Easterly appointed to Eliot Spitzer Chair in Gender Empowerment

The NYT revealed today a new way to launder contributions to Congress for purposes of influencing legislation. Corporate lobbyists help fund a chair or research institute at a university, naming it after the Congressperson they want to influence. This naturally excited the fundraising department of Aid Watch. We welcome suggestions from readers on which corporate lobbies we could suck up to for funding and which politicians can be bought honored with these funds. Right now we are conducting a search for the new Sarah Palin Professorship in Geographical Studies.

Are many dimensions better than one?

Over at From Poverty to Power, Duncan Greene hosted a fiery debate about how best to measure poverty, sparked by the release of the UN’s new Multidimensional Poverty Index. The new index will complement a simpler method used in the UN Human Development Reports which relies on uniformly-weighted variables measuring life expectancy, education and income. The new method, created by researchers at the University of Oxford, combines ten different variables (including malnutrition, years of schooling, access to electricity and toilets, type of cooking fuel used, and others) and assigns them different weights.

The Oxford researchers say this is the first index covering most of the developing world to be created using micro datasets (ie household surveys), and that it is useful because it “captures a set of direct deprivations that batter a person at the same time.”

The MPI also captures distinct and broader aspects of poverty. For example, in Ethiopia 90 per cent of people are ‘MPI poor’ compared to the 39 per cent who are classified as living in ‘extreme poverty’ under income terms alone. Conversely, 89 per cent of Tanzanians are extreme income-poor, compared to 65 per cent who are MPI poor.

On Duncan’s blog, Martin Ravallion of the World Bank asks why we should add up different measures of poverty into a single index rather than getting the best data we can on individual measures, especially when weights assigned to those measures are likely to be arbitrary and controversial. (Gabriel Demombynes at the Africa Can…End Poverty blog also has a good summary of the discussion).

What is the point of creating ever more complex measures of poverty? For one, they draw attention to the importance of facets of poverty besides low income, like lack of access to education or clean water. But coming up with better measures of who is poor and how they are poor really matters if it helps allocate resources more effectively to those who need them most. It might be informative to understand why (for example) many more Ethiopians are poor under the new index than using the conventional, under-$1.25-a-day measure. But it’s hard to imagine how to find the answer without unraveling the many strands that make up the multidimensional index.

This blog frequently asks whether we should trust the figures we purport to know (for example: the malaria data cited over and over by the Gates Foundation; post-economic crisis poverty forecasts from Ravallion and colleagues; new maternal mortality figures reported in the Lancet). Aggregating different poverty measures together could also mask weaknesses in the data. Better then to measure and meet each type of deprivation separately, as best we can.

CORRECTION: In this year's Human Development Report, the new index will be used as a complement to the existing Human Development Index, not as a replacement, as paragraph two originally stated.

Talking to Mozart about how rapid economic growth is temporary

Update 8/6/2010 3:30pm Response to RT @auerswald People r (Not) Statistical Noise http://bit.ly/bAwtpQ: on objection that small bursts of creativity can have very large effects. Um, yes, it's called non rivalry of ideas (and music scores). Many people can simultaneously use the same idea/score. And everyone wants to use the best ones. So the scale effects can be Gigantic. I guess I had noticed I'm not the only one who likes Mozart.

This blog has often pointed out that bursts of rapid growth don’t last. I provoke readers with words like “luck” and “random” to describe the transitory component of growth.

The evidence says High Growth is likely to include a temporary component that will not recur. So High Growth countries in one period will likely experience a decrease in growth in the following period, moving them back DOWN towards the world mean.

The graph below shows a typical regression to the mean graph for a few data-points. The mean of the data is roughly 2 (where the mean reversion line crosses the horizontal axis). Years above 2 are usually followed by a decrease, while years below 2 are usually followed by an increase.

What’s slightly different about this graph is that the numbers here like “2” don’t refer to average annual economic growth, but to the number of masterpieces produced by Mozart every year from 1781 (after he moved to Vienna) until his death in 1791. Mozart produced 18 major classics over this period, or about 2 per year.

However, his economic growth number of masterpieces produced each year fluctuated a lot. For example, in 1788 Mozart produced three of the greatest symphonic breakthroughs of all time (Symphonies 39, 40, and 41), but in 1789 there were no new masterpieces at all.

I decided to discuss this with Mozart to see if we can get any more insight into what drives good and bad years.

Me: I love your symphonies 39, 40, and 41, congrats on having such a great year in 1788.

