Waylaid Dialectic

July 14, 2014

Does aid undermine democracy?

Filed under: Aid — terence @ 10:41 am

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

Human Development vs GDP & Capabilities vs Utility

Filed under: Development Theory — terence @ 9:13 am

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

A Very Human Endeavour

Filed under: Aid,Development Theory — terence @ 9:18 am

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

The legacies of war…

Filed under: Social Justice — terence @ 8:25 pm
Tags:

I opposed the Iraq war from the start, but it was an agonised opposition. Agonised because not going to war meant leaving an obvious tyrant in power.

Yet in the end invasion seemed worse.

Worse because the neo-cons so clearly did not give a hoot about the welfare of Iraqis. And because in international relations intentions play a major role in outcomes. And so from their evil to the ongoing nightmare.

And worse because war is hell. And surely any domestic social contract worth having would treat it as an absolute last resort. Something only to be used to stave off calamity.

On this latter point, Frank Rich, in the process of tearing apart unrepentant liberal hawks:

Iraq’s legacy in America goes well beyond the steep toll of casualties, injuries, and billions wasted on corruption and folly. Of the 2.6 million Americans who served in Iraq and Afghanistan, more than half have physical or mental-health problems…

 

June 11, 2014

Poverty, Economics and Poor Philosophy

Filed under: Development Theory — terence @ 4:04 pm

A book mark: three great posts  at interfluidity on how economics stumbles from is to ought.

New Zealand’s half full aid glass

Filed under: Aid — terence @ 5:38 am
Tags:

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.

The Centre Left and Centre Right are all the same, right?

Filed under: Development Theory — terence @ 5:32 am

A useful corrective from Australia if you happen to labour under that particular delusion.

June 4, 2014

GGGrrrrrrr…

Filed under: Aid — terence @ 4:14 pm
Tags:

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

The Foundations of Modern Conservative Thought

Filed under: Random Musings — terence @ 10:11 am

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

What the blogs did for development

Filed under: Random Musings — terence @ 2:05 pm

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

The economic rationality of polygamy

Filed under: Random Musings — terence @ 12:42 pm

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.

Democracy and Economic Development

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

Does aid make you more popular?

Filed under: Aid — terence @ 11:21 am
Tags: ,

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.

Aid, blame and Rwanda

Filed under: Aid — terence @ 8:12 am
Tags: ,

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

Make Hot Air History

Filed under: Random Musings — terence @ 7:58 pm
Tags: , ,

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.

Easterly’s new book, judging by the reviews, is meandering and misleading. Sachs’ defence of himself the Millennium Villages on Econtalk was agonising.

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.

And in breaking news, someone’s asked Ugandans what they think of aid…

Filed under: Aid — terence @ 8:53 am
Tags: , ,

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.

Meanwhile…

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
Abstract
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

Advice for people thinking of standing in the 2014 elections

Filed under: Random Musings — terence @ 1:11 pm

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.

Economic Growth Does Not Help Reduce Child Malnutrition?

Filed under: Economic Development — terence @ 12:25 pm

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.

File under organisations *not* to donate to

Filed under: Aid — terence @ 12:13 pm

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

The Eagle Has Landed…

Filed under: Development Theory,Economic Development,Governance — terence @ 6:42 am

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.

March 4, 2014

Resistance (to Acemoglu and Robinson) is futile…

Filed under: Development Theory,Institutions — terence @ 7:02 am

Of all the competing explanations to ‘Institutions Rule’, the human capital one always struck me as the most plausible. Or, at least, on the basis of observations of Solomon Islands, I could be very easily convinced that education’s contribution to the world of ideas, and the re-fashioning of ties it also induced, was a deep(er still) determinant of growth. Working in part through its effects on institutions.

However A&R are here with a new NBER working paper, which aspires (on the basis of the abstract only) to lay waste to human capital’s claim to importance…

Institutions, Human Capital and Development
Daron Acemoglu, Francisco A. Gallego, James A. Robinson

NBER Working Paper No. 19933
Issued in February 2014
In this paper we revisit the relationship between institutions, human capital and development. We argue that empirical models that treat institutions and human capital as exogenous are misspecified both because of the usual omitted variable bias problems and because of differential measurement error in these variables, and that this misspecification is at the root of the very large returns of human capital, about 4 to 5 times greater than that implied by micro (Mincerian) estimates, found in some of the previous literature. Using cross-country and cross-regional regressions, we show that when we focus on historically-determined differences in human capital and control for the effect of institutions, the impact of institutions on long-run development is robust, while the estimates of the effect of human capital are much diminished and become consistent with micro estimates. Using historical and cross-country regression evidence, we also show that there is no support for the view that differences in the human capital endowments of early European colonists have been a major factor in the subsequent institutional development of these polities.

 

March 2, 2014

Aid works, aid works, aid works!

Filed under: Aid — terence @ 7:08 pm

Not only is it hard to get aid to work, thanks to endogeneity it’s hard to get good evidence of aid’s actual impact at a country level. Does aid increase growth on average? Quite possibly, but we don’t know for sure. And methodological limitations make it very likely we will always have doubts, even if aid in-aggregate does actually work.

