Results for “africa”
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The Millennium Challenge Account progresses

Some facts:

1. The U.S. is engaged in a major restructuring of its foreign aid programs, bypassing the multilateral institutions. For better or worse, this is one of the most innovative ideas of the Bush administration.

2. The Millennium Challenge Account represents a yearly foreign aid increase of about nine percent. By 2008 this could amount to a total of $5 billion a year.

3. For this year to come, perhaps no more than fifteen nations will win awards. All but five countries in Latin America are ineligible for the awards, largely because they are now too wealthy

4. Countries such as Senegal and Ghana, which are poor but respect (some) basic civil liberties, are leading contenders for funds.

5. We are told that grants will be handed out in accordance with a variety of indices, many of them non-governmental, such as the corruption index of Transparency International, the rule of law index of the World Bank Institute, and the Heritage Foundation index on trade policy and freedom.

6. The U.S. will not try to dictate how the money is spent, but rather leave this decision in the hands of the receiving government. This, plus the use of the indices, represents the real innovation of the policy. In essence we are giving bonuses to countries with good policies.

Here is a recent New York Times story on the policy initiative. Here is a previous MR post on the topic.

What’s the bottom line? One scenario is that the Bush people are serious about sticking to the chosen indices. In that case we are funding the marginal, otherwise-not-worth-doing Senegalese project. Third world countries typically need stronger states (as opposed to bigger states per se), it is an open question how much outright cash gifts will further this end, without further mechanisms for accountability. Another scenario involves a deepening of our fiscal crisis, and the use of the fund to prop up current efforts in Iraq and Afghanistan, or perhaps anti-AIDS efforts. In this case we have created another bureaucratic instrument to finance aid efforts that are already in place.

Stay tuned…

Victory songs are for the birds

Sports fans are not the only ones to celebrate a win with a rousing tune – a chirpy African bird does the same, researchers have revealed.

Mate pairs of the tropical boubou belt out their special victory song after they have deterred would-be invaders from their territory, suggest Ulmar Grafe and Johannes Bitz at the University of Würzburg, Germany.

The discovery was made by accident, the scientists happily admit. They were investigating the birds’ musical repertoire in the Ivory Coast when they noticed that whenever they packed up their equipment and left the bird territories, the birds would trill a particular tune.

To investigate this further, Grafe and Bitz then tried broadcasting recordings of the duets commonly used by boubous in territorial confrontations. They found most mate pairs that stood their ground against the recorded intruders burst into song shortly after the tape was switched off.

“There’s a whole neighbourhood of birds listening into these conflicts, so it’s important to advertise a victory,” says Grafe, a behavioural ecologist. “We think it’s not only to let the loser know they’ve lost, but to let others know that one has been victorious – it serves to lessen further conflicts over territory.”

He adds that there are few animals which vocally celebrate a win in this way. And the tropical boubou is the first documented to perform a duet. “It’s sort of like a rugby team, a whole team display – I don’t know of any other animal example,” he told New Scientist.

I’ll really be impressed when they can hum “We Will Rock You.”

Here is the full story. Thanks to for the pointer.

Why Ed Sullivan is important

This coming Sunday marks the fortieth anniversary of the Beatles on The Ed Sullivan Show. We look back on Sullivan as an antiquated, somewhat quaint relic of a bygone era. In reality he was a daring market entrepreneur who promoted important music and broke down racial barriers.

Sullivan was especially important for his advocacy of African-American music and entertainment. He helped Bill “Bojangles” Robinson, Ethel Waters, Nat “King” Cole, Leontine Price, Louis Armstrong, George Kirby, Duke Ellington, Richie Havens, Mahalia Jackson, Louis Armstrong, Diana Ross and the Supremes, and Marvin Gaye, among others. At the time the major networks typically shied away from carrying such performers, primarily for racial reasons. Sullivan consistently fought with his conservative sponsors and insisted on booking these individuals.

Sullivan was a musical visionary more generally. In addition to the Beatles, he promoted The Rolling Stones, Elvis Presley, and Barbra Streisand. In comedy he showcased Woody Allen, Richard Pryor, and Jerry Lewis, among many others. In each case the performers had not yet established their later significance.

