Owen abroad

Archive for August, 2006

A new paper by Ilyana Kuziemko and Eric Werker finds that joining the Security Council results in a 60% increase in foreign aid, and an 8 percent increase in aid from UN bodies; and that it returns to normal when the country’s time on the Security Council comes to an end.

Using country-level panel data, we find a large positive effect of Security Council
membership on foreign aid receipts. On average, a non-permanent member of the council enjoys
a 59 percent increase in total aid from the United States and an 8 percent increase in total
development aid from the United Nations. Further results lend strong support to the bribery
hypothesis over the two alternative hypotheses mentioned above. First, we find that aid to
Security Council members is significantly larger during key diplomatic years—that is, years in
which the United Nations receives an especially large amount of media coverage, or in which a
major international event occurs. The variation used to identify this effect is plausibly
exogenous; it is driven by the fact that some countries serve on the Security Council during
relatively calm years while others, by chance, are fortunate enough to serve during a year in
which a key resolution is debated and their vote becomes more valuable.

Second, aid payments sharply increase in the year that a country is elected to the Security
Council, remain high throughout the two-year term, and return to their earlier level almost
immediately upon completion of the term. The sharp increase challenges the notion that the
correlation is being driven by an unobserved, secular change in a country’s international
influence or diplomatic savoir-faire. Similarly, the rapid return to baseline aid levels after a
country has completed its tenure suggests that the aid is not due to a newfound awareness of the
country’s needs. Instead, the discontinuous pattern of aid suggests that Security Council
countries experience a windfall of aid only during the period when they enjoy increased
influence in the United Nations.

In Britain, the International Development Act makes it illegal to use aid for anything other than the relief of poverty; but as far as I know, the act does not prohibit the government from focusing its poverty reduction efforts on countries that are politically or strategically useful for other reasons.

The Wall Street Journal reports a new paper by Paul Collier about the reasons why growth in Africa has been slower than elsewhere.

“African performance has been far worse than that of any other region,” Collier has written. “The explanation for this is not that African economic behavior is fundamentally different from elsewhere, but rather that African geographic endowments are distinctive.”

Note that geography, rather than corruption, explains the difference from Europe.  (Or, as Acemoglu, Johnson and Robinson pointed out a few years ago, geography may have influenced the pattern of colonisation and subsequent development of effective institutions.)  Not much support for Jeff Sach's view that the problem is disease.

See the discussion over at Greg Mankiw's blog.

Update: Praguetory in the comments asks for my views.   They are:

a. I do not put as much weight on these cross country regressions as others.  They are statistically weak; though they do have some use as a way to check the validity of generalisations (eg 'most poor countries are in the tropics').

b.  Africa's geography does seem to be an important determinant of its poverty.  I think Collier and Sachs may both be right: the burden of malaria in Africa's lowlands has pushed a lot of settlement into highland areas, which in Africa are mainly inland, so exaggerating the geographic limitations of small, landlocked countries.

c.  I believe that corruption is an effect more than it is a cause of poverty and weak institutions.  If corruption is higher in some countries in Africa than it is elsewhere, this is because economic institutions have evolved more slowly, and I think both geography and disease are part of the explanation for that.  The geographic endowment has been made worse by the legacy of colonialisation, both by creating inappropriate political boundaries and by corroding Africa's own mechanisms of accountability and political economy.  So while I think corruption is a significant problem that has to be tackled as part of the development process, I do not think that Africa is poor mainly because of corruption, but rather that the root causes of Africa's poverty are also the causes of corruption. 

This article in The Onion is very funny:

"If they want to ensure that millions of children receive immunity shots for typhoid, whooping cough, or diphtheria, we will ensure that country's medicine is never received."

Added Negroponte: "This bill gives us the power to take on these extremists before they create positive global change that will haunt us for generations."

According to congressional testimony, the CIA sees Gates' intention to bring improvements in health and learning to the poorest corners of the world as the most serious threat to American foreign interests since the wave of independence-granting that plagued Africa in the 1960s and '70s.

I am sure that you are all avid readers of Public Finance magazine.

You’ll be fascinated to hear that this week’s cover feature is my article calling for the establishment of a service-oriented architecture for IT systems across the public sector.  Here is an extract to titillate your tastebuds:

The priority for government should be an IT strategy that organises the individual functions in government applications into interoperable, standards-based services that can be shared, combined and reused quickly to meet business needs. For example, once the government has developed a procurement system or a payroll module, these should be used and adapted by other business units.

