World Bank to Bloggers: Drop Dead

UPDATE: Bill receives WDR2011 in Sunday 12:30pm email from World Bank. Should we complain now that he is getting special treatment? This morning we learned that the World Bank does not consider bloggers journalists. According to Bank policy, it won’t give press accreditation to bloggers, denying them access to the media briefing center where new reports are released under embargo before they are published for the public.

In this case, the report we won’t be allowed to see an advance copy of is this year’s World Development Report, on Conflict Security and Development. It’s due to be released to the public on Sunday night.

I was shocked, actually, since the World Bank is usually ahead of the curve when it comes to technology and communication. They have dozens of internal blogs which they encourage their staffers to post and comment on. Many of these these blogs don’t shy away from substantive debates about real development issues, including thoughtful self-criticism (a relevant example is this blog post by a World Bank staffer questioning whether anyone even reads the WDR any more, which makes us think they would WANT bloggers to write about it, but that’s another story).  Last year, the Bank opened up a new, user-friendly site with free access to 2,000 development indicators, and is hosting a competition to develop new apps that take advantage of this data.

We’ve given the WHO flak for shutting down debate saying that they “don’t participate in discussions on blogs” and shamed the UN for telling us they “didn’t have a communication policy for blogs.” But the World Bank? I expected so much better.

The White House has been accrediting bloggers since 2005, as do many US cities and states. Even the Millennium Challenge Corporation (a US aid agency) treats print and new media journalists equally.

I’m drafting an email to the Bank’s media department about this and encourage other bloggers to do the same. If we start now, we might just receive accreditation in time for the World Bank's 2015 "Mainstreaming New Media to Facilitate Progress of Democratizing New Technologies"  report.

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World Bank President starts brawl about development economics research

UPDATE 4:30 PM, Sept 30 -- debating Ravallion about World Bank censorship (see end of post) World Bank President Robert Zoellick gave a speech at Georgetown University today calling for the "democratizing" of development research.  Bob Davis at The Wall Street Journal reports some reactions:

Nobel Prize-winning economist Michael Spence, who led a commission on economic growth, said Mr. Zoellick's comments are "generally not only in the right direction, but very useful." Harvard economist Dani Rodrik.... also praised the World Bank president. "The speech hits all the right notes: the need for economists to demonstrate humility, eschew blueprints...and focus on evaluation but not at the expense of the big questions," Mr. Rodrik said.

But the reaction wasn't unanimous. New York University economist William Easterly...called Mr. Zoellick's comments "amazingly presumptuous." He says the current system of economic research, where ideas are picked apart by other economists, works well. If anything, he says World Bank economists are often the exception because their bosses pressure them "to reach the 'right' conclusions," Mr. Easterly said—meaning that World Bank loans are useful and foreign aid is productive.

The World Bank's chief of research, Martin Ravallion, responded, "I have never been told what conclusions I should reach, and I doubt very much that anyone told Bill Easterly what conclusions he should reach in his many years working for the Bank's research department."

That's OK, Martin, you must have been on vacation when the World Bank pushed me out the back door for not reaching the right conclusions on aid.

Mr. Zoellick, a moderate Republican who pushed for trade expansion as U.S. Trade Representative, also said that researchers should keep an open mind about whether countries can benefit from heavy doses of industrial policy.

That won praise from Mr. Rodrik, who has long pushed that view, and opposition from Mr. Easterly. "The most extreme advocates of industrial policy have lost the argument in the free and fair competition of ideas" Mr. Easterly argued. "Zoellick is trying to politicize it" by making it a bigger part of a World Bank research agenda.

UPDATE: see Martin Ravallion's comment below denying World Bank censorship, here is my response.

Martin, you are being disingenuous in what you do NOT say. Yes, I agree that if any given World Bank researcher sticks to publishing in academic journals, the findings do not spread to general public awareness, and, most importantly, the researchers themselves make no attempt to publicize their findings, then the researchers can say (ALMOST) anything they want (ALMOST because even then there have been exceptions and SOME politically sensitive findings would still be out of bounds). I myself did this for many years.

But once a researcher makes an effort to communicate with a broader audience beyond the tiny number who read academic journals, then any such statements are subject to censorship, as I found in my own experience personally, and others with whom I have communicated (unfortunately, they will not allow me to use their names) have verified similar experiences. So the World Bank researchers' participation in the "democraticized" debate, which President  Zoellick says he wants, is still subject to censorship. I can't believe you can really claim to deny this.

Moreover, the World Bank produces many public non-academic reports itself based on research findings. These reports' conclusions are politically influenced and censored. Again I cannot believe you would deny this.

But thank you, Martin, for taking the time to engage in a dialogue on this. I do believe the research done for academic journals in the World Bank has generally been of high quality and meets standards of academic rigor.

best, Bill

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Separating the wax from the gold: social accountability in Ethiopia

This post was written by Helen Epstein, author of The Invisible Cure: Why We Are Losing the Fight Against AIDS. I was heartened to see that Shanta Devarajan, the World Bank’s Chief Economist for Africa, blogged about my article Cruel Ethiopia in the New York Review of Books.

