Showing posts with label Economic Development. Show all posts
Showing posts with label Economic Development. Show all posts

Wednesday, June 24, 2009

The Atlantic's Fifteen Ideas to Fix the World

The July/August Atlantic magazine offers this modest collection of brief essays, on ideas that range from reasonable to stupid, "15 Ways to Fix the World". One of the reasonable ones comes from Andrew Bacevich1, "Give Up on Democracy in Afghanistan". Here's the key excerpt:

[T]he attempt to create a cohesive nation-state governed from Kabul (something that has never existed in modern times) is a fool’s errand. Better to acknowledge and build on the Afghan tradition of decentralized governance. Let tribal chiefs rule: just provide them with incentives to keep jihadists out. Where incentives don’t work, punitive action—U.S. air strikes in neighboring Pakistan provide an illustrative example—can serve as a backup. Denying terrorists sanctuary in Afghanistan does not require pacification—and leaving Afghans to manage their own affairs as they always have will reduce internal instability, while freeing up the resources to allow our own country to tackle other challenges more pressing than the quixotic quest to modernize Afghanistan.


A couple of the stupider ideas come from Thomas Toch, co-director of a think tank called Education Sector, and Kerry Howley, a contributing editor at the libertarian magazine Reason. In Toch's essay, "Tell the Truth About Colleges", he offers these revelations,

Tuition has been skyrocketing for years, with little evidence that education has improved. Universities typically favor research and publishing over teaching. And influential college rankings like the one published by U.S. News & World Report measure mostly wealth and status (alumni giving rates, school reputation, incoming students’ SAT scores); they reveal next to nothing about what students learn.


Shocking, no? Toch must be wracking his brain wondering why so many students are desperate to apply to elite schools such as Harvard, which favor research and publishing over teaching. Apparently, no one has explained to Toch the signaling value of a diploma from an elite school.

On to Kerry's howler, "Welcome Guest Workers",

Say you’re a Bangladeshi taxi driver struggling to survive on your daily wage in Dhaka. A couple of nongovernmental organizations have offered you help, but you can pick only one form of assistance: access to microcredit[2], or a chance to work in the United States. What’s the better deal? According to a recent analysis by the Center for Global Development, microcredit loans might net you an extra $700 over the course of a lifetime. Working stateside, you’re likely to make the same amount in a month.


Howley goes on to describe a grand plan by Harvard economist Lant Pritchett to achieve "economic justice"3 by having every rich country "hand out enough work visas to increase its labor force by 3 percent" so that Bangladeshi taxi drivers can work as taxi drivers and such in developed countries such as the United States. It's tough to decide where to begin in responding to this one. The first thought that comes to mind is how politically tone-deaf Howley is to bring this plan up when the unemployment rate here is the highest it's been in a quarter century (Howley at least admits in her essay that the timing for implementing this plan would be a tad inauspicious now). That political tone-deafness must be common among libertarians, which may help explain why they never seem to win any elections. My next thought is to wonder whether Howley has ever considered why countries such as Bangladesh are poor in the first place. Is it really because not enough of their citizens have gotten guest worker visas to drive taxis in the U.S.? Has there ever been a country that pulled itself up to affluence by cashing in on the remittances of its citizens working as guest workers in rich countries?

If Kerry Howley cares about Bangladesh, she ought to donate some of her own money to WaterAid, the charity mentioned in this Financial Times article from last year, "How toilets transformed a Bangladeshi village". An excerpt from this article will demonstrate, I think, that Bangladesh has bigger fish to fry before worrying about getting its taxi drivers a temporary raise overseas:

It was 16 days since the chairman of the local council had been murdered by militants who swept in under the cover of a travelling circus to erase one of their political enemies. Now, as the Professor sat in his dried-mud dining area, eating a breakfast of last night’s rice, he was told that a group of strangers had arrived.

He headed to Mosmoil’s sole strip of asphalt, a road bisecting the riot of vegetation that has otherwise recolonised the village’s 63 iron-roofed homes in a tangle of crawling stalks and fat leaves.

The strangers had arrived on a motorcycle rickshaw. They carried documents and pens. They did not wear coloured lungis – the dress of men in rural Bangladesh – but the dark trousers of city dwellers.

“I suspected that because the murder had taken place, they were either government spies or members of a terrorist group,” the Professor recalls. Instead, they pursued an unexpected line of questioning. “Where do you defecate?” they asked him.

“It was the first time I’d heard such a thing,” he says. Overcoming his surprise at the question, he forgot his initial fears, allowed his curiosity to be tweaked, and gave an honest answer.

He told them that sometimes he used a “hanging toilet”, a metre-high bamboo structure built on the banks of a pond, where users climbed up a rickety ladder to a squat hole that was shielded imperfectly from view by a sack cloth cubicle. Other times he ventured into the paddy fields and betel groves that surround the villages of west Bangladesh and squatted, preferably out of the sight of others, over the soil.

