Net-migration bubble map

From: Growthology.org

The Guardian to stop printing by 2015?

More on the economics of newspapers:

Peter Kirwan at  wired.co.uk has pieced together some numbers and estimates that the Guardian’s online ad revenues could be enough to entirely funding its reporting and editorial operations by 2015.

[£40m] is the number budgeted for overall digital revenues at GNM [Guardian News & Media] during the year to March 2011.

…

GNM expects to boost its digital revenues by around 30 percent in the space of a year.

…

I’ve used a range of more realistic growth rates to estimate how long it might take GNM’s digital operations to earn the £100m required to keep a decent-sized newsroom operating seven days a week.

At 10 percent annualised growth, the target date is 10 years away, in 2020.

At 15 percent, it’s seven years away, in 2017.

At 20 percent, it’s five years away, in 2015.

I need an iPad now.

The “missing middle”

The failure of microfinance to have a large impact on firm creation and firm growth (Banerjee et al. 2009; Karlan and Zinman 2009; a summary by FT) may be due to its targeting of poor people and small-scale firms. It is medium to large scaled firms that are missing in less developed countries (LDCs) if the firm size distribution is compared to the one from developed countries (Hsieh and Klenow 2009), and that type of firms is probably the driver of economic growth. Governments in LDCs and development assistance agencies, however, have ignored these medium and large scaled firms.

That is Abhijit Banerjee talking at the Annual Bank Conference on Development Economics.

I suppose medium scaled firms just aren’t as sexy as a single female entrepreneur. Perhaps we need a catchy name for support to mid-sized firms. “Middle-finance”? “Medium-finance?” “Meso-finance?” Melody Atil is trying to plug this gap in Southern Sudan by recruiting investors for slightly larger firms.

Then again financing might not even be the main constraint to firm growth…

The Curious Economics of the Newspaper Business

newspapers typically spend about 15 percent of their revenue on what, to the Internet world, are their only valuable assets: the people who report, analyze, and edit the news. Varian cited a study by the industry analyst Harold Vogel showing that the figure might reach 35 percent if you included all administrative, promotional, and other “brand”-related expenses. But most of the money a typical newspaper spends is for the old-tech physical work of hauling paper around. Buying raw newsprint and using it costs more than the typical newspaper’s entire editorial staff.

The Atlantic

Gettin’ by pouring drinks

Meet Dominic Loki.

The business

First, I worked as a Gardener, then a cleaner, before finally becoming a Barman. I only went to school until Senior 4 in Uganda.

The costs

Most hotels provide all the logistics needed for survival – accomodation and food.

Although the costs I encountered in turn on my family are high for me. For my two wives in Torit, I send them 150 pounds [$50] every 2 months. For the one in Juba, I give her 50 pounds per month.

The pay

I earn 25 pounds [$10] in a day … I also make side income from customers who give me tips in appreciation for serving them … My mandate is to save all the salary I make. I usually ask the cashier to pay me at the end of the month.

With [my savings] I have managed to build a small 14 roomed lodge with a bar in Eastern Equatoria. This is another big boost to my income.

Typical day

I am up by 5:30 a.m. each day to count the available drinks and also to clean up bottles and glasses for customers. After a hard working day, I go to bed after serving all my customers. Sometimes at midnight, sometimes at 2 o’clock.

From the South Sudan Business Week, May 31 2010.

Gettin’ by in Bangladesh

Meet Hamid. He is a “reserve driver” for a motorised rickshaw in Dhaka, Bangladesh. This job earns him about $70 per month, with which he supports his wife Khadeja and their son. This works out at about $0.78 per person per day. Yet despite this low income, the family have an impressively wide range of financial activity.

And what about purchasing power parity (because a dollar goes much further in Bangladesh were things are cheap)?  That multiplies family income by 3:

Multiplying the $0.78 per person per day by 2.88, gives a PPP amount of $2.08 per person per day.

All of this is from the freely downloadable first chapter of The Portfolios of the Poor. Yes I’m a bit slow to this, but I live in a country that doesn’t have any book shops yet, so leave me alone.

The AfDB vision for African Infrastructure

From the ONE campaign DATA report

Why do the Lib Dems want to get rid of Child Trust Funds?

I’m surprised that one of my biggest gripes with the Coalition plans (aside from the illiberal immigration nonsense) comes from the Liberal Democrats. Surely a nest-egg for every child is a liberal policy, good for social mobility. It is also pretty cheap, and popular (see below, from the Economist). What is going on?

Brad Delong on the New York Times

I have reached my limit with the New York Times: I think it would be a better world if it shut tomorrow--all of the best and some of the good journalists would go elsewhere and do their work, and a lot of bulls--- would vanish from the public debate.

