If resources are limited, focus your efforts on making your data open rather than in producing generic “lessons learned” documents (or other knowledge management products) that have little contextual value for practitioners on the ground. In a world where SMS makes it possible to connect with affected communities even in rural areas, those products will sound increasingly hollow.

In our work on aid transparency, we’ve heard a lot of staff of aid agencies insist that aid agencies have to package the data, otherwise it will be no use to anyone.  The charitable interpretation is that they want to make sure that information is useful; less positively, this impulse may come from the desire to avoid difficult questions that may arise from the raw data.

There is an excellent slide show by Chris Taggart at countculture on this latter point: the risk that open data will lead to the exposure of problems and to difficult questions being asked.

I do not have a problem with public authorities using data to present information and analysis that they think is useful and which will help build their reputation.  But they should publish the raw, underlying data as well.  Any services which they provide to information consumers – such as websites – should use the same data, and the same public access interface, as is available to everyone else.  So if someone else wants to set up a different website, telling the story in a different way or mixing it up with data from another source, they can do so.  There is no reason why the authorities should have privileged access to the data: it should be a common, universally accessible layer on which anyone can build their service or tell their story.

There is a particular challenge in publishing foreign assistance: the consumers of information want information from many different donor agencies and international organisations.  In most cases, citizens in developing countries don’t want to know what a particular organisation is up to everywhere; they want to know what all organisations are up to in a particular place or on a particular topic.  So information intermediaries serving these users need some way to pull together data from many different sources, and turn it into a single stream of comparable, consistent and coherent data.  To a large extent information intermediaries could  do this automatically, if the organisations publish enough detail about their activities to enable the data to be compared; but to some extent it requires that data is deliberately classified and structured to enable this kind of mash up.   A good example is the ability to trace aid from one organisation to another: a lot of aid passes through many organisations before it arrives at its intended beneficiary, and even if every organisation is transparent about all its spending, there is no direct way to track the aid through this chain.  That would need an agreed way of tagging the data so that we can all see how money flows through the system.

So for me, the key messages are:

a. publish the raw data, either instead of or alongside the information and analysis (and sometimes spin)

b. to the extent necessary, agree a minimal set of standards for the way the data are structured and the detail it contains to enable users easily to mix and mash the data so that they can use it. The International Aid Transparency Initiative has the potential to do this.

c.  Aid agencies should not feel that they themselves have to meet the needs of information consumers; they should provide financial support to information intermediaries who will access this data, mix it with other data, and provide locally useful and relevant information which meet a wide range of needs.   The more the donors make detailed, raw data easily available in a consistent format, the less financial support they will need to provide to information intermediaries enable them to use it.

Obviously I don’t use Internet Explorer because it is (a) not compliant with standards; (b) not safe; (c) Microsoft.  And I don’t use Safari because Steve Jobs is a control freak and I don’t wish to be locked up in his world.

So like most geeks I’ve been using Firefox, which is faster and safer than Internet Explorer and has great add-ons. But I’m finding Firefox is becoming a little sluggish as it gets more bloated, and perhaps it is becoming a little unstable. For the time being  I have now switched my default browser to Google Chrome, because it is quite a bit faster than Firefox. (I’m writing this in a Chrome, for example).  I’m keeping Firefox because I like some of the plugins (such as S3Fox and Scribefire) but I reckon I’ll only use it when I need one of those.

But, I hear you cry, what a pain switching between different browsers!  It means your bookmarks and logins are never in one place, and they are never there when you want them. Well that is where Xmarks comes in.  This nifty add-on which is available for Firefox and Chrome (and indeed IE and Safari, if you like that kind of thing) synchronises your bookmarks to a central server on the interwebby.  (Securely, we hope.) Once you have installed Xmarks in your various browsers you can forget about it.  Whenever you bookmark something in one browser, that bookmark will appear the same everywhere.  (Ditto stored passwords, if you want.) So whether I am using my home computer, my work laptop or my Linux server, and whether I am using Chrome or Firefox, my bookmarks and logins are all the same in every broswer without me having to copy them over.  Which is nice.  Even if you don’t use more than one browser, Xmarks is pretty handy if you use more than one computer.

</geek stuff />

First, taking something for nothing, without permission, and with no compensation for the person who created and owns it, is wrong. Simple as that.

With respect, it is not as simple as that.

The reason this looks plausible is the use of the word “taking”.   If I take something from you, that implies that I now have it and you no longer do.  If it was yours to start with, that would be unfair (or, in Mr Mandelson’s word, “wrong”).  But the challenge for making good policy about intellectual property is that the goods in question are non rival – meaning that one person’s consumption does not come at the expense of another person’s consumption of the same good.  If I make a copy of a song and listen to it on my MP3 player, that in no way reduces your ability to listen to it.   So I have not “taken” it from you.  We can both listen to it.  The marginal cost to society of my listening to the song is zero.

