Geckonomy...

Letter to Mr. Kaiza at the East African

2011-03-07T14:22:00.001+01:00

Dear Mr. Kaiza,

Your article "http://www.theeastafrican.co.ke/news/-/2558/1119958/-/item/2/-/ewxenp/-/index.html" suffers from selection bias.
You selected some numbers that confirm your (political) hypothesis, while you omitted the fact that Uganda's economy has been doing exceptionally well in recent years.
Apart from the quite respectable GDP growth numbers, real exports were up 610% from 2000-2008 (World Bank numbers).
This export performance stabilized the trade deficit in nominal terms, but reduced it enormously relative to the economy.

As every trader in Uganda knows, this is thanks to agricultural goods being exported to neighbouring countries (Sudan, Congo, etc)- a trade that has not (yet) been targeted by government interference or distortion, at least not on the Ugandan side.

Therefore, your claim that agriculture is declining in Uganda, is simply contradicted by the facts. Ugandan farmers never earned more.

I do agree that investment in infrastructe, power generation is highly needed, as the removal of import tariffs, punishing all Ugandans except a few priviliged (exempted) businesses.

Something very few people understand

2010-12-28T16:16:00.000+01:00

http://cafehayek.com/2010/12/krugman-should-study-julian-simon.html

protectionism

2010-06-08T09:28:00.001+02:00

Quite an original way to attack the protectionists:

http://cafehayek.com/2010/06/protectionist-poison.html

aid for universities

2010-06-08T09:25:00.001+02:00

in reply to : http://aidwatchers.com/2010/06/universities-in-africa-the-forgotten-link/

Why don't you worry first about primary education for all?
That would add a lot more value to a dirt poor nation. Development econ 101.

Why would aid money be used pamper the lucky few who were rich enough to get secondary education and can even afford university fees...?
And the aid sector gives many scholarships to local students - hence it is not really true that the university education is "neglected".

But, if Moussa Blimpo cares so much about a decent university, why doesn't he start a private university where he sets the high quality standards himself?

Then he could put his NYU economics PhD to some practical use.
After all, he already identified a ready market for his product - yet he doesn't seem to realise that fact himself.

Such posts make me wonder what people actually learn in an economics course at NYU. And even at PhD level the knowledge apparently gained doesn't impress...

send a Cow

2010-06-04T14:35:00.001+02:00

The name of the NGO suggests that its core business is to "Send a cow".

http://www.monitor.co.ug/SpecialReports/-/688342/919476/-/fvsvn7/-/index.html

However, the only mammal that the NGO seems to have sent is a UK girl, who's enjoyed her time in Uganda, esp. the weekends!

and hopes to come back again to enjoy life some more, "while dedicating my career to working in this sector".

I wonder how the people feel who actually donated money to the *send a cow" NGO. Do they feel they got value for money?

Should they assume that Ms R. Brooke qualifies as "a cow" ?
To answer that question, I guess I am a bit biased after reading utter crap like this: "Uganda, for me, is a place where friends are family, where no inconvenience is too great and where the pace of life drifts, rather than rushes along; where the opportunities are endless, the potential is tremendous and the future is full of dazzling sunshine."
(never mind those poor lads starving, they can be happy to live in a country with tremendous potential!)

100% import duty!!!

2010-06-04T11:29:00.001+02:00

http://www.monitor.co.ug/Business/Business%20Power/-/688616/929714/-/lk1jci/-/index.html

And this is believed to "benefit" the country!!

Idiots.

Crop yield fallacy

2010-06-04T09:58:00.001+02:00

in response to http://aidwatchers.com/2010/06/if-an-evaluation-is-released-on-the-internet-and-no-one-comments-does-it-make-a-sound/comment-page-1/

Again and again the same crop yield/production fallacy...
Crop yields say bugger all about the income of a farmer!!!!! That's economics 101.

Actual volume traded x actual farmgate price might say a little more, but even that is suspicious, esp. in this artificial MV environment.

I am very sorry if MV Project managers, and apparently Mrs. Fresschi as well, do not understand that.

Even if the MVP guarantee their farmers a bottom price for their corn, the day that that price moves above the farmgate market spot price (i.e. in a bumber harvest year like 2009 in East Africa), each and every one of those lucky MVP farmers turns into a middle man/woman who's buying @market rate and selling @MVP price.

