Friday, January 02, 2009
A narrow vision of development economics
A survey by the Economist of the “international bright young things” of economics, based on canvassing leading authorities in the field, shows how narrow the study of development has become. It seems that the leading young thinkers are focusing on relatively narrow micro questions rather than the big picture:
“Esther Duflo of the Massachusetts Institute of Technology (MIT) received more recommendations than any other economist. Some who didn’t nominate her thought she was too established to count as “new”.
“With her colleague, Abhijit Banerjee, Ms Duflo and Mr Kremer have remade development economics, nudging it away from its concern with policies, towards a preoccupation with projects. They study economic development as seen from the field, clinic or school, rather than the finance ministry. They might be called the “peace corps” of economists, bringing the blessing of their investigative technique to the neglected villages of India or the denuded farms of western Kenya.
“Ms Duflo has made her name carrying out randomised trials of development projects, such as fertiliser subsidies and school recruitment. In these trials, people are randomly assigned to a “treatment” group, which benefits from the project, and a “control” group, which does not. By comparing the average outcome of each group, she can establish whether the project worked and precisely how well.
“In one study, Ms Duflo and her colleagues showed that mothers in the Indian state of Rajasthan are three times as likely to have their children vaccinated if they are rewarded with a kilogram of daal (lentils) at the immunisation camp. The result is useful to aid workers, but puzzling to economists: why should such a modest incentive (worth less than 50 cents) make such a big difference? Immunisation can save a child’s life; a bag of lentils should not sway the mother’s decision either way.”
Academic economics is evidently narrow and technocratic rather than asking the big political questions about inequality and slow development.
“Esther Duflo of the Massachusetts Institute of Technology (MIT) received more recommendations than any other economist. Some who didn’t nominate her thought she was too established to count as “new”.
“With her colleague, Abhijit Banerjee, Ms Duflo and Mr Kremer have remade development economics, nudging it away from its concern with policies, towards a preoccupation with projects. They study economic development as seen from the field, clinic or school, rather than the finance ministry. They might be called the “peace corps” of economists, bringing the blessing of their investigative technique to the neglected villages of India or the denuded farms of western Kenya.
“Ms Duflo has made her name carrying out randomised trials of development projects, such as fertiliser subsidies and school recruitment. In these trials, people are randomly assigned to a “treatment” group, which benefits from the project, and a “control” group, which does not. By comparing the average outcome of each group, she can establish whether the project worked and precisely how well.
“In one study, Ms Duflo and her colleagues showed that mothers in the Indian state of Rajasthan are three times as likely to have their children vaccinated if they are rewarded with a kilogram of daal (lentils) at the immunisation camp. The result is useful to aid workers, but puzzling to economists: why should such a modest incentive (worth less than 50 cents) make such a big difference? Immunisation can save a child’s life; a bag of lentils should not sway the mother’s decision either way.”
Academic economics is evidently narrow and technocratic rather than asking the big political questions about inequality and slow development.
Labels: development, economics
Tuesday, December 30, 2008
Guides to China 2008
The China Digital Times, an excellent portal source for information on contemporary Chinese society, has produced a useful series of guides to China in 2008. Topics include China and the developing world, the environmental crisis, the global financial crisis and China’s domestic market. Links to each review are provided in the latest topic guide: on the contentious subject of food and product safety.
Labels: china, development, economics, environment, food
Monday, December 22, 2008
Uplifting mortality statistics
Indur Goklany has written a cheery article for the Cato Institute on death from extreme weather events in America. Despite the grim nature of the subject the ultimate conclusion is uplifting:
* Extreme cold is responsible for about half the deaths from weather-related events - about twice as many as extreme heat.
* Extreme weather accounts for a tiny proportion of the annual American death toll.
* The trend over time is for extreme weather to be responsible for an ever smaller proportion of deaths. That is despite any tendency towards global warming.
The more humanity advances economically the less vulnerable it becomes to extreme weather.
* Extreme cold is responsible for about half the deaths from weather-related events - about twice as many as extreme heat.
* Extreme weather accounts for a tiny proportion of the annual American death toll.
* The trend over time is for extreme weather to be responsible for an ever smaller proportion of deaths. That is despite any tendency towards global warming.
The more humanity advances economically the less vulnerable it becomes to extreme weather.
Labels: climate, development, progress, technology
Thursday, December 18, 2008
Economic history with sceptical tinge
Monthly Review, an American left wing publication, has an article by Immanuel Wallerstein, a senior research scholar at Yale, on “The Human Costs of Economic Growth” in its December issue. The title is misleading as the article is a review of Amiya Kumar Bagchi’s Perilous Passage: Mankind and the Global Ascendancy of Capital (Rowman & Littlefield, 2005). The most explicit reference to the headline states that Bagchi:
“wishes to center his attention on the degree to which economic growth under capitalism is very poorly correlated with human development, even in the West. His book is an attempt to analyze in detail the human suffering that has been at the basis of ‘the advantages reaped by the European ruling classes’”.
