Red states & Blue cities: Divided we'll endure anyway

Happy election day! Aid Watch is unable to maintain any pretense of doing its normal business in the midst of all the excitement. Please vote early and often for the candidate of your choice, as long as they passed 8th grade science.

This cool 3-D map shows the Red - Blue split in a way that captures the large Democratic vote in large urban areas. Thanks a lot, cool mapmaker, now we seem even more divided.

We now see that there are really no Blue States, there are only Blue Cities. The rural blue areas are mostly reflecting concentrations of blacks (South), Hispanics (Southwest), or native Americans (West), along with the remaining 11 rural white people voting Democratic somewhere in West Virginia. Otherwise, if you see a patch of blue, it's probably a lake.

Yet after all that, thanks to a certain Seattle-based franchise, supporters of The Coffee Party from either red or blue areas can find drinkable French Roast in just about every last rural or urban square inch of the US. Some will win and some will lose today, but both winners and losers will still enjoy the same cheap caffeine and the same Bill of Rights.

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Photocredit: Alexander O'Neill via Climatico

The Coffee Party Manifesto

The Coffee Party is alarmed that our discourse has been hijacked by Partys named after other Beverages. The Coffee Party is for all the reasonable people, which happens to be correlated with drinking good coffee. Here is our manifesto:

1. The Coffee Party has had the privilege to meet people from many different creeds and races, and despises fear-mongering towards any one group.
2. The Coffee Party also hates xenophobia towards immigrants. We don’t plan to vote for any candidate who first exploited an immigrant for nine years and now wants to deport her.
3. And ixnay on Yet Another Xenophobia aimed at particular trading partners, falsely blamed for our economic woes. The Coffee Party likes free trade -- how else are we going to get our Coffee?
4. While we’re at it, we don’t want Homophobia or Misogyny either.   
5. The Coffee Party wishes the tax debate would also discuss whether we are getting our money’s worth. We have a tax-bloated government here at Coffee Party HQ, so why did they cut the one government activity we actually find useful – subways!?#!
6. Suppose you had to make an agonizing decision whether to endanger the mother of your child by going through with a pregnancy. Pick one: (1) you and the mother should decide yourselves, (2) some Old Fart on a Bench or Legislature should decide for you.  The Coffee Party does not consider this a difficult pick.
7. The Coffee Party wonders why all candidates from all parties have forgotten to mention that we are still waging war for reasons no longer clear, not to mention still violating civil liberties of both citizens and foreigners?
8. Speaking of wars, how about ending the War on Drugs, which is so destructive  to our inner cities and to the source countries? (link to Nick Kristof){Wait a minute, we could even tax pot and restore subway service! (see 5) }
9. Oh yes, Development. Frankly, the candidates are doing so badly on our issues 1 through 8, the Coffee Party is not expecting much from them on Global Development. At this point, we would just ask them not to destroy industries in poor countries with some arbitrary trade policy decision.
10.   Our country is based on the ideals that ALL "are by nature equally free and independent,” and have “inalienable rights, among them life, liberty, and the pursuit of happiness,” men and women, blacks and whites, gays and straights, immigrants and natives, Christians and Muslims, Jews and Gentiles, citizens and foreigners, rich and poor. The Coffee Party wants our country back.

Eyes Wide Shut: Philanthropy Action on the "Rescheduled" Sachs vs. Clemens/Demombynes debate

Tim Ogden at Philanthropy Action issues a petition for the "rescheduled" (quotes in original) Sachs vs. Clemens/Demombynes debate on evaluating Millennium Villages, which was supposed to happen last Wednesday, to be indeed, well, rescheduled.

He asks for all of us to be watching whether this indeed happens. Aid Watch is always in favor of more Watching, so we support Tim's petition.

Physics Envy in Development (even worse than in Finance!)

Andrew Lo and Mark Mueller at MIT have a paper called "WARNING: Physics Envy May Be Hazardous to Your Wealth," also available as a video.  The takeaway, which is equally relevant to Development as to Finance (the actual topic of the talk),  is that inability to recognize radical UNCERTAINTY is what leads to excessive confidence in mathematical models of reality, and then on to bad policy and prediction.

