Get Back to Work, Phil!

I'm very interested in reading this paper after it has been written:

In the case of Egypt, there's also an argument to be made that the US effectively bought the end to one of the postwar era's most intense interstate rivalries. (One of the too many papers I'm working on at the moment develops this argument. When it is ready, I will post a version here. The preliminary results suggest that the best explanation for patterns of conflict between Israel and her neighbors is the amount of US foreign aid given. Standard factors like parity and rapid shifts in the distribution of capabilities do not have much effect, though they do help explain how much aid the US gives.)

Against the Kristof/Friedman Comparative "Method"

Texas in Africa takes out the trash:

Even though Kristof has more anecdotes than your average observer, it's still not evidence. As @WrongingRights tweeted while quoting her dad, "The plural of anecdote isn't data." Data that isn't gathered systematically isn't data at all. ...

Because Kristof's only research method is his personal observation, we can't be sure that he's not simply making general claims on outliers. He's not using data; he's using anecdotes. And anecdotes are a slippery slope on which to base claims about the kind of aid work that will best aid the world's poor.

At least Kristof talks to professional aid workers and NGOs. It's possible that their opinions are based on underlying data, or at least a model, and that he's getting good information from them. Friedman's method -- "the boy pulling my rickshaw in Mumbai is more optimistic than the farmer at the Dairy Queen in Topeka, therefore India must be in better shape than America" -- is even worse. How much worse I can't say. But it has to be worse.

Aid Incentives Matter (?)

Here’s the simple version: If people give you money because of A, then you don’t do anything to stop A. Even better, make A bigger so you get more money. ...

What’s interesting in Polman’s book is the way that warlords and crooked politicians [in the developing world] are actively making poor people worse off, to raise their profile and increase the flow of “do something!” money funneled through the Angelina-Bono-Geldof-Sachs pipeline.

That's David Zetland at William Easterly's place, building off of his short Public Choice piece (pdf). More discussion is here. The Jolie/Bono/Geldof/Sachs money is then appropriated by warlords and crooked politicians of course rather than going to the needy. Thus the needy stay needy, so they get more aid, which is also stolen by warlords, etc. It can be a vicious cycle.

The argument is that aid actually encourages oppression from autocrats, because they get more aid the more destitute and brutalized the populace is. More research is clearly needed on the question, but the I think the hypothesis is plausible. It reminded of this Acemoglu/Robinson paper (pdf), which I don't think is very convincing but points towards a similar dynamic whereby leaders actively harm their populations in order to secure positions of power.

I don't think we know enough yet to judge how prevalent this phenomenon is, but apparently Linda Polman makes the case in a new book that it's common enough to take seriously. I haven't read the book so I can't comment on it, but there is a logic here that is hard to dismiss out of hand.

Saturday Morning Cartoons

A few weeks back I posted an excellent animation of a talk by David Harvey on a Marxist interpretation of the financial crisis. It turns out that it was made by RSA animate, and there is a whole series of them. Below are two more, the first of a talk by Slavoj Zizek on charity, and the second an interview with superfreakonomists Stephen Dubnar and Steven Levitt on altruism.

Update

The dregs of the semester are here, and we're finishing up papers and grading and etc. Normal blogging should resume in the next few days. Until then, everybody else is linking to this, so I will too; Esther Duflo, most recent John Bates Clark Medal winner, talks about the usefulness of randomized controlled trials in helping guide social policy. I am not likely to ever do this sort of work (because the research questions I'm interested in don't lend themselves to RCT), and questions always exist about external validity, but I think that these sort of experiments are interesting and worthwhile.

Berlusconi Gets OWNED!

In case you haven't been following some of the Italian dailies lately, Silvio Berlusconi, a constant source of entertainment on this blog (along with our friends Hugo, Evo and Kim - not good company) and one of Italy's richest men who also happens to be Prime Minister, recently had a hair transplant. This comes a month or so after being smacked in the face with a mini-statue, having his tooth chipped and his face all bruised up.

Bill Gates, feeling that the mini-statue wasn't enough punishment for being a creepy old dude and the most vain politician on earth, went after Berlusconi today for the recent hair transplant in light of Italy's dismal foreign aid numbers.

From FP:

"In a clear reference to the notoriously image-conscious Berlusconi, Gates told Süddeutsche Zeitung: "Rich people spend a lot more money on their own problems, like baldness, than they do to fight malaria."

Italy's foreign aid budget was approximately 0.11% of its GDP in 2009, one of the lowest figures among developed countries, and half of what it was even in the prior year. Gates didn't mince words on his views:

"Dear Silvio, I am sorry to make things difficult for you, but you are ignoring the poor people of the world," he told the Frankfurter Rundschau.

