Cool globalization video: who's reading the New York Times when and where

In the pre-Internet age, we used to joke that availability of the printed New York Times (just within the U.S.) was the best single indicator of civilization (Bowling Green, Ohio did not do that well on this indicator). Today we use the word "globalization" instead of civilization, but it's still fascinating to see where the hot spots of NYT readership are -- and large regions without hardly any hot spots  (Africa, Middle East, Russia are the most striking). Asia is much more NYT-intensive.

This video is for the whole world.

And this one is just for the U.S. Dallas and Atlanta do better than I expected!

(HT World Bank PSD Blog, orginal source is Nick Bilton, Lead Writer, The New York Times Bits Blog @nickbilton)

Are terrorists statistically significant?

Here’s another discussion relevant to the earlier post that DO SOMETHING is not a helpful government response to the current terrorismscare:

[T]he key point about identifying al-Qaeda operatives is that there are extremely few al-Qaeda operatives so (by Bayes’ theorem) any method you employ of identifying al-Qaeda operatives is going to mostly reveal false positives.

(From Matthew Yglesias via Tyler Cowen ONCE AGAIN, I think I’m now Tyler’s full-time RA).

How does this relate this to our usual statistical analysis? Proving someone is a terrorist is analogous to proving a nonzero effect that confirms an economic theory. We allow a rate of false positives of 5 percent (“statistical significance at the 5 percent level”) for showing that, say, good institutions have a positive effect on development. The false positives do not automatically swamp the true positives, because the true effects of  one thing on something else are not as rare as terrorists.

To have a low rate of false positives, we have to accept a high rate of false negatives. But we don’t care about false negatives. You failed to show an effect of your favorite magic ingredient X on development? Too bad, the burden of proof is on YOU if you want to add your ridiculous theory to the existing development knowledge.

Contrast airport security, where we DO care about false negatives (i.e. failing to detect a terrorist). To reduce false negatives even more (as everybody is demanding ), we would have to accept MORE false positives. This would swamp even more the rare genuine terrorists.

Yglesias used a hypothetical rate of false positives of 0.1 percent in his discussion of screening 15 million British Moslems. Of course, TSA makes it much worse by screening each and every of the 800 million airline passengers annually in the US -- including my 80 year old mother whose only suspicious behavior is hiding her handbag in fear of NYC purse snatchers. A false positive rate of 0.1 percent times 800 million means that false positives would be 800,000 people.

Have you seen 800,000 terrorist suspects milling around at airport security? No, I haven’t either. So the true TSA false positive rate must be even lower, which must mean the false negative rate must be a lot higher than the TSA would like to admit (as confirmed by audits). Intensified universal screening cannot possibly work: QED. (For useful alternatives, consult the people in the know.)

As Shakespeare once said about TSA:

It is a tale told by an idiot, full of sound and fury signifying nothing.

OBLIGATORY AID PARALLEL TO TODAY’S APPARENTLY UNRELATED NEWSWORTHY TOPIC: the Do Something approach in aid has not been a great success either. Although it is still popular in aid and social activism, as illustrated by the nearly 300,000 followers on Twitter of @DoSomething, who wrote the following “Tweet”:

Its really easy to be a critic. Its really hard to be a do-er who actually makes stuff happen.

Stuff happen like click on a non-binding poll on their web site whether unnamed state legislators who don’t check web sites should pass laws against texting while driving. That may be easier than being a critic.

UPDATE: announcement today that TSA will piss off 14 mostly Muslim countries by subjecting fliers from those countries to the US to universal invasive screening. Thank goodness the terrorists are so dumb they would never think of flying from ANOTHER country besides these 14!

What exactly is “Climate Aid”?

Alan Beattie has a great piece on this murky concept in the FT. Here is Alan’s exposition recast in the form of Q and A: Q: Should “climate aid” be additional to existing aid?

A: Of course, except how do you define “existing aid”? Should the yet-to-be-fulfilled climate aid pledges be added to the yet-to-be-fulfilled pledges for general aid made in Gleneagles in 2005? Or should they just be added to the actual current disbursements of aid, so you could substitute less generous climate pledges for more generous Gleneagles pledges?

Q: How to guarantee that “climate aid” is spent on climate?

