Millennium Villages: don't work, don't know or don't care?

UPDATE 10/16 12:25PM:  Tim Harford in FT also covers Clemens and Demombynes paper and gets response from Sachs. In a new paper, Michael Clemens and Gabriel Demombynes ask:

When is the rigorous impact evaluation of development projects a luxury, and when a necessity?

The authors study the case of the Millennium Villages, a large, high-profile, project originally meant to demonstrate that a package of technology-based interventions in education, health and agriculture could lastingly propel people living in the poorest African villages out of poverty within five (now ten) years.

One way Clemens and Demombynes get at their central question is to examine how the Millennium Villages are (so far) being evaluated, and ask whether a more rigorous method of evaluation would be 1) feasible and 2) likely to yield very different results. They answer 1) yes and 2) yes.

They start by looking at the findings of a Millennium Villages midpoint report released last summer, which shows movement on indicators (higher crop yield, more cell phone usage, fewer cases of malaria, etc.) against a baseline of data collected in those same villages three years prior. In the graph of cell phone ownership in Kenya below, this progress is charted by the black line.

Clemens and Demombynes then put this data in the context of how non-Millennium villages in the same country and region are faring on these same indicators, using publicly available data from national surveys. These are the red, blue, and green lines in the figure below.

What is going on in non-Millennium Villages in Kenya to drive up the number of cell phone users? Conventional wisdom is that it’s driven in very small part by outside aid and in large part by entrepreneurs, small and large. (There are a whole series of these graphs included in the paper, many show more improvement in MVs than in comparators, while a few show worse performance in MVs.)

The paper goes on to describe the weaknesses in the MVP’s published plans for future evaluations, which do involve comparison villages, and suggests how future waves of MVP interventions could be more rigorously evaluated without spending a lot more. (Summary here.)

The MVP team responded to the critique, saying that it “misunderstands the MVP’s aims and evaluation methods.” They shift away from portraying MVP as a demonstration project: the “primary aim” is “to achieve the Millennium Development Goals in the Project sites.”

When Fat Cats Bet on Fat Tails

UPDATE 9:30am get me rewrite! Readers ask for more clarity on what my point is, so a little added rewriting. There has been a lot of passionate moral debate about US income inequality (Greg Mankiw recently got a torrent of abuse for the horrific sin of admitting that he was a rich person).  But you have to UNDERSTAND income inequality before you CONDEMN it. By the end of this post, I'll suggest a different angle.

So what if we step back from the moral judgments and just try to describe the upper echelons of US riches. Figure 1 below shows the likelihood of each level of income in the US income distribution, using the same logarithmic graph which was greeted with total incomprehension wild enthusiasm in a previous post.

In this graph, the vertical axis shows your chances out of 10,000 in reaching the income level shown on the horizontal axis, assuming very stupidly that you are typical of the entire American population. 1 out of every 10,000 Americans clears on average more than $10 million a year (the data are from the great and famous paper by Piketty and Saez). Every movement on either axis multiplies by 10. So 10 out of 10,000 (or 1 out of a 1000) have to settle for being only millionaires instead of deca-millionaires. 1000 out 10,000 (or one out of 10) clear a measly $100,000 a year. (Since the line in Figure 1 is almost straight, we could say the upper limits of the income distribution fit a Power Law, which as mentioned in the previous post is a special type of fat-tailed distribution that many people (at least three) find fascinating.)

Figure 2 shows an alternative way of becoming rich at great odds. This is an exact power law with a slope of -1, meaning that if your chances get 10 times worse, you get 10 times the payoff if you succeed.

We call this alternative income-generating-process “Las Vegas.” The line shows the payoff if you bet $10,000 at the odds shown. Ignoring the tiny detail that the house takes its cut, betting a fixed amount at longer and longer odds follows an exact Power Law.

So is getting rich in America just a matter of making a big bet at very long odds? It’s not the worse metaphor ever – an awful lot of things all have to go right for somebody to become very rich, so the odds are indeed long. A lot of economic outcomes follow Power Laws – the sizes of firms, the sizes of cities, the export value of different exported goods, the cumulative growth of nations, etc. – for similar reasons.

