Waylaid Dialectic

May 6, 2014

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.



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

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

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

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

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.

December 11, 2013

Materialism, Happiness and Development

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

George Monbiot has a fascinating column in the Guardian in which he links to research suggesting materialism as a cause of loneliness and unhappiness. Shopping for shopping’s sake, or in search of status, tends to make people miserable.

It is a great column but Monbiot gets it wrong at the end:

This is the dreadful mistake we are making: allowing ourselves to believe that having more money and more stuff enhances our wellbeing, a belief possessed not only by those poor deluded people in the pictures, but by almost every member of almost every government. Worldly ambition, material aspiration, perpetual growth: these are a formula for mass unhappiness.

As best we can tell (also here; and see here for some debate) as countries as a whole become more wealthy, they become happier. This is most strongly felt at low levels of wealth and the effect weakens in wealthier countries, yet the effect still seems to be present even among wealthier countries.

When the unit of analysis becomes people not countries, within wealthy countries the best available evidence suggests that, up to a point (and this point is quite high) more money makes you happier, beyond the point it does not. Technically this is known as satiation, and while satiation seems to exist for self-assessed happiness, it does not seem to be present in other self-assessment based quality of life measures. Using these, more money continues to be associated with higher life assessments as far up as the data go — although diminishing returns exist, it takes more money to bring the same amount of quality of life improvement when you already have a lot of money.

Money, however, is not materialism — you could have a wealthy society without being materialistic. In it we’d be wealthy thanks to technology, good institutions, and high levels of human capital, but we’d be spending our money on leisure, and our time with family and friends, and in the outdoors or in libraries, not in shops. And, for what it’s worth, this is what I think the end goal of development out to be. Prosperous, peaceful countries which afford their citizens health, education and free time. As well as freedom from advertising driven myths about needing to own more. Countries where people are wealthy and where people still keep shopping, but where wealth and markets are a means to an ends — the good life.

November 12, 2013

The good news from the Amazon…

Filed under: Environment — terence @ 10:04 am

It meanders and bifurcates like a grand tropical river, but this podcast talk by Professor Susanna Hecht is fascinating for one simple point: since 2000 the rate of deforestation in the Amazon (and more broadly through much of Latin America) has fallen precipitously. What had once seemed like untrammelled eco-catastrophe is now starting to look like a surprise good news story. Read the rest of this post at Devpolicy.

November 3, 2013

The trouble with free trade…

Filed under: Trade — terence @ 10:44 am

My reasons for opposing free trade are surprisingly similar to my reasons for opposing Abominable Snowmen. I oppose both, because neither exist. There is no such thing as free trade. The term is a marketing gimmick used to make a certain approach to trade sound appealing — free as in ‘born free’, as in ‘free at last’. In reality trade takes place everywhere on Earth bound by rules and regulations. (Consumer protection rules, labour laws, rules to prevent monopoly price gouging, rules to prevent theft…) Without these rules, exchange of all but the most primitive sort would be impossible.

Saying this isn’t the same as saying trade is bad (it’s not; it’s essential) or that globalisation is bad. But the rules that govern trade matter. They shape the outcomes we see from trade and exchange. And when the rules governing trade are inequitable there are usually welfare consequences. Indeed part of the reason New Zealand is a relatively well developed country is that we have rules that enable trade in a manner that is usually fairly fair. Rules developed and debated in the open and amongst a power structure of somewhat balanced countervailing forces, amongst the governing framework of democracy.

In the case of international trade things aren’t so simple. There is far greater potential for power imbalances, which reduces the odds of good rules. There is also often far too little transparency to international trade agreement negotiations. Yet transparency is crucial. Not only to let us know if the rules being negotiated are good ones but also because there are always be winners and losers from trade agreements, and if we are to have any idea of who these will be, we need to know what’s in the agreements in question.