Mr Mandelson may have meant by “take” the idea that if I neglect to pay you for something, you lose out.  But this isn’t necessarily wrong.  As Chris Dillow points out, if I give a lift to a friend, I deprive a taxi company of revenue.  The taxi company might not be very happy about that. They might lobby the Business Minister over cocktails on a yacht, requesting that taxi companies be given a monopoly on giving rides in the area they serve.  (After all, they have spent a lot of money on cars and offices.)  The Business Minister should tell them to get stuffed.   There is no basic right to make money on your investments, and being deprived of potential revenue is not the same thing as a cost.

As I explained in more detail here, the economics of non-rival goods is quite different from the other kinds of goods.   Intellectual property rights are a social construct to create temporary monopolies which, unlike other forms of property, worsen rather than increase static allocative efficiency.  For non-rival goods, allocative efficiency requires that the price is zero, but dynamic efficiency may require some sort of remuneration for the creators of the products.  A society may choose to restrict access to a product as a way to create financial incentives for innovation. This may be worth doing if the welfare gains from the incentives to innovate exceed the welfare costs of reducing access to the products.  But that trade-off does not automatically and necessarily come down in favour of having intellectual property rights, nor is the creation of intellectual property rights the only or the necessarily the best way to create incentives to innovate.

This is not a wholesale argument against intellectual property rights.  But it is an argument against the daft claim that intellectual property rights are just the same as rights to rival goods such as physical property.   Property rights for rival goods increase, or at any rate do not diminish, allocative efficiency and hence welfare;  property rights for non-rival goods decrease allocative efficiency, and that is a welfare loss that has to be justified by a welfare gain elsewhere.

We do need to reward and incentivize innovation and creativity appropriately.  But I am struck by the lack of imagination and innovation in the current debate about how we do it.  Intellectual property rights are one approach, but they have important drawbacks.  We should not forget other possible approaches – such as prizes, buy-outs, or public funding – which might secure many of the same benefits without the costs.

So I fitted the hard disk (which took about 30 seconds), stuck the Ubuntu CD in the drive, and the install was going nicely until about 54% of the way through, when I got this error message :

[Errno 5] Input/output error

This particular error is often due to a faulty CD/DVD disk or drive, or a faulty hard disk. It may help to clean the CD/DVD, to burn the CD/DVD at a lower speed, to clean the CD/DVD drive lens (cleaning kits are often available from electronics suppliers), to check whether the hard disk is old and in need of replacement, or to move the system to a cooler environment.

I tried again; tried a different copy of the install CD (my friend had helpfully brought two copies); and tried installing from the Live CD.  Nothing worked.   So, on a hunch, I tried removing all but one of the RAM sticks in my PC (I have 4GB of RAM).  With only one RAM stick, the install worked perfectly.  I then reinstalled the RAM and rebooted.

I then followed these instructions to install additional software that I wanted.

First impressions: I much prefer the look and feel of Ubuntu to Windows.  I enjoy the combination of simplicity and ease of use, with the knowledge that there is power under the hood to do what I want.   I am in complete control, with no digital rights management restrictions trying to stop me from doing what I want.

Ubuntu is normally very easy to install and use. It is disappointing that there seems to be a problem with the installation programme for Ubuntu Jaunty 9.04 – I guess a lot of people would be put off by having to remove the memory chips from their PC, so I hope it is fixed soon.

Because I now have two hard disks, I’ve kept the old version (Ubuntu 7.04 Feisty Fawn) on the old disk for now.   Ubuntu is smart enough to configure my PC to give me an option at boot time to decide which version I want to use.  So I can easily go back if there is something I don’t like in the new version.

I have found the solution.  I needed an option called NAT Loopback which is apparently only available through the command line interface, not the web interface.   From a Windows (or, in my case, Linux) command line, you need to telnet to the router. Then enter:ip config natloopback=enabled
saveall

I did not need to reboot.

Hat tip: Matt Buckett

Very sensibly, that is what the Home Office has now announced in the Strategic Action Plan for the National Identity Register. 

So far so good.  There is one protection, however, that the government has not yet been persuaded to implement. Each citizen should be able to log in, see their own information, and see the names and job titles of every government official who has accessed that data. 

In ” Let Their People Come ,” a new book published by the Center for Global Development, Lant Pritchett reports that if rich countries permitted extra immigration equivalent to 3 percent of their labor force, the citizens of poor countries would gain about $300 billion a year. That’s three times more than the direct gains from abolishing all remaining trade barriers, four times more than the foreign aid given by governments and 100 times more than the value of debt relief.