The article—and Dr. Devarajan’s blog—deal with the extremely delicate and complex relationship between economic and social development and human rights. He and I agree that there is no simple formula to explain this relationship. However, in order to help the poorest people realize their basic right to development, and to ensure our aid dollars are spent as effectively as possible, we need to try to understand it. That’s why I was troubled by this section of Dr. Devarajan’s blog.

Ethiopia has done well in reducing poverty and child mortality, and increasing primary completion rates because their system of delivering basic services has various elements of this accountability built in.  Local districts receive resources based on clear, data-driven formulae that can be independently verified (by third-party civil society groups). The allocation of these resources within the district is decided in community meetings, with the final budget posted on a central bulletin board for the community to see.

If only this were true.

Dr. Devarajan is describing the “social accountability” component of a World Bank-Ethiopia program to support health, education and other social services. In general, social accountability programs train community groups or NGOs to carry out surveys of local government budgets, monitor the quality of services such as clinics and schools, and publicize problems such as corruption or absenteeism among teachers and health workers. In an ideal world, these groups then work constructively and openly with local government officials to find feasible solutions to these problems.

Social accountability programs can be an extremely powerful mechanism for holding local authorities to account, building local democratic mechanisms, improving education and access to safe water, and even saving lives. A World Bank-sponsored evaluation of two such programs in Uganda found that one increased the amount of public education funding that actually reached schools nearly four-fold, and another increased the survival of children under five by one third, with no additional direct funding for health services.

When I first visited Ethiopia in late 2008, I was eager to see how the social accountability program that Dr. Devarajan refers to was working. But during the four visits I made to the country over the next 12 months, World Bank and other officials repeatedly told me the program had been only a small scale pilot program, that it had ended in 2008, and that an expanded program was planned, but would not start until after the elections in May 2010. So I am not sure what program Dr. Devarajan visited. Even in the pilot projects, the monitoring was not, by and large, done by “third party civil society” groups. Nearly all the NGOs were ruling party affiliates.

There is no automatic relationship between development and human rights. But it’s worth asking whether development can ever occur in a society where a government is deaf to its people. It seems to me that development takes root in societies that listen, either because the people truly have power, as in a democracy, or because the government is afraid of what would happen if they demanded it.

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The World Bank’s “horizontal” approach to health falls horizontal?

The history of foreign aid for global health has seen a cycling back and forth between two alternative approaches. The “vertical” approach focuses on fighting one disease at a time, and in Africa has been very effective in targeting smallpox, Guinea worm, measles, and river blindness, to name a few examples. After large initial successes though, diminishing returns to vertical programs set in. The “horizontal” approach instead invests sector-wide to make health systems work to administer prevention and treatment for all diseases. (For more on the history and pros and cons of these approaches, see Can the West Save Africa, pp 57-60). Since the late 1990s, the Bank and other donors have shifted resources to back the idea that “it’s the health system, stupid.” (According to the Institute for Health Metrics and Evaluation, health sector support shot up from $2 million in 1998 to $937 million in 2007, and surpassed specific funding for TB and malaria for the first time in 2006.)

Strangely enough, whether this resource shift has actually improved health has never really been tested.

Aid Without Impact ACTION reportA new report funded by the Bill and Melinda Gates Foundation found that sector-wide approaches (aka SWAps—the development industry never misses the chance to make a silly acronym) “are not yet being implemented in a way that has led to improvements in health outcomes in effective, efficient, measurable, or sustainable ways.” In other words… SWAps don’t work.

Written by Richard Skolnik, Paul Jensen and Robert Johnson of ACTION (Advocacy to Control TB Internationally), the report looks especially at whether the Bank’s sector-wide programs are associated with success in TB detection and treatment, and concludes with a number of alarming or surprising findings. (We don’t know if the authors have a predisposition towards the vertical approach given their affiliation with advocacy on one disease, but they do seem to ask the right questions.)

First, the authors find little evidence of the impact of SWAps on health outcomes, and what little there is, is mixed at best. The World Bank’s own evaluation picks up on a “general lack of attention to results,” “insufficient attention to ensuring that SWAps are technically sound,” “a general failure to monitor country expenditures,” and “very weak monitoring and evaluation of the health programs that SWAps are supporting.” In the history of SWAps, there has been only one rigorous, independent evaluation, in Tanzania.

Second, only three of the 15 Bank SWAp projects in sub-Saharan Africa from 2001-2008 even included indicators for detection of TB cases and successful treatment of TB. And in only one country (Tanzania), a SWAp “might” be linked to an actual health outcome: higher rates of TB treatment success.

