Tag Archive | Jeffrey Sachs

Does Development Work? Observations on Gates’ Annual Letter

Infant mortality is down worldwide

Infant mortality is down worldwide

Asking a question like “does development work” is like asking “does policy work”: it depends. I seem to be fielding questions about development with increasing frequency. Mostly I find that the harshest critics don’t know a whole lot about development and haven’t been to many places in the world, complicating my ability to respond in an reasoned manner. Development is a complicated beast but, the truth is, that it didn’t come easy for us 1%’ers either.

Every year, Bill and Melinda Gates release a letter on the state of the Gates Foundation and the current situation of global development and health. This time Gates set out to dispel three common myths on development, namely that poor countries are doomed to be poor forever, foreign aid is a total waste and that development will just lead to overpopulation.

The first is the most cynical, but even for us development/public health folks, it’s easy to be discouraged. Pessimism aside, the data don’t bear out the assumption that developing countries are entrenched in poverty. Just about all Sub-Saharan African countries experience consistent economic growth throughout the 00’s and have seen rapid improvements in just about all of the common health indicators. People are living longer, fewer kids are dying and they’re making more money to pay for school and health care.

Over the past five years that I’ve been going to Sub-Saharan Africa I’ve seen this change on the ground. Cars are in better shape, there’s more goods on the shelves, kids are better nourished and security has vastly improved. Does this mean that all of the problems are magically going away? No, there are still vast challenges to infrastructure development, access to health care and affordable medications, educational quality, gender issues and basic business development. However, these improvements do signal that Sub-Saharan African countries are reaching a point where sustained development is possible.

I have a hard time disagreeing with Gates here, but I did find his “before” and “after” pictures of Nairobi a bit bizarre. Though Nairobi is currently going through a construction boom, I fail to see how it would look any different in 2014 than it did in 1969 after more than three decades of stagnation.

Gates second point and the hardest myth to dispel is that of the alleged ineffectiveness of aid. Bill Easterly has made a career out of aid bashing, and, unfortunately, given cynical politicians looking for policy scapegoats a point to scream to their angry constituents. In a broader sense, the screaming over aid is really a questioning of developmental policies themselves. Certainly, there are development failures. The neo-classically informed structural adjustment policies of the World Bank and the IMF during the 80’s and 90’s were, on the surface, colossal failures (Read Beyond the World Bank Agenda: An Institutional Approach to Development by Howard Stein for a great analysis). On a smaller scale, we can easily cherry pick misguided but well meaning development projects or plans that simply went awry for any number of unforeseen reasons. The recent takedown of Jeff Sachs (The Idealist: Jeffrey Sachs and the Quest to End Poverty) and the massive problems of the Millenium Village in North East Province in Kenya is a great example of the challenges a development project can face.

However, in ever insular post Iraq America, the question that is most often asked is why we should even care and does our presence merely serve to make things worse. The truth is, and the point most often overlooked, is that most development projects are international collaborations. Many projects are conducted with partners in target countries and, more often than not, projects often make up for shortfalls that hobbled governments are unable (or sometimes unwilling) to provide. Health care is one example.

Jeff Sachs wrote a nice article this morning on how effective free insecticide treated nets have been in reducing malaria incidence and mortality in Sub-Saharan Africa. Nearly half a billion free nets have been given out worldwide as of 2014 and a lot of kids are alive today who would have been dead had they been born ten years earlier. Malaria is 100% associated with poverty. Wealthy people do not get malaria, even in malaria endemic countries. Though some of the decline in malaria incidence has been due to increased affluence and urbanization of African countries, a major percentage of this decline has been due to aid programs which provide bed nets and have expanded access to life-saving malaria medications. Certainly, not all aid works, but nothing works 100% of the time, particularly when humans are involved.

Which brings us to the most cynical and offensive of Gates’ three myths. Some people truly believe that saving African kids is a bad thing. One day there will be too many of them and they will suck up the ability for the world to sustain life. Honestly, this view couldn’t be more wrong.

The poorest parts of the world are the areas which are seeing the most rapid population growth. The average Malawian woman has 8 children in her lifetime, often starting when she isn’t even yet 15 years old. It has been said that if Malawi continues on it’s current trajectory, that it will have a population equivalent to that of Japan’s by 2050. Women in water and food constrained pastoralist communities can have ten or more children. The most affluent areas of Africa are the places with the slowest population growth.

Even more incorrect is the assumption that poverty is less harmful to the environment than development. Malawi is almost entirely deforested due to extensive use of charcoal for heating and tobacco cultivation. Deforestation not only robs the earth of potential carbon sinks, but also reduces need biodiversity and directly impacts precious water resources. Africa burns unclean fuels such as charcoal and coal for heating, and the poor condition of vehicles make it a major potential source of greenhouse gases. The air in Nairobi on any given weekday is so filled with exhaust that one can become dizzy just walking around town. It is, of course, unreasonable (and stupid) to deny Africans transportation and cooking fuel, but well meaning though poorly informed armchair environmentalists in the United States would happily suggest doing just that.

