Some of us are getting a little too excited about Presidential Study Directive #7

Professor Philip Auerswald published a spirited rebuttal to my post on the US government process reforming policy towards global development. In all the heated excitement on this subject, a few points may have been overlooked: (1) my post was signed "Laura Freschi", (2) my name is not "Laura Freschi", (3) there is a very gifted writer on the Aid Watch blog whose name is "Laura Freschi." I do confess I have had trouble getting consumed with thrills about the whole PSD 7 exercise. I actually got an earlier leak on the process a while ago, in which there was an attempt to get consensus from all the US government experts on development. One of the consensus conclusions was that higher productivity was an important deteminant of development. I really have to agree with that one, since the definition of productivity was GDP per worker and the definition of development was GDP per worker. At least we finally have agreed that if you increase GDP per worker, it is likely to increase GDP per worker.

Professor Auerswald was consulted during the PSD 7 process and he asked me if I was. I vaguely remember that I was invited to a meeting with a US government big shot on development whose name I've forgotten, to take place in Washington. I failed to do my patriotic duty, using the lame excuse that the meeting was two days before Christmas, and I unreasonably treat the days around Christmas as belonging to Family Zone.

Professor Auerswald (sorry for my teasing you in this post), you do seem to have a theory of social change in which promises about government intentions to someday change priorities are a major force. My experience of many years of observing such statements is that they are more like New Year's resolutions that are repeated every year.

I do heartily believe development change is possible and indeed is already happening, but I still  have these nagging doubts that PSD #7 will go down in history as the major turning point.

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Inequality does cause underdevelopment: insights from a new instrument

Consistent with the provocative hypothesis of Engerman and Sokoloff (1997, 2000), this paper confirms with cross-country data that agricultural endowments predict inequality and inequality predicts development. The use of agricultural endowments –specifically the abundance of land suitable for growing wheat relative to that suitable for growing sugarcane -- as an instrument for inequality is this paper’s approach to problems of measurement and endogeneity of inequality. The paper finds inequality also affects other development outcomes – institutions and schooling –which the literature has emphasized as mechanisms by which higher inequality lowers per capita income. It tests the inequality hypothesis for development, institutional quality and schooling against other recent hypotheses in the literature. While finding some evidence consistent with other development fundamentals, the paper finds high inequality to independently be a large and statistically significant barrier to prosperity, good quality institutions, and high schooling.

I got two useful suggestions yesterday. One is why not use the blog to promote my own research papers, some of which remain tragically under-read and under-cited. The second is why not balance my blog posts a bit more from my usual playfulness, irreverence, and satire with an occasional reminder that I actually do work as a serious academic for a living?

The title and abstract are from my article in the Journal of Development Economics, Vol. 84, Issue 2, November 2007, 755-776. For dataset click here.

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Mysteries of technological miracles

UPDATE 11 43 am May 7: on something else on which I had been procrastinating forever: my iPad just made me a dentist appointment. I just did a tech upgrade and my productivity has quintupled. And I don't know why. Even the word "upgrade" is in doubt. Typing is more awkward. I make typos. I can't plug in my camera. Some graphics that worked with my oldntechnology no longer work. The screen is smaller. Yet I stick to my claim that my productivity is much higher.

Some of you have guessed that I am typing this post on my new iPad. Why is it such a hit when many similar devices failed? I don't know. Why did I just do a travel reservation and answer several overdue emails on which I had been procrastinating? I don't know. The proof of the productivity pudding is only in the eating, even if it can't be articulated.

Is this why consumer choice is a much better guide than expert advice to technologies that actually work? Is this why many promising technologies fail in the field in development, because nobody wants to use them? I think so. Is this why other unexpected technologies succeed because users like them? I just know I love my iPad. Sorry about the typos.

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The Plumpy’Nut dust-up: Nutriset’s side of the story

The following post was written by Alanna Shaikh. Alanna is a global health professional who blogs at UN Dispatch and Blood and Milk. Plumpy’Nut is a lifesaving Ready-to-Use-Therapeutic-Food that was developed, and patented, by a French company called Nutriset. An American NGO and company have brought suit against Nutriset in an attempt to break the patent. I wrote about the basics of the situation in a previous post.

