note to self: this blog post, which links to a series of blogs is a very good take down of the institutions and growth literature. Jeffrey Sachs much be happily chuckling somewhere.
December 2, 2014
October 23, 2014
Graduation ceremonies are not for me. I imagine wilting pomp and standing, bored. I don’t begrudge other people wanting to mark their achievement with this, but it wouldn’t make me happy.
And so, instead, two days after I handed in that final hard-bound thesis, to make something of the flush of relief, and to give me a full stop, Jo and I drove out to Lake George.
There, the west wind, already summery-warm and dry, had the windmills busy, and purple flowers were splashed up the hillsides. Gallahs and Rosellas flew about while we sat eating sandwiches, and I thought about old uncertainties. Could I get a research permit? Could I get access to villages? Would people speak to me? Could we manage my health? What would the travel be like? Could I find questions? Answers?
I also thought about the work: the chasing, the making contacts, the organising, the re-organising. And I could have thought about the small group of people who made it harder than it should have been. But it was too nice a day for this. And it was a celebration. So instead, Jo and I talked about everyone who had helped. And we thought back over the adventure — the travel, around parts of the Solomon Islands that we would have seen no other way. Rainforest tumbling down mountainsides into the grey seas of the Weather Coast. The sunsets of Langalanga lagoon. The flower-clad villages of Gao-Bugotu. The way thunder storms thumped over Iron Bottom Sound.
I’m still waiting for the university to confer my degree “in absentia” but, fuck it, we had our ceremony. That was graduation. And as Jo could make out from my happy chatter, it felt as good as it should.
October 17, 2014
An interesting looking new working paper:
by Jean-Paul Azam and Véronique Thelen
The incidence of civil war in Sub-Saharan Africa since the turn of the century is about half what it was on average in the last quarter of the 20 th century. This paper shows that the aid boom triggered by 9/11 played a key role in achieving this result using panel data for 46 African countries over four decades. The estimated linear pr obability model predicts that doubling foreign aid would reduce the probability of a civil war occurring in a typical African country/year by nearly 5%, not far from the sa mple average. This was achieved despite the pressure in the opposite direction of the rise in the incidence of natural disasters across the continent, a piece of information that is ta ken into account by donors to determine their aid allocation.
It goes on my long to read list…
September 18, 2014
AidGrade, very easy to use, drop down box driven, results from meta-analyses of impact evaluations of a (still fairly small) number of development problems.
September 2, 2014
What traits are associated with more donations to NGOs? Do wealthy areas have more donors? Does education play a role? What about political leanings? Perhaps voting for the left is associated with a preference for giving to NGOs born of a desire for redistribution? Perhaps, on the other hand, giving comes from a right wing desire to help without using the state? And, also, is NGO support associated with support for ODA? Do people who want their government to give also put their own money where their mouths are?
September 1, 2014
Two papers in the latest issue of World Development look, from a first glance, like they need to have a chat
Why there Should be No Political Foreign Aid Curse
Ceren Altincekic, David H. Bearce
This paper considers the causality underlying the so-called political aid curse, which proposes that foreign aid, like oil, should hinder democracy. Using a theoretical model which identifies repression and appeasement as the primary alternatives to democratization, it argues that aid revenue should not produce a political curse because it is less fungible, more conditional, and less constant than state oil revenue, making it difficult for recipient governments to use their aid to fund either repression or appeasement. Using several different measures associated with repression and appeasement, the statistical results show that aid cannot be associated with any of these dependent variables.
I analyze a unique dataset of sub-national resource allocations in Kenya from 1989 to 1995 and show that project aid and local funds were disproportionately directed to the president’s political base. Per-donor analyses of aid flows show that bilateral donors and the African Development Bank were most likely to skew their aid to the president’s base. Kenya’s autocratic leader was able to exercise strong political influence over the location of many aid projects, even under unfavorable circumstances. While disbursing aid as projects may have ensured better accounting of funds, it did little to prevent aid from becoming patronage.