That being said the authors of this paper (h/t colleagues at ANU) seem, from my skim of its abstract while proofreading my PhD, to have spotted a very smart tool for isolating (some) aid’s actual impact on growth. Very smart. Will its findings stand? Let’s wait and see…in the meantime I’m looking forwards to a read, when I hand my thesis in.

The Effect of Aid on Growth: Evidence from a Quasi-Experiment
Sebastian Galiani
Stephen Knack
Lixin Colin Xu
Ben Zou
February 24, 2014
The literature on aid and growth has not found a convincing instrumental variable to identify the causal effects of aid. In this paper we exploit an instrumental variable based on the fact that since 1987, a major criterion for IDA (International Development Association) eligibility has been whether or not a country is below a certain threshold of per capita income. This threshold is predetermined and arbitrary, so it is plausibly exogenous to recipient countries in a model that conditions on initial income levels, country and period fixed effects. We find evidence that other donors tend to reinforce rather than compensate for reductions in IDA aid following threshold crossings. Overall, the aid to GNI ratio drops by about 60% on average after countries cross the threshold. Focusing on the 35 countries that have crossed the IDA income threshold from below between 1987 and 2010, we find a positive, statistically significant, and economically sizable effect of aid on growth. A one percentage point increase in the aid to GNI ratio from the sample mean raises annual real per capita GDP growth by approximately 0.6 percentage points. We also demonstrate that an important reason for underestimating aid effects is the attenuation bias associated with measurement errors in aid that the literature has ignored so far. Finally, there is some evidence that our results may apply to the other low-income countries that are still below the threshold.

February 25, 2014

Development is unquestionably good, but it also needs good questions

Over two weeks in 1996 I travelled between extremes of the public transport spectrum. At one end were the buses of Sumbawa in Indonesia – grumpy, diesel-spitting creatures that lurched their way around potholes taking hours to get anywhere. At the other end was the London Underground. Trains were frequent, quick and – despite everyone’s complaints – mostly on time.

Compared to the bus riders of Sumbawa, all but the poorest travellers on the London Underground were also wildly wealthy. And yet they appeared miserable. Commuting in silence. Pale, staring at their shoes. The Sumbawan bus travellers, on the other hand, were full of cheer. The buses rang with talk and laughter.

For a time this contrast led me to question the merits of development. If London was wealthy but glum and Sumbawa poor but happy then — I thought — perhaps we should abandon development and live like Sumbawanese? Such thinking was common currency on the backpackers’ trail. And something similar is also, I discovered when I did a Development Studies degree in 2003, common currency amongst an influential group of intellectuals, the so-called ‘post-development’ thinkers. The first book I was assigned to read for class was The Development Dictionary a post-development tract edited by German academic Wolfgang Sachs, in which a range of well-credentialed researchers excoriated the development enterprise, taking the doubts of backpackers and fortifying them with critical theory…read the rest  of this post on Devpolicy.

February 16, 2014

Hate Speech

Filed under: Random Musings — terence @ 8:14 pm
Tags:

Provoked, perhaps, by cant over at NoRightTurn, an old manager of mine decries liberal males who plead free-speech in defence of ultra-misogynist hip hop acts.

Speaking as a liberal male I just wanted to say: not me.

If Odd Future’s lyrics were about Jews, or if they were a white group singing about African American men, we’d put an end to their concert one way or another. I can’t see how the fact they are singing about women could possibly change this. And yet somehow in our messed-up world it does. They get to be famous and rich, when they ought to be banned

While we’re on the subject, hate speech — including vile hip-hop lyrics — ought to be illegal.

The counter argument has it that freedom of speech is too precious for us to allow the state impede upon its domain, even when we deplore what’s being said. But, as Maria eloquently points out, there are many different threats to the freedom to speak — the state is only one. And when you let a certain group of people sing the praises of violent acts against others, one way or another, you are impeding the freedoms of those others. There are times when intervening maximises available freedom.

You can argue slippery slopes of you like: but we already make liable and incitements to violence illegal, and have done for a long time without the rest of our freedoms slipping away. We’d cope with hate speech added to the list.

January 28, 2014

No so surprising if you’ve watched the Wire…

Filed under: Random Musings — terence @ 7:24 am

A New NBER working paper

The (Surprising) Efficacy of Academic and Behavioral Intervention with Disadvantaged Youth: Results from a Randomized Experiment in Chicago
Philip J. Cook, Kenneth Dodge, George Farkas, Roland G. Fryer, Jr, Jonathan Guryan, Jens Ludwig, Susan Mayer, Harold Pollack, Laurence Steinberg

