Is Sen wrong on famine?; Krugman 4 Tobin; US as failing state; weasel words; China ain’t green; how Gordon can defend aid and pomo-babble: links I liked

‘Famines have indeed occurred in electoral democracies’ About as close to heresy as a development wonk can get. Olivier Rubin questions Amartya Sen’s famous assertion that political rights avert famines

‘A financial transactions tax is an idea whose time has come.’ Paul Krugman gives his support to the new incarnation of the Tobin Tax

‘America’s governance crisis is the worst in modern history. Moreover, it is likely to worsen in the years ahead.’ Jeff Sachs gets apocalyptic on Congress v President in the world’s biggest failing state

‘“Inappropriate” and “unacceptable” are the catchwords of a moralism that dare not speak its name. They hide all measure of righteous fury behind the mask of bureaucratic neutrality. For the sake of our own humanity, we should strike them from our vocabulary.’ Edward Skidelsky in Prospect takes aim at two words I hate.

Leo Horn argues that China’s fiscal stimulus has been anything but green

Owen Barder shows Gordon Brown how he can keep his promises on aid

And finally, ‘The characteristic theme of Sargeant’s[1] essay on the neoconstructivist paradigm of narrative is not, in fact, narrative, but subnarrative’. Let the proudly meaningless prose of the Post-Modernist Generator mess with your mind. Every click brings a new, equally random bit of Pomo-babble  [h/t Martin Walsh]

Oil melts glaciers, Gandhian climate marchers and hitch-hiking polar bears

A Thanksgiving and pre-Copenhagen treat – this vintage 1962 Life Magazine advert from Humble Energy – which became Exxon after its merger with Standard Oil. In those days, big oil really told it like it was [h/t Alex Evans].

By the way, if you’re somewhere between Oxford and Copenhagen and you see a footsore Indian hiker with flowing locks, be nice to him. He’s Push (full name Pushpanath Krishnamurthy), an Indian colleague who’s making a Gandhian style 370 mile trek from Oxford to the climate summit and keeping a moving (in both senses) webdiary. In a few days time, he will be overtaken by a hitchhiking polar called Nicola from our Manchester office, but I’m a bit worried she will never make it (would you give a polar bear a lift, especially when “The suit is incredibly hot and sweaty. It’s not very comfortable and a lot of the time it doesn’t smell very nice”). The tribes are gathering…….

Text Reads:

‘Each day Humble Supplies Enough Energy to Melt 7 Million Tons of Glacier!
This giant glacier has remained unmelted for centuries. Yet, the petroleum energy Humble supplies — if converted into heat — could melt it at the rate of 80 tons each second! To meet the nations growing needs for energy, Humble has applied science to nature’s resources to become America’s Leading Energy Company. Humble provides energy in many forms — to help heat our homes, power our transportation, and to furnish industry with a great variety of versatile chemicals. Stop at a Humble station for new Enco Extra gasoline, and see why the ‘Happy Motoring’ sign is the World’s First Choice!!’

How has the World Bank performed on the global economic crisis?

The Bank’s Independent Evaluation Group – an internal watchdog with a good track record in spotting problems, has just published an evaluation of the World Bank Group (WBG)’s response to the crisis. Nothing earth-shattering, but here are some highlights:

‘The greatest part of the Bank’s response in fiscal 2009 was a large increase in IBRD lending, which was unprecedented relative to previous levels but modest in relation to crisis- induced needs and to support from other sources (for example, the IMF or the European Union)…. IBRD disbursements increased from $10.5 billion in fiscal 2008 to $18.5 billion in 2009. IDA disbursements remained flat—though high by historical comparison—at some $9 billion.

Given high unemployment and a rise in poverty, a positive feature in the current response is the greater prevalence of social protection programs. The bulk of the increase in Bank funding has gone to middle- income countries, where the initial impact of the crisis and its potential systemic effects are large and where significant pockets of poverty exist. But this pattern raises questions about the adequacy of financial flows to poorer countries. As the crisis unfolds, the World Bank must be careful to ensure adequate attention to low- income countries and to poverty reduction.

The larger increase in lending to middle- income rather than low- income countries reflected specific country demand, but also the greater ability of middle- income countries to formulate their financing needs and tap sources more quickly.

With the pressure of high oil prices moderating, fiscal space shrinking, and the urgency of the financial crisis, attention to the environment and climate change issues in most countries has declined. The WBG has recently promoted renewable energy and energy efficiency and helped mobilize funds to address climate change. But the WBG can play a stronger role in ensuring that actions on climate change are integral to the crisis response.’

