Obligatory Dead Aid Post

So there's been loads of chat about Dambisa Moyo's new book by much smarter people than me (here, here, here and here), but I think I can answer David Roodman's question - "why is anyone paying attention to this book?"

Because she's a hot economist, and hot female famous economists are in pretty short supply. I noticed this a while ago when some friends were telling me about which male economists they had crushes on, and I couldn't think of anyone. Simple.

You have got to be kidding me.

Yep, thats exactly what the problem is.

Sudan finance minister says oil price drop Western conspiracy

The World is not Flat

The latest World Development Report is all about economic geography.

Distance, Density and Division matter.

Distance because of those transport costs, density because agglomeration raises productivity - cities are better for growth than the countryside, and artificial divisions raise costs of trade.

What does all this imply for Southern Sudan? At the moment market traders rely on both Khartoum and Uganda.

There are 2 key policy messages from the report - infrastructure and trade barriers.

The strategic question is how much the South chooses to orientate itself towards integration with the Khartoum, and how much with the East African Community. The goal is to make links through improved transport and reduced administrative barriers to a successful agglomeration. At the moment there aren't any passable roads from the South to the North, so goods get flown in. Goods from Uganda and Kenya do get brought in by road.

One way to think about this is Sachs' GDP density, which basically gives you a map of where these agglomerations are.



Zooming in on Africa, its pretty clear that Lake Victoria is where all the action is at. This is pretty convenient for Juba which is only just across the Ugandan border, but not so much for the big towns like Aweil in Bahr el Ghazal, which are closer to Khartoum than Kampala.




This idea is also reflected in the raw population densities - far more people around Lake Victoria than in Khartoum (Addis also has a lot of people, but there are some mountains in the way).



Trouble is that it seems from what weak data there is that the largest agglomeration in Southern Sudan is also the furthest from the Ugandan border, in Northern Bahr el Ghazal.



And unsurprisingly it is Central and Western Equatoria next to the Ugandan border that are doing the best, and the more populous States in Bahr el Ghazal and Upper Nile that are doing the worst.

Global economic crisis?

What global economic crisis?

As much as it might be more interesting if the government had blown the budget on poker and women, I'm afraid there's a slightly more mundane explanation for the recent lack of cash at GoSS.



Also heard the same thing this morning about disabled rioting in Yei. No comment.

More cash dropping from helicopters

Matt doesn't think that cash handouts can lead to long-term growth. A cynic might argue that neither does conventional aid. I also agree that targeted handouts could encourage dependency and moral hazard – that's why you'd need either conditional transfers like PROGRESA, or else just completely random/universal transfers.

In the nick of time, one of my very favourite irregular macroeconomist bloggers, Younotsneaky! links to a slightly old paper on the use remittances by individuals in Bangladesh. Much of it goes on investment, which of course potentially means an impact on growth. Of course remittances might not be the same as a completely free cash handout, there might be some moral obligation to use them more wisely, but the figures are interesting nonetheless.

History Repeating?

This is the tragedy of Southern Sudan. After not one but TWO long long wars, Southern Sudan is finally at peace with the North once more. But things are already falling apart.

Many common problems exist – ethnic/tribal divisions (see above), natural resource dependence (98% of the budget), and bad geography (it costs $10,000 to get a truck to Mombasa, and we have the "the highest concentration of neglected diseases in the world").

Can Southern Sudan learn from the mistakes of its neighbours, or is it doomed to repeat them?

Call in the riot squad

So every morning this week there has been a huge scrum of people trying to fight their way into the Ministry to speak to the Minister. We have to push our way through just to get into the office.

By today I think he was finally sick of it.

Those 19th Century Ugandans knew how to party

I just found some photos on my phone from a visit to the Uganda Museum in Kampala during my last stopover there (it took a day to get a new entry permit for Southern Sudan).

The Museum is small but worth a visit, its cheap and won't take more than 45 mins, and there's a nice cafe next door.

One of the sections is called 'Recreation', which consisted of displays on Banana beer, hemp and goat-fighting. Awesome.

Is it a bird, is it a plane,,,

I'm as Obama-crazy as the next guy. I even have the t-shirt and poster from Customs market to prove it.

But I can't help worrying about what a let-down he's inevitably going to be and how terrible its going to be. I don't care if he's charming the pants of every rogue state going, I don't think anyone can be that good.

This great excerpt from Hunter Thompson reminds us how bad it was last time.

