Planners vs. Searchers in 1958

At the 9th meeting of Hayek’s Mont Pelerin Society (MPS) in 1958, members discussed two papers by P.T. Bauer on economic development and foreign aid. Over at the Foundation for Economic Education’s excellent From the Archives blog, Nicholas Snow recently posted the account of that discussion from the first issue of the Mont Pelerin Quarterly. The entire issue is available for download (NB: as a 20 MB PDF) here.

Bauer’s discussants included Hayek’s mentor Ludwig von Mises and the (according to Bill) perennially under-appreciated Herbert Frankel. Given the number of my favorites there or represented, reading these comments is a bit like watching the 1927 Yankees in action (or for our nerdier readers, the Justice League of America).

Nick singles out a great quote from Mises’s comments, and here is another that captures well the bias that still exists against skeptics and critics in debates over foreign aid:

People will call us negative because we do not consider the plight of the so-called underdeveloped countries as a problem to be solved by the governments. The governments want to solve it by spending the taxpayers’ money for the execution of some spurious plans, of plans that are badly designed and, as a rule, even more poorly put into effect. The popularity of this mode of speech is reflected in the way in which the words plan and planning are employed today. Planning, as our contemporaries use the term, means always planning by the government. The plans of the individuals do not count; they are just no planning. (p. 19)

Herbert Frankel also offers a gem of an insight well ahead of the development literature of his time. He says of Bauer’s on-the-ground work:

The lesson that flows from it is that it does pay to go to these remote areas and find out what the problem is, instead of assuming that one knows the problem before one begins. Until recent years, people have simply assumed in many of these territories in Africa, that there were no real, positive signs of enterprise among the indigenous population, which was supposed to be so uninstructed or inert that it was not able to fend for itself, experiment for itself, or improve itself. It was not realised that a reason why there was this apparent lack of initiative in the population was that there were serious customary or legal obstacles to the exercise of ordinary enterprise, even on a small scale. (p. 16)

Here we have not only the recognition that local conditions matter, but that institutions--the rules of the economic game--matter crucially for explaining cross-country income differences.

The whole document is worth reading. It provides a fascinating retrospective on how the development economics of its day looked from a classical liberal perspective. Certainly the development planners of their day failed; otherwise more recent efforts would never have come to be. Did the MPS members put their finger on why those plans failed? If they did, how many of the same errors guide development research and policy today?

Generalized Automatic Email Response

UPDATE: Thank you all so much for the wonderful responses to this post on Twitter,  which I will appreciate so much after never reading them. I have been having a lot of trouble managing my email. This causes some people who email me to get very upset. I was thinking I would try to automate the response so as to leave people who email me smiling, happy, satisfied, and in love with me. Here goes:

Thank you for your wonderful email – hearing from you is one of the best things to happen to me today.

Allow me to elaborate further:

1. If you are an automatic mass mailing to a huge number of people, THEN:

1. I will never read your email.
2. That’s OK, because you will never read this reply.
3. Almost everyone else on your list will respond likewise.

2. If I don’t know you, and you are asking me for help or advice on something, THEN:

1. I love what you're doing! You are great!!
2. Please read the part of my  writings where I argue the aid of poorly informed strangers is often not very helpful.
3. This applies very much to the likelihood that I would be of any use to you whatsoever.

3. If I do know you, but somehow I have failed to answer your previous email, it is because:

1. I hate you.
2. I am an arrogant prima donna jerk who is ignoring you.
3. I am disorganized, absent-minded, forgetful, and indecisive, and so have already forgotten whether I answered you already, what the answer was, and what the answer should have been, and I’m really sorry and always will be.
4. The only correct answer in this case is (c)

4. If you invited me to something very noble and honorable, and I have failed to respond, it is because:

1. Consider possibilities (a) through (c) in 3 above.
2. The only correct answer in this case is (c)

Thanks again for your lovely email! Please write again soon!

The First Law of Development Stats: Whatever our Bizarre Methodology, We make Africa look Worse

UPDATE: Just received notice of drastic punishment for this post: invited to join HDR 2011 Advisory Panel I’ve complained previously about how design of the UN Millennium Development Goals make sub-Saharan Africa look worse than it really is. Now I realize that UNDP’s new Human Development Report (HDR) does the same thing. Not alleging any conspiracy here, it seems unintentional, but is then not caught because … well we all know Africa is supposed to look terrible.[1]

My HDR education comes from Martin Ravallion, who has a great new paper on the new methodology of the Human Development Index (HDI). (Martin does not mention the Africa angle, but provides the necessary insights described below).

