Very Childish Tittering at a Very Serious Issue

From our sexual innuendo department, a headline from Uganda’s Daily Monitor:

“WE WILL NOT BEND OVER FOR AID”

Uganda Monitor Headline 1

And what stimulated this statement of defiance? The proposed Anti-Homosexuality legislation, in which they propose a *minimum* sentence of life imprisonment for homosexual acts.

Well, at least no-one can accuse them of inconsistency.

(As an aside, I love the fact that this man is the ‘Minister for Ethics and Integrity’. What next, ‘Minister for General Awesomeness’?).

To Find Certainty upon the Dreaming Air

David Roodman over at the CGD recently posted a great article about the new aid-growth paper published by WIDER, of which he remains a skeptic. Scroll down to the comments, and you’ll see Owen Barder making some very good points in response.

I also posted a comment on the piece. My concern was rather different and probably not best suited for that blog. Among various ramblings, I wrote:

At what point did finding universal answers become the only legitimate basis of economic study? Development has looked and proceeded differently in different places…

Statistics is just one type of evidence. Why have economists apparently forgotten this?

My plea was for an approach to development that took in far more specific case study analysis. By this I mean not the Duflo/Banerjee approach of randomized trials, but a holistic approach to development that focuses more on the actual historical process of development in specific places over real time than abstractions with pretense to universality based on cross section data or studies dealing with specific interventions.

The rationale behind this is simple to me: firstly, a disinterested analysis of what we know about successful development processes emphasises their diversity more than their similarities, though these exist and are important. There is little reason to assume that imagined future development processes will have more uniformity. Secondly, understanding of real development successes and real development failures (however they are defined) demonstrate that they are typically the result of a range of complex interacting factors. In most cases, causal mechanisms have shown inconstancy, with the same phenomenon having markedly different effects depending on context and time, even within the same country.

Of course, this kind of method is messy; it won’t ever give us unambiguous answers as to what works and to what extent. It requires that we formulate policy based on our understanding of the historical circumstances that led to the current state in a country, bearing in mind that the interplay between factors cannot always be modeled as there are concurrent effects on multiple levels (individual interactions, social interactions between groups and state-subject/citizen relations for example) and different effects in different regions or time periods. It will mean that we have to rely on what we know from other countries and other times, trying to tease out the central relevant lessons.

It’s an approach that is anathema to modern economics. The majority of our current work tends towards universality of analysis and conclusion. It seeks to pose theoretical relationships that hold under specific assumptions (which are often implicitly further assumed to hold everywhere if they hold anywhere) and then test them. If the tests work (and for the cynical, even if they don’t), they seek to tell us of a ‘robust’ concrete relationship: each unit of factor X contributes 0.1 units of GDP growth. Paradoxically, this often leads to just as much messiness and uncertainty as a historical analysis. The aid regressions Roodman looks at are a classic example: the exact same data produces opposite results depending on model specification. Neither result is unambiguous even on its own terms.

Economics was not always like this though. Early economists were multidisciplinary creatures by nature. They studied history, social relationships and the economy as interlinked phenomena, using a holistic method that took in historical evidence, theoretical abstractions from this evidence and some further statistical evidence to support their ideas. Statistics was necessarily a smaller part of their work, for their data and the sophistry of their statistical techniques was still quite basic. This period still produced what to my mind remain the two greatest works of economic thought: The Wealth of Nations and Capital.

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You can build it. But they still might not come.

 

photo posted on www.post-gazette.com

Kevin Costner built the field and got a game going. I think he was lucky.

An anthropologist I know once told me a great story, which may be a rural myth. It was about a remote tribe in Papua New Guinea from which two members were given the opportunity to travel outside of their homestead to see the urban world in all its ‘glory’. When they returned, they recounted their experiences to the rest of the tribe, and they set about replicating one of the more amazing things they’d seen: an airport. They cleared a runway. They built an observation tower out of wood. They even crafted headphones with little reed antennae for the ground control team to wear. When they were done, they waited for the planes to arrive.