Absolutely fantastic! Italy's foreign aid numbers are pretty damn bad, but when Silvio wants some new plugs, Silvio gets some new plugs.

Chavez: U.S. Purposefully Caused Haiti Earthquake (and a lesson in overcoming bias)

No joke:

Venezuelan leader Hugo Chavez Wednesday accused the United States of causing the destruction in Haiti by testing a 'tectonic weapon' to induce the catastrophic earthquake that hit the country last week.

President Chavez said the US was "playing God" by testing devices capable of creating eco-type catastrophes, the Spanish newspaper ABC quoted him as saying.

Evo Morales was only slightly more sane, calling US relief efforts a "gringo military occupation":

President Evo Morales said Wednesday that Bolivia would seek U.N. condemnation of what he called the U.S. military occupation of earthquake-stricken Haiti. "The United States cannot use a natural disaster to militarily occupy Haiti," he told reporters at the presidential palace.

"Haiti doesn't need more blood," Morales added, implying that the militarized U.S. humanitarian mission could lead to bloodshed. His criticism echoed that of fellow leftist, Venezuelan President Hugo Chavez, who said Sunday that "it appears the gringos are militarily occupying Haiti."

Robert Farley adds comment:

Now, I'm going to go out on a limb here and argue that Chavez' comment is substantially stupider than Pat Robertson's, if only because I suspect that God actually could cause an earthquake in Haiti if He so desired. I suppose we could debate the point, but I also find God's motivation (get back at the Haitians for their Satanic proclivities) considerably more plausible than that which Chavez and Morales attribute to the United States; the single last thing that anyone in the Pentagon wants to do right now is devote more troops and treasure to Haiti...

I'm with him, even though I'm an unbeliever. Robertson's quip is eminently more sensible than Chavez's (although I can understand Morales' skepticism of the U.S.'s intentions given our history in Haiti).

Chavez, Morales, and Robertson are interpreting current events through their ideological prisms. Their presuppositions are absurd, so this predictably leads to bias, and these biases lead to borderline-insane statements. Farley is right to poke fun at their expense.

Unfortunately, Farley's co-blogger Charli Carpenter recently made a similar -- though much less egregious -- mistake when she referred to the Haiti earthquake as a "climate disaster". I took umbrage in comments to that post, and she responded by posting this link as evidence that the Haiti disaster could have been related to climate change. But what does the author of that post conclude about the likelihood that the Haiti earthquake was caused by climate change?

Who knows.

I don't mean to pick on Carpenter, who is one of my favorite bloggers and who provides a unique and vital voice to the blogosphere generally and the IR blogging community specifically. I know that I regularly make the same mistakes in bigger ways. And her broader point -- that the U.S. and international community don't have a coherent disaster-response program, much less standards for infrastructure development -- is certainly well-taken.

But framing matters, and framing crises like the one in Haiti as a climate disaster can be counter-productive. Even people who acknowledge the reality of global warming can be skeptical that every natural disaster is a result of these processes, so claiming any particular crisis is a result of climate change can come across as opportunistic. That turns people off, as it did when similarly dubious claims were made about Hurricane Katrina. The fact is that no one can know, nor could they prove, that the Haitian earthquake or Hurricane Katrina was caused by climate change, and such needless spinning-of-wheels distracts from what's really important: improving and institutionalizing emergency responses to disasters, and improving global infrastructure so that the effects of disasters are not as extreme.

If it's counter-productive when Chavez or Morales or Robertson do it, it's no more productive when we do it. So let's not.

UPDATE: I can't believe it, but Chavez has just jumped his own shark:

In a recent speech against capitalism (South Americans must never get tired of them) Venezuelan President Hugo Chavez lambasted Playstation videogames because they encouraged violence, which is, uncoincidentally, just what capitalism wants. According to the babelfish translation of the spanish language article, Chavez warned that:

In those electronic warlike games “cities are bombed, pumps are thrown”, and are promoted by “Capitalism” to seed the culture of the “violence” that, is saying, guarantees that soon it can “sell arms”.

I’m going to assume that “pumps are thrown” is not a mistranslation, but rather some strange Venezuelan violence phenomenon. The best part of the article though is the picture juxtaposing it

Click the link for the pic; it's well worth it. When Hugo Chavez and Tipper Gore agree on something, you know it's wrong.