Of course, UNDP has an impregnable position: while their results get huge publicity, the methodology behind the results is interesting to approximately 3 people.  As an avid promoter of hopeless causes, here goes…

The biggest change in method was that the new HDI is a geometric average rather than a normal (additive) average. Geometric average means you multiply the separate indices (each ranging between 0 and 1) for income, life expectancy, and education together and then take the cube root (I know your pulse starts to race here…)

Now, students, please notice the following: if one of these indices is zero, then the new HDI will be zero, regardless of how great the other indices are. The same mostly applies if one of the indices is close to zero. The new HDI has a “you’re only as strong as your weakest link” property, and in practice the weakest link turns out to be very low income (and guess which region has very low income).

So, as Martin noted, the new HDI relative to the old HDI penalizes countries with very low income compared to decent numbers on life expectancy and education. One reason I think this is unintentional is that these are exactly the cases that the HDR used to celebrate! The biggest losers here are Zimbabwe, Liberia, DR Congo, Burundi, Madagascar, Malawi, Niger, and Togo.

Martin makes the “decent life expectancy doesn’t help you if you have low income” point in a different way: the new HDI has vastly different numbers for the value of life between poor and rich countries. Martin had previously made this criticism of the old HDI in a paper published in 1997, which Aid Watch covered in a previous post. The HDR addressed this criticism by making the problem much worse. Previously we were all whining about differences in the value of life of 70 times between rich and poor – now it’s a differential of 17,000 to one. Sorry, Zimbabweans, UNDP thinks your lives are worth 50 cents.

But wait, Africa has another GREAT chance to perform well --  the HDR also gives mucho publicity to the “top movers” in HDI over 1970-2010, ranked in order of percentage increase. My old MDG paper mentioned above said Africa would look better on percentage increases in health or education indicators.  Indeed, Ethiopia, Burkina Faso, Niger, Mali, and Burundia all had more than a 300% increase in educational enrollments (using the UNDP’s own data) from 1970 to 2010.

So naturally, among the champion improvers are … Oman and Nepal … and no sub-Saharan African countries in the top 10. What happened?

In yet another twist, the HDR ranked the top improvers measured as deviations from the average growth in HDI of others at similar initial HDI in 1970. Since almost all of the bottom ranks of the HDI are sub-Saharan African (exacerbated by the above “weakest link” methodology), Africa will only do well if it does better on average than – Africa.

If we forget the deviations thing, and just rank by growth in the HDI from 1970 to 2010, then sub-Saharan Africa would get 6 out of the top 10 improvers.

If you have read this far, you get a medal. So what’s the lesson of all this mumbo-jumbo about methodology? Maybe you could make a case for the new methodology, but at the very least it’s clear that obscure choices of method make a big difference in who you celebrate – and who you make look bad. And way too often, Africa winds up in the latter category.

Postscript: we want to thank UNDP for generously making all their data and methodology available to us even though they knew we were critical, because they also generously gave reactions to a preliminary draft based on an earlier dataset we downloaded from the HDR website. They did not change our minds and the new dataset confirmed our earlier results. But we give them great credit for constructive engagement. The paper that describes their methodology is here.

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[1] This post uses the words “Africa” and “sub-Saharan Africa” interchangeably, following common development-speak. North Africa is in a very different situation from that described here.

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Related posts: The First Law of Development Stats: Whatever our Bizarre Methodology, We make Africa look Worse What the New HDI tells us about Africa Human Development Index Debate Round 2: UNDP, you’re still wrong

3D Action: Hillary orders US government staff to spy at UN

Thanks to Wikileaks, we have a new appreciation how seriously Clinton takes that whole 3Ds thing (Defense/ Diplomacy/ Development). We all should work together, which apparently means all work for the Defense (cum Intelligence) establishment. According to a secret July 31, 2009 cable signed by Clinton, now available thanks to Wiki the on NYT web site, she asked all US government staff at UN, even over and above her own diplomats (does that include aid staff also?) to spy on everyone else at the UN:

Important information often is available to non-State members of the Country Team whose agencies participated in the review of this National HUMINT Collection Directive...The intelligence community relies on State reporting officers for much of the biographical information collected worldwide.