So what if one of the contributing factors to income inequality is just that finding your own personal VERY BIG HIT is rare? This is equivalent to the usual description of income inequality as a very small proportion of the population having a VERY LARGE INCOME. Moreover, by comparing Figure 1 and Figure 2, you can see the payoff from the "bet" in figure 1 is not large enough to be a  "fair bet" in the sense of fully compensating for the very long odds. (Mischievous Question to provoke discussion: does this mean the income distribution is unfair to the rich?)  And furthermore the rest of us want somebody to take on the very long odds of finding a VERY BIG HIT, like the movies Titanic and Avatar, or the iPhone and iPad, because the very big payoff reflects how valuable the Big Hit is to consumers.

So (as @dillardsarah on Twitter suggested as a summary of this post) could inequality just be big, valuable, unlikely bets paying off?

Of course, not everyone faces the same betting odds in the American income distribution, which is when the passionate moral debate kicks back in.

Technology history don't lie

Yours truly has a crazy new article in the latest issue of Foreign Policy on why no-tech ancient civilizations still can't catch up, based on my published research with Diego Comin and Erick Gong. But all is not doom and gloom, you just have to learn the right lessons from technology history:

As China's history has shown, when governments stop killing innovation, good things happen. Technological change has also dramatically speeded up, and lower communication and transportation costs make it cheaper and easier to borrow advanced technologies from other countries -- allowing societies to leap forward....The explosive growth in cell phones in Africa, skipping the intermediate step of land lines, is a promising sign of what Africa's tech future could look like -- if it weren't for its plague of poor governments.

Former World Bank chief economist Stanley Fischer used to joke about a new grammatical tense he called the "World Bank imperative form": Country reports were long lists of things that "must be done" by the authorities, ranging from grandiose infrastructure projects to implementing detailed plans to meet health, nutrition, sanitation, and education needs.

But our research shows that development is not about what you dictate, but what you discover. Little penicillin did far more to improve the world's lot than big plans conceived around a conference table.

...If there's anything that "must be done" to spur future development, it's to create the conditions necessary to empower the ordinary individuals who will create new and unforeseen technologies out of old ones. There's a Thomas Edison born every minute. We just have to help them turn the lights on.

Read the whole article here.

How Sweden is off-track on the Millennium Development Goals

...and other mysteries, all explained by data guru Hans Rosling in this don't-miss Ted talk:

Columbus Day: Christopher as a typical Entrepreneur case study

America was discovered accidentally by a great seaman who was looking for something else; when discovered it was not wanted; and most of the exploration for the next fifty years was done in the hope of getting through or around it. America was named after a man who discovered no part of the New World. History is like that, very chancy.

from Samuel Eliot Morison

Hey UN Peacekeepers--Congo, we need to talk

Vivek Nemana is a graduate student in economics at New York University and works for DRI.

Jeff Gettleman has an unnerving piece in the New York Times on the inability of UN peacekeeping forces to protect civilians in the Democratic Republic of Congo. In one particularly gruesome consequence last July, rebels gang-raped 242 people (including a one month-old baby and a 110 year-old woman, according to the Guardian) in the village of Luvungi, just 11 miles from where dozens of peacekeepers were stationed. Gettleman writes:

Despite more than 10 years of experience and billions of dollars, the peacekeeping force still seems to be failing at its most elemental task: protecting civilians…many critics contend that nowhere else in the world has the United Nations invested so much and accomplished so little.

On the other hand, David Bosco at Foreign Policy chalks it up to problems of perception:

part of peacekeeping's image problem is that it's asked to handle some of the world's worst conflicts and then given very little credit for moving situations from awful to merely bad.

And Jason Stearns writes in the CS Monitor that while the peacekeeping force may have been negligent, the main problem is corruption within the Congolese army:

So long as ... impunity within the army reigns, these kinds of abuses will continue to happen. Just look at all of officers recommended for sanctions in UN Group of Experts reports and various human rights documents. Almost none have been arrested.

These explanations gloss over a simple necessity that MONUSCO, and many previous failed PKOs and aid efforts, fundamentally lacked: a reliable system of communication. Despite $1.35 billion a year and 18,000 peacekeepers, correspondence between Congolese civilians, peacekeeping troops, and UN officials remains deficient. As Shakespeare could have told the UN, failures in communication between the parts lead to easily-preventable blunders which lead to tragedy.

For instance, Gettleman reports that because “there is no cellphone service in the area or electricity, it is not always simple to know when there is an attack. The United Nations…is now trying to install solar-powered high-frequency radios in some villages.”