Third, the aid workers and health experts interviewed for the evaluation said that SWAps focus on the process of coordinating aid delivery, which has become an end in itself, obscuring the need to actually increase successful treatment and decrease deaths. NONE of them questioned the need to work through SWAps BUT they almost all agreed there is “little evidence” that SWAps are associated with improved health outcomes.

This suggests to us that it's not only about correctly choosing the right mix of horizontal and vertical but whether ANY approach will work unless it has feedback and accountability. Is this why SWAps were a good idea in theory but a disaster in practice?

What to do? The authors have some suggestions, which are a little hard to believe aren’t already being done as a matter of course: Create incentives to focus on results not the process, drastically increase transparency of project information and evaluation, and do independent program evaluation.

Come to think of it, the donors’ behavior reminds us of Aid Watch’s analogy from Monday. Here, the Bank sends truckloads of money down the same SWAps road, ignoring increasingly obvious and urgent signs that the Bank should change course. But still it hurtles along, unfazed by even its own evaluators shouting from the side of the road that what it’s doing isn’t working.

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Why the World Bank supports tyrants: the Gerund Defense

Meles Zenawi World Bank Ethiopia country director Ken Ohashi has a letter in the New York Review of Books responding to Helen Epstein’s charge that the Bank is supporting tyranny (which we also blogged). Ken’s letter defends World Bank aid to Ethiopia:

There are concerns about the overall governance of the country, efficiency and fairness of resource use, the risk of dependence on aid, and protection of basic human rights, as Ms. Epstein points out. We recognize these concerns, and development partners in Ethiopia take them seriously.

We start, however, with a belief that in every country people want to be self-reliant and prosperous, and to develop a transparent, accountable, effective, and efficient governance system. Ethiopia is no exception. Our task, as an external development partner, is to support that innate tendency.

However, building institutions, public and private, that assure every citizen’s right to and effective delivery of public services takes a long time; indeed, it never ends, as we can see even in the most industrialized countries. Changes are incremental, and at times they may suffer serious setbacks. It is, therefore, crucial that development partners work with the long-term process of change, always in support of it, not in control of it (which is impossible in any case).

Fascinating defense, Ken! You are saying the World Bank sees all countries with an “innate tendency” towards better governance (nicely conflating citizens’ aspirations and the frequently opposite tendencies of those in power). You can then use an all-powerful Gerund like “building institutions” to suggest that you and the autocrat of Ethiopia are benevolently working together on that “innate tendency.” The Gerund  Defense implies that any horrible tyrant can be supported under the assumption that this tyrant is merely a temporary stage in a country “in transition to democracy,” part of an “innate tendency” towards “building institutions.”

The alternative to the disingenuous Gerund Defense is to take a look at the current regime’s political, economic and human rights track record. Two weeks ago, Prime Minister Meles Zenawi’s party and its allies swept the elections, winning over 99 percent of parliamentary seats. Election observers from the EU found that the electoral process "fell short of certain international commitments, notably regarding the transparency of the process and the lack of a level playing field for all contesting parties."

A report from Human Rights Watch criticized the ruling party’s “total control of local and district administration” which they have used to “monitor and intimidate individuals at a household level, punish and undermine the livelihoods of citizens who do not abide by the ruling party, and create a climate of fear that suppresses freedom of expression and opinion.”

The government’s centralized control of land ownership, banks, the internet and even the mobile telecom industry has stymied enterprise and depressed economic growth, while the regime is accused of using the food aid upon which 1/6th of the population depend as a political tool to reward supporters and punish those who dare to join opposition parties.

The US State Department went even further, citing reports of “unlawful killings, torture, beating, abuse and mistreatment of detainees and opposition supporters by security forces, often acting with evident impunity,” in their Human Rights report published last year.

At least you are being consistent. After Meles and his security forces perpetrated election fraud, jailed opposition leaders, and killed over 200 student demonstrators in 2005, the World Bank continued to provide aid.  We have it from a reliable source that your predecessor as Ethiopia Country Director won an award for keeping the lending going despite all the hardship Bank staff inconveniently had to endure.

Sorry, Ken, it’s hard to drown out these realities even with your clever use of the classic Gerund Defense.

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Oops, did I just prove "Confessions of a hit man" conspiracy?

Ray Fisman in Slate takes my paper with Daniel Berger, Nathan Nunn, and Shanker Satyanath on Commercial Imperialism as partial confirmation of John Perkins' allegation of a global conspiracy to take down poor nations for the benefit of rich corporations. This is fun, so let's run with it. Of course there's a eeny weeny difference between conspiracy theories and social science that just says, yes, CIA interventions could have been helpful to US corporations making a few export sales in US client states (Fisman knows this as he makes clear in the article). The full-fledged conspiracy version has the World Bank coordinate and centrally plan the actions of myriads of large corporations, US government agencies, and other aid agencies, all with their own separate interests, to all work for the general obscene profit of all corporations. Which is a bit implausible when the World Bank can't even plan malaria control.

