Archive | April 2014

Academics as iconoclasts…

This struck me this morning while reading a post on Chris Blattman‘s development blog where he refers to Harvard academic, Matthew Stephenson’s anti-corruption blog:

But as long as folks having this conversation feel free to engage in armchair psychoanalysis of others’ motives, I’ll throw out my own hypothesis about why so many academics in the blogosphere are drawn to the anticorruption-is-a-Western-obsession-that-doesn’t-matter-much-for-development canard: academics (and I speak as a member of the tribe) enjoy feeling like iconoclasts willing to speak uncomfortable truths to power. And in the development field, a certain type of academic particularly enjoys attacking anything that the major institutions (World Bank, U.S. government, OECD, etc.) seem to be for. That’s not a bad thing in and of itself – a contrarian cast of mind is often conducive to questioning received wisdom and pointing out contradictions, self-serving justifications, and the like. But in this case, I think it’s lazy and counterproductive.

Well, yeah, it’s usually lazy and unproductive. As a member of the tribe, I feel vindicated. I find that too many academics aren’t as concerned with bettering to world so much as making themselves feel good about themselves by following a political script. If we’d worry more about pragmatics and less about ideology, we might be able to help make the world a better place.

Morning reflections on the Japanese Communist Party

I’m still getting adjusted to being halfway around the world where night is finally slowly turning into day and I promise this site won’t morph into a daily blog on Japanese politics (though it wouldn’t matter since noone reads this anyway!)

On my morning walk, however, I was struck by a poster from the Japanese Communist Party which made three points. First, that the Trans-Pacific Partnership will destroy Japan’s economy and the agricultural sector, second that the United States will have to stop using the Osprey aircraft in Japan, and third that Japan should leave the Japan-American protection agreement as soon as possible so that Japan can build a peaceful future.

While I generally like the Japanese Communist Party, I had to laugh. Japan’s agricultural sector is already in major trouble and protectionist policies which insure price floors for aging farmers while restricting supply (which has the happy effect of keeping Japan thin) are not doing Japan’s food security situation any favors at all. Japan is a manufacturing and a consumer economy. It should sell cars and buy food, not rely on the good graces of a corrupt cabal of octogenarians to keep growing rice.

Second, the JCP’s focus on a particular aircraft really doesn’t get to the heart of the problems surrounding bases in Okinawa. The mention of Osprey’s is merely a way of pandering to the mainland vote, while not challenging mainlanders to investigate Okinawa’s situation to any appreciable degree.

The third point was the most troubling. It’s odd that the JCP would hope that Japan leave the Japan-American protection agreement given the current state of Abe’s right wing government. Without fanning more flames of the Yellow Peril at all, Japan will have to think long and hard about the implications of the LDP’s long push to amend the current Constitution to allow Japan to deploy troops outside its borders or preemptively strike targets it deems as a potential threat. Given the unwillingness of the LDP to substantively recognize Japan’s imperial incursion into Asia, and their willingness to agitate China at any cost, I think that the costs could be far greater than the benefits and doubt that the JCP would be around to hold the LDP back.

I know that small parties have to pick their battles carefully to ensure their political survival, but the JCP’s demands were almost comedy. I’m not sure what that makes me. Every year I become more and more cynical about progressive opposition parties and politics both in Japan and in the US. I’m not sure what that makes me. Are they really that poorly informed or is this just political pragmatism?

Movie review (super short): 永遠のゼロ (The Forever Zero)

04015dde6181377015fe977f56c94dd7I finally watched this on the plane. For those who don’t know, 永遠のゼロ is a right wing film production, which tells the story of a contemporary family seeking information on their grandfather, who signed up to be a part of the Kamikaze program at the end of WWII.

I learned a couple of things by watching this movie. First, the Japanese incursion into Asia never really happened. In fact, it’s never mentioned at all. No wonder kids don’t know anything about the war. The right wing is selectively erasing it from the history books.