Quite so.  Development assistance is only a small part of what developed nations can, and should, do to reduce global poverty.

Hat tip: Pienso. More from Arnold Kling.

Over the past couple of years there has been a growing consensus that conditionality does not work.  … It has failed because imposing good policies on countries that don’t want to do them just results in countries taking the cash and then not doing the agreed policies. … Instead of conditionality, the approach should be to set minimum levels of governance and anti-corruption that countries must attain before receiving budgetary support – those countries are likely to absorb the money well and pursue good policies, thereby not needing the conditionality.

This is exactly right. (It is also what I argued in a presentation I gave in a meeting at the Africa Centre in December 2001, what the British Government set out in its policy paper of March 2005, and which I described at greater length here in December 2005.)

Alex goes on: 

DFID currently pays lip-service to governance, but in practice just writes the cheque. In countries where money is likely to be misspent by government, that is a mistake. Instead money should be spent through local, domestic NGOs, and through other bottom-up mechanisms like aid vouchers.

I don't agree at all that DFID only pays lip-service to governance.  DFID has just published an entire White Paper about Making Governance Work for the Poor.   It has recently reallocated its aid in both Uganda and Ethiopia in response to concerns about governance.  That is why DFID refuses to give budget support in countries such as Kenya and Zimbabwe. 

To be a liberal does not mean shrugging your shoulders at those who loathe you and hoping that somehow everyone will get on. A world divided between Christian bible-belt fundamentalists, powered by US military and oil interests, and Islamist Qur'an-belt fundamentalists, ruled by misogynistic mullahs, is a bad world, period.

Quite so.  But let's be clear: the battle of ideas is not between Christian and Islamic religions and cultures. The real battle of ideas is between rational, reality-based thought and religions of all kinds.

1. "Ghana is allowed to sell raw cocoa beans to the European Union, but if it exports finished chocolate it gets hit by big tariffs."

2. "Each European Union cow gets $2.40 a day in subsidies, more than what 1bn people each have to live on."

3. "The World Trade Organisation is undemocratic and secretive.

4. "No economy ever got rich without using tariffs to industrialise."

5. "Cutting rich countries' farm subsidies and tariffs will be a big boost for the world's poorest."

The truth behind the top five trade myths and why it matters

By Alan Beattie

Published: July 1 2006 03:00 | Last updated: July 1 2006 03:00

Perhaps it is the astonishing complexity of trade negotiations such as the "Doha round", the latest iteration of which will occupy several dozen trade ministers in Geneva this weekend, that makes the subject so susceptible to myth and legend. As a public service I present below, in a convenient cut-out and keep form, the current top five myths on the trade negotiations circuit:

1. "Ghana is allowed to sell raw cocoa beans to the European Union, but if it exports finished chocolate it gets hit by big tariffs."

No it does not. Chocolate from Ghana has a zero tariff into the EU. (Some sweetened cocoa powder is taxed but generally only when it contains more sugar than cocoa.) As a member of the poor "Africa-Caribbean-Pacific" grouping of countries, Ghana gets special trade access. Check for yourself at http://export-help.cec.eu.int.

The real, rather banal reason

Ghana tends only to export small amounts of high-quality premium chocolate is that it has neither the infrastructure nor the capability to scale up. It does not help that chocolate melts in the tropical heat and maintaining a temperature-controlled manufacturing, trucking and shipping chain is expensive.

Incidentally a common, equally false variant of this myth is that Uganda (or Ethiopia or Rwanda au choix) exports raw green coffee beans free, but instant or roasted and ground coffee is taxed. Again, not so.

2. "Each European Union cow gets $2.40 a day in subsidies, more than what 1bn people each have to live on." Not really. The $2.40 number comes from taking the "producer support estimate" (PSE) for the dairy industry and dividing it by the number of cows in Europe. The PSE shows how much taxpayers and consumers transfer to farmers because of subsidies or other market-fixing practices. But at present the EU delivers the vast bulk of that support to dairy farmers not by handing out cash but by maintaining artificially high milk prices, mostly by taxing cheaper foreign imports.

This distinction matters for two reasons. One, if we are going to count import tariffs as subsidies, it is only fair to say that sauce for the rich protectionist goose is sauce for the poorer protectionist gander. If Europe's cows have it easy, each Indian grain of rice must also be living the life of Riley.

Second, the myth appears cunningly designed to imply that the "subsidy" money could be better spent elsewhere, perhaps on foreign aid. But that money does not pass through the government's hands. It goes straight from consumer to farmer at the point of purchase. If governments wanted to redirect money from farming to aid they would have to come out and raise taxes or cut other spending to pay for it.