You don't need to be an agricultural engineer to understand that this makes yield "jumps" from 0.8T/hectare -> 4,5T/hectare very likely, regardless of whether they threw the fertiliser in the pit latrine or not.

Emphasis on production is plain stupid. Every farmer knows this, as he sees his additional/bumper crop rots in the field, since nobody comes to buy it at a price worth harvesting.

nice post

2010-05-28T22:57:00.001+02:00

http://www.pittsburghlive.com/x/pittsburghtrib/opinion/columnists/boudreaux/s_683085.html

and in Europe, even Guy Verhofstadt, the leader of the so-called "free democats"/liberal party in the european parliament claims "he hates speculators" and he wants new powers to fight them.

Precisely what Prof. Boudreaux describes.

the fast lane to become a middle income country is cheap!

2010-05-27T13:45:00.001+02:00

a mere 2 bn $ will transfer Uganda from a peasant society to a "middle income country" !

And that in less than 5 years!!

http://www.newvision.co.ug/D/8/13/720827

Waw, miracles do happen, why did the World Bank wait so many years to launch this wonderful program??

Expect another round of debt relief for the Heaviest Indebted Poor countries by 2020 ... and Uganda will be one of the needy.

Parasites of poverty, please don't expose them

2010-05-25T15:47:00.001+02:00

great article, even greater comments! http://aidwatchers.com/2010/05/secret-ngo-budgets-publish-what-you-spend/

I just love O'Neil Daniel's comment :
"Although open accounting can seem like a good practice, it is very tricky in poor countries. I have been running international projects for twenty years. The rent on my house is higher than the salary of many of my staff. My salary is nearly triple the highest local salary. Additionally, my top staff is paid well–many times more than what our beneficiaries receive. I think that telling our beneficiaries how much we earn would reinforce the gap between them and us. It would also complicate relations with our government partners (who earn less). I am always happy to share general information about costs (our program in the Haitian-Dominican borderlands is around $650,000/year), but see little upside to sharing details."

I also love the narrative of JMK, explaining how different the international labour market is from the local market.

Absolutely brilliant.

They create no value whatsoever, make a living from donor budgets for many years without any justification and seem very afraid their scam is made public.

Rwandan coffee

2010-05-12T11:18:00.001+02:00

Comment on this story : http://aidwatchers.com/2010/05/rwanda's-coffee-success-story

People respond to incentives, that shouldn't surprise Prof. Easterly. Arabica prices have been around 130ct/lb for 4 years now, and the gourmet coffee chains add 20% to that (rough rule of thumb).
If this money is passed on to the farmers in a competitive market, they make good money.
Therefore they produce more of the stuff, and put in extra effort in quality if this effort pays off.

And really unique for the coffee farmer: the higher the quality, the higher the quantity.

We're talking much more money here that goes to the poorest farmers than any aid campaign that Prof. Easterly ridiculed Starbucks for.

There is only one big problem with coffee trade in East Africa : THEFT
In cooperatives, it goes like this: The cooperative gets the coffee on credit from their member farmers, exports and the managers steal the incoming money. Bad luck.
The smarter cooperative managers do this in a leveraged way, they steal the pre-financing (from a coffee trading company) , buy the coffee on credit from their members, but export to a different company for hard cash...
This leaves the cooperative farmers not only unpaid, but also on the hook for repaying the debt to the pre-financiers.
This happened in 2005 to probably the biggest coffee cooperative in East Africa, the Bugisu Cooperative Union.
Bonus: all the time this particular cooperative had the "Max Havelaar FAIR TRADE label" . Go figure.

When I read such a sentence: "poor management at some coffee cooperatives points to a persistent need for good training and financial management skills", I can not agree.
This poor management deserves tough jail sentences for the thieves.

But I guess the aid sector prefers to dole out "management trainings".

The aid sector might be the prime victim of tougher sentences for thieves, so it's wiser not to focus much attention to fraudsters.

brilliant

2010-05-06T09:03:00.001+02:00

http://cafehayek.com/2010/05/open-letter-to-prof-barry-popkin.html

no Tshirt please

2010-04-29T16:37:00.001+02:00

in a reaction to:
http://aidwatchers.com/2010/04/a-suggestion-for-the-1millionshirts-guys/comment-page-1/#comment-11746

Dear Laura Freschi and Alanna Schaik, let's assume you've *successfully(?)* stopped this project.

But usually you demand ACCOUNTABILITY, esp. from OTHERS.

How exactly are you gonna compensate the 1 million poor people that now won't receive anything at all because of your actions??