A: Aid veterans have long known this horrible jargon “fungibility.” What this means is that the recipients of climate aid may cut back their own spending on climate-related areas to be replaced by “climate aid”, and increase their own spending on something else. So the real effect of “climate aid” is really to increase something else. As the World Bank’s first chief economist said way back in 1953: “you might think you are financing a power plant and you are really financing a brothel.”

Q: By the way, what IS Climate Aid anyway?

A: Let’s answer this with another question: if you have a project for solar pumps to irrigate farms to grow crops for export, is this (a) climate aid, (b) agriculture aid, or (c) aid for trade? Does the answer depend on which type of aid is currently most popular?

Tiger Woods thoughtfully explodes “Halo Effect” myth in development (editorial note)

For anyone who noticed or got confused by Google Reader: A preliminary draft of the Tiger Woods post accidentally went live at midnight on Saturday night. We took it down again on early Sunday morning, and the absolutely correct analysis of Tiger Woods was re-posted early this morning, taking into account any late-breaking news on this major world news story.

Tiger Woods thoughtfully explodes “Halo Effect” myth in development

I am sure all of you had the same reaction I did as Tiger Woods slid into taudry tabloid hell: “thanks, Tiger, for creating a teachable moment for development economics!” Our expectation that celebrities will be model citizens, contrary to vast evidence, is based on the Halo Effect. The Halo Effect is the idea that someone that is really, really good at one thing will also be really good at other things. We thought because Tiger was so good at being a golfer, he also must be very good at to have and to hold, forsaking all others, keeping thee only unto her as long as you both shall live…

What Tiger considerately did for our education was to show how the Halo Effect is a myth. This blog has a undying affection for those psychological foibles that cause us to strongly believe in mythical things, and the Halo Effect is a prime example (and the subject of a whole book on its destructive effects in business.) Why would marital fidelity and skillful putting have any correlation?

OK fine and good, but many of you are asking: What the Vegas Cocktail Waitress does this have to do with development? The Halo Effect was discussed in a previous blog, but when assaulting psychological biases, you can never repeat the attack enough. Not to mention that we all remember the psychology literature more easily when illustrated by a guy with 10 mistresses.

So if we observe a country is good at say, technological innovation, we assume that this country is also good at other good things like, say, visionary leadership, freedom from corruption, and a culture of trust. Since the latter three are imprecise to measure (and the measures themselves may be contaminated by the Halo Effect), we lazily assume they are all good. But actually, there are plenty of examples of successful innovators with mediocre leaders, corruption, and distrustful populations. The US assumed world technological leadership in the late 19^th century with presidents named Chester Arthur and Rutherford B. Hayes, amidst legendary post-Civil War graft. Innovators include both trusting Danes and suspicious Frenchmen.

The false Halo Effect makes us think we understand development more than we really do, when we think all good things go together in the "good" outcomes. The "Halo Effect"  puts heavy weight on some explanations like "visionary leadership" that may be spurious. More subtly, it leaves out the more complicated cases of UNEVEN determinants of success: why is New York City the world’s premier city, when we can’t even manage decent airports (with 3 separate failed tries)?

The idea that EVERYTHING is a necessary condition for development is too facile.  The principles of specialization and comparative advantage suggest you DON"T have to be good at everything all the time.

So the true Tiger Woods Effect tells us something else more interesting than the false Halo Effect: that if you are very, very good at hitting a 1.68 inch ball into a 4.25 inch hole, then you can often get away with everything else for a long time. But sometimes not forever.

Copenhagen Special: Climategate and the tragic consequences of breaching scientific trust

Clive Crook is such a calm, sensible, non-ideological voice, that if you ever get him really upset, you're in deep trouble.  And he could hardly contain himself at his blog at the Atlantic on Climategate, in which some climate scientists engaged in censorship and cover-ups:

The closed-mindedness of these supposed men of science, their willingness to go to any lengths to defend a preconceived message, is surprising even to me. The stink of intellectual corruption is overpowering.

Clive is also hard on the head of the Intergovernmental Panel on Climate Change (IPCC) who saw no problems of bias, even when contributing scientists said about studies they didn’t like: they “will keep them out {of the IPCC report} somehow - even if we have to redefine what the peer-review literature is!"

One problem that Clive points out is that some climate scientists don’t know that much about statistics and show little interest in consulting statisticians even while they are basing their finding on statistical analysis. The Wegman report on the “Hockey Stick” controversy has this amazing summary:

It is important to note the isolation of the paleoclimate community; even though they rely heavily on statistical methods they do not seem to be interacting with the statistical community.