Imagine how much harder physics would be if electrons had feelings! (Richard Feynman)

The key concept of the paper is to define a continuum of uncertainty from the less radical to the more radical. You get into trouble when you think there is a higher level of certainty than there really is.

1. Complete Certainty
2. Risk without Uncertainty (randomness when you know the exact probability distribution)
3. Fully Reducible Uncertainty (known set of outcomes, known model, and lots of data, fits assumptions for classical statistical techniques, so you can get arbitrarily close to Type 2).
4. Partially Reducible Uncertainty (“model uncertainty”: “we are in a casino that may or may not be honest, and the rules tend to change from time to time without notice.”)
5. Irreducible Uncertainty:  Complete Ignorance (consult a priest or astrologer)

Physics Envy in Development leads you to think you are in Type 2 or Type 3, when you are really in Type 4. This feeds the futile search for the Grand Unifying Theory of Development.

Type 4 "model uncertainty" seems even more likely in development than in finance, theory is a lot better developed and produces more precise hypotheses in the latter than in the former (but even I am not so skeptical to think that we are in Type 5 in development).

What to do about large uncertainty in development? Obviously not a question that can be answered in one sentence.  Maybe we can start by discussing social systems that allow decentralized agents to solve their own problems that feature less uncertainty, and doesn't require any centralized agent to know the uncertain whole model of the whole system.

Millennium Villages: Moving the goalposts

Here on the blog, we’ve been following the progress of the Millennium Villages Project, a joint effort from the UN and Columbia’s Earth Institute that has introduced a package of development interventions in health, education, agriculture and infrastructure into 14 “clusters” of villages throughout 10 African countries. In response to a critical paper by Michael Clemens and Gabriel Demombynes, the MVP architects published a statement last week that they said would “clarify” some “basic misunderstandings” about the project. This statement caught our attention because—I would argue—what it is actually doing is seeking to reframe the debate about the project, and redefining project success in different, less ambitious terms.

“The primary aim” of the project, the MVP architects write, “is to achieve the Millennium Development Goals in the Project sites, as a contribution to the broader fulfillment of the MDGs (Evaluating the Millennium Villages: A response to Clemens and Demombynes, October 2010, emphasis in the original). Also important, they say, is to clarify what the MVP is not: “The MVP is not testing a rigid protocol for implementing MDG-based outcomes…The MVP is not claiming or aiming to provide a unique or “optimal” model for achieving the MDGs.”

This sounds fine unless you’ve read the many other MVP project reports and documents that clearly outline other, different, major goals and indicators of success.

For example:

• “To create and demonstrate a model for achieving the MDGs that can go to scale in all senses: concept, financing, implementation, monitoring and evaluation” (The Millennium Villages Scaling-Up Strategy,” late 2005)
• “To raise the capital stock above a threshold level, above which the village can move toward self-sustaining economic growth.” (The African Millennium Villages, PNAS, 2007)
• To prove that ”rural Africa can…escape the extreme poverty that traps hundreds of millions of people throughout the continent.” (Millennium Villages Info Kit, undated)
• To provide “a solution to extreme poverty” (Millennium Villages Info Kit, undated)

So, in this context, what’s even more revealing about this new statement is what it does NOT say. It does not mention that the improvements to the villages will be self-sustaining, or even moving towards self-sustainability by 2015, although that notion was at one point advertised as a “central proposition underpinning the Millennium Villages concept” (MVP FAQ, late 2006). In this case, the clarification seems more like a retrenchment, a moving away from the ambitious claims made at the project’s optimistic outset.

The new MVP definition also backs away from talking about interventions “undertaken as a single integrated project” that will serve as “proof of concept that the poverty trap can be overcome” (as stated in the PNAS paper cited above). In fact the impact of the project as an integrated whole can’t be demonstrated, the MVP authors argue, because some of the same improvements at work in the Millennium Villages (insecticide-treated bednets, subsidized fertilizer and seeds, for example) are also present in many of the surrounding villages.

Before, the project was defined in its own materials as a research experiment (a “proof of concept” carried out first in “research villages”) to prove that a package of development interventions delivered in a particular way can help lift the very poorest people living in rural Africa out of poverty forever. In today’s new formulation, the MVP is a means to show that by spending an amount roughly equal to 100 percent of the village’s per capita income on already “proven” interventions, for a period of 10 years, it can allow that village, for at least one moment in time in 2015, to step across the finish line demarcated by the Millennium Development Goals.

