Tag Archive | development

Linking taxes to empathy

I look at how logical Ireland, Sweden, Denmark, Japan, Australia and the Netherlands are [because they enacted a carbon tax] and wonder how we in the US are still so positively stupid.

(I’m not alone in thinking so.)

It’s the one tax that both conservative and liberal economists agree on. You tax the amount of gasoline you use, the amount of garbage you don’t recycle (since it releases greenhouse gases once it’s sitting in a landfill), and the amount of energy you use to heat your home. The result: more money for the government (which wouldn’t be in such a fiscal mess otherwise), and less pollution. If you design it so that lower-income households are subsidized, it doesn’t lower consumption or increase inequality.

You can’t blame Obama entirely because any environmentally-progressive thing he might want to do would be vetoed by the Republican-controlled House (though it doesn’t mean he shouldn’t try). And you can’t blame Republicans in the House entirely because someone elected them. Could you blame the people that elected the Republicans?

I used to think that people who were homophobic, conservative, and tax-evading didn’t have the same access to good education. But then I remembered Alex. He and I went to the same public middle school and high school, and by his senior year, most of his opinions were already formed. He was smart and capable–he just didn’t care about most other people. And there’s the problem: no public school curriculum in the US teaches empathy.

Are all environmentalists good people? Probably not. Are all environmentally apathetic people “bad?” Certainly not. But for every person who opposes having taxes, I must ask: will they still refuse to pay taxes once they need the services of a fireman, policeman, public school teacher, or even sanitation engineer (garbage collector)? Once they or their children somehow end up needing social services support? Why should it be different for our shared environment and climate? Why do we need gigantic natural disasters to foster any significant action?

Do politicians cause famines?

So many great, honest quotes from John Githongo, who works on good governance in Kenya, from a November 2012 interview with the Economist about corruption in Kenya (that I wish I’d seen earlier but is still worth sharing):

A drought is made by God, a famine is made by man. Drought is big money for the corrupt elite—because it gives you the opportunity to import maize and other staples into the country and make a killing off of the backs of hungry people.

The key implication from his words is that imported maize (corn) and other crops are actually cheaper by weight than crops grown locally in Kenya, because agriculture (including fertilizers, pesticides, and good seeds) is often more subsidized in the US, the EU, and in other developed countries than in Kenya. As a result, political elites can make large profits fairly easily, in the name of helping people. This is more than just a problem of Kenyan political corruption, and probably wouldn’t change even if the level of corruption went down.

Kenya is more corrupt than other African countries. It’s our history. At independence, the state that emerged was a colonial one in many respects – small, aggressive, violent and engineered to serve the interests of only a small elite. Corruption can create an elite which creates a system of patronage that in itself produces a level of stability, where the goodies are being shared out by an elite, and a bit of it trickles down to the poor. Those poor who complain are locked up or killed, and that’s the way it has been for a long time.

I was surprised by this one, both for its honesty and its conclusions. China and its investors have been linked to corruption and exploitation in Africa, and particularly because they target mineral extraction and other resource-intensive industries. Extraction of rare earth metals and fuel result in huge profits but usually require well-educated [foreign] specialists; as a result, very few locals benefit in terms of jobs or payoffs unless contracts explicitly require paying a significant portion of profits to the community. Governments are often hesitant to set strict profit-sharing demands, though, for fear of scaring away investors.

But Kenya isn’t exactly at the center of the diamond, oil, natural gas, copper, coal, and other mineral extraction in Africa, even if the amount extracted is no longer zero. At the same time, Kenyan firms are said to devote 4% of all their sales income on bribes–enough to be hiring 250,000 new employees if the corruption were to stop. And Kenya isn’t actually the worst, according to many sources (though it’s hard to figure out exactly who is worst):

The World Bank’s CPIA Index on government transparency, accountability, and corruption surprisingly ranked Bhutan, St. Lucia, and the Cape Verde islands as having the worst corruption in 2011 (of the countries they were able to rank).

WB CPIA ranking on corruption worldwide for 2011. Darker red = more corrupt.

WB CPIA ranking on corruption worldwide for 2011. Darker red = more corrupt.