Most of the review focuses on different explanations for the relatively rapid economic growth of the world over the past two centuries. However, from Wallerstein’s account the book sounds highly sceptical of the benefits of economic growth:
“Bagchi analyzes this capitalist world not in terms of how much growth it made possible but how much human development it made possible, and in this regard he finds it very wanting. One of his principal services to readers is his pulling together of the demographic literature on life expectancy, the public health literature on disease prevention and cure, data on nutrition, income levels, and the various forms of labor coercion to give us a nuanced picture of human development over time and throughout the world, one that is differentiated by geography, age cohorts, and gender.”
“wishes to center his attention on the degree to which economic growth under capitalism is very poorly correlated with human development, even in the West. His book is an attempt to analyze in detail the human suffering that has been at the basis of ‘the advantages reaped by the European ruling classes’”.
Most of the review focuses on different explanations for the relatively rapid economic growth of the world over the past two centuries. However, from Wallerstein’s account the book sounds highly sceptical of the benefits of economic growth:
“Bagchi analyzes this capitalist world not in terms of how much growth it made possible but how much human development it made possible, and in this regard he finds it very wanting. One of his principal services to readers is his pulling together of the demographic literature on life expectancy, the public health literature on disease prevention and cure, data on nutrition, income levels, and the various forms of labor coercion to give us a nuanced picture of human development over time and throughout the world, one that is differentiated by geography, age cohorts, and gender.”
Labels: book, development, economics, growth
Saturday, December 13, 2008
Video of my session at Battle of Ideas
Highlights of my appearance at the Battle of Ideas 2008 can now be viewed on the latest Worldbytes programme (see 30 October 2008 post). I appeared on a panel on “Growing pains: the pros and cons of economic dynamism” alongside, among others, Martin Wolf of the Financial Times and Ha-Joon Chang of Cambridge University.
Labels: development, economics, growth, media appearances, speeches, Worldwrite
Thursday, December 11, 2008
A growth sceptic classic
Yesterday I went to the launch of the International Growth Centre at the London School of Economics (LSE). The international network of scholars is a joint venture between LSE and Oxford University with funding of £42m from Britain’s Department for International Development (DFID).
Superficially the tone was incredibly pro-growth. This was reflected in a DFID booklet (PDF) handed out at the event called Growth: Building Jobs and Prosperity in Developing Countries. It opens with the sentence: “Economic growth is the most powerful instrument for reducing poverty and improving the quality of life in developing countries”. Much of the rest of the text is in a similar vein.
However, numerous caveats to the initially upbeat assessment of growth are subtly introduced including:
* An emphasis on “poverty reduction” rather than all-rounded development.
* An emphasis on the importance of climate change.
* References to “environmental sustainability” and “low carbon” growth.
The whole approach is also technocratic. It emphasises “growth diagnostics” - experts identifying the barriers to growth - rather than mass participation in development. Although it discusses “ownership” of projects by third world nations this conception only seems to take in a narrow elite of government officials, business leaders and non-governmental organisations (“civil society”).
I also notice that Paul Collier, one of the directors of the centre and a speaker at yesterday’s event, has a forthcoming book, Wars, Guns and Votes (Bodley Head), out on development. It evidently extends his call for United Nations intervention in troubled areas (see 14 May 2007 post) - an initiative that can only make matters worse for the world’s poorest countries.
Superficially the tone was incredibly pro-growth. This was reflected in a DFID booklet (PDF) handed out at the event called Growth: Building Jobs and Prosperity in Developing Countries. It opens with the sentence: “Economic growth is the most powerful instrument for reducing poverty and improving the quality of life in developing countries”. Much of the rest of the text is in a similar vein.
However, numerous caveats to the initially upbeat assessment of growth are subtly introduced including:
* An emphasis on “poverty reduction” rather than all-rounded development.
* An emphasis on the importance of climate change.
* References to “environmental sustainability” and “low carbon” growth.
The whole approach is also technocratic. It emphasises “growth diagnostics” - experts identifying the barriers to growth - rather than mass participation in development. Although it discusses “ownership” of projects by third world nations this conception only seems to take in a narrow elite of government officials, business leaders and non-governmental organisations (“civil society”).
I also notice that Paul Collier, one of the directors of the centre and a speaker at yesterday’s event, has a forthcoming book, Wars, Guns and Votes (Bodley Head), out on development. It evidently extends his call for United Nations intervention in troubled areas (see 14 May 2007 post) - an initiative that can only make matters worse for the world’s poorest countries.
Labels: Africa, book, climate, development, economics, environment, growth
Tuesday, December 09, 2008
Microfinance loan sharks
Saturday’s FT Weekend magazine had an article by Tim Harford, a senior columnist at the Financial Times, on microfinance. The most interesting point in made was on the split in the ranks of those providing microfinance:
“The commercialisation of microfinance has sparked a fierce debate between profit advocates such as Carlos Danel and Carlos Labarthe, the founders of Compartamos, and traditionalists such as Muhammad Yunus, who see microfinance lenders such as Compartamos as indistinguishable from the moneylenders he set out to replace in 1976. Between these two poles lie the majority of microfinance practitioners, eager to gain access to capital and commercial expertise, but concerned that competitive market forces may not help the poorest.”