Could someone please explain why, if there was no cellphone service or electricity, and peacekeepers had been operating in remote areas like Luvungi for 10 years, these radios weren’t installed before the UN embarrassed itself a little earlier?

But that’s not all. Marcel Stoessel, Oxfam’s country director in DRC, told Voice of America that many of the peacekeepers do not speak French, and do not have interpreters. That means that villagers often can’t inform peacekeepers about major threats or problems.

The Guardian wrote that MONUSCO insists it didn’t know about the attacks for more than a week, adding, “Two UN officials in Kinshasa told the Associated Press they heard it from media reports, even though the UN’s small civil affairs office in Walikale is charged with protecting civilians.”

In fact villagers did warn the peacekeepers about a coming attack, but their entreaties were lost in translation – the interpreter-less peacekeepers dismissed it as a false alarm.

While many things can complicate a peace-keeping operation, we shouldn’t excuse the UN for failing on something as simple as installing radios or hiring interpreters.

And now going for the Aid Watch record on global charity cluelessness…

Aid Watch received the following tidbit from a trusted source. It was posted on a community list-serve:

Does anyone have any old men's size  8.5-9.0 sneakers they would like to get rid of? Like, lawnmowing sneakers, that sort of thing?  I'm running a mud race on Sunday and at the end the muddy destroyed sneakers will be donated to Green Sneakers, a non-profit that recycles old sneakers and donates them to people in need around the world. If you have a decent pair that can withstand a mud run, I'd be happy to take them off your hands.

Despite the great popularity of Aid Watch posts like Nobody wants your old shoes (by Alanna) and  A suggestion for the 1 million shirts guy (by Laura) it would be safe to say that all of us in this business still have a little  educatin' left to do.

Can we get the World Bank to say the D- word?

UPDATE 10/12 1PM: we have a winner! (see end of post) UPDATE: No winnners yet, see end of post.

Following last Friday's post on the New Yorker profile of Justin Lin, I had this email exchange with the World Bank media officer David Theis, who kindly responded promptly to my inquiries.

Original Inquiry Fri, Oct 8, 2010 at 11:30 AM:

David Theis Media Chief, World Bank

Dear Mr. Theis, As I am sure you are aware, the current New Yorker has a profile of {World Bank Chief Economist} Justin Lin, especially his advocacy of an authoritarian development model. Does this reflect World Bank policy? In other words, is it official World Bank policy to endorse the authoritarian approach to development? If not, does the World Bank endorse instead a democratic approach to development? or does it simply take no position? Many thanks, Bill Easterly

Reply Fri, Oct 8, 2010 at 12:29 PM:

Bill, No, we are not advocating an authoritarian development model. In fact, Bob Zoellick's recent speech at Georgetown University (http://go.worldbank.org/5VEUBEBHY0) is entitled "Democratizing Development Economics." Many thanks. David

My follow-up question Fri, Oct 8, 2010 at 1:15 PM:

David, thanks so much for being so responsive. If you don't mind, a follow-up question. Mr. Zoellick's speech you mention is using "democratizing" in a different context. He does not bring up the issue of democratic vs. authoritarian regimes in developing countries. So when you say that you are "not advocating an authoritarian development model," I am unclear whether you are saying you are against this model, or whether you are neutral. Could you please clarify? Many thanks, Bill

His reply Sat, Oct 9, 2010 at 9:55 AM:

Bill, I believe "we are not advocating an authoritarian development model" is quite clear. Thanks. David

Bonus Reader exercise: find the word Democracy on any official World Bank website, or in any speech by Mr. Zoellick, or in any other official report authored by the World Bank.  The winner will receive two free tickets to the launch of the World Bank's new Policy Research Report: "D#m#cr#cy: Not Advocating Its Savage Repression."

Footnote: I also corresponded with David Theis on another question in the same series of letters that remains a bit unclear , and will be featured in a future post.

UPDATE: 3:30 pm no convincing winners yet as far as the World Bank offering an official embrace of Democratic Values, as opposed to isolated reports by individual authors and a few stray Zoellick remarks. You have got to do better, guys!! Or is it impossible?

UPDATE 10/12 1PM: We have a winner...