So this means the money has largely flowed to middle income countries (that’s what the IBRD funds) rather than the low income countries that borrow from the IDA (see table).

The report concludes with 7 key issues:

1. ‘Poverty must be the main focus of WBG support.’ That means focusing more on poor countries, and on poor people within middle income countries.

2. ‘Close attention to fiscal deficits and debt sustainability is essential’ Increased borrowing could lead to a new debt crisis, especially in low income countries.

3. ‘The shift toward a greater role for government needs to be balanced with efforts to re- invigorate the private sector…. This underscores the importance of the WBG support for government capacity, transparency, and effective regulatory policy. At the same time, the private sector will need to be supported, in particular by facilitating its access to finance.’

4. ‘Environmental and climate change issues need to be integrated into crisis response and recovery strategies.’

5. ‘WBG capital adequacy issues need to continue receiving attention.’ Concern here that bunging a load of money at the crisis could leave the Bank short of cash for future crises.

6. ‘A strong focus on results is vital.’ Interesting point here. Big money, and the need to borrow more means the Bank will have to show results, but also ‘the greater focus of conditionality on few prior actions with strong country ownership’ means that the Bank will have to demonstrate actual results, for example in terms of poverty reduction rather than say ‘the countries complied with our conditionalities, so at least we got some policy reforms that we wanted.’

7. ‘Complacency needs to be avoided and preparedness enhanced.’ i.e. get ready for the next crisis, guys.

A unique 30 year portrait of a shanty town and its people

In 1978 Caroline Moser, a young British anthropologist went with her two children and film-maker husband to Indio Guayas, a new squatter settlement in the swamps surrounding the Ecuadorian city of Guayaquil. They built a 4 x 8 metre bamboo house joined to dry ground by long, rickety walkways, and lived there for 7 months while Brian Moser made a film of life in the shanty town.

Caroline went on to work in academia and the World Bank, but has gone back repeatedly over 30 years, building up a unique longitudinal picture of the evolution of a shanty town which she has now pulled together in a new book, ‘Ordinary Families, Extraordinary Lives: Assets and Poverty Reduction in Guayaquil, 1978-2004’.

The book employs something she terms ‘narrative econometrics’, a mix of quantitative analysis based on 3 household surveys in 1978, 1992 and 2004, and field notes and focus groups from her 10 visits to the community. A series of photos chart the transformation of the community from swamp to a well-constructed suburb. The result is a deep insight into the lives of a community that she contrasts with the ‘decontextualized, quick-fix experimentation solutions in twelve villages in rural Africa’ of Jeffrey Sachs. The book charts the interplay between the individual struggles of families and a community, and the sweep of economic and social change as Ecuador’s oil boom of the 1970s gives way to the ‘lost decade’ of austerity and structural adjustment, and then an ‘explosion of migration’ to Spain suddenly floods the settlement with remittances (she even goes to Barcelona to interview the migrants).

Moser shows how the initial struggle for land (literally – organizing to pressure the authorities to fill in the swampland) and housing evolved over time. Next came services and education. Much depended on the degree of ‘social capital’ largely stemming from the rapid friendship and organization of women as they found their feet in a new urban world (the men seem to have spent most of their time drinking, but Moser is nuanced on the importance of marriage and relationships with men). Their achievements were extraordinary (hence the title) – bamboo shacks transformed into two story concrete houses; mains water for 94% of the houses by 2004; ‘extraordinary educational outcomes’ as parents who had not even finished primary school made the sacrifices to see their kids finish secondary and even (10%) go on to tertiary education.

Along the way, expectations changed – educated young women rejected the cleaning, washing and cooking jobs their mothers had found, but were unable to find better alternatives. Migrants to Barcelona worked in jobs well below their qualifications. The system failed to keep up with the progress of families, and as a result alienation has grown.

This is no development fairy tale – Moser’s keen eye and massive database charts success as well as failure in a ‘natural experiment’ where the decades produce winners and losers from a community that began as equals. If I have one criticism, it is that she fails to spell out the implications of her ‘big idea’ – she has developed an ‘asset vulnerability framework’ as a way of understanding the lives of the poor and the role of assets (physical, human, social etc) but I finished the book unclear on the ‘so what’ – what do you do differently using that framework rather than any other? It appears to lead to a focus on creating the ‘enabling environment‘ that allows poor people to build their assets, stressing opportunities rather than risk management or protection from shocks. So far, so World Bank. Thinking about assets highlights the interrelated, but sequential way in which households accumulate them. As they do so their wellbeing increases (e.g. housing is the first asset the acquire – it does not get you out of poverty but is a precondition for others that can and do). That sequential aspect is largely missing from other analyses of poverty and vulnerability.