they should collect things like

internet and intranet "handles," internet e-mail addresses, web site identification-URLs; {SO MUCH FOR ANONYMOUS BLOGGING AND TWITTER!}, credit card account numbers; frequent flyer account numbers;

Her country spying priorities are interesting:

3. (S/NF) Priority issues and issues outline:

A. Key Near-Term Issues 1) Darfur/Sudan (FPOL-1) 2) Afghanistan/Pakistan (FPOL-1) 3) Somalia (FPOL-1) 4) Iran (FPOL-1) 5) North Korea (FPOL-1)

Should we be grateful that nothing resembling Economic Development or Global Poverty shows up on her issue list for her spies to report on? Or sad that she is revealing the true US government lack of interest in development?

B. Key Continuing Issues 1) UN Security Council Reform (FPOL-1) 2) Iraq (FPOL-1) 3) Middle East Peace Process (FPOL-1) 4) Human Rights and War Crimes (HRWC-3) 5) UN Humanitarian and Complex Emergency Response (HREL-3) 6) Proliferation of Weapons of Mass Destruction (WMDN-5H) 7) Terrorist Threat to UN Operations (TERR-5H) 8) Burma (FPOL-1)

Clinton has denounced Wikileaks for harming national security.

Well, Secretary Clinton, couldn't you also work in an apology for turning your staff into spies and the UN into even more of an ugly spy nest?

The 100 Bestest Global Thinkers

The Foreign Policy magazine ranking of the top 100 Global Thinkers just came out. The rankings can be a bit mysterious, like college football rankings that confuse Texas Christian University with a real football team. I myself had a two-year run in the top 100 for still unexplained reasons. Alas, a late-season loss to Collier State University doomed my chances this year. I wouldn't mind as much if there were not way too many politicians and high ranking government officials this year, few of whom have previously been suspected of Thinking.

On the bright side, wonderful development-connected economists have been added this year: Carmen Reinhart, Ken Rogoff, Raghu Rajan, Paul Romer, Sendhil Mulanaithan, Daron Acemoglu (and Esther Duflo and Nouriel Roubini repeated from last year).

Please suggest your own favorite thinkers from this year's 100. And of course, this being Aid Watch, feel free to volunteer any least favorites.

Understanding India’s Microcredit Crisis

by David Roodman, Senior Fellow at the Center for Global Development As Vivek Nemana reported here, the Indian microcredit industry has pitched into what appears to be a replay of the American subprime debacle. I just spent a week in India, talking to nearly everyone. I learned there were so many complexities—history, politics, institutional rivalries— that to just view events through the foreign lens of the subprime crisis is…actually about right.

The microcredit industry indeed appears to have grown irresponsibly fast, partly out of pursuit of profit. But this is not a simple morality play. The state government’s response (an October 14 ordinance) is draconian, tantamount to banning mortgages after a mortgage crisis. Why such a crackdown? The rise of private microcredit threatened a big, World Bank–financed government program that provides credit and other services.

Until last month, India was home to the fastest microcredit expansion the word has seen. Between 2003 and 2009, the number of microloans shot from 1.0 million to 26.7 million. Unlike in Bangladesh, which India recently surpassed in number of microloans, investor-owned, for-profit companies do most of lending in India. SKS Microfinance went public in July, earning tens of millions of dollars for founder Vikram Akula, venture capitalist Vinod Khosla, and others. This inevitably led many to blame the hypergrowth on pure greed. I don’t doubt that pursuit of profit played a big role, but Akula’s new book also persuades me that he concluded—along with most of the Indian microcredit industry—that reaching the poor required being profitable enough to attract serious venture capital.

Nipping at SKS’s heels were other microcreditors, also based in Hyderabad, which helped make Andhra Pradesh India’s microcredit hotbed. Villagers experienced the arrival of 2, 3, 4, even 8 or 10 microcreditors within the last few years, all eager to press loans into the hands of women. Loan officers learned that they could line up customers more quickly in villages where their competitors already operated, for there the women would have been educated in the mechanics of microcredit—and might want new loans to service old ones. So loans were heaped on top of loans.

Even Vijay Mahajan, the president of the microfinance industry association, has been bluntly critical:

In their quest to grow, they kept piling on more loans in the same geographies…That led to more indebtedness, and in some cases it led to suicides.

