Go forward by going back

Tim Harford is  the younger version of David Warsh when it comes to explaining economics in popular language.  This times, he deliver an accessible summary of a paper from Das and Hammer, who find the following:

Das and Hammer tested the competence and the practices of a sample of doctors by sending observers to sit in their surgeries. They discovered that “under-qualified private-sector doctors, although they know less, provide better care on average than their better-qualified counterparts in the public sector”. This is not particularly mysterious, because private-sector doctors don’t get paid unless they can convince their patients that they’re doing a decent job. Public-sector doctors draw salaries and, if they are held accountable at all, it is through indirect channels.

Obama (and his speechwriters) have been reading their North, Rodrik and Greif:

Across Africa, we’ve seen countless examples of people taking control of their destiny and making change from the bottom up…

Now, make no mistake: History is on the side of these brave Africans, not with those who use coups or change constitutions to stay in power. Africa doesn’t need strongmen, it needs strong institutions.

…The people of Africa are ready to claim that future….With strong institutions and a strong will, I know that Africans can live their dreams in Nairobi and Lagos, Kigali, Kinshasa, Harare, and right here in Accra.

His reference to trade links with the US, however, were weak.

Damning words from Bill Easterly:

The United Nations today issued its Millennium Development Goals (MDGs) Report 2009. To make a long story short, the accompanying press release says:

The assessment, launched today by UN Secretary-General Ban Ki-moon in Geneva, warns that, despite many successes, overall progress has been too slow for most of the targets to be met by 2015.

Let’s face it: it’s over. The MDGs will not be met…

The MDGs warrant a world of merit for ambition and for providing a set of goals that the development community can target. However, the inability to . Development, expecially at the micro-level is not linear. Every project or program faces stops and starts, right turns and left. However, like the peak on the horizon everyone will reach it at a different time, following their own path. The development community can provide a better map and, maybe giving a lift to some countries, but to set a global expectation for achieving a goal in unison is to set expectations with ambition, not lucidity.

Easterly’s point about the lack of ownership over the MDGs is vivid.

WHO is to blame for missing the MDGs? Advocates enthusiastically advertised that 189 leaders signed the Millennium Declaration in 2000, but that was actually a sign of weakness rather than strength. Does an agreement have teeth when EVERYONE agrees – including many oppressive governments who had no more interest in alleviating poverty than in promoting Brussels sprouts? And if the agreement is broken, how can you find WHO is to blame, when 189 leaders (not to mention dozens of international organizations and NGOs) are COLLECTIVELY responsible?

I am optimistic that, in many settings, the combination of more stable governments, promotion of trade, and learning through development project experimentation ARE leading to an improved groath and development trajectory in poor countries.

Easterly doesn’t not want to give up on development just because the MDGs might not be met in all parts of the world. It would be a shame if this were to happen. But measuring of our work in development on grand plans and ambitious goals should not be the arbitor of success or failure.

…this paragraph from Michela Wrong’s It’s Our Turn to Eat should figure prominently when reflecting on the first half of this decade:

By the turn of the century, Western policy in the developing world was increasingly being set not in ministeril offices but by NGOs – organizations like Oxfam, Save the Children, Christian Aid. The Make Poverty History campaign, pushing for the cancellation of Africa’s foreign debt and dramatic increases in Western aid levels, was gathering momentum. Jeffrey Sachs, the brilliant American economist who campaigned in favour of a massive hike in funding, appeared to have won the emotional, if not the intellectual, argument. Other analysts might shake their heads at Sach’s simplistic formula for the continent’s recovery, but he had successfully wooed pop-star campaigners like Bono and Sir Bob Geldof, and their abilty to mobilise a younger generation bored by traditional politics awed Western governments. Whether on the right or the left, political parties realised that promising to ’save’ Africa was a potential vote winner in the eyes of an idealistic coming generation. No wonder members of the African elite, aware of these pressures, sometimes sounded unappetisingly smug when contemplating tortured Western attitudes to the continent. As one Kenyan newspaper editor told me: ‘What we Africans have realized is that your leaders need to lend to us more than we need to be lent to.’

See Chris Blattman’s review of the book.