...except in reverse. Since nobody was able to provide a compelling example of the World Bank affirming democratic values, Aid Watch decided to give the prize to David Ellerman for his piquant comment that he was once forced to substitute the word "participation" for "democracy" in a major World Bank speech. This allows Aid Watch to selflessly quote its own previous posts deriding participation as a meaningless buzzword , which goes all the way back to colonial times and was therefore not seen as inconsistent with even Imperial Autocracy.

America's first failed attempt at foreign occupation of barbarous lands

Canada

In memoriam, Linda Norgrove, humanitarian in Afghanistan

The New York Times reports:

A Scottish aid worker who was taken hostage two weeks ago by the Taliban in eastern Afghanistan was killed by her captors early Saturday during an unsuccessful rescue raid, according to the British Foreign Office.

The aid worker, Linda Norgrove, 36, was regional director of a jobs program financed by the United States Agency for International Development for Afghanistan’s eastern region.

Former colleagues described her as a person of enormous warmth and kindness who was deeply committed to helping people in poor areas of the world and who had spent years in Peru and Laos as well as in Afghanistan.

Ms. Norgrove loved Afghanistan from the first time she arrived in 2005 on a United Nations mission, colleagues said. While many United Nations workers stay for a year or two, she stayed for more than three years working on environmental programs and helping to administer an alternative livelihoods program for farmers in poppy farming regions.

In her latest job she was the only expatriate in the Jalalabad office of DAI, directing about 200 Afghan professionals and coordinating with Afghan ministries and local companies. Sensitive to local tradition, she always wore the long, loose tunic and trousers known as a shalwar kameez and covered her hair with a large scarf. “I’ve seen few people among Afghan and Muslim people like her,” said a man who worked with her who gave his name as Bakhtiar. “She was very kind, very helpful, a lovely lady, a very respectful woman.”

Deepest condolences and sympathies to Linda Norgrove's family and friends.

Our China who art in heaven, hallowed be thy growth rate

UPDATE 4: thanks to all the critics on this post, too bad I couldnt get Chinese censoring technology to work:) UPDATE 3: 9:30am Sat 10/9: links to Nobel Peace Prize and Charter '08

UPDATE 2: 1:30pm. New Yorker writer Evan Osnos generously replies to my criticisms (see end of post)

SCOREBOAD UPDATE 10 AM 10/8: understanding key to China's future development: Nobel Committee 1, New Yorker 0; Liu Xiaobo 1, Justin Lin, 0.

A writer in the New Yorker has an article fawning all over China’s rulers and Chinese economist Justin Lin (currently the Chief Economist of the World Bank).

I’m saddened to see my favorite magazine publish an article seemingly in search of every possible fallacy about growth, the main one being that if you have a high growth rate, then the current autocrats and their economist advisors must be Gods.

(Sorry to be so harsh.  Can you tell that this time I am really annoyed to see so much gushing over a Party that kills, beats, and imprisons any Chinese citizens who are not quite as enthusiastic about their own government as a New Yorker writer? And recommends this approach to other countries?)

Let’s review the logic and evidence.

1. See previous post on the myth of the benevolent autocrat. (To be fair to the New Yorker writer,  he mentions briefly at the very end of the article Dani Rodrik’s similar argument. But it comes as across as a CYA after the long hagiography.)
2. Rapid growth episodes never last indefinitely, so forget all the nonsense about projecting today’s growth rate forward till China overtakes Japan, the US, God, etc.
3. Especially considering (2), Growth is not a reliable indicator of performance, income levels are what matters:
   1. China’s per capita income is currently 13 percent of the US level.
   2. Remember growth is the CHANGE in income. A change is made up of two elements:
      1. The extent to which things are good now.
      2. The extent to which things were totally f’d up before.
         1. China performs really well on this second part of the CHANGE equation. Not even mentioning previous authoritarian emperors and political chaos, it had from 1949 to 1976 a totalitarian psycho in power responsible for the deaths of millions, the Great Leap Famine Forward, the Cultural Revolution.
   3. So compared to the official “complete wacko destructive” standard set by Mao, today’s citizens are free-er, but still not very free.
   4. Did I mention that I am really annoyed?

So another way of stating China’s rapid growth recipe would be something like the following:

Have a succession of crazy autocrats, political chaos, and war savagely repress one of history’s most inventive peoples, along with not allowing one of the most successful trading diasporas in history to operate in China proper.  Then have things calm down a bit and have somewhat less crazy rulers allow more of the people’s energy and creativity to burst out. Presto, the change from EXTREME NEGATIVE to LESS NEGATIVE is called a “growth rate,” and it will be high. Now accept worship from around the world.

