Owen abroad

Archive for January, 2007

The African Union has once again refused to appoint Sudan's President, Omar al-Bashir, as its Chairman.  Compare this to 1975, when the AU's predecessor, the Organization of African Unity, appointed a murderous buffoon, Idi Amin, as its President.

We often complain that Africans need to stand up for better governance and for human rights.  So full kudos to the AU for doing so.

Tim Worstall also picks this up. 

The Ideal Government blog comments on Gordon Brown's call for Government to make better use of the internet to have an open debate about globalisation and trade.  The Times quotes Mr Brown:

“We have not had these debates successfully. Why are we so much on the defensive on globalisation, why have we failed on the trade debate, why haven’t we persuaded people of the wisdom of what is being done on Iraq?”

Mr Brown said that the positive aspects of globalisation were not being communicated because voices on the internet focused on job losses and other downsides. It was a similar story on world trade, he added.

“One of the failures on trade is that we have not had the debate and on globalisation that we have not been prepared to have the debate,” Mr Brown said

There is not much incentive for government officials to use the internet to engage in these debates – and plenty of downside risks if we overstep the mark.  I wonder whether Mr Brown will do more to encourage it.

I thought this was a very interesting and readable paper about aid effectiveness by François Bourguignon and Mark Sundberg.   They describe an emerging consensus for the aid architecture, based on what they call implicit aid contracts:

The use of implicit aid contracts, based on monitorable evidence of improvement in final results and the observable quality of policies, is the direction in which donors are beginning to move. Aid allocation is increasingly done on the basis of country performance that combines governance, general policy environment and some intermediate or final results. The use of the CPIA index, although imprecise in its coverage, is a move in that direction. The selectivity of aid allocation based on the quality of governance and general policies, has increased significantly since the mid-1990s, particularly among the multilateral institutions but also among bilateral agencies, possibly pointing to the emergence of a new model. Consistent with this trend is the donor commitment to make aid more predictable, and deliver more aid as budget support rather than tying it to specific imports, projects, or policies.

I agree with that, though I think we may go further than this implies towards linking aid to ex post outputs, and rather less to measures of governance and policy environment.

Among some bloggers (such as Tim Worstall), and now on the BBC, it is becoming fashionable to say that Nicholas Stern's analysis of the economics of climate change overstates the case for intervention to prevent climate change, because it overstates the value we should attach to the income of future generations. 

In simple language, the claim is that Stern does not properly take into account the principle that an extra pound of consumption is worth less to you as you get richer.  This means that future generations – who are expected by everyone to be much richer than we are – will value an extra pound of consumption less than we we will. If you take account of this, we should attach less weight to the possible costs to future generations when we compare those to the immediate costs of making the adjustment.  (For a technical version of this critique, you may want to read this piece by Byatt, Castles, Goklany, Henderson, Lawson, McKitrick, Morris, Peacock, Robinson and Skidelsky.)   I am undecided on whether this is an important weakness in Stern's account, and I wish that the report had contained a more systematic analysis of the sensitivity of his conclusions to different assumptions about discount rates (there is some of this in the new Technical Annex to the Postscript).

But even if you do conclude that Stern overstates the case for action now to prevent future costs, there is an important distribution effect that is masked by the aggregate numbers that Tim Worstall and others quote.   The likelihood is that the main beneficiaries of the anticipated economic growth will be in rich countries, as they have been through the twentieth century, while the costs of climate change will be borne disproportionately by the poor.   If it turns out, as predicted, that agricultural productivity in Niger collapses as temperatures rise in sub-Saharan Africa, leaving 12 million people with nothing to live on, it will be little consolation to them that people in Western Europe and North America are living much better as a result of the economic growth that the high carbon consumption has permitted.   

So this is the challenge to those who take the view that the overall numbers do not make the case for action against climate change:  are you prepared to support the massive transfers in resources that will be required from those who enjoy the growth to those who suffer its consequences? 