For what it’s worth, I don’t think the findings are as at odds as they seem. As best I can tell, most of the time aid is relatively impotent in the face of domestic political economy factors. It might be able to help (or hinder) a bit, but my experience based on Solomon Islands is that it is very hard for aid actors to transform a domestic political economy: for better or for worse. Although I agree with Bearce that they probably do have enough power to offset the political resource curse problem (and maybe a bit more), if they act wisely and with recipient population welfare as their first motivation. And this is the likely second explanation of the difference: look at the time frame of Brigg’s dataset. The tail end of the cold war and just after (which given some path dependency more or less means ‘in’).
August 27, 2014
I’m only 6 pages in (usual disclaimer then, but hey when your blog is small as mine you can get away with this sort of stuff) yet Nancy Qian’s new NBER working paper on foreign aid is promising to become the best review of the economics and political science of aid written to-date.
Foreign aid is one of the most important policy tools that rich countries use for helping poor countries to improve population well-being and facilitate economic and institutional development. The empirical evidence on its benefits is mixed and has generated much controversy. This paper presents descriptive statistics which show that foreign aid to very poor countries accounts for very little of total global aid; reviews the evidence that foreign aid is often determined by the objectives of donor countries rather than the needs of recipient countries; argues that the evidence on the impact of aggregate foreign aid is hindered by problems of measurement and identification, which are partly due to the heterogenous nature of aid; and discusses recent studies using natural and randomized experiments to examine narrowed definitions of aid on more disaggregated outcomes.
Chris Blattman has already said many of the sensible things to be said of the paper. However, to add a couple:
1. It is surprising that economists such as Angus Deaton and William Easterly often focus on recipient side factors to explain why so much (their claim) / some (my claim) foreign aid does not seem to sustainably improve welfare. Given that, as Qian shows, much aid does not seem to be given foremost for the purpose of helping recipients, it strikes me the first question we should be asking, before anyone starts shouting “aid doesn’t work” is whether we could give aid for more decent motives, and what might happen if we did. (This isn’t to say that aid which is given for reasons of our own interests itself never works; sometimes, I think it, can, often thanks to the hard efforts of aid workers).
2. If we are really serious about getting aid working (or, indeed, finding out what aid works, for what and in what circumstances), in addition to tackling our own political-economy of giving problems. We. Really. Need. To. Get. Better. Data. And do better testing. Data and methodology aren’t sexy and they don’t lend themselves to polemic. But if you want to know what works and why, they are essential.
August 19, 2014
And interesting new NBER working paper from Rachel Heath and A. Mushfiq Mobarak (disclaimer: I haven’t had time to fully read it yet):
NBER Working Paper No. 20383
We study the effects of explosive growth in the Bangladeshi ready-made garments industry on the lives on Bangladeshi women. We compare the marriage, childbearing, school enrollment and employment decisions of women who gain greater access to garment sector jobs to women living further away from factories, to years before the factories arrive close to some villages, and to the marriage and enrollment decisions of their male siblings. Girls exposed to the garment sector delay marriage and childbirth. This stems from (a) young girls becoming more likely to be enrolled in school after garment jobs (which reward literacy and numeracy) arrive, and (b) older girls becoming more likely to be employed outside the home in garment-proximate villages. The demand for education generated through manufacturing growth appears to have a much larger effect on female educational attainment compared to a large-scale government conditional cash transfer program to encourage female schooling.
This looks like more evidence (if any more was needed) that anti-globalisation arguments against trade are wrong. IT’s also evidence from an interesting direction: gender equality.
Remember though, this isn’t evidence to suggest that sweatshops themselves are good. If you make this argument, you’re falling into the fallacy of one choice and just two options: either trade and sweatshops or no sweatshops and rural poverty. There is a third way: trade plus ongoing campaigning to improve conditions in garment factories, using the levers we have as consumers, though aid, and maybe (maybe, maybe) through trade agreements. While also trying raise human capital through every means possible to ultimately give women in developing countries as many options as those in our countries have. That’s the right way to think about this, I think.