Sadly, I fear I am fighting a losing battle on this one. Misleading though it is, the $2.40 cow is too good a story to give up. Bono, for example, keeps citing it even after I have explained to him why it is wrong.

3. "The World Trade Organisation is undemocratic and secretive."

Yeah, right. The WTO is so democratic it can hardly move. It has 149 member governments, any one of which can block a deal. Imagine the British House of Commons or the Japanese Diet or the US House of Representatives if every member had a veto over every bill.

As for secrecy, the negotiating papers for this weekend's talks, with some blunt commentary from the authors who are chairing the discussions, are right here. And while you are reading this I will be sitting in a press room in Geneva knee-deep in trade ministers sounding off to the world's media. It is about as secretive as the World Cup final.

4. "No economy ever got rich without using tariffs to industrialise." This claim, generally used by developing countries to avoid cutting tariffs, has a two-word refutation: Hong Kong. Some say Hong Kong's postwar success was as a port and financial centre for China. Not true. Being the entrepot for a country under US and United Nations embargoes and ruled by an autarkic Communist was not exactly a licence to print money. Hong Kong did the same as the other Asian tigers – starting off with clothing and other labour-intensive manufacturing and moving into more sophisticated products and services later.

5. "Cutting rich countries' farm subsidies and tariffs will be a big boost for the world's poorest."

This is the one that we all really want to be true. Sadly, it is not. The poorest countries, with the important exception of cotton-growers such as those in west Africa, generally do not grow many crops that compete directly with exports from Japan, Europe or the US, and they themselves have pretty good access to those countries' markets through special preference programmes. They do not need new markets as much as they need something to sell and decent roads, ports and airports to help them sell it.

Buried in these myths are glints of truth. Rich countries do practise "tariff escalation" – charging higher taxes on finished goods than on raw materials – on poorer ones; subsidised EU farm produce can and does undercut some farmers in developing countries; the practice of convening select groups of ministers in trade talks does appear arbitrary and unfair. But that does not mean that every story you hear about trade is true.

The writer is the FT's world trade editor

Copyright The Financial Times Limited 2006

Ring leaders are buying bars of chocolate and packets of crisps in bulk, and making small profits by surreptitiously selling on to sugar-craving classmates.

Even if the school started selling these things again, we’d still buy from these boys as they’re not so expensive 16-year-old school girl  "You can get a good deal from the boys selling sweets," says a 16-year-old pupil at a respectable comprehensive in south London. "They sell them cheaper than the tuck shop used to."

She claims that three boys in her year are selling junk food to fellow pupils. And it seems that they are cartelising the market: one boy sells crisps, another chocolate, and the third sweets – "chewy sweets and hard sweets and things like that," says the pupil, who asked not to be identified.

"Our school has a healthy eating policy, so the shop and the canteen stopped selling crisps and things. Not long after, these three boys kind of took things over. Now we all know where to go if we want something like that to eat."

You shouldn’t laugh, really – selling sugar to kids is no funnier than selling other addictive and harmful drugs to vulnerable people.   But it is encouraging to hear that an entrpreneurial spirit is flourishing among the British youth.

After all, what are schools for if they don’t teach economics? In today’s lesson, we have learned that markets will generally find a way to close an artificially-created gap between supply and demand; and Government regulations rarely have the effects that the policy-maker intended.

I’ve been a long-time advocate of budget support, as I think it is a very important way to reduce some of the possible negative impacts of aid, such as undermining the systems of recipient governments, and reducing their accountability. It is good that the anecdotal evidence on which the policy is based has been backed up by this more comprehensive, rigorous and independent review.

I’m a bit surprised by the OECD press release about the evaluation (pdf) which is much more nuanced about the findings than the evaluation report itself (5Mb pdf here).

Hilary Benn, the UK development minister, was more effusive:

Mr Benn said Britain provided 25% of its aid directly to governments and, in addition to boosting health and education spending, there had been better management of public finances, greater transparency and more effective coordination between donors. …

The development secretary said he reserved the right to stop donating to  governments that failed to meet expected standards of governance and human rights. Britain has cut off aid to Ethiopia and Uganda over alleged human rights abuses, and in Zimbabwe the UK is
prepared to back only specific projects, such as HIV/Aids assistance.

See also the BBC report here.

Asked if the Prime Minister had sanctioned a peerage to Peter Law, the PMOS said that it was not only a party matter, but also, as people knew, the PMOS did not talk about the nomination process for the House of Lords.

The House of Lords are our legislators, for chrissake. They make our laws. And the official spokesman of the person who chooses them is not allowed to talk about the process for putting them there?

• courts, not civil servants or politicians, should determine what punishment a criminal deserves, based on the individual circumstances of the crime;
• foreigners should be punished no more harshly, and no less, than a UK citizen. 