They never did. Building the structures, the visible artifices of an airport is only symbolic. The actual meaning of what an airport is, what makes it functional, cannot be seen. It lies in the relations between people and institutions and in agreements between them.

This anecdote constantly pops into my mind when I observe technical reform processes introduced by donors (often with domestic support) in African Governments. Mark Miller and Matt have both discussed this issue in the past. What they and I have in common (apart from devastating good looks and a rapier-sharp wit) is that we have all done time as long term TAs in developing country Governments. All of us have been witness to ambitious reform programmes stalling on the road to implementation or lying dead and ineffective after implementation. Yet only sporadically have the causes of this been critically examined and learnt from.

On this note, The Roving Bandit recently linked to an exciting post from the IMF’s Public Financial Management blog (and yes, I’m aware of the depths of geekery I’ve plumbed by using the word ‘exciting’ about the IMF and PFM). In it, Richard Allen makes a series of simple, reasonable statements about how technical reform should and shouldn’t be tackled in low income countries. Three things that had me high-fiving myself:

The experience of now-developed countries suggests that the process of establishing credible and robust budgetary institutions can take many decades, or longer. There is no reason to expect LICs to be different.

Because the necessary basics are not in place, many reforms are likely to fail.

Much more attention needs to be given to the political economy constraints to reform since changing budgetary institutions is not at root a technocratic issue.

The most important point Mr. Allen makes is the last one, and it extends beyond budgeting. Very few reform processes recognize that at root, the biggest problems in Government administrations are political economy problems. They are not technical or technocratic problems. Treating them as such can simply create new problems without actually addressing the original ones.

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The More Money We Come Across, the More Problems We See…

Matt referenced Jonathan Swift recently. I appeal to another noted wordsmith.

Matt referenced Jonathan Swift recently. I appeal to another noted wordsmith.

Recently, I’ve noticed support for a few new innovative solutions in fundraising for development. Duncan Green supports a Tobin Tax for development (a small tax on international currency transactions which when aggregated across many transactions, would result in a large windfall for development), and reports that Pittsburgh G20 provided a small, qualified triumph in getting it on the agenda. Another item that’s been in the news is the ‘plane ticket tax’ for development, which Matt reported on. These are of course, on top of the existing G8 commitments on increasing aid for development made at Gleneagles a few years back.

This all begs a question: where is the analysis that tells us that the constraining factor in reducing poverty is aid funding? I can’t think of any really robust, legitimate analyses that say what is really holding us back is not having enough money to spend on development activities. Nor can I think of any shout-from-the-mountaintop successes that have roll-outs languishing on the proposals shelves because the funds simply can’t be found.

The argument for more money is not based on an analysis of the constraints to development. Rather, it seems to be based on a feeling that we can give more, we can forego more; and given how much people are suffering, we really ought to. It’s a commendable and moral impulse. It’s also wrong. Before we start appealing for more money much more needs to be gotten out of money we currently do have. Getting this the wrong way round may actually hamper efforts for development, rather than help.

At the risk of pissing off the fundraisers on the one hand, and the ‘no shit, Sherlock’ brigade on the other, I propose a short list of what comes before asking for more money below.

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Apparently, Not Everybody Gets This…

In addition to having an *awesome* beard, Marx also understood what makes capitalism so dynamic.

In addition to having an *awesome* beard, Marx also understood what makes capitalism so dynamic.

Markets (even free markets) are not the same thing as capitalism.

Yet constantly people, even economists (who should really know better), conflate the terms. They’ll start a sentence by saying ‘capitalism has been promoted throughout Africa…’ and end it talking about ‘… despite extensive market liberalization, poverty reduction remains slow’ as if they are still talking about the same thing.

Entrepreneurship is not the same thing as capitalism.

I’ve often heard people say ‘Africa is one of the most capitalist places I’ve been to – everywhere I went someone was trying to sell me something!’ More news – that’s commerce and entrepreneurship. Neither of those things are the same as capitalism.

The existence of private property is also not sufficient to indicate capitalism.

Private property exists in almost every form of economic organization beyond the most primitive economies. Capitalism isn’t defined by private property either.