Second, I learned that Japan’s attack on Pearl Harbor and the subsequent war with the US wasn’t a bad idea. It was a great idea, but just need to be fought smarter. If only more people had been like the heroic main character of the, the Japanese would have won. The main character isn’t worried about fighting a senseless war and that millions are dying all around him, He’s really only worried that it’s being fought badly.

The right wing in Japan and in the State have a lot in common. They selectively pick snippets of history which they like, regardless if they actually ever happened, and ignore the parts they don’t like to create a new historical narrative. This movie, aside from the generally annoying dialogue and subpar acting, works as a great propaganda piece, but not for much of anything else.

Today is World Malaria Day

Kenya (23 of 26)I was supposed to give a presentation, but instead I’m in the Delta SkyClub writing a blog post.

I’m not exactly sure what we’re all supposed to be doing on World Malaria Day that we shouldn’t be doing every day, but at least we have a day! There’s no such thing as “World Helminth Day,” unfortunately.

What I think we should be doing on World Malaria Day:

1. Reducing ridiculous bureaucracy in developing countries which inflates the price of goods at the border.
2. Eliminate ridiculous protectionist policies in wealthy countries which selectively hobbles imports from developing countries.
3. Encourage true democracy in African States (where it doesn’t already exist) and eliminate unproductive authoritarian dead weight.
4. Guarantee rights to representation, legal fairness, political expression and property.
5. Create a global tax on capital and reinvest monies fairly in locally developed infrastructure projects in developing countries.
6. Encourage deep state investments in health care and health delivery in malarious countries while creating conditions favorable for the private sector to meet health needs.
7. Invest in the development of new pharmaceutical tools to prepare for the day when ACTs are no longer effective.

Wait, only points 6 and 7 had anything to do with malaria, you say, but I say they all do. Malaria is a complex disease, the root cause of which is poverty, the root cause of which is politics and economics. We will never be able to eliminate malaria unless we take care of all of the other problems which create the context that allows it to exist.

Is this racist? (これ、差別的かな??)

I really have no clue. I think I’m too distracted by the utter awfulness of this musical crime against humanity. Can we really give Lavigne that much credit?

Is this racist? Somewhat odd given the themes of the song (submissive Japanese women ready to commit to her man “unconditionally”), but at least a step above the first clip.

Is this racist? I’m willing to say probably. Japanese girls bowing down to the white lady at the beginning kind of throws me over the edge. At least some locals got a paycheck….

Is this racist? Though I have to credit Styx with teaching me the first Japanese I ever learned, watching this video now does give me the shivers. Japanese people as army of mindless, though secretly cunning robots (with big teeth a la Breakfast at Tiffany’s) ready to infiltrate and destroy America’s sacred classic rock world.

Is this racist? Kobota Toshinobu and EXILE in blackface. I’m pretty sure Kobota and EXILE are both great fans of American soul and plenty of Japanese stars have tried to look like white people in the past so I’m hesitant to call this racist, but painful, nonetheless.

I’ll leave it up to the reader to discuss, but THIS is DEFINITELY racist:

“I want to tell you one more thing I know about the Negro,” he said. Mr. Bundy recalled driving past a public-housing project in North Las Vegas, “and in front of that government house the door was usually open and the older people and the kids — and there is always at least a half a dozen people sitting on the porch — they didn’t have nothing to do. They didn’t have nothing for their kids to do. They didn’t have nothing for their young girls to do.

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“And because they were basically on government subsidy, so now what do they do?” he asked. “They abort their young children, they put their young men in jail, because they never learned how to pick cotton. And I’ve often wondered, are they better off as slaves, picking cotton and having a family life and doing things, or are they better off under government subsidy? They didn’t get no more freedom. They got less freedom.”

Do malaria interventions cause human suffering through population growth?

041614_1200_Theimpactof3People often ask me this. I mostly find the question annoying since a dead kid is, well, a dead kid.

The thinking, however, isn’t entirely illogical and can, of course, even be traced back to Malthus himself. Malthus believed that helping the poor would only increase their misery through worsening conditions of crowding and starvation. If Malthus had lived in 2013 and were concerned with welfare policy, he’d probably be a card carrying member of the Republican Party.