Transparency International, in contrast, ranked Somalia, North Korea, and Afghanistan as tied for worst corruption in 2012.

The Sunlight Foundation's map of Transparency International data for corruption in 2012. Again, Kenya is not ranked as worst, though  there is clearly progress to be made.

The Sunlight Foundation’s map of Transparency International data for corruption in 2012. Again, Kenya is not ranked as worst, though there is clearly progress to be made.

Regardless of exactly how corrupt Kenya and other developing countries are measured to be, it is in everyone’s best interest to improve.

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Update: For an interesting take on the cultural/psychological/sociological reasons behind perpetuated corruption, especially in developing countries, see Kathleen Reedy’s freshly pressed post on corruption in Afghanistan.

Road-tripping in Perú

Three weeks ago, I spent seven crazy, sleep-deprived days flying and driving around southern Perú with nine other friends. I could probably write a 50-page essay on my impressions, but I will try to sum it up crudely in a few words:

llamas-donkeys-bowler hats-ponchos-coca leaf tea-Inka heritage-ceviche-income disparity-tourism-poverty-agriculture-Andes-desert-terraces-writing on mountainsides-generous people-promising path to development-Lima < Cuzco

Even today, most Peruvian women of non-European descent (i.e. indigenous) wear knee-length skirts–even in the cold, even when they’re farming in the fields. Why? Because Peruvian women were traditionally judged by the size and strength of their calves, as an indication of how capable they would be as farmers, and therefore as good wives. The farms I saw while driving around Lima and Cuzco had tractors, yokes with oxen, and everything in between–but most of the manual work still seemed to be done by women.

In the cities, tourism was certainly a big industry–in Cuzco, it accounted for 60-95% of jobs, depending on who you asked–and not everyone was happy about it. Judging by the graffiti, some Peruvians felt like they were sell-outs, catering to foreigners instead of preserving traditional occupations. But tourism revenue can also have its benefits: when my friends and I were walking by the historic center of Cuzco (the traditional seat of the Inca civilization, and a city which, by the way, is much more impressive than most parts of Lima, the capital), we were approached by two siblings, trying to sell us hand puppets that their mother had made.

After one of us caved in and bought a few, things got more interesting. The boy, 7, told us that he wanted to be a musician, architect, scientist, chemical engineer, and writer (in roughly that order) and was better at multiplication than we were at that age. (We decided to motivate him by buying a bottle of Coke and some mints for a little experiment. It was a bit anti-climatic; I think he almost expected the mini-explosion…) As for his younger sister, she told us about how she’ll be performing Gangnam Style in her first-grade class. This is a city in the middle of nowhere, between the towering Andes and the Amazon. The tourists brought McDonalds, and the internet brought Gangnam Style; I’m thankful the government (and likely private funding) brought decent schools.

To give you an idea of how little of Perú I saw (and how much remains to be seen.) Most of my travels revolved around Lima, Cuzco, and Paracas.

To give you an idea of how little of Perú I saw (and how much remains to be seen.) Most of my travels revolved around Lima, Cuzco, and Paracas.

I can go on, about how the residents of Cuzco still seem proud and a bit resentful of the Spanish conquest, even 500 years later, while the residents of Lima seem to have forgotten … or of how we saw someone unloading alpaca stomachs from an unrefrigerated truck, still dripping blood, into the main bazaar in Cuzco … or of how we ran into a herd of lambs crossing the road near Moray (close to Cuzco). But instead, I’ll just show a few of the thousands of photos I took in this warm, photogenic country.

Flowers with the Catedral peaking through, at the Plaza de Armas, Cuzco. As simple as it was, I was elated to see such color after the gray fall/winter at Stanford.

Flowers with the Catedral peaking through, at the Plaza de Armas, Cuzco. As simple as it was, I was elated to see such color after the gray fall/winter at Stanford.

The historic center of Cuzco, Perú (Plaza de Armas)

The historic center of Cuzco, Perú (Plaza de Armas)

A beautiful courtyard in Cuzco. The storeowner decorated it himself; unfortunately, the squalid room where his family was watching TV behind me didn't look nearly as clean or beautiful.

A beautiful courtyard in Cuzco. The storeowner decorated it himself; unfortunately, the squalid room where his family was watching TV behind me didn’t look nearly as clean or beautiful.