“Do you know that you eat this goo?” one of the strangers asked, using a Bengali word for human waste, which spans the English spectrum of social acceptability from the scientific right through to “shit”. “If it rains now, it will wash some of the goo into the pond,” the stranger continued. “Then you bathe there, you wash your dishes there, and you wash your food with water from the pond, so you are eating it.”

The Professor was stunned. “That was the first time we realised we were eating our own goo and I felt something very strange inside,” he recalls. “Not hatred but disgust.”


That article goes on to explain that the "Professor" is, as you may have already suspected, not a real professor; he earned the honorific "Professor Goo" (i.e., "Professor Shit") by becoming an evangelist for the use of the composting toilets introduced by the NGO WaterAid. A nation that shits where it eats has some remedial work to do before it can waste time worrying about any of Kerry Howley's or Lant Pritchett's grand plans. Would Bangladesh be better off if Professor Goo were driving in a taxi in New York instead of teaching his countrymen how to safely and profitably4 dispose of their waste?

1Bacevich, a professor at Boston University, former Army officer, and Vietnam War veteran, had a son who was an Army officer as well. His son was killed in action in Iraq two years ago. Bacevich, who opposed the war in Iraq, wrote this Washington Post op/ed about it at the time, "I Lost My Son to a War I Oppose. We Were Both Doing Our Duty."

[2]This is more commonly called microfinance. We've blogged about its limitations in the past, e.g., here.

3I've long been skeptical of any phrase in which "justice" is modified by an adjective. "Justice" should stand alone. Once you put an adjective such as "economic" or "social" in front of it, you're really talking about a form of redistribution. If justice demanded redistribution, there would be no need to call for "economic justice"; it would be implicit in the term "justice". Since it isn't, it's up to the advocate of redistribution to demonstrate that redistribution is just. Saying it doesn't make it so.

4The article notes that the compost derived from human waste increases the villagers' vegetable yields, earning them more money at the market.

Saturday, May 9, 2009

An African Perspective on Economic Development



From an op/ed in Friday's Financial Times by Paul Kagame, the president of Rwanda ("Africa has to find its own road to prosperity"):

[A]s I tell our people, nobody owes Rwandans anything. Why should anyone in Rwanda feel comfortable that taxpayers in other countries are contributing money for our well­being or development? Rwanda is a nation with high goals and a sense of purpose. We are attempting to increase our gross domestic product by seven times over a generation, which increases per capita incomes fourfold. This will create the basis for further innovation and foster trust, civic-mindedness and tolerance, strengthening our society.

[...]

Entrepreneurship is the surest way for a nation to meet these goals. Government activities should focus on supporting entrepreneurship not just to meet these new goals, but because it unlocks people’s minds, fosters innovation and enables people to exercise their talents. If people are shielded from the forces of competition, it is like saying they are disabled.

Entrepreneurship gives people the feeling that they are valued and have meaning, that they are as capable, as competent and as gifted as anyone else.


The rest of Mr. Kagame's column is worth reading. In it, he refers to the ideas of an economist we've mentioned here before, Dambisa Moyo.

A quick check of Wikipedia suggests that Kagame had a long, eventful (and somewhat controversial) military career before entering politics. This year, Kagame was included in Time Magazine's list of the world's 100 most influential people. His entry was authored by the mega church pastor Rick Warren, who wrote (in part),

Kagame's leadership has a number of uncommon characteristics. One is his willingness to listen to and learn from those who oppose him. When journalist Stephen Kinzer was writing a biography of Kagame, the President gave him a list of his critics and suggested that Kinzer could discover what he was really like by interviewing them. Only a humble yet confident leader would do that. Then there is Kagame's zero tolerance for corruption. Rwanda is one of the few countries where I've never been asked for a bribe. Any government worker caught engaging in corruption is publicly exposed and dealt with. That is a model for the entire country — and the rest of the world too.


The photo above, of President Kagame shaking hands with President Bush in the White House in 2006, is from Wikipedia.

Tuesday, March 17, 2009

Water: Not the Next Oil?


A couple of years ago, articles with titles such as this one by Rohini Nilekani in Yale Global were fairly common: "Is Water the Next Oil?". Today, the pseudonymous author of the blog The Learning Diary of an Israeli Water Engineer suggests otherwise ("Worldwide water sector devalued"):

I continue thinking that the expansion of the water sector is an illusion, it is not happening and will never [...]. The water crisis is more a media event, or an eternal United Nations issue for travelling to exotic places, than a real investment opportunity. People who "bought" the concept of water as the golden investment opportunity - lost [their] money.


In previous correspondence with this water engineer/blogger, I had asked him what investment opportunities he saw in the sector. His response, in a nutshell, was that most countries that could afford water infrastructure already had it, and most of those that didn't, didn't have the money to pay for it.