There is growing concern that improving the academic skills of disadvantaged youth is too difficult and costly, so policymakers should instead focus either on vocationally oriented instruction for teens or else on early childhood education. Yet this conclusion may be premature given that so few previous interventions have targeted a potential fundamental barrier to school success: “mismatch” between what schools deliver and the needs of disadvantaged youth who have fallen behind in their academic or non-academic development. This paper reports on a randomized controlled trial of a two-pronged intervention that provides disadvantaged youth with non-academic supports that try to teach youth social-cognitive skills based on the principles of cognitive behavioral therapy (CBT), and intensive individualized academic remediation. The study sample consists of 106 male 9th and 10th graders in a public high school on the south side of Chicago, of whom 95% are black and 99% are free or reduced price lunch eligible. Participation increased math test scores by 0.65 of a control group standard deviation (SD) and 0.48 SD in the national distribution, increased math grades by 0.67 SD, and seems to have increased expected graduation rates by 14 percentage points (46%). While some questions remain about the intervention, given these effects and a cost per participant of around $4,400 (with a range of $3,000 to $6,000), this intervention seems to yield larger gains in adolescent outcomes per dollar spent than many other intervention strategies.

January 14, 2014

Why I became an (aid) conservative

Filed under: Aid — terence @ 10:51 am
Tags:

At 6.40am on January 1st I made a new year’s resolution. This year, I decided as I contemplated lifting my weary head from my worn-out pillow, I would become a conservative. With 40 not far off, and with Canberra’s political tides having turned, the time seemed right. Exchange the soy lattes for Victoria Bitter. Stop reading the Guardian. Trade in the Yaris for an SUV. Easy. Or was it — read the rest on the Devpolicy blog.

January 7, 2014

Encouraging if you work at a human rights NGO…

Filed under: Conflict,Human Rights — terence @ 11:52 am

The abstract of a new (gated) article by Amanda Murdiea and Dursun Peksen in the Journal of Politics:

Do transnational human rights organizations (HROs) influence foreign military intervention onset? We argue that the greater international exposure of human suffering through HRO “naming and shaming” activities starts a process of mobilization and opinion change in the international community that ultimately increases the likelihood of humanitarian military intervention. This is a special corollary to the supposed “CNN Effect” in foreign policy; we argue that information from HROs can influence foreign policy decisions. We test the empirical implication of the argument on a sample of all non-Western countries from 1990 to 2005. The results suggest that HRO shaming makes humanitarian intervention more likely even after controlling for several other covariates of intervention decisions. HRO activities appear to have a significant impact on the likelihood of military missions by IGOs as well as interventions led by third-party states.

The Government and Poverty

Filed under: Random Musings — terence @ 8:16 am
Tags:

Every fool knows the only way to reduce poverty is by letting teh marketz rul right?

A new NBER working paper:

Using data from the Consumer Expenditure Survey and the March Current Population Survey, we calculate historical poverty estimates based on the new Supplemental Poverty Measure (SPM) from 1967 to 2012. During this period, poverty as officially measured has stagnated. However, the official poverty measure (OPM) does not account for the effect of near-cash transfers on the financial resources available to families, an important omission since such transfers have become an increasingly important part of government anti-poverty policy. Applying the SPM, which does count such transfers, we find that historical trends in poverty have been more favorable than the OPM suggests and that government policies have played an important and growing role in reducing poverty — a role that is not evident when the OPM is used to assess poverty. We also find that government programs have played a particularly important role in alleviating child poverty and deep poverty, especially during economic downturns.

And, via Mike Konczal, a study on the impact of the minimum wage in the US on poverty:

I use data from the March Current Population Survey between 1990 and 2012 to evaluate the effect of minimum wages on the distribution of family incomes for non-elderly individuals. I find robust evidence that higher minimum wages moderately reduce the share of individuals with incomes below 50, 75 and 100 percent of the federal poverty line…I also provide a quantitative summary of the literature, bringing together nearly all existing elasticities of the poverty rate with respect to minimum wages from 12 different papers. The range of the estimates in this paper is broadly consistent with most existing evidence,…

December 15, 2013

The Trans Pacific Partnership

Filed under: Trade — terence @ 12:56 pm

I’ve blogged my objection to it before. Currently it is receiving some very good discussion from economists and political scientists:

1. Focusing on the economic impacts of tariffs Paul Krugman says it does not matter much for good or bad.

2. Dean Baker and Henry Farrell make offer the right response: the issue really isn’t tariffs but rather rules about intellectual property and the like.

3. And a couple of very interesting looking posts on the Monkey Cage.

As I said in my original post, my problem with free trade is the same as my problem with Abominable Snowmen: they don’t exist. Trade is never free — it is always enabled and bound by rules. And its outcomes depend on the nature of the rules. Whether the TPP is a good thing or not depends very much on the rules it contains. And the trouble, the fundamental problem with it, is that we — citizens of the democracies negotiating it, aren’t being told what rules are being negotiated into the document. Meanwhile lobbyists from various vested interests are actively trying to get rules shaped to serve their needs. Hence the problem

 

 

December 12, 2013

PhD Neologisms: delation

Filed under: Development Neologisms — terence @ 6:51 am

Delation: the feeling you experience as a PhD student upon completing a major task (marking essays, writing a consultancy report, organising a conference, writing a working paper…) and realising that all that work has not brought you even a single step closer to completing your thesis.

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