Owen abroad

Archive for the ‘Science’ Category

Alex Singleton, now at the Globalization Institute has been a leading opponent of Fair Trade labelling.  I argued some time ago that his negative view on Fair Trade was inconsistent with his belief in markets.

To his credit, Alex seems to be softening his position.  He says

But I’ve increasingly found being a critic of Fairtrade somewhat uncomfortable. … Let’s face it, the Fairtrade scheme – despite its provocative name – is not the opposite of free trade. It can go hand in hand with free trade – after all, it’s about consumers being free to choose to be altruistic when buying coffee.

Quite so.  It is a sign of his intelligence that Alex is willing to be convinced, and it reflects well up on him that he is open about changing his mind.  

The Globalization Institute’s new position will be set out in a report next year, including suggestions for improving the scheme.

I know it is unfashionable, but I am much less convinced than the GI that their beloved microcredit schemes do any good.  But that is a discussion for another day. 

It seems that the UK Government’s proposed ban on smoking in public places is faltering. 

Intellectually, I find it hard to justify a smoking ban in private businesses.  It should be for the owner of a bar or restaurant to decide if he or she wants to allow smoking or not, and for customers to choose the establishment that meets their preferences. 

Here in California, smoking is not allowed in bars or restaurants, and the improvement in quality of life for me is substantial. I can go out to a bar and have a few drinks without coming home smelling like an ashtray and having to wash everything from my jeans to my sweater.  I actually enjoy spending time out in clubs now; with the result that I go out to bars more often here than I would in London.

You would think that there are enough people like me who would choose a smoke-free environment that some pubs and clubs would allow smoking and others would not, and then we could choose where to go to.  Something like this works for coffee bars already: in London, Starbucks does not allow smoking and Caffe Nero does: it is a free market, and I can choose which I want to go to.  So why doesn’t it work the same way for pubs, restaurants, and clubs?  But for some reason it doesn’t happen – I am not aware of any non-smoking pubs and restaurants in London.

I am with Third Avenue on this (perhaps not surprisingly, as we are both Brits living in America).  Though intellectually I think there should be a choice, the improvement in quality of life from a smoking ban is much larger than I would have expected; the market does not in fact provide the choice; and I would vote for a ban.

I don’t understand why the UK is finding it hard to put together legislation.  There are well-functioning examples here in New York and in California, and as I understand it, the ban in Ireland works OK too – so how hard can it be?

Who wouldn’t want a $100 laptop? Most of the world’s poor, at least for now.

As usual, Russell Southwood at Balancing Act gets it right:

Try going to the informal settlements of most major African cities and explain to potential customers why they might want a cheap PDA or indeed a cheap laptop. Negroponte is giving them away because he knows what an unbearably difficult task it would be to have to actually sell the things to people who might actually want them and have the money to buy them.

Somehow I don’t think Negroponte’s plan is going to work any better than Simputer.

But take a look at Ndiyo.  (The BBC reported it in April.)  That looks to me as if it might be a real success.

More from World Changing and Ethan Zuckerman. 

A fascinating new paper from the National Bureau for Economic research finds that adult mortality alone can account for all of Africa’s growth shortfall over the 1960-2000 period.

This comprehensive analytical and statistical study finds that high adult mortality induces people to invest less, accumulate less human capital, have a large number of children rather than fewer, children who are likely to survive and have be economically productive. This, in turns, lowers economic growth. The effect is economically very substantial. The linkage with fertility is particularly strong: as countries develop, the reduction in mortality precedes, and appears to cause, the fall in fertility (and not the other way round).

In my view, this has important policy implications. We should be careful about blaming Africa’s poor performance on its governments and institutions: this paper finds that the whole of Africa’s poor economic performance can be explained statistically by higher levels of mortality.  Some of this may be an indirect result of poor governance; but the burden of tropical disease is also substantially higher in Africa; and the paper points out that poverty can be self-perpetuating, because countries are too poor to be able to devote resources to fighting diseases and reducing mortality. This suggests that we should focus on fighting disease as a significant investment in reducing poverty and helping to break out of this vicious circle. The proposal  to create market incentives for the development of new vaccines for malaria, AIDS and TB, by promising to buy them if they are developed, would be an excellent start (full disclosure: this is what I work on).

It is also worth noting that this analysis tends to back Jeff Sachs’s claim that there is a poverty trap, as opposed to Bill Easterly’s scepticism which I reported last month.

Source: Death and Development, Peter Lorentzen, John McMillan & Romain Wacziarg NBER Working Paper 11620 (registration required; send me an email if you want me to send you a copy)

Hat tip: Stationery Bandit

The A2K initiative is an effort to change the priorities of the World Intellectual Property Organization (WIPO) to encourage it to pay more attention to the needs of developing countries, and balance the benefits of easier access to knowledge and knowledge-intensive products such as medicines and software, with the benefits for greater innovation of copyright, patents and trademarks.  The website brings together a group of international non-governmental organizations, governments, scholars, acticists and individuals which has been working on a proposed treaty.