Are you gonna put your money where your mouth is and wire money to those people and their governments that missed out on the import taxes?

And dear Alanna, you put a link to an Oxfam report on your blog. But I guess you haven't taken the time to actually read it, since it conveys the opposite message, namely that the second hand clothing market is a boon for all poor people and that westafricans would be outcompeted by the Asians anyway when it comes to producing new clothes themselves!!

Keep up the good work, congratulations.

And I assumed that Prof. Easterly preferred "searchers".
That's what the t-shirt project is all about!

When push comes to shove, they'd rather "design" and be Mr. and Mrs. know-it-all, criticising whoever doesn't fit their blogosphere community of pen-pushers writing "working papers" on "development" and congratulating each other on how bright they are. With prizes and everything.

immigration

2010-04-27T17:25:00.001+02:00

Very well explained by Prof. Boudreaux.

http://cafehayek.com/2010/04/supply-and-demand-for-labor.html

i am sure the commenters will produce a lot of blablah about aliens' abuse of welfare state money, esp. those who don't understand that immigrants probably will bring in more tax than they will cost, surely after taking education costs in account - as immigrants tend to have received a costly education in another country.

Furthermore, as Taleb explained eloquently, any income distribution is fractal, therefore one extremely rich immigrant, offsets hundred thousands of others.

By coincidence, it was in the news today, the richest two men in the UK.... are immigrants (Mittal & Abramovich...)

food paste

2010-04-15T13:32:00.001+02:00

in response to http://aidwatchers.com/2010/04/the-plumpy'nut-dustup/

Nice that a patent attorney states that the patent system has many flaws. Perhaps he and his learned colleagues should stop filing thousands of junk patent applications. biggest flaw gone.

The idea for an NGO to fight any patent instead of paying royalties is called : PUBLICITY

The NGO's need press coverage, publicity, and what could be better than getting heroic press coverage for battling multinational companies who appear to harm poor starving kids?

Nobody will ever mind or look at the merit of the case, as the NGO has already achieved its goal.

Furthermore, Nutriset filed more patents to cover their invention & product, for instance FR2815825 , much more detailed claims, hence more limited and applied for in the same countries.

Therefore, nothing more than a bogus battle in search of publicity for themselves.

Even if valid OAPI & ARIPO patents exist, they are not enforced in Africa - some countries don't even publish or process the national patents, so they are in fact non-existent in those countries. Therefore, there would be no royalties due anyway.
Who's gonna collect them in Darfur?

Not to mention that countries can force licensing in case of epidemics, famines, etc.

nice explanation

2010-03-23T09:40:00.000+01:00

http://cafehayek.com/2010/03/on-consumers-producers-and-trade.html

it's so easy

2010-03-22T09:48:00.001+01:00

http://www.monitor.co.ug/Business/-/688322/883904/-/ee3umkz/-/index.html

Deposits 419Bn Shillings (200 million $)
Loan portfolio : 240Billion shillings only

That makes one wonder what they do with all that money sitting idle on the balance sheet.

Not really, banking in Uganda is the easiest business you can think of.
First, all your costs are more than paid for by the fat fees the customers pay for each and every transaction.

if a bank wanted to make a profit, then just lend the money to the government at double digit interest rates. in shilling terms 100% risk free.

The T-bills alone could have produced those Crane profits, if necessary, though 240Bn outstanding at >20% commercial rate, probably brings in some cash as well.

It certainly brings in "assets" (misnamed in this context), which are the properties/collateral the bank grabs when borrowers default.
In an ever booming property market, Crane is very happy to keep this collateral on the balance sheet, even when they don't do anything with it (not rented out for instance).

Unlike their predictions, next year could be much tougher: the government today needs to pay only half as much interest on their T-Bills compared to yesteryear.
Automatically commercial lending rates will follow downwards as more money is chasing fewer opportunities.

What annoys me most about the Monitor: they can not produce 1 article about money without some figures not adding up: "Total assets also increased by 23.34 per cent to Shs56 billion from Shs431 billion in 2008". Is it really so hard far an editor/journalist to check at least the numbers & see whether it makes sense?

Housing & smelly Plantations

2010-03-19T13:31:00.001+01:00

Another piece in the same paper (Eastafrican) caught my attention, stating that the building sector in Uganda has grown by at least 10% since 2006.  That's a joke.
By coincidence I have been immersed in building projects with my own money, so I think I do know a thing or two about it.

