Development as Burritos

This one has been sitting in my drafts folder for months, but Hausmann just got me thinking about it again.

"Meze Fresh" is probably one of the best places to eat in Kigali. Certainly one of the fastest. It's a Chipotle-style Mexican place, with a range of salads, meats, salsas, and sauces in a bar at the front that are thrown together in a tortilla in no time at all. Plus they do margaritas. The owner, I'm told, is a young American guy in his 20s who worked in a Chipotle back home in California, and basically borrowed the entire concept and replicated it here. A similar thing is going on with the Office, or with the young Americans in Kigali setting up their own gyms and solar energy businesses.

To some extent, that is what development is. Borrowing ideas. At least that's what catch-up growth is. At the world technological frontier you need to invent new ideas to get economic growth, but for most developing countries you can get a long way just copying other ideas.

Hausmann's point is that it takes people to transfer ideas, because it's really hard to teach people things that depend upon learning by doing. Which resonates with the experience of all these expats in Kigali who came to do traditional aid work, decided they liked living there, and started spotting all these business opportunities based on ideas from back home. The policy implications of this? For developing countries, one is to make it really easy for people to come visit and live in your country. Rwanda is doing this. The kind of bureaucracy and visa fees you find in many other countries is just incredibly short-sighted.

I'm also reminded of another Hausmann contribution - growth diagnostics. In a place like Rwanda, having got the basics of physical security, macroeconomic stability, decent government administration, and infrastructure under control, one of the things that might start to bind as a constraint to growth is "information externalities."

Any suggestions for what any of this implies for donor policy? Can we and would we want to increase subsidies for foreign investment?

The Mr. Miyagi Theory of Economic Development

Very interesting hypothesis from Ricardo Hausmann on Project Syndicate.

The bottom line is that urbanization, schooling, and Internet access are woefully insufficient to transmit effectively the tacit knowledge required to be productive. That is why today’s emerging markets are so much less productive than rich countries were in 1960, even though the latter were less urban, had higher birth rates and less formal schooling, and used much older technologies. 

The policy implications are clear. Knowhow resides in brains, and emerging and developing countries should focus on attracting them, instead of erecting barriers to skilled immigration. They should tap into their diasporas, attract foreign direct investment in new areas, and acquire foreign firms if possible. Knowledge moves when people do.

The Karate Kid reference is from the very entertaining powerpoint here.

South Sudan: Safer (for aid workers) than detroit?

"There are 17,000 aid workers in South Sudan, making it one of the largest aid operations in the world. In 2012 there were 25 major attacks on aid workers ... With 9 murders of aid workers, that puts the aid worker murder rate in South Sudan at 53 per 100,000. How does this compare to the murder rates of other places?" 

From Aid Leap

How to fix education in developing countries

Annie Lowrey interviews Lant Pritchett in the NYT, who argues

1. We need to think about the whole system rather than just single interventions
2. We need clear goals in terms of learning outcomes, what we are trying to achieve
3. We need local flexibility to come up with solutions to achieve those clearly agreed goals

I'm struck that if we believe this (and I think I do), then effective management of systems of public service delivery looks a lot like effective management of individual people - set clear outcome goals but don't micromanage the process.

Well worth reading in full.

On private schools, Lant has this to say:

"You can get local control by increasing the number of private schools — I’m not advocating privatization as a solution, but those private schools are freed from being in a top-down bureaucracy, and in India and Pakistan, they do better with less resources."

Some of my best friends are knee-jerk leftists

I wrote a thing for the Guardian blog defending aid in support of private schools in developing countries. Which is very exciting because I've been reading the Guardian every day since I was 16. Some of the comments are a bit colourful, so for the record I feel I should burnish my lefty credentials (even though this feels really lame as it's exactly the kind of thing that annoys me when the likes of Goodhart and Collier do it before they go on to support mainstream Conservative party opinion).  

But for what it's worth, I started my lefty career when I was 6, when my "Dennis the Menace fan club says no Gulf war" poster made it to the local news. I went campaigning door-to-door for the Labour party when I was 8. I wrote to the Green party asking for a copy of their manifesto when I was 10. When I was 15 I vandalised the Conservative party billboard in my neighbourhood, and volunteered for a local Labour MP when I was 17.

I'm proud of having attended my local comprehensive school in Leeds. I'm proud that my fiercely liberal granddad sent my mum to the local comprehensive school on principle, instead of the more conveniently located selective school. I'm proud of my mum who was a school teacher for 20 years, and my aunt and uncle and grandparents, who all work or worked for the NHS (which yes, I'm also proud of).

I worry a lot about private schools in the UK, and the consequences for social mobility and segregation. 

So I'm not a natural supporter of private schools. But I care about evidence - and my reading of it is that there is a great potential to do good by experimenting with private sector service provision in education in developing countries. (Many other intelligent people, including several colleagues - none of whom are knee-jerk leftists - disagree with me, but thankfully none of them have yet accused me of "plain bullshit", "neo-con mantra", being a Mugabe-apologist, or a "twat.")

India fact of the day

In India, remittances are larger than the country’s earnings from IT exports.

From Dilip Ratha 

A naked man in a tie

My favourite description of the country came from Souleiman Youssouf, a 35-year-old Somalilander who lives and works in Canada but tries to visit every year. “Somaliland is a naked man in a tie,” he told me, in a vivid reference to the way the country spans extremes of development. Ageing nomads still walk the plains with their camels, but they can also call the US at cheap rates on the territory’s extremely competitive and successful mobile telephone networks. And although no other territory in the world recognises it, Somaliland strives to run itself as any other nation-state. It holds elections, passes laws and collects taxes – however meagre – and has developed an impressive clutch of commercial mobile phone, mobile internet and money transfer services.

From Katrina Manson's notes on her visit to the 6th Annual Hargeisa International Book Fair. My favourite short story about economics set in Hargeisa is here.

How to switch careers into international development

A 6-part guide from Rachel Strohm (formerly of IPA and other things):

1. What is development
2. What interests you
3. Building transferable skills
4. Unpaid internships
5. What to do if you can't go unpaid
6. CVs and cover letters

And whilst I'm on the subject - a plug for an exciting new job for a social science PhD to work with OPM and the University of Bath to develop better ways of integrating quantitative and qualitative methods in development policy impact evaluation.