It also pointed out that microfinance arguments can charge interest rates with an annual percentage rate of over 100%. Harford argues that this “is not as usurious as it might seem” as the overheads are so high. Sounds more like glorified loan sharks to me!
“The commercialisation of microfinance has sparked a fierce debate between profit advocates such as Carlos Danel and Carlos Labarthe, the founders of Compartamos, and traditionalists such as Muhammad Yunus, who see microfinance lenders such as Compartamos as indistinguishable from the moneylenders he set out to replace in 1976. Between these two poles lie the majority of microfinance practitioners, eager to gain access to capital and commercial expertise, but concerned that competitive market forces may not help the poorest.”
It also pointed out that microfinance arguments can charge interest rates with an annual percentage rate of over 100%. Harford argues that this “is not as usurious as it might seem” as the overheads are so high. Sounds more like glorified loan sharks to me!
Labels: development, economics, finance
Sunday, November 23, 2008
Insights from the Economist
A couple of particularly interesting pieces in this week’s Economist (22 November):
* An article on the creation of a Committee on Climate Change, chaired by the ubiquitous Adair Turner, modelled on the Bank of England’s Monetary Policy Committee. In other words it will give Britain’s green pledges the force of law. They will be enforced by an unelected committee with no popular accountability.
* An economic focus on the relationship between economic growth and health. The piece looks at whether healthier populations lead to more economic growth rather than the other way round. Daron Acemoglu and Simon Johnson of the Massachusetts Institute of Technology. After a review of the discussion the Economist does not reach a definite conclusion but one passage is worth quoting:
“Beginning in the 1940s, several medical innovations involving penicillin, streptomycin and DDT made it easier to treat diseases—such as tuberculosis, malaria and yellow fever—that disproportionately affected people in developing countries. Because these ideas originated in the rich world and were spread by organisations such as the WHO, any improvements in health they led to would have been unconnected with prior improvements in the economic circumstances of poor countries.
“This international revolution in public health did lead to substantial increases in life expectancy in poor countries by the 1950s.”
To me this shows that economic growth, along with the associated development of technology, helps the poorer countries. This can happen even when the poorer countries do not become richer themselves – although of course it is better if they do.
* An article on the creation of a Committee on Climate Change, chaired by the ubiquitous Adair Turner, modelled on the Bank of England’s Monetary Policy Committee. In other words it will give Britain’s green pledges the force of law. They will be enforced by an unelected committee with no popular accountability.
* An economic focus on the relationship between economic growth and health. The piece looks at whether healthier populations lead to more economic growth rather than the other way round. Daron Acemoglu and Simon Johnson of the Massachusetts Institute of Technology. After a review of the discussion the Economist does not reach a definite conclusion but one passage is worth quoting:
“Beginning in the 1940s, several medical innovations involving penicillin, streptomycin and DDT made it easier to treat diseases—such as tuberculosis, malaria and yellow fever—that disproportionately affected people in developing countries. Because these ideas originated in the rich world and were spread by organisations such as the WHO, any improvements in health they led to would have been unconnected with prior improvements in the economic circumstances of poor countries.
“This international revolution in public health did lead to substantial increases in life expectancy in poor countries by the 1950s.”
To me this shows that economic growth, along with the associated development of technology, helps the poorer countries. This can happen even when the poorer countries do not become richer themselves – although of course it is better if they do.
Labels: climate, development, economics, health
Monday, November 17, 2008
Linking aid to military intervention
William Easterly, a professor at New York University and one of the world’s leading conservative development economists, has done a belated review (PDF) of Paul Collier’s The Bottom Billion ( “Foreign aid goes military”, New York Review of Books 55(19), 4 December 2008). Easterly looks at the increasing trend to link development to calls for Western military intervention. He also argues Collier is guilty of statistical fallacies such as confusing correlation with causation.
Labels: aid, book, development, economics, inequality
Sunday, November 16, 2008
Debating sweatshops
The last programme in the series of the BBC Radio 4 Iconoclasts programme looked at the debate around third world sweatshops. Jagdish Bhagwati, a professor of economics at Columbia University, argued that sweatshops should not be criticised for paying poor wages although he conceded it was wrong to have poor working conditions. He emphasised that industrial exports could lead to growth which could in turn life countries out of poverty.
After an initial introduction by Bhagwati there was a debate involving Ceri Dingle of Worldwrite a campaigner from War on Want and the owner of a fair trade fashion label. The advocates of ethical consumption came out with the usual clichés: complaining about free market economics and trickle down theory (even though neither had been mentioned by Bhagwati or Dingle). They also focused on sweatshops in the poorer countries without understanding that the plight of those working on the land is generally worse. There were also complaints about inequality (but not arguing for more growth) and an implicit assumption that the British government could somehow help trade unions organising in poorer countries. Dingle ably put the case for more growth, greater industrialisation and higher expectations.