Mozart: who are you?

Me: Why did you have such a bad year in 1789?

Mozart: Let me get this straight, I revolutionized music with 18 masterpieces in a decade, and your main concern is that I didn’t spread them out more evenly across years?

Me: I just thought we could discover your secret to success by comparing the good years with the bad years.

Mozart: (Whispers to his servant: “Check with Viennese insane asylum whether they are missing a patient…”) I was learning and experimenting all my life, which all contributed to my miraculous final decade. When the masterworks happened to come out during that decade is arbitrary and of no importance whatsoever.

I learned from Herr Mozart that musical creativity, like economic growth, proceeds in fits and starts, and we should not be so obsessed with short term fluctuations.

Also I would not dare apply the words “random” or “lucky” to The Marriage of Figaro. Bursts of creativity, like bursts of rapid growth due to, say, entrepreneurial breakthroughs, may be temporary but they are not “random” in any mechanical sense. They reflect the best of humanity’s purposeful activity, and they stay with us forever even if the original creative moment is fleeting.

Can aid win hearts and minds?

A recent Christian Science Monitor article reported that USAID is “losing hearts and minds” in Afghanistan’s northeastern Badakshan province because of failed and shoddy projects, corruption, secrecy and waste. Given how much of the US aid budget is spent trying to make the world a safer and more secure place for Americans, you might think there would be plenty of studies testing the hypothesis that aid funds can reduce terrorism or shift hostile public opinion. In fact, there is startlingly little evidence that we know how to use aid for this purpose.

Andrew Wilder, who led a two-year study at Tufts on the relationship between aid and security in Afghanistan, Pakistan and the Horn of Africa, has studied perceptions of the US following the 2005 earthquake in Pakistan, for which the US quickly pledged $50 million and played an early and visible part in relief efforts. A widely-cited poll taken a month after the quake showed that the percentage of Pakistanis with a favorable opinion of the US had doubled, from 23 percent to 46 percent.

But it took only six months for those numbers to drop back down to near pre-quake levels. A year and a half after the earthquake, Wilder’s team found that while the US response was effective from a humanitarian perspective, there was “little evidence of any significant ‘hearts and minds’ or security benefits....”

A slightly sunnier outlook on the question  comes from a quantitative study on Iraq by Eli Berman, Jake Shapiro, and James Felter, entitled “Can Hearts and Minds Be Bought?” The answer seems to be a tentative “sometimes:” The authors concluded that increased public service provision did reduce violent incidents, but could only speak to CERP funds, which are allocated to small-scale projects and made up a very small fraction of overall reconstruction funding.

But researchers working with Wilder on the Tufts study conducting interviews in eastern Kenya found that small-scale projects (carried out in this case by AFRICOM’s Joint Task Force) didn’t succeed in getting communities to change their minds about the US. The authors explained:

…We found that attitudes were influenced by factors that went beyond the scope of aid projects- faith, the relationship between target populations and the Kenyan state, US foreign policy, and events in Somalia- were all much more important.

And in a context where US foreign policy in Afghanistan and the Middle East is perceived as an attack on Islam, a strategy that aims to win both "hearts" and "minds" appeared to people locally as an attempt to directly influence a Muslim community's faith and beliefs.

Wilder also tipped us off to a German longitudinal study underway in northeast Afghanistan. They found that aid positively influenced perceptions of the peacekeeping mission, but only when people felt that their own security was not at risk. Aid also had a positive impact on perceptions of local government, but these perceptions were “short-term and non-cumulative.”

So, are there cases in which aid COULD be used to promote security objectives? Maybe. The studies cited here lead to a couple of possible hypotheses, both of which would need much more research:

1. Aid could help consolidate stability in areas that are already relatively stable, but is not much use in stabilizing a war zone
2. Aid could help shift public opinion in a country that is already favorably disposed towards the US, but is less useful where attitudes are hostile to begin with.

It is hard enough to demonstrate that development assistance effectively promotes development. Especially in conflict zones like Afghanistan, the smart aid programs that can show lasting impact are sadly few and far between. The additional, unproven assumption that aid can tamp down terrorism and change the way people think about Americans in the midst of a conflict fought by Americans is almost certainly too much for it to bear.

NYT's David Brooks discovers Planners vs. Searchers -- for running your own life

Brooks discusses the Well-Plannned Life vs. the Summoned Life. Could this be a good excuse for those of us who never plan more than 5 minutes ahead?