Not published until September 29 of this year, William Kamkwamba’s The Boy Who Harnessed the Wind (with Brian Maeler), is already on my reading list.

William, already a top blogger in Southern Africa, provides an example of an inventor and a man with a spirit for making dreams reality. I predict that it will be a worthwhile read for anyone interested in development, Arfica and invention. The power of human ngenuity should be a motivation for all of us who strive to improve living conditions throughout the world.

William’s home town is in Kasungu, Malawi, where I do a lot of my work. I hope to meet him once he returns to Malawi after an international tour of engagements.

Here is the twitter feed for The Boy Who Harnessed the Wind: http://twitter.com/malawindmilbook

And here is a short clip of William at TEDTalks.

I’m looking forward to buying a copy of Dambisa Moyo’s Dead Aid when I return to the United States for vacation in May. Moyo’s thesis a s hot topic of conversation in the development community these days. The subject matter has been a running subject of discussion among development theorists, emiricists and practiioners for many years. I am interested to see what Moyo’s book adds to this debate. 

Shanta Devarajan supplies a good teaser on how to view the book’s thesis and proposals. (ht to Chris Blattman also read Chris’s post here and here).

If Moyo’s argument is anything like George Ayittey’s, then I believe that there is good reason to pay attention to the messages contained in the book. Until I have a full reading, I am unconvinced by the policy recommendations quoted by reviews. I will post my thoughts after reading the book.

Moyo does get my respect for this particular zinger (from a conversation with the Financial Times):

Most Brits would be irritated if Michael Jackson started offering advice on how to resolve the credit crisis. Americans would be put out if Amy Winehouse went to tell them how to end the housing crisis. I don’t see why Africans shouldn’t be perturbed for the same reasons. 

From a new paper by Simeon Djankov and Sandra Sequiera (pdf here):

…We find that bribes are product-specific, frequent and substantial. Bribes can represent up to a 14% increase in total shipping costs for a standard 20ft container and a 600% increase in the monthly salary of a port official. Bribes are paid primarily to evade tariffs, protect cargo on the docks and avoid costly storage. We further identify three systemic effects associated with this type of corruption: a “diversion effect” where firms go the long way around to avoid the most corrupt port; a “revenue effect” as bribes reduce overall tariff revenue; and a “congestion effect” as the re-routing of firms increases congestion and transport costs by causing imbalanced cargo flows in the transport network. The evidence supports the theory that bribe payments at ports represent a significant distortionary tax on trade, as opposed to just a transfer between shippers and port officials that greases slow-moving clearing queues.

ht to Justin Grimmer

A new NBER paper on funerals in South Africa.

We find that, on average, households spend the equivalent of a year’s income for an adult’s funeral, measured at median per capita African (Black) income. Approximately one-quarter of all individuals had some form of insurance, which helped surviving household members defray some fraction of funeral expenses. However, an equal fraction of households borrowed money to pay for the funeral. We develop a model, consistent with ethnographic work in this area, in which households respond to social pressure to bury their dead in a style consistent with the observed social status of the household and that of the deceased. Households that cannot afford a funeral commensurate with social expectations must borrow money to pay for the funeral.

In light of increased death rates due to AIDS, these findings are troubling:

These results do not lead us to optimism on the impact of the AIDS crisis on the future economic wellbeing of South Africans…we add evidence that households are taking what, in other circumstances, could be productive capital and using it on coffins, meat and groceries to bury their dead.

Very interesting post from Chris Blattman. Allegience to armed forceds seems to be highest among the youngest of child soldiers.

child soldier allegiance

Chris is one of the best bloggers around and a darn fine economist. I read his work and blog with great interest.

Dani Rodrik thinks so:

 I have a feeling that this will be the make-it-or-break-it week for emerging markets. I hope the IMF will make an announcement in time to make a difference.

Discussing the particular case of Africa, Shanta Devarajan concurs::

Of greater concern in Africa is the resurgence of inflation and macroeconomic imbalances in some countries…Although unrelated to the financial market crisis in the U.S. (but closely related to the food and fuel price increases of earlier this year), these developments will require early and decisive actions to avoid the situation getting worse.

Groups of a socialist bent in Africa seem to think that trouble is a stir on the continent/