Spies Play Economists, Economists Play Spies

The New York Times on Friday the 13th headlined “Global Economy Top Threat to U.S., Spy Chief Says.” Many other papers followed suit with similar prominent headlines. Director of National Intelligence Dennis Blair staged a raid on the Big Issue of the Day as a “security threat” and thus something falling within his bureaucratic turf. Thanks, Spy Chief, but we have enough trouble sorting out the advice of the expert economists on the Global Financial Crisis without adding the amateur opinions of spies.

Of course, Spy Chief’s turf raid could just be retaliation for foreign aid economists' even more audacious turf raids on the worlds of spies and generals. Aid economists like Paul Collier in his book The Bottom Billion are trying to micro-manage the deployment of UN and Western armies around the globe, suggesting aid economists have hitherto-unsuspected access to both global intelligence and military knowledge.

Here’s an even more audacious proposal. Let’s go back to that old-fashioned world called Division of Labor and Gains from Specialization, where spies were spies, generals were generals, and economists were economists.

Did Bill and Melinda Gates Claim Malaria Victories Based on Phony Numbers?

Tuesday’s Financial Times printed a Martin Wolf interview with the Gateses from Davos, available as a video on the FT web site. A sample quote from the interview:

We’re trying to make sure that people understand this: aid is effective…So, for instance, malaria incidence is down in countries such as Zambia, Ethiopia, and Rwanda. It’s down in some countries by over 50 percent and some by 60 percent…[if we and other donors] come in and distribute mosquito nets – 60m to date – that is how we have achieved these declines. So we are able to say, “Look, aid is making a huge difference, we are literally saving people’s lives."

Real victories against malaria would be great, but false victories can mislead and distract critical malaria efforts. Alas, Mr. and Mrs. Gates are repeating numbers that have already been discredited. This story of irresponsible claims goes back to a big New York Times headline on February 1, 2008: “Nets and New Drug Make Inroads Against Malaria,” which quoted Dr. Arata Kochi, chief of malaria for the WHO, as reporting 50-60 percent reductions in deaths of children in Zambia, Ethiopia, and Rwanda, and so celebrated the victories of the anti-malaria campaign. Alas, Dr. Kochi had rushed to the press a dubious report. The report was never finalized by WHO, it promptly disappeared, and its specific claims were contradicted by WHO’s own September 2008 World Malaria Report, by which time Dr. Kochi was no longer WHO chief of malaria.

(There was never a retraction in the New York Times, so perhaps Mr. and Mrs. Gates can be forgiven for being confused – although with most of the world’s public health professionals on Mr. and Mrs. Gates’ payroll you would think their briefers would have access to the most accurate information.)

The September 2008 WHO Malaria Report keeps Rwanda as a success story (along with some other new success stories – not mentioned in the New York Times – like Sao Tome & Principe and Zanzibar), but Zambia and Ethiopia are gone: the effects of malaria control in Zambia were “less clear,” and in Ethiopia, “the expected effects” of malaria control are “not yet visible.”

Digging deeper into the WHO Malaria Report, the standards for data on malaria are set so low, it is even more striking how the Kochi numbers – those numbers that fueled a February 2008 New York Times story and a February 2009 Gates claim – failed to meet even these low standards. The WHO says (in a small print footnote): “in most countries of Africa, where 86% cases occur, reliable data on malaria are scarce. In these countries estimates were developed based on local climate conditions, which correlate with malaria risk, and the average rate at which people become ill with the disease in the area.” Another stab at explanation of their malaria numbers was: “From an empirical relationship between measures of malaria transmission risk and case incidence; this procedure was used for countries in the African Region where a convincing estimate from reported cases could not be made.” (Possible translation: we make the numbers up.)

The shakiness of the numbers is visible when you look at them by country in the WHO Malaria Report. For the “success story” of Rwanda, there is an estimate of 3.3 million malaria cases in 2006, with an upper bound of 4.1 million and a lower bound of 2.5 million. But wait – another way to estimate cases, which is the one used to estimate trends, shows 1.4 million cases in 2006 (and this was an increase over the 2001-2003 average). Estimates of child malaria deaths in Rwanda are similarly all over the place – they do show a drop from 2001 to 2006, but the change is dwarfed by the vast imprecision conveyed by the lower and upper bounds.

In another WHO success, Zanzibar (which, to be fair, Mrs. Gates also mentioned as a success by in the interview), there seems to be more consensus on success from a combination campaign featuring indoor spraying of homes, insecticide-treated bed nets, and treatment of malaria patients with advanced drugs. It seems to be easier to make inroads into malaria on small islands. The American Journal of Tropical Medical Hygeine has published two articles suggesting there was success of malaria control in Sao Tome (also an island) and a corridor in South Africa, Mozambique, and Swaziland, apparently using more rigorous data methods.