Moser family and friends 1978

Today, Indio Guayas faces new challenges of crime, drugs, violence, fear, and the erosion of the social capital accumulated by years of community organization. Once again, much will depend on the women leaders who became Caroline’s friends, most of them now grandmothers, who must now deal with this new threat (the police are largely absent, or part of the problem).

Longitudinal studies, especially this thorough, are like gold dust. They reveal all the complexity, optimism and beauty of human development. It’s too late for me, but could younger readers please think about doing a Moser and putting in place their own personal baseline that they can return to as their careers develop?

Millions Fed: 20 case studies of agricultural success

‘In the late 1950s around a billion people—about one-third of the world’s population—were estimated to go hungry every day. Famines were threatening millions in Asia and Africa in particular, and prospects for feeding the world’s booming population looked bleak. In response to this alarming picture, scientists, policymakers, farmers, and concerned individuals initiated a concerted push to boost agricultural production and productivity in developing countries. Developing and industrialized countries, together with development agencies and civil society organizations, pursued a range of interventions in agriculture: they applied modern science to crop and livestock production, constructed irrigation systems, developed new cultivation practices to conserve natural resources, introduced policies to encourage farmers to grow and sell more food, and launched many other programs in agricultural development. The result? About one billion people now go hungry every day.’

So begins ‘Millions Fed‘, IFPRI’s collection of uplifting case studies of agricultural success, funded by the Gates Foundation. It offers an interesting science + private sector counterpoint to Ha-Joon Chang’s FAO book on role of the state (see previous blog).

The 20 case studies include successes in defeating plant diseases and bugs in wheat, cattle and cassava, the Green Revolution in Asia (of course), improved yields in African maize, Asian mungbeans or Indian millet and sorghum; zero tillage methods in Argentina, India and Pakistan, and farmer-led innovation in water and soil management in Burkina Faso and Niger. NGO types may be more skeptical over the generally anti-state stance on market and land tenure reforms, but there is an interesting ‘third way’ quality to the discussion on the successes of dairy cooperativization in India, or cotton farmers’ associations in Burkina Faso.

Main lessons from these 20 case studies?

‘Science and technology: The application of science and technology to agricultural development— whether by developing advanced techniques for crop breeding or updating farmers’ traditional soil and water management practices—is a common determinant of success.

Complementary investments. Science and technology are not enough: sustained public investment in the hardware and software of agricultural development is also critical. This includes public investment in irrigation schemes, rural road networks, rural education, market infrastructure, and regulatory systems.

Private incentives. But even with sustained public investment in science, technology, and complementary investment areas, little can be achieved without the right incentives,  putting policies in place that encourage farmers, entrepreneurs, and companies to invest in agriculture, and ensuring that markets provide accurate and timely price signals to these private sector actors.

Cooperation and collaboration. Partnerships among diverse actors in the agricultural sector—research institutes, community-based organizations, private companies, government agencies, and international bodies—are evident in almost all successes.

Timing and planning. Many successes result from good timing, whether by chance or design.

Experimentation and evolution. Often, successes emerge from localized experiments that allow participants to learn from their mistakes, adapt to changes in the landscape, evolve as the playing field becomes more complex, and pursue incremental, step-by-step approaches to scaling up.

Community involvement. Relatedly, by vesting communities with a stake in ownership of a development process, grassroots participation contributes much to the long-term sustainability of a success.

Leadership and dedication. Often, the solutions needed to address agricultural development challenges require dedicated individuals to make the difference—champions to push the issue to the forefront of the public’s consciousness, demonstrate what can be done in the face of seemingly insurmountable challenges, or mobilize the political and financial capital to overcome inertia.’

Superfreakonomics undone; affirmative action works in India; China’s carbon; Africa is rich; good ideas with stupid names; three arguments for taxes and it’s raining polar bears: links I liked

Like a good academic assassination? Settle back and enjoy a quite brilliant filleting by the University of Chicago’s Raymond T. Pierrehumber of Superfreakonomics’ ‘analysis’ that expanding solar power would increase global warming.  [h/t Steve Jennings]

Affirmative action works for women in India, according to a research round-up by Chris Blattman

What is China doing about its carbon emissions? Sort out facts from abuse at this website run by the World Resources Institute [h/t John Magrath]

Africa is rich: Bill Easterly has a magic moment trekking in Ethiopia

Richard Gowan laments a good new idea with a rubbish name: the UN’s new ‘Network of Men Leaders’

‘“Windfall” support should be matched by windfall taxes. What the state gives, the state is entitled to take back.’ Martin Wolf in the FT makes the arguments for a tax on bonuses.