Sullivan’s show, of course, was an institution. At its peak it regularly commanded an audience of over 50 million Americans and it ran for 23 years. Here’s a hat tip to Sullivan, who exemplified the best of entrepreneurship and cosmopolitan vision.

Kristoff on sweatshops

In a hard-hitting NYTimes op-ed, Nicholas Kristoff writes:

I’d like to invite Richard Gephardt and the other Democratic candidates to come here to Cambodia and discuss trade policy with scavengers like Nhep Chanda, who spends her days rooting through filth in the city dump….Here in Cambodia factory jobs are in such demand that workers usually have to bribe a factory insider with a month’s salary just to get hired.

Along the Bassac River, construction workers told me they wanted factory jobs because the work would be so much safer than clambering up scaffolding without safety harnesses. Some also said sweatshop jobs would be preferable because they would mean a lot less sweat. (Westerners call them “sweatshops,” but they offer one of the few third world jobs that doesn’t involve constant sweat.)…

The Democratic Party has been pro-trade since Franklin Roosevelt, and President Bill Clinton in particular tugged the party to embrace the realities of trade. Now the party may be retreating toward protectionism under the guise of labor standards.

That would hurt American consumers. But it would be particularly devastating for laborers in the poorest parts of the world. For the fundamental problem in the poor countries of Africa and Asia is not that sweatshops exploit too many workers; it’s that they don’t exploit enough.

Be sure and look at Kristoff’s heartbreaking audio-slide show, the Realities of Labor available at the above link, halfway down the right hand side. Hat tip to Life, Liberty, and Property.

Should we ban HIV-positive immigrants?

Jonathan Rauch says no. He argues that allowing HIV-positive individuals to apply for residence will bring those individuals into mainstream medical institutions. The alternative may bring undocumented HIV-positive individuals who never receive good medical care or perhaps never even discover their HIV status, infecting others in the process. Rauch writes:

The ban on aliens with HIV was first imposed administratively, by the Public Health Service, in 1987, when fear of AIDS was at its peak and the disease was effectively untreatable. As therapies became available, public health authorities soon came to believe that the policy merely drove the disease underground and thus was ineffective, if not counterproductive. The first Bush administration and then the Clinton administration tried to revoke it. To no avail: In 1993, Congress wrote the HIV ban into law. No other disease faces such a statutory ban.

Even in 1993, the ban made little sense. America was the world’s epicenter of AIDS, exporting rather than importing the disease, and so aliens were far more likely to get HIV in America than to bring it in. Anyway, the policy never required an HIV test for entry; only when an alien seeks permanent-resident status, usually after having already been in the country for years, is the blood test routinely required. So the policy, as put into practice, is about kicking people out, not keeping them out.

Congress was worried about the costs of welfare and publicly funded care for immigrants with AIDS. A valid concern, but one addressed by the underlying immigration law, which bars aliens deemed likely to become a “public charge,” whatever their disease. Today, diabetics and cancer patients can visit and live in the United States on showing they have insurance or resources to keep themselves off the welfare rolls; only people with HIV are barred, whether they are sick or not. This is discrimination, pure and simple.

The numbers suggest that much is at stake: for instance about 1 in 12 Africans is HIV-positive, by some estimates. Singapore has faced related issues with foreign prostitutes.

Rauch’s proposal, obviously is not a political winner, even though the Bush administration has been relatively sympathetic on the AIDS issue. I am interested in considering the deportation question more generally. Should we, for instance, deport SARS carriers? SARS is highly contagious to larger groups in a shorter period of time. Unlike HIV-positive status, you can’t (it seems) just walk around with SARS for years. You might argue that if we deport SARS carriers, undocumented immigrants with SARS will be reluctant to report to hospitals. A good point, but I suspect that many of them rather quickly cannot continue on their own without dying. On the other hand, say you have an undocumented SARS patient on your hands. It is crazy to put them on a plane (we cannot over time afford many quarantined flights), best to leave them in a hospital. Nor does it gain you much to deport them once they are better.