For the record, I despise Malthus (and his spawn, Paul Ehrlich). I can’t think of a more cynical and heartless thinker. It’s disturbing to me that his ideas continue to permeate today, despite being wrong at best and simply hateful, at worst. More disturbing is how eagerly his ideas are absorbed by even otherwise well meaning people.

“It’s obvious,” I’ve heard people say while implicitly suggesting the some lives (ours) are worth more than others (theirs). As cliched as it may sound, I think that every human has both a right to live and the right to a life that is healthy and meaningful. Not saving kids from malaria compromises the ability to do either.

So far, though, no one really knows whether life saving interventions in developing countries fuel population growth. Does saving a child’s life simply increase the number of mouths to feed, thereby straining resources and insuring misery for everyone? David Roodman, a public policy consultant working on behalf of GiveWell, a group which does analyses on the effectiveness of charity programs, has searched the published literature to find the answer.

I think the best interpretation of the available evidence is that the impact of life-saving interventions on fertility and population growth varies by context, above all with total fertility, and is rarely greater than 1:1. In places where lifetime births/woman has been converging to 2 or lower, family size is largely a conscious choice, made with an ideal family size in mind, and achieved in part by access to modern contraception. In those contexts, saving one child’s life should lead parents to avert a birth they would otherwise have. The impact of mortality drops on fertility will be nearly 1:1, so population growth will hardly change.

He goes through the available data and finds evidence to suggest that averted child deaths are associated with a decrease in the number of births over the lifetime of a woman. This is somewhat non-controversial. It has long been noticed that economic development and increased access to medical care is associated with decreased lifetime fertility.

Where things become controversial is in the case of developing countries, where saving a child’s life might not have the same effect on reducing births overall. This might be true in the short term, and Roodman finds evidence to suggest this. A short term reduction in child mortality might not yield immediate results.

The issue might be more nuanced, however. Merely providing malaria interventions such as insecticide treated nets to prevent disease without increasing access to quality health services might lead to a situation where population increases quite rapidly. I would think that this might explain why some of the most malarious countries in the world are experience the most rapid population growth. Malawi would be an example.

The strategy, then, is incomplete and Roodman’s analysis might suggest that we need to take a holistic approach to include both malaria prevention and reproductive health services.

I would, however, suggest that the problem is more complicated, particularly when reflecting on Kenya, where the most effective method of reducing fertility has probably been the imposition of school fees. The issue then isn’t merely a matter of saving kids and Depo shots, it’s also a matter of finances. If people can’t afford kids, they won’t have them, but the only way to arrive at economic barriers to reproduction is to have an economy, which is exactly what a country like Malawi doesn’t have.

OECD social indicator report: not much in the way of good news

FoodSecurityThe new OECD “Society at a glance” (paywall) report came out today. It’s part of a series of policy papers assessing the social implications of the economic crisis and its aftermath, and offers a list of policy recommendations on a yearly basis.

The picture is never good.

The financial upheaval of 2007-08 created not just an economic and fiscal crisis but also a social crisis. Countries that experienced the deepest and longest downturns are seeing profound knock-on effects on people’s job prospects, incomes and living arrangements. Some 48 million people in OECD countries are looking for a job – 15 million more than in September 2007 – and millions more are in financial distress. The numbers living in households without any income from work have doubled in Greece, Ireland and Spain. Low-income groups have been hit hardest as have young people and families with children.

The financial crash was one of the most important events that occurred within my lifetime, but still some people don’t seem to get how far reaching its impacts have been. The American Republican Party seemed to mostly bury its collective head in the sand, perfectly willing to sacrifice the welfare of poor people for the sake of a few narrow political goals.

The paper is filled with interesting data and charts, but the are some other gems here. Food security:

While federal food assistance programmes in the United States now support roughly twice as many households as in 2007, the number with inadequate access to food at some time in the year has nonetheless climbed from 13 million (11% of all households) in 2007 to 17.6 million (15%) in 2012. Rates of food insecurity were substantially higher among households with children (20% in 2012) and lone-parent families were particularly affected (35%). Forty-one percent of all food-insecure households received no support through federal food assistance programmes.

