FAO senior economist responds on “made-up world hunger numbers”

We received this comment this morning from David Dawe, senior economist at FAO, in response to Wednesday's post Spot the made-up world hunger numbers. Kudos for the prompt reply and the willingness to engage in discussion.

Dear Professor Easterly,

I am a leader of the technical team in FAO responsible for publication of the State of Food Insecurity in the World, which reports FAO’s estimates of undernourishment every year. I would like to clarify the methodology behind the recently reported estimates of undernourishment for 2005/07 and 2010. FAO attempts to measure the number of people in the entire population (i.e. of all ages) for whom caloric intake is below a threshold, what we call the minimum dietary energy requirement. This is a different way to measure hunger than the anthropometric estimates published in World Development Indicators, which measure the nutritional situation of children under 5 years of age.

There is no need to summarize FAO’s methodology here – a brief summary of it is publicly available here , as noted in the blog post by Richard King. A more detailed discussion (411 pages) of FAO’s methodology and related measurement issues can be found here, which reports the results of an international scientific symposium held in 2002 on the measurement and assessment of food deprivation and undernutrition. In addition, the data for reproducing FAO’s country estimates for 2005-07 are publicly available here.

As noted by Richard King in his blog post, lags in data collection prevent FAO from using this same method to construct undernourishment estimates for 2009 and 2010. Instead, we have to use models to get estimates for more recent years. Therefore, to get the number of undernourished people for 2009 and 2010, we applied estimates of percentage increases in undernourishment from the USDA Food Security Assessment model to our own estimates of the level in the previous year. A short summary of the USDA model was provided on pages 22-26 in the State of Food Insecurity 2009. A longer publication (from USDA) that describes the model in more detail and its estimates is also available.  Referring again to Richard King’s blog post, he provides an excellent summary of the shortcomings of applying the USDA model to our own estimates, so there is no need to repeat them here. In addition, note that our model-based estimates do not take into account the floods in Pakistan or recent increases in wheat and maize prices on world markets.

As with any methodology for constructing global estimates of socioeconomic variables, it is subject to many valid criticisms, and some of these criticisms are available in the published literature (e.g. Peter Svedberg, 1999, 841 million undernourished?, World Development 27 (12): 2081-98). Some of the criticisms suggest that FAO overestimates the extent of under-nutrition, while others suggest that our estimates are too low. A recent World Bank Working Paper provides estimates of the impact of the crisis that are roughly similar to ours (Sailesh Tiwari and Hassan Zaman, 2010, The impact of economic shocks on undernourishment, World Bank Policy Research Working Paper 5215). Whatever the estimate may be, FAO welcomes such criticisms and alternate methodologies so that the world has a better quantitative understanding of the extent of this problem.

While we stand by our current estimates, we also recognize that improvements to our methodology are possible. Thus, FAO is currently investing financial and human resources to improve our estimates of the number of undernourished people in the world. Constructive contributions to this effort are welcome.

I am happy that you have brought these issues to the attention of your many readers, because it focuses attention on the problem of hunger and will help us to improve the quality of our estimates. In that regard, we encourage you and all those who are reading this blog to sign the online petition at 1billionhungry.org to help put pressure on politicians to end hunger. In addition, I will invite you to present a seminar at FAO so that we can benefit from your insights on this issue.

Sincerely,

David Dawe

Top 25 rankings of all time

Today's topic was spurred by some rather unusual college rankings by the Wall Street Journal, in which Texas Tech has a higher rank than Harvard. This has been among the most popular articles on the Online Journal for 3 straight days now. Of course, also very popular are the US News and World Report College Rankings (which give the rather opposite results in which Harvard does slightly better relative to Texas Tech.) We all love rankings.

Talking about ranking methodology, not so much.

(Turns out WSJ rankings were biased towards larger colleges. Texas Tech had undergraduate enrollment of over 22 thousand, compared to less than 7 thousand at Harvard.)

In development, we have all kinds of ranked beauty contests: the Human Development Index (HDI), Doing Business, Governance Indicators, Corruption, etc. etc. I've even been participating in one ranking exercise myself, on, of course, aid agencies.

Just like wacky college rankings, many development rankings are based on methodologies that could use a lot more scrutiny than they usually get. Take the much-loved uber-publicized Human Development Index (HDI). The HDI has a hidden implication pointed out by the World Bank's Martin Ravallion as long ago as 1997. Imagine the reaction to this hidden implication if they publicly announced it:

The UNDP announced today that they consider a human life in the USA to be 70 times more valuable than human life in the Democratic Republic of the Congo.