I think it is downright racist to have a policy of imposing a punishment on foreigners that is harsher than you would impose on UK citizens in the same circumstances.

It is worrying that the Home Office was unable to carry out its policy of deporting foreigners after their release.   But moving to a policy of deporting all foreigners, irrespective of whether that was the punishment imposed by the sentencing judge, would be the biggest over-reaction since the Dangerous Dogs Act. 

Update: Bondwoman at The Sharpener is spot on about this.

One problem with the World Bank is that decisions continue to be made on the basis of "one dollar one vote", reflecting the continuing pretense that it is nothing more than a lending insitution owned by its shareholders, rather than the strategic international institution that it is.

Over on the Center for Global Development blog (CGD is my employer), Ngaire Woods makes a very interesting proposal for the reform of the governance of the World Bank.

… for about 174 members of the Bank, there is little incentive to engage in decisions being made by the Board. Eight Directors can marshal a majority among themselves with little if any consultation with others.

This does not have to be the case. If Directors had to marshal not just 50% of votes (which might be just 8 members), but also 50% of members (92 countries) to make decisions, there would be a clear incentive for to consult and bring on board Directors who represent a large number of countries but wield few votes (such as the two Directors who represent over twenty African countries each yet each wield less than 3.5% of voting power).

This is not a difficult reform. The Bank’s Articles already provide for double-majority voting (Article VIII) for any amendment to the Articles. This could be extended to other decisions. Along with transparency of the Board’s process such as publication of the full minutes of any Board meeting so that countries can read exactly what their Director has said in Board meetings, would be first steps towards a more effective Board.

This seems to me a splendid proposal.  We also need to stop the board from micromanaging every decision taken by the World Bank, focusing instead on strategic direction – perhaps a change like that would help to force the Board to move more "upstream" in its deliberations? 

NB: I’ve disallowed comments on this post here: if you agree (or not), visit the CGD blog and comment there.

Today, many knowledge workers feel overloaded because they are forced to react to a constant stream of email, phone calls and instant messages. Email, the phone and instant messaging have one thing in common – they are all push work flows. In other words, they interrupt what you are doing. Theoretically, people can ignore all three, but generally, socially, it is difficult to get away with ignoring all three when you are at the office. Web Office will change that. With Web Office, knowledge workers can pull the information they need when they need it. They can use directories to go straight to the right People Page or Project Page. If that doesn’t work, they can use enterprise search tools. Knowledge workers can also post information, and know that their colleagues will find it when they need it. Gone is the need to blast out an email to everyone in a large group, providing them with information they might need in the future. My colleague, Dan Hoover, puts it this way: “Web Office replaces the current manual processes of reacting to emails, and organizing emails with a system that lets the computer do the filtering and organizing for you.”

There is a revolutionary change going on here.  The kids graduating from college today regard email as my generation regarded carbon paper: it is their parents’ technology. The new generation uses instant messaging, MySpace, and wikis, not email and read-only websites.

As a manager, everything I have been taught, and everything I have learned on the job, has been about the management of people in an office – sharing information in meetings, with back to office reports, exchanging comments on draft papers, implementing central systems.  But the office of the 21st century will be different: staff will work flexibly, from home or on the road, maintaining shared knowledge for others to access as they need it.  We have not begun to understand how to organise and manage the enterprises of the future.

The terrible story of six men who suffered severe complications in the trial of TGN1412 should make us pause to ask how we choose which of us will test new drugs.

The media have coyly referred to the men as "volunteers". In one sense they are: industry guidelines require that trials should not be advertised as a way to make a living, and that payment for testing can only for the time and inconvenience it caused.  But they are not really "volunteers" because that they take part for money.  Drugs are tested mainly students and the unemployed, who are paid between £120 and £150 a day. In an interview on the World at One on Wednesday, one such ‘volunteer’ said that he took part because testing drugs was an easy way to earn money.  (Why else would they do it?)

More than 100,000 people take part in clinical trials every year in the UK.  The Medicines and Healthcare Products Regulatory Authority (MHRA), which reviews the testing of the drug on animals and in laboratories and the conditions of any human trial, say that 1,100 clinical trials are currently under way in Britain, involving between 10 and 120 patients. Of those, 284 are phase one trials, the riskiest stage and the first testing on humans, typically involving healthy subjects.

While I am opposed to unnecessary testing on animals, I am in favour of testing drugs on animals first before they are tried in humans, if the scientists believe that this will help to reduce the risks to people when the drugs are eventually tested in humans. But eventually we do have to test new drugs in humans.  The question then arises: who should those people be? 

This is a case in which we need some people in a society to make a sacrifice, by taking a risk that can be detrimental to their health and sometimes fatal, for a broader public benefit.  