Is it possible I like Searchers because of my personality type?

The Aid Trap: A reply

The following post was written by Glenn Hubbard and William Duggan, authors of The Aid Trap, which we reviewed last week. We are delighted that the blog site that Bill Easterly oversees, Aid Watch, has reviewed our book, The Aid Trap. And we are further delighted that on balance the reviewer agrees with what we say in the book. But the reviewer also makes one major objection that we have heard many, many times in the months since the book came out. We have not replied to this objection yet:  Aid Watch is perhaps the best venue for such a reply. So here it is.

First, here is the objection.

The Aid Trap proposes a ‘new Marshall Plan’ for the world’s poorest countries, along the lines of the original Marshall Plan’s support for the local business sector in Europe after World War II.  The Aid Watch reviewer – and many others – point out that poor countries today, especially in Africa, never had the business infrastructure that Europe had before the war.  Rebuilding Europe’s business infrastructure is very different from building a business infrastructure from scratch in poor countries today.  So our proposal for a ‘new Marshall Plan’ won’t work.

Now, here is our reply.

We begin by invoking Bill Easterly’s key distinction between ‘searchers’ (good) and ‘planners’ (bad). Aid planners design and fund projects based on what they want to happen, while aid searchers find something that works and do more of that. But of course, when your search yields something that works, you never apply it wholesale to another situation.  Easterly, correctly, makes that very clear. In this he echoes T.S. Eliot: “Immature poets imitate, mature poets steal.”

In the Aid Trap, we do not propose to ‘imitate’ the Marshall Plan. We propose to ‘steal’ from it. If you see nothing to ‘steal’ from the Marshall Plan for poor countries today, then you have no imagination. If you see a little to steal, then you have a little imagination. If you see a lot to steal, then you have a lot of imagination. That’s why the most creative aid pioneer in modern history, Muhammad Yunus, says this about our book:

The Aid Trap is not about the failure of conventional aid but provides the outline of a solution that can work if taken seriously. It is that rare prescriptive book, and the world must pay attention.

And Bill Easterly says we:

persuasively argue that thriving private businesses are the best hope for the world’s poor and have taken a practical and pragmatic approach to allow business to thrive.

Do you think that Yunus and Easterly do not realize that post-war Europe is different from poor countries today?  Of course they know that.  We have a whole chapter in the book giving some preliminary details on how to adapt the successes of the Marshall Plan to the very different situation today.  It really calls for a whole book devoted just to that.  But these details will fall on deaf ears unless you recognize that development calls for ‘searching’ and then creatively applying what you find to different situations.

We also cite more recent programs that support local business, also worth stealing from.  The ANDE and DCED networks alone provide plenty of worthy examples. But these programs amount to perhaps 5 percent of current aid – scaling them up to 50 percent, which is what poor countries need, calls for some larger coordinating mechanism that operates very differently from the core practices of the major aid agencies. That’s what the Marshall Plan offers.

We would also like to reply to a somewhat less common objection to our book, that the Aid Watch reviewer also makes: institutional reform in poor countries to help their local business sectors will make aid unnecessary, because private loans will supply the necessary capital. So you don’t need a Marshall Plan to channel the aid. Well, here’s the problem: you will never get lasting institutional reform without a middle class that comes from the local business sector. For better or worse, aid is not going away anytime soon:  the best you can do is channel more of it to the right thing – local business – as the original Marshall Plan did. Otherwise, it goes to the wrong things, as Aid Watch correctly and relentlessly reminds us.

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Related post: Could aid revive business instead of stamping it out?

US gets a strategy to meet the Millennium Development Goals – please explain

UPDATE: UN Dispatch disagrees, we respond (see end of post). Although the eight goals that seek to reduce the global burden of hunger, poverty and disease were agreed upon by aid donors almost 10 years ago, and most of the goals come due in 2015, the world’s largest donor has never had a strategy to achieve them. Obama campaigned on the promise of making the MDGs “America’s goals,” but the first year and a half of his administration has not yet delivered on this promise.

On Friday, though, the US released a document written by USAID which declares that the US “fully embraces the MDGs” and “will put innovation, sustainability, tracking development outcomes, and mutual accountability at the heart of our approach to development, and, consequently, to the MDGs.” The administration is delivering this strategy just in time for the MDG summit in September.