The Plaza in Cuzco at night.

The Plaza in Cuzco at night.

A man dressed up as an Inca king posing for photos in Cuzco.

A man dressed up as an Inca king posing for photos in Cuzco.

The outskirts of Perú; poverty that was in clear contrast to the clean, well-restored historic quarter. The neighboring hillsides were all covered in eucalyptus, fast-growing but sucking the soils dry.

The outskirts of Cuzco: poverty that was in clear contrast to the clean, well-restored historic quarter. The neighboring hillsides were all covered in eucalyptus, fast-growing but sucking the soils dry.

Donkeys munching on succulents by the roadside near Moray, Perú.

Donkeys munching on succulents by the roadside near Moray, Perú.

Moray with the snowy Andes in the background. It was springtime at this point.

Moray, about 1.5 hours driving from Cuzco. The Incas used this site to experiment with agriculture at different elevations & temperatures. As we descended down to the center, we started peeling off our jackets--pretty incredible for a many hundreds-year-old experiment..

Moray, about 1.5 hours driving from Cuzco. The Incas used this site to experiment with agriculture at different elevations & temperatures. As we descended down to the center, we started peeling off our jackets–pretty incredible for a many hundreds-year-old experiment.

A salt mine near Cuzco. Saline water from hot springs flows into a canal and gets distributed to each of these pools, which are owned by members of a communal enterprise. The salt is collected after the water evaporates and then sold. I'm still not sure what else besides salt is there, but it tastes pretty good!

A salt mine near Cuzco. Saline water from hot springs flows into a canal and gets distributed to each of these pools, which are owned by members of a communal enterprise. The salt is collected after the water evaporates and then sold. I’m still not sure what else besides salt is there, but it tastes pretty good!

Standing on the salt mines. For some reason, the white sides reminded me of white-washed walls in Greece and the Middle East.

Standing on the salt mines. For some reason, the white sides reminded me of white-washed walls in Greece and the Middle East.

Next post–Machu Picchu, Lima, and Paracas. Next time I visit–the Amazon (Puerto Maldonado) and areas further inland and to the north. I’d love to hear about other places as well though!

The Cars Are Submarines

I can’t help thinking that in all the years I’d spent in New York City, I’d never experienced a hurricane or a tornado. But over the past few years, New York has seen tornados, hurricanes, record-breaking blizzards–in short, some of the most severe weather in centuries. All the houses in my neighborhood, and many others, lost power, and didn’t regain it for days, if not weeks. My parents’ car, and every other car in a 5-block radius? Submerged like submarines and completely useless. If you want to see climate refugees, look no further than Brooklyn, NY.

A view of lower Manhattan during Superstorm Sandy. Source: AP Photo/Bebeto Matthews

I’m thankful for the early warning system and the efforts that went into informing people ahead of the storm. But it was not nearly enough. Several hospitals lost power after the generators were flooded; some, like Coney Island Hospital, which caters largely to South Brooklyn’s low-income, immigrant, and elderly populations, won’t be open until at least January. What’s worse, most patients–as well as nearby residents–weren’t ordered to evacuate. After the over-precaution for Hurricane Irene, people were hesitant to leave their homes for another merely heavy storm. Now, they have left their homes, but mostly because they don’t have a home left to stay in.

I can’t begin to imagine how much worse it must be to live in the Caribbean or Southeast Asia, where intense hurricanes, cyclones, and monsoons are an annual occurrence. I would think that communities would become more resilient and neighborly over time, the way that New York has become after Sandy, but there’s evidence to the contrary. Ether Duflo and Abijit Banerjee, two economists at MIT, found that many people are less likely to help in times of need because they don’t want to start a cycle of reliance. This point (mentioned in their wonderfully insightful book Poor Economics) about avoiding taking on other people’s financial burdens–even when they’re your parents or siblings–jars with my upbringing. Nonetheless, these findings have significant consequences for economic development. Perhaps storms in the developing world have costs like these that we can’t see or measure, but that may be harder to overcome than the mess that we in New York are continuing to face.

Bamboo: the next revolution?

