Do only democracies have anti-immigrant movements?

This great picture on changing share of foreign-born residents in the NYT today (showing countries with largest increase): You can see why anti-immigration sentiment is a big deal in the European countries shown and in the US. (This is a descriptive statement, I myself hate xenophobia.)

But what about the countries at the top of the graph? Let's exclude the special and controversial case of Israel from all the following statements.

Correct me if I'm wrong, but I have not heard of prominent anti-immigration movements  in any of these countries.

Is that because these are non-democracies in which immigrants can be treated as second-class citizens with little or no rights?

Again, this is just descriptive speculation -- I would certainly NOT recommend that approach to the democracies.  But it does show the complicated political economy you get when you mix xenophobia, democracy, equality before the law, and immigration.

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Here's what reporters would really like to say about G20 summit

...at which ministers from around the world gather to wring their hands impotently about the most fashionable issue of the day. The organisation has sought to justify its almost completely fruitless existence by joining its many fellow talking-shops in highlighting whatever crisis has recently gained most coverage in the global media. By making a big deal out of the fact that the world’smost salient topical issue will be placed on its agenda ...it hopes to convey the entirely erroneous impression that it has any influence whatsoever on the situation.

From the brilliant Alan Beattie some time ago here in the  FT.

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US food aid policies create 561 jobs in Kansas, risk millions of lives around the world

I read recently the First Law of Policy Economics: Every inefficiency is someone’s income. US food aid policy is definitely no exception, and it is riddled with inefficiencies.

Exhibit A: This invitation from a coalition of big US shipping interests to an event in Washington today. At this event, USA Maritime will have tried to convince lawmakers and their staff that ancient and outdated US food aid legislation, which requires virtually all US food aid to be bought in-kind from the US, processed and bagged in the US, and shipped on US-flag ships to even the most far-flung destinations, should not be altered.

Let us leave aside for a moment that the report recommending favorable policies for the US shipping industry was bought and paid for by the US shipping industry and may not be the most objective or trustworthy source on the subject.

The main thrust of the shipping industry’s argument is that handling, processing and shipping food aid creates US jobs—13,127 of them to be exact—and boosts US industry, leading to this actual headline: “Food For Peace Program Produces More Than 870 Iowa Jobs.” If these policies were removed, they argue, it would be less profitable to operate a ship under the US flag, the US-flag fleet would shrink, and American jobs would be lost.

“Did you know,” reads the invitation, “that these programs have positive economic consequences for our economy at home?” The report tries to quantify one benefit of current US food aid policies, but (obviously) does not discuss the considerable costs of these policies to US tax payers, to the US’s reputation and credibility abroad, and most importantly to programs’ intended recipients—the millions of hungry and malnourished people fed by the world’s largest food aid donor every year.

The shipping industry’s arguments don’t hold water for many reasons. Here are two of the big ones:

First, assuming that you did want to subsidize the US Maritime industry, US food aid policies that create an overpriced, uncompetitive oligopoly are NOT a good way to do it. There are much cleaner, simpler and more effective ways to support US Maritime, such as direct payments to vessel owners. There is no reason to bundle shipping subsidies in with humanitarian aid other than the deeply cynical logic that it’s easier to rally public and Congressional support around money for starving children than around padding to the bottom line of multinational shipping conglomerates.

Second, current US food aid policies are NOT an effective or efficient way for the US to achieve what should rightly be the primary objective for food aid. According to the government’s own accountability office, buying food locally in sub-Saharan Africa (which is where the majority of US food aid goes) costs 34 percent less than shipping it from the US, AND gets there on average more than 100 days more quickly, AND is more likely to be the kind of food people are used to eating. I am not arguing that cash aid is ALWAYS better than food aid, only that any reasonable food aid policy would allow aid agencies the flexibility to determine what kind of assistance works best in each situation.

Despite resistance from all three sides of the iron triangle holding this legislation in place, innovators have managed to break loose about $400 million for pilot and supplemental programs over the last two years to buy food locally or regionally. This is still a small sum compared to the roughly $2 billion that the US spends annually, but it is progress.

With today’s lame report, the big shipping companies behind USA Maritime are asking us to value a few thousand American jobs in a declining and uncompetitive industry over America's humanitarian reputation abroad AND the lives of the millions more people around the world who would benefit from reform to US food aid policy.