August 10, 2014
I opposed George W Bush’s invasion of Iraq. And, although I subsequently changed my mind several times, I opposed the invasion of Afghanistan in the beginning. As a teenager I opposed George HW Bush’s Iraq invasion too. My default position on war is against. As a good war movie will show you, war is hell. And it should only ever be a last resort. (This was one of the reasons I opposed the Iraq invasion of 2003. The other two key ones were: because international institutions matter; and the neo-cons clearly did not care an iota about the welfare of Iraqis, and in war motives matter for outcomes).
Yet despite all this, I think I support what Obama is doing now, for very similar reasons to those that led me to supporting the bombing if Libya.
The reason I support the bombing, and other logistical support for the Kurds (and possibly the Iraqi government), isn’t because ISIS/IS are odious (although they obviously are), or because I think they’re some existential threat to the West, or because I think the US is an altruistic defender of freedom in all instances. I support the bombing simply because if ISIS were to spill into Kurdistan humanitarian catastrophe would follow. And such circumstances are, I think, one of the few instances where military intervention is justified. Justified, because it will probably make things less worse. Not necessarily better, but at least less worse – less catastrophic.
I had opposed intervention because, on the basis of this (still excellent, and worth listening to) LSE talk, I’d thought ISIS would be little threat beyond Sunni parts of Iraq. And that even in Sunni Arab Iraq they only held sway because of discontent with the Shia dominated (and more importantly ethnically oriented) government. And that with time their own hatefulness would see them removed in the best available way, by the Sunni Arab populous.
Yet now this prognosis no longer seems right, at least in the country’s north and north east. The risk of ISIS sweeping into parts or all of Kurdish Iraq seems very real, and the potential consequences very bad. And so I think air strikes and logistical support are a good idea.
My support is agonised: air strikes will bring civilian deaths even as they save them, and they are a ridiculously expensive way of saving lives (and more profit to the hateful military industrial complex). And, as Libya shows, intervention does not guarantee a happy ending. But if Gaddafi had been able to sweep over rebel areas things likely would have been worse still. And this is what I hope US involvement can stop in Iraq too.
I’m not sure about any of this — this blog post isn’t a manifesto; it’s me trying to sort my thoughts — but for now, for what it’s worth, this is why I support what Obama is doing.
August 5, 2014
An interesting looking new NBER working paper from Raluca E. Dragusanu, Daniele Giovannucci, Nathan Nunn reviewing the economics of fair trade.
From page 11:
In side-by-side comparisons, Fair Trade certified producers do receive higher prices, follow specified work standards, and use environmentally-friendly methods. We review this evidence, but also explore the more difficult questions of interpretation. Are the changes that are correlated with Fair Trade production also caused by certification or is some other factor like the entrepreneurial capacity of the producer affecting both outcomes? What factors make producers more likely to join Fair Trade? What may happen to the advantages of receiving a higher price from being a Fair Trade producer as more producers seek to join? After taking these factors into account, the balance of the evidence does suggest that Fair Trade works—but the evidence is admittedly both mixed and incomplete.
July 14, 2014
A common trope amongst aid’s let-them-eat-cake opponents is that aid-provided services undermine governance in democracy by reducing citizen’s incentives to hold their government to account.
I’m a sceptic, not because I think aid can do no harm, but simply because in strongly clientelist polities (i.e. most developing countries) the impediments to citizens holding their governments to account are more fundamental, stemming from complicated collective action dilemmas.
This Afrobarometer study offers some interesting associated evidence:
Can Donors And Non-State Actors Undermine Citizens’ Legitimating Beliefs?
Author(s): Sacks, Audrey
Year Published: 2012
Published in Working Papers
Abstract: This paper addresses the conditions under which donor and non-state actor service provision is likely to undermine or strengthen citizens’ legitimating beliefs. On the one hand, citizens may be less likely to support their government with quasi-voluntary compliance when they credit non-state actors or donors for service provision. On the other hand, the provision of goods and services by donors and non-state actors might strengthen citizens’ confidence in their government and their willingness to defer to governmental laws and regulations if citizens believe that the government is essential to leveraging and managing these resources. The author assesses these competing hypotheses using multi-level analyses of Afrobarometer survey data. The sample, drawn from a continuum of developing societies in Africa, allows for analysis of associations between donor and non-state actor service provision and the sense of obligation to comply with tax authorities, the police and courts. The findings yield support for the hypothesis that the provision of services by donors and non-state actors is strengthening, rather than undermining, the relationship between citizens and the state.
