Sam Bowles on tackling Inequality

“Suppose instead what we did is this: We said, ‘Look, when somebody turns 18, he gets a quarter of a million dollars and, after that, you’re on your own,’” Bowles says. “Once you’ve got your quarter-million, you’ve got to make a decision: ‘Should I go to college or do I want to start a business?’—which you could do with a quarter of a million.” 

“They just get a check. And they get it no matter what—Rockefeller, the poorest person in America, everybody gets it,” Bowles says. “There’s nothing you can do to get more; there’s nothing you can do to get less.” 

Such a system eliminates the disincentives to work in the current social safety net. “The problem with the welfare system is that as soon as you get a job, they start taking your money,” Bowles says. “This basically says, ‘You’ve got this nest egg and, if you go out and get a job, you keep the whole thing—except for whatever taxes you pay.”

Sante Fe Reporter (via Marginal Revolution)

How to painlessly balance the budget

We could auction off 10 million U.S passports. Suppose we could sell each for $200,000 --- that would yield a one time payment of 2 trillion dollars. Now that I think of it, that's a pretty good idea! 

As these "international superstars" sort across our cities, many of them will buy homes. This will help to slow down home price declines and thus slow down mortgage defaults. This will prop up the balance sheets of banks and make them more likely to make loans and this will help the economy to rev up again.

--Matthew Kahn on an untapped revenue opportunity (via James Choi)

On the importance of motivation for results

So the other day I was idly browsing the tinterwebs for some info on the different tribes of Southern Sudan (yes I am that kind of geek). Tribe, ethnicity, language, and religion were all explicitly excluded from the 2006 census and the 2009 household poverty survey because they are too contentious, so I was assuming that hard data is difficult to come across. Not so.

Joshua project is a research initiative seeking to highlight the ethnic people groups of the world with the least followers of Jesus Christ.

And oh the data is copious. And detailed. I am slightly creeped out and utterly amazed all at the same time.

On the velocity of money in Southern Sudan

This note is only 4 years old.

Gettin' by with a Senke

The idea blatantly stolen from Miles Estey's "Gettin' By" series, here are the economics of riding a Senke (cheap Chinese motorbike) boda-boda (motorbike taxi) for a living in Juba (taken from the South Sudan Business Week).

"Meet Senke Rider Who Out Earns GOSS (Government) Staff"

John Modi started borrowing a Senke to earn a few Sudanese Pounds after arriving back in Juba from a Ugandan refugee camp, and failing to find a job. After 6 months he had saved $750, enough to buy his own Senke.

"I am out of the house by 7am to drop my first client to work… I end my work at 8pm, take my supper and relax with my boys in our hood."

Modi has 3 regular customers who he takes to work and back every day, giving him something of a regular wage. The rest depends on the day, and whether it is raining or not.

"The income from a Senke is not regular … the tricky part of being self-employed is how to save the money. Income that comes in drips is hard to save. If one is not careful that money slips through the fingers."

A standard fare in Juba is $2. Modi tries to save the money from the first 10 trips ($20), and use anything on top of that to cover his daily expenses, such as lunch ($2.50), breakfast ($2) and a "White Bull" beer at the end of the day ($1). He also gets another $20 a day from his 3 regulars, paid in a lump sum at the end of the month.

"It also helps that compared to Senke business in neighbouring Uganda, in South Sudan, the costs are lower."

These costs amount to just under a dollar per day for insurance, plus the one-off cost of $115 for a licence plate, and some occasional $5 fines from the traffic police.

"If I had taken up a job in my management profession in Uganda, I wouldn't be earning half of this money."

There is of course, unmentioned in the article, a reasonable risk of death or injury. I see a smashed-up motorbike on the tarmac on a weekly basis, and it is only getting worse as more and more roads are paved in Juba. Bumpy dirt roads at least impose something of a speed limit. Still, I'm betting that $40-$50 a day puts you pretty high in the income distribution in Southern Sudan.

(Photo Credit: White African on the Rise of the Motorcycle Taxi in Africa)

French policy taking money from the poor?

Sanou Mbaye, a Senegalese economist does a comparison of different European money transfer markets.

Whilst the UK, Italy, Spain, and Portugal are taking steps to try and keep costs low for sending remittances, the French approach relies upon a monopoly for Western Union:

"which controls up to 90% of the total formal transfer volume within Africa's 16-member Franc Zone. Western Union charges fees as high as 25% on transfers to these countries, compared to an average global benchmark of 5%, and has required that Franc-Zone countries sign exclusivity agreements, thereby preventing foreign-exchange bureaux, post offices, and micro-finance institutions from carrying out money transfers."

HT: Duncan Green

On information overload

If information overload is such a problem, why don't we do something about it? We could if we wanted to. How many of us bother to tune our spam filters? How many of us turn off the little evanescent window in Outlook that tells us we have a new email? Who signs off of social media because there's just too much junk? Who turns off their BlackBerry or iPhone in meetings to ensure no distractions? Nobody, that's who — or very few souls anyway. 

Why? First, there is the everlasting hope of something new and exciting. Our work and home lives can be pretty boring, and we're always hoping that something will come across the ether that will liven things up. If I turn up the filtering on the spam filter or turn off the smartphone, I might miss out on an email promising a new job, a text message offering a new relationship, an RSS feed with a new news item, and so forth. Every new communication offers the frisson of a possible life-changing information event, though it seldom delivers on the promise.