Shut down the New York Times today

Scott Adams on BP

As I mentioned in an earlier blog, I bought some BP stock recently because I liked the odds that the top engineers and scientists in the solar system, with unlimited funding, presumably somewhat freed from management meddling, could plug a hole. And yes, I averaged down.

I also assumed that the liberal media's coverage of the oil damage would depress the stock more than necessary. It's a catastrophe, no doubt, but even catastrophes have levels. I'm betting the financial damage will be very, very, very bad and not very, very, very, very bad.

This is also a test of my theory that you should buy stocks in the companies that you hate the most. In general, you hate the companies that have the most power. And BP is the frickin' Death Star of companies. They're in the process of destroying an entire region of the world and there's still no talk of cutting their next dividend. I admire them in the same way I admire the work ethic of serial killers. There's an undeniable awesomeness about BP. I hate BP, but I still want to have their baby.

Note: Do not take stock advice from cartoonists who want to have babies with oil companies.

on dilbert.com

Why don’t aid workers pay tax?

If oil and aid were given directly to citizens rather than governments, then governments would presumably need to generate a bit of revenue through their tax systems to deliver some public goods.
Independent of these arguments – a good tax system is inherently a good thing: providing predictable funding for the government and a bit more accountability.
So why doesn’t the international community do more to support these systems directly by putting their (overpaid?) salaries through them? Hey donors – we’re giving aid anyway, does it really matter if some of it goes into developing country government coffers in a good way? Wouldn’t the increased volumes create demand for a better, more efficient tax system? Is it only Southern Sudan where the entire international community is exempt from paying any income tax?

UK coalition government: development policy scorecard

Dirk Villem te Velde of the Overseas Development Institute delivers a scorecard on the new UK coalition government’s development policies. 
His verdicts are:

Aid: very good.
Beyond aid: promoting international finance: unknown.
Beyond aid: promoting Foreign Direct Investment: cautiously positive.
Beyond aid: trade: mixed, because unclear.
Beyond aid: migration: potentially bad.
Beyond aid: climate change: positive

And on new challenges:

the absence of concrete suggestions dealing with the new challenges– all of them critical to the development agenda – is a major concern.

The role of the private sector in development: few new ideas on the private sector and development (PSD)
Dealing with the new international powers: no analysis of the implications for development (and the UK) of the rise of emerging markets.
Reducing vulnerability to shocks: no mention of the need to make the development architecture better able to deal with such shocks as the global financial crisis.

What does all of this tell us? People are stupid. Aid and climate change are easy sells to the public, and therefore that is what the public knows and cares about, and therefore that is all that politicians know and care about. Everything else gets ignored. Even if the "everything else" is actually more important for, you know, development.

Which means we need some leadership from somebody, anybody, to promote this whole development policy agenda thang. Erm ODI…..?….Oxfam?…….

Duncan Green suggests that this new IPPR/World Vision paper might be making waves amongst tory policy wonks. The paper makes for the case for DFID behaving more like "Whitehall warriors", pushing their message across government. Which is fine. But I would guess that they'll be needing a bit of public support for that....

Just Give Money to the Poor

A new book by Hanlon, Barrientos and Hulme from the University of Manchester on social cash transfers finds that:

‘Four conclusions emerge repeatedly: These programs are affordable, recipients use the money well and do not waste it, cash grants are an efficient way to directly reduce current poverty, and they have the potential to prevent future poverty by facilitating economic growth and promoting human development.’

HT: Duncan Green

WB Chief Economist for Africa supports cash transfers…

… for oil revenues. In a paper co-authored with World Bank Senior Economists Tuan Minh Le and Gaël Raballand, Shanta says

accountability,  and  hence  public-expenditure  efficiency,  can  be  increased  by transferring oil revenues  to citizens and  then  taxing  them  to  finance public spending ... We  conclude  that, while  it may be difficult  to  implement  such  a proposal in existing oil producers, there is scope for introducing it in some of Africa’s new oil producers.

[For more papers from the 2010 Oxford Economic Development in Africa conference, go here.]

Nancy Birdsall and Arvind Subramanian of the Center for Global Development raised this proposal in 2004 for Iraq, so it isn’t exactly brand new, but good to see the Bank looking at it.

Now, how long before the World Bank make the logical leap from decisions they have very little influence over (how developing country governments choose to use their own revenues) to decisions which they do (how rich countries choose to spend their aid in poor countries).

Oil and aid are both money into the government coffers (directly, or indirectly, via fungability), removing the need for government to bother tax people and face any accountability for its actions. In places where there is low accountability and low efficiency of government spending, why not strengthen the hand of citizens rather than the state, and give our aid money directly to the poor.

Cut out the middle-man.