In Africa’s Vanishing Forests, the Benefits of Bamboo

In Africa you want everything. You want firewood, you want to reduce erosion, to maintain the water supply, generate cash and employment. Bamboo comes the closest — it gives you the most things.

The need for firewood is now critical in Ethiopia; trees covered 35 percent of the country a century ago; by 2000 they covered just 3 percent.

Paradoxically, harvesting bamboo to make durable goods is greener than not harvesting bamboo.

While Rosenburg, who wrote the above New York Times blogpost, makes some interesting points, she misses one huge, gaping hole of an argument: planting bamboo plantations will overpower and undermine whatever remaining biodiversity persists in these growing semi-deserts. The same process already occurred with eucalyptus, but given the even more extensive root networks of bamboo, native tree species may be completely outcompeted, leaving a vast, bamboo-only landscape rather than the extremely diverse forests that Africa used to be known for (along with the associated ecosystem services that all those different species provided.)

Predicting the Future of the World Bank

Most people have now probably seen the news that Jim Yong Kim, the president of Dartmouth College in the US, has been elected as the next president of the World Bank. As a professor and former WB employee noted, the appointment is mostly political, and was never going to take merit into account.

“The Obama administration would almost certainly have withheld support for Lagarde’s appointment to the IMF if European nations had not agreed in advance to support whomever was Washington’s candidate for the World Bank.”

Even when I was still working at the Bank, we were told that a process was taking place to nominate eligible candidates from within the Bank. However, given that this has never yielded an actual Bank president, we knew that the whole process was only for show; the president always comes from outside the Bank. As a result, I think that the Bank will continue to stagnate and lose influence as a player in the international development sphere, and will likely become a lender of last resort rather than of first priority. While it is debatable whether the other two candidates would have done a better job than Kim, someone would have still been offended if one and not the other was elected.

Pro: Kim is foreign-born, and not Caucasian–definitely a change from Zoellick. He would also likely attract more investment from Asia than other candidates.
Con: Kim isn’t actually that different from Zoellick. He’s the president of a US university, and therefore works well in big bureaucracies and in the American/European business context.

Pro: Kim has a public health background and isn’t just going to look at financial returns.
Con: Kim doesn’t have an economics background… though arguably, the president never does economic analyses himself before making decisions anyway. Kim also likely would prioritize health issues over other problems (i.e. environment, agriculture/food security, infrastructure, etc.) even though these problems are often intertwined and can’t be approached in isolation (which is how the Bank continues to work.)

P.S. – Sorry for the long delay! I’ve been traveling and have sadly neglected the blog because I’ve been putting off putting up photos from Spain, Turkey, and France. Will get to it soon…

The Future of International Relations

Many people now believe that the future of international development lies not with large organizations like the World Bank or USAID or UNDP (United Nations Development Programme), but with nimble entrepreneurs and small businesses. Alex Evans often talks of a movement not towards a G20 world but towards a Gø world. Parag Khanna, of TED fame, likes to talk of structural change (moving from a world of unipolarity where the US is all-powerful to a multipolar world with multiple loci of influence) and of systemic change (with hordes of influential new actors other than countries, like cities and corporations).

While I can’t always buy into such black-and-white arguments, there is some credibility to their claims—especially (and hopefully) to their predictions that collaboration (“proactive”) will become a more useful tactic than diplomacy (“reactive”). Which is why I was disappointed to hear President Obama’s State of the Union address yesterday, in which he boldly claimed that the United States must win.

Why must everything be about winning? Since when is economic growth a game? Since when is toying with protectionist trade policies, unemployment, war in multiple countries, and human rights abuses a game? This, if anything, is precisely the reason why the US won’t win—because it places itself on a pedestal of excellence, alienates any and every neighbor and friend, and gives more reasons for potential enemies to become definite enemies. If there’s any explanation for why the US has gotten this far, it’s because of hardworking citizens and entrepreneurs—and not because of our government and its quest for total domination.

The next Nobel Peace Prize goes to…

Here’s to hoping that Sayyid Abdullah Hashemi is at least considered for the Nobel Peace Prize. I have no idea how his work (turning around all the corrupt orphanages run by the Afghani government) made it to the NYT, or what keeps him going despite all the threats from incumbent, well-connected orphanage directors, or how he’s doing a better job at age 29 than most people twice his age… but I’m glad I came across his story nonetheless.