Growth by at least 10% per semester looks more realistic, given that between at least 2006 and today, cement factories are failing to cope with demand, despite new capacity coming on-line,
no dealer or trader has any stock of anything, causing prices to fluctuate enormously at the smallest hick-up in supply.
The construction sector sucks up all (young) people coming to the towns, esp. Kampala as day labourers - since there is no other industry worth mentioning.
Or if you want to make it more scientific, compare the pictures of google earth of 5 years ago with the current ones (taken about two years ago). The amount of new roofs on any given space around Kampala (unfortunately the only area where images are detailed enough), will be shockingly high for you if you believe that the sector has only grown by 10% since 2006. The price of a bag of cement has at least doubled in that period, probably even in dollar terms

This building sector is totally ignored by the "development experts" of Kololo (DFID, USAID, World Bank, etc ) and Muyenga (OXFAM). They have a high expertise on rents in Kololo and Naguru and that's about it (Mind you, they're not even expert on that, but one should leave them at least one dream).
These paper shufflers issue a report once a year indicating by how much the country has grown. Yeah right.     Perhaps they base themselves on what the Eastafrican writes.

By the way, the ever booming construction market has had several interesting side effects.
Five years ago, nobody was propagating & growing garden plants. Today, each and every sewage draining wetland near town (check mukwano road, Bugolobi, etc) is used to grow and sell garden plants. Hundreds of women are wheeling and dealing in plants, many worth more each than the highest currency bill (50.000sh).
Anybody who would have suggested ten years ago that 1 Ugandan person could be making a good living out of growing garden plants, would have been declared totally nuts.   now there are hundreds making real cash out of that.

Needless to say that these people make a living without help from NGO's or microfinance or fair trade of whatever crackpot idea was supposed to be the next big thing, according to the "experts" . It's the market, that's all.

Observing this activity for 1 hour teaches you more about Uganda than whatever aid administrator thinks he knows when he lectures you (they all wanna do that, that's why I steer clear of them as much as possible).

Another side effect relates to the transport sector. Building is very transport intensive, and in Uganda it involves many people, from boda boda's to giant trucks. All informal and again, difficult to measure, and always ignored.

Time to eat

2010-03-19T12:59:00.001+01:00

John Githongo is hopefull : http://www.theeastafrican.co.ke/news/-/2558/878482/-/puh8g1z/-/index.html

I am not. The ones caught stealing are more often than not able to walk free and even return to their old seat, perhaps with another title (Consultant or the like).

And their places will be taken over by almost as experienced people facing exactly the same incentive as the ones before them. As Mr. Githongo knows, it just another one person getting his/her chance to eat.

too many M's

2010-03-17T23:47:00.000+01:00

http://www.spiked-online.com/index.php/site/article/7723/

fantastic article, as Malthusians are popping up in the media again and again.

look who's talking

2010-03-17T13:56:00.001+01:00

http://www.monitor.co.ug/Business/-/688322/879290/-/eeldv7z/-/index.html

"The 2010 World Bank report on African development indicators that will be released today, has warned of grave consequences if much attention is not given to the current quiet corruption experienced on the continent. Quiet corruption relates to civil servants who are paid salaries but neglect the delivery of services to the people who deserve to get them. "

By their own definition, the world bank is engaged in a lot of "quiet corruption", since its employees/civil servants are paid salaries but neglect the delivery of services to the people who are supposed to get them (namely the poor). At least I haven't seen any evidence that the world bank has ever helped or provided a service to any poor person, or that its money has ever had a significant positive effect on a country's economic growth.

But its' so easy to blame others for your own failures.

the grand prize

2010-03-17T13:38:00.001+01:00

http://aidwatchers.com/2010/03/best-in-aid-the-grand-prize/

someone called "Schimmelpfennig" nominating a movement called "Smart giving" , by which "money giving" is meant, lest your pennies mould in ur pocket.

You really couldn't make it up.

ekitanda

2010-03-16T09:59:00.001+01:00

in a country where most drunkards are drunk 24/7 , a law telling bars to close by 10pm , won't make a difference.

http://www.newvision.co.ug/D/8/12/712988

goats !

2010-01-14T09:43:00.000+01:00

in reply to the Bennett's and their Bibles, I mean goats:
http://aidwatchers.com/2010/01/goat-loans-reach-the-end-of-their-tether

"these villages no longer need extra food assistance".

after getting three goats!