After an initial introduction by Bhagwati there was a debate involving Ceri Dingle of Worldwrite a campaigner from War on Want and the owner of a fair trade fashion label. The advocates of ethical consumption came out with the usual clichés: complaining about free market economics and trickle down theory (even though neither had been mentioned by Bhagwati or Dingle). They also focused on sweatshops in the poorer countries without understanding that the plight of those working on the land is generally worse. There were also complaints about inequality (but not arguing for more growth) and an implicit assumption that the British government could somehow help trade unions organising in poorer countries. Dingle ably put the case for more growth, greater industrialisation and higher expectations.
Labels: consumption, development, ethics, radio, trade, work, Worldwrite
Friday, November 07, 2008
Key report on cities
The latest annual World Development Report from the World Bank is about “reshaping economic geography” and specifically the role of cities (see 30 December 2007 post).
Labels: cities, development, economics
Tuesday, November 04, 2008
When “broadening” is a step back
Some useful references on Duncan Green’s blog for Oxfam. He point to what looks likely to be a key paper by Paul Shaffer of the University of Toronto on the “broadening” of the definition of poverty from the Real-World Economics Review (formerly the Post Autistic Economics Review). As I have alluded to in the past (see 27 September 2008 post), and I will expand on in the future, this represents a retrograde step. Green also points to another paper on the increasingly influential “growth diagnostics” approach to development favoured by Dani Rodrik of Harvard and others.
Labels: development, economics, inequality
Thursday, October 30, 2008
Be careful what you wish for
“Be careful what you wish for” is going to be the theme of my introduction to the session on “growing pains” at this coming weekend’s Battle of Ideas.
For a long time growth sceptics have expressed concern about the rising affluence of places such as China and India. They have argued, at least implicitly, for a cut in their economic growth. Now, with the global financial crisis, they could get what they wish for. If they do it will be a tragedy as billions of people will not be in a position to benefit from rising prosperity.
There are already signs that instability is spreading to developing economies. This was discussed in last week’s Economist (25 October) as well as by such luminaries as Paul Krugman of Princeton and Dani Rodrik of Harvard.
Over the past couple of days the authorities (the International Monetary Fund, America’s Federal Reserve and the European Union) have offered financial help to emerging economies in a bid to stabilise them. The catch is, according to a report by Capital Economics, that they are offering help to those countries that need it least. Those which most need help are unlikely to qualify.
For a long time growth sceptics have expressed concern about the rising affluence of places such as China and India. They have argued, at least implicitly, for a cut in their economic growth. Now, with the global financial crisis, they could get what they wish for. If they do it will be a tragedy as billions of people will not be in a position to benefit from rising prosperity.
There are already signs that instability is spreading to developing economies. This was discussed in last week’s Economist (25 October) as well as by such luminaries as Paul Krugman of Princeton and Dani Rodrik of Harvard.
Over the past couple of days the authorities (the International Monetary Fund, America’s Federal Reserve and the European Union) have offered financial help to emerging economies in a bid to stabilise them. The catch is, according to a report by Capital Economics, that they are offering help to those countries that need it least. Those which most need help are unlikely to qualify.
Labels: development, economics, finance, speeches
Sunday, October 26, 2008
Collier for agricultural development
Paul Collier¸ professor of economics and director of the Centre for the Study of African Economies at Oxford University, has expanded on his arguments on the need to develop agriculture (see posts of 15 April 2008 and 22 August 2008) in an article in the latest issue of Foreign Affairs (November / December). I have previously criticised Collier in my review of his book, The Bottom Billion (see link on the left hand side of the homepage), but on this topic he talks much sense. His latest arguments summarises his argument as follows:
“The real challenge is not the technical difficulty of returning the world to cheap food but the political difficulty of confronting the lobbying interests and illusions on which current policies rest. Feeding the world will involve three politically challenging steps. First, contrary to the romantics, the world needs more commercial agriculture, not less. The Brazilian model of high-productivity large farms could readily be extended to areas where land is underused. Second, and again contrary to the romantics, the world needs more science: the European ban and the consequential African ban on genetically modified (GM) crops are slowing the pace of agricultural productivity growth in the face of accelerating growth in demand. Ending such restrictions could be part of a deal, a mutual de-escalation of folly, that would achieve the third step: in return for Europe's lifting its self-damaging ban on GM products, the United States should lift its self-damaging subsidies supporting domestic biofuel.”
“The real challenge is not the technical difficulty of returning the world to cheap food but the political difficulty of confronting the lobbying interests and illusions on which current policies rest. Feeding the world will involve three politically challenging steps. First, contrary to the romantics, the world needs more commercial agriculture, not less. The Brazilian model of high-productivity large farms could readily be extended to areas where land is underused. Second, and again contrary to the romantics, the world needs more science: the European ban and the consequential African ban on genetically modified (GM) crops are slowing the pace of agricultural productivity growth in the face of accelerating growth in demand. Ending such restrictions could be part of a deal, a mutual de-escalation of folly, that would achieve the third step: in return for Europe's lifting its self-damaging ban on GM products, the United States should lift its self-damaging subsidies supporting domestic biofuel.”