Alright, you got me, I'm part of the conspiracy. They threatened my dog Lucy if I did not recant my candid research. Which is also kind of the problem with conspiracy theories: if there is no evidence for them -- it just means the conspiracy hid the evidence! Conspiracy theories never go out of fashion because it's impossible to disprove them.

The NYT today had a front pager about a conspiracy theory in Pakistan that sees a vast effort to destroy Pakistan led by an American "think tank." I wonder which one? Some think tanks I know (NOT including my good friends in think tanks) could possibly wield deadly weapons of mass boredom.  Let me investigate further and get back to you.

Unfortunately for those fighting the proliferation of conspiracy theories, the US military is doing it's best to spread mass paranoia about Americans everywhere. According to the headline story in yesterday's NYT, General David Petraeus has ordered a vast secret intelligence gathering program around the world, among other things:

General Petraeus’s September order is focused on intelligence gathering — by American troops, foreign businesspeople, academics or others — to identify militants and provide “persistent situational awareness,” while forging ties to local indigenous groups.

Thanks a lot General Petraeus! Now no American academic can go anywhere in the world with being seen as a spy. John Perkins knew it all along...

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Are aid donors now running Haiti?

This post is written by Daniel Altman Who will determine Haiti’s future?  Probably not the Haitians.  With aid groups enlarging their presence on the ground and foreign governments exercising control through their wallets, Haiti’s future may be out of the hands of the Haitians for years to come.

Nowhere is this clearer than in the recently convened Interim Committee for the Reconstruction of Haiti (CIRH), which will set the nation’s priorities during an 18-month state of emergency.  The committee has more seats for foreigners than for Haitians, and voting power is determined in part by amounts of aid money committed.  Donors offering more than $100 million have their own votes; those offering less must share one vote.  Non-governmental organizations operating in Haiti share one seat on the committee but don't have any voting power.

The World Bank will dole out the donors’ money at the instruction of the CIRH, but it is not alone in holding the purse strings.  Haiti has also accepted a loan of over $100 million from the International Monetary Fund, which includes lengthy conditions and benchmarks for Haiti’s economic policy.  Meanwhile, the United Nations Development Program is poised to become the country’s biggest employer through its Cash-for-Work project, and UNICEF is moving forward with a long-term plan to build a national education system.

How did this happen?  After the earthquake, with its people in desperate need, Haiti’s government was ripe for coercion.  Donors could set their own terms, and the government was not in a position to negotiate, even if it wanted to.  Three months later, this continues to be true.  Haiti’s president, René Preval, can in theory veto the CIRH’s decisions, but doing so might mean the freezing or loss of hundreds of millions of dollars.  And now his backers in the Haitian senate want to extend the 18-month state of emergency – and thus the CIRH’s mandate – to solidify their own grip on what’s left of political power.

“I believe everybody agrees this conference is a unique occasion to try to rebuild the Haitian economy,” said Dominique Strauss-Kahn, managing director of the International Monetary Fund, at the international donors conference for Haiti last month.  You could be forgiven for thinking that Strauss-Kahn considered the earthquake a blessing.  Yet he may have been echoing the views of many people in the aid community; finally, he seemed to say, we can go into this country with a free hand and do the things that we've wanted to do for a long, long time.

Daniel Altman is president of North Yard Economics, a not-for-profit consulting firm serving developing countries.  He is the author of three books, most recently Power in Numbers: UNITAID, Innovative Financing, and the Quest for Massive Good (with Philippe Douste-Blazy), and teaches as an adjunct at the Stern School of Business.

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Red Sea parts, Development data set free

This week, the World Bank unleashed, a website that provides free access to 2,000 indicators about development. For years, only those who paid high subscription fees could access much of this data. One of us authors had been meaning for all those years to complain about this -- how could a public organization like the Bank charge high fees despite the obvious case for a free public good of data on development?! I never got around to making this criticism, and now it suddenly happened without any obvious cause.  (Maybe if I had procrastinated on another bit of criticism, the World Bank would now be refusing to finance tyrannical rulers.)

OK,  just teasing, congrats to the World Bankers for making their data wide open to any citizen, journalist, student, researcher, or policymaker with a computer and an internet connection.

The site includes the newly-released 2010 World Development Indicators (WDI), along with other widely-used Bank datasets: the Africa Development Indicators (ADI), the Global Economic Monitor (GEM), Global Development Finance (GDF) and indicators from the Doing Business report. The data covers 209 countries and goes back in some cases as far as 50 years.

Not only that, the Bank is taking some much-needed steps to make the data not just free and available but also user-friendly. For a start, the new visual interface for data exploration is clearly a big improvement over the old Bank statistics sites. Consensus from data and information architecture geeks around the web so far is that the site, created by Development Seed, is both good-looking and intelligently designed.