I argued in an earlier paper that the intellectual property regime is increasingly unsuitable for balancing the needs to create incentives for innovation, and to ensure that as many people as possible have access to the benefits of that innovation once it occurs.  In the past, technology transfer from rich to poor has been an important mechanism to allow poor societies to "catch up" and so limit the growth of inequality; as patent and copyright laws have been extended and been applied more exhaustively, and as the importance of knowledge as a factor of economic production has increased, so the intellectual property system has made it harder for poor countries to keep pace with rich countries.   As I explain in my paper, this is not an argument against intellectual property per se, but rather a case for thinking more creatively about how we can create incentives for innovation while ensuring that we do not unnecessarily and ineffeciently exclude the majority of the world’s population from the benefits.

The White House is clear that it did not agree to any additional aid for Africa in Gleneagles.

Here is an extract from the transcript of the press briefing, given on Air Force One on the way home, by Faryar Shirzad, the Deputy National Security Advisor for International Economics. He’s also the United States G8 Sherpa (that is, the official responsible for representing the President in the run-up to the summit).

Q I believe there was an agreement on Africa aid to go up to $50 billion — was it $50 million or — does the administration support that, because I know in the past the President didn’t want a specific number agreed to.

MR. SHIRZAD: It’s a good question. The question had to do with that there was a $50 billion aid commitment to Africa. What the document reflected was a — what the leaders’ text reflected was that the individual G8 countries, as well as the European Union, had together committed to increase aid by $25 billion in a year to Africa. So there wasn’t a new commitment reflected in the text, but it was an articulation of previous commitments that were already made. …

Q So there’s no promise of new money from the U.S. in that statement.

MR. SHIRZAD: No, I think what that portion of the leaders’ text was supposed to highlight is that while the leaders came to Gleneagles to press the issue of Africa, there’s also a broader development challenge that they reflected in their leaders’ text, and that is the challenge that the OECD has, in their estimation, said they expect development assistance will increase by $50 billion. So it’s not a commitment, but it’s a reflection of an outside estimate that’s been made on that issue.

A recent entry over at Unrestricted Domain raises an interesting and important point which is often ignored in the discussion of the relationship between aid and growth.

Unrestricted Domain says:

To be honest, I’d find it extremely odd if several hundred billion dollars failed to yield any benefit whatsoever.

This is absolutely right.  And it highlights that not everyone realises that the various aid-growth studies are an attempt to measure the medium term growth benefit to the economy over and above the direct benefit of the transfer of the aid.

Say, for example, that the UK gives $1 million in aid to Uganda.  Even if this aid had no long term growth benefits, the direct effect is to reduce consumption in the UK by $1m, and increase consumption in Uganda by the same amount (assuming that it all arrives – which on the whole it does).  If Ugandans get more benefit from the money than we do (economists call this diminishing marginal utility) then the Ugandan gain in welfare from the extra $1m will be bigger than the British loss of welfare, and the world as a whole will be better off.  Transferring money from someone who will barely notice the difference to someone who goes to bed hungry is, in itself, a good thing.  To my mind, that would be justification enough for aid, even if it did not increase growth but simply shifted consumption from the relatively rich to the relatively poor.

But the aid-growth regressions are a more demanding test of aid effectiveness.  The question they ask is: what is the effect of these transfers on the growth of the economy, over and above the direct benefit of the transfer?  Clearly, if aid is invested in transport infrastructure, commercialisation of state utilities, or in improving agricultural productivity, it might be expected to have long term benefits above the simple increase in consumption that it permits.

The most recent, careful study finds that aid does have a considerable positive impact on growth. On average, aid worth one percent of national income increases annual growth in the recipient country over the medium term by about a quarter of a percentage point a year. Or, viewed as an investment in the growth of developing countries, the average rate of return from aid is at least 13% – which is higher than many other uses of public funds.  These rates of return are additional to the direct benefit of the aid transfer.

In other words, aid would be justified even if there was no long term impact on growth, as it would still increase incomes of people who need the money most, at only a  modest cost to those who pay. The fact that a whole raft of studies find that, on top of this, there are long term benefits for the recipient economy strengthens the case, but the case for aid does not depend on this finding.

Normally I tried to avoid blogging about blogging – it is all too self referential. But three recent articles (see below) got me thinking.

It seems to me that there are three distinct roles for blogs in relation to conventional media:

• first, blogs give a chance for experts to communicate directly, without being intermediated by the media. They can express themselves at length, and impartially without the constraints that inevitably constrain commercial news outlets to simplfy and sensationalize, to be balanced (as opposed to objective); I know only too well the frustration of trying to convey ideas through newspapers and broadcast media, and when in charge of communications for a Government department, often wished that I could speak directly to the readers;
• second, blogs are a way for well-written opinions to be written in the true voice of the author – with passion and personality, rather than adhering to the political position of a commercial news organisation. These are not necessarily written by experts: the value lies in the judgement and eloquence of the commentator; this point is made by Paul Mason, in his very interesting reflections on his experience blogging Live8 for Newsnight.
• third, blogs act as a sort of watchful eye on the conventional media, correcting mistakes, challenging biases both in reporting and ommission, and so helping to raise the quality of journalism. This point is well made by Daniel Glover in a speech to a Heritage Foundation round table.