UPDATE 1:30PM New Yorker writer Evan Osnos has a generous response to this critique:

Dear Bill, Thanks for the twitter headsup to your post. I agree with your "logic/evidence" on China's growth model. I also agree with you on the myth/fallacy that it's a guaranteed (or democratic) path. I think we'll have to disagree on whether this piece about Lin and his ideas is an endorsement of him - - or an effort to explain the background of an unfamiliar name in an influential job and why he got there. The story also relies on the critiques from Yang Xiaokai, Yawei Liu, Yao Yang, Wu Jinglian, and Dani Rodrik, but only one of those five was referenced in your post. Fair enough: I suspect you found the overall mix to be unpersuasive. As I said, I agree with much of your take on the overall approach to growth. Best, Evan

UPDATE 3: New York Times on Nobel Peace Prize for Liu Xiabo.

The English translation of Charter '08 that Liu Xiabo signed along with 300 other Chinese intellectuals.

Development: the Greatest Story Ever Told

After all the efforts of the last 6 decades, only a minority of countries are developed. That seems like a sad indication that the odds are long as countries struggle to attain Development. Yet let's not take the Development that has been achieved for granted. If you beat the odds, the payoff is remarkably large (which is maybe why all of us are working so hard on Development!) As the figure shows, a third of the sample of countries is at $8000 per capita or better in 2008, and a fifth of the sample is $16,000 per capita or better. In this sample, there is a 1 percent chance of getting all the way to national average income per person of $32,000.

To put it another way, development does NOT follow the bell curve distribution thought to be “normal” for many things (which is why the bell curve is called the “normal” distribution). The hypothetical bell curve in the figure gives you basically ZERO chance of ever getting above $8000.

Another way of illustrating how LARGE the payoff to development is, contrast it with something that does follow a bell curve: human height. American males have an average height of about 5’ 9 ½ inches (1.77 meters). Using the actual bell curve for their height distribution, American males have about a 1 percent chance of being 6’ 4’’ or taller (1.93 meters). But if height followed the same distribution as development, there would be 1 out of every 100 American men taller than 46 feet! (14 meters!). (Try fitting THEM into your family picture.)

The boring technical jargon is that development has a “fat-tailed” distribution. The normal bell-curve distribution is not “fat-tailed” because its right tail in the figure above vanishes quickly, while the development distribution has a right tail, that is, well, Fat.

It’s easier to see what is going on with fat-tailed distributions when using log scales, shown in the second figure. With these log scales, every additional movement along the scale is a DOUBLING of the previous level. So move down the “probability” vertical axis, where every step down cuts your probability in half, but at the same time roughly doubles your per capita income payoff.

Moreover, the graph shows the distribution at different points in time: 1870, 1913, 1950, 1975, 2008. The payoffs keep getting better for the same probability. Or to say it another way, as you move from 1870 to 2008, the attainment of higher and higher per capita income levels becomes more likely. In fact, the definition of what income level represents “Development” has to keep changing because the whole distribution is moving to the right.

So first the bad news and then double good news. The bad news is that the odds are long to attain “Development.” The double good news is that (1) the Development prize is remarkably Large, and (2) it keeps getting Larger.

From Greek myths to Hollywood romances, we all love the story of the Hero who overcomes long odds to attain a Remarkable Prize (the Golden Fleece, the woman of my dreams, etc.)

Development then should also be one of the greatest stories ever told.

Wonky footnotes: I am obviously leaving out a lot of necessary details and further discussion. Two famous fat-tailed distributions in statistics are the log-normal and the Pareto. The Pareto distribution would show up in the second figure as downward sloping lines that are exactly straight (which are called Power Laws, a topic which has a huge literature and generates wild excitement in some quarters). Income per capita across countries appears to follow more the log-normal distribution. I am more interested in development being fat-tailed than in whether it is following exactly a Power Law. Countries dominated by oil income are omitted from the distributions. The source for the per capita income data is Angus Maddison, updated to 2008 with WDI. It goes without saying that per capita income numbers are shaky (and even more so as you go back in time), but I think the qualitative story is probably mostly right despite shaky individual numbers.