As someone who grew up in a food insecure household, I take this quite seriously. Right wingers who have a stocked fridge don’t get what it’s like to have an empty fridge. It’s easy to say that SNAP benefits foster “a culture of dependence” with a bulging stomach. Perhaps they don’t know that in food insecure households, the last people to eat are the kids. Of course, they don’t care.

To “crisis-proof” social policies and to maintain effective support throughout the economic cycle, governments must look beyond the recent downturn. First, they need to find ways to build up savings during upswings to ensure they can meet rising costs during downturns. On the spending side, they should link support more to labour market conditions – for example, by credibly reducing benefit spending during the recovery, and by shifting resources from benefits to active labour market policies. On the revenue side, they should work to broaden tax bases, reduce their reliance on labour taxes and adjust tax systems to account for rising income inequality. Second, governments need to continue the structural reforms of social protection systems begun before the crisis. Indeed, the crisis has accelerated the need for these. In the area of pensions, for example, some future retirees risk greater income insecurity as a result of long periods of joblessness during working age. In health care, structural measures that strip out unnecessary services and score efficiency gains are preferable to untargeted cuts that limit health care access for the most vulnerable.

If GWB 1 is any indication, the Republican Party dislikes savings and when they get a surplus they seem to squander it. There’s no reason to believe that the future will be any better. I’m thinking about the dichotomy of labor taxation versus capital taxation. Republicans have made it quite clear that they dislike capital taxation and prefer labor taxation. But what this does is create a gated community of capital holders, who exert vast political control without having to take responsibility for, well, much at all.

While I do advocate for a national sales tax to pay for transfers to create an income floor for American wage earners, we also need to tax the hell out of inheritances. There’s no reason that Bill Gates’ son (does he have one?) deserves a leg up any higher than he’s already got it. If America wants to foster innovation, it has to start by bolstering it’s labor classes. Forcing them to go without meals and scramble around to meet basic health needs only creates a dog eat dog culture of basic survival, and leaves little room for good ideas.

Alright, happy zombie day.

New insurance product protects pastoralists from losses due to drought in Kenya

This is rather interesting. Pastoralism is characterized as a complex system of avoiding, accounting for and taking advantage of risk, not unlike hedge fund managers in the United States. Animals represent potential earnings, prices at markets vary with grazing conditions and perceived long term benefits, and decisions to sell animals are not made lightly.

In the past, pastoralists have protected against devastating losses through herd maximization and cooperation and conflict over prime grazing spots, along with systems of redistribution where animals from wealthy herders are given away or stolen with the approval of the community. The world has become complicated, though, as droughts become more and more frequent, political borders and conflicts constrain the movements of pastoralists, and as the spear has been replaced with the AK-47.

An interesting though appropriate insurance system might help to mitigate losses and stabilize communities.

Capital and inequality

Joseph Joyce, professor of economics at Wellesley College wrote and interesting piece to day on capital liberalization and inequality.

I’m glad to see that so much attention is being fawned on Piketty’s most excellent book, “Capital in the 21sr Century.” It’s sure to go down as a classic in the economics literature, but the debate and discussion surrounding the book couldn’t come at a better time.

I don’t think it’s an accident that Piketty’s book, would top the NYT best seller list just a week after appearing, that a sitting President of the US would mention that inequality is one of the most important issues of our time, or that Christine LaGarde, head of the IMF would make a case that we need to address inequality at a global level.

They (Florence Jaumotte, Subir Lall and Chris Papageorgiou) analyzed the effect of financial globalization and trade as well as technology on income inequality in 51 countries over the period of 1981 to 2003. They reported that technology played a larger role in increasing inequality than globalization. But while trade actually reduced inequality through increased exports of agricultural goods from developing countries, foreign direct investment played a different role. Inward FDI (like technology) favored workers with relatively higher skills and education, while outward FDI reduced employment in lower skill sectors. Consequently, the authors concluded, while financial deepening has been associated with higher growth, a disproportionate share of the gains may go to those who already have higher incomes.