Post hoc ergo propter hoc…

But hey, it is true! I also bought two goats some years ago, not too far from Sudan, and they produced many baby goats. After eating some, now we still have 7!
And it is true, I swear, since the day I bought those goats, we have not needed external food assistance!!!

Guess this makes me now a top contestant in the best aid project 2009 competition!
(despite the monetary and dietary success, the goats failed to do their job on our land, namely to keep the vegetation small& short. Turns out investing in sheep would have been more effective)

Let's make it a tradition, every time one of the countless Bennett's success stories is posted,
it is time for the Onion:
http://www.theonion.com/content/node/46226

third way

2009-12-02T14:23:00.001+01:00

in response to:
http://aidwatchers.com/2009/12/the-secret-to-success-is-failure

Although I haven't read the book, i am sceptical concerning a "third way".

I was hired once by a loss-making "third way business" in a poor country for an audit and a turn around of it by a philantropical zillionaire.

The business had several aims:
- give good jobs to local people;
- offer better quality products than currently available on the local market
- export, preferably under a "fair trade" umbrella.

All aims were achieved, unfortunately the losses were accumulating faster and faster.

My findings:
- very high quality stuff they sold at a good gross margin;
- but the local staff was stealing almost all the revenues!

Result:
the philantropical guy gave a bonus to the greatest thieves,
and i was told to mind other things.

I resigned on the spot.

there is good business and there is bad business.
There is no third way business.

I must add that until this day I am considering starting up a business selling exactly the same stuff, but with profit in mind.

Cafehayek vs Aidwatchers

2009-11-18T10:12:00.001+01:00

Unlike Cafehayek, the aidwatcher blog of Prof. Easterly is edited a lot. Several of my posts there were heavily messed with, that's why I keep a back-up here.

Easterly in Ethiopia

2009-11-18T10:05:00.001+01:00

Posted as a comment to http://aidwatchers.com/2009/11/africa-is-rich/

I agree with IdealistNYC.
Moreover,
I hope there was no individual who tried to open a guesthouse in that neighbourhood with his own money. He'd now be bust because of the free aid money his competitors received and probably keep receiving, in the name of sustainability.

I also don't understand why it 's important to be ethiopian owned. If I open a guesthouse in Africa, is that supposed to be less good according to Prof. Easterly?    but when I die and the guesthouse goes to my kids - with African citizenship- the same investment is suddenly so much better?

Maybe Prof. Easterly hasn't noticed, but foreign investors - without a penny of aid - seem to do a pretty decent job in creating wealth for the odd billion poor Chinese.
But indeed, let's "buy american" in the US, and go Ethiopian in Ethiopia.
Next year Prof. Easterly should go hiking in N-Korea. There must be goldmines of happiness to found as well. Can't wait for the report.

And it's a real pity Prof. Easterly didn't collect anecdotal evidence concerning the auction system for commodities that was the subject of a previous post here. He must have had the chance to ask the farmgate prices for coffee, wheat, etc. , who was buying, the government meddling, etc.

Rights

2009-11-05T09:08:00.000+01:00

commented here:
http://aidwatchers.com/2009/11/seeing-the-light-on-a-rights-based-approach-to-development/

The potential impact of aid is again grossly overestimated here.
When there is a problem with "rights" in education or food provision or anywhere else, it is always caused by a hopeless government that doesn't give a shit about the well-being of its citizens and takes terrible decisions, sets bad rules, etc.
Whatever the aid agencies do or not do, those actions are just symptoms and side-effects, but not the cause of the problems.
Perhaps the world bank/IMF force policies onto governments, but ultimately it remains the government's responsibility/liability.

Health and cafehayek

2009-11-04T16:34:00.001+01:00

posted in response to http://cafehayek.com/2009/11/so-you-want-european-style-health-care.html

Prof. Boudreaux,
As far as i understand your point of view, you would prefer a system where everybody buys catastrophe-insurance-health care,
and optionally whatever more insurance cover with high or low deductibles as they please.

That looks a lot like the type of health insurance that entrepreneurs/independents/students (i.e. non-employees) have to purchase in Europe, as everybody is obliged to have car insurance and fire/catastraphe insurance for their house.

I agree that such system makes the most sense.

I don't know what the "socialist" politicians are proposing in your country, but I guess from your posts, it is something different from that.
I also understand the current system is nothing like that.

