Relative Poverty Silliness #45364

The Queen is coming perilously close to joining millions of her subjects in “fuel poverty” as energy bills for four palaces and a draughty castle absorb a rising share of her income. 

About 4m households in England have fallen into fuel poverty, a situation in which a homeowner must spend 10 per cent of their annual income to keep their abode acceptably warm. (FT)

Any poverty line which puts the Queen in poverty = a silly poverty line.

Why so little internal migration in India?

The potential gains are large, but you also risk losing your social network, which is critical when there are inadequate government social safety nets and inadequate private insurance markets (Kaivan Munshi and Mark Rosenzweig).

So - development as a process of transforming small, inefficient, but personal networks of connections to much broader nation-wide government- and market-coordinated networks - less personal (I haven't necessarily met the people helping me out when I'm in need, or those I might be helping out) - but more efficient due to the larger scale and the greater allowance for mobility. Development as the atomisation and individualisation of society. Something to be happy about? Similar to how folks moan about Facebook destroying strong ties and replacing them with abundant weak ties, as they continue to dive headfirst into the internet.

Exploring the Portaloo Product Jungle

The Great BBC series African Dream profiles entrepreneur Moses Nderitu, who went from being a TV producer to setting up Kenya's first portable toilet rental business almost by accident. He needed to buy a portaloo, but couldn't just ship 1 to Kenya, so had to ship 4. And then slowly started persuading people to rent them from him. And now employs 20 staff in his booming loo rental business.

Which is a lovely illustration of Hidalgo and Hausman's product space theory of economic development. The economy is a bit evolutionary, with lots of random leaps, but some products (and services) are closer together, and so it only takes a small leap (like Nderitu's). Some are much further apart. So the things that an economy can produce tomorrow depend a lot on what you can produce today (learning by doing and path dependence are not new ideas in development economics, but this is a sophisticated new data-driven way of looking at it).

Or as Rodrik puts it

think of the product space as a forest, goods as trees, and entrepreneurs as monkeys. Countries develop as monkeys jump from tree to tree. Trees further away are harder to jump to. Some parts of the forest are denser than others. What trees you have monkeys on today determines where your monkeys will be tomorrow. And it goes from there.

Crowded Planet?

World population is expected to hit 7 billion people this month. So are we running out of space? Not if we all move to cities. This chart from Paul Romer's TED talk represents the space that the world's 3 billion city dwellers take up of all the arable land on the planet. It's 3%.

Lessons for South Sudan

"When a new government comes into power, especially an inexperienced one, there's one phenomenon that never fails: every crook on Earth shows up. And every crook on Earth has the biggest promises, has access to billions of dollars of lines of credits, of loans."

Deborah Brautigam (via co-blogger TH)

Development Strategy in Equatorial Guinea

Teodorin, who is Equatorial Guinea's Minister of Agriculture and Forestry, clearly has a three-step plan for development success: (1) pilfer proceeds from nation's natural resources and spend on useless luxury crap in Los Angeles, (2) ?, (3) profit!

Amanda Taub at Wronging Rights

Evil Aid-Cutting genius

Now if only there were a way of convincing those liberals that aid is bad. You would want to think of some clever way in which foreign aid is totally at odds with fundamental liberal values.

The British government says it will cut aid to African countries that persecute LGBT people.
International Development Secretary Andrew Mitchell revealed the UK has already cut funding to Malawi by £19 million after two gay men were sentenced to 14 years in prison last May reports the Daily Mail.

"We only provide aid directly to governments when we are satisfied that they share our commitments to reduce poverty and respect human rights."

What say you now Liberal! Should we feed the starving if they are homophobic!? Mmmmm, thats right liberal, squirm, mmm let me taste your discomfort....

[Bit rich coming from a government intent on repealing the Human Rights Act though right?]

How to Spend It (Paul Collier on Budget Support)

I managed to miss this a couple of months ago*; Paul Collier proposed at an ODI meeting that Budget Support should be given according to a simple decision rule, based upon an independent assessment of country public financial management (PFM).

Mick Foster's response is very interesting, arguing that "It is about managing an aid relationship, not certifying PFM and turning on auto-pilot ... Aid donors are the right people to do this – not agents who don’t have to live with the consequences of their verdicts."