One of the most important and cost effective ways that rich countries can help poor countries is to invest more in R&D, especially in products that would benefit the poor (such as a malaria vaccine, cheap solar panels, or a cassava plant resistant to mosaic virus).   We do have large research programmes; and I took part yesterday in an interesting discussion about whether we should fund such research by paying the researchers directly, or whether we should create financial incentives for the private sector to invest its own money in looking for solutions.

My conclusion is that we need a judicious combination of "push" funding (e.g. subsidies to research institutes) and "pull" funding (e.g. guaranteed markets, or prizes).  Push funding is especially useful for R&D that produces basic science of general value which cannot be mainly appropriated by a firm through the sale of products; pull mechanisms are more efficient for R&D that is specific to a particular product.

David Wessell has an interesting article in the Wall Street Journal on January 25th the use of prizes to spur innovation.  I thought this was particularly interesting:

One surprise: The further the problem was from a solver's expertise, the more likely he or she was to solve it. It turns out that outsiders look through a completely different lens. Toxicologists were stumped by the significance of pathology observed in a study; within weeks after broadcasting it, a Ph.D. in crystallography offered a solution that hadn't occurred to them.

One of the merits of prizes over government-directed research is that they encourage engagement by a more diverse range of investigators than would be likely to be supported by cautious and risk averse bureaucrats.  This finding suggests that might be rather important.

Full text of WSJ article below the fold.

Read the rest of this entry »

Many progressives here in the UK have a stereotyped view of US politics (roughly speaking: 'Democrats good, Republicans bad').  These assumptions have been reinforced by negative perceptions of the Bush presidency.  And so there is an assumption that the Democrats are more likely to pursue policies that are good for developing countries, such as increasing foreign assistance, or opening markets.  But that is a one-dimensional view about US politics and American attitudes to foreign assistance .  As Todd Moss shows in an updated note:

Under President George W. Bush U.S. assistance to Africa has sharply increased, reaching $4.2 billion in 2005, nearly four times the level of 2000. This rapid growth is partly a result of a renewed sense that aid can fulfill humanitarian objectives and be a useful foreign policy tool—which helped encourage the creation of two major new aid programs, the Millennium Challenge Corporation (MCC) and the President’s Emergency Plan for AIDS Relief (PEPFAR). But the conventional wisdom says that the party of Jimmy Carter and Bill Clinton is a better friend to Africa than the GOP. Thus the scale of recent aid—and President Bush’s overall enthusiasm for Africa—caught many aid activists by surprise. 

The Republicans have in the past spent more on aid than the Democrats: Todd estimates that, based on past averages, the success of the Democrats in the mid-terms will cost Africa about $800 million. 

I think we forget the importance of the evangelical movement in the Republican coalition; and that the churches have continued to press for more aid for the developing world.  Furthermore, on trade policy, the Republicans are routinely less protectionist and less mercantilist than the Democrats. 

All of which shows that we should not make simplistic assumptions about politics in other countries.

The Washington Post reports the death of Ryszard Kapuscinski:

Ryszard Kapuscinski a Polish writer and journalist who gained international acclaim for his books chronicling wars, coups and revolutions in Africa, the Middle East and other parts of the world, died of a heart attack, his literary agent said. He was 74.

His book The Emperor about Haile Selassie is one of the great studies of dictatorship; and the Shadow of the Sun is among the very best accounts of travelling in Africa.

Here is my ha'porth, for the record.  

It is no excuse to say that your religion requires you to discriminate against gays.  We would not tolerate the same argument to justify discrimination against people on grounds of race.  

Nor is it a defence for the churches to say that it is OK for them to discriminate because there is another agency that does not.  As somebody said, it is like telling Rosa Parks that she should get off the seats-for-whites-only bus and wait for the fully integrated bus coming along behind.   

This is not mainly a point about public services and public funding. As Evan Harris MP points out, there is a problem with contracting public services out to "third sector" organisations if they then expect to be able to impose their prejudices on how those services are delivered.  But even if the churches were delivering these services at their own expense, they should not be allowed to discriminate against blacks, gays or anybody else.

Frankly, I'm amazed that this is even a matter of public debate. 