So in looking for standards for deportable diseases, we might focus on rapidity of contagiousness, and ability to deport without infecting others in the process. Whether an individual can serve as a “silent carrier” can cut either way. On one hand, silent carriers can infect others for a longer period of time, which suggests a reason to boot them out (though of course they must go somewhere). On the other hand, it is the silent carriers that you want to report to the medical establishment. There is also a question of stock vs. flow. If the potential future flow of HIV-positives is high, that argues for deportation, as an incentive to keep others away. But if the stock is high relative to the flow, that argues for greater tolerance.

Sometimes it puts the world at risk to deport individuals before their treatment is complete, read this story on tuberculosis. And of course some of the deported will simply die without the medical care of the wealthier nation.

Marriage Mathematics and Political Change

John Gottman has spent decades studying how married couples interact. His most striking finding is the tendency of couples at risk of divorce to have markedly different interaction styles. His recent book, The Mathematics of Marriage, summarizes his observations of married couples and presents a parsimonious model of marriage (see here for Slate’s review). The highlight of the research is that couples where the dominant mode of interaction includes criticism, contempt, defensiveness and stonewalling are very, very likely to divorce. Successful marriages involve a great deal of mending and reworking of the relationship. The mathematics links some theories about emotions and interaction to this observed pattern.

What I find interesting is the implication for thinking about politics. Let’s assume that political order is a sort of “marriage” between state and citizen. At least from the perspective of the citizen, it’s a relationship that can be broken, if warranted. This is a premise of many normative theories of revolution – the citizens have a right to a new government if they feel the written and unwritten rules have been violated. Unfortunately, what we know about exactly how this happens – moving to abandon the social contract – is sketchy at best, although political scientists and sociologists have a hunch that it involves some combination of repression of the population and a de-legitimizing of the government, which itself might have multiple causes.

Gottman’s approach to studying relationships offers a useful way to think about these issues. Gottman’s point is that there may be varying sources of the emotions that destroy marriages, but the road to divorce usually starts in the same place – once spouses have learned certain interaction strategies, they create hard to change feedback loops. Similarly, governments and populations that learn certain strategies for interacting with each other probably set up hard to break cycles leading to long term stability or perpetual crisis. The nice thing about Gottman’s analysis of marriage is that the math predicts stability or decline, and not much in between – a non-trivial prediction. The same prediction for states is that states tend to be on a tough to change road to constant crisis (like in Africa and the Middle East) or stability (like in the US). Switches from one path to the other should be infrequent and difficult, which seems to describe the world pretty well.

What have international capital flows brought us?

Brad DeLong writes:

It is not possible for a card-carrying neoliberal like me to wish for any but the most minor of controls to curb the most speculative of capital flows. Capital markets can get the allocation of investment badly wrong, but governments are likely to get it even worse, and the incentives to corrupt bureaucrats do need to be kept as low as possible. But the hope for a repetition of the late nineteenth-century experience, in which core investors’ money gave peripheral economies the priceless gift of cutting decades off the time needed for successful economic development, has–so far–proved vain.

The full post — worth reading — is a very thoughtful and indeed moving elegy to the nineteenth century. DeLong points out that today a good deal of international capital flows today to the United States, rather than to the poorer countries.

Nonetheless I am more optimistic about the contemporary potential for international capital movements to spur growth. Singapore moved from a run-down port to a wealthy country in a few decades, and the transition was driven largely by foreign investment. Malaysia has faced a rockier road but by historical standards must be judged a success. Most of Africa has stood still or regressed, but clearly domestic policies are the major culprit. The more serious counterexamples have been in the Latin countries, many of which have received significant foreign direct investment, yet without coming close to eliminating poverty.

When it comes to China, we can see the glass as either half empty or half full:

China’s scorecard for attracting foreign investment reads like this: Trying hard, doing well, but could do even better. That is the assessment of a just-published OECD report, Investment Policy Review of China — Progress and Reform Challenges. In 2002, China became the world’s largest recipient of total foreign direct investment (FDI), attracting nearly $53 billion. That performance comes thanks to China’s progress on structural reforms, its accession to the World Trade Organization, and efforts to bring regulations in line with international standards.

So is China a counterexample to Brad’s claim? It depends how we count. It is only one country but of course over a billion people.