Once the real statisticians looked, one "Hockey Stick" result fell apart: the conclusion that

the decade of the 1990s was the hottest decade of the millennium and that 1998 was the hottest year of the millennium cannot be supported by {the} analysis.

Clive considers some of the reactions to his blog in a subsequent post, and is unyielding:

Once scientists set out to mislead the public, they can no longer expect to be trusted. End of story.

So is Clive a climate “denialist”? Or am I a “denialist” by featuring this story on the opening day of Copenhagen?

That such questions are even on the table is itself a symptom of the problem. A less balanced but still insightful piece by George Will in Sunday’s Washington Post complains bitterly about this. Part of the problem is the real “denialists,” who DO ignore science -- but scientific dishonesty is not exactly a confidence-building response.

The analogy that got me interested in Climategate is of course with social science in development, where the problem is vastly worse. Advocacy on global poverty distorts everything from the data to the econometrics, as this blog frequently complains, so that credibility of development social scientists is sinking to dangerously low levels. It’s so bad that there is never a “Povertygate” scandal, because “Povertygate” is the norm rather than the exception.

What’s most tragic about both climate and poverty advocates engaging in censorship and distortion is that, while it might help advocacy in the short run at the expense of science, it destroys both advocacy and science in the long run. It’s infeasible for every individual to independently do their own research to verify problems and proposed solutions, so they have to trust the professional, full-time researchers. As Clive understood, if those researchers destroy that trust, then even honest advocacy becomes increasingly impossible, which means solutions become increasingly impossible.

Since any meaningful agreement on emissions at Copenhagen is about as likely as igloos in the Sahara, maybe the delegates could pass a resolution in defense of responsible criticism?

Hopeless cause of the week: save Madagascar!

Aid Watch has a stubborn attachment to excellent but possibly hopeless causes… Madagascar, a country we first blogged about in June and then again in August, may be down to its last few days as regards AGOA, the US preference program that underpins about 50 percent of the country's $500 million textile industry.  Because of the change of government that took place in Madagascar in March, the US has been steadily threatening to suspend its AGOA eligibility unless the country returns pronto to constitutional government.  A committee consisting of representatives from State, Commerce, Labor, Treasury, USAID, the NSC and the USTR has been deliberating for several days on whether Madagascar's transgressions merit suspension from AGOA.

With little likelihood that egregious democracy and human rights violators like Gabon and Angola will be suspended from AGOA, it's hard not to be cynical about why Madagascar has come under such scrutiny for a regime change in which a highly experienced kleptocrat was replaced by a less experienced one.  Or why, suddenly, there is such concern about a return to constitutional government when it's not at all clear that Madagascar's leaders over the last 40 years have ever placed the interests of their people above their own.  We can be fairly sure that if Madagascar were pumping oil instead of just looking for it the country's AGOA status would not even be under consideration. Still, we’re going to try not to be cynical.

We don’t know WHAT the AGOA eligibility committee on Madagascar is talking about. (The committee doesn't actually make the final decision on AGOA.  They make a recommendation to the president who typically announces who's in and who's out around Christmas time.)  But we imagine the discussion breaks down in two ways.  On one side, there are the idealists who believe that the AGOA goals of promoting democracy and good governance will never be achieved unless the US gets serious about sanctioning individuals who overthrow democratically elected governments.  After seeing Madagascar's political leaders backslide, prevaricate and just plain lie about their intentions in on-going negotiations brokered by the AU, SADC and the UN, the idealists are skeptical about whether these leaders - none of whom is a poster child for good governance - are serious about resolving their long standing differences.  The idealists are probably right.  These political adversaries, who have overthrown one another like kids playing leapfrog, despise each other.  We can expect that, AGOA or no AGOA, political friction, back-stabbing and jockeying for position will continue in Madagascar for years to come - just like in most countries.

On the other side of the committee table, there are the realists who recognize that cutting off AGOA is unlikely to have any effect on those behind the overthrow of the previous government but will vaporize millions upon millions of dollars of foreign investment in Madagascar, some of it by US companies, and dump tens of thousands of young female workers trying to feed their kids into the streets.