The other consequence of this hidden implication is that rich countries will get A LOT of credit for higher life expectancy (and not much for income). Scandinavia does very well on the HDI because its life expectancy is higher by 1 or 2 years than the US, even though US income is higher. Bryan Caplan suggests:

Scandinavia comes out on top according to the HDI because the HDI is basically a measure of how Scandinavian your country is.

There's an alternative to constructing murky indexes with dubious assumptions. This would be to be use people's actual choices to infer which places are better. If a college recruiter (the basis of the WSJ rankings) had to choose between otherwise equivalent Texas Tech and Harvard graduates, which one would they pick? Instead of the US News convoluted rankings, why not just ask a student admitted to both Texas Tech and Harvard which one they would pick (or DID pick).  These are called "revealed preference rankings" and have actually been done for colleges.

Instead of Human Development Indexes, why not just ask migrants where they would choose to live (or do actually choose to live): US or Iceland? Iceland has a much higher HDI, but actually has out-migration, whereas I think there are a few people trying pretty hard to get into the US.

Instead of Doing Business index-based rankings, why not use the actual choices of businesses where to invest? These also have the added attraction of not being subject to artificial manipulation (which happens with both college index rankings and Doing Business).

Indexes should not be discarded altogether. Sometimes there are no choices to guide rankings (like aid agencies, sadly). They can also summarize information for those making the choices.

But please double check your methodology.

India tells UK to turn off the aid tap already

Reported yesterday in the English language daily newspaper the Indian Express*:

The External Affairs Ministry has instructed the Finance Ministry to inform London that India will not accept further aid from next April...

“…[I]t would be better if our decision not to avail any further DFID assistance with effect from 1st April 2011 could be conveyed to the British side in an appropriate manner at the earliest,” [Foreign Secretary Nirupama Rao] wrote to Finance Secretary Ashok Chawla.

Ahead of Cameron’s visit, India had considered rejecting DFID offer in view of the “negative publicity of Indian poverty promoted by DFID”.

Welcome to the paradox of aid to India. On the one hand, the World Bank still classifies India as a “lower middle income” country. With a per capita GNI hovering around $1000, it is home to one-third of the world’s poor, and 75 percent of its population lives on less that $2 per day.

On the other hand, India is the world’s 11^th largest economy. It has a space program, a nuclear weapons program, and it is projected to grow by 9 percent this year and 8 percent the next.

At the same time that India is telegraphing its readiness to lessen its dependence on official aid, it is also positioning itself as a donor, using its aid money just as traditional donors do, to gain friends and influence among its neighbors. Though no one knows exactly how much aid India gives out (it does not have one central development agency, nor does it report aid statistics to the OECD) India recently offered a $1 billion loan package to Bangladesh and announced $25 million to aid Pakistan’s flooded areas.

Over the last decade, India has consistently been the largest recipient of the UK’s aid, receiving some $3.3 billion since 2001. But last month, we learned of a major change in Britain’s criteria to allocate aid, requiring that aid projects make “the maximum possible contribution to national security.” The UK development secretary has basically admitted that this means places of current military-strategic interest, like Afghanistan, are in, while holdovers from colonial- and Cold War eras, like India, are out.

Apparently, India got this memo as well and has decided to preempt UK cuts by announcing that India no longer needs the aid anyway, thank you very much.

*Thanks to reader Luke Seidl for the tip.

Spot the made-up world hunger numbers

Today's exercise, dear readers, is to spot made up numbers in major news stories. Leading newspapers today report on FAO's new world hunger numbers (see FT and NYT). The FAO reports that the number of hungry people fell from 1.02 billion in 2008 to 925 million in 2009. That's very good news, unless it didn't happen.

Inquiring minds want to know:

(1) how did the FAO come up with a number for 2009, when the World Development Indicators (WDI) of the World Bank are only reporting malnutrition numbers up through 2008?

(2) how did the the FAO even come up with a number for 2008, when the current WDI reports malnutriton indicators (either height for age or weight for age for children under 5 ) for only 4 countries?

(3) the FAO says that two-thirds of the hungry are concentrated in seven countries: (in order of number, with WDI latest year of data between 2005 and 2008 reported in parentheses): China (none), India (2006), the Democratic Republic of Congo (2007), Bangladesh (2007), Indonesia (2007), Ethiopia (2005), and Pakistan (none). So how did they arrive at numbers for these countries for both 2008 and 2009?