It also depends how we understand China. Liberalization has brought foreign investment, which has made its “low-wage-but-much-higher-than-before-wage” factories possible. My post immediately below cites research that finds much of the Chinese progress as coming from the shift of labor out of agriculture. This does not mean that capital flows had no role, since they helped make such a shift possible. We also should distinguish between total foreign investment and the per capita measure: “At $30 per capita, China receives less FDI than other major developing countries, such as Brazil with $195 per capita.” But of course foreign capital flows, and Chinese progress, have been concentrated in just a few regions of China.

What is the lesson? Foreign direct investment needs good domestic policies to translate into significantly higher living standards. When such policies are in place, it is amazing how far foreign direct investment can go. Even small per capita amounts of FDI can have a large and positive impact on individuals’ lives. Foreign capital flows have not lost their magic, but they will not lift all boats either.

Cadavers for rent

In most of the world socialist ideas are practically passe, but in Africa they are still killing. In a few short years, Zimbabwe under Robert Mugabe has gone from being the breadbasket of Africa to being on the verge of mass starvation. Only a handful of stalwarts warned of the dangers when in the 20th century large parts of the world descended into economic insanity and political barbarism. At the beginning of the 21st century, virtually the entire world knows of the dangers and Zimbabwe yet descends.

Read Samantha Power’s Atlantic article How to Kill a Country for the full tragedy. I will quote only one semi-amusing aspect that illustrates, once again, some of the absurd consequences of price controls.

[Mugabe] fixed the price of a loaf of bread at half the bakers’ break-even price, and levied astronomical fines on any baker who charged more. Bakers stopped making bread until somebody noticed that sesame bread, a “luxury item,” wasn’t price-controlled; by sprinkling a few sesame seeds on their standard loaves, bakers were able to get back in business. A pair of mortuary workers were arrested recently for running a profitable “rent-a-cadaver” business: because Mugabe had decreed that drivers in funeral processions would get privileged access to the trickle of fuel coming into the country, these entrepreneurs had begun leasing bodies to Zimbabwean drivers.

The return of piracy

Ninety-five per cent of the world’s cargo travels by sea. Without the merchant marine, the free market would collapse and take Wall Street’s dream of a global economy with it. Yet no one, apart from ship owners, their crews and insurers, appears to notice that pirates are assaulting ships at a rate unprecedented since the glorious days when pirates were ‘privateers’ protected by their national governments. The 18th and 19th-century sponsors of piracy included England, Holland, France, Spain and the United States. In comparison, the famed Barbary corsairs of North Africa were an irritant. Raiding rivals’ merchant vessels went out of fashion after the Napoleonic Wars, and piracy was outlawed in the 1856 Declaration of Paris (never signed by the US). Since the end of the Cold War, it has been making a comeback. Various estimates are given of its cost to international trade. The figure quoted most often is the Asia Foundation’s $16 billion per annum lost in cargo, ships and rising insurance premiums.

The International Maritime Bureau (IMB), which collects statistics on piracy for ship owners, reports that five years ago pirates attacked 106 ships. Last year they attacked 370. This year looks worse still. In the first nine months, there were 344 attacks, up from 271 for the same period in 2002. Twenty crewmen have been murdered so far this year, up from six a year ago. If violent crime increased more than 300 per cent in five years in New York or London, the public would demand urgent police action. At sea, where the only lives lost are those of poor seafarers from the Third World, no one cares.

Here is the full story. The U.S. government is not making this a priority, but the next major terrorist attack may well be seaborne.

Water privatization

Lynne Kiesling offers a lengthy discussion of water privatization, with useful links. I have long thought that water is one of the tough cases for market economics. It is hard to imagine having two sets of pipes built to your home and thus it is difficult to see how competition would operate. Even Milton Friedman, to the best of my knowledge, never came out for laissez-faire for water. An obvious option is to have the pipes regulated, but allow competing carriers within a single piping network. You then have to regulate access to the piping network, and regulate the pricing of that access. Furthermore you must make sure that some institution has sufficient incentive to maintain the value of the piping network, comparable issues have proven problematic in the case of electricity. Managed competition may prove a better form of regulation than municipal ownership, or a vertically integrated natural monopoly, but it is regulation nonetheless. And unlike with electricity, it is hard to see decentralized provision of water becoming the norm anytime in the near future. Electricity offers options such as batteries, solar power, and private generators. Water without pipes is simply hard to live with, get ready to carry buckets on your head.