That post brought up more questions than it answered. In an attempt to cast some light on the situation, I talked to two people from Nutriset: Remi Vallet, and Adeline Lescanne, by phone and via email. The answers below cover my communications with both of them. Mr. Vallet is the Nutriset communications officer and Ms. Lescanne is Nutriset’s deputy general manager.

The Nutriset View:

1) What’s the deal with nutritional autonomy?

When Nutriset was founded in 1986, its mandate was “feeding children.” That changed over time – the current mandate is contributing to nutritional autonomy. “Nutritional autonomy does not mean nutritional autarky,” says Vallet, “We don’t want North Koreas. But local production benefits the local economy.” Rather, communities should be able to identify their own nutritional needs and access to what they need to meet them. This means that Plumpy’Nut should be made as close to the place of need as possible. Most Plumpy’Nut ingredients are available in Africa, especially peanuts and oil.

2) Won’t restricting Plumpy’Nut to local production drive up prices and limit access to Plumpy’Nut?

Local production is not necessarily more expensive than international production; transportation taxes are high and so are import taxes. In addition, small local NGOs may not have the capacity to handle a large internal procurement of Plumpy’Nut, but they can work with a local manufacturer.  Importing Plumpy’Nut can also face political opposition, such as what we saw in India. Local production avoids that problem.

3) How does Nutriset’s patent support local production?

It’s much more difficult to set up a factory in Africa than it is in the US. African businesses have trouble accessing capital and navigating bureaucratic obstacles. The patent allows Nutriset to work with local partners and protect them from international competition while they develop. US producers would use subsidized raw materials, and overwhelm local producers.

My take on this:

I came away from my discussion with Nutriset convinced of their good intent and unconvinced of their logic. This is clearly not a case of an evil corporation profiting from hungry kids. Unfortunately, I don’t think that matters.

Nutritional autonomy is the heart of Nutriset’s case for their patent, and I just don’t get it. I spent quite a while talking to Nutriset, but I still don’t see nutritional autonomy as a justification for the Plumpy’Nut patent. It seems to me that Nutriset could support local level nutrition through methods more effective than the Plumpy’Nut patent. For example, political opposition to imported food is not immutable; Nutriset could advocate for governments to accept the product. And if local production is no more expensive than international production, it won’t make much difference if factories take longer to set up in Africa.

Nutriset is trying to argue everything at once, here, and it doesn’t hold. If locally produced Plumpy’Nut is cheaper, more accessible to small purchasers, and less taxable, why exactly does it need a patent to protect it?

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Will the real development champion please stand up?

Earlier this week, Foreign Policy blogger Josh Rogin published a leaked White House document detailing the Obama Administration’s “New Way Forward on Global Development.” The optimistically-titled document is the draft output of the Presidential Study Directive (known as the PSD-7), ordered by the Obama Administration nine months ago as a government-wide review of global development policy, and conducted by the National Security Council and the National Economic Council.

The document proposes to “elevate development” as a “key pillar of US foreign policy.” How so? The most significant change in the draft is the creation of interagency committee reporting to the President to run US development policy. This would essentially pull responsibility for development away from State, (where it has been since Condoleeza Rice initiated the mysterious-sounding “F process” in 2006), although not completely since the USAID Administrator would still report to the Secretary of State.

Meanwhile, the State Department is also promising to “elevate development” as a “central pillar of all that we do in our foreign policy.” The State Department’s own review of development policy, called the Quadrennial Diplomacy and Development Review (QDDR to close friends) has not yet been published (or leaked), but will most likely not propose that State relinquish budget and policy planning authority over USAID.

What would be the best outcome for the people around the world on the receiving end of America’s imperfect largesse? Will it make any difference which one of these plans wins out in the upcoming political turf battles? One thing’s for sure, US foreign aid reform has a long and inglorious history, and tinkering at the margins (or stirring the spaghetti bowl, as a recent Oxfam editorial put it) will only make things worse.

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Jeff Sachs’ intellectual empire gets new funding

There’s a new way to study development: a masters degree in the practice of development. The MacArthur Foundation announced ten universities to receive funding for the new degree program yesterday, bringing the funding from MacArthur for this project to $16 million. The first students matriculated at Columbia University in 2009, and by 2013 the foundation expects the programs to be producing 400 graduates a year from around the world.

