Shifting Perspectives

"We need to shift perspectives, leave the large question aside, and focus on the lives and choices of poor people-if we want to have any hope of making progress on this issue."
"Saving behavior crucially depends on what people expect will happen in the future. Poor people who feel that they will have opportunities to realize their aspirations will have strong reasons to cut down on their 'frivolous' consumption and invest in that future...the bigger point is that a little bit of hope and some reassurance and comfort can be a powerful incentive."
-Duflo and Banerjee, Poor Economics

The Dragon's Gift: Deborah Brautigam

Collecting thoughts and ideas from a recent book, "The Dragon's Gift: The Real Story of China in Africa." Having a discussion about development in the modern age without discussing the impact of China on the Global South is plain ignorance; the role of the world's rising superpower cannot be overstated in the developing world over the last decade, and even, the last 60 years. The decline of the West and the rise of Asia is the great movement of the modern age; what will this enormous shift mean for global poverty alleviation and humanitarian response, moving into the near future?
What path will China walk moving forward in both internal and external development? Will increased global power bring increased global commitments and responsibility? Will the dragon focus within? Will non-intervention, supremacy of sovereignty, and resources-for-infrastructure rule the day? And what are the ramifications for this in the lives of the citizens of the bottom billion?
"If you plan for a year, plant a seed. If for a hundred years, teach the people. When you sow a seed, you will reap a single harvest. When you teach the people, you will reap a hundred harvests."
-Confucius

Haiti's Rise From the Rubble

Paul Collier recently wrote an excellent review of Paul Farmer's new book on reconstruction in Haiti, entitled, 'Haiti After the Earthquake' with some salient points about Farmer's approach to reconstruction and redevelopment. Farmer, whose work in health has been truly monumental (and will, most certainly, lead to a Nobel Prize at some point in his career), and has been well documented in Tracy Kidder's beautiful tome, "Mountains Beyond Mountains," does not, it seems, play the role of development expert as well as he does health expert. Farmer's recommendations involve the heavy reliance on a national government that was both unable and unwilling to provide services BEFORE the disaster struck; granted, which local ownership of the reconstruction process is a vital component in the medium-to-long term, the immediacy of the impact of the earthquake and the as-of-yet inadequate governmental response to the calamity demands innovative thinking. Thus, the "Interim Haiti Recovery Commission," described by Collier as, "...a potentially far-reaching innovation, one that could serve as a prototype for for aid in fragile states." The biggest challenge since the disaster has been the coordination of the NGO's that have sprung up in its wake; the dissonance caused by too many organizations working in too small of a space has inhibited progress instead of serving to propel reconstruction. Thus, the Commission: "The commission was set up to break the logjam of dysfunction, tell donors what to fund, tell NGOs what to do, and provide the necessary authorizations on behalf of the government. In the longer term, it will need to evolve into something fully Haitian that can supersede those parts of the state that are essential yet, realistically, beyond reform."
Collier had touched on this point in his book, "The Bottom Billion," with his Independent Service Authorities, set up as extra-governmental bodies to, in essence, get the job done on crucial tasks of governance. Thus, there is something to these external-bodies; and in meeting the largest critique, that of the vested interests enjoying the low-hanging pickings of corruption, milking on fickle, external development and humanitarian funds for personal gain,  inside the status-quo, Collier answers sagely, "...prickly assertions of soverignty are an inadequate response to reasonable concerns."

Poor Economics

“Poor Economics”

Reading Notes/Quotes

“Poverty is not just a lack of money. It’s not having the capability to realize one’s full potential as a human being.”  -Amartya Sen

“Talking about the problems of the world without talking about some accessible solutions is the way to paralyze rather than progress.”  (15)

“The poor often resist the wonderful plans we think up for them because they do not share our faith that those plans work, or work as well as we claim.” (40)

“Generally, its clear that things that make life less boring are a priority for the poor…the basic human need for a pleasant life might explain why food spending has been declining in India (with increased prosperity). Today, television signals reach into remote regions, and there are more things to buy, even in remote villages.” (42)