This would catalyse significant changes:

• Public services would organise services to correspond to citizen experiences, such as starting a business or moving house, rather than the functions of government
• The frontline service, not the IT department, would design and create applications directly
• Organisations would not bet their future on a single, long-term IT development – instead they would implement change in smaller steps using small, reusable, interlinked modules
• Systems would be designed to change to meet future needs rather than being tightly coupled to today’s processes, and
• Instead of settling on a single, homogenous technology, the government would adopt a variety of different technologies appropriate to the needs of the services.

A common, government-wide structure, based on components, applications and data that could be reused and shared, would reduce development time, cost and risk. Frontline services would control their own processes, which would allow them to respond flexibly to changing needs and develop increasingly customer-centric services.

The article is a shortened version of my chapter in a new IBM publication, Capability, Capacity and Reform, Insights from government leaders on delivering transformational government.

There is more to the fight against global poverty than aid.

The Make Poverty History campaign in 2005 focused on trade, debt and aid.  But even that is just picking some high profile targets.

Developing countries get a lot of advice – mainly unsolicited – about what they should differently, on almost every topic from growing more maize to improving the telephone system.  Some of the advice is good and governments would do well to heed it, if they can. Some of it is not good: our prescriptions may be ignorant, self-serving or ideologically motivated.

As we lecture others on what they should do differently, it behoves us to look long and hard at our own behaviour.  To what extent do our own countries – by action or inaction – contribute to the problems of global poverty? Rich countries impact on the prospects for development in poor countries in a wide variety of ways.  The current trade talks have drawn attention to the importance to the global system of trade rules, which disadvantage some producers in poor countries.  Reforms of trade could do much more to alleviate poverty in poor countries than many years of aid.  But what about our other policies?  We complain about corruption, but it is usually our own companies that pay the bribes, and our banking secrecy laws that shield the recipients.   We produce more than our share of the world's pollution, but it is poor countries that bear more than their share of the costs of global warming, from desertification in sub-Saharan Africa to flooding in Bangladesh.   We use patents to promote R&D into our own problems, even though they prevent the spread of life-saving new technologies.   We encourage free flows of investment to where the profits are highest, but discourage free flows of people to places where they can earn a living to support their families.   We call for an end to conflict in poor countries, but sell arms to the combatants, and buy the diamonds and minerals that bankroll the armies. 

The Center for Global Development (full disclosure: I am proud to say that CGD is my employer) produces an annual report that analyzes each rich country's total contribution to the fight against poverty.

The 2006 report has just been released, and the results are in the September edition of Foreign Policy magazine as well as on the CGD website.

The Netherlands tops the 2006 index, overtaking Denmark which fell back to second place.  They were followed by Sweden, Norway and New Zealand. The UK was 12th, one place ahead of the US and in the bottom half of the league. Japan was last among the 21 countries, mainly because its barriers to exports from developing countries are the highest, because of rice tariffs, and because its foreign aid is the smallest as a share of income.

A striking finding of the 2006 survey is that, despite the rhetoric that 2005 would be the Year of Development, there has been little progress across the range of policies that affect prospects in poor countries.  Indeed, Netherlands has moved into first place because Danish aid has been cut despite strong economic growth.

The UK comes top in two of the seven components, thanks to policies that promote investment in poor countries, and an outstanding environmental record.  The aid program, managed by DFID (disclosure: my past and future employer), is internationally respected, though less generous relative to national income than the Scandinavian countries.  Overall, however, the UK finishes in the bottom half of the league table, weighed down by extensive arms sales to undemocratic governments and tight immigration policies.

Blogged at:

• Center for Global Development Blog (from the horse's mouth)
• Foreign Policy blog
• Michael Stickings
• Pienso
• ThinkMojo
• Andrew Brown

News reports at:

• The Guardian
• The FT
• The BBC
• Reuters
• Foreign Policy magazine
• The Japan Times

This post comes from the new Microsoft blog post editor.

My initial impression is that it will make blogging much easier for people used to Microsoft Word.  It is astoundingly easy to set up – for this blog, which uses WordPress, all it needed was my username and password.

But speaking personally, I much prefer the Performancing add-on for Mozilla Firefox, which makes it all too easy to knock together a traditional link-quote-comment blog post.

If it turns out that the intelligence services and the police have indeed foiled a plot to commit mass murder on a scale never before seen in the UK – and I have no reason to believe that it won't – then we owe them our thanks and gratitude.