The two-year degree is multidisciplinary—the health sciences, the natural sciences and engineering, the social sciences, and management—with a focus on application and fieldwork.

Since today’s problems—like climate change, poverty and sustainable development—are interconnected, students need to be prepared to think across disciplines, so the argument goes. If ending global hunger (Millennium Development Goal number one) requires technical knowledge of health and nutrition, agronomy, agricultural supply systems, as well as managing organizational change, then this degree proposes to equip graduates with basic knowledge on all those topics.

The idea for the new global program comes from the Earth Institute’s Jeffrey Sachs, an architect of the Millennium Development Goals, and John McArthur, the head of the NGO that supports the Millennium Village Project, who articulated their vision in a 2008 report on education for development professionals.

Here’s what this program assumes the world needs more of:

a new generation of development practitioners who can understand the “languages” and practices of many specialties, and who can work fluidly and flexibly across intellectual and professional disciplines and geographic regions.

This sounds pretty good. In fact, I’m a generalist myself, which is how I ended up in this job, where I write about a global health issue one day and an economics paper the next.

But what if what the world really needs more of something else? What if it needs more specialists, more people with deep knowledge about the regions they study and work in? What if it needs people who are well-versed enough in their own disciplines to be critical of half-baked development ideas cooked up by aid planners who know just enough about every topic to believe they have the answers?  What if the world needs more specialists to evaluate the quality of the work in each specialty?

Curriculum and course materials proposed by the central “Secretariat” for development practice are housed in Columbia’s Earth Institute. Will the new programs produce students with a standardized, narrowly-prescribed view of how to approach development problems? Or will the melding of disciplines encourage critical thinking and help straddle the theory-policy divide, making global cooperation run more smoothly and international aid more effective?

I hope it’s the latter. But here’s one discouraging clue: The draft 2009 syllabus for the development practice degree’s required “foundation course,” offered at Columbia and several other universities around the world through web conferencing, reads like a synopsis of the degree itself. And all the readings for the course’s introductory week, the week devoted to foreign aid and policy, and the week on the Millennium Villages Project are authored by either Jeff Sachs, John McArthur, the Millennium Villages Project scientists, or the UN.

Hat tip to Michael Clemens.

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The map history of an unhappy place, 1829-present

In the greater Horn of Africa, the talk is of civil war, genocide, tyranny, interstate war, failed states, fragile peace. Where did this all come from? One perspective is given from Europeans' maps of this area. The maps below are cropped so as to cover the exact same area from the Tropic of Cancer to the Equator, from 20 degrees longitude to the tip of the horn (approx. 50 degrees longitude). The maps are from early 1800s (exact data unknown), 1829, 1885, 1906, 1924, and the Present. The place names appear early on: Darfur, Somalia, (or earlier versions of those names, like Nubia for Sudan, Abyssinia for Ethiopia), but the borders are remarkably unstable.

Among the forces at work changing the map are Europeans’ increasing knowledge of the area, the expansion of European colonial control, European border changes, and Ethiopian expansion. Somehow it led to the present mix of tragic mess, cultural richness, and potential for hope.

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The knowledgeable people agree on how to reform finance, so Senate gets it wrong

Senate Financial Bill Misguided, Some Academics Say As Democrats close in on their goal of overhauling the nation’s financial regulations, several prominent experts say that the legislation does not even address the right problems, leaving the financial system vulnerable to another major crisis

so says the NYT today.

Meanwhile, the academic I respect most on Finance, Ross Levine of Brown, has just released an NBER Working Paper called The Autopsy of the Financial System (ungated version), with this abstract:

In this postmortem, I find that the design, implementation, and maintenance of financial policies during the period from 1996 through 2006 were primary causes of the financial system’s demise. The evidence is inconsistent with the view that the collapse of the financial system was caused only by the popping of the housing bubble ("accident") and the herding behavior of financiers rushing to create and market increasingly complex and questionable financial products ("suicide"). Rather, the evidence indicates that regulatory agencies were aware of the growing fragility of the financial system due to their policies and yet chose not to modify those policies, suggesting that "negligent homicide" contributed to the financial system’s collapse.