I do like the principal that decisions be made objectively according to a transparent rule, but it is easy to imagine problems. A donor could easily be embarrassed by a democratically elected recipient government with good PFM systems deciding to make spending decisions which look somewhat inappropriate to a British taxpayer. But then that is the whole point of budget support - ceding control over spending decisions to a recipient government which is accountable to local people. Which could get tricky if local people hold values which might be different to the donors' (e.g., "The British government says it will cut aid to African countries that persecute LGBT people").

Foster argues that the economic case for budget support is clear, providing "the most cost effective way to deliver services, including allowing for leakages," which contrasts with the perspective of politicians who are "absolutists, not a penny can be stolen, clearly unrealistic." The trouble is, our politicians are also democratically accountable. To an electorate which is also pretty absolutist about corruption. And kind of understandably so. Being stolen from generates an emotional response.**  

Imagine you want to give £100 to a Kenyan family. Would you rather spend £25 of that on legitimate administration expenses and have £75 go to the family, or have £80 get through to the family, only £10 spent on administration, and £10 stolen by a politician and spent on his new Mercedes Benz? We know from a large literature on psychological experimental games that individuals often value procedural "fairness" above  monetary gain. People can choose inferior outcomes when they think that they are getting stiffed. Does this extrapolate to aid? I can certainly understand both a rational economic acknowledgement that corruption often isn't the main issue, alongside a kind of emotional moral revulsion which makes me want to absolutist.

If the economic case really is so strong compared to the political constraints, how can supporters of budget support make it more effectively? 

Read the ODI meeting summary here, and Mick Foster's response slides here.

*Thanks for the reference to Stephen Peterson at a recent Oxford Seminar.
**And as an aside, it's interesting that proponents of budget support argue that the economic case needs to trump the political one in this case, when they are often the kind of folks who criticise economists for focusing only on the economic case with scant regard to political constraints.

Did donors in Sudan try to move on from humanitarian aid too soon?

Médecins Sans Frontières (MSF) (Doctors Without Borders) sadly witnessed this premature assumption in 2009. The overwhelming majority of international funding was directed at development and provision of basic services in support of the state — to the detriment of emergency preparedness and of civilian populations at a time when violence was resurgent. While the international community recognises the new start for South Sudan, aid is not only about state-building — it cannot lose sight of the humanitarian reality on the ground that may
not be as rosy as the projected political future. 

So far in 2011 nearly 3,000 people have been killed due to violence in South Sudan and around 300,000 displaced, giving a hollow ring to the idea that South Sudan is now ‘post-conflict.’

Parthesarathy Rajendran, MSF’s head of mission in South Sudan

Census love

"In the absence of actual data (such as an official census), NGO staff make a back-of-envelope estimate in order to plan their projects; a postgraduate visiting the NGO staff tweaks that estimate for his thesis research; a journalist interviews the researcher and includes the estimate in a newspaper article; a UN officer reads the article and copies the estimate into her report; a television station picks up the report and the estimate becomes the headline; NGO staff see the television report and update their original estimate accordingly." (source: www.humanitarian.info) (via Map Kibera Project)

I honestly had no idea that Kibera is less than 200,000 people, and not over a million, despite the Kenyan census establishing this fact taking place 2 years ago. Via the Africa Research Institute

Election Day in Liberia

Wow, Rob Blair is even more cynical than me.

Seen in this light, the “massive turnout” that the newspapers are reporting this morning starts to seem disenchanting. To the extent that turnout is driven by campaign promises, more voters may mean more disillusionment and less communal collective action down the line.

Definitely worth reading the rest of his report from Election Day in Liberia on Chris Blattman's Blog. 

"B-roll" footage from South Sudan Emerging

Some really beautiful shots here from around Juba by Jon Shuler. I'm really looking forward to the final film. Follow Jon on Twitter @jonshuler.


B-Roll from South Sudan Emerging from Jonathan Shuler on Vimeo.

Child Poverty in the UK

...is defined by the 2010 Child Poverty Act. According to the IFS report just out, 

The Act defines an individual to be in relative poverty if his or her household’s equivalised income is below 60% of the median in that year; and he or she is in absolute poverty if the household’s equivalised income is below 60% of the 2010---11 median income, adjusted for inflation.

