New evidence on the importance of migration for development

The International Organisation for Migration (IOM) have just released the data from a survey of over 10,000 migrant households in Bangladesh. Michael Clemens does a quick calculation of the rate of return on investment for these migrants – 117% per year for an upfront investment of $3150. “That’s a stunningly profitable investment,” given that the returns to microfinance in Bangladesh might be 11% at best.

Meanwhile the Institute for Public Policy Research (IPPR) and the Global Development Network (GDN) have released a new study based on 10,000 households across six countries: Colombia, Georgia, Ghana, Jamaica, Macedonia and Vietnam. Their findings on the economic impacts of migration are that:

• migration increases migrants earnings
• it also increases the incomes of the households they come from
• receiving remittances increases business ownership
• receiving remittances does not impact labour market participation or unemployment
• receiving remittances increases savings

Links

1. A reminder that Easterly actually does great research as well as snark

2. Why Southern Sudan should be called "the Nile Republic"

3. A Glimpse Into the Awesome World of Meetings

4. AidThoughts on the J-Pal research on education information

5. Economics proves that England, or Brazil, will win the World Cup

World Touristiness Heatmap

Some clever soul has mapped the location of holiday photos uploaded to website Panoramio and made this cool “touristiness heatmap.”

Look how bright Europe is! Given that tourist spending in developing countries is already 3 times official aid, how to harness a bit more of all that spending in Europe? Could the World Cup have a disruptive impact?

HT: Lifehacker

Foolproof Job Application Questions

A friend was asked this on the standardised online job application form of a major international organisation:

What is your level of interest in fighting poverty and reducing gender inequality?

• Low
• Medium
• High

Er….

A change.org campaign for oil transparency

Dear rovingbandit.com,

In 2008, Chevron paid more than $40 billion to the governments of countries around the world – most of it entirely in secret.

Chevron drills for oil in places where millions of families struggle on less than $1 a day. That $40 billion could have supported schools, health care and food programs – so where did it go?

Chevron knows exactly how much it paid to each country. But they won't say. And without any information on these secret payments, poor communities can't demand their fair share – to send their children to school, create jobs and escape poverty and hunger.

Tell Chevron to open the books on its secret payments so that the world can follow the money and help put it toward real development.

In less than a week, Chevron will hold its annual shareholder meeting. This is our moment to demand that Chevron finally come clean. Greater transparency and accountability will stabilize countries and help Chevron in the long run.

Chevron won't even provide a basic accounting of how much money goes to each country – so there's no transparency, no accountability, and no way for poor people to call for their fair share.

That means people whose lands are yielding up billions of dollars in oil revenues still face chronic hunger and poverty. It means some officials remain free to enrich themselves with no public oversight. This makes it hard for citizens and watchdog groups to follow the money and keep officials honest.

Our partner, Oxfam America, has met with Chevron multiple times, but they keep refusing to disclose. So they have filed a shareholder proposal for Chevron's May 26th annual meeting, by which shareholders can exercise their rights and ask Chevron to open the books on its secret payments – and in partnership with Oxfam America we're also making it easy for people like you to put direct pressure on Chevron.

Other oil and mining companies disclose this information, and Chevron should join them – especially since more transparency will actually help Chevron in the long run by stabilizing countries. If the company agrees to change its policies, it could be a watershed moment across the oil, gas, and mining industries.

Tell Chevron to stop the back-room deals that open the door to corruption and keep people in poverty.

Chevron advertises itself as a protector of the planet. So why isn't it agreeing to let the public see what it pays to foreign governments?

With your help, we can pressure Chevron to make a real change in its policies – and help millions of poor people in the process. Please share this alert with your friends and family.

Thank you,

- The Change.org team in partnership with Oxfam America

Tyler Cowen on the World Bank Dining Room

Overall you could do worse than to eat here, which implies donor opinion is a constraint on raising WB salaries explicitly.

The rest here.

What is better than deworming for increasing school student attendance?

For me this was the stand-out chart from Esther Duflo’s recent TED talk. Apparently providing information on the returns to education does even better than deworming for increasing school attendance.

I am somewhat surprised that there haven’t been more efforts to replicate the Kenya deworming finding, which is quite old now (noting that there is one study on India here – but what about other African countries?). A key defence of the randomistas position is that external validity can be improved by replication of findings in different settings. The incentives probably aren’t there for academics to do boring replication studies, but surely there is an incentive for donors to want to fund such studies?

Dear Secretary of State

Alison Evans, Director of the Overseas Development Institute, has written an open letter to the new Conservative Secretary of State for International Development, Andrew Mitchell MP.

She highlights 10 priority issues for UK international development policy:

1. With only five years left to realise the  promise of the Millennium Development Goals, the international community must refocus its efforts

2. Think aid, think smart aid, but also think beyond aid

3. Global economic governance and the G-20

4. European development policy

5. Climate financing

6. Trade

7. Migration

8. The private sector

9. Rebuilding in fragile states

10. Accountability

Discuss.

How do poor people define poverty?