I recently came across a paper by David Hulme that frames the fierce debate around the value of the MDGs nicely. According to Hulme, the viewpoints

… range from the high modernists, who take them at face value and are optimistic that they are a blueprint for the transformation of the human condition (Sachs,  2005); the strategic realists, who don’t believe the MDGs are a blueprint for action but believe they are essential to stretch ambitions and mobilise political commitment and public support (Fukuda-Parr, 2008); the critics, who see them as well-intentioned but poorly thought through – distracting attention from more appropriate targets (or nontargets) and more effective policies and actions (Clemens et al, 2007; Easterly, 2006);  through to the radical critics, who view them as a conspiracy obscuring the really important ‘millennial’ questions of growing global inequality, alternatives to capitalism and women’s empowerment (Antrobus, 2003; Eyben, 2006; Saith, 2006).

The US strategy is notable in that it is not internally coherent according to ANY of these alternative MDG world-views.

By doing a strategy at all, the US would seem to have placed itself firmly in the high modernist camp and to have rejected the critics’ view. But a curious feature of the new US strategy is its failure to mention the goals by name, or to strategize progress specifically towards any of the agreed-on indicators. From the critics’ point of view, this is certainly better than the UN Millennium Project’s strategy, which created a 449-step comprehensive strategy to reach the 8 goals and 18 targets. But with no concreteness on goals or indicators at all, one wonders what exactly was the point of the new US strategy according to the “high modernist” approach.

As far as “mobilizing political commitment,” it’s perhaps telling that the report is subtitled “Toward 2015 and Beyond,” which reads like an unintentional acknowledgement that the MDG exercise has already failed for 2015 – something on which this blog opined a year ago. But then again, we are a little confused why the US is now jumping on the MDG bandwagon when the band is starting to pack up their instruments.

Could it be that there should be a fifth Hulme category – the “PR view,” according to which the MDGs are a politically costless way for any given aid donor to create a positive image of benevolence towards the world’s poor, which is sadly unrelated to whether the goals are actually achieved?

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UPDATE Monday August 2, 3:22 pm: Duncan Greene of Oxfam GB more optimistically reckons that this strategy shows “how quickly Shah and USAID have won back lost political ground from other government agencies;” UN Dispatch interviews Rajiv Shah;  Porter McConnell of Oxfam US says the development community is still waiting for the administration’s long-promised global development strategy.

UPDATE 2 Tuesday August 3, 11:36 am: Mark Leon Goldberg of UN Dispatch has responded to this blog post, arguing that The US MDG Strategy is More than a PR Ploy! and represents real progress:

….It was only five years ago that we had a freelancing UN ambassador [John Bolton] who thought he could get away with erasing the mere mention of the MDGs from a UN Summit…. Fast forward to 2010 and not only is the United States embracing the MDGs, but the administration has made it an organizing principal of US foreign policy.

Sure, the new US willingness to engage with the UN, and this new MDG strategy document, may represent progress in repairing the fractured relationship between the US and the UN. In the annals of UN bureaucratic infighting this does indeed sound like a revolutionary change.

But on the more important question of whether this change in orientation on the MDGs will make a real difference in the way that the US and other donors deliver development assistance to the world’s poor, we’re going to need more than just an official statement of intentions before we can conclude that real progress is being made.

Why African women and girls are still manual porters

The Washington Post this morning carries a story on a DC couple who went on safari in Tanzania and then decided to start an NGO to donate bicycles to give relief to the vast number of female manual porters they encountered.  Whether their project fits into the well-populated category of poorly informed good intentions I leave to the readers to judge (although the NGO name is the cringe-inducing Pets Providing Pedals, since one of the couple is a professional dog groomer). Every visitor to Africa is struck by the huge amount of human porterage going on, usually by women and girls. The stereotypical image of an African girl walking long distances with a large load balanced on her head is not just a stereotype.  But the Pets Providing Pedals project raises a different question -- why aren't bicycles already used a lot more already? Or carts drawn by draft animals? Or cars or trucks?

A standard economist's answer could suffice, although it hardly lessons the tragedy of the women condemned for life to porterage. You substitute capital (trucks, bicycles, carts) for labor (head porterage) when labor is scarce. You substitute labor for capital when capital is scarce and unskilled labor is abundant.  Guess which one applies to most African countries.

A sustainable alternative to women being used as draft animals probably requires something that vastly increases the demand for unskilled labor and makes it more expensive ("sweatshops" look positively attractive by comparison). Of course, there are also these little tiny issues about women's rights and gender equality -- but that too could respond to economic forces that gives women many more viable alternatives.