As far as the country claims by the WHO and Mr. and Mrs. Gates, however, there seems to be mass confusion, and data that ranges from phony to made-up to shaky, about what interventions are responsible for what trends where. The WHO Malaria Report offers this ringing conclusion in its “Key Points” summary on how to control malaria:

In general, however, the links between interventions and trends remain ambiguous, and more careful investigations of the effects of control are needed in most countries.

Maybe the Gates Foundation should be funding more rigorous data collection. With all this effort to fight the tragedy of malaria, it’s even more tragic that the malaria warriors can’t even get accurate reports of who is sick and dying when and where.

NYU’s Aid Watch Initiative Held Conference on “What Would the Poor Say? Debates in Aid Evaluation”

By William Easterly During last Friday's conference, participants and speakers leveled a variety of criticisms at aid agencies for lacking accountability and transparency, but also suggested new ideas and expressed hope for a new way forward. Here are some highlights; check back soon for more details and some video footage. Click here for the full conference agenda.

Yaw Nyarko (NYU): “No nation has ever developed because of aid and outside advice.”

Esther Duflo (MIT): “Field experiments have a subversive power.” Find her presentation here.

William Easterly (NYU): The institutions of a free society make it possible to answer "what would the people say?" Can we imitate this in aid to know "What would the poor say?" Full presentation here.

Laura Freschi (DRI) on Aid Watch: “We want to act as ONE OF MANY catalysts in the open marketplace of ideas about aid evaluation: inspiring connections, and helping to convert good ideas into opportunities.” Find the text of the Aid Watch launch announcement here.

Andrew Mwenda (the Independent): “Aid money makes African governments accountable to the aid agencies rather than to their own people.”

The power of accountability for African governments is shown by some examples when political elites faced a threat to their very existence, like in Rwanda after the genocide or Uganda after Musevni’s takeover in 1986, when both governments instituted pro-development policies.

Nancy Birdsall (Center for Global Development): Cash on delivery aid “traps the donors so they are forced to have poor country governments accountable to them and accountable to their own people.” Find her presentation here.

June Arunga (BSL Ghana Ltd.): "Aid money is diverting African skilled professionals away from private enterprise to writing proposals for NGOs.”

When June pitched her idea of using cell phones to facilitate financial transactions to Western investors, one well-known philanthropist expressed disbelief that poor Africans (whom she had seen mainly in pictures begging and starving) had cell phones: “Who do they call?” she asked.

Dennis Whittle (GlobalGiving): “Put up a billboard in each community saying what aid money is supposed to be going towards.” Click here for his presentation.

Lant Pritchett (Harvard University): "Is this information you are gathering from us just to help you write your report or can you really be helpful to us?" - a woman in South Sudan.

Evaluation can help make politically successful development movements into effective ones. Find his presentation here.

Ross Levine (Brown University): “Aid agencies are insufficiently evaluated on advice…financial survival depends on distributing money.” The right advice often violates the imperative: “Don’t interfere with lending!” Click here for more.

Leonard Wantchekon (NYU): "We African professionals want to be the ones advising our own governments rather than foreign aid professionals!" Find his presentation here.

Karin Christiansen (Publish What You Fund): “In Afghanistan, the government does not know how one-third of all aid since 2001 – some $5bn – has been spent…Liberian civil society organizations couldn’t get basic information [which foreigners could.]” Find her presentation here.

William Duggan (Columbia School of Business): “I wasted 20 years of my life on aid efforts, but now I see some hope for change.” Click here for his short paper (co-authored with Lynn Ellsworth) on "Evaluation, the Poor, and Foriegn Aid."

How About a Free Press to Hold Aid to Africa Accountable?

Courageous independent Ugandan journalist Andrew Mwenda was featured in a mass circulation magazine last weekend, getting some well-deserved recognition.

Mwenda has been in and out of jail for his criticism of the (aid-supported) authoritarian Ugandan government. He was a recipient of the International Press Freedom Award for 2008.

Mwenda started his own independent newspaper (known appropriately as the Independent) in Uganda, after complaining the government was curtailing the freedom of the newspaper where he previously worked.

He also is a frequent critic of aid agencies’ operations in Africa for tolerating corruption and poor results, which caused Bono to heckle him in a famous confrontation at the TED conference in Tanzania in 2007.

A free press is an important way in which we hold our governments accountable in rich democratic countries. Why shouldn’t Africans have the right to freedom of the press as well?

Mwenda will be speaking at the NYU conference “What Would the Poor Say? Debates in Aid Evalution” this Friday, February 6.