Do we even have to say it? This is NOT a fair trade.

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How the development of technology averts Shakespearean tragedies

  1. Juliet texts Romeo: Going 2 play dead, LOL!
  2. Huff Post unearths email incriminating Iago after 24/7 coverage of Desdemona-cheating-on-Othello rumors
  3. Hamlet gets treatment for depression, starts blog "Rotten in the State of Denmark"
  4. Brutus orchestrates Twitter campaign to overthrow Julius Caesar
  5. MacBeth double-checks Facebook page of Three Witches, comments: "no way I'm basing career decisions on somebody that twisted"
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Response to Dani Rodrik on Washington Consensus

Dani gives a response to some “counter-arguments” against his post favoring Import-substituting Industrialization (ISI) over Washington Consensus (WC) that had mysteriously “resuscitated” themselves after they “had long been laid to rest.” I appreciate Dani’s courtesy in not identifying the culprits in this misguided resuscitation of long-dead counterarguments, but it does make it a little difficult to carry on a precise debate. It’s possible that my post about skill vs. luck, and the comments that followed, may have been one of the culprits (fitting the theme of that post, this can only be a probability rather than a certainty). Anyway, assuming that my post and ensuing comments was partly to blame (and thanks to Chris Blattman for a more favorable review), Dani does not have time in his short post to get to the crucial arguments. His original post was too vague about the timing and identification of just who had ISI and who had WC and when, and so what growth experiences to attribute to each, and whether to control for the overall fall in average growth of ALL countries in the world from the ISI to the WC period. And in Dani’s new post, we also have the third category of policy regime “unorthodox but well-targeted reforms” (UBWTR?) for Asian countries. And to test a hypothesis that growth under one regime is higher than under another, you have to calculate standard errors reflecting noise in the growth rate (affectionately called “luck,” which standard errors I and others have shown are large), you cannot dismiss standard errors with a quip about “the check is in the mail.” Most attempts to sort all that out have not been very successful or conclusive, which is why economists started saying things like:

the experience of the last two decades has frustrated the expectations …{that} we had a good fix on the policies that promote growth.

I will acknowledge from whom I think I absorbed this valuable cautionary statement. I am pretty sure it was from a 2005 article by a certain D. Rodrik (ungated version here, official version here).

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Failure to award

Can you imagine an aid-disbursing agency that refused to disburse? How often do you hear of a donor that decides not to give grants at all for lack of good candidates to receive them?

While donors do occasionally cut funding to a particular government or program, such a radical move usually requires either repeated and unrepentant corruption, or overwhelming international reprobation.

So the announcement from the Mo Ibrahim Foundation last week that it would award the 2010 Excellence in African Leadership prize to no one at all created a little bit of a stir. The prize, worth $5 million over the first three years plus $200,000 a year after that to the right former African head of state, is going unclaimed for the second year in a row.  (It went to Joaquim Chissano of Mozambique the year it was announced in 2007, and to Festus Mogae of Botswana in 2008.)

But consider the Ibrahim prize eligibility requirements. Candidates have to be 1) democratically elected heads of state who 2) served within their country’s constitutional term limits (Sorry, Museveni and watch out, Kagame) and 3) have left office within the last three years. There were only three candidates seriously considered for the 2009 prize (Thabo Mbeki of South Africa, John Kufuor of Ghana and Nigeria's Olusegun Obasanjo) and none were judged worthy of the prize. Since no leader left office in the months since, no new candidates have emerged. With this in mind it seems perfectly reasonable—in fact necessary—that no winner would be chosen for this year.

In an editorial in the Financial Times, Mo Ibrahim explained:

Whether there is a winner of the prize or not, the purpose of the foundation is to challenge those in Africa and elsewhere to debate what constitutes excellence in leadership. The standards set for the prize winner are high, and the number of eligible candidates each year is small. It is always likely there will be years when no prize is awarded.

Consider also that if we were expecting Ibrahim to make an award every year, perhaps we’re simply not used to an international organization setting high standards and sticking with them even in the face of apparent failure. Maybe aid agencies could even take a cue from Mr. Ibrahim and start setting higher standards for non-humanitarian aid that goes to governments rather than just doling it out again year after year regardless of whether improvements are made or conditions are met. How unfamiliar, how refreshing, for someone to actually enforce the conditions of the award, not robotically disburse aid because it has already been earmarked and budgeted for.