One option is to offer payments sufficient to induce people to take part in the trials.  My inner economist has no problem with paying other people to take risks that we would rather not take ourselves.  In one sense no different than paying people to fight wars or to go down coal mines.   But drug testing is not a profession that requires training and experience.  Nor is it particularly inconvenient.  I could not be an effective fire fighter without proper training, and that would be a career.  But any of us at random could test a drug.  The egalitarian in me feels very uncomfortable with the notion that we should rely on the poor being so hard-up that they are willing to risk discomfort, their future health and perhaps their lives to test a drug that, on average, they will never need themselves.  Unlike fire-fighters, the only reason it is them, and not us, taking this risk is that they need the money more than we do.

In principle, an alternative approach would be to make drug testing like jury service, based on random selection of citizens. You would receive a message in a brown envelope:  "You have been randomly selected to test a new drug.  Please present yourself to Northwick Park Hospital at 9am on Monday morning."    True, this would require people to make a sacrifice that they would probably rather not make, but such are the costs that somebody has to bear for the tremendous benefits of new drugs.  Why should it not be you, from time to time?  (There might be an opt-out: I have decided not to take part in this trial, and recognise that this means that I will not be permitted to use any pharmaceutical product that I may need in the future.)

If we do think that it is acceptable to allow people to sell their bodies to medical science to test our drugs because we don’t want the burden to fall on society through random ballots, then we should have the courage of our convictions:

• the ABPI guidelines which limit the payments that can be made in drugs trials are hypocrisy verging on market fixing.  If we are going to pay people to take part in trials, we should at least let them negotiate a decent payment.  It is self-delusional to pretend they are not doing it for the money.

• we should also allow poor people to rent out their wombs as surrogate mothers, and to sell body parts such as kidneys or corneas, to people who are willing to pay for them.  There is no logic in saying that people can be paid to risk their lives testing drugs, but not be paid to donate a body part to someone who needs it.

We were all shocked at the suggestion in the recent Oscar-winning film, The Constant Gardener, that pharmaceutical companies might exploit Africans to test new products.  In that case, part of the allegation was that the people being treated as guinea pigs had not given informed consent: nobody is making such a claim about the people in the UK who take part in trials. But it is a difficult line to draw. If we are prepared to let the disadvantaged in our own society take these risks on our behalf, then why not outsource the whole business to people in countries who need the money even more? 

(And here is the one he did write.)
 

This has been the year fans have increasingly taken music into their own hands, rejecting the over-processed diet served up by many major labels in favour of something a little more homemade. In the process they have notched up numerous high-profile successes, including Arctic Monkeys, Arcade Fire, Clap Your Hands Say Yeah, Spinto Band and Nizlopi.

It does seem to me broadly right that it is in the interest of songwriters and performers that people should be able to share music, rather as many of us did with cassette tapes many years ago.

Even the title, Increased migration to US holds back wages, is misleading. (I realise that journalists do not control the headlines that sub-editors put on their articles; but when the headline is comprehensively wrong it does suggest that the article may not have conveyed its meaning very effectively.)

Here is the first paragraph:

Increased immigration of low-skilled workers from Mexico and Central America helps to explain the pattern of low average wage growth in the US in recent years, the Congressional Budget Office said in a report released on Thursday.

You might reasonably conclude that migration is bad for the wages of native-born workers, since it slows down wage growth.  But you’d be wrong.  The CBO report is clear what causes this: the migrant workers themselves accept jobs for lower wages than native-born workers, and so depress the measured average wage of workers as a whole.

The CBO report does not find that increased migration reduces the wages of native-born workers.  It says:

More recent studies based on differences across a large number of local labor markets have continued to find little, if any, adverse effect on native workers. For example, based on his analysis of data from the 2000 census for about 300 metropolitan areas, David Card concluded  “Although immigration has a strong effect on relative supplies of different skill groups, local labor market outcomesof low skilled natives are not much affected by these relative supply shocks.

Now that is rather an important distinction.  The report does caution that there may be other changes which dull the impact of migration on native-born unskilled wages:

To the extent that employers or workers adjust their location decisions in ways that offset the otherwise adverse impact of immigration,the effects will be diffused.

The CBO paper has an interesting discussion of Borjas’s estimates which try to take account of this effect, making nationwide estimates of the impact of migration on wages of unskilled workers.  The estimates are inconclusive about the size of the effect, because the effect is muted by secondary adjustments that occur in response to the increased labour force (such as more investment, or greater educational attainment by native-born workers), whose size is unknown.

So what the CBO report tells us is:

• The migrant workers are better off (presumably, else they wouldn’t come)
• If there is a fall in the wages of native-born workers, it is too small to detect statistically, and the effect appears to be very small.
• The economy is more competitive, goods are cheaper and consumers (including native-born workers) are better off.