Unfortunately, while loan disbursement became irrationally exuberant, loan collection remained insistent. Microcredit is about mass-producing low-quality services in order to keep costs in line with the small amounts transacted. For the machine to run efficiently, clients must keep up on their payments. Microlenders also pounce on delinquency to prevent it from snowballing, so that women will not ask, “Why should I pay if she is not?” Loan officers now stand widely accused of harassing borrowers, yelling at them outside their homes, even threatening violence. The pressure has been blamed for at least 54 suicides. While the allegations are individually dubious, arising as they do in a politically charged, media-scrutinized environment, the link to suicide is plausible. Microcredit is the least flexible, least forgiving form of credit available to the poor of Andhra Pradesh, thus most likely to push them over the edge.

So the Andhra Pradesh government responded to a real problem. However, its response is also a real problem. As I explain on my blog, the October 14 law has frozen microcredit in across the state; it contains provisions that would be unconstitutional in many countries; and it could bankrupt several lenders. The law is defending a rival government program that provides credit and other services to millions of women in self-help groups. Because these groups are communal rather than corporate, they tend to be more lenient than microcreditors. When cornered, women with multiple loans default on self-help group loans first. Thus did the public and private programs collide.

These events should be cause for introspection at the World Bank, which has financed both sides, but especially the government’s self-help group support program (with $1 billion or so). The latter may well be doing much good. But World Bank money has also beefed up a political economy hostile to private sector solutions.

Perhaps the heedlessly expanding Indian microcredit industry deserved a smackdown. But what matters most is not what is fair to the microcreditors but what is best for the poor. The Indian government has built an impressive 50-year track record failing to meet the financial service needs of the poor. Under the right circumstances the private sector can help fill the gap. The goal should be to reform microfinance, not kill it.

One problem with reports from large bureaucracies

Here is an NYT headline and a WSJ headline on the same Pentagon report last Tuesday. Reports produced in large bureaucracies have to interpret the "facts" so as to please competing interest groups within the bureaucracy, as I can testify from my World Bank experience. The result is usually a report with a very unclear message. If I was not feeling so lazy on a Sunday morning, I could cite a lot of aid reports with the same problem as the Pentagon report.

WHO: 20 to 40 percent of money spent on health wasted, more funds needed to be wasted

Health care systems worldwide are wasting up to 40 percent of their funds, but more money is needed to boost their capabilities, according to a new report from the World Health Organization. In an analysis of how countries pay for health and what they get in return, the United Nations agency concluded that despite these losses even more funds need to be invested in health care.

This article by AP reporter Maria Cheng on the WHO’s newly released 2010 World Health Report explores some of the biggest inefficiencies in global health spending.

Of the approximately $5.3 trillion the world spends on health care every year, about $300 billion disappears in mistakes or corruption, according to European Health care Fraud and Corruption Network, quoted in the report. Up to a quarter of the money governments are supposedly using to buy drugs are somehow lost along the way, costing developed countries up to $23 billion a year, the report said.

WHO says some countries pay almost double what they should for drugs and that, and that at least half of the medical equipment in poor countries is unusable. Much of the medical equipment donated to developing countries is also useless, it said.

"In some countries, almost 80 percent of health care equipment comes from international donors or foreign governments, much of it remaining idle," the report says.

It said most of the medical equipment shipped to the Gaza strip after 2009 simply sat in warehouses.

The AP article also quotes Bill who points out the irony of asking donors for more money when it’s clear so much better use could be made of the funds already spent:

"How do you make an impassioned plea for spending more money when we're wasting so much?" asked William Easterly, a foreign aid expert at New York University.

He said much of the problem in developing countries is that while donors have spent billions on things like drugs, vaccines and malaria bednets, little has been spent on the health workers needed to distribute them.

"Medicines and vaccines don't administer themselves," Easterly said.

He also criticized U.N. agencies and major donors like the Bill & Melinda Gates Foundation, who have mostly avoided investing in health systems, preferring instead to build separate programs for illnesses like malaria, polio and AIDS.

"That is like doing aerial bombing at 35,000 feet without knowing what you're hitting on the ground," Easterly said. "But investing in medicines for AIDS and malaria makes for much better publicity than investing in health systems."

Read the whole article here.