[I at least think he’s a more worthwhile candidate than Obama was, but that’s besides the point.] What’s more important is figuring out how to facilitate the work done by him and others like him in developing countries, who have fantastic ideas, refuse to abide by the status quo of corrupt government bureaucracies, and are often sidetracked, discouraged, or stopped altogether once they upset the wrong [well-connected] person.

To say, as an economist would, that government officials and others that perpetuate corruption aren’t paid enough, isn’t good enough in my opinion. They may not be paid enough, but that can be said for the vast majority of people in developing countries. To say, as a sociologist might, that these are deeply-ingrained norms perpetuated by the culture and its people, isn’t good enough either. But the combination of these two, now that holds promise.

A great paper by Sunil Sondhi addressing the history and dynamics of corruption in India outlines 4 main courses of action to combat corruption:

  1. Demonstrated political commitment to combatting corruption
  2. Administrative accountability (and enforcement)
  3. Procedural simplification
  4. Active & vigilant civil society groups (like national chapters of Transparency International)

While Mr. Sondhi seems to imply that actions by a government must necessarily come first (such as creating independent government bodies to monitor corruption), I think that this can only come after enough people rally against corruption, especially in the case of non-democracies (as in, countries where citizens have little political say and whose opinions are often overlooked). Politicians have few incentives to curb corruption unless the people responsible for their staying in office no longer approve of the politician’s practices and can stage a revolt. I liked Mr. Sondhi’s idea of Gandhi-style non-violent mass protests (in particular, “24 hour relay fasts” staged at the same time as parliamentary sessions), though this might not work in places where food insecurity and starvation are the norm…

——– Update:

Funny how there’s an article in the IHT about the Indian anti-corruption efforts a few hours after I wrote my post. The author essentially claims that the anti-corruption movement, started a few months ago by Anna Hazare, an aging old man with outdated opinions, has failed due to the fact that people couldn’t actually relate to his views once they found out what they were. However, it pointed out a deeper flaw in the system: that the majority of Indians who had market and political power, and who would stand to benefit from less corruption–the growing middle class–have not actually done much themselves. They may have written blogs and articles lamenting of the corruption, but did nothing to mobilize themselves and actually change their own behavior. It’s a lot easier to say that you support one man (in this case, Anna Hazare) who supposedly represents you, and to say that you’re too busy to rally because of your work and family obligations.

And maybe that’s why protests in Egypt and Tunisia worked — the majority of the masses in the beginning were unemployed and/or unmarried. Something to keep in mind for those that will hopefully take up the challenge after Hazare …

The new FAO Director General (and why things will falter)

In going through recent articles on food security, I was extremely surprised to see such a pompous stance taken by José Graziano da Silva, who will step up as the new FAO director general on January 1, 2011.

1. In the several questions addressed to him explicitly mentioning Africa, he sidestepped the question and instead gave examples from South America. Your background may be specific to Latin America, but if you are to be the global director for such an organization, you ought to know the global state of things.

2. He plans to “start consultations with…poor food importers.” Importing food is not the way to go for any country that already has foreign debts, high poverty rates (thus people can’t afford imported food without high subsidies), and no other industries to fall back on when local economies are driven by smallholder food production.

3. He sees nothing wrong with biofuels other than corn (supposedly because everything else doesn’t distort food prices.) There are other measures of good decision-making besides economic efficiency…

4. The kick: he sees corporate agribusiness as benevolent and complementary to smallholder farmers, and civil society groups as a detriment to progress. Even smallerholders in Brazil are screwed over by Cargill and other global traders. Sure, they may have a market to sell their soy now, but if they’re getting below-market prices because the agribusiness has no competitors, then is that really the best outcome?

The few views from his interview that I would agree with (that were, albeit, rather obvious):

  • More emphasis on diversified food crops
  • Greater cooperation between FAO and other relevant organizations (i.e. IFAD, though one could ask “How?”)
  • Less emphasis on chemical rather than organic fertilizers
  • Development of local markets (which I doubt is within the jurisdiction of the FAO anyway, but he’s a politician after all)