Labels: development, economics, food
Wednesday, October 22, 2008
Bush shares water bed with NGOs
A striking feature of yesterday’s speech by George Bush at the White House Summit for International Development was how much he agrees with NGOs such as Actionaid or Oxfam. The supposed conservative demagogue and the supposed radical activists are sleeping in the same bed. The following passage on water provision clearly illusrates this shared approach. None of them are campaigning for modern water utilities for the world’s poorer countries. Note the cute PlayPumps suggestion - children working treadle pumps:
“The United States works with partner nations to deal with the lack of clean water. Last year we dedicated nearly a billion dollars to improve sanitation and water supplies in developing nations. We're also wise enough to enlist the private sector to help, as well.
“I want to share with you an interesting program -- for two reasons, one, it's interesting, and two, my wife thought of it -- (laughter) -- or has actually been involved with it; she didn't think of it. But she thought of it for this speech. She has been involved with a public-private partnership called the PlayPumps Alliance. It brings together international foundations and corporations and the U.S. government. Now, catch this: PlayPumps are children's merry-go-rounds attached to a water pump and a storage tank. When the wheel turns, clean drinking water is produced. And as my good wife says, PlayPumps are fueled by a limitless energy source -- (laughter) -- children at play.
“The United States is working with our partners to install 4,000 pumps in schools and communities across sub-Sahara Africa, which will provide clean drinking water to as many as 10 million people. It's not that hard to help people get clean drinking water. It takes focus, imagination, and effort. And I call upon all nations around the world to join us. (Applause.)”
It is also worth noting that Bob Geldof was another speaker at the event.
“The United States works with partner nations to deal with the lack of clean water. Last year we dedicated nearly a billion dollars to improve sanitation and water supplies in developing nations. We're also wise enough to enlist the private sector to help, as well.
“I want to share with you an interesting program -- for two reasons, one, it's interesting, and two, my wife thought of it -- (laughter) -- or has actually been involved with it; she didn't think of it. But she thought of it for this speech. She has been involved with a public-private partnership called the PlayPumps Alliance. It brings together international foundations and corporations and the U.S. government. Now, catch this: PlayPumps are children's merry-go-rounds attached to a water pump and a storage tank. When the wheel turns, clean drinking water is produced. And as my good wife says, PlayPumps are fueled by a limitless energy source -- (laughter) -- children at play.
“The United States is working with our partners to install 4,000 pumps in schools and communities across sub-Sahara Africa, which will provide clean drinking water to as many as 10 million people. It's not that hard to help people get clean drinking water. It takes focus, imagination, and effort. And I call upon all nations around the world to join us. (Applause.)”
It is also worth noting that Bob Geldof was another speaker at the event.
Labels: America, celebrities, development, water
Tuesday, October 21, 2008
Mobile phones raise productivity
The introduction to the following story shows how mobile phones can be used to raise productivity in poorer countries. I should emphasise I have no personal interest in Thomson Reuters!
“CHANDIGARH, India, Oct. 21 /PRNewswire/ -- Thomson Reuters today announced that it has expanded its ground-breaking mobile information service for India's agricultural community to Punjab. Reuters Market Light, which brings commodity prices, crop and weather data to Indian farmers via mobile phone, launched today with over 3,000 subscribers signed up in Punjab, the birthplace of Green Revolution in India.”
“CHANDIGARH, India, Oct. 21 /PRNewswire/ -- Thomson Reuters today announced that it has expanded its ground-breaking mobile information service for India's agricultural community to Punjab. Reuters Market Light, which brings commodity prices, crop and weather data to Indian farmers via mobile phone, launched today with over 3,000 subscribers signed up in Punjab, the birthplace of Green Revolution in India.”
Labels: development, food, technology
Sunday, October 12, 2008
My session at the Battle of Ideas
Just a reminder I will be speaking in the session growing pains: the pros and cons of economic dynamism at the Battle of Ideas festival at the Royal College of Art, London on 1-2 November. Other speakers in that session include Martin Wolf of the Financial Times, Paul Mason of BBC Newsnight and Ha-Joon Chang of Cambridge University.
Labels: development, economics, growth, speeches
Saturday, October 11, 2008
Back from Dubai
I have not posted for a few days because I’ve been at a conference in Dubai and have also had to follow the market mayhem. I hope to write a piece about recent market developments over the weekend – arguing that share price movements are a poor indicator of economic health – but in the meantime a quick thought on Dubai.
Before visiting the emirate I was struck by how many people – most of whom have never been there – told me it was awful. No doubt there are genuine grounds for criticism. For example, its lack of democracy and its unequal treatment of migrant workers. But what most people seem to dislike is precisely what is good about it: its modernity. The critics seem to hate the fact that it has created gleaming, modern buildings out of what was until recently desert. In other words they are criticising precisely what is the best thing about Dubai. It is akin to an aristocrat, who perhaps is not as affluent as he once was, sneering at what they regard as the vulgarity of the new rich.