Still, it is discouraging that no good candidates can be found. And this year’s African presidential elections will not produce a wealth of better retirees for the 2011 or near-future prize. Ethiopia’s Meles who “won” recent elections has disqualified himself many times over. Leaders in Burkina Faso and Niger have altered their constitutions to extend their term limits, and leaders in Madagascar and Niger weren't democratically elected in the first place. Rwanda’s Kagame will likely win another seven-year term, while President Nkurunziza is currently the only candidate participating in Burundi’s elections.

We may be in for a much longer wait than just two years if Ibrahim and his foundation stand their ground.

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What don’t make sense in trade don’t make sense in aid

Common sense principles in international trade are surprisingly useful for aid as well. Here's a list of overall principles that help explain some of the most discussed aid dos and don’ts on this and other blogs. 1) Don’t trade low value items with huge transport costs. No exporter or importer in their right mind would ship bulky low-value items large distances, which is why things like construction materials are often locally-sourced. Aid examples: Nobody wants your old shoes, 1 million shirts. 2) Don’t send coals to Newcastle. Nobody exports food to a food-abundant region. Well nobody but US food aid, which ships food from Nebraska to the Horn of Africa, when there is plenty of food already in the region (it’s just badly distributed inside the region, which is what wise food aid could correct). 3) Don’t do dumping; it is illegal. Exporters are not supposed to charge a much lower price abroad than they do domestically, driving local producers out of business – that’s called dumping, and it’s illegal under WTO rules. Wait, unless the dumper is USAID and it's called food aid. Actually, US food aid violates all of these first three principles. 4) Do export goods intensive in abundant resources; don’t export goods intensive in scarce resources. Many aid projects designed to promote poor country exports in a promising product violate this rule when they make the project dependent on the scarce and expensive resource called International Expertise. Small-scale handicraft projects heavily dependent on foreign experts are particularly gross violators.

Actually, ANY aid project should be designed to maximize use of abundant resources and minimize use of scarce resources. This is one of the defects of the Millennium Village approach – it’s intensive in the use of expensive foreign expertise, and so is not scalable.

5) The most gains from trade come when something is cheap in the exporting country and expensive in the importing country. Thank goodness the US does not try to grow its own bananas at some enormous expense, when they are cheaply bought from Central America and Colombia. Antibiotics can be cheaply made in rich countries but would be very expensive to produce in African countries, which is why aid projects that provide antibiotics cheaply make a lot of sense (actually private trade in antibiotics happens for the same reason, but doesn’t reach the poorest of the poor). Antiretroviral drugs, unfortunately, are expensive in the exporting country, so they are not as good an aid deal as antibiotics.

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How skill beats luck in the World Cup of Development

This blog periodically points out the role of randomness in development, much to the frustration of many readers. This post is how to set things up so that skill triumphs over luck. Today’s official metaphor is, of course, for us sports-obsessed nuts, the World Cup. Early rounds have seen remarkable upsets: Switzerland beats Spain, Japan beats Cameroon, Serbia beats Germany. Yet no super long shot team has ever won the World Cup. In fact, 14 of the 18 previous World Cups were won by only 4 teams: Brazil, Germany, Italy, and Argentina.

The World Cup uses a tournament to make skill beat luck. There’s a preliminary round won by 16 out of 32 teams, and then there’s four rounds of elimination to determine the champion. To simplify for illustration, let’s just discuss a five-round single elimination tournament for 32 teams.

The tournament magnifies the importance of skill versus luck. Based on the above upsets, a weak team still manages to win a single game sometimes, let’s say for illustration 15 percent of the time. So roughly for every 7 games, there will be one huge upset, which explains why the Cup with lots of games has seen a few surprising upsets.  To win a single elimination 5-round tournament, however, this weak team would have to reel off 5 straight upset wins. The probability of this is .15 x .15 x .15 x .15 x .15 = 0.000076, i.e. 13,000 to 1 odds against this weak team winning the tournament.