(4)  is there any possibility that political pressure surrounding the hunger Millennium Development Goal (MDG) led to the creation of numbers based on the alternative methodology known as "wild guesses"? If so please explain why we cannot talk about the tragedy of world hunger without making up numbers?

(5) a good test of how serious is the UN about the hunger MDG is that it would have devoted a lot of effort to improving the data on hunger. Does the UN pass this test?

Perhaps the FAO has very good answers for these questions.  I am asking you to do some of the work here, dear readers, and investigate the mystery of the missing hunger indicators underlying non-missing precise world hunger data. I will write a follow up post as you and others respond.

Growing cars in Iowa

[T]here are two technologies for producing automobiles in America. One is to manufacture them in Detroit, and the other is to grow them in Iowa.

Here's the detailed technology by which you grow cars in Iowa:

First you plant seeds, which are the raw material from which automobiles are constructed. You wait a few months until wheat appears. Then you harvest the wheat, load it onto ships, and sail the ships eastward into the Pacific Ocean. After a few months, the ships reappear with Toyotas on them.

Who could object to such a nice technological alternative?

Today, I am beginning to teach trade in my Principles of Economics class. This is a classic folk description of international trade first advanced by David (son-of-Milton) Friedman and then quoted by Steven Landsburgh (the source of the quotes here) in his marvelous book The Armchair Economist. David quoted it again in his own book Hidden Order: the Economics of Everyday Life.

How to respond to a bad government in someone else's country?

The question in the title is one of the hardest in our field. I just wrote a Wall Street Journal book review critical of the Meles' government in Ethiopia. I got some supportive letters from Ethiopians, but a Political Science Ph.D. student named Hamere wrote me as follows:

Hello William, It is a pity that you produced such a hate and politics charged article against my country, Ethiopia and its leadership... What we have is simply visionary, caring, developmental and strong leadership.

I criticize others for intrusively intervening in poor countries, or advocating intervention, especially with outside military force. So what am I doing meddling in Ethiopian politics?

It's important to distinguish between talk and action. It's consistent with free values to criticize tyranny everywhere. It doesn't follow that one or more outside powers should overthrow any one tyrant, or indeed tyrants everywhere. The following box suggests the range of alternatives.

Aid agencies don't even criticize specific tyrannical acts, although they might advocate "good goverance,"  and they wind up supporting bad governments with aid funds. This is ironically the same box that the Cold War support for allied dicators used to be in, and still includes support of bad governments who are "War on Terror" allies (including Ethiopia).

Neo-cons (and their liberal twins, the humanitarian military interveners) want to both speak and act against bad government.

Isolationists want to just ignore tyranny elsewhere.

I'm drawn to the "talk, not act" box, which I've labeled "libertarian". Advocate passionately for free values, human rights, the freedom of political prisoners, but don't presume to socially re-engineer someone else's society in the name of those values.

Thank the IRS for giving you your last name

UPDATE 9/13 noon: see end of post Wonderful post by Cafe Hayek on the history of how the state imposed last names to supersede local practices ("Bill who lives in the east"),  featuring an awesome essay on Cato Unbound by James C. Scott and a thoughtful response by Donald Boudreaux.

Query: which societies today still do not have permanent last names?

UPDATE 11:30am: thanks for the responses to the query! keep them coming. The James C. Scott thesis is that a permanent last name (i.e. the same across generations) is some measure of the "modernization" of the state. I think I feel an instrumental variable coming on here...

My own contribution: in Spanish and Latin American cultures, you have two last names, the first is the surname of your father and the second the surname of the mother. If you give only one of these names to identify someone, you use the first, not the second (I always complain to the American bookstore owners who file Gabriel Garcia Marquez under M instead of G).

UPDATE 9/13 12 noon: THANKS  for all the great responses to the surname survey! Looks like we have an awful lot of societies that don't pass the James C. Scott "state modernity" test of having permanent surnames across generations.

Just to clarify: Scott was not necessarily arguing that this kind of "state modernity" was always good. The state wants it to collect taxes, which are not always a good thing, and maybe also to make it easier for the state Gestapo to keep track of everyone, which is even less of a good thing. Donald Boudreaux (see link in the Cafe Hayek post)  has the insightful comment that  even with this state control downside, permanent surnames also facilitate personal identification for many "gains from trade" transactions among private persons.