If the project continues to define success in these narrower terms, it will effectively shift the focus away from any obligation to show that the positive things achieved in the Millennium Villages are self-sustaining beyond the 10-year life of the project, or to prove that they are actually a result of the project itself.

POSTSCRIPT:

Screen shot of the top of World Bank's Africa Can...End Poverty Blog last Friday:

That notice was removed; here’s what the same blog tells us, at the bottom of the post, today:

UPDATE: Another view from Chris Blattman.

Between the Massive Middle and Ivy Elite

UPDATE 9am, Oct. 27: commenter says too rosy a picture of Middle? see end of this post There has been a lot of talk this political season about Ivy League Elitism. My own background—of belonging and yet not quite belonging to the elite— makes me very conflicted.

On Monday, I gave a seminar (not for the first time) at my undergraduate alma mater, Bowling Green State University, which is located in my hometown of Bowling Green, Ohio. It was a very good audience, and I enjoyed as always interacting with my old professors, my first mentors in economics, Charles Chittle, John Hoag, and Leo Navin, as well as with one of BGSU’s new generation of star professors, Timothy Fuerst. I also gave a talk at my old high school (BGHS), and was very impressed with the knowledge and smarts of the students (from the Model UN club) and the Social Studies teacher who hosted me, Theresa Dunn, on development topics.

Earlier this year, I attended an awards ceremony where I was one of 100 alumni that were “among the most prominent” of BGSU’s first 100 years, 1910-2010. Some of my friends teased me that getting an award like this was a bit easier at BGSU than it would have been at, say, Harvard, and I played along with maximum self-deprecation. Yet at the awards ceremony, I felt very humbled by how impressive the rest of the 100 were, with high-achieving entrepreneurs, scientists, actors, artists, and athletes.

My Bowling Green experience always reminds me how American economic development is not just built on a bicoastal elite that went to the elite high schools and universities, but on a very broad and deep Middle America (usually dissed as “flyover America”). The bicoastal elite itself is not a fixed hereditary class, but is constantly renewing itself with new recruits from the same vast Middle, of which I am originally one.

The Massive Middle also provides upward mobility to the poorer regions. My family had lived in one of the poorest regions of the US, the Appalachian Mountains of western Virginia and West Virginia for seven generations. My father grew up in southern West Virginia during the Depression, after having lost his own father at age 2 to tuberculosis. Yet thanks to his hard-working mother and his own hard work, he got a Ph.D. at West Virginia University (WVU) and then got a job as a biology professor at BGSU. Government-funded education like WVU, BGSU, and BGHS is also what helped create the Massive Middle.

So after all this, I am a bit conflicted about the Ivy League Elite. I don’t like the anti-intellectual attacks on this elite (from the Middle); I respect very much all the incredibly smart and creative people I know who belong to this elite.  Contrary to the perception of the attackers from the Middle, the elite universities do a great job producing world-class ideas and achievements.

At the same time, I don’t like the pretensions of some in the elite who look down on the Middle and who think they are the only ones qualified to contribute to our development.

Having been on both sides, Middle and Elite, it looks to me like BOTH are success stories in themselves and BOTH have played their own important part in America’s Miracle of Development.

UPDATE POSTSCRIPT 9 AM, OCT. 27: a commenter suggests my portrait of the Middle is too rosy and mentions the "cult of mediocrity."   I agree that this exists. In Bowling Green, the Junior High and High School periodically face threats of cutbacks to their (already limited) programs for gifted students. And yes, I perceived that many people in Bowling Green had anti-intellectual values, both when I was growing up and now, which does feed a "cult of mediocrity."  But Bowling Green is diverse (check out the coffee shop Grounds for Thought as the HQ of the local intelligentsia), and there were and are many who recognize and encourage those who do well in school.

Is Papua New Guinea the New Niger Delta?

The New York Times reports:

In 2014, ExxonMobil is scheduled to start shipping natural gas through a 450-mile pipeline, then on to Japan, China and other markets in East Asia. But the flood of revenue, which is expected to bring Papua New Guinea $30 billion over three decades and to more than double its gross domestic product, will force a country already beset by state corruption and bedeviled by a complex land tenure system to grapple with the kind of windfall that has paradoxically entrenched other poor, resource-rich nations in deeper poverty.