Childhood nutrition programs, such as deworming and micronutrient fortification will lead to significant lifetime income gains-these should be an integral part of post-conflict/poverty trapped education development programs; both the awareness and distribution should be hubbed out of local educational establishments, using teachers as the front line combatants against malnutrition. “The social returns of directly investing in children and pregnant mother nutrition are tremendous. The rich world is still caught in the wrong thinking that the poor need more cheap grain-this is not the case-they need more nutrients.” (44)

When one has been continually let down, or failed by the state charged with providing for their wellbeing and security and provision of public goods, how do we expect that person to then turn around with open arms when the state suddenly decides to “act” in the public good, often at the pressuring of outside organizations or nations? If this is not intrinsic to governance, it is very hard to turn around. There is an embedded complacency and a sense of low expectation, which spreads like ripples through a society in the converse of ripples of hope, as the result of the non-functioning or vampire state. This will parlay into what Richard Kapuscinski calls “moribound waiting” as the default physical response to many social situations.

Esther Duflo at The European Bank for Reconstruction

I had the opportunity this evening to hear Esther Duflo, MIT development economics professor and the founder of the Poverty Action Lab, speak tonight in London. It was great to put a face to the words that I have been reading in her recent book, "Poor Economics." Here is a rough transcript of her speech tonite:

Big world events seem to have more to do with politics than with policies; in the West, enough Aid was given to Egypt every year to give every child in Africa $20; the aid in Egypt was not about reducing poverty; in the South, we need to look at questions like what encourages mothers to immunize their children in the DRC? This comes down to politics, to the governments in disarray.

A growing number of academics are saying that we are wasting time in designing policies, as we are missing the elephant in the room, what determines whether policies will be implemented or not, is politics;

Institutionalist View: the main question of development is to figure out how to solve the political process; from a good political process will emerge good policies; without the political process, policy will not be implemented.

INSTITUTIONS are the main driver of success in a country (Acemoglu-Robinson); unfortunately, they are also very hard to change; they have a large shadow of history; in the areas in West Africa where the colonial powers spent more on education, there is still better education today; in India, places where more egalitarian tax collection are still doing better today.

Does this mean that we are stuck where we are? Institutional change cannot be easily engineered or imposed from the outside (see: Collier vs. Easterly-we cannot import freedom by force, this is an impossibility); Thus, can anything be done? Institutions, and hence history, clearly matter and define the broad constraints; To what extent is there slack for better policy? Is there a chance of improving policies can improve politics?

Progress with bad Institutions

One rarely sees wholesale institutional change, and these are very hard to predict or provoke; but incremental democratic changes do happen at the margin, even with fairly autocratic regimes, such as Indonesia, Brazil, China, Mexico;  looking at fixing corruption at the margins is also seen as fruitless; however, this is not always the case; in Indonesia, the threat of audits on road construction projects was enough to decrease the theft level from 27 cents to 18 cents on the dollar; this shows that something can be done, that change at the margins is possible in imperfect systems

Even good institutions are not a guarantee for a good functioning of the institutions; 

Many people believe that even democracy is bound to fail in many African countries because of the importance of ethnic voting; in Benin, a study was randomized in which the voters were given different messages in different areas of the country, with different degrees of ethnic appeal and clientism vs: messages of nationalism and national peace; the result was that the client/ethnic message won hands down in the nation, by over 20%. In Uttar Pradesh, Banarjee ran a randomized trial where an NGO went village to village and told the villagers to not vote on caste, but on the issues, and ethnic voting went down from 25% to 18%; these trials show that voters may simply not know enough to vote for competence providing that information matters.

Ideology, Ignorance, and Inertia

There can be good politics in even in bad environments; see: education in Suharto’s Indonesia; moreover, there is plenty of bad policies within generally good policy environment; corruption and inefficiencies are more likely to be due to the lack of understanding and attention to details then to a conspiracy against the poor; Ideology, Ignorance, Inertia (the three I problem)

Example of the Three I’s: school committers in Uttar Pradesh (poor should be involved in the public service)-this was a product of World Bank consensus; thus, the Indian government decided that every village would have a village education committee; after surveying, only 8% even knew these existed, 2% knew what they were supposed to do, and 25% of the members didn’t know they were members. Efforts to re-invigorate these has proved fruitless. This defunct scheme is a pure 3i example. Its not that people don’t want to do something ,  its just that the system was defunct-the implementation was completely disastrous. 