This still isn’t an argument against international trade (it’s generally a very good thing). Rather it is an argument for transparent trade negotiations. Something we currently lack when it comes to the Trans Pacific Partnership trade agreement. And if you would like to know which aspects of your life your government is currently signing away as it negotiates this agreement, or if you just want other people to know to facilitate analysis and debate, the It’s Not Right petition is for you. You can sign it to call on the New Zealand government to make the text of the Trans Pacific Partnership available for public scrutiny. Signing takes all of two minutes, which is a very small price to pay to promote democratic deliberation.

October 30, 2013

Parenting advice…

Filed under: Random Musings — terence @ 10:34 am

No doubt, just like development, much in parenting theory is contested. However, I think at least some useful learnings can be inferred from p7 of ‘Why Humans Cooperate‘:

We know there must be “human genes” that somehow allow for culturally acquired behavior, as chimpanzees reared (enculturated) alongside human children do not acquire anything approaching adult human behavioural patterns or social norms. Interestingly, although human-reared chimpanzees seem to acquire little from their human families via imitation, these families’ human children have been observed to readily acquire a number of behaviors from their physically more advanced chimpanzee “siblings,” including knuckle walking (even after achieving full bipedality), shoe-chewing, a habit of scraping their teeth against interior walls, excessive biting, and a range of sterotypical chimpanzee food grunts and hoots.


October 24, 2013

What to thank for civilisation…

Filed under: Environment — terence @ 11:32 am

Paul Krugman reviews William Nordhaus:

Throughout this book, Nordhaus’s tone is slightly cynical but basically calm and optimistic: this [climate change] is ultimately a problem we should be able to solve. I only wish I could share his apparent conviction that this upbeat possibility will translate into reality. Instead, I keep being haunted by a figure he presents early in the book, showing that we have been living in an age of unusual climate stability—that “the last 7,000 years have been the most stable climatic period in more than 100,000 years.” As Nordhaus notes, this era of stability coincides pretty much exactly with the rise of civilization, and that probably isn’t an accident.

October 23, 2013

Angus Deaton and Roadblocks to Development

Filed under: Aid — terence @ 7:56 am
Tags: ,

Well, I was looking forwards to reading Angus Deaton’s new book, but Chris Blattman’s review leaves me less inclined. (Acting on the assumption that Blattman is treating Deaton fairly of course). In particular, writing of Deaton Blattman states:

Where he’s enflamed passions, though, is his last chapter: “How to help those left behind”. It’s a tirade against aid, especially naive aid. Overall one message comes through: Aid is a roadblock to development.

Blattman then goes on to sensibly point out that not all aid is equal, and to offer the following partial agreement with Deaton:

I think Deaton has his sights aimed at dollars sent by the West to local governments to supposedly reduce poverty, improve health, and ignite growth. This is a lot (if not the bulk) of money sent to poor countries, and so it’s a fair target.

This makes it easier to see what he means by aid not working. It probably hasn’t produced growth, even if most of Africa has been growing steadily for ten years. And it might not be what’s responsible for falling poverty levels. Frankly we don’t know, but I think we can say that if aid did ignite this growth, it certainly has been coy about it.

Yes, Chris and Angus, that might well be the case, but if aid — for all it’s flaws — really was a roadblock to development, Africa would not have grown so well in the last decade, would it?

The growth might have been in spite of aid, but that African countries could, on the whole, grow rapidly over a decade where aid to Africa itself grew rapidly, is about as definitive evidence as you could want for that aid does not prevent development.

There is a lot wrong with the world of aid. And giving aid that works is hard. But claiming that is a substantial roadblock to development is simply not true.

As an aside Blattman also writes that:

And, frankly, I personally find it hard to believe that levels of democracy in Africa would be as high as they are without aid. I think the most important forces driving democracy are probably internal to Africa, and the example and economic success of advanced democracies comes second. But aid and foreign meddling comes a close third. I simply find it hard to believe that aid–both the direct democratization kind, and maybe aid more generally–hasn’t played a big role.

Of course, I haven’t seen much evidence to support my gut feel, which (as we’ll see in a minute), is part of my larger point.

Yet there is evidence. See here and here.