Why the US “whole of government” approach to development is a black hole

UPDATE by Bill: unconscious experiment on Twitter of sexiness vs wonkiness, see end of post. Aid Watch has frequently panned the administration’s declared strategy of “elevating development” to be “on par” with diplomacy and defense. For one, this rhetoric obscures the actual—and continuing--disparity in magnitude, power and influence between the so-called “3Ds.” For another, it implies that the objectives of each “D” tend to be aligned.

Todd Moss, at the Center for Global Development, writes that the administration’s speechifying on this subject is increasingly “ringing embarrassingly hollow,” as USAID doesn’t control its own budget, and the State Department is effectively running both US aid efforts in Haiti and the president’s new food security initiative.

But rather than attributing USAID’s weakness to the usual turf wars and inter-agency power grabs, Moss suggests another explanation:

What if the real problem is that the much-vaunted “whole-of-government” approach is fundamentally unworkable in the United States?

The idea behind whole-of-government seems sensible enough: lots of federal agencies have skills and resources and experience that can be brought to bear on complex problems. If we can get everyone in the same room and all in the same boat, then the USG effort can be greater than just lots of agencies all running around doing their own thing, right? This seems especially attractive in development policy, where the United States may be involved in helping foreign countries improve health, education, agriculture, transportation, democracy, security, financial regulation, and loads more. If we want to help entrepreneurs in Liberia, why not bring in USAID, the Treasury, the Commerce Department, the US Trade Representative, and the Small Business Administration? If we’re fighting HIV/AIDS in Uganda, let’s use the expertise of HHS, CDC, NIH, and the FDA, right? We’ve now got at least 26 agencies involved in foreign aid of one kind or another. But the room is starting to look a bit crowded now....

But in the United States—with its sprawling federal structure and huge agency staffs and budget—just getting everyone around one table is perhaps too much to ask. The interagency process in any country is a strain…[T]he process can become convoluted and bogged down when the scale is out of whack. Simply put: when you have too many people at the table, nothing gets done.

Read the whole post here.

UPDATE: 11:30 am Bill unconsciously ran an experiment on Twitter: (1) he posted a link to this blog on Twitter, and (2) he asked Twitter what was happening on Facebook such that he started receiving a bunch of messages from uncl*d l*dies saying "Hello :)" At this point the responses to (2) are outnumbering those to (1) by a 3:1 ratio. Please comment.

The transparent US government to development advocates: drop dead

Robert Strauss, a Madagascar-based consultant, filed a Freedom of Information Act request last March to find out more about the US government decision to remove Madagascar from its list of countries eligible to receive trade preferences  under AGOA. This is a decision we have blogged about many times, since it has cost thousands of Malagasy textile workers their jobs, without having any discernible effect on the leaders responsible for the 2009 coup and subsequent governance gridlock that landed Madagascar on the US Trade Representative's hit list in the first place. We also wondered why Madagascar was singled out when dictatorships like Cameroon are still eligible for AGOA.  Strauss requested: Four months later, the USTR replied:

We have already had a fruitless dialogue with Ms. Hamilton, so that's just a cover for the cover-up on what really caused the US government to do something so destructive to blameless textile workers in Madagascar.

The Communist version of Facebook

see here.

Stop me before I paradox again

Robin Hanson offers these thoughts on big-picture thinking (HT Dennis Whittle):

I’ve ...noticed that among smart folks, the most successful keep their smarts on a short leash. They use their smarts to make the sale, win the case, pass the test, get published, etc., but they don’t use much smarts to consider whether they really want to make the sale, win the case, etc. ...

In contrast, on average smart folks gain far less success when they seriously apply their smarts to big pictures, reconsidering what they want, what we really know, how the world is organized, what they can do to make the world a better place, and so on. They go off in a thousand directions, and while some might break new ground, on average such smart folk gain much less personal success, and may well do less to help the world.

As some of you might have guessed, I am very sympathetic to portraying big-picture thinking as low-payoff. Big picture development will happen not from a Great Thinker achieving Development, but from a lot of little thoughts and actions by a lot of creative, motivated individuals operating in political, social, and economic systems that facilitate liberty.

Of course, the idea that big-picture thinking is low-payoff is Itself a big-picture idea with an incredibly high payoff.

Government warns against global travel and/or staying at home

UPDATE 1PM: let's be fair to our beleagured security officials (see end of post) The NYT correctly mocks the new US government travel alert:

Where is the threat? Europe. What is the target? Subways, railways, aircraft, ships or any “tourist infrastructure.”