The 9/11 values of a development economist

With all the hatred, mistrust, and conflict associated with today's date, it's a good time for a development economist to describe his  or her values. I believe that all humans are created equal, that they have inalienable rights, which include freedom of speech, freedom of religon, and freedom from persecution because of race or religion.

That includes not persecuting members of a religion because some OTHER members of that religion have done evil.

Why do I believe in these values? Is it because these values promote development? I think they do, they promote the kind of peaceful cooperation through trade and investment that creates prosperity, as opposed to the destructive effects of war and terrorism. But that's not why I hold these values, and I doubt hardly anyone else holds values based on econometric relationships between values and development.

You could even say that values chosen for material reasons are not real values at all. It's more like pretending to be in love so you can marry a millionaire.

So while it might seem attractive to argue for values of tolerance to promote prosperity rather than violence, it's a potential trap if we are going to leave it up to econometrics to choose our values for us.

So let's all just reassert individual freedom, tolerance, and mutual respect for all, not because it's good for development, but because it's right.

Our Afr*c* P*rn problem gets worse after we try to make it better

UPDATE 9/10/10 1:30 PM: Barbara Streisand and anti-Muslim bigotry (see end of post) Yes, after that post that admitted our P*rn problem and tried to get out of it, the problem has gotten even worse, like rapidly. The original post Famine Afr*c* stereotype p*rn shows no letup has now climbed from 4th to 3rd most popular post of all time.

Number 1 popular post of all time -- African leaders advise Bono on reform of U2 -- and Number 2 -- Nobody wants your old shoes -- still have a large lead, but we are still worried.

I guess we have learned the hard way the #1 rule of the science of Public Relations -- don't do anything to give more legs to a story that you really want to go away (which I am further violating with this very post). I'm not too embarrassed about not understanding PR, since I have never met a single PR person who understood Economics as anything other than the sworn enemy of good PR. (Both sciences DO have in common a spontaneous order in which ACTIONS OFTEN HAVE THE EXACT REVERSE OF THE INTENDED EFFECT.)

Not only that, but most PR people themselves don't understand the #1 rule of PR. Just think of all the defensive, angry, clueless responses from PR people defending their organizations, which play right into the hands of their critics and INCREASE the negative publicity (Catholic Church abuse scandal, Climategate, etc.)  Actually, Aid Watch has gotten much needed publicity for the cause of Watching Aid from many such clueless organizational PR responses to our own posts.

I guess it's only poetic justice that we are the victim of my own PR ineptitude about making a bad story disappear.

UPDATE 9/10/10 1:15 PM: Thanks for the great comments, you are making me realize this is deeper than I thought.

Please read the link to the Streisand effect, in which Barbara inadvertently caused more publicity about herself in an attempt to stop publicity.

The analogy to the B*rn*ng the K*r*n story is very apt. All those critics and public officials who understandably piled on that nut in Florida with 50 followers gave him exactly what he wanted -- lots of publicity for the cause of H*t*ng M*sl*ms. Newspaper stories pointed out today that nobody had ever heard of him and his stupid and hateful ideas until the critics started piling up. So the effect of lots of criticism  is to cause exactly what the critics were trying to prevent -- a major backlash among Muslims worldwide as they hear about this one obscure idiot.

Two reactions: (1) what a great example of the law of unintended consequences! (2) what a moral and pragmatic dilemma! do you denounce a bigot if your denunciation is going to increase the effect of his bigotry?

Beautiful fractals and ugly inequality

UPDATE 4pm: is there any point to this post? see end of text UPDATE II: 4:30pm Critic cuts me some slack. see end of text

UPDATE III 11am, 9/10/10: Paul Krugman says he had the idea first (see end of text)

In our ceaseless search for trendy themes, let's consider today the beauty of fractals. The picture below shows one fascinating kind of fractal called a "Koch snowflake." Fractals have the same amount of "jaggedness" or "unevenness" at every scale. Income inequality behaves like a fractal: income is very uneven at large scales and at small scales. Here's a mapping exercise that illustrates this, with a tastefully chosen color scheme that is consistent across all maps (rich is red or brown-red, poor is pale yellow, in between is orange). We are going to go from global to the US to the New York City metro area to the neighborhood of NYU in Manhattan. At each scale, there is a remarkably high level of inequality across space. The rich coastal cities in the US and the poor rural South. Rich lower and midtown Manhattan and poor South Bronx. Rich West Village and Soho and poor Lower East Side. Inequality is one of the hardest policy problems, so more later. A simpler insight of economics is that the most obvious answer to inequality is exactly wrong -- complete redistribution (i.e. a 100 percent tax on everyone above average to go to everyone below average) would destroy incentives for wealth creation and make everyone worse off.