So what to do?  Cancel AGOA in support of a principle that will do nothing to advance good governance in Africa, or continue it and support workers and investors who had nothing to do with the whole business?  Forgive us for our presumption that this is a fairly obvious call.

This is an interesting test of whether independent observers who actually care about Madagascar have any effect on US government decisions in our democracy, or whether the departments concerned simply act with impunity to pursue their own interests and agendas. The rest is up to you, most esteemed AGOA committee. -- Update: Take action on this cause! Send an email to Florizelle Liser (Florie_Liser@ustr.eop.gov), Assistant U.S. Trade Representative for Africa, telling her not to cancel AGOA in Madagascar.

Friday Roundup: Who Will Implement US Aid to Pakistan?

With a USAID administrator at long last named and awaiting confirmation, some of pieces of the overall US development strategy should finally begin falling into place. Will we then get some answers on what the heck is going on with US aid in Pakistan? Those of you who follow the region know that in October, Congress moved to triple current levels of non-military aid to Pakistan, approving a package for $7.5 billion over the next five years. After that, the fight broke out. The State Department and special envoy Richard Holbrooke sketched out plans to abruptly funnel the money through the Pakistani government and Pakistani NGOs, rather than through American contractors, who implement the majority of USAID’s contracts at the moment. The idea is to cut the overhead costs of working with foreign contractors, build the capacity of local organizations, and get results fast.

The NYT reported the means and ends of the new aid money: “American officials say the main goals of the new assistance will be to shore up the crumbling Pakistani state by building infrastructure like roads and power plants, and to improve the standing of the United States with the Pakistani people.”

Note the assumption here that development is a tool for achieving diplomacy goals, and that it can be used to achieve these goals in short order. I wonder: have they taken a hard look at Afghanistan’s ring road project, which remains unfinished after taking the lives of 162 contractors and $1.4 billion in foreign aid funds? As for winning hearts and minds, conditions of the new aid bill have caused anger at what many Pakistanis perceive as American interference in Pakistani affairs, with one Pakistani politician calling the bill “the charter for new colonization.” Public opinion polls show overwhelming opposition to US military activity in Pakistan, and popular resentment towards the US appears to be growing, influenced by opposition to drone attacks in Pakistan and events in Iraq and Afghanistan (and fed even by Pakistani pop musicians.) So if hearts and minds can be won with development dollars at all, it is bound to be a long, expensive, uphill slog.

Unsurprisingly, USAID and their contractors are opposed to the State Department reshuffle. A sensitive but unclassified memo leaked to USA Today from a senior USAID economist complained of “contradictory objectives” and protested that “directing an immediate shift away from US contractors already on the ground to local implementers without an appropriate transition period will seriously compromise the more important requirements for quick counterinsurgency and economic impacts.” Local organizations, he said, are not equipped to follow the complex accounting and reporting procedures required to ensure that the money is spent properly.

Then again, USAID’s track record for success in Pakistan post 9/11 is spotty at best, with reports from CSIS (quoted below) and Harvard finding that US development aid spending has been hampered by security concerns, plagued by unnecessarily high overhead costs, and is unlikely to be effective in the tribal areas: “The process of building schools and opening health clinics is unlikely to produce development in any broad sense. What is more likely… is that the system of patronage used to maintain political authority will also co-opt the development funds provided to the tribal areas.”

USAID later issued a press release noting that “big changes” are “imminent” but insisting that current USAID programs would not be terminated.  So what's the plan??

We Were Starting to Think It Might Never Happen...

...but after months of delay, the Obama administration has finally named a nominee for the position of USAID administrator. The Center for Global Development's Sheila Herrling was among the first to mention Shah as a last minute candidate:

[R]ecent activity on our poll shows an unusual flurry of write-ins for Raj Shah, currently serving as Undersecretary for Research, Education and Economics at USDA.   Could this be the final twist of fate?

Politico picked up the gossip on Monday and added some details on this little-known candidate's bio...

Whiz kid (he's 36), the former Bill and Melinda Gates Foundation director of agriculture development and financial services, and manager of the foundation's $1.5 billion vaccine fund. A trained medical doctor, Shah has some interesting political credentials, having campaigned for Obama, [and] served as the former health care policy advisor to Al Gore's presidential campaign.... He was confirmed in April just a month after being announced without a hitch, and has been involved in numerous philanthropic efforts to combat poverty in India and around the world, and worked at the World Health Organization.