Before visiting the emirate I was struck by how many people – most of whom have never been there – told me it was awful. No doubt there are genuine grounds for criticism. For example, its lack of democracy and its unequal treatment of migrant workers. But what most people seem to dislike is precisely what is good about it: its modernity. The critics seem to hate the fact that it has created gleaming, modern buildings out of what was until recently desert. In other words they are criticising precisely what is the best thing about Dubai. It is akin to an aristocrat, who perhaps is not as affluent as he once was, sneering at what they regard as the vulgarity of the new rich.
Labels: development, economics, modernity, technology
Friday, October 03, 2008
Me on global equality on Worldbyes
Worldwrite’s latest Worldbytes television programme includes an item with me talking about global inequality. Other stories include challenging China bashing, a scientist talks about waste and an alien’s take on carbon footprints.
Labels: china, development, environment, footprint, inequality, media appearances, Worldwrite
Free market take on development economics
William Easterly, probably the world’s best-known free market inclined development economist, gives his view of the emergence of development economics in an article in the Wall Street Journal:
“Development economics -- the study of how poor countries can become rich -- was forever cursed by the timing of its birth after the Great Depression. That gave development economics a bias toward relying on governments, rather than markets, to create growth. The early development economists ignored a century and a half of European and North American development through individual enterprise, remembering only that their governments forcefully intervened to stimulate output during the 1930s.
“What is widely agreed to be the seminal article in development economics appeared in 1943, calling poor countries "depressed areas." The Economic Journal article by Paul Rosenstein-Rodan, "Problems of Industrialization of Eastern and South-Eastern Europe," concluded that a fourth of the population of these countries was unemployed, and the solution rested in ceding development to the state. Development comes from state-planned investment in all sectors at once, the "Big Push," not reliance on private investors: "An individual entrepreneur's knowledge of the market is . . . insufficient," because he cannot have all the data "available to the planning board."
“Similarly, the U.N.'s Depression mindset prompted them to ask an expert commission led by Sir Arthur Lewis in 1950 to prepare a report on unemployment in underdeveloped countries. Its report concluded that "economic progress depends to a large extent upon the adoption by governments of appropriate . . . action," and that political leaders must have a strategy for such growth, reflecting "the facts of each particular case."
No doubt Easterly is right to argue that when development economics emerged it was a product of its time. At that point state intervention was widely popular. However, he is wrong to argue that America and Western Europe emerged as a result of individual enterprise - the state played a substantial role.
More importantly it is no sadly no longer true to define economics as “the study of how poor countries can become rich”. At best the current perspective can be defined as “the study of how poor countries can become just slightly less poor”.
“Development economics -- the study of how poor countries can become rich -- was forever cursed by the timing of its birth after the Great Depression. That gave development economics a bias toward relying on governments, rather than markets, to create growth. The early development economists ignored a century and a half of European and North American development through individual enterprise, remembering only that their governments forcefully intervened to stimulate output during the 1930s.
“What is widely agreed to be the seminal article in development economics appeared in 1943, calling poor countries "depressed areas." The Economic Journal article by Paul Rosenstein-Rodan, "Problems of Industrialization of Eastern and South-Eastern Europe," concluded that a fourth of the population of these countries was unemployed, and the solution rested in ceding development to the state. Development comes from state-planned investment in all sectors at once, the "Big Push," not reliance on private investors: "An individual entrepreneur's knowledge of the market is . . . insufficient," because he cannot have all the data "available to the planning board."
“Similarly, the U.N.'s Depression mindset prompted them to ask an expert commission led by Sir Arthur Lewis in 1950 to prepare a report on unemployment in underdeveloped countries. Its report concluded that "economic progress depends to a large extent upon the adoption by governments of appropriate . . . action," and that political leaders must have a strategy for such growth, reflecting "the facts of each particular case."
No doubt Easterly is right to argue that when development economics emerged it was a product of its time. At that point state intervention was widely popular. However, he is wrong to argue that America and Western Europe emerged as a result of individual enterprise - the state played a substantial role.
More importantly it is no sadly no longer true to define economics as “the study of how poor countries can become rich”. At best the current perspective can be defined as “the study of how poor countries can become just slightly less poor”.
Labels: development, economics
Tuesday, September 30, 2008
Growth Commission blog
Saturday, September 27, 2008
Dumbing down development
The recent Oxfam International paper on Climate Wrongs and Human Rights is a classic example of how an apparently ambitious approach to development has curtailed ambitions. It looks at climate change as violating basic human rights such as the right to life and security, the right to food, the right to subsistence and the right to health. In effect what it is doing is redefining development as survival. It uses the term “rights” in a promiscuous way to mean basic needs. I suspect that also, by introducing the threat of litigation in relation to climate change, it will increase anxiety about pursuing economic growth.
Labels: climate, development
Great news on development
According to the International Communications Union the number of mobile phone users worldwide should reach about four billion by the end of 2008. That is 61% of the world’s population against only 12% in 2000.