But for most of recent history, those socialists were not in power in your country.
Why didn't their opponents provide a much better system than the current one when they were in power?
How come they neglected the subject?
Did you remind them ever of how obscene it is for millions of americans not to have even a catastrophe-like health insurance ?

On-topic. The lady in the video wants to make a political point, fair enough. Just like Michael Moore makes political points with his videos.

But the "facts" she cites, are farther away from the truth than those of Michael Moore: in Belgium, Netherlands and Germany (3 of 4 of the countries mentioned), there are - to my knowledge - no waiting lists for highly urgent treatments. In Belgium there are none at all, and there is a 100% free choice of doctor, hospital, etc.

So, will you in future also start posting Michael Moore's video's here and consider them hard truthful facts?

Easterly vs. Gates

2009-10-28T14:31:00.001+01:00

as a comment to http://aidwatchers.com/2009/10/the-political-economy-of-aid-optimism-or-pessimism/

I do not care what data Mr. and Mrs. Gates use as a guide to where and how to put their money.   Precisely BECAUSE it is their money, they can invest it in any way they want.
Whether they want to help Goldman Sachs, bail out Medicare, fund the health budget in Zambia or gamble it in a casino in Vegas,   it is totally their choice.

That is in stark contrast to Prof. Easterly in his former World Bank job and all others spending and wasting taxpayers' funds on aid projects. And I bet, sometimes based on far worse data than the Gates family is using.

And even today, suppose Prof. Easterly detects a negative effect in some data, and the program is stopped because of that.
Suppose this was a false negative ( because of mistakes in the data, etc), and therefore in effect he stopped something very good for the poor....
Will Prof. Easterly be accountable for this?

Nope. I guess he will continue to receive his university salary.

Unlike the Gates family, who lose billions of their own dollars if their programs turn out as false positives.

In case the US government puts taxpayers money in the Gates' aid accounts, then blame the US government, not Mr. and Mrs. Gates.

If you have problems with WHO data, tell the WHO that they either stop collecting those useless things, or invest in better data collection.
Don't blame others for using them as they are.
Because:
Suppose Gates funded better data collection. These new data show a positive effect, but the WHO data a negative effect.
Wouldn't Prof. Easterly and many others blame the Gates data collector for being biased in favour of his paymaster?
Therefore Gates can't win this argument. Better not to waste energy in his own data collection then.

I don't know how the Gates family is spending their money, but I read they tried a few new approaches, let people/institutions compete for the funds, and cut off the money if there are no results at all.
Sounds far more sensible than whatever the multilateral aid sector ever did, does and will do.

comment

2009-10-21T10:39:00.001+02:00

a comment to Chris Blattman's blog :

http://chrisblattman.com/2009/10/20/markets-in-everything-foreign-aid-edition/

It is clear from the paper, that the only poverty that ever shall be eradicated by it, will be the poverty of the writer.

It is a paper written by an author who is paid for writing 40 pages of content, and nobody is expected to actually read this, or implement the policy suggested (the author himself says that it is only for provoking a discussion, he is not sure it contains a single good idea that will help anybody).

I did read it, unfortunately. It was a complete waste of my time.

Suppose that collaborative markets would be implemented in the aid world today, the way that is proposed in the paper.

Suppose then that it brings nothing, a complete failure. Or that countries without collaborative aid markets, do much better.

Will Mr. Barder be held accountable? What will this intact feedback loop tell him?
Will Mr. Barder then refund the money to the Swedish International Development agency and the Flora Hewlett Foundation ?
Will the author be sacked by his aid-employer, as would no doubt be the case in the private sector?

No, of course not. There will be much more pages of such papers produced, more discussions provoked, and with some luck for him, a nice $ 200K job at a multilateral agency will be waiting for him. The poor will be delighted.
And his own poverty eradicated!

But as the last 5 pages of references suggest, there are many people like him, being paid for writing things about aid, citing each other and Adam Smith, none held to account when their policy recommendations end up badly hurting the poor.

I guess this is the prevailing aid paradigm.
Let's get rid of it

on the MV project

2009-10-16T14:05:00.001+02:00

comment I made here

http://aidwatchers.com/2009/10/can-we-push-for-higher-expectations-in-evaluation-the-millennium-villages-project-continued/

About the students and their vote: When i was a student, I would also probably have voted yes to such proposal. It sounds good and who doesn't want to do some good with 6$/year.
I can understand that outcome of the vote.