UPDATE: a commentator on Facebook asked me what the implications are. Reminds of the World Bank research managers, who if you told them it was raining, they would ask "but what are the policy implications?"  Finally a chance for revenge through my favorite Mark Twain quote (from preface to Huckleberry Finn):

Persons attempting to find a motive in this narrative will be prosecuted; persons attempting to find a moral in it will be banished; persons attempting to find a plot in it will be shot. By Order of the Author.

Please be content every now and then to just contemplate how the world is, which is kinda necessary before you immediately try to fix it.

UPDATE II: my Facebook critic and also @viewfromthecave grant permission for me to meditate on this for a while, and just try to convince you IT'S INTERESTING; note that fractal genius Mandelbrot thought cotton prices were interesting.  (If you do want my Comprehensive Solution, see here.)

UPDATE III: Paul Krugman noted this post and self-deprecatingly notes he had the idea first of the fractal nature of inequality. No problem, Professor Krugman, you can have it. As a long-time fan of your theoretical research, could I request that you take some time out from NYT to come up with a nice theory of why inequality behaves fractally?

Welcome to economics, all you students (and aid workers)

Today, for the first time in my professional career I taught Principles of Economics. I'll be teaching this all semester long and giving occasional reports from the classroom. The officially required duty of all Principles instructors is to first define economics. Here is the definition from the 18th edition of McConnell, the most popular text on the market and actually the exact same text I used in my own first econ class 35 years ago:

Economics is the social science concerned with how individuals, institutions, and society make optimal choices under conditions of scarcity.

OK, just kill us all from acute boredom right now. [If you are an economist, try introducing yourself to someone: "I am somebody concerned with how individuals, institutions, and society make optimal choices under conditions of scarcity."]Is there some conspiracy to make econ so boring that the number of economists stays low and we get high salaries from our scarcity?

The boredom of economics education also has the unfortunate effect of making economics scarce in aid work, given the number of aid ideas that violate elementary principles that all economists (from all points on the political spectrum) agree upon.

Sorry, I'm not all that concerned with "how individuals, blah, blah, optimal choices, blah, blah, scarcity, blah, blah..."  I'm concerned why some people are so rich and other people are so poor. I want to understand why some economies work and others don't, and why even the ones that work still don't work for everyone. I want to understand how other Americans and I got 64 times richer than our ancestors.

I want to know why Robert Iger, the CEO of Disney, makes $140,000 a day, andwhy some rock-breakers I met in Ghana make $1 a day. I think a differential of 140,000 times is pretty important to understand (obviously includes both domestic and international inequality).

Economics principles are a set of tools that have evolved to transcend scarcity into abundance.  When students use these principles to solve problems in an Econ class, they are recreating the process of historical problem solving in which poor people discovered the principles to become rich people.

I am going to try to convince the students that Principles of Economics gives considerable insight into the slightly different outcomes experienced by us and by our ancestors, and by Disney CEOs and Ghanaian rock-breakers. Stay tuned.

Knowledgeable, powerful expert in charge of development strategy admits he is fictional

Just a day after completing the country’s Comprehensive Development Strategy, the expert in charge of Development admitted that he does not actually exist. The expert had done a superb job prioritizing the needs of the poor across 9 major sectors and hundreds of development interventions, not to mention mainstreaming gender and the environment. He had calculated the country’s financing requirements to attain the Millennium Development Goals, as well as the country’s needs for neutral, humanitarian peacekeeping forces to end the civil war, along with a post-conflict strategy to re-integrate combatants, and a timetable for fair, competitive elections. The regrettably fictional expert had drawn upon a large body of country and sector work to identify best practices to successfully treat a range of development challenges facing the country, such as AIDS, malnutrition, malaria, lack of infrastructure, illiteracy, war, rule of law, governance, the fragility of the state, and the absence of economic growth. The expert had coordinated the actions of the 37 Development partners operating in the 9 major sectors and 147 sub-sectors within a Public Sector Medium-Term Expenditure Framework.