In contrast, a strong team who wins a single game 85 percent of the time has a .85 x .85 x .85 x .85 x .85 = .44 probability of winning the tournament. Of course, there’s still a slightly worse than even chance that this particular strong team does NOT win, but the probability that SOME strong team will win is very, very high. (We have to make all the probabilities for all 32 teams consistent by making sure they add up to one, but I ignore this since I am only discussing a few teams.)

OK, now it's time for the clumsy transition from the World Cup metaphor to development. As this blog likes to frequently point out, economic growth has a lot of random variation. Over a short period of time (metaphorically equivalent to one game), a country with bad policies and bad institutions still might have a good growth rate. But over a long period of time (equivalent to playing many successive games), the consistent winners are very likely to be countries with good policies and good institutions. So in deciding whether a particular set of policies and institutions are good or bad, you need to look at long periods (tournaments) and not at short ones (single games). How long  the long periods have to be will depend on how important luck is in the short term; the evidence we have on economic growth is that short term luck is very important, and the periods have to be pretty darn long for proper analysis. (Hint: the periods were NOT long enough in this Rodrik analysis as to why the Washington Consensus sucks.)

POSTSCRIPT for those who hate LUCK: we are all intensely uncomfortable with the idea that luck matters at all in something we really care about -- like the World Cup. Not even this luck-reducing therapy is likely to be enough.  The example above still implies which of the strong teams wins is random. But what do the words “random” or “luck” really mean? They could capture temporary and non-replicable fluctuations in human skill as well as pure luck. There are two competing narratives: (1) a strong player on a strong team just happens to be in the right place at the right time to receive the right pass to score a Cup-winning goal. (2) a heroic player consciously exerts extraordinary skill at the most crucial moment to score the Cup-winning goal. Scientifically we can’t really distinguish (1) from (2). Psychologically, we intensely prefer (2). Fine, go with that, just remember it’s not replicable. Same goes for heroic entrepreneurs and political reformers.

POSTSCRIPT 2 for those who hate LUCK: luck matters even as much as it does for the World Cup because there has already been a lot of screening to select the best teams in the world. Saying luck matters does not imply the Balding Middle-Aged Econ Prof All-Stars would have a chance in hell against Brazil. Likewise, in development, luck matters for growth in the sample of societies as much as it does because most of them are already doing their best to achieve growth. If some whack job does a demolition job on their own economy, like Mugabe or Chavez, it’s pretty clear that bad policy will overwhelm good luck pretty quickly.

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Department of Lame International Action: Blood Diamond Division

From the Wall Street Journal today on the comeback of Blood Diamonds:

The Kimberley Process says well over 99% of the world's rough-diamond trade is now "conflict-free."

But critics say there's a big loophole in that definition: It doesn't take into account human-rights abuses in diamond territory controlled by governments themselves.
...
In Angola ... the Kimberley Process appears to have little appetite for human-rights issues. Last August, when a Kimberley Process peer-review team arrived to check the country's compliance procedures, Angolan forces were just mopping up a major operation to expel some 30,000 illegal Congolese miners from Angolan territory near here. According to a U.S. State Department report citing local media and nongovernmental organizations, military and police "arbitrarily beat and raped detainees" and forced them to march to the border without food or water.
...
A confidential Kimberley Process report on the review visit makes no mention of alleged human-rights abuses... The group spent just two days in Lunda Norte, an area near the Congo border that has become a flashpoint for clashes between diggers and security forces. According to a draft of the internal report, the delegation intended to visit the site of a large illegal mining operation but was thwarted by "a last-minute decision to participate in a graduation ceremony for new border patrol security officers."
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The lure of starting from scratch

It is an acknowledged national characteristic that Americans believe in self-reinvention. One of our founding myths—inspired by the once unexplored and sparsely populated expanse of the North American continent—is the idea that you can head out of town, leave the encumbrances of the past behind, and start over in a new, unspoiled place. What would happen if we brought this sensibility to development plans for poorer, more crowded nations? What if we already do?

The ingredients for Paul Romer’s solution to global poverty include an unoccupied tract of land, a charter to lay out a new set of just and commerce-promoting rules, and two or more sovereign governments. Just as Hong Kong was created as an island of prosperity by the British in China (only voluntarily this time), poor countries would lease a piece of their land to a richer, benevolent government or group of governments that would agree to administer the new city according to the rules of the agreed-upon charter.