A fascinating new paper by Ben Olken and Abhijit Banerjee uses a field experiment to look into the difference between “objective” consumption-based measures of poverty and what Indonesian villagers define as being poor. They find that a community ranking exercise basically does at least as well as an objective alternative in estimating consumption (until people get tired of the exercise), but that villagers value other non-consumption factors in determining who is poor.

Independent of consumption, poorer households are deemed to:

• Be smaller (reflecting a view that there are household economies of scale)
• Have more children
• Not be elite-connected
• Not be connected to the financial system
• Not have family outside the village (who might be able to send remittances)

the community seems to have a widely shared objective function that the government does not necessarily share, and implementing this objective is a source of widespread satisfaction in the community. Moreover, what makes this objective function different is neither nepotism (elite capture) nor majoritarian prejudices. Rather, these preferences appear to be informed by a better understanding of factors that affect the earning potential or vulnerability of the household, such as the returns to scale within the family, incentives, and insurance, as compared to relying purely on consumption as the government does.

Targeting the Poor: Evidence from a Field Experiment in Indonesia, Vivi Alatas, Abhijit Banerjee, Rema Hanna, Ben Olken, and Julia Tobias. May 2010.

Poverty Professionals

Via Chris Blattman, here is Ravi Kanbur on Poverty Professionals and Poverty

those of us, including me, who analyze poverty and discourse about poverty, seem to do rather well out of it.

Ravi’s concluding proposal is that

each poverty professional should engage in an “exposure” to poverty (also known as “immersions”) every 12 to 18 months.

That sounds a bit weak to me. Especially when he also briefly hits upon what could potentially be a more significant problem.

How many poverty professionals could really and truly get an equally well paying job in the private sector, say, even allowing for the specific human capital they have built up in the organization in which they work? This is an empirical question, of course, but I advance the hypothesis that pay among poverty professionals is better explained by distribution of economic rent than by a market process (or any process) that selects talent for poverty reduction and rewards it by results. There are, of course, individuals who have demonstrated that they could thrive in alternative settings, and have come to the calling of poverty reduction after achievements elsewhere. But as I noted earlier, increasingly, in agencies, in academia, in think tanks, in foundations and in NGOs, poverty professionals are on a cradle to grave career path within an organization

Perhaps reforming the cradle to grave career path would do more good than just assuaging some middle-class guilt?

Why is America so much more religious than Europe?

it is precisely the de-regulation of the religious market and not, as is often assumed, the residue of the “puritan founding” that explains why Americans are so much more religious that Europeans. [Finke and Stark] estimate that rates of religious adherence in the colonies reached their maximum at about 20% and religiosity took off only after previously protected monopolists lost their privileged access to colonial markets (starting in 1776).

From William Roberts Clark in a survey essay on the political economy of religion.

The religious markets approach typically explains variation across time and space in terms of the regulatory environment. In the absence of over-regulation of religious markets, a variety of religious firms hawking variegated religious products can be expected to arise in response to the natural heterogeneity of religious preferences. Consequently, one would expect to find a vibrant religious market where the regulatory environment allows low cost entry of new firms and where state-run monopolies are absent.

The theory also fits with experience in Latin America:

As the Catholic Church lost its ability or willingness to impose monopolies, Latin America countries came under increased pressure from protestant groups who attracted many followers and also spurred Catholics into action

The essay also disputes the phenomena of significant secularisation in Europe:

Stark places one more nail in the secularization hypothesis by arguing that its acceptance has been fueled in part by what he calls the “myth of past piety” in Europe. Current differences in religious behavior between  the U.S. and Europe are  not  the  result  of  secularization  in Europe but  rather  the  fact  that Europe was never as christianized  as  commonly believed.  In 1551 the Bishop of Gloucester  found,  for example,  that more than half of his 311 parish priests could not recite the Ten Commandments

On relative poverty

I learnt yesterday that, at market prices, my income is roughly at the Norwegian poverty level threshold.

Given that my personal subjective valuation probably wouldn’t put my income level beyond any poverty threshold, we can conclude 2 things from this information.

1. Relative poverty in rich nations is a very strange concept.

2. Let’s all move to Norway!

Alex de Waal on Urbanisation

This is not wholly negative. Sudan’s cities, while poorly planned, have better services  than  the rural areas, and are more stable and  less violent. The urban economies are dynamic.

Erm, better services, less violence, dynamic economies, is it just me or does that sound like something slightly better than not wholly negative?

Heinrich Boll Foundation, Sudan: No Easy Ways Ahead

Links

1. New ODI blog on EU development cooperation http://international-development.eu/
2. Africa's journalists are under attack – why the rest of us should help http://tinyurl.com/28q83bm
3. Development policy under the new UK government - some background: http://is.gd/c7lsg
4. Hal Varian (Google's Chief Economist) on the Newspaper business http://tinyurl.com/2fdjaqr
5. Kayak.com Cofounder Paul English Plans to Blanket Africa in Free Wireless Internet http://tinyurl.com/33a4k53
6. All the research, 1/40 the size! | Innovations for Poverty Action http://poverty-action.org/node/2912
7. Technology linked to happiness http://news.bbc.co.uk/2/hi/technology/10108551.stm