Aid Watch Thanksgiving Thanks

It's not commonly known that the most skeptical and critical people usually have a strong sentimental streak...at least if I can extrapolate from introspection.... So here goes for what Aid Watch is sincerely thankful for:

For the largest reduction in world poverty in human history, which has already happened in our generation.

For the largest improvement in health and life expectancy in human history, which has already happened in our generation.

For all those who contributed to these successes: whether individuals operating in private, social, nonprofit, charitable, civic, public, aid, or international realms.

For all those who helped themselves and those around them escape poverty through their own efforts.

Lennon vs. Bono

I watched last night a remarkable documentary on the life of John Lennon called “Imagine.” For my generation, it’s pretty much automatic that Lennon is our hero, and I am no different.

But then I thought, do I have a double standard? I criticize celebrity musicians today like Bono for taking on a role like “Africa expert,” because we would never put rock stars in charge of say, Federal Reserve Policy. Yet Lennon was also a politically active celebrity rock star – why shouldn’t I make the same criticism of his career?

Well, I still think there is a big difference between Lennon and Bono. Lennon’s anti-war activities courageously challenged the power of the status quo, so much so that he was frequently harassed by the police and FBI.  Bono’s support of aid to Africa and the MDGs is more like a feel-good consensus that does NOT challenge Power. Celebrity counter-weight to established power seems much more constructive than celebrity expert.

Bono did photo ops with George W. Bush; Lennon doing a photo op with Richard Nixon would have been inconceivable.

Lennon had a real impact protesting the Viet Nam war. Where are Bono and today’s other celebrity activists on the injustices and human rights violations of the War on Terror, Iraq, Afghanistan, Guantanamo Bay?

Fighting for Freedom of the Press in Ethiopia and AidBlogWorld

Had a fascinating lunch today with Dawit Kebede, the courageous editor of the only remaining independent newspaper in Addis Ababa.  He is getting a  2010 International Press Freedom Award tonight in New York from the Committee to Protect Journalists. I hope he gets lots more recognition for what he's doing to preserve a neutral, independent voice. Thank goodness we have press freedom here at home...oops, Dennis Whittle points out we don't. At least not for many aid bloggers, who have to remain anonymous for fear of losing their jobs.

Could the CPJ consider an award for those aid bloggers? Alas, it would still have to be anonymous, unlike Ethiopia.

A Subprime Crisis for the Poorest?

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

The impending collapse of the microfinance industry in Andhra Pradesh, one of India’s largest states and a major hub of microfinance, is the ultimate example of a silver aid bullet…not being a silver aid bullet at all. The New York Times reports:

India’s rapidly growing private microcredit industry faces imminent collapse as almost all borrowers in one of India’s largest states have stopped repaying their loans, egged on by politicians who accuse the industry of earning outsize profits on the backs of the poor.

Responding to public anger over abuses in the microcredit industry — and growing reports of suicides among people unable to pay mounting debts — legislators in the state of Andhra Pradesh last month passed a stringent new law restricting how the companies can lend and collect money.

Even as the new legislation was being passed, local leaders urged people to renege on their loans, and repayments on nearly $2 billion in loans in the state have virtually ceased. Lenders say that less than 10 percent of borrowers have made payments in the past couple of weeks.

The FT apocalyptically adds:

The crisis that began in Andhra Pradesh threatens to spill over to the entire sector, with other states already feeling ripples against the industry. That could trigger a wave of bank defaults nationwide and a rural liquidity squeeze.

But is microcredit really as bad as it seems? Last month, the Wall Street Journal wrote:

Microlending companies say that often where they have investigated suicides attributed to their lending, they have found that microloans were among the smallest of the many problems of the people that have killed themselves.

And in a Journal Op-Ed:

Up until a month ago, at the biggest lenders, less than 2% of borrowers in the state were missing payments on their microloans. The payment crisis, where people abandoned their repayment schedules, happened only after [Indian politicians] told borrowers they didn’t have to pay. If this borrowers’ rebellion was triggered by dirty lenders, one would imagine the default rate would have expanded gradually before tipping into crisis.

Doesn’t quite sound like the end of microfinance as we know it, but we’ll keep our ears perked. Can micro-lending be both for-profit and sustainable for development? ------------------- Image Credit: neytri

QDDR: we can hardly contain our excitement

Aid Watch is as excited as everyone else to get a leaked, advance summary of the Quadrennial Development and Diplomacy Review, (HT Josh Rogin at Foreign Policy) which is a critical part of the US government process to set its priorities  on Development.