From a new article in Atlantic Monthly by Sebastian Mallaby, we learn that Madagascar might have become the first testing ground for Romer’s charter cities idea—if not for a coup that ousted the Malagasy President in March 2009.

Madagascar’s government was anxious to attract foreign investment, and it understood that a credibility deficit held it back…Faced with this obstacle, the Malagasy authorities were open to unconventional arrangements. To boost investment in agriculture, they were ready to lease a Connecticut-size tract of land to Daewoo, a South Korean corporation, for 99 years…Romer’s proposal fit in with these adventurous ideas.…

Romer made his pitch for a charter city, and Ravalomanana responded that he wasn’t sure one was enough; if Romer could identify two rich countries willing to play the role of government trustee, it might be better to launch two parallel experiments. The president and the professor agreed that the new hubs should be open to migrants from nearby countries as well as to locals. They rose to examine a map of Madagascar on the study wall. Ravalomanana suggested building the first city on the island’s southwestern coast, which was largely uninhabited because of its dry heat. To Romer, the site sounded very much like the coastal locations that appeal most to the world’s affluent as vacation spots.

Ravalomanana’s government was toppled before any of these plans could go forward, in part as a result of violent protests over the perceived threat to national sovereignty represented by the Daewoo deal. As Mallaby points out, this failures suggests at least one flaw of the charter cities idea—that land ownership and sovereignty are explosive issues that may not be easily or peacefully negotiated away by leaders on behalf of their people. But Romer remains optimistic, and is talking to other African leaders, possibly ones with more staying power.

The charter cities idea appeals because it is bold. It promises a fresh start for people mired in the muck of old conflicts, inequality, and bad government. When Mallaby concludes “When African teenagers do their homework under streetlights, isn’t Romer right to think the unthinkable?,”  he is arguing that while there may be legitimate concerns about the ethics or feasibility of the charter cities, those concerns are made irrelevant by the overwhelming gravity and scale of global poverty and inequality.

In other words, big, desperate problems call out for big, radical solutions. Solutions that sweep away the detritus of past failure, promise to replace it wholesale with something new and better, and perhaps even alter the boundaries of the world as we know it.

The discussion about rebuilding Haiti has been full of ideas about the earthquake as an opportunity to ”start over,” “reboot,” “wipe the slate clean” and finally “get things right” (some stellar examples here). Two recent proposals brought the call for slate-cleaning back to Africa: We already blogged Professor Pierre Englebert’s suggestion in the NYT for the international community to “move swiftly to derecognize the worst-performing African states” like Chad, the DRC, Equatorial Guinea and Sudan, and in Foreign Policy, G. Pascal Zachary submitted that “no initiative would do more for happiness, stability, and economic growth in Africa today than an energetic and enlightened redrawing” of Africa’s colonial borders.

Call it the “let’s just scrap this mess and start over” approach to development.

Unfortunately, in earthquake-devastated Haiti as in troubled central Africa, the promise of starting from scratch is an illusion. It has always been true that no matter where you go, you take yourself with you—culture, history, habits, attachments and animosities come along like a skin you can’t shed. But these days there are fewer and fewer territories on our taxed and shrinking planet beyond the reach of someone’s determined claim.

These ideas share an overly-optimistic belief in a neutral, benevolent international community and its power to peacefully oversee imposed changes. All are tone-deaf to the very real degree of nationalism that does exist in basically all countries by now, regardless of whether they were misbegotten colonial creations or not. They also violate sovereignty as conventionally defined, which may be good or bad but is sure to provoke a nationalist reaction.

Early development economists working at the hopeful dawn of colonial independence believed that they really were starting from scratch. The last fifty years have shown us that they weren’t, and this has been—and remains—one of development’s biggest blind spots.

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Big places have small beginnings: increasing returns in Greenwich Village

Bought this great book of New York City historical maps today.

This is a map of "Mannados"  in 1664. The northern edge of New Amsterdam (just in the process of changing its name to New York) was protected by a wall, and hence the street along the wall was called "Wall Street."

The next map is from 1766.  The city has spread a bit north now, but still has a long ways to go. Population had only recently passed 10,000. The port was way behind Boston and Philadelphia and barely ahead of Newport, Rhode Island.

