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The Tyranny of Aid Critics

Shanta Devarajan's picture

Charles Kindleberger (h/t Gerry Helleiner) asserted that all reviewers can be counted on to say three things about a book: “It isn’t new. It isn’t true. And I would have said it differently.”  Notwithstanding their internal contradictions, these statements summarize my thoughts on Bill Easterly’s latest book, The Tyranny of Experts.

It isn’t new. The main point of the book is that the rights of the poor have been systematically undermined, directly by governments, especially authoritarian ones; and indirectly by “experts”, who either prescribe technical solutions that ignore poor people’s ability to come up with their own solutions, or provide legitimacy to these autocratic regimes so that they continue to suppress the poor.  Bill illustrates this point with three historical examples—China between the world wars, Africa at independence, and Colombia in the 1950s—where a combination of western (in some cases, colonial) interests and local elites conspired to keep the large majority of poor people poor for a long time.  The analytical backdrop to these three case studies is the “debate”—a debate that never took place—between two Nobel-prize-winning economists: Gunnar Myrdal, who advocated government intervention to improve the lot of the poor; and Friedrich Hayek, who believed in protecting the individual rights of the poor as a means of their escaping poverty.

Six Strategies to Fight Corruption

Augusto Lopez-Claros's picture
Also available in: العربية

Having looked at some of the ways in which corruption damages the social and institutional fabric of a country, we now turn to reform options open to governments to reduce corruption and mitigate its effects. Rose-Ackerman (1998) recommends a two-pronged strategy aimed at increasing the benefits of being honest and the costs of being corrupt, a sensible combination of reward and punishment as the driving force of reforms. This is a vast subject. We discuss below six complementary approaches.

Statistical Earthquakes

Homi Kharas's picture

The New ICP Data and the Global Economic Landscape

The new report of the International Comparison Program published last week promises to invigorate debate about the global economic landscape. In some areas, the report challenges conventional wisdom. In other areas, it reinforces the narrative.

The headline change according to The Economist is the rise of China to potentially become the largest economy in the world by the end of 2014. According to Angus Maddison, the United States’ economy became the largest in the world in 1872, and has remained the largest ever since. The new estimates suggest that China’s economy was less than 14% smaller than that of the US in 2011. Given that the Chinese economy is growing more than 5 percentage points faster than the US (7 percent versus 2 percent), it should overtake the US this year. This is considerably earlier than what most analysts had forecast. It will mark the first time in history that the largest economy in the world ranks so poorly in per capita terms. (China stands at a mere 99th place on this ranking.)

Rights and Welfare Economics

Shanta Devarajan's picture

ML028S19 World Bank Some 135 countries have constitutional provisions for free and nondiscriminatory education for all. Seventy-three countries guarantee the right to medical services. And 41 countries have either enshrined the right to water in their constitutions or have framed the right in national legislation.  All of these actions are aimed at protecting the rights of poor people. 

Yet, it is poor people who are losing out on access to these services.  In Mali, whereas almost everyone has access to a primary school, and 67 percent from the richest quintile complete primary school, only 23 percent from the poorest quintile do.  The percentage completing higher levels of education is in the single digits. In rural India, in the period since the Right to Education act was passed, student learning outcomes in public schools have been declining.  Equatorial Guinea, with a per-capita income of $20,000, has a child mortality rate of 118 per 1,000 births, comparable to that of Togo with a much lower per-capita income.  As a result of intermittent (or nonexistent) water supply through networks, poor people in South Asia and Africa have to buy water from vendors at 5-16 times the meter rate.

When Figures Speak

Gael Raballand's picture
Also available in: Français

Some Myths about Informal Trade in Developing Countries

Commuters at the Wynberg Taxi rank in Cape Town on their way home. By definition, informal trade is difficult to measure because even if everyone has seen it, there is no evidence of it in official statistics.  Thus, estimates are often difficult to arrive at and quite costly because they require the collection of data from several sources (customs data, data from border surveys, local economic and social statistics, interviews with actors and stakeholders in the sectors concerned).

However, such efforts appear to be bearing fruit: as information and data production improves, a number of assertions based on rumors or even beliefs are contradicted by actual figures. It is especially interesting to note that the phenomena and characteristics of informal trade are the same, whether in central Asia, Sub-Saharan Africa, or North Africa.

The End of the Population Pyramid

Wolfgang Fengler's picture

This is a surfer’s dream: catching a great wave, far from the shore, and riding it for long beautiful moments as it stretches further and further gathering momentum until the very end, when it breaks right at the beach. This is how my generation, born in the 1970s (when the Beach Boys released their iconic Surf’s Up album), should feel, as we are riding on a “global demographic wave” which keeps extending further and further.
 

Rana Plaza One Year On

Ellen Goldstein's picture

Lessons on Governance from Bangladesh’s Garment Industry


One year ago today, in the outskirts of Bangladesh’s capital city, an eight-story garment factory collapsed of its own weight, killing 1,130 young workers and injuring thousands more.  The ghastly photos of bodies trapped in the Rana Plaza wreckage provoked outrage in the wealthy world, targeted largely at global retailers who purchased garments there.  North American and European consumers called for measures to ensure safe conditions and humane treatment for Bangladeshi garment workers, mostly young women from poor families in remote rural areas.  Many called for a boycott of the big-box retailers and of the Bangladeshi products they sell.

I had just moved from Bangladesh to Europe at the time, and my advice to friends who asked was: “Go ahead and buy those skinny jeans or that tank top if you want.  It’s the right thing to do for Bangladesh and its young workers.”

Why should Governments Spend on Sanitation?

Shanta Devarajan's picture

A puzzle:  Sanitation is one of the most productive investments a government can make.  There is now rigorous empirical evidence that improved sanitation systems reduce the incidence of diarrhea among children.  Diarrhea, in turn, harms children’s nutritional status  (by affecting their ability to retain nutrients).  And inadequate nutrition (stunting, etc.) affects children’s cognitive skills, lifetime health and earnings.  In short, the benefits of sanitation investment are huge.  Cost-benefit analyses show rates of return of 17-55 percent, or benefit/cost ratios between 2 and 8.

But if the benefits are so high (relative to costs), why aren’t we seeing massive investments in sanitation?  Why are there 470 million people in East Asia, 600 million in Africa and a billion people in South Asia lacking access to sanitation?  Why are there more cellphones than toilets in Africa?

Can Computers Outperform Humans?

Wolfgang Fengler's picture

The epic battle of man against machine has been fought on many occasions. One of the most memorable encounters was the chess game between IBM’s Deep Blue and Gary Kasparov. Deep Blue was the first computer to beat a reigning chess champion in 1996 (the machine still lost 2 to 4 after six games). A year later, at their “rematch”, the machine won on the overall score: 3.5 to 2.5.

However, it is surprising that, 18 years later, we still have not figured out the ultimate winning strategy in chess. Any game with limited combinations and full disclosure of information must have ‘safe strategies’ and can be ‘solved’ (as has happened with the game checkers in 2007). The solution, in chess, would from what we know today involve strategies whereby the white player would win or the black player would force a draw. Yet no human or super computer to date has managed to solve chess’ mathematical puzzle.  How much more computing power do we need to succeed?

Guns, Drugs and Development

Laura Ralston's picture

Trafficking in West Africa



Trafficking is not new to West Africa, but its magnitude is
. From Northern Mali to The Gambia, smugglers have traded fuel, cigarettes and staple food for decades. Longstanding trade routes and interregional tribal connections have allowed illegal cross-border trading to grow alongside traditional commercial practices.

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