From Good Policies to Good Politics

Voters adjust their views based on what they see on the ground; we can look at the attitude towards women in India; there has been a quota system in the village level Panchayat elections-women tend to be at least as good leaders as men. Randomized trials were held, in which respondents listened to speeches by either male or female; the villagers were then asked questions about the same speech; in the villages where there had been quotas for women, they fared much better in the results than in villages where there had been no quotas; the quotas showed to reduce prejudice in these villagers and respondents, and added to the chances of women being elected in the future.

Another example is in Benin; there was an expert conference held in Benin on the problems on the country, and the experts came up with policies and platforms based on it. In some villagers, the traditional method of campaigning was replaced by town meetings based on these concrete policies that had been formulated. In the villagers where there had been the meetings, the experimental candidate got a much higher level percent of the vote than in the control villages. This shows if you want good politics you must have good policies, to give people something to discuss in making their decisions.

Conclusion

Many in the West are pessimistic about the institutions of the developing world. Political constraints exist-and hard to predict political events have important impacts; however, there is a lot of scope for better policies, perhaps particularly in regimes that are not completely locked or at war; there are a lot of very bad politics for no good reason.

Nothing will come out of just one RCT; but at the same time, it is ridiculous to say that these experiments do not matter when used to establish patterns, to trace a story about what is going on in a particular domain.  What matters at the end of the day is not the multilateral organizations, but the policies of the countries themselves-this is where most of the money is, not in the aid dollars, which are quite marginal. Once we recognize that aid money is marginal, this can liberate, and create the understanding of leverage for the money in the most effective way. Thus, some of the money should be used to find out what works best, through trials and experimentation. There is room for this with development policies. This will maintain relevance in a way that is more useful than today in the development world. Lack of change is more due to inertia than to resistance. Thus, change is often identifying opportunities.

More Dowden on African Aid

More from Richard Dowden, from his great work, "Africa: Altered States, Ordinary Miracles" :

"...when the 'right answers' are found by the Africans themselves, moderate amounts of external funding can help speed up the process of development. But when outsiders decree the solution and pour in money, most aid is wasted. In some places it has destroyed local initiative and held Africa back."

Richard Dowden on the role of Aid....

"Aid can speed up development that people have already decided to carry out for themselves and have the capacity to do...but aid from the outside cannot transform whole societies, who countries. That can only come about through producing things and trading them, or doing something that someone else wants to pay for."

"Real change must come from within. African countries will be better places to live and work in when Africans in positions of power and influence begin to invest their futures, energy, and money in the continent...If Africans move their own wealth out of the continent, how can Africa ask outsiders to invest there?"

Collier, Foreign Exchange, and Pseudo-Democracies

Watch Paul Collier Foreign Exchange 522 in News | View More Free Videos Online at Veoh.com

Paul Collier: Pseudo-Democracies and Solutions: Foreign Exchange 522

Why are elections meaningless for the countries of the bottom billion?

Elections depend on being well conducted; they are only well-conducted when there are institutions already in place that force the politicians to stick by their honest roots; if these institutions are not in place, elections are easy to circumvent by corrupted leaders.

If the first wave of democracy is to hold elections, we will never get to institutions that are needed for effective democracy.

In our own democracies, this mean much more than just elections; there are lots of checks and balances in our systems that prevent cheating; however, we have not translated this to the nations of the bottom billion. These institutions take time to build, and governments resist building them. The only people that cheating elections fool are the west, not the citizens of the nations; ordinary citizens simply get infuriated by the entire process and blame the west for the continued failings.

There are many aspects to accountable government; the first is the amount of money that is raised; conditioning aid to policies does not work; governments need to be accountable to their own citizens, and not to donors. Aid needs to be tied to governance. The alternative to money being well spent is to further empower the crooks stealing it, creating a vicious cycle.