 Way up in the upper right on the Hudson is a little hamlet called Greenwich, surrounded by lots of farmland.  Directly east of this hamlet, which was roughly around where Hudson and Christopher Streets intersect today,  is where I am typing these words right now.

The last map is from 1836, when the city has spread as far as around 14th street. In the summer of 1822, there was a yellow fever epidemic in New York, reflecting the poor sanitation in the city among other things.  This was the last straw for the wealthier inhabitants who moved to a suburb that became known as Greenwich Village, named after the hamlet in the previous map.  To maintain property values in the Village, an enterprising New York mayor named Philip Hone created a Washington Memorial Parade Ground (the land was available because it was a graveyard for the criminals and poor; Mayor Hone just paved over it; many remains are still buried beneath what is today's Washington Square).

In the map, directly beneath the number 15 is a little building on the west of Washington Square that housed the entirety of New York University in 1836.

Why did New York (and Greenwich Village) thrive so much more than other east coast cities? Cities are obvious cases of increasing returns, where the more you have already, the more new stuff you attract.  (Many people have looked for development insights from this, without ever really resolving what they are.)

Another important event between map 2 and map 3 was the opening of the Erie Canal on October 26, 1825.

New York had major geographic luck -- the lowest point to cross the Appalachian Mountains was just west of Albany,  so the Erie Canal could connect the vast interior linked to the Great Lakes to Albany and down to New York City. After the Erie Canal became defunct, New York had now had such a head start that it is still the premier East Coast  city. (Historical neighborhood details from here.)

As Billie Holiday sang, "them's that's got shall have, them's that's not shall lose."

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Grass roots soccer, African style

In honor of the opening week of the World Cup we bring you these images of grass roots soccer from photographer Jessica Hilltout. Over nine months, Jessica made two trips through Africa—one up the south coast—South Africa, Lesotho, Mozambique and Malawi—and one through a swath of West Africa—Ghana, Burkina Faso, Niger, Benin, Togo and the Ivory Coast.

During her trip she took pictures of worn shoes, tattered jerseys and hand-made balls, capturing the spirit of the sport and its players through these small, homely objects.

In one of the first villages she visited, in Mozambique, she gave the local team a brand-new ball, one of 30 she had brought with her as replacements for the home-made samples she collected. When she came back the next day, it had already begun to come apart. “They had already stitched it,” she wrote. “I felt terrible. The white lady gives them a ball with a shorter life span than any of the ones they make.”

These pictures are a welcome antidote to the commercialism and hype that come along with the FIFA tournament.  From the introduction of Jessica’s new book of photographs, by football historian David Goldblatt:

In South Africa, the world will see that the continent, at its leading economic edge, can build world-class infrastructures and run major global events. This is a good thing, but what the world may not see, and that would be everyone’s loss, are the World Cups that are played every day by teams, friends, communities all over the continent; the leading informal economic edge of Africa where they are making balls, marking pitches, scoring goals, and above all, pleasing themselves. If somehow, the corporate carnival should make all this invisible, we are lucky that Jessica Hilltout’s photographs can take us some of the way there.

Preview the book here, see more of Jessica's video slideshows on vimeo, or read the journal of her trip (caution: this last link requires a fast connection).

NOTE: There is a video embedded in this post. If you can't see it, click here instead.

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Africa: land of wildebeest and child soldiers

UPDATE: response to criticisms at end of this post.

(Apologies to the great blog Wronging Rights for stealing one of their headline templates.)

Big attention grabber in the NYT with this picture splashed all over the front page.

The usual mixed emotions: (1) compassion and sorrow for these and other children caught up in horrific wars, (2) alarm at exploitation of the child soldier stereotype for Africa.

Very crude data that I checked a while ago suggested that about 0.2 percent of African teenage boys were child soldiers.

UPDATE: Response to critical comments below: thanks for pointing out where I was too terse or unclear on this post. I did not mean to say the NYT should NOT do a story about US taxpayers financing child soldiers in Somalia, of course that is big news and should lead to a backlash correcting the problem.

