idealized notion of free markets and free elections are all we need be asking for to secure a future for our children, whether the prescriptions of economists will deliver in the end for ordinary people.

Economists have gotten a bad rap lately, with so many of them having been so spectacularly wrong about so many things around the origins of the current worldwide economic crisis and its aftermath. Some of this in the end is about economics status as a science, about protecting a discipline that is deeply political, but strives to cloak itself with objectivity. Someone like Jim Kim, trained in the biomedical sciences, trained to rely on hard endpoints, is a threat is a more fundamental sense, as he doesn’t take the laws of economics as equivalent to the laws of gravity, to the central dogma of molecular biology or the germ theory of disease.

To be fair, there are economists who recognize that their field is contingent, more inexact, and are raising serious questions about the rigor of their assumptions, about over-reliance on models, the need for a far better quality of evidence, far beyond the sub-specialty of global development.  These are the kinds of people, the fresh voices and thinking, one could see coming to the Bank under Kim’s leadership.  Kim is also trained as an anthropologist as well; he knows there a variety of tools with which to see the world as long as you know their limitations.  Dr. Pritchett and his colleagues don’t have this humility, they have their certainty, that they know what is right, what is needed, what should be done. This is what scares me most of all.

In the end, Jim Kim represents a national development perspective, but a critical one. For Pritchett, national development is about economy, polity, administration, and society.  Kim’s work has certainly centered around the last three of these and he will bring a critical eye to the first.  I am sure Ngozi Okonjo-Iweala is brilliant.  I am not quite sure she represents much more than a reification of traditional ideas about development, has sufficient distance from things to offer a critique, bring change.  She is the establishment’s choice, even if she hails from Africa. As others have said, including economists like John Bates Clark medal winner Daron Acemoglu from MIT, the opposition to Kim all seems like a strange defense of business as usual from people who have been critics of the Bank in the past.

–

Gregg Gonsalves is a long time AIDS activist and an Open Society Foundations Fellow.

Click to enlarge

Click to enlarge

On April 16, expect white smoke to rise out of H Street and 19th.

*UPDATE April 16, 2012: The new World Bank President was announced today and the American nominee, Jim Yong Kim, was elected. For the first time in World Bank history, the vote was not unanimous, but the voting tally has so far not been made public.

Bill Easterly reviewed “Why Nations Fail” by Daron Acemoglu and James A. Robinson for the Wall Street Journal:

Far too much intellectual firepower regarding the global poor these days focuses on the (small) things Westerners can do to help—obsessing about, say, how much money to spend on mosquito-blocking bed nets to fight malaria. The bigger questions—about why some societies prosper and others don’t, about how to improve the lot of an entire impoverished class—are left by default largely to uncritical admirers of China’s growth. The arrival of “Why Nations Fail” is thus a hugely welcome event, since economists Daron Acemoglu and James A. Robinson take on the big questions and in doing so present a substantial alternative to the dominant thinking about global poverty.

For Messrs. Acemoglu and Robinson, it is institutions that determine the fate of nations. Success comes, the authors say, when political and economic institutions are “inclusive” and pluralistic, creating incentives for everyone to invest in the future. Nations fail when institutions are “extractive,” protecting the political and economic power of only a small elite that takes income from everyone else.

It is common among those who work in development to wish for a technocratic rule of experts unencumbered by politics. Messrs. Acemoglu and Robinson insist that getting the economics right requires getting the politics right. They support their thesis with evidence so comprehensive that it includes the rise and fall of medieval Venice, the colonization of the Americas, and the tribal politics of Botswana at its independence in 1966.

Read the full review here.  The authors also have a new blog; follow it here.