The knowledgeable and powerful but nonexistent expert had also integrated into the country’s Comprehensive Development Strategy the Human Resources Strategy, the Empowerment of the Poor Strategy, the Gender Framework, the Post-Conflict Strategy, the Climate Change Response Program, the Governance Framework, the Capacity-Building Initiative, the Country Ownership and Participation Strategy, and the Comprehensive Peace Agreement. The expert had inclusive participation by all stakeholders, including Development Partners, government officials, and civil society, in designing the Comprehensive Development Strategy.

Leading aid agencies expressed doubts that the expert’s claims to be nonexistent were valid, and promised to address the issue of expert fictionality in the next donor meetings in Geneva.

Postscript: the Onion recently reported a similar problem with US Homeland Security.

IAD on A-i-d

This post is by Claudia Williamson, a post-doctoral fellow at DRI. In The Samaritan’s Dilemma: The Political Economy of Development Aid, Elinor Ostrom and other members of the Workshop in Political Theory and Policy Analysis at Indiana University apply Ostrom’s Nobel Prize-winning Institutional Analysis and Development (IAD) theoretical framework to development aid, specifically examining Sweden’s development agency, SIDA.

The IAD framework begins by analyzing the local context governing individual decision-making and scales up this analysis to include all types of rules that provide various incentive structures. This model presents the process of development as a series of collective action problems, analyzing the incentives for the provision of public goods and managing common pool resources.

Applying IAD to aid means that donors must first consider why there are development failures to begin with before they can accurately access whether intervention is an appropriate solution. This means investigating the underlying institutional arrangements structuring the incentives that produce collective action failures. If donors do not address these fundamental institutional failures, then any aid program is unlikely to be sustainable. Most donors pay lip service to these insights, but Ostrom and her colleagues find that their concern for the problems they entail is more rhetoric than reality.

The IAD framework views aid as a nested game, not a chain of delivery, between a variety of actors across different countries – including donor and recipient governments, contractors, civil society, NGOs, etc. These interrelationships create the incentive structure that will ultimately determine the likelihood of success from foreign intervention; therefore, the sustainability of a project and the achievement of long run development goals depends on the complex structure of incentives faced by all actors involved.

Given how complicated of a task this can become - e.g., dealing with the presence of multiple donors, special interest groups, the addition of new rules introduced by donors, and the possibility of corruption- it’s no wonder that donors may not be able to achieve their stated ends. In fact, donors often face perverse incentives that hinder sustainability and project success.

The title 'The Samaritan’s Dilemma’ stems from an article by James Buchanan (more on which here), another Nobel Laureate. Buchanan explains how donors' willingness to be charitable incentivizes recipients to alter their behavior in counterproductive ways. Recipients may, for example, reduce the amount of resources they themselves devote to the problem at hand. The original problem worsens and donors feel even more compelled to continue support, establishing a cycle of interventionism and reducing the chances of sustainability.

Ostrom’s approach to understanding development is to shift our focus towards the underlying incentives surrounding collection action problems. The traditional solution to such problems is central planning and government regulation, including the use of foreign aid. Ostrom argues, however, that expanding centralized bureaucracies is often counterproductive and may create additional unintended consequences. Instead, we should focus on individuals at the local level who are better equipped to develop solutions that are responsive to the complex local conditions generating these problems in the first place.

Be careful what you export

Our distant ancestors had a biological constitution awfully similar to our own, and, like us, only 24 hours in a day. Arguably the main reason we have so much better lives than them is that we have better ways of doing things (broadly conceived). So it makes a great deal of sense that much of the work in development planning and foreign aid consists in exporting ways of doing things. Technology and scientific know-how are the most easily obvious examples, but we also export methods of organization and governance. People in poorer nations don't have the nice things we do, so it must be because their ways of doing things aren't as effective as our own. If we could just convince them to do things the way we do them then everyone would be rich, and Bill wouldn't get any reception in Ghana either. So wealthy nations have spent a lot of time trying to export their newest and best makes and models of laws, regulations, and government agencies to the rest of the world.

One problem with this approach--one among many--is that it assumes that our every institutional and organizational innovation is beneficial. We call this "Whig history." And while it's hard to argue that wealthy nations don't have an overall mix of institutions better adapted to producing wealth, it's quite another to assume that they're superior (at wealth production) to poor nations' institutions on every margin. It could be that the evolution of our ways of doing things has taken a wrong turn in one or more spheres of activity.