Which bring me to my final point. The case against development is one that assumes that the status quo is somehow preferable to anything that might come after. The assumption is that Africans were just fine without Europeans and their planet destroying ways. There is, of course, little data on what Africa was like before Europeans started extracting resources from the continent. We do, however, know a lot about underdeveloped areas of Africa. There is evidence to suggest that some do fine. There is however, much evidence to suggest that other simply do not. The worst parts of Africa are the parts which are the least developed. They are the areas where the market doesn’t function. The areas where there is little education, no access to health care, no roads, no economy, kids regularly die, where old people are a venerated since they are so rare, where there’s violence and instability and people are entirely marginalized from any level of political participation. While development likely will never solve the worst problems (like those in Somalia), there is no case to be made that the current state of the ultra poor is acceptable on any measure, even to the poor themselves!

Alright, off to bed.

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Apparently, “the Aid Debate is Over.” We Can All Go Home Now.

I was just checking out Bill Easterly’s (author of The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good) article in the January issue of Reason, “The Aid Debate is Over.” (I wonder if he noticed that he had written an article called “The Big Aid Debate is Over” back in October of 2013.)

Yet again, Easterly uses Jeff Sachs as his academic punching bag. Sometimes I wonder if those two really just like each other a great deal, but go to great lengths to hate on each other in public.

I’m somewhat interested in his derisive tone towards technology:

Jeffrey Sachs’ formula for ending poverty was appealingly simple. All the problems of poverty, the famous Columbia University economist argued, had discrete technological fixes. Bed nets could prevent malaria-spreading mosquito bites. Wells could provide clean water. Hospitals could treat curable diseases. Fertilizer could increase yields of food crops.

Through a recent book on Sachs by Nina Munk (author of: The Idealist: Jeffrey Sachs and the Quest to End Poverty), he goes on to expose the failings of Sachs’ “Millenium Villages” experiment. Sachs wanted to test the hypothesis that throwing money at the poor and solving their basic ills would get the wheels rolling and free them from the chains of poverty for good.

Sachs’ technical fixes frequently turned out to be anything but simple. The saga of Dertu’s wells is illustrative. Ahmed Mohamed, the local man in charge of the effort, discovers that he needs to order a crucial part for a generator that powers the wells. The piece takes four months to arrive, and then nobody knows how to install it. Eventually a distant mechanic arrives at great expense. A couple of years later, Munk returns to find Mohamed struggling with the same issues: The wells have broken down again, the parts are lacking, and nobody knows how to fix the problem.

Easterly then moves on to use Sachs “failures” to criticize the current trend in development which uses small targeted programs which lend themselves to easy evaluation and implementation. People will often work on localized water development programs, or experiment with ways to help small farmers. Behavioral economists will attempt to use cash incentives to get parents to send their children to school. The thinking is that if projects are too big, they become unwieldy and impossible to properly implement.

Easterly believes that development should come from releasing countries from the shackles of bad policy. If the economic policy of a country is too intrusive or bureaucratic to allow the market to function properly, the policy should be changed.

We can now see that aid and development are two distinct topics that should each have their own separate debates. If today’s development economists talk only about what can be tested with a small randomized experiment, they confine themselves to the small aid conversation and leave the big development discussion to others, too often the types of advocates who appeal to anecdotes, prejudice, and partisanship. It would be much better to confront the big issues, such as the role of political and economic freedom in achieving development.

I mostly agree with Easterly’s position. The problems of poverty are mostly problems of the market. Even within Kenya, for example, high value companies must follow a Kafkaesque bureaucracy to do business, following 10 procedures and taking an average of 32 days from initial application to license. To put it in perspective, in the States, you’ll have to jump through 6 hurdles and it will take you five days. In developed countries, that’s considered extreme. In New Zealand, there’s only one step and it takes all of four hours.

Setting up a fruit stand may be easy, but profits slim, business slow and tax revenues are impossible to collect. Setting up a new wage paying transport company to move massive amounts of fruits from producers to markets efficiently is a bigger bureaucratic challenge, though the long term benefits are massive. Reducing the number of gatekeeper would go a long way to allowing these industries to grow.

However, aid and social programs are not ineffective. Though Easterly loves to beat up on Sachs, painting aid with a broad brush is unsatisfying. Sure, the water pump in one village may break, parts may be difficult to obtain and expertise hard to find when things go wrong, but the simple fact is that some people are getting water where they couldn’t before. Internationally funded distributions of bed nets have reduced malaria incidence and mortality all across the continent. There are a lot of kids alive today who would have died a decade ago.

Naively, I measure social progress through dead kids. There’s no way to measure the level of devastation that families feel when children needlessly die and the negative impacts on society and development are vast. Anything which keeps kids from dying is a good thing.

My view is that the macro and micro level development strategies need to work in tandem. Bed nets need to be distributed and water pumps provided. Aid programs which increase access to capital and training need to be strengthened. Evaluation of programs will be important to insure that waste is minimized and report successes. But we also need to see the end of unnecessary regulatory hurdles which do nothing but foster corruption and hamper the ability for countries to develop their market sectors.

Aid programs and market oriented regulatory reform developing countries will insure that short term problems are ameliorated and insure long term sustainability of current gains. While probably patently obvious, a combination of these two strategies will go a long way toward improving the public health and making sure that kids don’t die.

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