Stop Giving Money to Haiti

I completely agree with all of this. This tragedy is terrible, but the world has already mobilized in support. There is a saturation point of efficacy, which has almost certainly been reached by now. It's much better to give unrestricted aid to reputable organizations (like Doctors without Borders, although there are others) that are operating around the globe, all the time, and not getting the sort of attention that a sudden catastrophe gets. If Haiti truly needs more aid, then these organizations will funnel cash there. If other places are more neglected, then the money will go where it's most needed.

This is not an encouragement to not give; it's merely an encouragement to give where it can be most beneficial. At this point, that is probably not Haiti. So give unrestricted donations to reputable aid organizations.

Blog Post of the Week

Reproduced, in its entirety, from Wronging Rights (definitely one of my favorite blogs; i only wish they'd post more frequently):

You may think it's a bit premature to award "Headline of the Week," given that today is only Monday, but I feel confident calling this one.

The award goes to the Independent (of Ireland) for "We can't abandon Africa to cannibalism and genocide." (Does the notion of intervention being necessary to keep "Africans" from eating each other ring any faint colonial bells for anyone else?) Sadly, they do not mention lions.

Yep. Blog post of the week.

Helping the Poor by Giving Them Money

Nice little natural experiment, recounted by Aid Watch:

Two NGOs working in Zambia, Oxfam GB and Concern Worldwide, tried a different approach: they handed out envelopes stuffed with cash—from $25 to $50 per month per affected family, with no strings attached. An evaluation found that common fears about cash transfers—that the cash infusion will cause inflation in the market, that the money will be squandered, or that men will take control of the money—were unrealized.

What did people buy with the money? The list includes maize, beans, salt, cooking oil, meat, vegetables, clothes and blankets, paraffin, transport, soap and body lotion, and lots of other mundane household items. They also loaned it to friends, used it to pay back debts, purchased health care, education and transport, and rebuilt their homes. Only a very small fraction of the money (less than .5%) was spent on “unproductive” items, like liquor for the men.

This approach is different from traditional aid programs that distribute items like seeds, fertilizer, medical supplies, or other relief goods. Instead of doing this, simply giving cash can be quicker, more cost-effective, and actually allow the recipients to spend the money on things that have the most value to them. This seems like a pretty obvious strategy, yet it is fairly uncommon in foreign aid programs, or even domestic social programs (e.g. we give food stamps rather than cash). I think there are two primary reasons for this.

1. Paternalism, a.k.a. the "I'm afraid you'll buy booze with it" syndrome: When we help people, we want to see results. Unfortunately, what we consider to be good results are not necessarily what the aid recipients would consider to be good results. So we give seed instead of the money to buy it, or we give an apartment in a housing project instead of an equivalent amount of cash. This is fine and good if the aid giver's preferences are perfectly aligned with the recipient's preferences. Of course, that nearly never happens.

2. Politics: The majority of foreign "aid" programs are really direct subsidies to local producers, because we force the recipients to use the aid money to buy from certain firms. This "tied" aid often leads to inefficiencies and poorer outcomes, but that only matters if you care about the aid recipients over the domestic firms. Often, that isn't the case. This also happens domestically, as conditionality on food stamp programs are considered by some to be little more than welfare for American corn farmers.

What's the take away? If you want to help people who don't have much money, then give them money and let them spend it how they please. They'll do a better job getting the goods and supplies that they want and need than we could do, and there is basically no overhead costs of shipping, storing, and distributing goods. Therefore, more of the aid money can go directly to the needy rather than funding a supply chain.

And if they decide to spend it on booze... so what? If you're a Zambian subsistence farmer and your livelihood has just been wiped out in a flood, you might need a stiff drink more than a bag of seeds. Ditto if you're an American autoworker whose factory has just been closed.

P.S. Aid Watch has also hosted a nice little spat between Dani Rodrik and William Easterly over the utility of industrial policy in fostering economic development. It starts here, then here, and finishes here.

Bono vs. Bill

Now this is interesting. A Clash of Development Titans: Bill Easterly has picked a fight with the Bono-fronted ONE campaign over their response to Dambisa Moyo's new book Dead Aid, which is highly critical of aid programs in Africa. Easterly and co-blogger Laura Freschi:

The vigorous and public debate that has greeted the release of Dead Aid is a good thing for transparency and effectiveness in aid, no matter what you think of Moyo’s book. ONE apparently doesn't agree. There are two things wrong with ONE’s campaign to discredit Moyo.

First of all, ONE misrepresents Moyo’s ideas to better tear them down. For example, ONE characterizes Moyo’s plan as a call to “shut off all aid in 5 years,” when Moyo is very clear about excluding humanitarian aid and NGO/ charitable aid from her discussion.