That sounds like a win for everyone.  It is a shame that the article, and especially the headline, in the FT chose to sound a misleading warning about a fall in average wages rather than highlight the reports conclusions of gains for everyone from more open migration policies.

Google has launched a new online blog reader (known to techies as an RSS feed reader). 

I’ve been playing with it this morning.  My preliminary view on this beta version are:

Pluses:

- nice look and feel – using Ajax to scroll through blog entries

- allows you to tag posts yourself so you can group them later (rather like GMail’s virtual folders)

- allows you to import your feeds in OPML

Minuses:

- OPML import doesn’t seem to work 

– It is slow (too slow to be usable). (For example, it does not seem to pre-load my feeds before I come to read them, and appears to load them in real time.)

My conclusion is that when this works, it will probably become my feed reader of choice. But it isn’t there yet. In the meantime, I’ll stick with akgregator.  As ever, more suggestions in Wikipedia.

More generally, this is yet another example of how Google is gradually (actually, not very gradually) taking over from Microsoft.  The web will be the new desktop. 

Update: October 7th – I’ve been playing and find I can import OPML files if I first edit them and remove all the categories, and change the header to:

<?xml version="1.0" encoding="utf-8"?>
<body>
        <outline type="rss" … etc

But the whole thing is painfully slow. Not switching yet.

This is important because there is good evidence that access to mobile phones is good for development. 

Easy! we all cry out in unison. Developing countries should stop being so short sighted and abolish the tax on mobile phones. Doh!

Indeed they should. But if you are the Finance Minister in a very poor country, this is easier said than done.  In Bangladesh, health expenditure per person per year is just $11, and primary education just $34 per person per year.  You need the money to expand those services. People with mobile phones clearly have more money than most.

Finance Ministers know that if they abolish the tax on mobile phones, there will be more usage, more business, and more taxes coming in. Well perhaps: but when will that revenue arrive?  How are you going to manage in the meantime?  Many developing countries cannot afford to borrow to see them through until the revenues pick up.

Mobile phones are just one example. The economies of many developing countries would benefit hugely if they could abolish import tariffs, for example on computers and cars; liberalise state telephone companies and other state companies; remove user fees on key government services; and so on.  But in poor countries with only a small formal economy, these taxes and charges are major sources of revenue for the government which pay for essential public services.

This seems to me a good example of how aid donors might help developing countries to carry out reforms. The rich countries could provide fixed term funding to finance the fiscal costs to developing country governments of sensible tax and policy reforms that will boost the supply side of the economy, to see the government through during the dip in revenues that they will inevitably experience and can ill afford.   The aid could be calibrated to replace the revenues forgone as a result of the reform, and taper off over time as the revenue benefits of the supply side reforms begin to materialize.  Donors would thereby provide bridging finance for reform, and share some of the risk that the revenues do not materialize.   For this to work, the bridging funds would have to be predictable, guaranteed for as long as the reforms are sustained, and unhypothecated and untied. 

Hat tip: John Naughton

So the centre has set up a pledge bank by which people who support the centre and want to stand in solidarity with them can pledge an amount which increases for each picket that shows up:

If you pledge 30 cents per protester, and PPSP has 100 protesters in October and 160 protesters in November, your donation would be 78 dollars for the entire two-month campaign.

The centre will have a sign outside which tracks the number of pledges, so that the protesters know that the more pickets they send, the more the financial support for the centre will grow.

(Hat tip: Warren Ellis)

Things are not getting any better. A fuel shortage delayed the deployment of Africa Union troops, desperately needed to restore peace.

George Bush and Tony Blair, both of whom have said words to the effect that another Rwanda must not happen on their watch, are doing nothing.

We know what needs to happen.  The International Crisis Group, a respected, independent, non-profit, non-governmental organisation, said this on July 6th:

The international community is failing in its responsibility to protect the inhabitants of Darfur, many of whom are still dying or face indefinite displacement from their homes. New thinking and bold action are urgently needed. The consensus to support a rough doubling of the African Union (AU) force to 7,731 troops by the end of September 2005 under the existing mandate is an inadequate response to the crisis. The mandate must be strengthened to prioritise civilian protection, and a force level of at least 12,000 to 15,000 is needed urgently now, not in nearly a year as currently envisaged. 

This requires more courageous thinking by the AU, NATO, the European Union (EU), the UN and the U.S. to get adequate force levels on the ground in Darfur with an appropriate civilian protection mandate as quickly as possible, which in practical terms means within the next two months. Otherwise, security will continue to deteriorate, the hope that displaced inhabitants will ever return home will become even more distant, and prospects for a political settlement will remain dim. 

What are we waiting for? 