...which gives yet more reason to worry that current reform bills are getting it wrong.

The concern about getting it wrong was what prompted this blog to argue clumsily against the indiscriminate rage towards malevolent bankers as individuals, and pleaded with lawmakers "not to hit the send button while you're angry." 

This is an extremely serious issue that will affect both the future of the US economy and the cause of global development, so therefore it is unlikely anyone will pay attention.

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2010 is the International Year of the First World in Need

Threatened by obesity, overconsumption of environmentally unsound mass-produced goods, an aging population with a low birth rate, and socially disruptive clashes between immigrants and existing populations, Western countries have failed to control their problems and desperately need outside intervention. Or at least that’s the partly tongue-in-cheek idea behind Design for the First World (Dx1W), a competition that seeks solutions to the rich world’s most pressing problems from designers and thinkers in the third world. Why? Because “the First World problems demand Simple Third World solutions.” The website elaborates:

We have been focusing our energy and resources on trying to solve our Developing World problems to become more like the First World. But perhaps it is time that we, the so-called Third World minds, focused our energy and creativity on solving some of the First World problems. We will have a brighter future to look forward to, and perhaps this can help us rethink and approach our current problems from a different perspective.

Contest entrants have to choose one of four program areas: “reducing obesity; addressing aging population and low birth rate; reducing consumption rate of mass produced goods; and integrating the immigrant population.” Only people born and currently living in the developing world (the website provides a list, cribbed from the IMF, of countries that qualify) can apply. Entries will be judged by an international panel, and the winner gets a cash prize and space in a New York gallery exhibition.

The contest, created by Carolina Vallejo, a Colombia native and graduate student in NYU’s Interactive Technologies Program, is meant to propose subversive answers to some very familiar and fundamental development-related questions. What does it really mean to be developed? If developed countries have so many problems, are we (developing countries) sure that’s where we want to be heading? Why does the West think they have a monopoly on innovative development solutions?

But the idea that the rest should be saving the West is vulnerable to the same critiques as its inverse. Isn’t it just as easy to misunderstand rich country problems as poor country problems? Should you really lump together Iowa, Iceland, and Italy into one category called “First World”? Contest entrants are born abroad and live abroad, possibly just as removed from and ignorant of the problems they’re designing for as a misguided Idaho missionary is from the “orphans” of post-earthquake Haiti. Does the developing world think we’re just some monolithic mass of non-baby producing, over-consuming, immigrant-hating old people? And hey, are you calling us fat?

One final question: is Dx1W a spoof, or a real contest? Is it supposed to produce real solutions, or just give the West a taste of its own medicine? Ms. Vallejo manages to suggest it’s somehow both at the same time.

Perhaps Dx1W will generate some brilliant ideas. And if not? Well, at least we in the rich West will know what it feels like to be stereotyped and misunderstood.

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Does complexity doom us? Not always

The NYT has an article about the proliferation of things too complex to understand -- Afghanistan, Iraq, the modern economy, collateralized debt obligations, health care reform, the 10,000 page manual for US accounting standards -- with some gloomy vibes:

There is a lot of end-of-days talk when it comes to this subject. You will find a strain of it in the work of Joseph Tainter, an anthropologist at the University of Utah and the author of “The Collapse of Complex Societies.” In the book, Mr. Tainter examines three ancient civilizations, including the Roman Empire, and explains how complexity drove them to ruin, essentially by bankrupting them.

Here's a more hopeful note, along with a warning. Complex systems do not necessarily have to be understood by any one person for them to work well.  They just need to have rules and incentives for the participants that make them self-correcting.

For example, supply and demand manages the allocation of millions of goods to millions of different users in our economy without anyone in charge. When a good is in excess supply, people act so that its price goes down. When a good is in excess demand, people act so that its price goes up. The system self-corrects. (Ideological code word alert -- just because I gave this example doesn't mean I am some extreme free market fanatic that believes the market solves everything and we don't ever need government for anything ever. It just means I understand supply and demand.)

Here's the warning. Where complexity gets us into trouble is when somebody creates some complex, impossible-to-understand-or-manage thing that is NOT self-correcting.  I will leave it to the readers which items on the above list are in that category.