So by "absolute poverty" we are still actually talking about inequality. Now, I care very deeply about inequality, and in particular inequality in life chances (i.e. starting points rather than outcomes).

But I just can't decide whether I should be irritated by imprecise and misleading language about poverty, or impressed by the re-branding of inequality (which is clearly something only loony socialists should care about) as child poverty (who wouldn't care about child poverty? Surely only a heartless monster. Even Conservatives should care about child poverty).

So points for clever marketing. But do we really want people to think for a second that the absolute poverty of living on £23.50 a day in the UK is in any way comparable to the absolute poverty of the billion or so people worldwide who live on less than 80 pence a day?

We need to talk about capacity-building

My new employers Oxford Policy Management have just published an interesting new opinion piece by Alex Matheson looking at the failure of capacity-building.

A 2006 Australian report ‘Capacity Building Evaluation’ states that the development community spends $15 billion annually on capacity development but is “unsure” of the return on its investment. In 2008, the World Bank concluded that no more than half of the $720m it spends on training each year actually resulted in enhanced capacity.

That bears repeating – less than half of World Bank spending on training actually does anything.

So why does this continue? Matheson explains how both donors and recipient governments have every incentive to carry on with the status quo and not rock the boat. For the recipients, well who doesn’t like an excuse to get out of the office for a few days of training? And for donors, it’s a nice clean easy way to spend some money, which may well have at least some short-term superficial outputs.

What is typically though needed in dysfunctional organizations is not more inputs into a bad organizational system, but the much more challenging job of managerial and organizational reform.

The first quick win is to be clear on terminology.

Training ≠ capacity development. 

The two are not synonymous (technical training for individuals can of course be very useful, we should just be clear that it is not going to create effective organizations, meaning the working relationships between individuals).

Finally Matheson offers up some more substantive solutions;

• Making a prior political economy assessment of the barriers to capacity development and the prospects for building conditions for successful partnership. 

• Not engaging unless the leadership group in the organisation is committed to the goals and is willing to allow space for change. 

• Designing interventions that take account of the political and economic environment. For instance, organisational change strategies in civil services in South Asia must take into account the power and influence of cross-departmental cadres, and the strong bonds between batch-mates. 

• Designing support programmes that allow enough time for new capacities to be institutionalised and are sufficiently flexible to survive political inattention, senior staff turnover, and periodic distractions. Important elements of this are establishing inclusive networks and engaging on a wide front to allow for changing partners and temporary reversals. 

• Promoting a process of change that allows time and opportunity for confidence building through small successes amongst the leadership team, before addressing major challenges. 

• Adopting a patient but persistent approach that keeps long-term behavioural goals in mind, exploits windows of opportunity, avoids unnecessary confrontations and focuses on results rather than publicising a badged reform.

Does media pessimism on migration and urbanisation get any worse than this?

China's rural poor left stranded as urbanites race ahead 

As workers leave the countryside in the hope of better pay, the communities they leave behind face increasing poverty

... 

Wang Fang and her husband, Chen Shuangfu, arrived in the provincial capital, Guiyang, 10 years ago, with just 10 yuan in their pockets. Their hard, unappealing work – collecting and sorting rubbish for recycling – earns them as much as 20,000 yuan a year, compared with their 1,000 yuan income back home. But their rural hukou means they are not entitled to many services – and, since the hukou is inherited, neither are their sons. (The Guardian)

So,  a couple living in rural poverty increase their income by a factor of TWENTY, from about £100 a year (at market exchange rates) to £2,000 a year, JUST BY MOVING TO THE PROVINCIAL CAPITAL, and you still want to find GRIPES!? Are you INSANE? Totally innumerate?!! Or know of some other secret government policy that nobody else has heard of that can increase the incomes of those living in rural poverty by MORE than 2000%?!! Get a grip!

Not for a second to deny that there are challenges to be overcome in the process of urbanisation. But writing long miserable articles about the woes of rural poverty without for a second stopping to celebrate the absolute wondrous miracle that is overnight 2000% pay increases for the poor, is insane. I would sort rubbish for recycling in a hovel for a 2000% pay raise. Wouldn't you?

That is the real story here. Not the fact that some poor rural people are still poor and rural.

Music from Saharan Cellphones

Trailer for Music From Saharan Cellphones from plastic shaman on Vimeo (via The Guardian, HT:TH)