July 7, 2014
Martha Nussbaum has an excellent piece in the Boston Review explaining why Narendra Modi ought do more than focus on GDP growth as he seeks to emulate the Gujarat miracle for India as a whole.
Economic development is important, but it isn’t everything when it comes to human welfare:
Now let us return to Narendra Modi’s Gujarat. Measured by the growth paradigm, its achievements are strong indeed. The growth rate of per capita SDP (State Domestic Prodct) between 2000 and 2011 averages 8.2 percent, higher than any other State excepting Uttarakhand (10.0). Other high performers, close behind Gujarat, are Tamil Nadu (7.5), Kerala (7.0), and Maharashtra (7.5)…If, however, we begin to examine distribution, things immediately look very different. Gujarat’s rate of rural poverty is 26.7 percent, of urban poverty 17.9 percent; the combined poverty rate is 23.0 percent. Of the high economic performers, Maharashtra does worse, but Uttarakhand, Tamil Nadu, and Kerala do much better, with combined rates of poverty of 18 percent, 17.1 percent and 12.0 percent respectively.2 Moreover, the following States, not such stellar economic performers, have lower combined rates of poverty than Gujarat: Andhra Pradesh, Haryana, Himachal Pradesh, Jammu and Kashmir, and Punjab…Let’s now look more closely. Gujarat has life expectancy at birth of 64.9 years for males, 69.0 years for females. The figures for Tamil Nadu are 70.9 (female) and 67.1 (male), for Kerala 76.9 (female) and 71.5 (male).3 Lest we ascribe these differences to climate or genes, quite a few other States also outperform Gujarat: these include Maharashtra, Haryana, Punjab, Karnataka, and West Bengal. In infant mortality and maternal mortality, Gujarat also lags well behind the two southern States and quite a few others. In maternal mortality, indeed, Gujarat has the high rate of 148 deaths per 100,000 live births, as compared with just 81 for Kerala and 97 for Tamil Nadu.4 So: comparable growth achievements, utterly disparate health outcomes.
Nussbaum lists similar discrepancies in gender and education.
As it critiques GDP as a measure of welfare, the piece makes the case for Amartya Sen’s capabilities approach to development — the belief that the end goal of development should be to maximise human functioning in a range of aspects of the human condition. Nussbaum lists these as: life, bodily health, bodily integrity, ‘senses, imagination and thought’, emotions, practical reasons, affiliation.
I’m not convinced. Or to be more exact: I am convinced that measuring the state of our lives across a range of indices will provide a better approximation/measure of welfare than measuring GDP alone. But I’m not convinced that maximising human capabilities is a better end goal than the one which supposedly underpins most economic thought: human happiness.
One problem with the capabilities approach is the same trouble all non-utilitiarian philosophies face. What if it turned out that maximising capabilities (or at least certain ones) made us less happy as a whole? Would you really want us to be talented but miserable? Not me, I’d settle for mediocre bliss for our species any day. You can argue that maximising capabilities won’t make us less happy. I’d agree with you. Hence my support of measuring welfare across a range of human indices. But it seems to me that if that’s your way out, you’re tacitly agreeing happiness, not capabilities, is the ultimate end goal.
The other problem with the capabilities approach, is a problem confronting all Aristotelian philosophies — how do you adjudicate trade-offs between the different things you want to maximise (capabilities in this case)? What happens when you need to curtail someone’s affiliation to increase someone else’s bodily health? For a utilitarian this is easy enough (in theory): you act to maximise the greatest good. But this option would not seem to be there for Aristotelians.
June 24, 2014
Over at WhyDev they’ve produced a long, bleak, amusing list of advice for aspiring humanitarian workers.