...before breaking the news on Tuesday afternoon, just a few hours before the White House made their official announcement.

After waiting so long, early reactions from the development community so far seem to run towards excitement and relief, although some have voiced concern that Shah's youth and status as a relative unknown outside of Washington (as compared to Paul Farmer, for example) may be a sign that the Obama administration does not plan to elevate USAID to a cabinet-level agency or restore the level of power and prestige to the agency that those in the movement to reform USAID would like to see.  Maybe Shah's age worked  in his favor at least in getting him more quickly though the notoriously arduous vetting process.

An article  in the New York Times last year featured Shah's work at the head of the Gates Foundation's agricultural development  program in Africa, and described a typical program under Shah's stewardship: "close to the ground and oriented toward practical innovation that reduces risk for small farmers and increases their incomes."

A passage at the end of the piece in which the author describes Shah's response to criticism of his approach may hint at the kind of leader Shah will be as head of USAID. While others are "contemptuous" or "disdainful" of their detractors, "Shah seemed unhappy."

“After I went to Berkeley to meet with the Food First people,” he told me, “I came away very much wanting to work more closely with agro-ecological groups. We talk to anyone who will talk to us. How could we aspire to be transformational if we didn’t?” He paused, and then added musingly: “I guess I really don’t know why there is so much hostility. I really think we have something to learn from them.”

Who knows, perhaps this augurs a USAID more open to listening to its critics.

Friday Round Up

Monkeys Do Markets In a recent experiment, a team of scientists trained a vervet monkey to open a container of apples, a task no other monkey in her group could do. She was well-compensated for this service by the other monkeys, who began to spend a lot of time grooming her (apparently, grooming is the monkey unit of exchange). Then, the scientists trained another monkey in the group to get the apples, and the “price” for the service (ie the amount of grooming the apple-providing monkeys received) went down. NPR Correspondent Alex Bloomberg explained:

[W]hen there was a monkey monopoly on the skill, the monkeys paid one price. But when it became a duopoly, the price fell to an equilibrium point, about half of what it had been. And this all happened despite the fact that we're talking about monkeys here. Monkeys can't do math.

What’s the point, other than research studies are really bizarre? Acquiring a sought-after new job skill leads to a higher income, even among monkeys. And, monkey markets can still set prices, even though the market participants can’t add, sign contracts, or talk. And, perhaps, complex markets can be the product of an unintentional, spontaneous order:  Out of the chaos of many monkeys running around hitting one another on the heads, pulling nits off each other’s fur, following only the simple rules of monkey hierarchies and monkey appetites…a functioning market emerges.

The Most Remote Place in the World is Three Weeks from Anywhere

Along the lines of our recent post, Africa Desperately Needs Trade Links: A Pictorial Essay, check out this feature from the New Scientist.

Bad Bosses Suck (Worse than War?)

I can think of lots of reasons why a local aid worker in Iraq might forego a secure paycheck and quit their job. Long lines and indignities at the security checkpoints to get in and out of the Green Zone every day. The dangers inherent to working with foreigners, like the threat of kidnapping or injury to themselves or their families.

But a paper based on conversations with local and international aid staff working in Iraq found that staff attrition and high turnover was more commonly caused by plain old bad bosses and poor treatment of staff. That’s not to say that poor management and dangerous environments aren’t linked in some causal way.  The paper pointed out that difficulties of aid worker life in hostile environments, like the lack of frequent contact with beneficiaries, problems building trust, and disparities in the amount of risk assumed by Iraqis vs international staff, magnify the effects of bad management.

I’m sure these “lessons learned” are old news to anyone who’s done aid work amidst hostilities.  But they are worth noting this week as observers of the attack on the UN guesthouse in Kabul asked whether there will soon be a Green Zone in Afghanistan, and in light of last month’s decision to bump up the amount of non-military aid the US gives to Pakistan, which may (or then again, may not, depending on how the aid is distributed) give aid workers a larger footprint there.

China in Africa

Finally, a couple notable books out to shed light on the little-understood subject of China’s  aid to Africa: The Dragon's Gift: The Real Story of China in Africa by Deborah Brautigam, and China into Africa: Trade, Aid, and Influence, a collection of essays published by Brookings.

Human rights are the wrong basis for healthcare

Column published today in the Financial Times.