Two recent articles raise the concern of Whig history, in ways relevant to ongoing debates in development. Eustace Davis writes at African Liberty that:

Governments world-wide are struggling to solve the problem of deficiencies in their schooling systems.  Politicians, teachers, educationists, administrators, employers, parents, politicians, policy analysts and students have differing ideas on how the problem should be solved.  All agree that something is wrong.  All have ideas on the kind of tinkering that is needed to fix the problem. The framework within which schooling functions is seldom or ever questioned; a framework that is little changed since schooling was nationalised in England in the late 19th and in the US in the early 20th centuries...

Schooling systems everywhere have become frozen in time. Schools are configured much as they were, and function in the same way they did, a century ago. A 1910 child would feel very much at home in a ‘modern’ school environment, whereas everything else in the world we live in has changed dramatically over the past 100 years.

Davis is concerned that the whole world copied England's public educational institutions after they changed for the worse (see also James Tooley's work on this topic).

And this article reports on the work of historian Eckard Höffner on 19th century Germany's copyright law, or lack thereof. Höffner argues that the absence of copyright law facilitated the spread of knowledge that was critical to Germany's industrialization and flowering scientific community. There is certainly no shortage of debate about the role of intellectual property in international development, but most of it assumes that IP law is wealth-enhancing in wealthy nations. Are we sure? How sure should we be before we export our IP laws?

Are these convincing examples of Whig history gone wild? Are there others?

Statement from CARE on Bruckner FOIA request

AidWatch received the following statement from CARE regarding Till Bruckner's AidWatch post on USAID and NGO transparency:

Statement from CARE (Aug. 30, 2010):

Contrary to what Till Bruckner suggested in a recent blog, CARE did not withhold information in response to his FOIA request to USAID regarding certain projects in the Republic of Georgia. Our records indicate that CARE never received the request from USAID to review CARE’s budget information before USAID provided it to Mr. Bruckner. USAID’s email request to CARE went to two inoperative emails; one was for a former employee and one went to a current employee, but the email address was incorrect.  As a result, the CARE document that USAID sent to Mr. Bruckner was redacted without CARE’s knowledge.

We have since reviewed the document and will ask USAID to produce it in full without any redactions, including our indirect cost rate, which was the primary information that had been withheld.

We now return to our regularly scheduled Hayek

Universidad Francisco Marroquin recently made available both the video and transcripts of a series of interviews with F.A. Hayek from the mid-1970's. Not only do they furnish an in depth look into the ideas of one of the past century's most influential thinkers, and pair him with some of the other great economists of the past half-century, they do so with a level of style that only the 1970's could provide.

Can you dig it?

Aid Watch readers might find this part* worth listening to. Hayek lambasts the "intellectuals" for their susceptibility to fads. By "intellectuals" he does not mean primarily academics, but rather "secondhand dealers in ideas" who specialize in conveying ideas to the general public: reporters, teachers, writers, artists, etc. Even though the ideas they propagate are frequently more trendy than well-founded, Hayek claims they end up serving as the public rationale for potentially grave policy decisions, such as interference in the internal governance of other nations.

And in this case, the example Hayek uses as a trendy idea has stuck around, especially in the development and aid world. Is Hayek ahead of the curve or behind the times in his prognosis?

*Those unable to view the video can read the transcript under the fold.

You see, my problem with all this is the whole role of what I commonly call the intellectuals, which I have long ago defined as the secondhand dealers in ideas.  For some reason or other, they are probably more subject to waves of fashion in ideas and more influential in the United States than they are elsewhere.  Certain main concerns can spread here with an incredible speed.  Take the conception of human rights.  I'm not sure whether it's an invention of the present administration or whether it's of an older date, but I suppose if you told an eighteen year old that human rights is a new discovery he wouldn't believe it.  He would have thought the United States for 200 years has been committed to human rights, which of course would be absurd. The United States discovered human rights two years ago or five years ago.  Suddenly it's the main object and leads to a degree of interference with the policy of other countries which, even if I sympathized with the general aim, I don't think it's in the least justified.  People in South Africa have to deal with their own problems, and the idea that you can use external pressure to change people, who after all have built up a civilization of a kind, seems to me morally a very doubtful belief.  But it's a dominating belief in the United States now.

Help the world's poor: Buy some new clothes

This is a guest post written by Benjamin Powell, an assistant professor of Economics at Suffolk University and a Senior Economist with the Beacon Hill Institute.  He is the editor of Making Poor Nations Rich, and is currently writing a book entitled No Sweat: How Sweatshops Improve Lives and Economic Growth. Back to school shopping leads many people to buy apparel that was made in sweatshops. Rather than feel guilty for “exploiting” poor workers, shoppers should rejoice.  Their spending is some of the best aid we can give to people in poorer countries.