Very funny parody of second life: www.getafirstlife.com.

I particularly enjoyed the recommendation to “fornicate using your actual genitals“.

Scientific American discusses the need for better forecasting of need for drugs and vaccines:

Unpredictable demand creates a three-way catch-22 problem, as pointed out in a 2002 study commissioned by the GAVI Alliance, formerly the Global Alliance for Vaccines and Immunization. Poor countries have to know the price of a vaccine to see if they can afford it. Manufacturers, however, are hesitant to set a price unless they know how many doses will be bought. And aid donors cannot be sure they can subsidize a purchase without knowing the price and quantity of the sale. Vaccine purchases have occurred anyway, but not without difficulty. In 2002, when GAVI convinced suppliers to manufacture extra courses of an existing vaccine against Haemophilus influenzae type b, poor countries were slow to buy it. "We were very naive at that time and thought countries would take up the vaccine much faster than they did," recalls Michel Zaffran, the group's deputy executive secretary. "The tools that we had available were very poor."

I am not personally convinced that the problem is forecasting demand in the sense of uncertainty about how many doses of vaccine we are likely to need. In principle, the number of children in a cohort, the extent to which they are at risk of particular diseases, and the the capacity of health services to reach them with vaccines, are all likely to vary little from one year to another. 

The big driver of uncertainty in demand seems to be the behaviour of donors, capriciously moving money from one priority to another according to the latest political priority or development fad, or unpredictably dumping their unspent budget at the end of the year on easy-to-buy goods such as pharmaceutical companies.  As well as improving our techniques for forecasting demand, we need to take a long hard look at how we can make aid budgets more predictable, so that developing countries have much more information with which to plan, long in advance, how many drugs and vaccines they will be able to afford.

 Andrew Jack wrote in the Financial Times on Wednesday about measures to reduce AIDS in Africa.  In a nutshell, he says that there has been too little support for campaigns to change sexual behaviour, even though these efforts appear to have worked in Uganda, Zimbabwe and Kenya.  By contrast, there has been more investment in drugs to treat AIDS and condoms to help prevent it.

Purnima Mane, director of policy evidence and partnerships at UNAids, the United Nations' Aids agency, says: "In the last 10 years, the focus has been highly biomedical. Social scientists have withdrawn a bit. They have been seen as playing second fiddle."  Furthermore, when programmes have been launched, monitoring and evaluation has often been lacking. "We have launched boutique projects rather than scaling things up," she says. "We don't establish what makes them effective. That has been the tragedy, because we have wanted to act quickly."

I drew several conclusions from this:

• donors do tend to invest more in development programmes for which there is statistically robust evidence of effectiveness, such as clinical trials which demonstrate effectiveness by comparing people who receive the drug with otherwise similar people who don't
• we need to invest more in rigorous impact evaluations of social programmes (e.g. behaviour change campaigns), preferably using random assignment trials wherever this is ethical, practical and cost-effective
• the value that we attach to acting quickly, with the minimum of delay and bureaucracy, to get programmes up and running, militates against embedding rigorous statistical evaluation into new programmes
• the benefits of developing having better information about the effectiveness of social programmes are long term and global, and the costs and delays are mainly borne by the individual donor and the community in which the programme is being conducted; as a result, there are insufficient incentives to do this kind of analysis.

The Center for Global Development report on the Evaluation Gap looks at these issues in more detail.  Their conclusion – with which I agree – is that we need a coordinated international effort to increase statistically rigorous evaluation of social programmes in development.

This all sounds very dry and technical.  But read the article in the FT: if we had better, more rigorous evaluation evidence we might have done better at reducing the AIDS epidemic in Africa.  And that would be quite something.  Read the rest of this entry »

The UK Government is going to consult more widely on its proposals for data sharing within government.

A national identity register that allows data sharing across government could be the technological underpinning of a huge improvement in the provision of government services.  (It is important that the technology will not transform the services: it is a platform on which government processes can change). 

Those of us who understand the technology and care about our civil liberties should not adopt a luddite stance of opposition: we should send a clear, consistent and simple message about the safeguards we need so that we get the benefits of joined up services without the risks to our freedoms. 