I was worried more about the emotional buttons that are pushed by the large picture dominating the front page. These pictures obviously provoke a visceral response: how horrific to see a child with a gun. For this reason, they are used awfully often by the media (see new pictures inserted into this update). A Google images search for "child soldiers Africa" returned 2 million hits. The frequency of repetition of these photos perpetuate the stereotype of Africa as a barbaric place awash in child soldiers. Newspapers would be more likely to be sensitive in other areas, especially domestic ones, like say not frequently showing scary pictures of young black males toting guns in US cities.

The statistic I gave was not meant to imply "hey it doesn't matter because the number is small," just like it would be of no comfort to someone paralyzed by a gunshot to be told that the incidence of gunshot-paralysis is low. The statistic was meant to correct the perception that child soldiers are more widespread than they really are in Africa, I think most people would have guessed a higher number.

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Can we move beyond a religious war over free markets?

UPDATE: Did I betray the free market side? see end of this post. From a review I wrote in yesterday's NYT Book Review of Matt Ridley's book The Rational Optimist:

The word “market” tends to set off a religious war. Opponents accuse proponents of blind faith in the Miracle of the Market. The proponents too often seem to confirm this accusation by overpromising and underproving what the market can do. (Opponents are often guilty of equally unthinking belief in the Immaculate Government Intervention.) Each side recites its creeds, giving heart to the faithful but making no converts.

Alas, Matt Ridley’s new book, “The Rational Optimist,” which argues for markets as the dominant source of human progress, is such a case. ... he shows a surprisingly casual attitude toward logic and evidence, which is likely to cause the antimarket side to see him as rigging the contest. It’s an example of a phenomenon many economists have noted: natural scientists have remarkably low standards for reasoned argument when they discuss social science, as compared with the rigor they bring to their home fields

....

Nor does Ridley grapple with why so many people doubt market-based progress. His entertaining account of how such pessimism is always in fashion — whether the subject is overpopulation, genetic engineering, Y2K or global warming (he thinks we’ll all end up living on a slightly hotter but richer planet) — also predicts that today’s pessimists will ignore his message. Ridley is tone-deaf to the 20th-century traumas that were huge setbacks for the gospel of progress. “Despite the wars,” he writes, “in the half-century to 1950, the longevity, wealth and health of Europeans improved faster than ever before” — a true statement that surely misses the point.

Ridley also fails to really address inequality and uncertainty. The free market may produce cornucopia, doubters concede. But it also gave Richard Fuld of Lehman Brothers $60,000 a day (in 2007, the year before the company went bankrupt) while one billion other people survived on a dollar a day. In his discussion of global warming, Ridley argues that we’ve avoided all previous doomsday predictions. But our resourcefulness, or our luck, could run out sooner or later.

A case for individual freedom and market exchange would have to convince doubters that alternatives would create even more inequality and uncertainty, or something worse. Such a case could argue that some of those 20th-century traumas were caused by a backlash against both the “free” and the “market,” and that central planning tends to create even more rigid inequality between political “ins” and “outs” while lacking the creativity needed to cope with future threats. But the case must move from “maybe” to logic and evidence. Alas, this book does not get there.

So read “The Rational Optimist” for its fascinating history of trade and innovation. But also ponder whether the debate over markets can move forward while it remains a purely religious war. Those willing to confront honestly all the doubts about the “free market” might then actually be persuasive in arguing that it is the worst system humans have ever tried — except for all the others.

UPDATE: some have expressed puzzlement and dismay that I was critical of a book when I am in agreement with the conclusions of the book: enthusiasm for free trade, free markets, the creativity of individuals to fuel optimistic hopes that we will keep solving our problems and getting better off.  Did I betray my own allies, the free market side?

There are two models of book reviewing: (1) just be positive about a book when you are on the same side of the conclusions, (2) analyze the argument that led to the conclusions, and be positive or negative based on whether it's a good argument. My model was obviously (2).

It doesn't do the free market side any favors if all of its advocates are willing to overlook sloppy logic and evidence and just follow clan-like loyalties based on the final conclusions. We will only move beyond the "religious war" if both the anti-market and pro-market sides are rigorously honest about the strengths and weaknesses of their own arguments.

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Aid Watch comes clean on unethical product placement in our blogs

The New York Times called my attention today to ethical problems with blogs that do product placement, such as shilling for a certain brand of vodka without disclosing gifts from Absolut:

a blogger must be clear about any “material connections” with a sponsor, especially if these would not be expected by the reader.