Nonetheless a good case can be made for the private provision of water, with unregulated pricing, in very poor developing countries, such as much of Africa. Let any private supplier sell water at any price the market will bear. Yes this sounds drastic, but the harsh reality is that otherwise many Africans have no access to piped water in the first place. Even a monopoly price is better than carrying that bucket on your head, and don’t forget that well water can cost ten or twenty times the price of piped water. I recall once reading that if the cure for AIDS were a simple glass of clean water, many Africans still would have no chance.

The problem remains that charging for water is problematic in many developing countries. Property rights are poorly defined and people are not used to paying for municipal services. If you set up water piping to the very poor and tried to collect fees in return, many people simply would not pay and legal recourse would be unclear. What can you do, report them to a credit bureau? Attach their wages? You can see the problems. Right now we know that progress in the water sector will be slow at best.

Underground dining

…securing a seat at Mamasan’s is not easy. The restaurant, which also happens to be Lynette’s apartment, has no sign, and the only way you will ever find it is if someone tells you where it is (a quiet street, a hidden door, up a dark stairwell to the top apartment). Even then, you can’t just show up: you must have an invitation. To get one you need an introduction from a previous guest. This may seem as if it’s a complicated way to get a plate of grilled salmon, but Mamasan’s Bistro is not a legal endeavor. Its kitchen lacks the certificates, permits and inspections required by the city of San Francisco. And although the coconut-mango cocktails flowed, Lynette does not have a liquor license.

Mamasan’s is not, however, an anomaly. Restaurants of dubious legality, where food is cooked in apartments and backyards, abound across the United States. These underground restaurants range from upscale to gritty, and are born from youthful idealism, ethnic tradition or economic necessity. They lack certification from any government agency and are, strictly speaking, against the law.

Many of the new entrepreneurs quite like this arrangement, this quotation is a delight:

I’ve worked at restaurants for years, and dealing with the public is a beast,” Lynette said. ”You don’t get to edit who comes into your space, and it becomes a very sterile exchange of goods. I like knowing who is coming, and whether they understand what I’m doing.”

Lynette describes her restaurant as a kind of ”party” — albeit one that comes with a bill — and many underground restaurateurs harbor similar visions.

In other cases immigrants start these restaurants out of economic necessity. Asking a taxi driver is recommended as a good way to find one. African and Brazilian restaurants in Queens are especially common. Here is the full story, and thanks to co-blogger Alex for the tip.

Yes, the public is a beast, and I suppose that includes me. But if you know a good underground restaurant in the Washington, D.C. area, please write me, and I promise not to publicize it on my Ethnic Dining Guide.

Musical evening, based on trade

Last night my wife and I saw Cesare Evoria in concert, she is the closest today’s world has to a Billie Holiday or Ella Fitzgerald. Here is one of her best CDs.

As you may know, Evoria is from Cape Verde, one of the most musically creative spots on the planet. Cape Verdean music draws from traditions of Portuguese song, Brazilian samba, and American jazz, among other styles. Bittersweet and lovely at the same time. Note that this unique musical culture draws on remittances for its finance; remittances constitute more than 20 percent of Cape Verde’s gdp. Cape Verdeans migrate to Massachusetts, Portugal, France and the Netherlands. According to some estimates, there are 500,000 Cape Verdeans abroad, and about 350,000 in Cape Verde. This is yet another example of the cultural benefits of trade and migration.

Addendum: Here is an update on what is going on in Cape Verde, with respect to economic development.

Why Botswana?

From 1965 to 1995, Botswana was the fastest growing country in the world. During this 30 year stretch, Botswana’s average rate of growth was 7.7% per year. Relative to other nations, Botswana rose from the third poorest nation in 1965 to an “Upper Middle Income” nation.

Of course the rest of Africa has not nearly done so well. The account of Acemoglu, Johnson, and Robinson, later published in Dana Rodrik’s In Search of Prosperity: Analytic Narratives on Economic Growth, suggests the following (summary taken from Beaulier):

1. Botswana possessed relatively inclusive pre-colonial institutions, placing constraints on political elites.

2. The effect of British colonialism on Botswana was minimal, and did not destroy inclusive pre-colonial institutions.

3. Following independence, maintaining and strengthening the institution of private property was in the economic interests of the elite.