Pickers of nits (who me?) can find things to complain about (it’s wrong to state categorically that foreign aid doesn’t stimulate growth; if anything, the best available evidence suggests it does) but, overall, the list rings true.
At a more meta-level the list illustrates well one of the grim truths of aid work, that it is a human endeavour, and so is replete with the human failings we see throughout our lives. There is no escaping this. No part of the world of aid work that’s free from it.
If you imagine yourself working for a crusading NGO speaking truth to
DFID/USAID/DFAT/MFAT power, odds are you’ll find yourself working for an entity that receives enough funding from the power itself, or easily scared suburban donors, that truth telling has to be muted. Or, if you end up in a small independently funded cluster of the ideologically pure, you’ll end up doubting, amidst the complexities of development, you actually know what the truth is.
Similarly, if you plan on standing in solidarity with some idealised noble savage against the depredations of the developed world, odds are you’ll find that while those depredations are real, the societies you imagine yourself helping have plenty of their own ambiguity and their own internal abuses of power. And that these are more often the source of suffering than our own crimes. You will also learn similar hard lessons about power and people’s failings if you stride into the world of development keen on promoting participatory approaches.
The dismal science won’t help you either. If, fresh from your economics degree, you imagine all you need is to bring some hard-nosed analysis based on sound theoretical fundamentals into the game, you’ll likely learn the hard way that amidst the messy processes of development tidy theories struggle to give guidance, and simple solutions fail.
Yet, at the same time, if the message you take from all this is that development itself is bad, and if you race to the embrace of chic, post-development philosophising, you’ll find just as much contradiction and confusion. Most importantly, if you are being honest, you will also have to face the uncomfortable truth that — for all it’s flaws and ambiguities, and for all we don’t know about how to bring it about — development actually delivers, both longer and happier lives.
And as for aid work, while it is far from perfect, it’s also far from the worst we can do. The long sad sweep of human history is mostly filled with examples of us actively doing harm to anyone who wasn’t kin or, more recently, compatriot. Set against this, the fact we try to help strangers in far away lands is actually something. Of course it’s still ambiguous, we haven’t actually evolved into a better species in the meantime, but compared to the unambiguous nastiness of much our past, muddled attempts at kindness are still an improvement.
For what it’s worth, if you end up working in development, my advice is to abandon all hope of perfection, or of healing the world, but try your best to contribute in some small way to making our planet a kinder, more sustainable place. Do this, and I think you’ve done your bit.
June 15, 2014
June 11, 2014
A lot has gone wrong in the world of New Zealand aid in the last 6 years. Aid diverted from the purpose of helping poor people to the purpose of helping NZ businesses. Good funding schemes broken. Cows without borders. And so on. But if you want a glass half full, it is still possible to talk of one. At the same time as a lot has gone wrong. Quite a lot has stayed on track. Jo and I assess this over at Devpolicy, and argue that the main reason is the hard work of aid programme staff.
Encouragingly, even when the politics goes wrong, and when civil society (us included) fails to do much to stop it, in some instances at least there is a degree of institutional path dependency, and a good aid organisation can keep on trucking, up to a point.
A useful corrective from Australia if you happen to labour under that particular delusion.
June 4, 2014
Don’t get me wrong, the data at the OECD DAC’s aid data base are a great resource but, mother of gods!, the front end is awful. The servers are forever timing out or crashing, and output is poorly formatted when you export to Excel. It’s egregious in this day and age. Everyone else can produce easily accessible online data, why not the DAC?
A year or so ago I went to use the DAC’s stats site, only to encounter a feedback form, which was nice, or at least it would have been were it not totally unintelligible. Very symptomatic.