That is a fantastic achievement for global development. The quicker it reaches 100% the better. As I have consistently argued it is vital to have a balanced view on progress towards development. There is a huge amount still to do but we should also recognise what we have already achieved.
That is a fantastic achievement for global development. The quicker it reaches 100% the better. As I have consistently argued it is vital to have a balanced view on progress towards development. There is a huge amount still to do but we should also recognise what we have already achieved.
Labels: development, technology
Monday, September 22, 2008
Millennium conference in NY
Who has the Financial Times got blogging on this week’s Millennium Development Goals conference at the United Nations in New York? None other than Bono and his sidekick, Professor Jeffrey Sachs.
Bono describes his week ahead as follows: “A sleepless cocktail of rabble-rousing, meetings with politicians, chief executives, faith leaders and NGOs. People such as Nicolas Sarkozy, President Jakaya Kikwete of Tanzania and Gordon Brown.” It seems that not only does he regard himself as extremely important but senior politicians, businesspeople and religious leaders do too.
A few things to note about this week in relation to the conference:
* The Clinton Global Initiative looks like it will play a prominent role. Clinton - Bill rather than Hillary - will be appearing on the Daily Show on Tuesday to promote the campaign. It is billed as: “the almost first husband talks about the Clinton Global Initiative”.
* According to Bono there will be a “historic and innovative announcement on malaria on Thursday”. I would guess it probably has something to do with anti-malarial bednets.
Bono describes his week ahead as follows: “A sleepless cocktail of rabble-rousing, meetings with politicians, chief executives, faith leaders and NGOs. People such as Nicolas Sarkozy, President Jakaya Kikwete of Tanzania and Gordon Brown.” It seems that not only does he regard himself as extremely important but senior politicians, businesspeople and religious leaders do too.
A few things to note about this week in relation to the conference:
* The Clinton Global Initiative looks like it will play a prominent role. Clinton - Bill rather than Hillary - will be appearing on the Daily Show on Tuesday to promote the campaign. It is billed as: “the almost first husband talks about the Clinton Global Initiative”.
* According to Bono there will be a “historic and innovative announcement on malaria on Thursday”. I would guess it probably has something to do with anti-malarial bednets.
Labels: America, celebrities, development, economics, health
Sunday, September 21, 2008
Economist on globalisation
This week’s Economist (20 September) includes a survey on globalisation. Its focus is the growing importance of multinational companies from emerging economy countries.
Labels: development, economics, globalisation
Saturday, September 20, 2008
Development Redefined
Development Redefined, a new book by Robin Broad and John Cavanagh, promises to provide a critique of the Washington Consensus or “market fundamentalism”. Unfortunately, judging by its endorsements – including Walden Bello, Naomi Klein and Vandana Shiva – it is likely to prove even more conservative than the ideas it criticises.
Labels: book, development, economics
Oxfam development blog
Duncan Green of Oxfam GB has started a blog on development issues. Given the substantial (and often pernicious) influence of non-governmental organisations (NGOs) in development it will probably prove worth monitoring. Oxfam is one of the most influential of such organisations.
On Green’s recent book on development see my 22 June 2008 post.
On Green’s recent book on development see my 22 June 2008 post.
Labels: book, development, economics
Monday, September 08, 2008
Fossil fuels vital to future development
The following comment by me appeared in this week’s Fund Strategy.
It seems virtually all politicians want to present themselves as enemies of "big oil". It is a pity they have forgotten the huge benefits of fossil fuels.
One of the less noticed passages of Gordon Brown's speech to the Confederation of British Industry in Scotland last week was his desire to "set a new ambition to free Britain from the dictatorship of oil".
Exactly how a physical substance can impose a dictatorship over people he did not explain. Rights are normally curtailed by governments, such as his own, rather than by chemicals. But he is far from alone in his hostility to oil.
Al Gore, the former American vice-president turned environmental campaigner, told the Democratic National Convention in Denver on August 28 that America needed presidential leadership to solve the climate crisis. He is also supporting a campaign demanding "electricity 100% clean within 10 years" (www.wecansolveit.org). Obviously, the term "clean" is open to interpretation but Gore made no secret of his distaste for "big oil and coal" in his speech.
Nor is criticism of oil interests restricted to those who might vaguely be defined as on the left. On the Republican side the new vice-presidential candidate, Sarah Palin, is portrayed by her opponents as a supporter of big oil. But she presents herself as a populist critic of corporate interests.
Few seem willing to put the case that fossil fuel has brought enormous benefits to humanity and, if allowed, is likely to continue to do so. It is a relatively cheap and highly flexible form of energy. That is why the International Energy Agency estimates it is likely to account for 84% of the overall increase in energy demand from 2005-2030. Without oil the world economy would not have grown nearly as fast over the past century.
Although Brown and others offer alternatives, their claims to be able to replace fossil fuel bear little relationship to reality. Brown supports more investment in renewables and atomic power - which is fine in principle - but on nowhere near the scale needed to meet future energy needs. And, contrary to the common misconception, greater energy efficiency is likely to lead to more energy consumption rather than less.