Getting ever closer to techno-data-utopia, the Bank will host an "Apps for Development" contest later in the year, and you can already download the new World Bank Datafinder app for the iPhone. Aid Watch's crack beta testers swung into action, and within seconds, we had a chart of trends in Rwandan air freight glowing on our iPhones. (Unfortunately, the chart had no data on Rwandan air freight since 1993. Oh and we could only get indicators on the iPhone that start with A, B, or C.  In fact, this app is pretty clunky- stick with the OECD Factbook app for the moment.)

A partnership with Google has made 39 indicators searchable on the experimental and extremely easy to use Google Public Data Explorer.

In the excitement over this very welcome release, we Aid Watchers can’t forget to keep asking the tough questions about where the data comes from, how it is collected, and where more and better data is urgently needed.

For example, regarding the recent controversy on maternal mortality statistics from 1980 to the present on this and other blogs,  we could quickly check for what years the World Bank was willing to stand by the data.  They limited themselves to providing  "modeled estimate" (i.e. made-up) data for 2005.  Apparently,  even the low standards of the Bank on this variable do not allow them to enter data for any other year.

And now, with the new openness, the more eyes on the data, the better.

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Why are we not allowed to talk about individual rights in development?

Individual rights for rich countries Individual rights in development discourse
“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness. That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed.” “Implementing the strengthened approach to governance … will require … …careful development of a … detailed results framework, consideration of budget and staffing implications … and further consultations with stakeholders…The specific initiatives needed to fully operationalize this strategy will be outlined in an Implementation Plan…”
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Who is best qualified to help Haiti? Why not the Haitian diaspora?

Toronto Globe and Mail columist Margaret Wente:

Who can offer the most help to the desperate children of Haiti? Is it Bill Clinton, Jeffrey Sachs, the World Bank or the UN? Is it the many experts who are calling for a Marshall Plan to “fix” Haiti once and for all, or the donor nations that have pledged billions for the task?

Personally, I would choose people like Eric and Nicole Pauyo. The Haitian-Canadian couple, who live in a prosperous suburb of Montreal, have taken in eight nieces and nephews left orphaned by the Jan. 12 earthquake. “I didn't think twice,” said Nicole, who's 62. The Pauyos have already raised three kids of their own. One of them is at Harvard.

For Haitians, the best way to improve their lives is to leave Haiti. More than a million Haitians now live abroad, including 100,000 in Canada. Life in Haiti, meantime, has become worse. Children go hungry, and barely a third finish primary school. About a 10th are restaveks (from the French reste avec , or stay with) – virtual child slaves who are sent to work as unpaid servants in the city by their impoverished parents....

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Afghans and social entrepreneurs improvise when official aid fails

From the blog FabFi (HT to blog Whirled Citizen)

{A} World Bank funded infrastructure project to bring internet connectivity to Afghanistan began more than SEVEN YEARS ago and only made its first international link this June. That project, despite hundreds of millions of dollars in funding, is still far from being complete.

{Meanwhile} the Fabbed Long-Range Wireless Antenna Project, ... as of December 2008 is working on an installation in Jalalabad Afghanistan.

today (Feb 4, 2010)  marks a new peak in the size of Jalalabad's Fabfi network--26 simultaneous live nodes.

Pictured above is a makeshift reflector constructed from pieces of board, wire, a plastic tub and, ironically enough, a couple of USAID vegetable oil cans that was made today by Hameed, Rahmat and their friend "Mr. Willy".

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This Friday: “Best and Worst of Aid” Conference

For aid watchers in New York, this post is a reminder of Development Research Institute’s upcoming conference this Friday, from 9 am to 2 pm, in NYU’s Kimmel Center. Called “The Best and Worst of Aid: Incentives, Accountability and Effectiveness,” speakers and participants will present new findings and discuss and debate the best and worst of what happened in aid this year.

(According to some rumors, the irrepressible light-hearted side of DRI will give Oscar-style Best of Aid Awards – and of course, Worst of Aid Awards – in several important categories).

9:00 am: Welcome and Introduction Yaw Nyarko, Professor of Economics and Co-Director of DRI

9:10 am: Aid and Development Today: The Best of Times, The Worst of Times William Easterly, Professor of Economics and Co-Director of DRI

10:00 am: The Best and the Worst of International Effort on Failed States Clare Lockhart, CEO, Institute for State Effectiveness

10:50 am: Coffee Break

11:05 am: Keynote: What Works and What Does Not Work in Aid and the Transformative Challenges Ahead Isabel Guerrero, Vice President, South Asia Region, World Bank

11:50 am: Thoughts on Aid from a Ugandan Perspective Andrew Mwenda, Founder & Owner, The Independent, Uganda

12:30 pm: Lunch Served

12:45 pm: Lunch Keynote: Historical Lessons: What Did Development Aid Do Best? What Did It Do Worst? Lant Pritchett, Harvard Kennedy School

The event is free and open to the public, but registration is required. (More details here. Register here.)