May 18, 2014
a depressingly common human failing I suspect…
Galiani and Schargrodsky (2004, 2010) provide an interesting example on the effects of extending property titles to poor squatters in Argentina. In 1981, squatters organized by the Catholic Church occupied an urban wasteland in the province of Buenos Aires, dividing the land into similar-sized parcels that were then allocated to individual families. A 1984 law, adopted after the return to democracy in 1983, expropriated this land, with the intention of transferring title to the squatters. However, some of the original owners then challenged the expropriation in court, leading to long delays in the transfer of titles to the plots owned by those owners, while other titles were ceded and transferred to squatters immediately. The legal action therefore created a “treatment” group—squatters to whom titles were ceded immediately—and a “control” group—squatters to whom titles were not ceded.12 Galiani and Schargrodsky (2004, 2010) find significant differences across these groups in subsequent housing investment, household structure, and educational attainment of children—though not in access to credit markets, which contradicts De Soto’s theory that the poor will use titled property to collateralize debt. They also find a positive effect of property rights on self-perceptions of individual efficacy. For instance, squatters who were granted land titles—for reasons over which they apparently had no control!—disproportionately agreed with statements that people get ahead in life due to hard work (Di Tella, Galiani, and Schargrodsky 2007).
from Dunning (2012-08-31). Natural Experiments in the Social Sciences (Strategies for Social Inquiry) (p. 10). Cambridge University Press. Kindle Edition.
May 7, 2014
This is pretty cool. CGD researchers post on new PPP data. Martin Ravallion shows up in comments to tell them off. And loses (IMHO) the subsequent debate.
Blogs, and the internet more generally, are great for this: real time discussion and interaction. I learnt from reading this exchange.
May 6, 2014
Kathleen Geier has written a great obituary, not so much for Gary Becker as for his ideas:
Becker said quite a few other wacky things in the Treatise. For instance, he performed a formal mathematical proof that purports to demonstrate that women are better off under polygamy, because, given Becker’s theoretical assumptions, their income under polygamy would be higher. H’okay.
Useful lesson for theorists of all types. If your theory leads to conclusions which are palpably crazy, abandon it.
Does democratic governance deliver economic dividends? Even if it didn’t we might still have cause to think democracy was worth it. After all, it seems fair to let people have a say in shaping the rules that govern their lives, and there is some evidence to suggest that democracy delivers important non-economic benefits. Nevertheless, the question of democracy’s impact on economic growth is an important one; at least up to a point wealth is an important component of welfare. And until recently the most influential studies in economics suggested that democratic governance has not been growth enhancing. In particular, sophisticated econometric work by conservative economist Robert Barro showed, or appeared to show, democracy having a small average negative effect on growth, everything else being equal. Barro’s work wasn’t the final word on the matter. Empirical work by political scientist John Gerring and co-authors found that in the long run democracy was probably growth enhancing, and at least one, more recent, econometric study suggests democratisation improves subsequent economic performance. Yet, for the most part, empirical work post-Barro has failed to find a positive causal relationship between democracy and growth. And this, coupled with the recent spectacular economic performance of China, has been enough to suggest to many observers that, however nice it may be, democracy is no better, and maybe even worse, than autocracy in generating growth.
All this might be about to change though…click here to read the rest of this post on Devpolicy.
April 23, 2014
Ethically, the foremost reason for giving aid is to help people in recipient countries. If aid does this alone I think we have good enough reason to give aid. Still it would be interesting to know if there were any benefits to donors of giving aid. In particular it would be interesting to know if donors received some sort of popularity dividend — where the fact they gave aid increased positive perceptions of them in recipient countries.
Like all the big questions in aid this is an empirical one. Like all the big questions on aid it is also a hard one to answer empirically. In particular, correlations between aid levels and opinion about aid are limited in what they can tell us because it’s just as likely opinions about donor countries influence how much aid a recipient country gets as it is that the amount of aid a country receives from a donor influences how popular the donor is.
In a recently published paper in the Quarterly Journal of Political Science two co-authors and I look use instrumental variables to try and overcome this methodological challenge and find out whether PEPFAR, the U.S aid fund for tackling HIV, has increased U.S popularity. The abstract is below; the paper is here; a blog post based on the paper is here (and here ungated).