Will Papua New Guinea’s Southern Highlands harness these revenues to grow economically and reduce poverty, joining the ranks of natural resource success stories like Chile and Botswana? Or will it instead follow in the path of Nigeria’s Niger Delta, where frustration over lost livelihoods and environmental devastation flares up into kidnappings, oil theft and sabotage? Or the Chad-Cameroon pipeline, a failed World Bank project that has become a cautionary tale against investing in extractive industries in a weak institutional environment?

The article doesn’t provide much cause for optimism:

While the West’s richest companies are used to seeking natural resources in the world’s poorest corners, few places on earth seem as ill prepared as [Papua New Guinea’s] Southern Highlands to rub shoulders with ExxonMobil. The most impoverished region in one of the world’s poorest countries, it went unexplored by Westerners until the 1930s…

…[L]ocal leaders worry about the continuing inflow of guns into an area with almost no government presence, and no paved roads, electricity, running water, banks or post offices. They worry that the benefits of the gas project will fall short of expectations, begetting a generation of young men who will train their anger on ExxonMobil.

PNG’s finance minister says that gas revenues will be invested in sovereign wealth funds, a strategy advocated by the OECD and used by Norway and Abu Dhabi to guard their oil revenues for the future, smooth volatility, and protect against Dutch Disease.

If there were a template for a country that could beat the odds and defeat the resource curse, it might look something like this: Strong institutions. A functioning democracy. An independent judiciary and a free press. A demographically homogenous society.  A diversified economy, with some strong, non-resource constituency that will fight to protect itself against resource distortions.

Unfortunately, this isn’t PNG. The largely rural, fantastically diverse island nation, home to hundreds of different ethnic groups and one-tenth of the world’s languages, is saddled with a weak, ineffective and corrupt government. Comparing perceptions of corruption, ease of doing business, and measures of freedom, Papua New Guinea ranks a lot closer to Chad and Nigeria than it does to Botswana and Chile.

The few pictures in the NYT’s accompanying slide show focus on the challenges of development in PNG, while they hint at the beauty that’s at stake.

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Photo credit

The myth of Ethiopia’s “natural” disasters

As Amartya Sen has shown, famines in our times are not true natural disasters, but more often the consequence of bad governments and their bad policies. Revisiting the era of Live Aid for a book review in The New Republic, David Rieff gives evidence of how the Ethiopian famine was framed as a natural disaster rather than a political one, so as not to “complicate” the picture for viewers:

… Michael Buerk’s first BBC report from the famine zone opened with the words, “Dawn, and as the sun breaks through the piercing chill of night on the plains outside Korem, it lights up a biblical famine, now, in the twentieth century.” Apart from the facts that it was dawn and there was a famine, nothing in what Buerk said was right. It was precisely not a biblical famine, in the locusts/great flood/visitation-from-God sense that Buerk was evoking. It was, rather, a man-made famine—the direct and in all likelihood inevitable result of deliberate policies in Addis Ababa by the Stalinist government of Mengistu Haile Mariam. That is to say, it was a famine that was more likely to occur in the twentieth century—the heyday of man-made famines—than at any other time in human history.

The book under review, by Peter Gill (also reviewed by Bill in the Wall Street Journal), takes stock of what’s happened and what hasn’t in Ethiopia since Geldof et al admonished us in 1984 to “pray for the other ones” living in a “world of dread and fear/ Where the only water flowing/ is the bitter sting of tears”:

[Gill’s] book is not just a look back at the great controversies of the famine years of the mid-1980s, but also an attempt to understand whether, as he puts it, “beyond the challenges of famine forecasting and hunger relief, are there [now] Ethiopian political institutions and policies in place to deliver the transformation known as ‘development’?”

The elision of the political causes of human suffering in Ethiopia has turned out to be a trend with more staying power than a few of the pop singers in Band Aid. Western governments, donors and academics have kept on admiring and abetting Meles even as he presided (this year) over an election of which Human Rights Watch said “the most salient feature ... was the months of repression preceding it,” and called the government’s performance “multi-party theater staged by a single party state.”

