Results for “africa”

1081 found

Charge 80% per year on a loan in the U.S. and you’re called a usurer.  Charge 80% on a loan in Latin America or Africa and you can be a poverty-alleviation charity.

That is Dean Karlan and Jonathan Zinman, in today’s WSJ, "In Defense of Usury," p.A18.  Karlan and Zinman discuss their study showing that micro-credit borrowers in South Africa are better off for receiving the money, even when they pay very high interest rates.

Emily Oster tackles this question:

I generate new data on HIV incidence and prevalence in Africa based on inference from mortality rates. I use these data to relate economic activity (specifically, exports) to new HIV infections in Africa and argue there is a significant and large positive relationship between the two: a doubling of exports leads to as much as a quadrupling in new HIV infections. This relationship is consistent with a model of the epidemic in which truckers and other migrants have higher rates of risky behavior, and their numbers increase in periods with greater exports. I present evidence suggesting that the relationship between exports and HIV is causal and works, at least in part, through increased transit. The result has important policy implications, suggesting (for example) that there is significant value in prevention focused on these transit-oriented groups. I apply this result to study the case of Uganda, and argue that a decline in exports in the early 1990s in that country appears to explain between 30% and 60% of the decline in HIV infections. This suggests that the success of the Ugandan education campaign against HIV…has been overstated.

Since I used to believe Samuel Brittan when he argued that trade spreads sex, this result accords with my intuitions.

I thank Scott for the pointer.  There should be an algorithm informing me every time there is a new Emily Oster paper.  If Scott is indeed such an algorithm, I am pleased.  And of course I am that algorithm for you.

Vivian Hoffman, currently a Ph.d. candidate at Cornell.  When I read this description of her research I think that modern economics is very much on the right track:

I study the economics of anti-poverty and health interventions using household survey and experimental economics methods.  Most of my work to date has been in East Africa.  For my dissertation research on demand for and intra-household allocation of insecticide-treated mosquito nets, I conducted fieldwork in southwestern Uganda. Ongoing projects include a study on the impact of food aid receipt on labor supply and agricultural production in Malawi, estimateing the returns to farm assets in rural Ethiopia, and an experimental investigation into the effect of stigma on HIV testing behavior.  I hope to continue working at the intersection of health and development economics.  My interests also include health and poverty-related issues in Canada and the United States.

Here is the abstract on her main paper:

This paper reports results from a field experiment in Uganda. Whether a mosquito net was purchased or received for free affected who within the household used the net. Free nets were more likely to be allocated to those members of the household most vulnerable to malaria, whereas purchased nets tended to be used by the household’s main income earners. The effect was strongest for free nets received by the mother, increasing the probability that all children five and younger slept under nets by 26 percent relative to when nets had been purchased by either parent or given to the father.

In other words, within the household the breadwinners have a greater practical ability to control priced goods than non-priced goods.  This hints at one reason why men are often more willing to "think like economists" within the family.

You might think that Vivian has not yet done enough to be judged, but surely she has done enough to be judged as underappreciated.  So go appreciate her and remove that label from her name!

In 2000, a world health conference in Abuja, Nigeria, set a goal: by
2005, 60 percent of African children would be sleeping under nets.  By
2005, only 3 percent were.

It turns out that handing nets out for free works much better than branding them, marketing them, and selling them, albeit at subsidized prices.  And when there are enough insecticide-laden nets in a village, mosquitoes avoid the place altogether (after the very first net, however, the mosquitoes simply move on to another nearby hut).

The sad fact is that the best insecticide-filled nets last no more than three to five years. And is this good or bad news?

…sales of malaria pills were way down.

Here is the full and fascinating story.  Eternal vigilance is the price of foreign aid, or something like that…

The network maps show that economies tend to develop through closely
related products. A country such as Colombia makes products that are
well connected on the network, and so there are plenty of opportunities
for private firms to move in to, provided other parts of the business
climate allow it. But many of South Africa’s current exports–diamonds,
for example–are not very similar to anything.

If the country is to develop new products, it will mean making a big leap. The data show that such leaps are unusual.

Tim Harford explains.  Here are maps of product interrelations.

Some states ban the use of credit scores to price auto insurance in part because African-Americans and Hispanics tend to have lower (worse) credit scores and thus pay higher auto insurance rates.  The brute facts, however, are that credit scores are good predictors of auto claims. Luke Froeb at Management R&D summarizes a recent FTC study on the issue.

1. Credit scores effectively predict … the total cost of [auto insurance] claims.
2. Credit scores permit insurers to evaluate risk with greater accuracy, which may make them more willing to offer insurance to higher-risk consumers … . [note: this is why you can call up GEICO, let them look at your credit report, and get an auto insurance quote over the phone].
3. ..as a group, African-Americans and Hispanics tend to have lower scores than non-Hispanic whites and Asians.
4. …scores effectively predict risk of claims within racial and ethnic groups.
5. The Commission could not develop an alternative scoring model that would continue to predict risk effectively, yet decrease the differences in scores among racial and ethnic groups.

Thus banning the use of credit scores would at best force good drivers (of all races) to subsidize bad drivers.  At worst, if insurance companies cannot price according to risk an adverse selection problem could be created in which good drivers purchase less insurance (to avoid having to pay the subsidy to bad drivers) thus pushing rates even higher and perhaps unraveling the market.

When my editor and I were exchanging drafts of this piece, my spam blocker wouldn’t let them through.  There is too much talk of Nigeria and diamonds!  Here is one excerpt:

Paul Collier, an economics professor at Oxford University,
has a new and potentially powerful idea.  In his recently published
book, “The Bottom Billion: Why the Poorest Countries Are Failing and
What Can Be Done About It” (Oxford University Press), Professor Collier
favors an international charter – some widely publicized guidelines
that countries can voluntarily adopt – to give transparency in spending
wealth from natural resources.  A country would pledge to have formal
audits of its revenues and their disposition.  Imagine
PricewaterhouseCoopers auditing the copper revenues of Zambia and
issuing a public report.

It’s not as futile as it might sound:

Professor Collier’s proposal at first glance seems toothless; a
truly corrupt country probably wouldn’t follow the provisions of the
charter, which, after all, is voluntary.  Yet citizens could pressure
their government to follow such a charter, and the idea of the charter
would create a focus for political opposition and signify international
support for concrete reform.

Foreign corporations would bring
further pressures to heed the charter.  Multinational companies that are
active in corrupt countries might receive bad domestic publicity.
Eventually the companies might push for adherence to the charter, even
if the charter limited their ability to bribe.  In another context, De
Beers has been stung by bad publicity about “blood diamonds,” and the
company is now a force for positive change where it operates.

In
the optimistic case, a few poor countries start abiding by the charter.
Those countries prosper and attract more investment and status in the
international community.  The pressure to adopt the charter would then
spread.  Of course, promoting the charter costs relatively little and
the potential benefits are significant.  International pressures did
eventually force a change in South African apartheid.  So maybe they can
improve other countries as well.

Did you know that Tony Blair was already promoting such a charter?  And the Nigerian government (really) already commissioned a private sector audit and now has enacted a version of this idea into law?  We’ll see how that goes, but Nigerian flirtation with rule of law ideas is one of the underreported stories of this year.

Paul Collier’s The Bottom Billion is a very exciting and important book.  It is rare to read something on economic development that is true, non-trivial, and potentially useful.  I recommend this book highly, it is also short and easy to read.  Here is a good review of the book by Niall Ferguson.

Here is the whole column.