Does foreign aid extended by one country improve that country’s image among populations of recipient countries? Using a multinational survey, we show that a United States aid program targeted to address HIV and AIDS substantially improves perceptions of the U.S. Our identification strategy for causal inference is to use instrumental variables measuring the magnitude of the HIV/AIDS problem in aid recipient countries. Our finding implies that in addition to its potential humanitarian benefits, foreign aid that is targeted, sustained, effective, and visible can serve as an important strategic goal for those countries that give it: fostering positive perceptions among foreign publics. By doing good, a country can do well.
Critiquing aid Angus Deaton writes:
Why might aid fail in aggregate? One of my favorite stories in Duncan’s book is about owners of fishponds being violently dispossessed by more powerful people, and then getting them back through political action. Money and know-how were not the issues; power was the problem, and politics the solution. But this good outcome is unusual. The worst case I know happened in Goma in 1994, when the perpetrators of the genocide in Rwanda fled into the eastern DRC with their wives and families. Perhaps two-thirds of the aid for the humanitarian emergency was diverted for training the murderers to go back to finish off the Tutsi “cockroaches.” Alex de Waal, in Famine Crimes, explains over and over how aid can only reach the victims of war by paying off the warlords, and sometimes extending the war. Such aid saves lives, but at the price of other lives later.
Meanwhile, also on Rwanada and Zaire, John Borton writes:
A clear example was in the refugee camps that formed in Zaire after the genocide. UN member states were unwilling to provide troops for a proposed UN force to provide security in and around the refugee camps and to separate the killers (genocidaires) from the majority of refugees who had not participated in the genocide. Humanitarian agencies were forced to choose between providing assistance to all those in the camps (including to genocidaires), or pulling out – as Médecins Sans Frontières (MSF) did in November 1994.
Which rather suggests to me that it’s far from inevitable that “aid can only reach the victims of war by paying off the warlords”. In the case of the camps on the Rwandan border the story would have been much different had the world been willing to lift a finger and provide troops. That we couldn’t bring ourselves to do even that hardly seems to be aid’s fault. Or to be evidence that in all post-conflict instances aid will only make things worse. It’s true, you can argue that the world will never care enough to send in the peacekeepers, and so therefore the Rwandan border story is a representative case, except that there are equally good examples where we have. Solomon Islands, the country context I know best, being one of them.
And this is the broader problem with Deaton’s ‘critique’ of aid, by selecting on the dependent variable, cases where aid hasn’t worked, (or the dependent polemicist, books whose authors critique aid) he ends up painting a very skewed picture of aid’s impact. For what it’s worth, the systematic evidence of aid’s impact on conflict actually suggests it reduces it on average, although much more study is needed. What’s more the best available evidence (ungated here) on the impact of major negative aid shocks (sharp falls in aid to a country) — you’ll recall that Deaton’s prescription for making the world a better place is cutting aid rapidly — is that they promote conflict, not reduce it.
April 21, 2014
In a field with so many big questions — does democracy promote growth on average? (probably), does aid promote growth on average? (quite possibly), can the planet industrialise within environmental constraints? (technologically probably yes; the problem is political economy) — it seems silly to devote space to a small one. But hey, this is a small blog, so…
…over the last few weeks I’ve been pondering the following: out of Jeffrey Sachs and Bill Easterly who has done more to impoverish development discourse in recent years? It’s a close run thing.
It didn’t have to be this way: White Man’s Burden and End of Poverty, were useful books, even if they were both wrong for the most part. And both E&S have written great papers in years past (Easterly some of my all time favourite papers). Yet the inescapable fact would seem to be that both of them have become so caught up in their own Big Ideas they’ve become ideologues of the first order. (Given the ideology he advocates, the irony of Easterly doing this is particularly rich, bringing to mind Oakeshott’s critique of Hayek: “A plan to resist all planning may be better than its opposite, but it belongs to the same style of politics.”)
Polemic’s fun of course, and even ideologues can still have good ideas. The trouble is development is difficult, there is a lot to learn, and nowhere near enough space to learn it in, and with all their bellowing, these two reduce that space even further.
