We love local. Whether it’s buying vegetables directly from your local farmer, frequenting a neighborhood business, or working as a community activist, many of us believe that solutions to some of our most pressing problems lie at least in part in a small series of actions taken from the ground up. This may be especially true in countries with limited state capacity, where community-based organizations (CBOs) are often among the highest-functioning entities at the local level. In some settings, producer cooperatives or savings and credit groups, for example, have stronger financial management capacity than local governments. Parent-teacher organizations, women’s associations, hometown associations, or other membership-based groups can be highly effective community mobilizers.
When the going gets tough, do the tough need higher pay?
Many public policies and nearly all international aid aim to improve the well-being of the poor. Front-line service providers may not embrace this goal, however. Is this mismatch important? Can it be corrected? These questions are crucial for the success of public policies meant to equalize services to the poor and non-poor. Recent evidence suggests that money helps – but how we select service providers matters, too.
Running a local government is not sexy. It’s making sure that roads are maintained, there is water to drink, health clinics are stocked and staffed, and schools are equipped to teach. Often, it means doing these things with limited resources, infrastructure, and manpower. With few exceptions, there is little fanfare and glamour. It’s a bit like being a soccer referee: you’re doing a good job when no one notices you’re there.
Artisanal mining has a terrible reputation. A widespread perception is that this low-tech and labor-intensive way to extract natural resources “may cause severe environmental and health risks, conﬂict and generally few economic beneﬁts.” Yet an estimated 40.5 million (+/- 25%) people around the world are directly working in these mines. What persuades them to do so?
In The Godfather II, Vito Corleone chooses his younger son, Michael, instead of his older son, Fredo, as his successor. This decision is based on Michael's intelligence and ability. Fredo, who is considered weak, is dismissed to do more menial tasks for the family. This has huge implications for Michael, Fredo, and the Corleone saga.
CC (The Godfather) Image courtesy of Insomnia Cured Here on Flickr
What makes parents decide to "invest" in one child over another? In economics, a key idea is that parents either reinforce or compensate for children’s endowments, such as health or intelligence. They reinforce by investing more in the human capital of their better-endowed children. Or they compensate by investing more in their worse-endowed children to reduce inequality among siblings. The core notion is : either parents are striving for equity (the compensating strategy) or efficiency (the reinforcing strategy of Vito Corleone).
When I was a high school student in Belgium, our history textbook included a reproduction of a painting entitled “The Drunkard” by Eugène Laermans. The painting was included in the section describing the history of the labor movement in the country and its achievements in passing legislation aimed at improving the situation of the working class. In particular, the painting was meant to illustrate why the Belgian law introducing child benefits – monthly transfers to all families raising children until age 18 (or until age 25 as long as they are still students) - stipulates that these benefits are paid to the mother. The law still holds today, even if it allows for exceptions when the mother is not present in the household.