What aid critics could learn from movie critics

The Wall Street Journal yesterday had an article on "2010: worst movie year ever?". Movie critics have a way with words that leaves us aid critics in the dust.

Hollywood is fighting a war on numerous fronts, and losing all of them.

And movie critics are even worse at something aid critics are often accused of: much more focus on the negative than on constructive positive suggestions -- "just stop."

Stop making movies like "Grown Ups," "Sex and the City 2," "Prince of Persia" and anything that positions Jennifer Aniston or John C. Reilly at the top of the marquee. Stop trying to pass off Shia LaBeouf—who looks a bit like the young George W. Bush—as the second coming of Tom Cruise. Stop casting Gerard Butler in roles where he is called upon to emote. And if "Legion" and "Edge of Darkness" and "The Back-up Plan" and "Hot Tub Time Machine" are the best you can do, stop making movies, period. Humanity will thank you for it.

Scorchingly negative movie critics are like aid critics in their social function -- clear away all the bad stuff to make room for the good stuff. Without movie critics, we'll have an octogenerarian Sex and the City 8. With critics, we have some hope of some day having another Godfather or Annie Hall.

Could aid revive business instead of stamping it out?

This post is by Claudia Williamson, a post-doctoral fellow at DRI. This is a central question of The Aid Trap, by Columbia professors R. Glen Hubbard and William Duggan. Instead of supporting development, the authors argue, aid creates additional hurdles. While aid ‘crowds out or corrupts the business sector,’ we remain caught in an aid trap because business doesn’t pull at the heartstrings the way charity does.

The first half of the book documents the historical roots of prosperity and poverty. While people in today’s rich countries rose out of poverty as it became easier to do business, bad institutions and policies in poor countries have created perverse business incentives (for example: it takes 361 days and costs seven times the average per capita income to go through the seventeen procedures required for a firm in Mozambique to get the government licenses it needs to operate).  Not only does aid support bad policies and the government that created them, but by decreasing the reliance on taxes for funding aid removes incentives for reform.  Why become a less corrupt, more business-friendly government when aid makes it unnecessary?

Aid stifles the private sector by hindering local entrepreneurship, decreasing reliance on market transactions and trade.  It is often more profitable to work for an aid agency or a NGO than to start a business. Locals get squeezed out of business when an aid agency shows up, so instead of competing with aid agencies most try and join them. Why buy grain from the local farmer when a NGO is giving it away for free?

The second half of the book describes Hubbard and Duggan’s proposed alternative, a modern “Marshall Plan” that would support business directly without channeling money to governments or through NGOs. An independent agency would loan money to local businesses, and these loans would be repaid not to the agency but to those local governments that have agreed to reform the business sector and spend the money on public infrastructure.

The Aid Trap’s focus on private markets and the need for change in the business environment is a laudatory move in the right direction for helping the world’s poor. But the authors’ new Marshall Plan raises some obvious questions

As the authors acknowledge, post-war Europe is very different than most poor countries today. Reconstruction is completely different than building from scratch. Most European countries had a healthy private sector before the war, implying that many of the barriers to business in today’s poor countries were absent. Removing these barriers is part of the new Marshall Plan, but transforming bad institutions into good ones remains elusive. And if such barriers were removed, wouldn’t private financing find it profitable to provide loans as we see in India or China, possibly making the new Marshall Plan unnecessary?

Despite this, the book as a whole is a great description of the current gridlock in the aid debate, and a creative attempt to get out of it.

When financial crises are devastating to a country's long-run prospects

I've commented previously on Carmen Reinhart and Ken Rogoff's great book, This Time is Different: Eight Centuries of Financial Folly, arguing that if financial crises are so common and the world keeps growing anyway, then they must not be so damaging  in the long run. I had been meaning to check what the authors themselves thought of this argument, but am only getting around to it now. Here is my email exchange with Carmen Reinhart:

Bill to Carmen: What do you think of the argument that your results suggest that financial crises are really not so enormously damaging in the long run, since you have confirmed they have happened repeatedly in both rich and poor countries alike. Or to put it another way, the US economy in particular has kept reverting to its long run trend path for two centuries despite all the crises you document. All the best, Bill

Carmen to Bill: On the long run effects being non-catastrophic I would tend to agree for most crises.