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Paying for school on $2 a day

When James Tooley first discovered low-cost private schools for the poor in urban slums and rural areas in India, Nigeria, Ghana, Kenya, and China, aid agency officials and local government administrators did not receive the news warmly. Most flat out denied that such schools existed. Even if they do exist, said the experts, they can’t possibly be any good. School owners that run for-profit schools in shantytowns and poor villages are just exploiting poor communities. Their teachers are untrained and poorly paid. Their buildings are cramped, dark and filthy. Worst of all, kids don’t learn anything there—they come out “half-baked,” one education official told him.

But what Tooley found, in four years of site visits and a five-country study described in his book The Beautiful Tree, throws a wrench in this familiar-sounding reasoning. Between two-thirds and three-fourths of students in the impoverished areas he studied were in fact attending these allegedly nonexistent schools, even when public options were available.

Why on earth would a poor family just getting by on the meager wages they earned fishing or pulling rickshaws choose to pay between $1.50 and $7 a month to send their children to private schools if they didn’t have to? In some isolated villages, the closest public school was still too far away, or impossible to get to during the rainy or cold seasons. For other families, the hidden costs of “free” education outweighed the very low cost of schools in their communities (in Kenya, for example, one parent described high up-front costs for a building maintenance fund and two complete school uniforms required by the public schools in her area).

Most reasons that the parents gave for their choice had to do with what the World Bank calls the “short route” to accountability (as opposed to the “long route” which works through the political process). Because school owners’ profits and reputations in the community depend directly on whether parents are happy with their children’s schooling, they paid attention to parents’ complaints. Because teachers in private schools can be fired, they were less likely to be late, idle or absent.

The most surprising thing to those of us who harbor prejudices (hidden even to ourselves?) that illiterate, unschooled parents can’t possibly know more than education experts, is that these parents were making smart, informed decisions. Not that the private schools were perfect—far from it: many of the schools Tooley visited were tucked away in poorly lit, dilapidated, smelly buildings without toilets, and teachers there did lack government training certificates, and were paid less than in the public system. But Tooley found that in low-cost private schools, across the board, classroom sizes were smaller, and teachers were much more likely to be found teaching during an unannounced visit. They are also achieving better results: the students in private schools outperformed their public school peers in nearly every subject they were tested in.

Tooley’s is just one study, and this post has given only a very general outline of its findings. (For a more in-depth look, buy the highly readable and entertaining book, or delve into the academic papers). But one lesson seems clear: Tooley’s work should open the door to more open-minded research on how private schools for the poor can play a part in achieving education for all.

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Decade Ender Edition: We interrupt this blog for a brief self-promotional announcement

People from Ohio are not supposed to trumpet their own achievements. Ohioans have this belief that if you do the Unforgivable Sin of Self-Praise, a tornado will immediately strike and wipe out you and your entire family. "Pride goeth before a fall" is the state motto. Still, when you are labeled an "aid skeptic" and make enemies everywhere, if you don't praise yourself, who's going to? On top of that, I will appeal to a technicality of quoting others praising me, is that alright Ohio? If not, at least tornadoes are uncommon in downtown Manhattan in the middle of winter. So just to note that the World Bank included my book on the PSD blog's Top Ten Books of the Decade. No, not the White Man's Burden, but my lesser known earlier 2001 book (paperback 2002), The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics. Some insiders, not necessarily including the author, actually like the first book better than the second. And there's nice poetic justice here, since the 2001 version of the World Bank forced me onto the exit ramp out of the Bank because of that 2001 book.

Then BOTH my books made the Top Ten Pro-Liberty Books of the Decade. Thank you liberty lovers, I love Liberty for All also, and thanks for giving me 20 percent of the whole decade liberty franchise. Good thing I didn't waste time on a 3rd pro-liberty book.

So for those who procrastinated on Christmas gifts, or maybe celebrate Orthodox Christmas instead, it's not too late to click on the above links and raise my Amazon rankings!

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Martin Ravallion comments on "We must know how many are suffering, so let’s make up numbers"

The following is a response from Martin Ravallion, director of the Development Research Group of the World Bank, on last week's Aid Watch post, We must know how many are suffering, so let’s make up numbers. Pull your head out of the sand Bill Easterly!

Faced with all these perceived “impossibilities,” Easterly and Freschi would apparently prefer to wait and see rather than take action when it is needed, based on the information available at the time. Forecasting is impossible in their eyes. What then is possible? The crisis will probably be over before we will no longer need to make forecasts or estimates to fill in for missing data. Counterfactual analysis of the impact of a crisis is also deemed to be “impossible,” even though the pre-crisis expectations for growth in developing countries are a matter of public record—hardly impossible to know! My Economix article last week defended forecasting against this type of analytic paralysis in the face of uncertainty.

Easterly and Freschi also suggest that the numbers coming from the international agencies are a muddle. Granted there are differences, but Easterly and Freschi have manufactured a good deal of the perceived muddle by mixing forecasts of different things made at different times (and hence with different information). As they could have readily verified, the 89 million figure quoted in the World Bank’s G20 paper is the estimated impact of the crisis on the number of people living below $1.25 a day by the end of 2010 based on our latest growth forecasts, as of mid 2009. “Impact” is assessed relative to the pre-crisis trajectories, as expected at the beginning of 2008.

