Zoe Williams shows numeracy is not her strong point

Stuart Broad, the England cricketer, tweeted:

I've heard if you earn minimum wage in England you're in the top 10% earners in the World. #stay #humble 

— Stuart Broad (@StuartBroad8) January 27, 2015

which apparently provoked a backlash. Renowned economist Zoe Williams added her insightful analysis thus:

"The cricketer’s minimum wage tweet shows numeracy is not his strong point. ... Money doesn’t mean anything out of context: its value is determined by what you can buy with it. Most people figure this out by the age of about seven."

Embarrassingly for Zoe, Stuart was right. Working full-time at the minimum wage earns £13, 124 per year. Plug that into the Global Rich List calculator, which, by the way, uses "Purchasing Power Parity Dollars (PPP$) in order to take into account the difference in cost of living between countries", and you're in the top 5.84% in the world. After accounting for cost of living differences.

You carry on being outraged on behalf of the relatively low income in the UK when you think they are being belittled Zoe, and I'll carry on being outraged on behalf of the absolutely low income in the rest of the world, in places like Gabon, where life expectancy is just 63 years, and 1 in 5 people live on less than the equivalent of what you could buy here for $2 per day. Just maybe try not to make such major conceptual errors when you are mocking people who point out the magnitude of global inequality.

The Future of the UN Development System

A new book from the co-Director of the Future of the UN Development System (FUNDS) project (can't believe they didn't call it the "FUN" project). Mark Malloch-Brown (former UN deputy-secretary-general and UNDP administrator) says;

"There is no better compilation of insights about the UN’s lack of cohesion, growing turf battles, declining capacity, clumsy implementation, and cooptation by bilateral and private interests of the family of organizations that calls itself—somewhat awkwardly—the UN development system."

Ouch.

One of the inputs to the book is a global perceptions survey of the UN system, summarised thus:

Four views emerge across the survey: 

• The UN’s development functions are less crucial than such other functions as security, humanitarian action, and setting global norms with teeth. 

• The UN’s development organizations are still mostly relevant, but some are not particularly effective. 

• The World Health Organization (WHO) and UNICEF consistently receive the highest rankings among operational agencies; regional commissions receive the lowest rankings. 

• The UN faces two major institutional challenges: poor internal organization and the predominance of earmarked funding.

What the survey misses, and what is really crucial, is that what we should care about is not just the effectiveness of organisations but the cost-effectiveness, or value for money. Houses in London are "effective" at keeping people dry, but they aren't exactly great value for money from a cost per square metre perspective. 

The IMF and Ebola

The debate rumbles on at the Monkey Cage, as Blattman responds to the response by the authors of the Lancet article to his response to their article. I find the debate mostly quite infuriating. To massively oversimplify, what tends to happen when IMF intervention is required is that;

1. Poor country governments spend more than their income for too long

2. They can't find enough people to keep lending them money

3. The IMF comes in as the lender of last resort, quite reasonably tells the government "look, we aren't a commercial lender, we're only lending because we have to, you're going to have to stop spending more than you're bringing in, because that is completely unsustainable"

4. Western academics criticise the IMF for forcing poor countries to cut their spending.

It's a bit like blaming firefighters for causing fires because they are always at the scene of the fire. The IMF isn't some kind of magic money tree. It only gets involved when countries have got themselves into a crisis. 

What complicates this narrative a little is the difference between austerity at home and austerity in poor countries, which are not the same thing. The UK can very happily carry on spending more than its income quite indefinitely, because commercial lenders continue to be very happy to lend enormous amounts at very low interest rates to the UK government, unlike the governments of very small, very poor, fragile states. It is ok and entirely consistent to rail against austerity in the West, and simultaneously support fiscal discipline (not spending more than your income) in poor countries. At least, it is odd to blame the IMF for not letting poor countries spend more than their income indefinitely, when money grows on trees for neither poor country governments nor the IMF.

Standing desks

Because all the other cool development bloggers are blogging about standing desks and back-pain, I thought I would share mine here. This was a present from Abhijeet and I use it a lot - it's lightweight aluminium, just about fits in a rucksack, and if you work on a laptop like I do, allows you to easily switch between standing and sitting whenever you feel like it. I'm pretty sure everyone at OPM was very jealous, though I'm yet to show it off at Sussex or CGD. 

Green Party are "Dotty Parochial Fruitcakes"

Bagehot, the column on Britain in the Economist magazine, says the Green Party of England & Wales have no grasp of economics and are fruitcakes, "dottier than UKIP," for backing a basic income policy. The same basic income policy which has received support from those other dotty fruitcakes with no grasp of economics; Martin Wolf, Tim Harford, Sir Tony Atkinson, and the late Milton Friedman.

This is the same fine Bagehot who happily elevates political objectives ahead of economic ones when celebrating the 2014 budget for its ideological approach to shrinking the state and cutting welfare regardless of the implications for the economy or for individuals affected in the short-run. The serious economists at the IFS said describing the same budget "policy choices have increased longrun risks to the public finances."

Bagehot also tells us that the Green Party are "parochial" and "contemptibly naive" for not thinking about the rest of the world enough. One might be forgiven for thinking that on the contrary it could be described as quite naive to expect political parties to spend all that much time focusing on people who don't vote in the UK. All this whilst we have a tory and liberal government which talks as if the main point of the aid budget should be promoting British business interests overseas, and likes to make a habit of offending our trade partners by insulting their citizens if they have the audacity to think of coming to the UK to work or study, including but not limited to putting actual vans on the streets with huge threatening "Go Home" signs written on them. No, it is the pro-immigration Green Party which is "parochial". 

"The world could use an economically literate and intellectually courageous British environmental party," Bagehot writes. We could also use an economically literate and intellectually courageous Bagehot column, but it seems we can't always get what we want.

My New Year's Resolutions

All come from the School of Life:

"Any occasion to improve ourselves should be seized upon. We need resolutions: they are promises we make to our better selves. In the future, we should try to worry less, forgive more, look at things through other people’s eyes and, most of all, learn to appreciate what we have."

And, apparently, from the accompanying video; "learn about economics".

Oh - and meditate more - I've paid for the headspace app.