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Here's one kind of racism you can still enjoy

UPDATE 2, 4/30 4:58pm see end of post for Response to "Glen Beck" comment et al. UPDATE 4/30 4:09PM: see end of post for a GREAT comment on this post from a very knowledgeable person

Most kinds of racism are now thankfully no longer tolerated. However, this doesn’t change the part of human nature that enjoys racism – it allows you to blame all your problems on some despised ethnic minority. So racism may have just gone underground to pop up in unexpected places. The old templates are still around -- an ethnic minority that has sinister intentions to harm everyone else, complete with conspiracy theories of hidden plots to consolidate their own secret control of society.

 One example is virulent prejudice against a group I will call “the X’s”. There is a website with a game called “Shoot the X’s”.  The X’s are trying to “suck the last bits of meat from the carcass” of society, but they are “running out of things to steal.” The X’s rig everything in their own interest: they “simply cannot lose.” Their “barefaced greed” simply “beggars belief.” They commit “blasphemy” that is “worthy of the 7th circle of hell.”

“Power is concentrated in the hands of a few key” X’s, the group of which “has also proved itself brilliantly capable of enlisting the power of the state to help along the process of concentrating economic might.” At a meeting “never announced publicly,” which “included virtually everyone who was anyone” among the X’s, they achieved a further “monstrous consolidation of financial and political power.” The “burglar” X’s ethnic group “now rules the national economy.”

It is now time to strike back: “put the greedy X’s in stocks.” "If you pressed a rifle into the hand of the man in the street,” he would surely choose to shoot the X’s.

Who are the X’s? If the X’s were Jews, this would all sound like quotes from the Protocols of the Elders of Zion. In fact these quotes seem uncannily similar in general to the virulent anti-Semitism that flourished in Europe before World War II (and still flourishes in some places around the world).  

Some of you have probably already guessed the identity of the X’s. The  X’s in the above quotes are the "race" of  financiers/bankers.  You can feel prejudice against an occupationally-defined race just as much as against an ethnically-defined race (and the two often overlap because some ethnic minorities are overrepresented in some occupations). Let’s call this form of racism “bankism.” As the previous post pointed out, bankism has a long and not very attractive history.

(The original sources for the above quotes are articles in Rolling Stone, Mother Jones, the Telegraph (UK), and the Times (UK)  -- the lastquoting others, not the author speaking . The web site is "Shoot the Banker").

No, I am not predicting genocide against bankers any time soon (although a joke wishing for such genocide would probably get an appreciative laugh). Bankism is destructive for many other reasons. Like other forms of racism, bankism feeds hatred towards the whole group because of the misdeeds of a few of its members. We are seeing the equivalent of Willie Horton ads to feed bankism. Most financiers are honest individuals performing socially useful services; promoting hatred of them is not a good thing.

Politically, bankism creates a distorted narrative where an economic disaster is blamed on the malevolence of a few specific individuals, rather than defects in the systemic incentives in which myriads of individuals interact. This fuels political responses that are irrationally punitive, rather than a rational attempt to correct perverse incentives. So crisis prevention will be unsuccessful, the next crisis will feed bankism further, and where will it all end?

Better to face up to the latest form of racism now, and stigmatize it just as much as the old forms of racism.

UPDATE 4/30 4:09pm

Great comment from a very knowledgeable finance professional:

The “shoot the bankers” strategy is a diversionary tactic that avoids dealing with who allowed this to happen … the FED and SEC, who are being given MORE power and MORE discretion and LESS oversight, and Congress … who were bought off by bankers and the GSEs.  If I were a banker, I would say fine … have a good shout, satisfy the public, but don’t really change the rules that allow me to make lots of money while gambling with other people’s money and while enjoying a government guarantee.

UPDATE 2 4/30, 4:59pm. Wow, today I seemed to have a Gordon Brown moment in this post. Kind of bewildered and surprised to have set off so many land mines and wind up next to Glenn Beck.  

Me the cloistered intellectual reading my history of economic and political thought books can unintentionally mumble some code words that cause immediate classification into some extreme ideological box that I didn't even know existed.

I had actually never watched Glenn Beck before being called a Glenn Beck. I went and checked out a few video clips and saw that he apparently likes to call lots of people racists and Nazis and so on. Sorry, didn't know that.