We are quick to criticize when things go wrong, such as the killing of Jean Charles de Menezes and the shooting of  Mohammed Abdul Kahar in Forest Gate in June.  Perhaps I am reading a biased sample blogs, but I have not seen a corresponding flurry of recognition of the success of intelligence gathering, investigation and international cooperation that has prevented the destruction in mid-air of nine passenger aircraft.

Similarly, in today's FT, there is a grudging editorial, complaining about the disruption at the airports and recalling past errors: there is no hint of congratulations for the success that the law enforcement agencies have achieved.  Nor does today's Guardian leader offer any thanks.

Well I think that is humbug.  Well done, men and women of the law enforcement agencies.  We owe you. 

G ran a personal best for 10km on Sunday, in a time of 42:16.  (I think she may well improve on that some time soon).  Here is the report in the ContraCostaTimes

Sarah Slaymaker had the best finish among Berkeley-based runners, taking 31st overall. Sarah Smith carried the banner for Piedmont as the 68th overall finisher. Slaymaker and Smith were first and third among women 35-39 with Berkeley's Grethe Petersen between them in second place.

I had the unusual experience of atttending a race as a spectator rather than a participant, as I was still nursing the bruising and bleeding from crashing my bike on the way to the start of the San Francisco marathon.

Enjoy this cartoon book about the development relationship from Survival International.

HT: Curious. 

Have a look at The Filter on Trade, and at Jim's response.

Jim says:

My bottom line is that I’ll support just about anything that tilts the system in favour of the poor. In so far as selective trade protection does that, I’m in favour of it. In so far as it doesn’t, I’m not.

I agree with Jim's objective, but  I take a more sceptical view than him that selective trade protection is ever likely to benefit of the poor.

As I said in thecomments in his post:

…when I said “every country” should liberalize unilaterally, I had in mind the richer countries. I think it is generally also true of poor countries, but I am not in the business of lecturing them about what they do differently when there is so much that we in the industrialized world can and should do differently. When we have our own house in order we can then think about telling others what to do …

Take a look at Don Beaudroux at Cafe Hayek explaining why the logic of protectionism is wrong:

a machine were discovered that, with only water combined with dried leaves or dirt or animal manure, could at the mere flip of a switch produce almost unlimited quantities of high-quality automobiles, household furniture, life-saving pharmaceuticals, personal computers, cell phones, clothing, and chia pets, would humankind suffer from this discovery?  Would people generally be made worse off by putting this machine to work?

From the Adam Smith Institute.

Brilliant.  I've asked for some.

Hat tip: Tim. 

Update: they arrived. Proving that even if there is no such thing as a free lunch, there is such a thing as a free wristband. 

Michael Gerson was, until last month, George W. Bush's speechwriter. His views are hard to pigeonhole – perhaps compassionate conservative comes closest – (see this profile in the New Yorker): he is strongly religious, anti-choice on abortion, and instinctively in favour of free markets.  But perhaps his defining interest is his passionate belief in the need for the US to increase foreign assistance, for both moral reasons and out of self interest, especially in the battle against infectious disease and against poverty.  He more than anyone else was responsible for persuading President Bush to adopt a $15 billion program to combat HIV and AIDS around the world.  His former colleagues used to refer to him as the conscience of the White House.

So it is interesting to read Michael Gerson being interviewed in Foreign Policy:

The Bush administration has increased foreign assistance at a higher rate than at any time since the Marshall Plan. A lot of that has gone to Iraq and Afghanistan, but a lot of it has gone to fighting AIDS and malaria and to the Millennium Challenge Account. The increases have been dramatic, but the need for more [aid] is even greater. Congress has not always been cooperative in increasing foreign assistance to the levels we need. So I think there’s a need for constant public pressure to make the point that foreign assistance, when it’s done properly, is not an altruistic add-on to American foreign policy. It’s a centerpiece commitment of our national security strategy. It shows our values in the world. We’re different from our Islamist opponents because we believe that everyone has value, or worth, and that worth is not determined by distance or culture.

Europeans tend to assume – wrongly – that Republican administrations are less generous in foreign assistance than Democratic administrations, because in European politics the left are identified with a more internationalist outlook than the right.  That is not true in American politics, not least because of the moral attitude of the religious right who make up an influential part of Republican support.

Let us hope that in his new role in the Council on Foreign Relations, he will continue to press the case – for which there is growing bipartisan support – that foreign assistance is both a centerpiece commitment of national security and a moral duty.