‘The IMF’s reaction to Brazil’s financial taxes reflects how ingrained finance fetishism has become’, Dani Rodrik is dismayed by the IMF’s old school hostility to Brazil’s 2% tax on short-term capital inflows to prevent a speculative bubble,

A happy tax story from Nigeria? Surely some mistake? Nope, but the tax dates from 1910 and has led to demonstrable improvements in health in the areas where it was introduced.

And finally, this is not for the squeamish, (the Guardian withdrew it after complaints) but Plane Stupid’s youtube on carbon emissions certainly makes its point

How archaeology holds the key to climate change adaptation in Bolivia

Climate Change is giving Bolivia a rough ride. One of the poorest, most unequal, and most biodiverse countries in Latin America, it has been buffeted by ‘natural’ disasters in recent years and is home to 20% of the world’s tropical glaciers, which are melting faster than most experts thought possible. Bolivia is also home to an exciting change process under the country’s first ever indigenous president, Evo Morales – will climate change unravel any progress?.

A new Oxfam report gives chapter and verse (and some amazing photos) on the impacts and responses to climate change in Bolivia, but one story caught my eye, from the north-east Beni region, where flooding in 2008 was the worst in 50 years. One project there has turned to an unusual source of ‘new’ ideas – archaeology – in search of ways to adapt to climate change.

In the 1960s, archaeologists revealed an ancient agricultural system, developed by a pre-Inca civilisation, which not only coped with environmental challenges such as flooding and drought, but also improved soil fertility and productivity. Three thousand years later, this ancient irrigation system has been revived.

Elevated fields of up to two metres high, known as camellones, are constructed to be above the height of floodwaters, and are surrounded by water channels. The elevated fields are somewhat like the raised beds that some vegetable gardeners construct, though on a much larger scale. During the rainy season, the surrounding channels fill with floodwater, preventing the crops in the fields being washed away. The water can then be used to irrigate and provide nutrients to the camellones during periods of drought.

The project is in its early stages, but initial results have been promising. The first trial camellones, built in 2007, were the only structures that survived the 2008 floods, which proved the system could help communities adapt and strengthen their livelihoods.

Improved fertility of the camellones means that farmers are able to produce up to three crops a year and much higher yields than can be achieved by conventional practices in the region. The water channels are vital to the success of this system, providing irrigation and year-round nutrients. Fast-growing aquatic plants called tarope purify the water, encouraging fish to colonise the canals, and these in turn provide an additional source of food and income.

This is one of a series of country reports by Oxfam on the impact of climate change – the latest, on Pakistan, was published yesterday. The full list (includes Uganda, Malawi, Nepal, South Africa, Vietnam and Russia) is here.

What can the BRICS teach us about reducing poverty?

An excellent new paper from the prolific Martin Ravallion, head of the World Bank’s research department, compares the successes in poverty reduction in three of the biggest beasts of the developing world: China, India and Brazil.

Between them, these countries are home to a bit less than half the world’s poor people, but it used to be a lot more. Each has combined market-oriented reforms with different kinds of social policy, producing different combinations of growth, inequality and poverty reduction that hold lessons for each other, and for other developing countries seeking their own paths out of poverty. Some highlights:

‘Brazil, China and India have seen falling poverty in their reform periods, but to varying degrees and for different reasons. History left China with favorable initial conditions for rapid poverty reduction through market-led economic growth; at the outset of the reform process there were ample distortions to remove and relatively low inequality in access to the opportunities so created, though inequality has risen markedly since.

By concentrating such opportunities in the hands of the better off, prior inequalities in various dimensions handicapped poverty reduction in both Brazil and India. Brazil’s recent success in complementing market-oriented reforms with progressive social policies has helped it achieve more rapid poverty reduction than India, although Brazil has been less successful in terms of economic growth.

In the wake of its steep rise in inequality, China might learn from Brazil’s success with such policies. India needs to do more to assure that poor people are able to participate in both the country’s growth process and its social policies; here there are lessons from both China and Brazil. All three countries have learned how important macroeconomic stability is to poverty reduction.’