Angus Deaton knows, just knows!, aid is a net bad and should be stopped immediately. When asked for evidence by Owen Barder, he cited some selective examples, argued their couldn’t be any empirical answers to these questions anyhow, and that we should all trust his expertise. Could this be yet another example of an economist expert imposing his view upon the reality of the poor? Is this what William Easterly is banging on about?
I’ve pointed out before that Africans*, when somebody bothered to ask them, on average seem to think aid actually helps.
ELITE AND MASS PERCEPTIONS OF FOREIGN AID IN RECIPIENT COUNTRIES:
A FIELD EXPERIMENT IN UGANDA
Adam Harris (NYU), Helen Milner (Princeton),
Michael Findley (UT-Austin), Daniel Nielson (BYU),
April 4, 2013
How do recipients view foreign aid? Systematic scholarship on this topic is very limited.
We provide a comparison of mass and elite support for aid from a randomized
field experiment and survey done in Uganda in 2012. We asked local village
leaders, provincial governors, national members of parliament, and more than 3,000
Ugandan citizens to demonstrate support for aid. For two aid projects, we randomly
assigned exposure to different project funders, including bilateral agencies, multilateral
organizations, and the domestic government. We invited subjects to demonstrate
their levels of support or opposition to these projects and donors by voicing
their support to others, signing a petition, and sending an SMS. For members of parliament
we asked them to sign letters of support to donors and the national president.
We examine the differences in attitudes and behavioral responses between
mass and elite recipients. We generally find that citizens strongly prefer foreign aid
over government programs, whereas elites support, albeit more weakly, government
programs over foreign aid in most outcomes. We interpret this as evidence
that citizens see aid as an escape from clientelism, but elites may perceive more
avenues for the capture of aid resources.
*and yup, I know Africa’s not a country. When I broke the AB results down by country support was high on average across almost all of those African countries surveyed.
March 30, 2014
You can download my PDF of advice for candidates standing in Solomon Islands elections in 2014 by clicking here. Please be aware, this is personal advice only and is not associated with my employer. Please use your own judgement when considering the advice.
That seems to be the conclusion of this new study in the Lancet. Or to put it another way – this is evidence to suggest that improving the welfare of the least well off in society requires direct action. Although – worth noting they do find a significant negative correlation between level of wealth and level of welfare. It’s just not there in data on changes.
The Washington Post’s Monkey Cage blog reports that:
World Vision U.S., a Christian nonprofit organization, announced Monday it would change its hiring policy to now include gay Christians in legal same-sex marriages. By Wednesday, they changed their minds:
Wow. I am presuming/desperately hoping that discriminatory hiring practices of this sort are illegal in Australia and NZ, so this darkness isn’t present amongst my own development community…
[Update: a colleague informs me WV Australia definitely *does not* have the same policy in place.]
March 25, 2014
While there is a lot to be said for democracy, generally the consensus is that there has, to date, been little robust evidence to prove it generates – on average – higher levels of economic development. Given the names attached to this new NBER working paper this situation may be about to change…
Democracy Does Cause Growth
Daron Acemoglu, Suresh Naidu, Pascual Restrepo, James A. Robinson
NBER Working Paper No. 20004
Issued in March 2014
NBER Program(s): DEV EFG POL
We provide evidence that democracy has a significant and robust positive effect on GDP. Our empirical strategy relies on a dichotomous measure of democracy coded from several sources to reduce measurement error and controls for country fixed effects and the rich dynamics of GDP, which otherwise confound the effect of democracy on economic growth. Our baseline results use a linear model for GDP dynamics estimated using either a standard within estimator or various different Generalized Method of Moments estimators, and show that democratizations increase GDP per capita by about 20% in the long run. These results are confirmed when we use a semiparametric propensity score matching estimator to control for GDP dynamics. We also obtain similar results using regional waves of democratizations and reversals to instrument for country democracy. Our results suggest that democracy increases future GDP by encouraging investment, increasing schooling, inducing economic reforms, improving public good provision, and reducing social unrest. We find little support for the view that democracy is a constraint on economic growth for less developed economies.