As Gill points out, in the development world, Sen’s celebrated argument in Development as Freedom that “no famine has ever taken place in the history of the world in a functioning democracy,” and its corollary, “that a free press and an active political opposition constitute the best early-warning system a country threatened by famines can have,” is considered to be proved, no longer open to dispute. But for Meles, as Gill reports, it is a neo-liberal myth, “not validated by historical facts.”

And today, despite some success in growing the Ethiopian economy:

[T]he food security of poor Ethiopians is anything but more assured today than it was a decade ago, and it is anything but clear that the country is any less dependent than it ever was on food aid from foreign donors.

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Photo credit

The Juan Williams Logic Test Edition

UPDATE: some of my dear satirically-challenged readers did not quite pick up on the ironic tone of this post, so I have made a few changes. Others seemed to be missing the point that I am mocking fallacious logical arguments, so let me just clarify that I am mocking fallacious logical arguments.

UPDATE 2: some of you have helpfully explained that Juan Williams was just talking about feelings. OK. Just wondering whether we should deny equal rights to an ethnic group based on feelings?

Multiple choice test!

1. Juan Williams' emotions seemed to say: "most terrorists are Muslim, therefore I deduce that most Muslims are terrorists." This is: (a) an elementary logical error, (b) a valid reason not to take a flight with people wearing "Muslim garb," (c) implies if Juan is afraid of the risks of a terrorist attack, he should never have braved the dangerous drive to the airport.

2. Some nut somewhere is a fan of the economist Friedrich Hayek. Therefore it follows that : (a) since I like Hayek, I am a nut, (b) you can logically prove that Hayek  is a talk show host (c) Hayek's ideas make possible a free society in which nuts say nutty things, but you can ignore them.

3.  The Nazis liked Wagner. James Levine recently conducted  Wagner's Das Rheingold at the Met. Therefore (a) James Levine is a Nazi, (b) Wagner is a Nazi, (c) the overture to Lohengrin is one of the most beautiful pieces of music of all time.

Tribute to Center for Global Development (CGD)

Dennis Whittle has a nice post praising CGD. I couldn't agree more, even when not agreeing on every issue with Nancy Birdsall and the brilliant staff she has hired at CGD. I will always be grateful to Nancy from an intensely personal perspective. She courageously took me in at CGD when I had become persona non grata to the rest of the development establishment, after my first book came out in 2001. She took a big risk in giving asylum to a dissident viewed by many as divisive and dangerous, just as she was trying to launch CGD from scratch. That said a lot about what kind of person Nancy was and is, and she has deserved every bit of her subsequent success at making CGD the premier institution it is today.

Yes, critics also appreciate a little sympathy every now and then

From Megan McArdle in a different debate:

The rest of her post puts me in mind of the phenomenon that William Easterly has described in development circles:  the recycling of ideas that have failed before, always unveiled with much fanfare, but no real explanation as to why this time is different.  Frankly, it makes me understand why Easterly sometimes gets a little testy.

Reader exercise: please explain "aid fungibility" to our Secretary of State

UPDATE: OK I finally define fungibility (see end of post). It involves brothels.

 the United States said Friday that it planned increased aid for Pakistan’s military over the next five years.

Secretary of State Hillary Rodham Clinton made the announcement in Washington ...

In announcing the aid, Mrs. Clinton did not discuss the administration’s moves to stop financing certain elements in the Pakistani Army that have killed unarmed prisoners and civilians.

On Thursday, senior administration and Congressional officials said that the Obama administration planned to cut off funds to those units.

From today's NYT

T or F: Increasing aid to Pakistani military while you "stop financing certain elements" who kill civilians is equivalent to increasing aid to these same "certain elements."

UPDATE: OK, OK I can tell you guys really want me to define "aid fungibility". Here's the official definition given by the World Bank's Chief Economist in the 1950s:

It's when we think we're financing a power plant, and we're really financing a brothel.

Aid Fungibility is when the Donor gives the Government Aid for Good Thing A and refuses to fund Bad Thing B. The clever Government then reduces its own spending on Good Thing A one for one with the aid, so that total spending (Donor + Government) on Good Thing A is unchanged. The government uses its savings on A to spend more on Bad Thing B. So de facto (compared to the pre-aid situation)  the Donor really has no effect on A and only has the effect of increasing total spending on Bad Thing B.