The point of this post and in the previous post was the historical continuity over many centuries in demonizing the group of financiers as malevolent individuals, and the parallels and sometime overlap with racist speech.

Apparently this came across as really insensitive and unfair to two groups: (1) the victims of racism, and (2) people who have a genuine beef with a screwed up financial system (which is basically all of us). Sorry for being insensitive -- I am not implying bankers are the equivalent of lynching victims or Holocaust victims, and I am not implying that all critics of finance are the equivalent of racists.

On (2), I tried already to say, but let me try again to say, that antipathy to finance is a mixture of irrational and rational anger, and I am just trying to point out the historically venerable and important irrational component.

Another part of the problem is my weakness for provocative titles and Tweets, and then people react only to those and not to the nuances in the actual post.

So, sorry, Aid Watchers, I didn't get it quite right today, and I appreciate the feedback. Be sure to check out the Seinfeld "anti-dentite" clip in one of the comments.

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To lawmakers on financial reform: Don’t hit the send button while you’re angry

Congress showed a lot of rage at Wall Street this week, for good reason. Some of the most eloquent senators spoke from their hearts. Senator A denounced those who devoted their financial “expertise” to “taking from others.” Senator B seconded the motion that Wall Street’s “illicit gains” were only possible through “the loss and ruin of others.” Senator C said his constituents had implored him to expose “financial misdoings” to save them from the “jaws of avarice.”

Senators A, B, and C do not usually show up for hearings. A is Aristotle, B is St. Jerome, and C is Martin Luther. One big step on the Five Stages of Recovery from Grief and Loss is to realize that rage against finance has been around for a long time, and not always in a good way. In fact, comrades A, B, and C succeeded in preventing any financial system from operating much at all for many long centuries of poverty.  It was only after we got over undiscriminating rage against all financiers, among other things, that we got an Industrial Revolution and the escape from global poverty.

So just like the good old email rule that you should not hit the send button when you’re angry, lawmakers might want to do a little introspection before passing the biggest financial reform since the Great Depression, which will influence policies towards Finance around the developing world.

Don’t get me wrong, part of – maybe most of -- the anger is rational and justified after the catastrophe of 2008. But I also think part is an irrational aversion to finance that has a long and inglorious history. As Jerry Z. Muller puts it in his great book, The Mind and the Market (from which I took the above references), for most of history  people thought “economic gain not derived from physical labor” was illegitimate. There was “a failure to recognize the role of knowledge and the evaluation of risk in economic life.”

Part of the problem that fuels Financeaphobia is that many financial deals are indeed zero-sum after the fact. If one side bets housing prices are going up and the other side bets down, one side’s gain is going to be the other side’s loss. Yet finance is NOT zero-sum before you KNOW the outcome.  Shorting housing markets is socially useful for a conservative money-manager hedging to protect the savings of widows and orphans. Going long was a socially useful high-risk, high-reward way to deliver financing for housing before the bubble developed.

One of the many signs of irrationality in the current climate is that Wall Street was first pilloried for not anticipating the fall in housing markets, and then the next illogical step was to identify those who DID correctly anticipate the fall as the biggest villains of all.

Again, again, don’t get me wrong – many financiers were deceptive, dishonest, or dumb, or all three. To differing degrees, so were regulators, so were borrowers. The system did go badly askew, and it must be put back inskew. But maybe you should let tempers cool a bit and make sure you do it right.

NOTE: above cartoon is from Rolling Stone magazine.

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A suggestion for the 1MillionShirts guy

Here’s the back story: A young American entrepreneur wanted to use his powerful social media profiles to do good. He hit on the idea of convincing people to pack up all their unneeded T-shirts, throw in a dollar for shipping, and send them - 1 million of them - somewhere in Africa. He partnered with two charities, applied for 501(c)3 status, and voila, a new cause was born: 1MillionShirts. Yesterday, professional aid workers, academics, and researchers responded vociferously to this idea. Take a look at these blog posts for more details, but for our purposes we can break it down to two reasons why 1MillionShirts is a poor idea:

  1. It’s terribly inefficient. One million T-shirts are heavy, and shipping and customs cost  a lot, likely more than it would cost to produce those shirts locally. Plus, cheap donated clothes flood local markets, undercutting local textile industries.
  2. It’s just not needed. There are many serious health, economic, social and political problems challenging different African countries today, but lack of T-shirts isn’t one of them. This project idea, like many bad ones, clearly came from thinking “what kind of help do I want to give” rather than “what kind of help would be most useful to some specific group of individuals.”