Most people understand there is an economic form called ‘capitalism’ which is distinct from and more dynamic than other economic forms. However, they define capitalism against a limited sample of comparators. Most people conceive of only two types of economic organization in any detail: capitalism and socialism (in its extreme form, communism). This is partly a product of the era in which we have grown up. The Cold War and the conflict between Capitalism and Communism so defined modern international relations until recently that the end of this conflict prompted Francis Fukuyama to declare ‘The End of History’, with the triumph of Capitalism (and liberal democracy) representing the end of modern development.

Thus, most observers define capitalism not by its most individual characteristics, but by those that best set it apart from communism: free markets, unfettered entrepreneurship (in the sense of freedom to pursue economic self-realisation) and the existence of private property. This has had serious effects on our ability to diagnose and define policy in less-developed countries. Economic policies attempt to manipulate or take advantage the underlying laws of motion of an economic system; if we have misunderstood that system, our policies may not have their intended effects.

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Bibles and lions, oh my!

Aid Watch occasionally features entries by NGO-worker Dianne Bennett. Her previous post on DFID’s Douglas Alexander’s inability to distinguish between self-promotion and accountability was well-argued and thoughtful. Her more recent post is a bit harder to swallow:

A small team was dispatched to assess and prioritize the needs of internally displaced people (IDPs) resettling in a corner of South Sudan…..

….Our team was horrified when we learned that lions actively hunted in this area, killing children daily without protection of shelter or family….

True to our word, our NGO brought in emergency food supplies, then seeds and agricultural tools. A year later, insufficient rain created a temporary food crisis and we again brought in supplemental food supplies to help them get through….

Within a short time of our first visit, there were no more lion attacks on helpless children and we never heard another word about the hundreds of orphaned children.

Is it just me, or are they claiming credit for the lack of lion-related deaths in this village? What sort of people does this NGO employ? There’s no mention of any direct attempt to protect the villagers from the attacks or kill the lions….. so how is it that they get the credit for this?

It’s odd that Easterly, usually a hound for good evidence, allows for the occassional bit of shameless promotion – Bennett’s article is titled “Respecting local values: Western confusion about African orphans,” yet her article deals very little with local culture, aside from a brief discussion of ubuntu (despite the fact that ubuntu is a bantu-based, south-east African concept, far from the culture of southern Sudan).

The story gets stranger, and a fair bit ickier when a commenter revealed this story on the website of Bennett’s NGO, Servant’s Heart Relief, titled “Going into the War Zone – Because They Care.” This is the part that struck me:

“…I made a commitment to them to bring in some food, bring in some bibles and I thought that was going to be the end of my involvement. Instead what happened was, that was almost 3 years ago now, and we’re still involved,” she said.

What was that about respecting local culture? I think this Onion article sums it up properly: Poverty-Stricken Africans Receive Desperately Needed Bibles.

What’s in a name?

Quite a lot actually. Thanks to the Roving Bandit, I happened upon this BBC news article. The main focus of the article is on DFID’s totally original new strategy to start focusing more on post-conflict countries, but tucked into the middle of the article is a single, terrifying sentence:

His department will also get a new look – branded UK Aid – to try to raise the profile of British government spending on international development.

Noooooooooooooooo! This is such an awful, awful idea. DFID has, since its inception worked up a decent, if spotty reputation for being serious about development, which is a wholly different concept than aid (yes, I know that our blog name doesn’t seem to make that distinction, but it’s catchy, so there). There’s a nice, short discussion by Lant Pritchett over at Aid Watch on the difference between the two, and the very basic problems with USAID’s name, which it seems that DFID, an infinitely better department, is fervently trying to ape.

They do look rather similar, don't they?

Seem familiar?

It’s unclear as to whether or not this is a full re-branding. Currently the new logo sits awkwardly on the right hand side of DFID’s website, peering evilly at its older brother, waiting for a chance to take its proper place at the helm.

On another note, since when did Collier’s ideas on security (which I agree somewhat with wished there would be more discussion about) become accepted enough to start influencing policy? The book has only been out a few months!

His department will also get a new look – branded UK Aid – to try to raise the profile of British government spending on international development.