Begin it Now: The Inspirational Success of Ashesi University in Accra, Ghana

Ashesi (which means “beginning” in a local language) is a remarkable private university begun in 2002 by a returning Ghanaian expatriate, Patrick Awuah. A recent column in the Seattle Times interviewed Awuah and profiled the university: “So far, its four graduating classes have had a 100 percent placement rate. Most graduates have stayed in Africa, and some have even started companies that are hiring Ashesi students.”

Half of the students are on scholarship. I have visited Ashesi myself on several occasions and have been humbled and inspired by the dynamism of the students and faculty.

Awuah said he was inspired by the words of Goethe: "If there is anything you can do, or dream you can, begin it. Boldness has genius, power and magic in it. Begin it now."

Now the campus is expanding rapidly, building on success. The Ashesi website gives its vision: “to educate a new generation of ethical, entrepreneurial leaders in Africa; to cultivate within our students the critical thinking skills, the concern for others and the courage it will take to transform a continent.”

Despite widespread international publicity as a homegrown success, Ashesi has yet to receive a single dollar of official aid (one famous official aid agency turned Awuah down when he refused to raise his student-teacher ratios to what he saw as unacceptable levels).

I Call Your Authenticity, and I Raise You One Ideology

People sometimes try to win a debate by playing “trump cards” that allegedly overturn any other argument, instead of practicing reasoned arguments based on logic, common sense, and evidence. One attempted “trump card” is that an “authentic” member of group X is in favor of a certain policy towards group X. The hidden assumption is that any “authentic” member of group X can speak for all other members of group X, and knows what is best for group X. When these hidden assumptions are clearly stated, they are clearly silly. I was authentically born in West Virginia, but I would not dare claim to know what’s best for Appalachian poverty based on my accident of birth (or speak for my fellow “Appalachians.”)

A recent use of this “trump card” was UNHCR’s statement defending its “Refugee Run” at Davos, which we debated on this blog last week: “The exhibit received a seal of approval from a genuine refugee, Raphael Mwandu from the Democratic Republic of the Congo.” I have every respect for Mr. Mwandu’s opinion, but I don’t approve of UNHCR’s using him as a trump card. What did it mean that one refugee was “genuine” – did they disqualify some other refugees that were not “genuine”?

Another example of this was the article this weekend in the Financial Times about Zambian economist Dambisa Moyo and her new book Dead Aid. Again, there seemed to be the idea that Dr. Moyo should win the argument because she was born in Zambia. This is unfair to Dr. Moyo and unfair to other African intellectuals. It also seemed very unnecessary because Dr. Moyo’s opinions are fascinating on their own merits. About celebrities working on African policy, she says “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.”

The FT article continues, “Moyo says it is easy for the western media to paint a doomsday scenario – one which depicts Africans as helpless – to justify the delivery of yet more aid.” I can’t wait to read her new book (it comes out February 5 in the UK and March 17 in the US).

Another very popular “trump card” is to dismiss your debate opponent as being “ideological” (variants on this trump card are to attack the research financing or think tank affiliation of your opponent). This has shown up quite a bit in comments on this blog. Now it is certainly true that some people make arguments based only on ideology and not on legitimate grounds like logic, common sense, or evidence. How can we tell who is being ideological? By doing what we should have done in the first place: debate the argument using logic, common sense, and evidence.

“Trump cards” are out, reason is in.

Jeff Sachs is Right! (at least about one thing)

When the global economy is in free fall and everyone else seems ready to throw each and every Econ 101 principle out the window, we economists – including some previously heterodox – get desperate to save the core principles that lead to prosperity and development. See Economists Go Back to Basics at Forbes.com.

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

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.

DRI to Host Conference on Aid Evaluation

On February 6th, NYU's Development Research Institute (DRI) will host What Would the Poor Say: Debates in Aid Evaluation, a one-day conference with the leading thinkers in development economics. The conference will take place at New York University, where participants from universities, NGOs, the independent media and the private sector will add to the dialogue on how to make aid agencies accountable for the most effective solutions to global poverty. A list of speakers and panelists follows, but for a complete schedule of events, go to DRI's website. The conference is free and open to the public, but space is limited and filling up quickly. To reserve a place, RSVP to aidwatch@nyu.edu with your name and affiliation.