When workers voluntarily take a job they demonstrate that they believe the job is the best alternative available to them – even when that job is unsafe and the pay is very low compared to wages in the United States. That’s why economists with political views as divergent as Paul Krugman and Walter Williams have both written in defense of sweatshops.

Sweatshop jobs are often far better than the vast majority of jobs in the countries where they are located. David Skarbek and I researched sweatshops that were documented in U.S. news sources (or see here for my shorter, more general defense of sweatshops). We found that sweatshop worker earnings equaled or exceeded the average national income in 9 out of 11 countries we studied. Working in a sweatshop paid more than double the national average in four of the countries.

Sweatshops can also play a crucial role in economic development. Sweatshops bring investment, better technology, and the opportunity for workers to build skills. It was not long ago that sweatshops existed in many now-wealthy Asian countries.

New York Times columnist Nicholas Kristof wrote that “We need to build a constituency of humanitarians who view low-wage manufacturing as a solution” for poverty in the third-world.   I hope many AidWatchers will join that constituency by defending sweatshops.

Turning over Aid Watch management for a week

Dear Aid Watchers, Both Laura and I are away for a week starting today.

I am cutting off the Internet entirely for a week in a bid to regain my sanity, so anything addressed to me in any Net medium (email, Twitter, Facebook, blog comments) I will not see for a week.

In the absence of Laura and I, DRI post-doc Adam Martin has generously agreed to take over as Guest Editor for a week, beginning with this morning's post about what we can learn from city plans based on shapes of zoo animals.

See you after Labor Day! Bill

Constructivist cartography

The development blogosphere recently lit up with news of South Sudan's plan to rebuild some of its urban centers in the shape of various animals.

The plan elicited no shortage of guffaws, as is appropriate. But in the interest of maintaining AidWatch's contrarian reputation, this post argues that we should be careful about focusing our ridicule on the Sudanese. Criticism should to be leveled at the appropriate target: cartography! constructivism.

Cartography actually suffers from the same schizophrenia that besets economics. At its best, it provides striking depictions of and keen insights into the bottom-up forces shaping social reality. (Even the burgeoning subdiscipline of cartozoology--obviously salient to the Sudanese plan--usually focuses on this important descriptive work.)

But, like economics, cartography has also been employed as a tool of central planners. The Sudanese are not alone in having put to paper visions of grandeur that seem goofy upon reflection. At least one such cartographical monument to the hubris of constructivist planning actually exists: Evita City in Argentina.

The point is this: we can and should mock the absurdity of the Sudanese scheme. But it should be mocked for its faith in central planning. Reinforced stereotypes of incompetent African rulers are at their most harmful when they serve as an excuse for wealthy governments and international agencies to throw their weight around, for that merely replaces domestic planners with foreign planners. These maps are a fine example of the absurdity of constructivism and the demeaning character of collectivism; it would be shame for them to contribute to more of the same.

Besides, I'm less worried about actual cartographical collectivism than the figurative kind.

Africans do not want or need Britain's development aid

Editor's note: This letter was published in the Telegraph (UK) on August 22, 2010 with the title given above for this post.

SIR – The parlous state of the public finances in Britain provides the perfect opportunity for British taxpayers to end their half-century-long experiment with "development aid", which has, since its inception, stunted growth and subsidised bad governance in Africa.

As Africans, we urge the generous-spirited British to reconsider an aid programme they can ill afford, and which we do not want or need. A real offer from the British people to help our development would consist of the abolition of the Common Agricultural Policy, which keeps African agricultural exports out of the European marketplace.

It is that egregious policy, combined with the weight of regulations, bad laws and stifling bureaucracy, subsidised by five decades of development aid, which prevents Africans from lifting themselves out of poverty.

Andrew Mitchell, the Secretary of State for International Development, speaks about a "moral imperative" to combat poverty around the world. We could not agree more. The British have a unique opportunity to cut the deficit and help Africa: please, ask your new government to stop your aid.

Andrew Mwenda Editor, Independent newspaper, Uganda Franklin Cudjoe Executive Director, IMANI Center for Policy and Education, Ghana Kofi Bentil Lecturer, University of Ghana and Ashesi University, Ghana Thompson Ayodele Executive Director, Initiative for Public Policy Analysis, Nigeria Temba Nolutshungu Director, Free Market Foundation, South Africa Leon Louw Law Review Project, South Africa