Dropping cash from helicopters

Why isn't more aid given directly to individuals? Why does it all have to get routed through government or NGOs? Nancy Birdsall and Arvind Subramanian argue that this is the best way for governments to deal with their oil, thus getting around the resource curse. Well if there is also an aid curse - aid stops governments from having to be accountable to their citizens - then surely direct, cash handouts to citizens could work for aid too? And - they've tried this in disasters and less than 0.5% was spent on beer by the men.

aah aah aah aah Stayin alive

The Sudanese guy wearing a shiny silver suit was back in the office today. You can't say these guys don't have style.

I'm turning yellow

Despite my all-labour upbringing, I've recently been kind of instinctively liking the Lib Dems, mainly because half of the top leadership are all economists. Gotta trust an economist right, they're completely rational! Now that Huhne and Cable are organising a game theoretical strategy for the next election, I am totally sold. Vote Lib Dem!

(Did I mention Vince Cable was even an ODI fellow back in the day? Awesome)

Diagnosis: Everything

Nathan Fiala recommends Rodrik's "binding constraints" approach to growth.

As a government economist I entirely buy into the need for effective prioritisation of interventions, and find this theoretical approach pretty persuasive (despite my wariness about development fads). Lant Pritchett, one of the developers of the methodology puts the remarkable speed with which policy-makers have been converted to "diagnostics" and "binding constraints" simply down to the lack of credible alternatives.

My issue is that although the theoretical approach is convincing, it hasn't really been tested. Especially in the lowest-income countries where it seems almost impossible to eliminate any of the potential constraints.

Furthermore it remains to be seen whether this kind of approach is even testable.

I await the results of the current World Bank exercise on Southern Sudan with bated breath.

How I get around when the car's broke

 
Motorcycle Juba style: sit as far back on the seat of the bike as possible. Hold handlebars only loosely when riding but rev frequently whenever stationary.

Put a giant fake diamond into your ear, a Rastafarian or woolly gangster style hat on your head. No helmets, but sunglasses.

Go fast. So fast your shirt seems about to fly off your back. Grow your hair long and ruck it into waves that redden in the dust of your vocation.

The joyous, looping traffic-dodging irreverence of Juba’s hundreds of motorcycle boys - many pre-pubescent - or young men have become a visual centerpiece of peacetime Juba.

The Aftermath

So Juba was a bit of an anti-climax yesterday. As much as noone really expected anything (well apart from the UN who actually did buy up all of the water and juice from the only supermarket in town), it was still quite exciting until absolutely nothing happened.

NGOs being kicked out of the North is doubtless going to create a huge humanitarian disaster in Darfur, but its unlikely there will be much effect on the South. And as for creating a "reversal of commitment to elections and self-determination for Southern Sudan", well a cynic might say thay Khartoum isn't all that committed to elections and giving away all its oil. The question to be asking is how does this alter each side's incentives in the Game Between Juba and Khartoum. Personally I would be slightly more hesitant to go back to war with that hanging over my head.

SPLM totally backs Bashir 110%

"According to Lakes State SPLM Secretary, Samuel Mathiang Keer, there must be no protest against the ICC decision of the indictment to President Omer Al-Bashir—an order from the SPLM leadership in Juba.

“We have to respect the ICC decision… If anyone likes to protest at the grassroots level about ICC decision, it is unacceptable,” said Keer."

http://www.sudantribune.com/spip.php?article30379

The answer to all our economic woes...

"Jemaine: Budgeting. Bret: Yeah, the government should do a budget. 

I believe we already have a budget. 

Jemaine: It doesn’t seem like it. Bret: They need to put aside a certain amount each week for rent and then some money for food and then some money for partying, having a good time. Jemaine: Put aside some for invasions!"

Read the whole thing

HT: Kids Prefer Cheese

In other, completely unrelated news, Salva shows he at least has a sense of humour.

"With falling oil prices, Sudan's budget has been drastically reduced. More than 95% of the southern government budget comes from your share of oil revenue. Now you're having trouble paying government workers and the military. 

It's a very serious crisis. Not only in the south. It will affect the whole Sudan. 

Where are you going to get the money to make up the shortfall? 

I don't know. Maybe you might loan me some money? (Laughter)"

Juba eagerly awaits ICC decision, stocks up on tinned food

Today's the big day! Unconfirmed reports of UN staff stocking up on beer and water at JIT before lock-down this afternoon when the announcement comes out. We have elite SPLA commandoes outside the Ministry so I'm feeling pretty safe, and we have a clear route home away from the centre of town. In any case, whats everyone worried about, the party getting a bit too wild?