I propose the following five, readily understandable safeguards.  The government should commit itself to each of these, or offer an extremely good reason why not:

• government data should be stored in decentralized databases that can communicate with each other on a need to know basis, not in shared data warehouses;
• citizens should have access to all data held about them by government
• citizens should be able to see a complete log of every access to their personal data by all public servants
• an independent information security ombudsman should police the systems
• there should be no identity cards and no collection of biometric data

Governments sometimes struggle to take a firm line on corruption overseas.  On the one hand governments recognize the damage that corruption does, particularly in developing countries where the proceeds from corrupt payments can sustain unaccountable governments and divert resources that are desperately needed for public services.  On the other hand, governments do not want to penalize British businesses who are responding to the business environment that they sometimes find, especially if that means sacrificing large export orders and jobs.

The OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions forbids signatories (of which the UK is one) from putting commercial interests ahead of the need to fight corruption.  Even so, governments inevitably face pressure not to put jobs and export orders at risk.  For example, on Any Questions in December, both Charles Moore and Edward Leigh appear to say that it is not worth putting jobs at risk to fight corruption.

So this letter sent just before Christmas from Hermes Pension Fund, one of the UK's largest investors, makes interesting reading.  It says, in effect, that the market distortions and uncertainty caused by corruption cost British business more than the short-term costs to business of taking a tough position against corrupt payments.

In other words, according to Hermes, there is no trade-off between the interests of business and the desire to be tough on corruption.  According to Hermes, Governments that want to be business friendly should stand firm in the fight against corruption.

Shadow Chancellor George Osborne has announced that the Conservatives would spend at least £500 million a year on fighting malaria.  He also confirmed that the Conservatives will increase aid spending to 0.7% of GDP by 2013.

This is a welcome announcement in a number of respects.  It affirms that there is a cross-party consensus that, when properly spent, aid can make an important contribution to the fight against poverty.  Second, it draws attention to an underfunded area – the fight against malaria – for which we have good evidence of the effectiveness of the interventions, but which remains underfunded.  Third, it highlights the need to work with and through other donors.

But I do have some quibbles.  There are presentational advantages to singling out particular diseases that we will tackle.  But the only cost-effective, sustainable, long-run solution is to build basic health systems – training nurses, building clinics, reforming procurement – which can deliver the full range of basic health services, from anti-malaria bed-nets to immunisation against measles.  The increasing focus of funding on specific deseases has over time led to more and more investment in drugs and facilities that focus on one particular condition, with a corresponding 50% fall in investment in basic health systems.  So while it is right to identify malaria as a condition we can address by increasing resources, we must ensure that the additional funding is delivered in the form of support to those health systems. (To be fair, nothing in the announcement contradicts this point; but I would have liked to see it made explicitly.)

My second quibble is not with George Osborne's announcement but with Jeff Sach's article yesterday in which he denounces the use of social marketing.  Social marketing is a method of increasing access to essential goods and services – such as anti-malaria bednets or condoms – by encouraging the private sector to provide those services on a commericial basis, sometimes with a subsidy.    Sachs says:

This policy reflects a shortsighted ambition to promote markets rather than the overriding goals of saving lives and removing bottlenecks to long-term economic development.

That is not an accurate description of the objective of social marketing, because it takes no account of the evidence (summarized here) that small firms incentivized by profits may be rather better at getting these goods and services to people than public sector organizations.  If so, then using social marketing may save more lives quicker.  It would be ironic if, in listening to Jeff Sachs's very persuasive views about the need to invest more in proven ways to reduce poverty, such as the fight against malaria, the Conservatives were also to adopt his anti-market prejudices about the best way to achieve those goals.

I mentioned earlier this year the need to be rational about "food miles" – that is, the pressure to buy locally produced food.

Interesting to see this article in the Metro today:

Too much attention is being paid to how vegetables and flowers imported by air from Africa cause greenhouse gas emissions, said Bill Vorley, of the International Institute for Environment and Development.