In low income countries, democracy is seen to be linked with an increase in societal violence.  Thus, we should not abandon democracy, but we need to make security a strategic priority in addition to democracy. This can be done through security guarantees through coups and western nations guaranteeing true democracies intervention from coups. This is already happening with Australia, as can be seen with East Timor; if the Australians had guaranteed that if there was  a coup the Aussies would put it down, they would not of had to actually do it a few years back. In Africa, as long as the elections were well conducted, they could be protected.

Smart power needs to be used; a small amount of hard power combined with more soft power is the necessary combination if used intelligently.

Looking the Other Way

 Looking the Other Way
The Economist recently published a short article entitled "Looking the Other Way," following up on a theme that I had touched on awhile  back at the onset of the brutal Somali famine. The biggest question that I raised initially was why is the West and the African public bearing the brunt of the fund-raising and donation efforts being undertaken to help alleviate the suffering in the Horn of Africa, while the most obvious partners, the neighboring countries and the countries of the broader AU, are providing a pittance? Fundamentally, one would expect a country such as Kenya, which shares a long and porous border with Somalia, to be stumping up funds for humanitarian aid, as they are most subject to bearing the brunt of the cross-border ramifications; a nation such as Uganda, which has provided troops for the AU mission in Mogadishu (funded by the UN/West through its peacekeeping initiatives) will provide men, but not food aid (there are no reimbursements from the international community for food aid, I suppose). Thus, the famine continues, as many as 3/4 of a million people at risk of eminent starvation, and 4 heads of state from Africa actually showed up for the pledging conference in Addis Ababa; could Jacob Zuma not spare a day, and could his country, South Africa, which makes up 1/3 of the GDP of the continent, spare more than the measly $1million dollars pledged? Zuma, staunch advocate of "African Solutions to African Problems...." This figure is simply an affront to collective humanity, to the dreams of the Pan-African statesman of the past. Zuma sent $250million to diminutive, autocratic Swaziland to help them fend off default and the subsequent democratic reform demanded by the international community. African solutions to African problems? Is the famine in the Horn not an African problem? Is this not a dangerous game of lethal hypocrisy? Criticism alone cannot provoke action; the action must be collective and intrinsic. If the entire African Union cannot pledge more than the $50 million already committed for the calamity unfolding on the continent, one must question the basic governmental impetuses of the nations of this land, the shared bonds and collective humanity present, or so seemingly deficient. How can true development take place in states that show little interest in actual altruism towards neighbors, and thus, their own citizens? Have the leaders been simply more frugal than the international community because they understand the realities of aid on the ground more than those in the developed world? Is this, in itself, a wake up call? Or is it simply the reinforced understanding that the international community will share the brunt of the burden, as they have done since independence for many of the aid-reliant states on the continent. This entire humanitarian catastrophe has shown down like a magnifying glass on the motivations and predispositions of the governments of the region, and it has not been a pretty sight.

Amartya Sen on "Good Fortune"

"Human well-being cannot be measured solely by wealth"

Paraphrasing the brilliant Amartya Sen in his behind-the-scenes comments on PBS's "Good Fortune" documentary: 

On "Development" 
Development is quite simple; it aims to remove the deprivations that plague human life; we need to look at the freedoms that people have in control over their lives to do the things that they wish to do; it is this extension of human freedom that is the central issue of development. 


On "The Solution"
We can do an enormous amount to make the lives of each other better; we live in a very interdependent world, and some of us are more fortunate to have more control over our lives compared with others that don't; we have to emphasize the development of human capabilities; not that you bestow development on people, but that you actually make people more enabled. Once one acquires knowledge on how to deal with a deprivation, then they are in a position to help others. This is a unique approach. The way to get things right is to put them under public scrutiny. I am a great believer in public reasoning; this is the most important freedom that human beings have in terms of consequences. Support, sympathy, and communication and more cooperative action are essential to making eachother's lives better. 

Good Fortune

I was fortunate enough to catch a fantastic, thought provoking documentary courtesy of PBS and POV, entitled, "Good Fortune," which traces two examples of "development" in Kenya through the eyes of both the "developers" and the "developees." The film brought to light many of the moral and political issues involved with poverty alleviation; seldom are there black and white, cut and dry issues when dealing with the human condition and human variables; this film shed some brilliant light onto some of these human predicaments.