The uncertainty about these numbers is, of course, acknowledged. But they appear to be the best estimates we can currently make given the information available.

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At least as good as cash from a helicopter? A new standard for aid effectiveness

by guest blogger Franck Wiebe, Chief Economist at the Millennium Challenge Corporation In the face of particularly senseless uses of foreign assistance, aid workers sometimes say “it would have been better to drop the money out of a helicopter” to convey how bad programs waste money.

Cash Transfers are less dramatic (and possibly less efficient) than throwing money from a helicopter, but CTs are increasingly accepted as a standard aid mechanism. Their beauty is their simplicity – simply give poor people what they need: more money so they can decide what they need most. Moreover, their likely impact on welfare is easily assessed, because the benefits can be quantified and tracked.

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Industrial Policy Showdown at World Bank: the policy that may not exist also may not work

The World Bank’s PSD Blog has a good discussion of the debate last Monday between Justin Lin (Chief Economist of the World Bank), Ann Harrison (Head of trade policy division at the Bank and well-known trade economist), and myself (random trouble-maker). The debate was very civil, and I am very grateful to Justin Lin for being so willing to debate his ideas openly (as opposed say to a former Chief Economist who forced me to seek political asylum to escape his enforcers :>) The debate basically boiled down to who is more likely to discover the country’s comparative advantage, the government or decentralized entrepreneurs.

(1) the argument for the government

-- according to Ann Harrison, there could be “latent comparative advantage” in industries with increasing returns – i.e., falling unit costs the more is produced. In these industries, they don’t have a cost advantage now because they are not producing much, but if they produced more they would have lower costs. A government could promote an industry to turn latent into actual advantage.

--according to Justin Lin, the market can handle static efficiency, but can’t handle the transition from one stage of exporting to another, like from lighter to heavier industry. All the government needs to do is look ahead at those countries ahead of it on the technological ladder and promote the next rung on the ladder to find the country’s true comparative advantage.

(2) The argument for many decentralized entrepreneurs seeking the next Big Hit

--If it's so easy for governments to do it, why do we have no success stories of imitating East Asian tigers?

--Ann pointed out that we have little evidence of any actual government policies aimed at finding “latent comparative advantage.” Even deeper than whether industrial policy works is the question of whether it even exists in the real world.

--there are almost 3000 manufacturing products to choose from, so how much guidance does the government get from looking ahead at a very broadly defined “technological ladder?” Entrepreneurs discovered such surprising Big Hits as Fiji exporting women’s cotton suits to the US and Egyptian exports of ceramic toilets to Italy.

--the central government has limited knowledge, limited skills, no direct rewards for finding winners, and lots of problems with corruption (Lant Pritchett reminded me of a recent paper that documented that we can’t even trust Indian civil servants to give out drivers’ licenses) as it tries to pick winners. Entrepreneurs have lots of local knowledge about their industry, specialized skills in that industry, abundant rewards for success, and will not steal from themselves.

--much of the “evidence” that industrial policy “works” is selectively picked from a huge amount of random variation. It focuses almost entirely on industrial policy successes and doesn’t document the much more numerous failures.

In the end, the question boils down to: does a poor country government have a comparative advantage in discovering a poor country’s comparative advantage?

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World Bank AIDS Drive crowds out other health programs – but fails to make progress on AIDS

A report released today by the World Bank’s own Independent Evaluation Group faults the Bank for allowing AIDS to drive out many other programs to improve health. To make things worse, the Bank’s AIDS effort itself failed to accomplish much – only 29 percent of AIDS projects (and only 18 percent of AIDS projects in Africa) had a satisfactory outcome – while other efforts were much more effective (89 percent satisfactory project rate for other communicable diseases). Despite the poor results on AIDS and better results on malaria and TB, AIDS accounted for 57 percent of Bank projects on communicable disease during 1997-2006 (the period covered by the evaluation), compared to 3 percent for malaria and 2 percent for TB.

The report notes the large share of health funding earmarked for AIDS tended to pull scarce resources in the local health system such as nurses and doctors away from other health problems. Within overall constrained donor budgets, AIDS financing tended to crowd out projects that support overall health system reform, despite the urgency of the latter issue to get any good results on any health outcome.

“A case in point is Malawi: because of constraints in the availability of Bank budget for supervision, IDA funds were available for the health {sector-wide reform} or … AIDS… but not for both. The Bank opted to drop support for the health {sector-wide reform} and continue support for HIV/AIDS.” (p. 40) The Bank did this even though a lot of other donor funding was already earmarked for AIDS.

Another victim of the AIDS emphasis was nutrition. The share of projects with nutrition objectives dropped by half; Bank support for nutrition reached only a quarter of countries with high stunting. This is particularly sad because many nutritional interventions are relatively cheap and easy to administer (for example, nutritional supplements, which had a big payoff in the PROGRESA program in Mexico).