My reaction was "wow, I had no idea we could make money that way!" Given the pathetic results of my fund-raising efforts so far on behalf of Aid Watch and the Development Research Institute, clearly it is time to "think outside the box." What product could Aid Watch strategically but unobtrusively mention in our blogs in return for generous support from the manufacturer?

After at least 5 seconds of undistracted brainstorming, I think I hit upon a product that has universal name recognition, not to mention utilization, among NGO workers: Birkenstocks!

I can testify that I myself can hardly write a column without the podiatric support of my own Birkenstocks, which have held up well in 9,772 days of consecutive daily wear in all weathers.  So Global Birkenstock Conglomerate Inc., I hope you are reading this, please send a check as soon as possible made out to "Development Research Institute."

I do have to confess one ethical lapse that already occurred. I walked over to my office yesterday in my comfortable Birkenstocks and picked up my mail, which contained a free gift of chocolate. It was delicious Madécasse chocolate from Madagascar, sent to me as a thank you for all the blogs Aid Watch did trying to save the jobs of Malagasy textile workers from US trade sanctions.

I do remember vividly a meeting with Laura in a cafe right next to our local Birkenstocks retailer, where we strategized for a long time about which blog posts would most likely result in free chocolate. Now that I have come clean, I do recommend this wonderful chocolate very highly .

Please keep this between us -- I have not yet shared any of this gift haul of 4 large chocolate bars with Laura. I'm concerned about her cholesterol , since she has yet to adopt the kind of footwear, such as Birkenstocks, that makes long, healthy walks in Manhattan possible.

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Sorry, Africans, you are no longer allowed to have your own countries

An imaginative proposal in a column by Pierre Englebert in today's NYT:

the international community must move swiftly to derecognize the worst-performing African states.

The problem of Africa that Professor Englebert is nicely fixing was that 50 years ago:

these countries were recognized by the international community before they even really existed.

So because the Western powers (affectionately called here "the international community") supported with abundant aid dollars the tyrants who oppressed their own citizens, those same citizens are going to be further punished by those same Western powers who will turn them into stateless persons without a country.

Characteristically for most grand schemes to "fix Africa" from outside, the column does not consider how this proposal might affect individual Africans; it only offers highly speculative hopes for how erasing countries from the map might make the rulers behave better after they no longer have a state to rule.

I have a couple of random thoughts on this for Professor Englebert:

(1) shouldn't you have considered an intermediate step of stripping the tyrants of just the aid dollars, while allowing the citizens to keep their own countries?

(2) do you really think the World Cup was the best time to propose such a scheme? I myself had not noticed the phenomenon of Africans not caring about the football teams of their non-existent nations.

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Trends in African governance

OOPS: see UPDATE at end of this post.  Let's just say we goofed in highlighting the word "Trends." Since, we criticize data errors in others, we will take any punishment you want to dish out to us. Or maybe we will be unintended beneficiaries of the phenomenon that nobody cares about data errors. (This is Bill: I will take the blame since I suggested the whole thing to Laura). The FT’s Emerging Africa section this week has an interactive graphic showing trends in governance for 53 African countries, as ranked  by the Mo Ibrahim index.  The index measures the quality of governance across four areas: safety and rule of law, participation and human rights, sustainable economic growth, and human development.

UPDATE 12:39pm 6/11, very nice quote from Mo Ibrahim in an article published in 2009 (HT @innovationsjrnl and @auerswald):

When accurate and timely information is accessible, it exposes bad practice and allows citizens to reject poor governance. Such a change brings us out of the era of Africans hanging their hopes on a nationalist leader or supposedly benign dictator. Kenya and Zimbabwe tell us that this is so; when people in these countries felt that their votes were not respected, they did not take it lying down and they did not accept it. This is a very strong message: that the wishes of African people can no longer be taken for granted. All Africans have a right to live in freedom and prosperity and to select their leaders through fair and democratic elections, and the time has come when Africans are no longer willing to accept lower standards of governance than those in the rest of the world.

UPDATE 2 3:47 pm 6/11: Commenter Mozza has rightly pointed out our error (and the FT's) in overlooking this statement on the Mo Ibrahim website: "Data availability prior to 2006 is patchy and is not recommended for comparison over time."

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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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