4. Botswana is rich in diamonds. This resource wealth created enough rents that no group wanted to challenge the status quo at the expense of “rocking the boat.”

5. Botswana’s success was reinforced by a number of critical decisions made by
the post-independence leaders, particularly Presidents Khama and Masire.

Scott Beaulier, a graduate student at GMU, attempts to amend this view. He argues that British colonial policy was not so beneficient toward market institutions and rule of law. Most of all, “Botswana’s success was the result of good post-colonial policy choices.”

In other words, countries are not trapped by their past. I don’t know enough history to judge this research, but I do know that topics such as Botswana, or Mauritius (another success story), are underexplored by economists.

Addendum: Abiola Lapite refers me to his interesting blog post, he suggests that the relative ethnic homogeneity of Botswana is a critical factor.

Russian bonds now investment grade

Baa3, that is. Here is the Financial Times story.

Russia’s debt to gdp ratio is 28 percent, Japan’s is 140 percent, but obviously Japan has more accumulated trust.

How much do these ratings make sense?

On May 31 the U.S. credit-rating agency Moody’s Investors Service lowered by two notches Japan’s credit rating on yen-denominated bonds issued by the government. Japan’s previous credit rating was Aa3, the fourth highest grade and already the lowest among developed nations. This was downgraded to A2, placing Japan below such nations as Chile and Botswana and on par with Israel, Poland, and the Republic of South Africa. As a reason for the downgrade, Moody’s stated, “There exists nothing within present financial policy that can put the brakes on the worsening debt situation.” The outlook for the credit rating is “stable,” so the series of downgrades appears to have ended for the time being. In addition, Japan’s government bonds issued overseas maintained their Aa1 rating with a “stable” outlook. Moody’s had announced in February that it was considering downgrading Japanese bonds and continued considering the matter based on the state of the Japanese economy and government finances.

Here is the link for the Japanese comparison. You might note that Botswana, although it received a higher rating than Japan, has Japan as its largest creditor.

French cultural protectionism

…the homogenization in question, which today is perceived most often as Americanization, is (insofar as it exists) American only in its most superficial and least durable aspects. It is above all the vehicle for popular culture–the entertainment, clothing styles, and fast foods favored by the young, and popular music (but not all of it, by any means). Here the word “culture” is being used in the rather loose sense that has prevailed because it is the entertainment industry that leads the choir in lamenting American influence. This influence may present a problem, but to identify the whole of cultural life with entertainment is a travesty.

Contrary to what Jacques Chirac maintained, globalization is not a “cultural steamroller.” It is and always has been an engine of enrichment. Think, for example, how the French artistic sensibility was revitalized by the discovery–or rather fuller knowledge–of Japanese painting afforded at the end of the nineteenth century, or by the arrival in France of African art ten or twenty years later. There are plenty of similar cases.

This is Jean-Francois Revel, writing in the latest New Criterion.

It is hard to tell you just how much I liked this article. Consider this:

And if the French film industry in 2001 has recaptured market leadership at home and found successes abroad, this is not because it is more subsidized than formerly, but because it has managed to produce a handful of films whose quality was appreciated not only by their auteurs, but by the public. A commercially successful French cinema, with international appeal, evidences a more authentic diversity than the kind preached by tedious diversity-mongers.

This article is just full of excellent bits:

…in the domain of languages too, globalization leads to variety, not uniformity. The spread of English facilitates communication and mutual influence between cultures; it is hardly a trivial matter when, thanks to the lingua franca, Japanese, Germans, Filipinos, Italians, Russians, French, Brazilians, etc., can participate in the same colloquium, sharing information and ideas.

Or how about this:

…the endowment of Harvard, certainly not the largest university in America, is close to $20 billion–more than twice the annual expenditure of France on its entire university system.

Here is another:

Giancarlo Pajetta, an important Italian Communist leader, once said: “I have finally understood what pluralism is; it’s when lots of people share my point of view.”

Highly recommended, go through the full text yourself, and prepare for the forthcoming book, entitled Anti-Americanism.