This is a scenario we’re all mostly familiar with, though the broad effects are still debatable. Increasing investment by giants like the US in overseas manufacturing push down wages on domestic unskilled labor, but it’s hard to say whether this had a major effect on overall employment. Unemployment remained steady even after Clinton signed NAFTA, and continues to remain well under European levels today, though the lowest level of workers feel the worst pain. I’m not sure if I can really advocate for protectionist measures to keep capital at home or dissuade foreign investment on principle alone, but it is true that the worst effect of foreign competition has been the erosion of labor’s political power.

Jayati Ghosh of Jawaharlal Nehru University of New Delhi has examined the role of capital inflows in developing countries. She maintains that the inflows appreciate the real exchange rate and encourage investment in non-tradable sectors and domestic asset markets. The resulting rise in asset prices pulls funds away from the financing of agriculture and small firms, hurting farmers and workers in traditional sectors. Eventually, the asset bubbles break, and the poor are usually those most vulnerable to the ensuing crisis.

Well, this is somewhat more interesting. Foreign investment in developing countries appreciates the exchange rate, leading domestic investors to put their money into, say, real estate assets. This is certainly the case all over Africa. Land and building developments are occurring at a breakneck pace, with the hopes that expensive properties will be bought up by foreign companies and individuals. It’s certainly the case that no common African could ever afford some of these places (or would even want to buy them if they could). Nairobi, Dar es Salaam and Luanda, Angola are all in the middle of a real estate bubble. The problem, of course, is that domestic investors are hoping to make a quick buck, rather than attempting to create long term, profitable industries. No wonder Africa imports the lion’s share of it’s manufactured goods. No local will invest in the infrastructure to create it locally since urban real estate is so absurdly profitable right now. This, of course, means that money flows directly into the pockets of the urban elite and then sent back out to bank accounts and retailers in France and England, further entrenching the poorest of the poor.

Without the development of local industries, domestic economies can’t function and opportunities for revenue collections are missed. and countries like Tanzania and Kenya, for example, will continue to be beggar economies which depend on the good graces of the international community to support domestic social programs.

Articles I liked 4/12/2014

Here’s a few articles I’ve been reading this morning that I liked.

Intellectual Property Rights, the Pool of Knowledge, and Innovation by Joe Stiglitz (National Bureau of Economic Research)

We began by noting that some observers of innovation have claimed that a more important determinant of the levels of investment in R & D and the pace of
innovation than the intellectual property regime is the “opportunity set,” the knowledge pool from which applied researchers can draw. Knowledge, it is has long been recognized, is a public good—a
common resource from which all can draw (see, e.g., Stiglitz 1987).32 Intellectual property provides a way of appropriating the returns to investments in knowledge, but in doing so, effectively privatizes a public good. But every innovation draws upon prior knowledge, and the boundaries of “new” knowledge are inherently imprecise. Patents inevitably enclose what would otherwise have been in the
public domain. In doing so, not only do they impede the efficient use of knowledge, but because knowledge itself is the most important input into the production of further knowledge (innovations),
they may even impede the flow of innovations.

Democracy does cause growth (National Bureau of Economic Research)

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.

Abe’s Law: Domestic Dimensions of Japan’s Collective Self-Defense Debate (HERE)

The Edutainment Industrial Complex (Africa is a country)

So this is their strategy? Ask a bunch of relatively wealthy, globally-mobile pop superstars to tell rural youth to not participate in the flashy urban lifestyle they (the artists) usually promote–to stay in the countryside and participate in the resource extraction side of global capitalism? As Sean pointed out to me over email, the video isn’t unlike the type campaign some dictatorship (South Africa’s racist regime was fond of it) might use as a tool of “national development” or to fight crime or build national morale.

Is this a surprise? Western liberals have long romanticized rural poverty and encouraged Africans to simply do nothing about their developmental problems. Sorry, I had to put on my curmudgeon hat for a while.

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