1. I think I would separate out cases where the crisis led to major policy reversals (epitomized by Argentina--perhaps also Spain in the 1800s)

2. I would also examine the 1930s depression case separately.  For many emerging makets it took more than two decades (no exaggeration-there are several cases where it took even longer) to get back to pre crisis GDP levels.

I guess the gigantic question is whether the current crisis fits into either of Carmen's categories 1 and 2.

African Tourism projects: great potential or white elephants?

Not too many people are aware that Ghana has a very good game park, called Mole National Park, about two hours drive from Tamale in the north, which is in turn a short flight from Accra. Like many other African governments, Ghana's government has high hopes for earnings from tourism. Will it happen?

You can sign me up as a zealous booster of Ghana tourism. Mole National Park alone is amazing, as I hope some of these amateur photos convey.The scene from the ridge on which the hotel sits was breathtaking and full of game.

And we haven't even gotten to Ghana's more famous attractions, like Elmina Castle, or even its famously welcoming and courteous citizenry, or just traveling about anywhere in Ghana. My message is unambiguous: come to Ghana!

Unfortunately, not all tourists base their choice of destinations on my recommendations. The prima donnas among the tourist set are going to complain about the not-quite-luxury-class hotel at Mole, or the teeth-chattering ride over an unpaved road from Tamale. Or maybe they will still be whining about the hassles of getting a visa. Some of them might have been a little put off by the welcome sign at the airport, whose principle message seems to be that pedophiles should surrender to the police immediately. (I of course sympathize with whatever problem led to this sign, but calling the visitors perverts is not the conventional way to attract tourists.)

This is the problem with trying to make tourism a major source of revenue. You have to keep the spoiled brats happy from the moment they enter to the day they depart. This chain is only as strong as its weakest link: one bad experience and it scares off the tourist masses. It seems that a lot of tourism projects do not appreciate these realities. The successful large scale tourist earners create at least a welcoming airtight enclave like Cancun. This is asking a lot of a poor country, to make everything fully functional for visitors when even making the basic health system work is a (higher priority) struggle.

Plan B is to attract at least the true  travelers, to whom a hitch in the road is material for an entertaining story to tell their friends, not something to ruin your vacation. Ghana is already doing this with some success and could conceivably do more (the hotel at Mole, while not large, was at least full to capacity in mid-July). I don't know how large the traveler market is compared with the mass tourism market, but a rigorous survey of my family, friends, and acquaintances suggests it's non-trivial. Perhaps somebody has already done a study of these various tourist market segments (anybody know?) Bottom line is that I think Ghana does have considerable upside potential, but not at Cancun scale. And maybe they should take down the pedophile sign.

African Export Success: Shooting Fowl while riding an Antelope

Contrary to the image of African countries as static mono-exporters, it is unpredictable from one period to the next which will be the top exports in each country. Consider this picture of Tanzania’s top exports in 1998 and 2007.

This is pattern of rapidly changing success is the norm across African countries. If you take the top 100 exports in each country in 1998 (or the first year in which data is available), its correlation with the rank of those same exports in 2008 is only .29.

Moreover, almost none of the changing success is explained by global commodity prices. In fact, there is little difference in the dynamic changeability of African commodity export performance and that of the continent’s non-commodity export performance. Nor is there any difference between how much global prices explain commodity exports (which is hardly at all) compared to non-commodity exports.

The usual stereotype of African exports as just given by a natural commodity or mineral endowment, with fluctuations mainly explained by global commodity prices, is just ... wrong.

These findings were featured in a paper by Ariell Reshef  (UVa) and myself in the National Bureau of Economic Research conference on African  Development Success July 18-20 in Accra.

What does it all mean? Actually, the patterns in Africa were similar to those in non-African countries. In all cases, succeeding in exports requires aiming at a moving target. Who will do better under these conditions, state industrial policy planners or decentralized entrepreneurs with specialized knowledge of what is working and what is not in each sector?

The Lives of Others

UPDATE: contrasting negative images offered by commentators on Twitter (see end of post) My Ghanaian friends often tell me that if you want to understand Ghanaians at all, you have to understand how religious are most Ghanaians. I believed them of course, but it didn’t really become vivid until I attended the most amazing church service this morning. I am not saying this out of any religious motives, just to point out another side of Ghanaians that outsiders seldom see or appreciate.