The Mystery of Economic Growth

The New York Times is as befuddled as the rest of us:

Development is an unpredictable business. ...One of the central questions facing India — and, indeed, the developing world as a whole — is why some people, or countries, move ahead, while others fall behind.

For all its temptations, however, the search for a policy toolkit toward development is fraught with pitfalls. Over the last 60 years or so, the international development community has come up with model after model, theory after theory, in search of just such a toolkit.

It has, at various times, promoted the benefits of huge, often conditional, inputs of foreign aid, the rigors of shock therapy, the virtues of free trade and the promise of the Washington Consensus (a set of policies prescribed and often imposed by agencies like the World Bank, the International Monetary Fund and the U.S. Treasury).

The author,  Akash Kapur, has superb taste in economists and publications:

Yet for all the efforts to come up with a general theory of development, the truth is that economic growth remains something of a mystery. This is the conclusion of a recent anthology, “What Works in Development?”, published by the Brookings Institution. The essays lead to the conclusion that there is no clear way to ease poverty, and — as the editors, William Easterly and Jessica Cohen, state in their introduction — “no consensus on ‘what works’ for growth and development.”

Mr. Easterly, a former World Bank economist, has elsewhere shown that there is little correspondence between a nation’s economic growth and the extent to which it follows international development prescriptions. Analyzing data for 1980 to 2002, he found that countries that grew the fastest received considerably less foreign aid and spent less time under I.M.F. tutelage than those that grew the slowest. This doesn’t mean that following the orthodoxy harms development, but it does suggest that rapid growth is possible without international aid or advice.

Unfortunately, this could create open season for ignoring Econ 101 (oops!):

Robert B. Zoellick, president of the World Bank ... spoke of the need for “rethinking” development economics and “a questioning of prevailing paradigms.”

The rise of Southeast Asia (and more recently China... represented a repudiation of textbook views about the proper role of the government and of the relationship between markets and the state.

India’s recent growth, too, can be seen as a result of a determination to follow its own path. ... {to} contravene the conventional model.

It's not going to be easy to conclude after all this, but the article gamely finds a constructive note:

Ultimately, it is... ability to accommodate context and local detail, that works best in development. The type of grinding, sweaty work it implies — time in the field, in villages and on farms, learning about cultures and social structures — is certainly less glamorous than designing overarching theories to rid the world of poverty.

But poverty is an unglamorous business. It is only fitting that the most effective way to address it would be through small, low-key and often backbreaking interventions.

Good, as long as we also recognize the tremendous poverty-reducing accomplishments of another grinding, sweaty, backbreaking, context-sensitive group  -- private entrepreneurs.

When the brain drain is healthy for democracy

The endurance of Indian democracy is one of the great Indian puzzles. How has a population so large, so ethnically and linguistically fragmented, and so economically unequal managed to sustain a participatory democracy since 1947? What forces have kept the country politically stable, enabling the rapid economic growth of the past two decades? One intriguing answer comes from political scientist Devesh Kapur, who studies the political effects of skilled migration (the so-called brain drain) on migrants’ home countries (we’ve blogged before about the positive economic effects of the brain drain). In a new book presented yesterday at the Center for Global Development, Kapur finds:

[T]he positive selection of Indian migrants through education has strengthened India's democracy by creating a political space for previously excluded social groups. Because older Indian elites have an exit option, they are less likely to resist the loss of political power at home.

Governments have historically used emigration as a pressure valve, to rid themselves of political dissidents and other undesirables, and preserve stability at home. After the Paris-wide workers riots of 1848, the French government tried shaking their “subversive elements” by offering them land grants in Algeria. Kapur also cites the examples of Cuba and Zimbabwe, where leaders allowed the periodic exodus of discontented citizens as a deliberate strategy to keep their hold on political power while migrants’ remittances helped keep things going economically.

In the decades following independence in India, Kapur argues, the migration of India’s high caste, highly-educated elite allowed more middle and lower caste Indians empowered by new voting rights to seek more political power and a bigger share of economic pie. In the 1990s, as affirmative action threatened elite privileges, the rich let them go with less of a struggle because emigration to Europe or the US gave them other, attractive options. At the same time, though, Kapur says that members of the upper class that chose exit have still retained their voice: their continuing influence in Indian politics perpetuates social inequalities.