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Yaw Nyarko (NYU), Welcome and Introduction

Esther Duflo (MIT), The Evaluation Revolution and the Aid Providers

William Easterly (NYU), The Big Picture on Aid Accountability

Panel 1: Evaluation: Issues in Transparency and Accountability

Andrew Mwenda (The Independent, Uganda), Independent Media in Africa and Foreign Aid

Nancy Birdsall (Center for Global Development), New Methods for Motivating Results in Aid

Dennis Whittle (Global Giving), Accountability in Decentralized vs. Centrally Planned Aid Systems

June Arunga (BSL Ghana Ltd.), Foreign Aid from the African Business Point of View

Lant Pritchett (Harvard), The Political Economy of Evaluation

Panel 2: Issues in Evaluation

Leonard Wantchekon (NYU), Independent Evaluation and the Reaction of Official Aid Agencies

Ross Levine (Brown University), Evaluating the Economics: Finance and the Aid Agencies

Karin Christiansen (Publish What You Fund), Aid Transparency as a Prerequisite

William Duggan (Columbia Business School), Pragmatic Learning from Success and Failure

How Nice Should Aid Commentators Be?

I wanted to respond today to your very helpful comments on yesterday’s launch, but of course I have to be very selective. To summarize a few areas of agreement and disagreement: I agree with:

(1) Those who said they liked the new blog. You get a free cup of coffee made with my hand-powered $20 espresso maker next time you are in Greenwich Village.

(2) Lucas who said I do need positive examples of aid working. Yes! Please send me more documentation on the Filipino example you gave, and I am happy to feature it. Positive examples are welcome from everyone reading this (but some kind of evidence and documentation is required.)

(3) Michael Clemens of the Center for Global Development on the counterproductive fixation with “0.7 percent of GDP” as an aid target. He is too modest – what he says is based on a killer article he did with Todd Moss also of CGD. The journal summary practically burns up the page:

First, the target was calculated using a model which, applied to today's data, yields ludicrous results. Second, no government ever agreed in a UN forum to actually reach 0.7 per cent – though many pledged to move toward it….The 0.7 per cent goal has no modern academic basis, has failed as a lobbying tool, and should be abandoned.

Clemens and Moss might have been a good reference to check before two opeds by Mr. Zoellick that mentioned “0.7” five separate times.

I disagree with:

(1) Jim, who said I was being too mean to Mr. Zoellick. First, I won’t be mean to YOU, Jim, I’m happy you gave me some tough criticism, debate is a GOOD thing.

Which is also my response to your criticism, which is that debate is a GOOD thing. Debate is good in academia, and it’s good in politics, and both kinds are usually fierce. It wasn’t a personal attack on Mr. Zoellick, it was a big disagreement about big issues.

We fiercely debate domestic spending bills that waste affluent taxpayers’ money with a few millions on a bridge to nowhere, so why should we be NICE when the head of the world’s premier aid agency outlines virtually zero accountability for helping the world’s poorest people?

Everyone Should Be Responsible...(except the aid agencies)

Today, I foist a new blog called Aid Watch on the blogosphere. The objective is to be brutally honest when aid is not helping the poor, but also praising it when it is. Alas, there is far to go. Take World Bank President Robert Zoellick’s oped (A Stimulus Package for the World) in last Friday’s New York Times and another one in today’s Financial Times (It is Time to Herald the Age of Responsibility).

The more you promise, the more you are telling us you don’t expect to be accountable for promises

In the NYT, President Zoellick requests an additional $6 billion from the US in foreign aid, which will “speed up global recovery, help the world’s poor and bolster [America’s] foreign policy influence…facilitate fast and flexible aid delivery…create jobs while building a foundation for productivity and growth…increase demand for American-made equipment...[and] limit the depth and length of the international downturn, prevent the contagion of social unrest and help save a generation from a new poverty trap.”

The more actions you list, the less you are serious about each action

Right after saying “priorities” for actions in poor countries (NYT), President Zoellick manages to touch on agriculture, health, education, nutrition, infrastructure, banking systems, small-and-medium-enterprise development, microcredit, global warming, and private sector development. Mr. Zoellick (FT) also wishes for international action on the Millennium Development Goals, the Doha trade round, the Copenhagen climate change agreement, humanitarian food supplies, energy conservation, and more G20 meetings to agree on fiscal expansion and reopening credit market agreements.

It’s not about aid money to reach objectives, aid money IS the objective

NYT: “The United States could begin by pledging some $6 billion…0.7 percent of its stimulus package.” FT: “How we respond to the crisis…will set the course.” The “first step” is to give more aid.

President Zoellick does mention briefly the critical issue in both the NYT and FT: some “safeguards to ensure that the money is well spent,” which don’t currently exist. In the FT, he makes the inspirational call for an “Age of Responsibility,” but the Responsibility seems to apply only to rich donors, there is nothing about holding the World Bank responsible.

If you are not accountable for promises, if you try to do everything and focus on nothing, and if you obsess about aid money raised rather than results achieved, haven’t you already told us that the money will not be “well spent”?