The service was at an Anglican church in Bolgatanga (I am myself an Anglican at a fairly tepid level). The Anglicans in in the US (where we’re called Episcopalians) are a pretty sedate denomination, associated with rich, formal, well-dressed, stuffy older people. So imagine an Anglican service with music including a drum-set, Ghanaian drums, a talented organist and a vocalist, dancing, and a congregation made up of all ages (also well-dressed in indigenous clothing). A drum-set would be as out of place at an American Episcopalian service as a vuvuzuela, but the Ghanaian Anglicans were clearly much more into the service than their American counterparts.

Exactly what point am I trying to make in my current travel-addled state with little time to write this? (Insert obligatory academic references to some random research findings on religion and development when I get more time.)

I think it’s something about how to understand people’s behavior, you need to understand how they see themselves. A good guess is that the people in the congregation this morning, in one of the poorest regions of Ghana, do NOT see themselves primarily as “poor” or “developing”, they see themselves as Christians. Another guess is that similar feelings about religious faith would apply to other Ghanaians in other religious services, like Muslims, Catholics, traditional religions, etc.)

Perhaps this fits into the recurring Aid Watch theme about humanizing aid recipients, how poor people have a life, and may not even see themselves as poor at all, and so may according to some other perspective NOT be poor. This is not to deny the material hardships of people around Bolgatanga; in fact, I talked to the bishop afterwards about really bad stuff like malaria and human trafficking in teenage girls. But not all the comparisons with rich Americans go one way. Just daring to speak for my fellow Episcopalians, Ghanaian Anglicans have something that American Episcopalians could envy and learn a lot from.

UPDATE: got this comment on Twitter:

@auerswald Noticed that too. RT @JaneReitsma: The absolute opposite of @bill_easterly's post today - "#Africa’s unsung heroines" http://econ.st/ce525h

The Economist article cited is a description of a few women in Burundi, whose husbands are depicted as follows:

As for the husbands... Many of those who stay are drunks with syphilis. Women are forbidden to inherit land. They are often beaten and raped.

I'm not sure how a random example from Burundi is the "opposite" of the post above on personally observing one congregation in Bolgatanga, since I was not trying to establish the definitive portrait of "the typical African", which would be a ludicrous enterprise. I certainly would not deny the very real existence of abusive husbands and victimized women, but it does bother me that there are a lot more of the extreme negative anecodotes  in the Western media covering Africa than any positive anecdotes.

Is &%# allowed in aid?

My wife and I visited the village of Goyire yesterday, about 30km from Bolgatanga in northern Ghana, home to the Builse subgroup of the Talensi ethnic group. We were looking at a malaria bed nets project that I will discuss more in a future post.  The community had organized a skit to dramatize why bed net utilization is so important to prevent malaria. The amateur community Thespians doing the skit really hammed it up and the villagers and us almost died laughing. Hilarity increased further when everybody started performing music and dancing after the skit. A certain middle-aged white male blogger displayed a deplorable lack of self-restraint and attempted to execute various jerky dance maneuvers that might have not been perfectly in time with the music, which most of the audience seemed to find deeply amusing.

A certain three-letter word not usually associated with aid projects seemed to be happening: f-u-n. We were all having a lot of fun, and I think malaria awareness increased more on this occasion than on other deadly boring health education lectures I have seen other times. As someone once advised me, take your work seriously but don't take yourself seriously. Fun is allowed in aid.

Greetings from remote places

Greetings Aid Watchers, just back on line, been busy touring remote places in northern Ghana. I'll be writing up experiences in a future post, but I only have a few minutes right now. One very quick thought I have been having: Q: what's the difference between remote northern Ghana and downtown Manhattan?

A: my iPhone gets a signal in remote northern Ghana

How to become a feudal lord with hundreds of servants for $99

Our image of a medieval king is of somebody with hundreds of servants waiting upon His Majesty. Today, for $99, you commoners can get a much larger and better group waiting upon you. You will even have dead servants working for you – (1) Sumerians from 3000 BC (2) Babylonians from 2000 BC, (3) Egyptians from 1850 BC (4) Indians from 500 BC, (5) 7^th century BC Romans, (6) 18^th century Austrian musicians, (7) a 19^th century professor from Lake Como. Living servants of yours have learned valuable things from the dead servants and added their own service. Your living workers come from (8) New York, (9) Dallas, (10) California, (11) Japan, (12) Taiwan, (13) Singapore, (14) Democratic Republic of the Congo, and (15) China. This remarkable $99 service plan is contained in a small object called an iPhone.