The AIDS crowding out troubled the independent Advisory Panel that IEG asked to comment on the report. At a time when international AIDS funding was surging, the Panel said, “we were surprised that the Bank did not provide a countervailing trend…there was a fall in nearly half in the share of projects with objectives to reform the health system.” (p. xxvv)

Given what looks to be irrational behavior, my guess is that the Bank made these choices for purely political reasons. It is extremely sad that such politics caused the Bank to neglect many other treatable and preventable health tragedies, without any countervailing benefit even for AIDS victims given the poor performance of the Bank’s AIDS projects.

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Thieves and Donors: Agencies Struggle to Respond to a Little Constructive Criticism on Tajikistan

Last month, the International Crisis Group came out with a report describing the "profound and all-pervasive nature of corruption in Tajikistan," and recommending that the international donor community "institute a totally new framework for the provision of aid to Tajikistan." Since "most" of the substantial amount of money provided by international donors (some $300 million in 2006) "is believed to be lost to corruption before it gets anywhere near its intended recipients" the ICG reasonably recommended that donors take another look at whether it is good idea to give Tajikistan direct budget support (that is, provide cash directly to the Ministry of Finance to go into the budget for public spending). If the government doesn't get into shape, they said, donors should keep on funding humanitarian relief but cut off direct budget support.

We wondered what Tajikistan’s donors would say about these recommendations. In an ideal universe of flexible, accountable aid, surely donors would welcome impartial, externally-funded research. They would have in place some mechanism to evaluate the recommendations and determine whether existing aid programs should be tweaked or even discontinued in light of new findings...right?

To their credit, the donors we spoke with were aware of the ICG recommendations, and all responded (though some more slowly and reluctantly than others) to our questions.

The IMF told us that the majority of the ICG findings didn’t apply to them: the IMF doesn’t give direct budget support, and it doesn’t fund specific projects. As it happens, though, a new IMF loan of $120 million was announced the same week the ICG report came out. The loan will go the central bank to bolster Tajikistan’s foreign currency reserves. "As is the case in all IMF programs, we will also conduct a safeguards assessment that seeks to confirm that IMF resources are used as intended" said the IMF rep in an email message. We just wonder if this is the same safeguards assessment that was conducted before the last six misreporting incidents between Tajikistan and the IMF, the most serious of which required Tajikistan to give back some $50 million dollars and hire Ernst and Young to conduct an independent audit of the National Bank.

So who is giving direct budget support to Tajikistan? The World Bank’s portfolio for 2006 to 2010 includes $30 million in direct budget support. A new agreement, also reached the same week that the ICG report came out, will add $20 million to that figure, bringing budget support to 30 percent of the World Bank’s total grants in Tajikistan.

Reached via email in Dushanbe, the World Bank rep said of the ICG report: “We do not find ourselves in a position to comment on those recommendations…what we can say though is that the World Bank is aiming to support the people of Tajikistan…and the monitoring and audit systems in World Bank-funded projects are carefully designed to ensure that the funds reach those whom they were intended for.”

At the same time, though, the World Bank rep sent us a case study commissioned by Brookings (forthcoming) on aid effectiveness in Tajikistan. This report’s key conclusions are worth quoting at length:

The existing aid coordination architecture and interaction mechanisms between the Government and development partners are unable to ensure efficient use of foreign aid resources being provided to Tajikistan. As a result, planned (or expected) results and impact are substantially different from those realized on the ground. External assistance...has resulted in the perverse situation of a lack of incentives and inability to focus on and pay attention to the long-term determinants of domestic growth and appropriate political and economic institutions.

What do you think? Are donors in Tajikistan and elsewhere doing enough to safeguard aid funds and make sure they reach the poor? Or are they taking the path of least resistance, responding to strong institutional incentives that require donor organizations to keep the money flowing? What more do you think can be done?

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And Now For Something Completely Different: Davos Features “Refugee Run”

Refugee-Run-Text-4.JPG 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?

Unfortunately, sensationalizing, patronizing, and dehumanizing attitudes are a real ongoing issue in foreign aid. David Rieff in his great book A Bed For the Night talks about how humanitarian agencies universally picture children in their publicity campaigns, as if the parents of these children are irrelevant. A classic Rieff quote: “There are two groups of people who like to be photographed with children: dictators and aid officials.”


Former World Bank President Wolfowitz with a few children

Alex de Waal in his equally great book Famine Crimes (and continuing writings since) writes about “disaster pornography.” He gives an example of a Western television producer in Somalia in 1992-93 who said to a local Somali doctor: “pick the children who are most severely malnourished” and bring them to be photographed.

Here’s a resolution to be proposed at Davos: we rich people hereby recognize each and every citizen of the globe as an individual with their own human dignity equal to our own, regardless of their poverty or refugee status. And Davos man: please give Refugee Run a pass.

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