We love to seize occasions where we can be more positive to reward positive things happening, and not be our usual snarky selves.

Today is not one of those occasions.

Some highlights of the QDDR:

It would concern us that the QDDR is as aggressive as previous efforts we have complained about that want to merge Defense, Diplomacy, and Development. Fortunately this alarming militarization of development only covers actual or potential Failed States which according to the above Map in the QDDR is the entire developing world.

The review recognizes that US suffers from “insufficient internal coordination”of existing officials, offices and bureaus and so proposes to…create new officials, offices, and bureaus: Office of the Under Secretary for Civilian Security, Democracy, and Human Rights; a new Office of the Under Secretary for Economic Growth, Energy, and Environmental Affairs; a Special Coordinator for Sanctions and Illicit Finance; a Bureau of International Energy Affairs.

The QDDR is very persuasive that the US government needs to set priorities, that it should focus on development issues where the US government has a comparative advantage, which turn out to be…all development issues: sustainable economic growth, democracy and governance, food security, global health, climate change, and humanitarian assistance.

We could go on, but let's mercifully draw this discussion to a close, and move on to something more useful, like trying to think of an iPod playlist of songs most relevant to development.

Life, Liberty, and the Pursuit of Subjective Well-Being

Tim Harford in the FT

Why is nobody worried about the Asian brain drain?

Aid-financed scholarships for African students to study in the US or Europe would be worth a lot more than a million "capacity-building" projects. The usual argument against such scholarships is fear of brain drain -- that the African students would not return home. So why is nobody worried about brain drain of the gigantic numbers of Asian students studying in the US?

Source: Institute of International Education

Why US Catholic Bishops selected NYC Archbishop as their new leader: they like his blog

This according to a Wall Street Journal article. Archbishop Dolan's blog is here. The future of social media is even brighter than I thought.

Occasionally Archbishop Dolan touches on development in his blog, like this post on a 19th century Haitian saint.  He also talks a lot about insulting stereotypes of Catholics  in the media, which maybe Aid Watch should add to its campaign against insulting stereotypes (do you want to hear the one about reversing conditional probabilities on Catholic priests?)

By the way, Your Holiness, we would welcome a guest post on Aid Watch. In return, I can give you some unsolicited PR advice on handling all that bad publicity Your Church is getting about sexual abuse of altar boys.  (If you are wondering how I know anything about PR, I have learned a lot from the stupid responses of aid agencies to aid critics.) Advance Hint: don't get defensive, don't attack the attackers, just keep expressing sorrow and regret about the abuses.

Living in Emergency

by Pierluigi Musarò, Associate Professor of Political Science at the University of Bologna at Forli, and a visiting scholar at NYU’s Institute for Public Knowledge A few months ago I organized a conference in Bologna on the topic of humanitarian emergencies and communication. I invited the communication manager of one of Italy’s most famous and most influential NGOs, called Emergency. He accepted but told me, “You should know that we do not deal with emergency, but rather than with development and health.”

As they admitted, their concern is not emergency. So why did they name their NGO Emergency?

I believe their choice (consciously or not) reflects the way discourse in the humanitarian space has increasingly come to describe global problems as “emergencies.”

A hallmark of mainstream economic and political thought in the West is the optimistic belief in Development as a more or less steady, linear progress towards a clear goal.  But a combination of factors in the post-Cold War era has made the deviations from this narrative increasingly visible. For one, the media’s increasing ability to confront us with shocking images of suffering from places previously too remote to be imagined have created a demand that “something be done” urgently in the face of that suffering. For another, shifting international norms and commitments have generated an obligation to help distant strangers. At the same time, charities and NGOs have grown and proliferated, professionalizing their fundraising and marketing efforts.

As a result, we find ourselves living in a world of constant emergencies.

Nowadays, issues of human rights, governance, gender inequality, conflict, and poverty are all packaged and sold to us as humanitarian emergencies! Don’t agree? Watch this video from the UK’s umbrella organization for funding NGO appeals. As sirens wail, the compelling voice recites: “It is not about the right and wrong of the conflict. This people simply need your help.” But under what definition of the word is the 60-year Israeli-Palestinian conflict rightly called an emergency? In Algeria, 200,000 Sahrawis are waiting out a 36-year stalemate in refugee camps. Is it an emergency or a long-term political problem? Does the concept of “emergency” help us to grasp or solve these problems?