It has contributions from all of the above, such as (1) the sexagesimal system (60 minutes to an hour and 60 seconds to a minute), (2) the calendar and the 24 hour day, (3) arithmetic, (4) decimal numerals, (5) the Latin alphabet, (6) Mozart and Haydn tunes, (7) Alessandro Volta, inventor of the electric battery, (8) the retail store where I bought my iPhone, (9) AT&T headquarters, (10) Apple, Google, Twitter, Facebook (11) the screen, (12) circuit boards, (13) the chips, (14) the mineral coltan used in cell phones, and (15) final assembly

From deadly data to lively pictures

For those of you who have not yet discovered the wonderful Hans Rosling, go to his Gapminder to discover whole new ways of visualizing development in motion. See the classic hilarious video of his TED talk, or something more recent.

Is Impact Measurement a Dead End?

This post was written by Alanna Shaikh. Alanna is a global health professional who blogs at UN Dispatch and Blood and Milk. We’ve spent the last few years watching the best donors and NGOs get more and more committed to the idea of measurable impacts. At first, the trend seemed unimpeachable. International donors have spent far too much money with far too few results. Focusing more on impact seemed like the way out of that trap.

But is it? The last couple of weeks have seen a spate of arguments from development thinkers rethinking this premise.

Steve Lawry at the Hauser Center, argues two main points against excessive focus on impact evaluation. The first is that it stifles innovation by keeping NGOs from trying risky new things. But I think that the problem is an institutional culture that doesn’t allow for failure. By allowing NGOs to fail and learn from failure, innovation is encouraged.

His second point is more interesting: “Many real-world problems are not easily described with the kind of precision that professional mathematicians insist upon. This is due to the limitations of data, the costs of collecting and analyzing data, and the inherent difficulties of giving mathematical expression to the complexity of human behavior.” This strikes me as very true. At what point are we expecting too much from our impact assessments?

In the same vein, the fascinating Wanderlust blog just ran a post about Cynefin. Cynefin is a framework for understanding systems. It categorizes systems into four subsets: Simple, Complicated, Complex or Chaotic. Chaotic systems, the author argues, can’t be evaluated for impact using standard measures. He states that “In a Chaotic paradigm, there is relatively little difference likely to occur in quality between a response that is based on three weeks’ worth of detailed analysis and one that is based on the gut reaction of a team leader…”

The Center for Global Development just published a paper by former USAID administrator Andrew Natsios. Natsios points out that USAID has begun to favor health programs over democracy strengthening or governance programs because health programs can be more easily measured for impact. Rule of law efforts, on the other hand, are vital to development but hard to measure and therefore get less funding.

Now we come to the hard questions:

If we limit all of our development projects to those that have easy metrics for success, we lose a lot of programs, many of which support important things like rule of law. Of course, if they don't have useful metrics, how do we know those programs are supporting the important goals?

And how meaningful is impact evaluation anyway when you consider the short time frames we’re working with? Most development programs take ten years or more to show real impact. How are we supposed to bring that in line with government funding cycles?

On the other hand, we don't have a lot of alternatives to impact evaluation. Impact is not unimportant just because it’s hard to quantify at times. We can’t wish that away. Plenty of beautifully designed and carefully implemented projects turned out not to have any effect at all. For example, consider what we’ve learned from microfinance impact evaluations. Microloans have a positive effect but not the one we expected.

It’s a standard trope of this blog to point out that there’s no panacea in global development. That’s true of impact evaluation, too. It’s a tool for identifying worthwhile development efforts, but it is not the only tool.  We can’t go back to assuming that good intentions lead to good results, but there must be room for judgment and experience in with the quantifiable data.

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UPDATE: This post was edited to correct an attribution error in the third paragraph - Eds.

The coming end to China's rapid growth

China's remarkable growth rate is unlikely to last. No country in history has managed to grow nearly so fast for so long. "China is defying the law of gravity at the moment," says New York University economist William Easterly, who has tracked economic development for decades. "But that doesn't mean that gravity is wrong."

…

From 1900 to 2000, NYU's Mr. Easterly says, per-capita growth of all countries ranged between 1% to 3% a year. Nearly all the nations on the high end so far, he says, are democratic capitalist countries — and the additional growth over long periods of time made them rich.

"When we make too much of growth spurts," he says, "it like making too much of a basketball player who has a hot hand."

From last week’s Wall Street Journal.

And here is some more substance (possibly spurious) to rationalize why China's growth will slow down, for those of you unhappy with impersonal statistical tendencies.