Tom Davenport in the FT

Wisdom on Sudan

"If [Southern Sudan] chooses secession, an independent state will be born as soon as the vote is announced. But independence is more than secession. Independence cannot happen without a whole range of agreements on fraught questions. Assets need to be divided – oil revenues, water, national infrastructure and other assets. Nationality needs to be defined. Any new currency will need to come into circulation at a price that is sensitive to the interests of many different economic groups. Somaliland and Eritrea are two nearby political entities that have recently fought wars after secession, in part because these issues were not addressed."

Edward Thomas, Chatham House

...

it is vital that the international community encourage and support negotiations on postreferendum arrangements

Jon Temin, US Institute of Peace (HT: Maggie Fick)

Development "Dream Manifesto"

Duncan Green, Head of Research at Oxfam presents his "dream manifesto" for the upcoming UK elections, restricting himself to "things that don't require big dollops of government cash." Here is my attempt at a coherent summary:

1. UK Aid - New money for climate adaptation, improve predictability and quality, untie it.

2. International action - push for Eurozone Financial Transactions ("Tobin") Tax, push for International Arms Trade Treaty, Raise development at G8 and G20, reform World Bank + IMF

3. Domestic Regulation - Increase reporting requirements for multinational companies in UK tax havens, regulate UK company behaviour abroad

4. Debt - Outlaw "vulture funds"

5. Rights - consistently condemn abuses of.

Migration is apparently a write-off.

And here's my "dream manifesto" drawing heavily from CGD's Commitment to Development Index and some recent Collier-Venables work on trade preferences.

1. Migration - Massively scaled up guest worker programme

2. Trade - Push for reform of "Everything But Arms", the EU's preferential trade policy for the least-developed countries, so that it does not include current restrictive "Rules of Origin" clauses (which mean poor countries can't just be part of the global economy and jump into the value-chain, they have to create an entire product from scratch)

3. Security - Stop exporting arms to corrupt dictatorships with poor human rights records. Britain has the highest export/GDP ratio of any rich nation.

4. Technology - Get rid of overly restrictive copyright rules which prevent the transmission of technology

5. Aid - Let's have some serious experimentation in giving aid directly to individuals. Do it with vouchers, do it via mobile phone, whatever, just do it.

Three of these; on trade, security and technology, are only difficult because they take on the interests of some major companies. And major companies have lobbying power. Who else has lobbying power? That's right. NGOs.

Beyond Planning

I have finally read Owen Barders' new paper: "Beyond Planning: Markets and Networks for Better Aid", required reading for aid-policy-wonks. It's pretty heavy going, so here's my attempt at a quick summary/intro/review.

The Paris/Accra agenda is failing. And it will continue to fail because of the political economy of aid organisations. NOBODY has any incentive to specialise, do what the recipient government wants, or commit to long-term funding.

The way to fix these incentives is through adding markets and networks to the mix.

Markets by having donors contract out more of aid implementation.

Networks by, er, having some kind of wikipedia-facebook-social-network-for-aid-type-thing.

Sounds good to me. One thing though, I would have liked to have seen more emphasis on cash transfers to individuals. One of Barder's key problems with aid is the lack of a feedback loop from recipients to suppliers. People in Southern Sudan can't take their receipt back to the UK and say, "er, yeah thanks for the community-peace-building-initiative but I want my money back please". Because in aid, the supplier is also the guy who pays.

There are 2 ways to get this feedback.

The "short chain" way to make aid more accountable to the beneficiaries is to give beneficiaries more control over the organisations that deliver services. One way to do this is to provide aid directly to the intended beneficiaries – for example, in the form of cash transfers or vouchers. 

The "long chain" way to make aid more accountable is to give much greater emphasis to transparency, community engagement, measurement of results and feedback through the political system.

At which point the short chain is dropped and never mentioned again.

You want to give people choice and be accountable for your service provision? JUST GIVE THEM THE MONEY

Sudan Election Poll

From the Sudan Tribune. Probably not entirely representative.

Links

1. Reporting on the Sudanese election

2. UN staff in Nairobi are not happy about the city being reclassified as safer

3. What the internet was made for: Photos of Chantal Biya's Hair

4. Round-up of gay rights activism in Africa

5. Mapumental: A ninja tool for helping you house or job hunt within Great Britain

Are NGOs killing civil society?

Paul who was in Juba recently has an interesting hypothesis: 

"International NGOs are killing civil society in developing countries."

I'm left with lots of questions. What is the counterfactual? Was there a flourishing civil society before aid? Is there anywhere without INGOs? If the question is about quality rather than quantity is it even possible to properly test this theory? How about Bashir's NGO expulsion as a natural experiment? How will Northern Sudanese civil society compare (with itself in the past, and with its equivalent in the South) in a few years time? What about militias, aren't they non-governmental organisations?

The heat has come

A few weeks ago I was feeling a bit cocky as the new arrivals from the UK were wilting in the heat.

"Oh you'll get used to it... you just adjust after a while... etc etc."

The dry-season-proper just arrived and now I am wilting in the heat. I haven't slept well in about 4 days. My bed is too hot despite dampened sheets, which dry out after about half an hour anyway. I'm trying not to fall asleep at my desk.