Tobias Pfutze (formerly one of our own at DRI) has also worked on this relatively neglected aspect of the brain drain, studying Mexican immigrants to the US and their influence on politics back home. In local elections in 2000 to 2002, Pfutze found that places in Mexico that sent more immigrants to the US were more likely to vote to boot out the authoritarian Institutional Revolutionary Party (PRI), which had dominated Mexican politics since 1929. His work suggests that the influence of Mexican immigrants to the US actually helped facilitate the Mexican transition from a one-party system to democracy.

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photo credit

World Bank busted for stereotypical images of Ghana

The World Bank has apologized for photographs on the web site for participants at its recent annual meetings, which showed offensive stereotypes about Ghana. A Ghanaian journalist broke the story after he saw the images portraying "a country full of hungry and miserable people." This has prompted an outcry and debate in Ghana.

World according to Blattman

Honoring Stealing from Chris Blattman's great blog, I am reproducing some of his recent posts because they have been unusually fun & good and because I'm just too lazy to write my own blog today. Favorite distorted maps of Africa:

Favorite wordle on which countries are mentioned in Journal of Development Economics shown below.

I'm fascinated by this. One idea that I am investigating in my own research is that success stories are over-sampled, a brilliant thesis for which there is a spectacular lack of confirmation in this wordle (3 out of the Gang of 4 are MIA, what's going on?) One paper already written shows a very strong association between per capita income and being studied by economists, which confirms another favorite personal hypothesis -- the poor get the worst of everything, including the worst economics.

The plight of the African intellectual – a moral fable

Once upon a time, there were two great lands: Donorlandia and Africa. Donorlandia had many intellectuals who opined about the solutions for Africa, who received much attention in the media of Donorlandia. Few African intellectuals received as much, or even any, such attention when they discussed their own land. Donorlandia’s intellectuals could work for great universities, or for think tanks, or for aid agencies. What’s more the aid agencies and charitable foundations often gave no-strings-attached funding to the independent intellectuals at think tanks or universities who worked on Africa, or created new Research Centers on Africa. Independent African intellectuals had small cash-starved African universities or think tanks, and they received hardly any no-strings-attached funding from Donorlandia’s aid agencies or charitable foundations.

The main option for African intellectuals was to work for aid agencies, where they would no longer be independent, be reporting to non-African bosses, and where their insider perspectives on Africa were seldom appreciated. Independent African intellectuals who criticized aid agencies were vilified and marginalized.

Intellectuals from Donorlandia led individual aid projects or research studies for Africa. Intellectuals from Africa could work for these projects or studies or research centers, but they had little hope that their insights about local culture or conditions would be respected or reflected in the projects and studies. Projects or studies or research centers led by independent African intellectuals did not receive funding from aid agencies or charitable foundations.

Some of the very best African intellectuals left Africa and became independent in the great universities or think tanks or research centers of Donorlandia. But the aid agencies and charitable foundations disqualified these African intellectuals from leading projects or research centers, due to Fear of the evil spirit called Brain Drain.

Donorlandia had once given international scholarships to encourage even more intellectuals in other lands like America-Latina -- so much so that by later times, such intellectuals were now making policy and dealing as equals with aid agencies in America-Latina. But Fear of Brain Drain had paralyzed aid agencies and charitable foundations in Africa in later times, and there were few or no international scholarships to encourage African intellectuals.

African intellectuals bravely persisted under such adverse conditions, believing that one day many more of them also could be independent, that one day they could lead their own projects, think tanks, and research centers, that one day they could be the ones to comment on their own continent and receive the attention they deserved.

Editorial note: This fable is based on many informal discussions I have had over many years with African intellectuals, who for obvious reasons do not want their names used (with the occasional rare exception). I use the literary form of a fable precisely because of this restriction, which means none of the statements can be verified. If it resonates with you the reader, then maybe it’s of some use. If not, then feel free to dismiss it for lack of verifiable proof.

Addicted to misery?

by David Zetland, S. V. Ciriacy-Wantrup Fellow in Natural Resource Economics & Political Economy, UC Berkeley

While Bill and others were messing around with the New Yorker piece on Chinese development, they overlooked another piece in the same issue that may be even more significant (!) than debates over China's growth.