Second, rounding up some Africans who happen to disagree with Zambian-born Moyo doesn’t alter the quality of her proposals, which deserve to be debated on their own merits. (We’ve blogged about the intellectually dishonest technique of the “authenticity trump card” before.) When the ONE campaign says in its email “We are collecting quotes from Africans who might disagree with her…”, it seems to be saying we will not trust or allow Africans to have this debate on its merits on their own.

Ouch. In aid circles, the "authenticity trump card" is like the "race card" in American politics: you don't go there unless you're losing. But ONE isn't giving in, and Easterly was magnanimous enough to post a response on Aid Watch:

In terms of the emails you refer to, yes, we emailed people in Africa who we work with to see what they thought, as many are involved directly with aid-funded initiatives. Their experience is very relevant in thinking through the impact of Ms. Moyo’s claims. So it wasn’t an attempt to shut a conversation down, but an effort to open one up. And it’s succeeded! We’ve also been in a direct and ongoing conversation with Ms. Moyo, before and after the book’s release. Our concerns are no surprise to her. We agree with your concerns about aid transparency and, as you know, we recently helped launch “publish what you fund”, an aid transparency effort. We share the goal of “asking that aid benefit the poor” (as you write on your website) and we campaign to ensure that it does.

We don't get that many (public and interesting) feuds in the social sciences, especially not spats that include the world's biggest rock-star-cum-aid-proponent fending off charges from the world's biggest aid skeptic.

We can only hope this escalates.

Buying Hearts and Minds

Mike Munger, political science professor at The School Which Will Not Be Named, recently points to a new NBER working paper [pdf] by Berman, Shapiro, and Feiter that claims that while money may not buy love, it still has other uses. Abstract:

Rebuilding social and economic order in conflict and post-conflict areas will be critical for the United States and allied governments for the foreseeable future. Little empirical research has evaluated where, when, and how improving material conditions in conflict zones enhances social and economic order. We address this lacuna, developing and testing a theory of insurgency. Following the informal literature and US military doctrine, we model insurgency as a three-way contest between rebels seeking political change through violence, a government seeking to minimize violence through some combination of service provision and hard counterinsurgency, and civilians deciding whether to share information about insurgents with government forces. We test the model using new data from the Iraq war. We combine a geo-spatial indicator of violence against Coalition and Iraqi forces (SIGACTs), reconstruction spending, and community characteristics including measures of social cohesion, sectarian status, socio-economic grievances, and natural resource endowments. Our results support the theory's predictions: counterinsurgents are most generous with government services in locations where they expect violence; improved service provision has reduced insurgent violence since the summer of 2007; and the violence-reducing effect of service provision varies predictably across communities.

It's not entirely clear that the relationship is causal, and as Blattman notes the sample is fairly small and focuses on one of the best-run programs in Iraq, but this is still encouraging news. It has long been alleged that one of the reasons why extremist groups like Hamas and Hezbollah retain such followings is that they do a very good job of providing services to local populaces. If the U.S. or other governments can compete, then perhaps we can do better with butter than with guns.

IMF Rising

Another phase of the global credit crisis has begun; developing nations are running to the IMF for emergency aid.   And finance ministers across the world don't see many other options for how to survive a crisis created by developed credit markets.  Capital flight, wide-swinging currency fluctuations, tightening private market credit - we've seen this all before.  

Now the IMF has begun talks to increase their lending capabilities to as much as $1 trillon.  Considering the bank has $200 million in collateral, they'll need quite a bit of supplemental cash.  Perhaps most telling of how weak the US economy is, the IMF has failed to even approach the Fed for support.  Instead, the bank is in talks with Japan and oil-producing companies.

So, is the IMF poised for a renaissance?  Gordon Brown certainly hopes so (interesting that Brown chaired the IMF's policymaking committee for several years).  The IMF's leader, Dominique Strauss-Kahn, stresses that the Fund will eliminate many of the loan conditions that made leaders such as Hosni Mubarak of Egypt refer to the IMF as the International Misery Fund.  However, new conditions have not yet been outlined and a recent study in the Harvard Medical Review found that IMF lending in the post-communist European Bloc directly led to decreased health conditions in recipient nations.  

Check out this map of Eastern European Countries and their debt load (source: www.economist.com):

Sachs on Foreign Aid and the MDGs

Jeffrey Sachs appears surprised by the G-8 governments' failure to live up to their promise to expand foreign aid programs. My personal favorite non sequitor: "To salvage its credibility, the G-8 needs to make crystal clear — once again — that it will honour its commitment to increase aid to Africa by $25 billion per year by 2010." To salvage its credibility with whom, exactly?