The agonising US healthcare debate has taken on a new moral tone. President Barack Obama recently held a conference call with religious leaders in which he called healthcare “a core ethical and moral obligation”. Even Sarah Palin felt obliged to concede: “Each of us knows that we have an obligation to care for the old, the young and the sick.”

This moral turn echoes an international debate about the “right to health”. Yet the global campaign to equalise access to healthcare has had a surprising result: it has made global healthcare more unequal...

Read the rest of the article here.

IMF and World Bank Take On Istanbul: A Links Round-up

- Zoellick speech on the eve of Istanbul: Current upheaval = French revolution, Africa’s growth potential = Europe’s with Marshall Plan. Earth-shaking changes: "Bretton Woods is being overhauled before our eyes." - Impartial observers like Nancy Birdsall noticed more “the timidity of planned reforms” like glacial reform on quota/voting power at the IMF and the World Bank.

- A communiqué issued yesterday offered more of the same weak brew, and reiterated the World Bank’s imaginary new poverty numbers: “As a result of the crisis, by end-2010, some 90 million more people risk being forced into extreme poverty.”

- “To combat the staggering statistic,” reported the WSJ, the World Bank is now pushing for its first capital increase in 20 years.

- Everyone is squeezing on the World Bank to lend more money to poor countries without conditions. The UK said no more money for the Bank unless it could speed up loans to Sub-Saharan Africa. A group of African Finance ministers, represented by lavish aid recipient autocracy Ethiopia, asked for more money and more loans without conditions, like that tiresome governance crap.

- Should you need up-to-the minute updates on Zoellick's earth-shaking changes, you can follow the appointed World Bank/IMF “Tweeter-in-chief” who is live-blogging the conference, or try the tag #wbmeets for other tweets on the topic.

Won’t shut up about Afghanistan

Transitionland had a thoughtful response to my cri de coeur on Afghanistan yesterday. Among her recommendations for improving things: (1) Stop the air strikes that are killing civilians,

(2) Crack down on corrupt contractors to USAID,

(3) Stop supporting Afghan warlords who are homicidal and/or corrupt.

So, after years of experimentation, we can now start applying these subtle, complex lessons:

(1) Don’t kill,

(2) Don’t steal,

(3) Don’t give aid to those who do.

Oh no, I’m giving in to the Satirical Dark Side again. But shouldn’t we all be angry that things are so awful in our Afghan program that THESE are the things that need to be changed? The “why does nobody care?” question from the previous blog post is alive and well.

In fairness to all the aid workers in Afghanistan making idealistic personal sacrifices to work there (and in fairness to Transitionland): there ARE many good efforts by good people (including Afghans) who are helping Afghans help themselves.

But the big players like the US military and USAID are still screwing up big time, hence the presentiment of disaster.

This blog’s previous posts on this have not been that successful in generating much response, so maybe I should follow my own advice of stopping what is not working and give up on the Afghanistan cause. Of course, if I went only by volume of response, I would only be doing posts on naked supermodels.

I think there is a tragic paralysis on Afghanistan that needs to be broken by as many voices as possible shouting:

Why does nobody care?

Links to Make You Think

If a group of lions is a “pride,” a group of development professionals is a ________. More and more mzungus (whites) fall truly, madly, deeply in love with Africa. (via Scarlett Lion)

Book-burner to be new head of UN education and culture efforts (UNESCO)? We wonder if the UNESCO Sex Ed book that Chris Blattman satirized might be the first to go on the bonfire under new management.

None of the 48 Slavic women in the US Open made the semifinals. Do we need an even more complicated story that Slavic countries currently have comparative advantage in female tennis except they never win any majors?

"This power to help is just about as dangerous as hard power." - Kenyan Writer Binyavanga Wainaina on the Ethics of Aid, on America Public Media's program Speaking of Faith (via Texas in Africa)

Freakanomics probably doesn't need us to promote them, but they have a nice post on African entrepreneurs (thanks for the tip to Indego Africa's great Social Enterprising blog).