October 11, 2013

Should you…

Filed under: Random Musings — terence @ 6:43 am
Tags: , ,

Should you ever be inclined to think that the Republicans are principled conservatives, or should you ever even just be inclined to think that they are simply the party of capital, remember this:

They have currently stopped the US federal government from functioning — causing suffering and inconvenience for millions of Americans — and are on the verge of quite possibly blowing up the global economy, for the simple reason that they do not want Americans to have access to health care.

Preventing less affluent Americans from being well matters that much to them.

They are not principled conservatives, nor principled anything. They are not the party of capital.

They are the party of crazy. A party driven mad by its own meanness.

I can think of no other explanation.

October 6, 2013

Great Reference on Inequality…

Filed under: Inequality — terence @ 12:18 pm

Do you think inequality is probably important? But are you also not wholly convinced by the Spirit Level? Are you an empiricist? Are you irritated by your (fellow) left wing friends who now somehow know post Spirit Level that inequality is the most important thing there is? Do you crave evidence? This website is almost certainly going to help.

October 1, 2013

Asylum Seekers and Australian Elections

Filed under: Random Musings — terence @ 8:26 am

Quite interesting analysis of Australia’s election results in the Washington Post although, typically it ignores the real issues of political economy.

One thing it does pick up quite well is just how distorted Australia’s politics has been by a relatively trivial issue (at least for those of us already living here in Australia):

While the number of immigrants seeking asylum is steadily increasing, the absolute number is still quite small – 16,000 in 2012 – compared to the total number of annual immigrants – 200,000 in 2012.  Nonetheless, 52 percent of voters reported that this issue was “very important” to their voting decision – a number higher than climate change, national security or interest rates.

Also, a depressing take on American politics by Larry Bartels. I wish Obama would have been more liberal but I don’t underestimate the forces pushing against him.

September 26, 2013

Politics, Development and Change

Filed under: Random Musings — terence @ 11:23 am
Tags: ,

In recent years the world of NGOs, bloggers and development think-tanks has gotten politics, big time. Or, at least, they’ve got it with respect to the governance of aid recipient countries. Politics matters. Good governance is not simply technocratic. It ain’t all markets. The state matters. And the state is shaped by politics.

Presumably because many of us are one way or another part funded via governments in donor countries we talking heads of development seem a lot more reluctant to concede that our own politics matter — that they determine the development-affecting international actions our governments take (aid and other foreign policy).

Fortunately, there is some interesting empirical evidence being generated in academia which is looking into this. As well as some interesting case study research just waiting to be done on different countries – indeed my wife’s just started a PhD on NZ aid).

While pondering the future for Australian aid I summarise some of this international work on the politics of aid donors in a blog post at Devpolicy.

September 21, 2013

Some Numbers on Asylum Seekers

Filed under: Development Philosophy,Migration — terence @ 9:13 am

From an interesting essay by Julian Burnside:

The fact is that boat people do not break any law by coming here the way they do. Over the past 15 years, 90% of them have ultimately been assessed as refugees entitled to our protection. Their arrival rate over the last 12 months has been much higher than the historic average, but even now it represents only four weeks’ ordinary population growth. While an estimated 25,000 boat people arrived in Australia in the 12 months to June 30, 2013, we received 168,685 new permanent migrants and over six million visitors came to our shores in the year ended December 2012. Boat people do not present a demographic problem for Australia.

Spooked by tabloid scare-mongering, both major parties have chosen deterrent policies: treat them harshly, push them off to small, impoverished Pacific neighbours. The low point of this is the recent Coalition promise to bring in the military to deal with the “emergency”.

The spectacular cost of these measures passes without complaint because it is seen as a kind of protection. While it is difficult to separate out the various components of the cost, indefinite detention costs, on average, around A$160,000 per person per year as of 2011-12. The actual cost varies: metropolitan detention is cheapest. It gets more and more expensive as the place of detention is more remote. On current estimates, we will spend about $4 billion each year brutalising people who have committed no offence and have done nothing worse that ask for protection [emphasis mine].

By way of comparison total Australian ODA in 2012 was just over $5.2 billion AUD.

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