You won a free ticket to see an Eric Clapton concert (which has no resale value). Bob Dylan is performing on the same night and is your next-best alternative activity. Tickets to see Dylan cost $40. On any given day, you would be willing to pay up to $50 to see Dylan. Assume there are no other costs of seeing either performer. Based on this information, what is the opportunity cost of seeing Eric Clapton?
(a) $0;  (b) $10; (c) $40; or (d) $50.

Not sure of the answer? What would you gain from seeing Dylan?  You value it at $50, and it would cost you $40.  So the net benefit to you of seeing Dylan is $10.  That is the opportunity cost to you of seeing Clapton.

Among the economists at the AEA, the answers given were:

The distribution of answers looks fairly random, though it is shaming to see that the correct answer was the least popular.

There are perhaps four concepts in economics that really, really matter, namely:

a. marginalism

b. opportunity cost

c. comparative advantage; and 

d. efficient markets.

As a government economist, the notion of opportunity cost was my bread and butter, the reason for my daily existence. If academic economists no longer understand the idea, what are they teaching the next generation of economists?

(via Robert Frank in the New York Times) 

• Private capital flows to Africa in the form of foreign direct investment (FDI) are growing. While in the past much of this investment was limited to the raw materials sector, the current wave involves firms from more countries and sectors than ever before.
• Foreign investors, including from within Africa itself, invested almost $50 billion in Africa during 2000–03. While this represents only a small share of global flows, the more relevant comparison iswith the size of the African economy. By this measure sub-Saharan Africa attracts almost as much FDI as Southeast Asia.
• Although Europe remains the principal source of investment, a rising share is coming both from Asia and from within Africa itself.
• Investors have been influenced by improvements in governance, most notably with respect to the business climate, where the desire to attract foreign investors can provide a strong incentive for African governments to reform their policies and practices. Although much remains to be done, some countries have nevertheless made great progress in areas such as political and economic stabilization, privatization and simplification of cumbersome regulations.
• This foreign investment also has implications for patterns of trade and integration. Many African exports are channelled through multinational enterprises, helping to integrate African countries both with one another and with the global economy.

As the paper argues, this is a tribute to the huge improvements in governance across the continent over the last few years.  I was also interested to see the conclusion that aid flows and foreign direct investment are complementary:

Not only can public donors encourage private investors and vice versa, but together they can also make a greater contribution to development than either by itself. This can be seen most clearly with respect to infrastructure where neither the large aid-financed projects of the 1950s and 1960s nor the largely private projects of the 1990s have yielded the expected private and social returns in many cases. In this light, any increase in aid to Africa such as through debt relief agreed at the G8 meeting is likely to foster greater flows of foreign investment in the future. When allied with improvements in governance on the continent, the combined impact of increased aid and FDI might well yield positive results on a far greater scale than has previously been seen.

Above all, however, he vowed to concentrate on the plight of Africa and climate change. The priorities have not changed. This week he and Gordon Brown face the task of making good on their progress so far. "The [UK's] objectives for the summit are ambitious but achievable if our political leaders are willing to give sufficient priority to them," said Owen Barder, a former official from the Department of International Development who works at the Washington-based Centre for Global Development. "In Whitehall parlance, they are ‘stretching’. The aid and debt targets are achievable: compared to other public spending programmes, only modest additional resources are needed, and straightforward institutional changes would improve the impact of aid. The trade objectives will be more difficult." ‘Stretching’ is an apt description of Blair’s negotiating stance. Despite the ground-breaking deal to relieve 100% of debts owed to international institutions by the world’s poorest countries, a number of Britain’s G8 partners remain reluctant to go further.

Surely, rather than rich nations sitting as judge and jury on the debts of the poor, it should be possible to establish an independent arbitration system to stop this situation ever developing again.

The establishment of an arbitration committee to regulate who can borrow does not sound practical or desirable. Here is another possible solution, focused on the particular problem of debts incurred by illegitimate and corrupt governments (often called "odious debts") – such as those accumulated by the apartheid government, or by the Government of Mobuto Sese Seko of Zaire. An institition would be nominated (perhaps the Security Council) which has the power to designate particular regimes as "odious". Countries such as the UK and US would change their laws to prevent the legal enforcement of any sovereign debts of those countries, for debts incurred after the regime was declared to be odious. Lenders would know that any loans to odious regimes could not be enforced or collected, and so lending would largely dry up. Such a mechanism (which has been proposed by economists Michael Kremer and Seema Jayachandran) would shut down access to credit for corrupt regimes (unlike trade or financial sanctions, it would be self-enforcing); and it would prevent the accumulation of debts by corrupt countries that might have to be forgiven in the future, with the consequential damage to credit worthiness of the government and skewing of aid resources.