Similarly this week’s Economist has an excellent 14 page special report on Brazil:

‘The country is enjoying probably its best moment since a group of Portuguese sailors (looking for India) washed up on its shores in 1500. Brazil has been democratic before, it has had economic growth before and it has had low inflation before. But it has never before sustained all three at the same time. If current trends hold (which is a big if), Brazil, with a population of 192m and growing fast, could be one of the world’s five biggest economies by the middle of this century, along with China, America, India and Japan.’

And long before then, if it continues on its current path, it will have become less unequal than the US (see graph). See here for previous blog on Brazil’s achievements on inequality.

Has the IMF really changed? Academic arm-wrestling from Washington…..

A new report from the Center for Economic and Policy Research in Washington DC tries to work out whether the IMF has really changed its thinking in response to the global economic crisis and the general perception that countercyclical responses (rather than belt-tightening austerity) are the right way to go in a recession.

After a (fairly polite) public row with Fund staff at a panel on the crisis (which you can watch on the 50 minute youtube below), the CEPR team went back and analysed IMF agreements with 41 countries. (For Fund geeks, these include Stand-By Arrangements (SBA), Poverty Reduction and Growth Facilities (PRGF), and Exogenous Shocks Facilities (ESF)). What did they find?

‘31 of the 41 agreements contain pro-cyclical macroeconomic policies. These are either pro-cyclical fiscal or monetary policies – or in 15 cases, both – that, in the face of a significant slowdown in growth or in a recession, would be expected to exacerbate the downturn. In some cases, the Fund subsequently relaxed the original conditions; sometimes (as in Hungary, Latvia, Republic of Congo, and Haiti) this appeared to be the result of social unrest or other pressures on the borrowing government.

In many cases the Fund’s pro-cyclical policies were based on over-optimistic assumptions about economic growth. The IMF has a history of over-optimistic projections in many countries. So it is not so easy to separate forecasting errors from an underlying bias toward overly restrictive fiscal and monetary policies.

Over the past year or two the IMF has been a strong supporter of the use of government fiscal stimulus to counter-act the world recession, and it has long supported expansionary monetary policies, e.g. in the European Union, as well. It may then seem paradoxical that so many of the IMF’s agreements concluded during this recession have been pro-cyclical. But there has long been a double standard for low-and-middle income countries, in that Fund policy does not allow or encourage the same types of expansionary macroeconomic policies as it recommends for the high-income countries.

The economic argument for this double standard is that developing countries face a much more binding foreign exchange constraint… Of course some countries headed into this downturn with unsustainable fiscal or current account deficits; but even in these cases there should be a strong bias towards waiting until the world recession has passed before attempting to adjust these deficits. Other countries may have an unsustainable debt burden; in these cases there is an argument for more and speedier debt cancellation in the near future, rather than trying to improve the fiscal balance while the economy is crashing.

In some countries the rationale for tightening macroeconomic policies during the current downturn has been to restore confidence as a result of capital flight. In these cases, the IMF should be more open to capital controls, which it does not recommend in any of the agreements, and in some cases (e.g. Pakistan) it opposes these measures.’

The report was rebutted by the IMF in another one hour panel discussion (that should test your youtube stamina), and the CEPR has responded to the rebuttal with an eight page response. Also worth checking out is ‘Doing a Decent Job‘, a Eurodad report on the IMF’s alleged conversion that goes into more depth at what is actually happening at country level. This one could run and run….

Ripples from the future; realtime climate change; food prices; throwing rocks; seduced by stories and why does she always guess right? Links I liked

‘Scientists at the £3.6bn Large Hadron Collider (LHC) found their plans to emulate the big bang postponed this week when a passing bird dropped a “bit of baguette” into the machine, causing it to overheat’ records the Guardian.  But there’s a much more sinister explanation from the whackier frontiers of theoretical physics: ‘ripples from the future are travelling back in time to stop the Switzerland-based particle accelerator working.’ Now that’s what I call a conspiracy theory.

Not sure if we’re allowed to use the word ‘funky interactive video’ when the video in question (by the talented Oxfam filmmaker Sandhya Suri) is a realtime account of a cyclone smashing into a community in Bangladesh, but take a look anyway

Excellent and alarming update on rising food and oil prices from Alex Evans

Throwing rocks at a war criminal in Guatemala (and keeping his hat for the town museum)

If you can get past the annoying voice, this brainteaser is very disturbing. Can someone explain to me why she always guesses right? [h/t Sarah Wootton]

Suffering from ‘narrative’ overload? Uberblogger Tyler Cowen explains why he’s suspicious of the power of stories