Links to make you Think

1. Is Nobody Safe? Foreign Policy article questions sainthood for Mohammed Yunus and Hernando de Soto. 2. Nobody is trying too hard to promote circumcision for heterosexual AIDS prevention in Africa, but we'll do universal circumcision in the US, which doesn't have much heterosexual AIDS

3. Right-wingers for foreign aid

4. Radical priest harshly criticizes patronizing American volunteers in Mexico -- in 1969.

5. Trying to find Chris Blattman a mattress in New York as good as the $10 foam model he bought in Uganda

6. Lord Skidelsky says nasty things about Transdniestria (via Mark Thoma at Economist's View).

I am much more sympathetic to it after the national newspaper headlined my co-authored path-breaking research on "squiggliness" as the basis for Transdniestrian independence.

1,3, and 4 suggested by Adam Graham-Silverman.

Hillary illustrates perils of fuzzy human rights concepts

There is an interview with Hillary Clinton in today’s Wall Street Journal. Matthew Kaminski of the Journal asked her:

Why push human rights and democracy so hard in Africa, and not in Russia or China? Some see a double standard.

Excellent question! Hillary answers:

First I think it is important to stress that human rights remain a central driving force of our foreign policy. But I also think that it's important to look at human rights more broadly than it has been defined. Human rights are also the right to a good job and shelter over your head and a chance to send your kids to school and get health care when your wife is pregnant. It's a much broader agenda. Too often it has gotten narrowed to our detriment.

Uh oh. Is Hillary saying:

Don’t emphasize so much the traditional human rights where you can actually hold someone like Chinese and Russian rulers accountable – like the right for dissidents not to be tortured, jailed, and killed –

Because we are going to add fuzzy human rights where you can’t hold anyone accountable—rights to jobs, shelter, education, health?

Rights to basic needs have enormous moral appeal, but do they work? Progress on the first kind of human rights has happened because you could hold somebody accountable, while there is little evidence that second kind of human rights has pragmatically contributed anything to better employment, shelter, education and health (as this blog previously argued). So shifting emphasis from the first to the second slows down progress on the first, while doing little on the second.

And if the second acts as an excuse to not speak out on the first kind of traditional human rights,as Hillary seems to say...NOT good.

The Idiot’s Guide to Answering Queen Elizabeth

Queen Elizabeth famously asked why economists did not predict the crisis. I wanted to add to the large chorus of responses, partly to save the reputation of mainstream economics as something still very useful to development, and partly to have a chance to reproduce this photo from my favorite Hollywood comedy The Naked Gun.

I can offer an Idiot’s Guide to answering the Queen because the subject is so far outside my area of specialization within economics, yet even an ignorant outsider like me knows the answer.

First, Your Majesty, economists did something even better than predict the crisis. We correctly predicted that we would not be able to predict it. The most important part of the much-maligned Efficient Markets Hypothesis (EMH) is that nobody can systematically beat the stock market. Which implies nobody can predict a market crash, because if you could, then you would obviously beat the market. This applies also to other asset markets like housing prices. If you think it is useless to be told you cannot predict the market, then you should change your Palace investment advisor. This knowledge will protect you from a lot of investment scams like Mr. Madoff’s and will also provoke a serious discussion of how to protect your Royal Wealth against risk in an uncertain world.

Second, economists did just fine pointing to fundamentals that were creating large risks of a financial crisis. Even an outsider like me heard long before the crisis hit about the dangers of opaque instruments like derivatives, excessive mortgage lending and leverage, and the bubble in housing prices. Economists have contributed a lot to understanding bubbles, but we can’t time exactly when they will burst (see EMH above).

So unlike some of my more venerable economist colleagues who are falling all over themselves apologizing to Your Majesty for OTHER economists (see for example your knighted subject Robert Skidelsky yesterday in the FT), I see nothing for which to apologize.

So please tell your subjects in poor countries to keep studying basic mainstream economics. This economics not only survived the crisis, it also is the proven set of ideas that get countries out of poverty.

Hillary offers trade opportunities to Africa – unless we don’t feel like it

Secretary of State Hillary Clinton had good news for Africa in the Nairobi forum yesterday on the US African Growth and Opportunity Act (AGOA). AGOA offers breaks from quotas and duties on African exports to the US. First enacted under Bush, AGOA is at least a partial success story, with exemplars like textile exports in Lesotho and Madagascar. Secretary Clinton yesterday endorsed new efforts to “maximize the promise of AGOA.” She declared “we are committed to trade policies that support prosperity and stability.” Except when we aren’t. AGOA privileges can be revoked for political reasons, like if the President and the US Trade Representative (USTR) decide a country does not have sufficient “rule of law.”