Emergencies by definition are sudden, unexpected exceptions to the natural order of things. They are an aberration, a tear in the fabric of normalcy, a disease in an otherwise healthy body. As such they demand urgent action, a quick cure. As NYU social sciences professor Craig Calhoun has written, “The term emergency became a sort of counterpoint to the idea of global order. Things usually worked well, it was implied, but occasionally went wrong….Where there is a discontinuity, there must be intervention to restore linearity and predictable functioning.”

What is at stake? The rhetoric of emergencies creates a powerful illusion that shapes both perception and action. Intractable problems that reveal the contradictions and limits of development are framed as emergencies, and NGOs as low cost managers that can intervene to solve these “exceptions” to the global order and put things right again.

If only it were so simple.

The plough and the veil

Why do some cultures encourage women to work, while others prefer they stay secluded in the home? Why do women in Africa command a bride price for their hand in marriage, while in northern India it is the bride’s family who must pay a dowry to the groom? Why are women secluded in the home in many Islamic countries, but not in Africa? Why is there the same contrast between female seclusion in northern India and not in southern India? Why are sons so intensely preferred to daughters in China?

It’s all about the plough.

A new paper presented yesterday at NYU by Alberto Alesina, Paola Giuliano and Nathan Nunn:

…[S]ocieties with a tradition of plough agriculture tend to have the belief that the natural place for women is inside the home and the natural place for me is outside the home. Looking across countries, subnational districts, ethnic groups and individuals, we identify a link between historic plough-use and a number of outcomes today, including female labor force participation, female participation in politics, female ownership of firms, the sex ratio and self-expressed attitudes about the role of women in society.

The idea orginates with Ester Boserup (who wrote a book with the same title as this post), who hypothesized that the way people farm influenced gendered division of labor and attitudes about women’s roles that persist to today.

She observed that in societies that didn’t rely on the plough to till the land—the case in most of Sub-Saharan Africa, and southern India—farming was largely done by women. By contrast, in societies that did use the plough—including North Africa, the Middle East, and northern India—men strong enough to do the plowing dominated agriculture, while women, sometimes veiled, were restricted to duties in the home. Their labor valued less, women in plough societies paid dowries rather than receiving a bride price. This distinction persisted in contemporary labor force participation, Boserup thought, for example in southern India where women were more likely to leave the home for jobs in factories than their contemporaries in the north.

Alesina et. al. have now confirmed Boserup’s findings with a variety of cross-country and within-country data. They find these effects even persist among second-generation US immigrant women, who work outside the home more when they are from non-plough cultures compared to plough cultures.

Obviously, cultures do evolve. This 1917 recruitment poster for British women to take up the plow while their menfolk are away at war reminds us how disruptions like war can help to shift gender roles relatively quickly—in the US, too, droves of women entering the workforce during World War II irrevocably altered American attitudes towards women working outside the home.

This paper is part of two separate kinds of studies now enjoying a vogue in economics: (1) ancient history matters, and (2) culture matters. The authors interpret their findings as suggesting “a very long persistence of cultural traits.”

-- Top photocredit: flickr user Bindaas Madhavi

True Confessions: I'm still unable to conclude whether aid does more harm than good

Margaret Wente  in Toronto Globe and Mail perceives a growing backlash against humanitarian aid, that it may be doing more harm than good in Africa (she concentrates on seemingly everyone's (including ours) recent favorite example of Ethiopia). I'm quoted in the article accurately. Contrary to some perceptions (not in Wente's article) however, I have never made a general argument that aid does more harm than good, or called for aid to be abolished or even cut. I said aid "has done so much ill and so little good" in the subtitle to the White Man's Burden. The "ill" is well covered in Margaret Wente's column and is similar to the recent posts on this blog about aid financing autocrats and political repression, with similar examples in my book.  However, I have also given examples of aid successes, particularly in health (vaccinations!) It is very hard to conclude what the net effect of the ill and the good is, and I've never attempted to do so.

Instead I think the viable arguments are that (1) aid's record is sufficiently disappointing that it is unlikely to ever be the main driver of successful development, (2) if aid were more accountable it would do less ill and more good.