However, years later and having seen and followed up (as a neutral, non-involved party) many aid projects, talked to many aid workers and "poverty experts", after living, working and investing for years in an aid sector's darling country, I would vote no.
But i don't expect that students of Carleton University have the same perspective, and even if they did, they might disagree with the conclusion.

It is clear that the MV project does not want to evaluate their efforts. They are part of a belief, and believers are usually not the most rational, self criticising group.
But it is damn difficult to evaluate such a project and include the externalities and unintended consequences.

Suppose you have a corn/maize flour market in a county with 2 villages, isolated from each other. One is MV the other one not.
Each village maize output was 50tons last year.
In the MV village there are plenty of new inputs, and the corn/maize production suddenly rises to 200tons.
The other villages produces the same as the year before, 50 tons.

There is now 150tons more on the market, 250 tons in total.

But 150 tons more than there is demand for it!!

Therefore, the maize price/ton halves in the county, the traders go to the MV and buy at once whatever they can sell, 100 tons.
The income of the MV does not fall since they sell 100tons instead of 50.
The other village gets no money and 50tons moulding flour. If they are lucky, a trader comes to take it away for free. No money means no school fees, no medicine, no wedding this year...

Hard to honestly evaluate the results, if you ask me.

It is the problem of most aid projects in agriculture/manufacture: they know very well how to increase supply, but they are clueless how to increase demand.
They simply don't understand that demand/consumption is the incentive for production, not the other way round.
That's why all of them fail.

As a commodity trader in a developing country, I am always very surprised when hearing how ignorant aid workers, "fair" traders and academics are about prices, incentives and how they always grossly underestimate the intelligence of farmers.
And of course, the traders are seen as evil and exploiting (although they pump daily millions of dollars straight in the pockets of the poorest farmers!)
whereas the aid workers are perceived as "making a difference" with their 5000$ projects every other year...

Therefore, when i hear the MV people talk about "increase the food security by providing expertise", i know they haven't learned a thing in the last 100 years, and they probably won't in the next 100 years.

health care, part two

2009-10-14T11:59:00.001+02:00

commenting on today's aid watch post by Prof. Easterly ( http://blogs.nyu.edu/fas/dri/aidwatch/2009/10/debating_health_as_a_human_rig.html )

I agree that there will never be enough money, and that the money that is available is not going to the neediest people if allocated by others.

However, there is not a causal link between health care spending and obtaining a healthy population.
Therefore, I do not believe it is required that governments allocate excessive amounts of scarce resources to the health budget.
Money and efforts would be much better spent in educating all the girls well, and teaching the young people about hygiene, the most important factor in life expectancy stats.

As I learned in a development economics course, best evidence for this = the dirt poor Indian state of Kerala that has obtained in this way first world health & life expectancy statistics (and a first world demography!).

And at the other end of the spectrum, there appears to be the USA, spending twice as much as other developed countries and obtaining at best mediocre results.

Therefore, to provide everybody on this planet with the right to a healthy life, has in my opinion less to do with the health budget than with the provision of an effective education for all members of society.

By the way, I think the right to live already implies the right to live a healthy life. No need to repeat that explicitly.

Health care and human rights

2009-10-13T13:28:00.001+02:00

My comment to this Aid watch post:
http://blogs.nyu.edu/fas/dri/aidwatch/2009/10/human_rights_are_the_wrong_bas.html

I don't think there is a causal link between considering health care as a human right and ineffective government/aid spending.

Special interests will always lobby to get funds directed their way, regardless of the underlying moral reason.

Thus ineffective government spending is a pleonasm, not an side-effect of human rights.

eradicating poverty

2009-10-13T13:04:00.002+02:00

Nice column in the Sunday Monitor:

http://www.monitor.co.ug/artman/publish/OConnor/Of_economic_and_social_inequality_92733.shtml

I especially like this paragraph:

"And the bazungu diplomatic and aid community attend the Kabira Country Club in great numbers. Whose poverty they were eradicating, other than their own, on that Sunday, was difficult to say. Though most expatriate donor personnel live a lifestyle in the third world far more luxurious than when back in their own countries. The gym, squash courts, swimming pool, obligatory jacuzzi and other facilities are all superb. But this is what you would expect, isn't it?"

Well, back home however, they are keeping up the appearance that they are doing some good work and keep up a holy profile.

first try

2009-06-26T15:17:00.001+02:00

As I was looking for a user name for a post on The Economist website, a gecko caught my attention on the wall across... Gecko + economist = geckonomist