Cutting this trade could have an overall negative impact on African development, he explained. …

'Air freight of fresh fruit and vegetables from Africa accounts for less than 0.1 per cent of total British carbon emissions.

'Climate change is going to affect the poor in Africa harder than anyone else. These are the people who have done least to cause the problem. They should not be made to pay the cost of fixing it too.

There is a debate about whether we should buy food from poor countries – which helps farmers, but might damage the environment.  Well-meaning people are torn.

Ideally, the price of food in the shops would reflect the full social marginal cost of producing it and transporting it.  So beans from Kenya would be more expensive if they use up more of the world's resources – including carbon emmissions from transport - than beans from a Spanish hothouse.   If taxes were levied at levels and in ways that reflected externalities such as pollution, then we could let the market decide.

In the meantime, should we be buying food imported from Africa? I think we should, for three reasons.

First, it is not clear that food that has travelled a long way is worse for the environment than food grown locally.  For many products, the energy needed to grow food locally – such as tomatoes in a hothouse – is more than the energy needed to grown them where the sun shines, even when you take into account the energy needed to transport them.  Flowers grown in European greenhouses result in more CO2 emmissions than flowers grown in Africa and flown in.

Second, the energy needed to transport food is a tiny proportion of greenhouse gas emissions.  It is way less important than, for example, putting your appliances into standby mode, or making one fewer business trip a year.

Third, millions of people depend for their livelihoods – and that of their children – on growing and selling food and flowers for the UK market.  UK consumers spend a million pounds a day on food and vegetables from African farmers.  If we deny Africans the opportunity to trade their way out of poverty by refusing to buy their agricultural products, then we will consign another generation of Africans to poverty and handouts from the rich.  In Kenya, where half the population lives on less than 50p a day – Kenyan farmers can earn £1000 a year by growing fine beans.  Tanzanian famers earn twice as much selling baby corn to UK supermarkets as they do selling maize locally.

More than two thirds of Africa's poor depend on agriculture for their livelihoods.  In our determination to tackle climate change and reduce carbon emissions, let us start with sacrifices we can easily make ourselves, before we deny them the chance of a decent life.

Laurie Garrett writes in the current edition of Foreign Affairs about the Challenge of Global Health:

Few of the newly funded global health projects, meanwhile, have built-in methods of assessing their efficacy or sustainability. Fewer still have ever scaled up beyond initial pilot stages. And nearly all have been designed, managed, and executed by residents of the wealthy world (albeit in cooperation with local personnel and agencies). Many of the most successful programs are executed by foreign NGOs and academic groups, operating with almost no government interference inside weak or failed states. Virtually no provisions exist to allow the world's poor to say what they want, decide which projects serve their needs, or adopt local innovations. And nearly all programs lack exit strategies or safeguards against the dependency of local governments.

The analysis emphasizes the difficulties caused by relentless focus on individual diseases (AIDS, malaria etc) and not enough on investment in the underlying health systems that are needed to deliver treatments and provide health care services to men and women in poor countries:

Which outcome will emerge depends on whether it is possible to expand the developing world's local talent pool of health workers, restore and improve crumbling national and global health infrastructures, and devise effective local and international systems for disease prevention and treatment.

According to the World Bank, while investment in disease-specific programmes (such as the Global Fund) have increased sharply in recent years, investment in health systems has fallen by 50%.

In this context, the Scaling Up for Better Health initiative (see pdf) is a very high priority.

This paper, by me and Nancy Birdsall, recommends that donors should consider linking aid to the progress that recipient countries make towards a small number of high-level goals (eg the number of children in school). The payments would be guaranteed, with no strings attached about how the recipient could use the money (though further payments would depend on continued progress); and the commitment would be transparent.  It would enable civil society organisations in developing countries to push for more rapid delivery of services, given that their government would be guaranteed a stream of aid revenues to cover its costs.

A promise of this kind would turn social benefits (eg better education, better health care) directly into a financial stream of payments, which they could use to invest themselves, or to pay private sector firms to deliver services.

(This paper was written before I returned to the UK Civil Service.)