In "Alms Dealers" [sub reqd] Philip Gourevitch reviews Linda Polman's book, "The Crisis Caravan: What’s Wrong with Humanitarian Aid?" The central thesis of this book (as presented in the review) is that the people who deliver aid are addicted to horror stories and starving kids, and this addiction is fed by those who benefit from aid, whether they be local leaders, militias committing atrocities or even victims who don't wear their prosthetic legs because they can get more attention with their stumps.

This thesis has always made sense to me (see this this and this at my day-job blog, aguanomics). Polman is merely putting data (multiple anecdotes) to the theory.

Here's the simple version: If people give you money because of A, then you don't do anything to stop A. Even better, make A bigger so you get more money. Here's the refined version: Bruce Yandle's theory of Baptists and Bootleggers holds that Bootleggers quietly cheer Baptists' efforts to close liquor stores on the Lord's Day. Closed stores mean less competition for Bootleggers selling booze from their, uh, boots.

Although Baptists and Bootleggers may not be explicitly cooperating, they are seeking the same thing (a ban on legal alcohol sales) for totally opposite reasons. The Baptists are deluded into thinking that the ban will end alcohol drinking; the Bootleggers know that the ban is good for business and their profits.

Now, let's reword that for aid: "The Baptists Activists are deluded into thinking that the ban aid money will end alcohol drinking poverty; the Bootleggers warlords and corrupt politicians know that the ban aid money is good for business and their profits."

Who suffers? Drinkers pay more for their illegal booze, and they are not better off. Tax payers pay higher taxes, and aid beneficiaries are not better off.

What's interesting in Polman's book is the way that Bootleggers warlords and crooked politicians are actively making poor people worse off, to raise their profile and increase the flow of "do something!" money funneled through the Angelina-Bono-Geldof-Sachs pipeline.

I covered a number of these issues, focussing on the discretion that middlemen (aid workers and bankers) have in choosing what actions to take and how much effort to exert in my Public Choice article, "Save the Poor. Shoot some Bankers" [open access], but I was not cynical enough to endogenize poverty. Polman's claim that the people in the aid business are actively worsening things for aid recipients, to give themselves job security and more money, is dangerous and damning, but it is fair game for testing evidence for and against.

Even if we give the World Bank, USAID and NGOs a free pass as pure Baptists, then we still have to worry about cynical warlords and politicians who cut off arms and starve their people to keep themselves at the top of the news hour and as beneficiaries of  well-meaning donors who want to do something.

Photo credits (top to bottom): World Bank, USAID, UN

Another fake numbers problem on a topic Americans (and NYT) care about even more than world hunger

In the wake of Aid Watch's posts on made up world hunger numbers, the NYT revealed today another scandalous made up numbers problem in another area:

{The methodology} is vilified by professional mathematicians .... {which} turned {the numbers' creators} into the laughingstock of the numbers community.

It is bad enough that one analytical mathematician, the U.C. Irvine professor Hal S. Stern, has called for the statistical community to boycott participation...

{another expert said} “This isn’t a sincere effort to use math to find the answer at all. It’s clearly an effort to use math as a cover for whatever you want to do. ...It’s just nonsense math.”

{Outside evaluators} cannot {fully check the numbers}...because of lack of transparency...Three of the {numbers creators} said the {reporting agency} did not verify the numbers they turned in.

All this fury is directed at a number that Americans DO passionately care about --

college football rankings.

See the full article in the Sports section of the NYT. To my knowledge the NYT  has not run a story on the equally dubious methodology in numbers the NYT reports about areas that we readers apparently care about much less: worldwide maternal mortality, world hunger, and global poverty.

Can the story on US food aid get any worse?

Hundreds of thousands of malnourished children are receiving poor quality and even harmful food aid because of the slow introduction of more nutritious alternatives, a medical charity has warned. The US is continuing to donate directly to relief agencies fortified flour mixes of corn and wheat with soya that do not meet international standards agreed in the 1960s...

...older corn-soy blend (CSB) pre-mixed foods donated by the US contained insufficient micronutrients, anti-nutrients that interfered with child absorption, no dairy proteins that were important for growth, and were bulky, limiting intake by young children with small stomachs.

see the full story in the FT.