At least for now, blogs are not replacing conventional journalism. Most blogging is derivative on news reported by the mainstream media – commenting on news, criticising the way it has been reported, and selectively drawing attention to it.  Almost no bloggers engage in the patient investigative journalism that makes great newspapers (think of Bernstein and Woodward, for example); and there is very little primary newsgathering by the blogging community.  Sarah Boxer remarked in the New York Times noted that the Flickr collection of photographs about London were "not about the tragedy itself but about how news is passed."

It is quite remarkable how much blogging is in this third category: commenting on the mainstream media. I’ve been surprised by the popularity of Tim Worstall’s blog, which is sometimes referred to as an influential blog in the print media (how these things come full circle!). Tim has a jovial and popular style, a voracious appetite for the writings of others, and he is never short of an opinion. But the contribution of his blog – and many others like it – is almost entirely based on synthesising and critiquing the work of the traditional print and broadcast press. This type of blogging is no more a journalism than drama criticism is acting. This is not intended to be a criticism of Tim or other bloggers – and the point applies in large measure to my own blog – but an observation on the limits of our contribution.

It is not the critic who counts, not the man who points out how the strong man stumbled, or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes short again and again, who knows the great enthusiasms, the great devotions, and spends himself in a worthy cause, who at best knows achievement and who at the worst if he fails at least fails while daring greatly so his place shall never be with those cold and timid souls who know neither victory nor defeat."–Theodore Roosevelt.

I am very glad that, as a result of hosting the Olympics in 2012, we will

• invest in regeneration of the Lea Valley
• improve our transport infrastructure
• promote sports among young people
• upgrade sporting facilities across London

What I don’t understand is this: if we all agree that these are good things to do (which I do), why couldn’t we do them anyway?  Why did we need to host the Olympics to force us to do them? 

(And if, conversely, these are not good things to do, why have we just spent a lot of money bidding to host the Games so that we are forced to do them?) 

I enjoy watching the Olympics and I hope the Games are a success. But I don’t think that the Government should be devoting its scarce resources to organising an entertainment spectacle.  We have more important things to spend public money on, and the fewer things the Government has to focus on getting right the better. Why couldn’t the private sector organise the Olympics?

Bah: humbug! 

Meskel Square has an evocative post about Lake Langano in Ethiopia.  When we lived in Ethiopia, we used to visit Langano (in part to get away from the high altitude in Addis Ababa).  We stayed in the cottages in his picture.

He asks for nominations for favourite places in Ethiopia. This is tough, because there are so many to choose from.  I nominated Lalibela, which Grethe and I visited on our cycling trip through Northern Ethiopia.

There is now a 50% chance of being infected by an internet worm in just 12 minutes of being online using an unprotected, unpatched Windows PC, according to Sophos.

Global Voices Online has a roundup of what African bloggers are saying about the Live 8 concerts. Most of the African commentators are not complementary about the idea, or the way it has been executed. For example, Gerald Caplan, writing in Pambazuka, says:

These views reflect a common theme: they leave the rich world blameless for Africa’s multitude of problems. I greatly fear that Live 8 is inadvertently strengthening the notion that we in the rich world must be missionaries to save Africans from themselves. The truth is already being lost– the deep, comprehensive responsibility of western nations and western financial institutions for so much of Africa’s continuing underdevelopment and poverty.

Very interesting article in The Times about Ratzinger and his time in the Hitler Youth.

“Resistance was truly impossible,” Georg Ratzinger said. … Some locals in Traunstein, like Elizabeth Lohner, 84, whose brother-in-law was sent to Dachau as a conscientious objector, dismiss such suggestions. “It was possible to resist, and those people set an example for others,” she said. “The Ratzingers were young and had made a different choice.” In 1937 another family a few hundred yards away in Traunstein hid Hans Braxenthaler, a local resistance fighter. SS troops repeatedly searched homes in the area looking for the fugitive and his fellow conspirators.

You can say we should forgive him the choices he made as a young man. But don’t tell me he didn’t have a choice. He did, and he chose wrong.

I have the greatest sympathy for the family of Charlie Bell, the Chief Executive of McDonalds who died on Sunday of cancer of the colon at the age of 43. That is a tragically young age for a man who should have had a great future. It is all the more saddening because it follows the death from a heart attack of his predecessor, Jim Cantalupo, who died aged 60 last April. It may seem distasteful to mention this, but you can’t help wondering if the premature deaths of these two men are related to their product. In American business circles you often hear companies say that they should "eat their own dogfood". I wonder if that is advice that the senior executives of McDonalds would do better to ignore.

"To lose one parent may be regarded as a misfortune… to lose both seems like carelessness." The Importance of Being Ernest, Oscar Wilde