The photo above accompanied the Yale Global article.

Sunday, February 22, 2009

More on Moyo


In a post last month ("An African Economist on Western Aid to Africa"), we mentioned the Zambian-born economist and author Dambisa Moyo, and posted an excerpt from the interview with her in the Financial Times. Today's New York Times Magazine features an interview with Moyo as well ("Questions for Dambisa Moyo -- The Anti-Bono"). From the interview:

Q: As a native of Zambia with advanced degrees in public policy and economics from Harvard and Oxford, you are about to publish an attack on Western aid to Africa and its recent glamorization by celebrities. ‘‘Dead Aid,’’ as your book is called, is particularly hard on rock stars. Have you met Bono?
I have, yes, at the World Economic Forum in Davos, Switzerland, last year. It was at a party to raise money for Africans, and there were no Africans in the room, except for me.

[...]

You argue in your book that Western aid to Africa has not only perpetuated poverty but also worsened it, and you are perhaps the first African to request in book form that all development aid be halted within five years.
Think about it this way — China has 1.3 billion people, only 300 million of whom live like us, if you will, with Western living standards. There are a billion Chinese who are living in substandard conditions. Do you know anybody who feels sorry for China? Nobody.

Maybe that’s because they have so much money that we here in the U.S. are begging the Chinese for loans.
Forty years ago, China was poorer than many African countries. Yes, they have money today, but where did that money come from? They built that, they worked very hard to create a situation where they are not dependent on aid.


The photo above, of Ms. Mayo, accompanied Deborah Solomon's interview.

Saturday, January 31, 2009

An African Economist on Western Aid to Africa

In a recent post ("The UN High Commissioner of Refugees Imitates The Onion"), we mentioned the NYU development economist William Easterly, who has been critical of traditional Western approaches to providing aid to Africa and other parts of the developing world. Coincidentally, today's Lunch with the FT interview in the Financial Times is with a Zambian-born economist, Dambisa Moyo, who seems to share Easterly's disdain of traditional aid approaches ("Lunch with the FT: Dambisa Moyo"). In fact, Moyo says that African countries would be better off if they were given a warning that foreign aid would be cut off in five years, and were forced to seek funds from the bond market instead. Moyo argues that bond investors would impose a discipline on African governments that aid donors so far haven't. Herewith, a few brief excerpts:

[A]s the historian Niall Ferguson (a contributing editor to the FT), notes in a foreword to Moyo’s book, she is venturing into a debate that has to date been colonised by white men – be they rock stars such as Bono, politicians such as Tony Blair or the academics Jeffrey Sachs and Bill Easterly.

[...]

So what of the rock and Hollywood stars, who have appointed themselves advocates of making poverty history? She is withering: “Most Brits would be irritated if Michael Jackson started offering advice on how to resolve the credit crisis. Americans would be put out if Amy Winehouse went to tell them how to end the housing crisis. I don’t see why Africans shouldn’t be perturbed for the same reasons,” she replies

[...]

We finish with a coffee. Moyo’s book ends on an equally energising note, that of an African proverb: “The best time to plant a tree is 20 years ago. The second-best time is now.”

Friday, January 30, 2009

The UN High Commissioner for Refugees Imitates The Onion


Hat tip to Atlantic blogger/FT Columnist Clive Crook for mentioning that development economist and NYU professor William Easterly has a new blog, Aid Watch. Easterly has been somewhat controversial for questioning whether traditional foreign aid approaches actually benefit the world's poor. In a recent post ("And Now For Something Completely Different: Davos Features “Refugee Run”"), Easterly writes about the tasteless event promoted by the flyer above, which apparently took place yesterday at the World Economic Forum in Davos, Switzerland. Excerpt:

When somebody sent me this invitation from Antonio Guterres, the UN High Commissioner for Refugees, I thought at first it was a joke from the Onion. What do you think of the Davos rich and powerful going through the “Refugee Run” theme park re-enactment of life in a refugee camp?



Can Davos man empathize with refugees when he or she is not in danger and is going back to a luxury banquet and hotel room afterwards? Isn’t this just a tad different from the life of an actual refugee, at risk of all too real rape, murder, hunger, and disease?



Did the words “insensitive,” “dehumanizing,” or “disrespectful” (not to mention “ludicrous”) ever come up in discussing the plans for “Refugee Run”?



I hope such bad taste does not reflect some inability in UNHCR to see refugees as real people with their own dignity and rights.



Of course, I understand that there were good intentions here, that you really want rich people to have a consciousness of tragedies elsewhere in the world, and mobilize help for the victims. However, I think a Refugee Theme Park crosses a line that should not be crossed. Sensationalizing and dehumanizing and patronizing results in bad aid policy – if you have little respect for the dignity of individuals you are trying to help, you are not going to give THEM much say in what THEY want and need, and how you can help THEM help themselves?