So it’s safe to say that Jason, the  guy behind 1MillionShirts, is not an expert in giving aid to Africa. But maybe he IS an expert in something.

He is  an expert in reaching people through social media. We can conclude this because Jason makes his living from companies that pays him to wear their T-shirts for a day and spread videos, pictures, blog posts and tweets about it to their networks—see iwearyourshirt.com. As one of the testimonials on their website puts it, “They are funny, creative guys who really know how to promote you and your products by wearing your shirt.” Another one: “Gotta love a guy who wears a shirt, gets great exposure for the company whose shirt he’s wearing as well as himself, and who manages to turn it into a business.”

After Jason’s do-gooding was met with such a barrage of criticism, he apparently offered to axe the 1MillionShirts campaign if someone could come up with a better idea.

So here’s our suggestion: Why doesn't he use his own specialized expertise to help get the word out that giving cash is better than giving stuff. I bet if he put his mind to thinking about creative ways to spread that message, he could knock it out of the park.

And if the 1MillionShirts guy doesn't feel that spreading this important message satisfies their desire to do good in the world, he can still follow the advice of many people who devote their professional lives to thinking about problems like these, and donate cash to a trusted charity with local knowledge and experience working to solve some specific problem—just so long as it isn’t African shirtlessness.

--

Update: Alanna Shaikh has written a definitive rebuttal to 1MillionShirts and Jason's reaction to criticism- see it here. Update 2: See also the open letter from Siena Antsis. Update 3: A perspective on the broader meaning of the 1MillionShirts fail from Christopher Fabian of UNICEF's innovation team. Update 4: This blog post has been edited at Jason's request to indicate that only Jason (and not Evan, with whom he works on iwearyourshirt.com) is involved in the 1MillionShirts campaign.

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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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Nobody wants your old T-shirts

UPDATE 4/28 10:45 am answering the "be a man" video: see end of this post I guess our great Alanna Shaikh post "Nobody wants your old shoes" (2nd most popular post of all time) did not quite reach everybody. Or maybe the parallels between old T-shirts and old shoes were not widely appreciated (HT @texasinafrica)

A new clothing-themed charitable campaign from the guys behind lucrative social media marketing exercise I Wear Your Shirt is looking to get unwanted T-shirts out of your closet and onto the backs of a million people across Kenya, Uganda, DRC, Ghana, Liberia, Mozambique, Nigeria, Ethiopia, Sudan, Swaziland and South Africa.

The 1MillionShirts project, launched this month, is asking for used (but decent) T-shirts to be sent in with a one dollar bill to help with container costs. The shirts will then be shipped to Africa to help clothe folks in need.

The guy in the video also asks for $  from each of us because it is very expensive to send containers full of bulky low-value T-shirts all the way over to all those places somewhere in Africa. Test question: why might this fact help explain why this is "one of the worst advocacy ideas of the year" (in @texasinafrica's words).

UPDATE 4/27 10:45 am: @iwearyourshirt posts an angry video attacking me and other "Internet trolls" for daring to criticize him, challenging us to come out from behind our computers to call him on the phone directly and "be a man."

Laura has put up a constructive alternative suggestion to #1millionshirts in response to the, um, "be a man" challenge.

I of course completely agree with Laura.

As far as how to have the debate on 1 Million Shirts, it's perfectly legitimate to have a public debate on Twitter or any other forum on a very public advocacy idea that is out there. That the only acceptable alternative for @iwearyourshirt is to get a personal phone call is to suggest that public debate is not legitimate and that the design of aid projects should be negotiated in private.

Sorry, pal, that's not how democratic debate  and accountability works.  I'm sorry if you feel blind-sided by this debate, but the burden of proof was on you to check out your idea before you made it so public to a large audience.  To me, that's what it means to "be a man", oops I mean, "be a human."

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