The government's cluelessness is even more breathtaking once we include two simple truths about risk:

(1) a warning covering an extremely broad area implies the risk in any one location is very low.

(2) risk must always be judged relatively, not absolutely. How does the risk of travel in Europe compare to the risk of staying at home? At home, you are likely at greater risk from a much more dangerous group than Al Qaeda: your fellow drivers every time you take the road. In Europe, you won't be driving as much as you traipse through picturesque Euro-sites.

Oh, wait, you will be driving more than usual because the government also tells you that --  if you are foolish enough to brave Europe -- you should avoid the safest forms of transportation: subways, railways, aircraft. It's obvious you should minimize risk by using non-seat-belt-equipped tiny taxis made out of aluminum and cardboard piloted by speeding cabdrivers.

What point is Professor Aid Watch making with this post today? Perhaps that we should worry about any government  this stupid about elementary probability theory when it takes on any other areas that require risk management such as just about everything. Maybe some tax money should be spent on economists, statisticians, and mathematicians giving probability courses to government officials?

UPDATE: let's give our security officials a break and exempt them from considering other risks of everyday life, so the Europe alert should be compared only to security at home -- where the threat level is also on high alert (either  YELLOW: SIGNIFICANT RISK OF TERRORIST ATTACK or for airline flights it is ORANGE: HIGH RISK OF TERRORIST ATTACK.)

Could our government kindly clarify WHICH it is recommending: that we should be attacked at home or in Europe?

Development: Say it with flowers

Cut flower exports get a lot of development buzz. I'll make this into a bleg for anybody who can contribute some systematic knowledge on this. Of course, I first did my own exhaustive research on this, in the form of a 10-minute chance conversation with a flower importer for a major chic retailer in New York. The flowers shown from South Africa and Ecuador surprised me. I didn't know Ecuador had cut into the famous Colombia success story in providing America's roses, and I didn't even know South Africa WAS a flower exporter, especially to the US. She told me that many flowers have a longer shelf life than I thought, like 12 days, giving time to fly them long distances.

The South African flowers went to Amsterdam (the center of the global market) to Miami (the entry point for all flowers to the US, possibly chosen by customs to catch drugs mixed with the flowers) and then to New York. Africa's most famous success story is Kenyan cut flowers to Europe, currently being somewhat displaced by Ethiopians.  According to a co-authored paper that I will discuss in a future blog, Uganda was a competitor in this market until increased fuel prices after 2003 drove their firms out of business; Ethiopia's flower exports took off at the same time because of some combination of better flowers, government subsidies, and foreign aid subsidies (the latter obviously merits more investigation on its own). Other small African exporters have been Zimbabwe, Zambia, and Tanzania.

My own informant had visited Cote d'Ivoire as a possible source for the US market, but the international flights were to Paris, and Abidjan to Paris to Amsterdam to Miami to New York was a few airports too many.

Flower exports could be beautiful in theory: good horticultural land + cheap labor + air transport = earnings for poor people. But may be not if they have to go through 5 airports.

Anybody like to respond to this bleg with some more flower information?

Osama Bin Laden, aid expert

From the New York Times:

We are in need of a big change in the method of relief work because the number of victims is great due to climate changes in modern times

We interrupt this diatribe for a brief kindly announcement

There’s been a lot to get outraged about on Aid Watch this week. World Bank leader calls for democratizing research while censoring research. USAID and NGOs urge transparency while egregiously non-transparent. Critics criticize our criticism of FAO hunger numbers that turn out to be even worse than we first suggested. Our strongest supporters correctly point out that excessively bland and polite statements have little effect on the debate compared to outrage, and outrage is often justified.

At the same time, we try to hold ourselves to the same standards as those we criticize, and we acknowledge that our own critics sometimes have a point. We are doing our best in our little part of the debate to use outrage constructively, but we sometimes go too far and get it wrong too.

Most importantly, our outrage is directed at OUTCOMES not at PEOPLE. The staffers at USAID, NGOs, World Bank, or FAO are doing their best subject to severe political and donor pressures, and often sympathize with our criticisms (judging by public and non-public comments that we get).

Let’s fight together the political pressures and mistaken perceptions of donors that result in bad outcomes for the people that ALL of us in this debate care about: the world’s poor.