Which is exactly what is threatened now with that success story of textiles in Madagascar. Ever since a political crisis and change in government in Madagascar last spring, the USTR has been threatening to revoke Malagasy eligibility for AGOA, which would effectively destroy the Malagasy textile industry (worth between 6.5 and 8 percent of GDP and accounting for 50,000 jobs).

We had a previous blog post on this, which had a dramatically nonexistent effect on USTR actions.

Of course, the USTR implementing AGOA has good intentions – to promote good governance. There are two problems with this: (1) we don’t have a clue how to do this in Madagascar, and (2) why try to do it by punishing private individuals instead of the government?

On (1), Malagasy politics are not really that hard to understand, as long as you have a Ph.D. in Malagasy history, political science, sociology, economics, and familiarity with the byzantine maneuvers of the FOUR way-far-from-perfect quarreling rivals for power. All the US government asks in exchange for continuing AGOA is that these four guys who hate each other come to an instantaneous consensus on early, free, and fair elections. USTR officials confirmed to us on background yesterday that these efforts continue.

It’s not totally clear why USTR is being so insistent, when “rule of law” is so vague as to allow the eligibility of DRC, Guinea, and Guinea Bissau (as we ineffectively pointed out last time). (This arbitrariness is what justifies the snarky title of this post.)

On (2), all I have to say to elaborate on “why punish private individuals”, is – why punish private individuals?

Time is running out for Madagascar, as incentives to invest and produce for advance US orders are disappearing further the longer the USTR dithers. Political risk comes not from the Malagasy or other African governments, but from the US government’s failure to follow any consistent rule of law on how to apply the AGOA rule of law provision. This arbitrariness weakens the AGOA incentives for ALL African countries.

Please USTR, try to make Secretary of State Clinton’s promising words come true, don’t throw away one of our all-too-scarce development policy successes.

USAID funding Iraqi insurgents? Well, on the plus side, they finally answered one of our emails

USA Today ran a story this week on a $644 million program in Iraq suspended by USAID four months short of its end date. The program was launched three years ago to create jobs and infrastructure in cities throughout Iraq. The Community Stabilization Program, said one hopeful report from 2006, “will provide safe and productive alternatives to insurgent activities while reinforcing democratic values and processes.”

Baghdad billboard for CSP job skills program Source: USAID/Iraq

So why was CSP suspended? According to a USAID statement, an external review begun in February discovered “inconsistencies” in the implementation of the project in one of the target cities. This deadpan response from USAID leaves aside just a few other reasons to be concerned about the project, namely a 2008 audit that found evidence of fraud, phantom workers, and money being diverted to insurgents through trash collection contracts.

The audit also found “short-term employment generated by the program was inadequately substantiated.”

Surely any reasonable understanding of transparent and honest reporting practices would require USAID to indicate in some way on their website that there were questions being raised about the transparency and efficacy of the CSP program.

We brought this to the attention of the USAID press officer in an email on Monday:

Dear Mr. Edwards,

Here at Aid Watch we read USA Today's article … we noticed that the text currently available on the USAID website (among the press releases or on the Iraq page) gives no information about investigations into the CSP projects or the decision to suspend the program.

The CSP accomplishments page still lists: "Almost 45,000 long-term jobs created; Nearly $80 million in grants approved for almost 10,700 businesses; More than 40,200 Iraqis graduated from vocational training courses; More than 9,900 apprenticeships awarded; About 316,000 young people reached through sports and arts program" as highlights of the CSP.

In light of the March 2008 audit and subsequent investigations, reported by USA Today in today's paper, is USAID planning to modify the claims on its website?

Many thanks,

Laura

USAID responded promptly:

Ms. Freschi,

This is the response from USAID as to your questions.

1) USAID suspended payments and new commitments under CSP to allow the IG to conduct and complete an investigation of allegations uncovered in the course of a USAID evaluation of the program. At the time, CSP was only operating in two cities and was on a path towards being phased out entirely as the program was nearing its end.

2) The accomplishments listed on the USAID website are from completed projects that were previously audited by the IG. We implemented all of the recommendations of the IG to their satisfaction, including doing a data quality assurance exercise.

Please contact me if you have more questions.

Thanks

Harry

Harry Edwards

USAID Senior Press Officer