Several people have been asking about the implications for Africa of the U.S. Federal Reserve Bank’s decision to buy $600 billion in bonds—known as “quantitative easing 2”. Four points:
Shanta Devarajan's blog
Update: This post has generated a very interesting discussion in a different blog. See it here.
I gave a lunch talk at a recent conference of civil society and technology people organized by the Tech@State people at the U.S. State Department. I thought I’d share it more widely.
In the old days—that is, the 1950s and 1960s—development was about correcting market failures. Influenced by the “big push” theories of economists like Rosenstein-Rodan, post-war Keynesian economics and the apparent success of the Soviet Union, policymakers in developing countries saw the role of government as providing public goods (bridges, roads and ports), addressing externalities (protecting “infant industries”) and redistributing income to poor people (by, for instance, keeping food prices low). Donors supported these countries by financing some of the public goods—a bridge, say. Knowledge assistance consisted of helping to identify the market failure, and then designing the “optimal bridge”.
- About 20 percent of the children who had completed seven years of primary school could not read their own language, Kiswahili, at the Grade 2 level;
- Half of them could not read English, which is the medium of instruction in secondary education;
- And about 30 percent could not do a simple (Grade 2) multiplication problem.
Interestingly, Tanzania has seen dramatic increases in primary school enrolments—so much so that the country won a Millennium Development Goals award for achievements in primary education.
To better understand the relationship between these different findings, I interviewed Rakesh Rajani of Twaweza, the NGO that conducted the survey, on the margins of the Open Forum at the recent World Bank-IMF Annual Meetings.
We discussed why and how they did the study, what the results mean, and what to do with them.
Yesterday’s side-event at the U.N. summit on the Millennium Development Goals on “Scaling up Africa’s infrastructure to meet the MDGs” was unusual for three reasons.
Au mois d’avril dernier, lors d'une conférence du Département britannique pour le développement international (DFID) sur les objectifs de développement pour le Millénaire, j'ai soutenu que l'Afrique était en mesure d'atteindre les ODM, peut-être pas d'ici 2015, mais du moins peu de temps après. Voici pourquoi :
1. Bien que de nombreux pays africains soient en retard pour la plupart des ODM, l'Afrique est sans doute, depuis le milieu des années 1990, le continent qui a accompli les progrès les plus importants en vue de leur réalisation.
3. Alors que l'Afrique a probablement été le continent le plus durement touché par la crise économique mondiale, la réponse des dirigeants africains a permis d'en atténuer les répercussions et a préparé le terrain pour que le continent bénéficie de la reprise mondiale.
Essayons d’approfondir :
Patrick Bond’s lengthy comment on my response to his blog post merits a separate blog post.
Thanks for your response. It appears as if there are at least four areas where we end up agreeing, except that I reach these conclusions using economic reasoning, which also serves to highlight some differences.
1. I’m glad you agree that there is a difference between accounting and economic welfare. But you still don’t seem to accept the result of my simple example of two countries (one following a wasteful trajectory and the other the optimal one) that genuine savings is the same in both cases.
In a recent interview on the Canadian Broadcasting Corporation, I reacted to statements by Patrick Bond on Africa’s export of raw materials and on structural adjustment policies. I said that the problem with natural resources was not that Africa exports them, but that many African governments have not used the revenues from these resources productively. On structural adjustment, I said that policies followed by the better-performing African countries over the last 15 years were quite similar to
Last month’s post on the exchange between Helen Epstein and Ken Ohashi on Ethiopia generated a large number of comments (and rejoinders), a response from Helen herself, and references in the Addis press.
One set of comments were about the facts. Many commentators questioned whether human development indicators were actually improving in Ethiopia, while others questioned whether the political situation was as repressive as described by Helen in her original piece in the New York Review of Books. Some asked whether the facts coming out of Ethiopia (on agricultural productivity for example) were reliable. Since these are questions of fact, they can and should be verified.
Another group of comments questioned my interpretation of the facts,
The exchange between Helen Epstein and my colleague Ken Ohashi about the role of aid donors in “subsidizing” what Epstein calls a politically repressive regime highlights the difficulty in linking politics at the top with poverty alleviation on the ground.
Even politically open regimes, such as India, have difficulty delivering basic services to poor people—the absence rate for teachers in Indian public primary schools is 25 percent; the rate for doctors in public primary clinics is 40 percent. Conversely, as Epstein points out in her reply to Ken’s letter, “poverty and disease have fallen sharply in some repressive societies, from Cuba to China…”