Peter Hitchens in the Mail:

I repeat, I love America, think we have much to learn from her, am endlessly glad that she exists, I like Americans and enjoy many aspects of American culture. My heart always lifts when I arrive there and sinks when I have to leave again. But I do not regard her as a reliable ally of Britain. And why should I expect to? It was the great British Foreign Secretary, Lord Palmerston, who pointed out that great powers had "no eternal friends, only eternal interests".

I pointed out last year that, just as the British misunderstand the nature of their friendship with the United States, so too many Americans have a hazy recollection of their role in two world wars. (Having been late for the last two world wards, they seem determined to be on time for the start of the third.)

Britain is still paying our war debt to America. Our final payment is due in December this year: I wonder if there will be a national celebration.

Senator Lieberman says he is going to run as an independent, having lost the Democratic Party nomination in Connecticut.

I don't know much about how party discipline works in the US, but in the UK running against an official party candidate would lead to automatic expulsion from the party.

As far as I know, Senator Lieberman is currently the ranking Democrat on the Senate Homeland Security committee, and he sits on the Armed Services, Small Business, and Environment Committees.  According to the BBC:

Meanwhile Senate Democratic leader Harry Reid of Nevada and Sen Chuck Schumer of New York – the chairman of the party's Senate campaign committee – have pledged their full support for Mr Lamont.

I wonder if Senator Reid's support for Mr Lamont includes removing Senator Lieberman from his committee posts?

According to the Guardian

The Darfur peace agreement is on the verge of collapse with fresh fighting displacing tens of thousands of people and violent attacks on relief workers forcing aid agencies to consider pulling out.

Clashes involving government forces, allied militia and guerrilla factions have forced more than 50,000 people from their homes since the deal was signed three months ago, aid workers said. Most have ended up in overcrowded refugee camps, which are becoming increasingly difficult for aid agencies to reach.

The United Nations is rightly putting together a UN peacekeeping force urgently for the Lebanon, three weeks after that conflict began.  So why is that the international community is still unable to summon the will to send a UN force to relieve the 7,000 Africa Union troops in Darfur a full three years after the genocide in Sudan began?

Could it be because the victims are, you know, African?

Niall Kennedy is leaving Microsoft after four months:

I was able to borrow resources here and there, but there was no team being built around the platform in the foreseeable future. I could have stayed at Microsoft, waited for the other 85% of the company to ship their products, and then hope support for my group might be back on track again, but I didn’t want to sit around doing little to nothing until Vista, Office, and Exchange ship. It’s easier to get funding outside Microsoft than inside at the moment, so I am stepping out and doing my own thing.

This sounds to me like a company in decline: if Windows, Office and Exchange are such a drag on the company that they prevent the business from working at the leading edge of technology then Microsoft has no future.

The Register reports Gordon Brown's interest in extending the ID cards scheme.

In the ID world according to Gordon, on the other hand, ID management will proceed down pretty much the path laid out by the architects of the ID scheme. It won't consider more decentralised and secure approaches that tailor levels of security to need, and although such matters will surely have to be considered by Brown's ID management task force (otherwise, what does it have to investigate?), Brown himself seems to be already pre-empting its report. Government ID management will however incur the vast levels of expense and complexity associated with the original ID scheme, and will, if Brown persists with the notion of expanding it to the private sector, collapse in even greater costs and complexities.

My views on all this are here and here.  In short – we need a decentralized and secure approach. They are building government cathedrals: we need bazaars.

Jackie Ashley is good in the Guardian today:

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.

Another Britblog Roundup from Mr Worstall.

This week's Economist asks why there is an invisible hand on the keyboard:

Not all economics bloggers toil entirely for nothing. Mr Mankiw frequently plugs his textbook. Brad Setser, of Roubini Global Economics, an economic-analysis website, is paid to spend two to three hours or so each day blogging as a part of his job. His blog, rgemonitor.com/blog/setser, often concentrates on macroeconomic topics, notably China. Each week, 3,000 people read it—more than bought his last book. “I certainly have not found a comparable way to get my ideas out. It allows me to have a voice I would not otherwise get,” Mr Setser says. Blogs have enabled economists to turn their microphones into megaphones. In this model, the value of influence is priceless.

Not up to the usual high standard of The Economist.

Economists blog because most of us believe that information and knowledge are more valuable shared than kept secret. As knowledge workers, we are valued by the information we share, not the secrets we keep.  Blogging is a hugely efficient way of sharing some kinds of information.