One-sided attacks on oil do not help promote a considered debate on the future of energy.
It seems virtually all politicians want to present themselves as enemies of "big oil". It is a pity they have forgotten the huge benefits of fossil fuels.
One of the less noticed passages of Gordon Brown's speech to the Confederation of British Industry in Scotland last week was his desire to "set a new ambition to free Britain from the dictatorship of oil".
Exactly how a physical substance can impose a dictatorship over people he did not explain. Rights are normally curtailed by governments, such as his own, rather than by chemicals. But he is far from alone in his hostility to oil.
Al Gore, the former American vice-president turned environmental campaigner, told the Democratic National Convention in Denver on August 28 that America needed presidential leadership to solve the climate crisis. He is also supporting a campaign demanding "electricity 100% clean within 10 years" (www.wecansolveit.org). Obviously, the term "clean" is open to interpretation but Gore made no secret of his distaste for "big oil and coal" in his speech.
Nor is criticism of oil interests restricted to those who might vaguely be defined as on the left. On the Republican side the new vice-presidential candidate, Sarah Palin, is portrayed by her opponents as a supporter of big oil. But she presents herself as a populist critic of corporate interests.
Few seem willing to put the case that fossil fuel has brought enormous benefits to humanity and, if allowed, is likely to continue to do so. It is a relatively cheap and highly flexible form of energy. That is why the International Energy Agency estimates it is likely to account for 84% of the overall increase in energy demand from 2005-2030. Without oil the world economy would not have grown nearly as fast over the past century.
Although Brown and others offer alternatives, their claims to be able to replace fossil fuel bear little relationship to reality. Brown supports more investment in renewables and atomic power - which is fine in principle - but on nowhere near the scale needed to meet future energy needs. And, contrary to the common misconception, greater energy efficiency is likely to lead to more energy consumption rather than less.
One-sided attacks on oil do not help promote a considered debate on the future of energy.
Labels: America, climate, development, economics, energy, Fund Strategy
Sunday, September 07, 2008
Brookings initiative on development
The Brookings Institution, a think tank based in Washington DC, is organising interesting-sounding events and publications on development. These include an event on how the world’s poor can deal with climate change and a book on Global Development 2.0 including a look at the new philanthropists. The latter looks at how: “The fight against global poverty has quickly become one of the hottest tickets on the global agenda—with rock stars, world leaders, and multibillionaires calling attention to the plight of the poor at international confabs such as the World Economic Forum and the Clinton Global Initiative.”
Labels: celebrities, climate, development
Friday, September 05, 2008
Quick catch-up
There have been several interesting articles and discussions this week but until now I have been too busy to blog them all. Here is a quick round-up:
* Debate on geo-engineering. The Royal Society (Britain’s premier science organisation) has published a series of papers in its Philosophical Transactions on geo-engineering. That in turn prompted a substantial article in the Economist (6 September edition) and a piece by Oliver Tickell (an environmental campaigner) on the Guardian comment is free site supporting geo-engineering but only if it is linked to a reduction in emissions.
* Book on Nazi’s green credentials. I came across this when I heard radio presenters making fun of the title How Green were the Nazis?. To me it is a perfectly reasonable question and the book looks interesting. There is no doubt that many Nazis supported what are today classified as environmental ideas - which does not mean that all environmentalists are Nazis. The most serious critique I could find of the book was in Haaretz (Israel’s leading newspaper).
* Critique of Garrett Hardin’s classic article on “The tragedy of the commons” from a leftist viewpoint. Available here.
* Article on conservative assumptions of organic food movement. Conservative in a literal Burkean sense. Available here.
* Poll on hostility to local development in America, Britain and Canada. Available here.
* James Heartfield on Enron as a pioneer of environmentalism. Based on extracts from his latest book. Available here.
* Debate on geo-engineering. The Royal Society (Britain’s premier science organisation) has published a series of papers in its Philosophical Transactions on geo-engineering. That in turn prompted a substantial article in the Economist (6 September edition) and a piece by Oliver Tickell (an environmental campaigner) on the Guardian comment is free site supporting geo-engineering but only if it is linked to a reduction in emissions.
* Book on Nazi’s green credentials. I came across this when I heard radio presenters making fun of the title How Green were the Nazis?. To me it is a perfectly reasonable question and the book looks interesting. There is no doubt that many Nazis supported what are today classified as environmental ideas - which does not mean that all environmentalists are Nazis. The most serious critique I could find of the book was in Haaretz (Israel’s leading newspaper).
* Critique of Garrett Hardin’s classic article on “The tragedy of the commons” from a leftist viewpoint. Available here.
* Article on conservative assumptions of organic food movement. Conservative in a literal Burkean sense. Available here.
* Poll on hostility to local development in America, Britain and Canada. Available here.
* James Heartfield on Enron as a pioneer of environmentalism. Based on extracts from his latest book. Available here.
Labels: book, development, economics, environment, finance, food, geo-engineering
Saturday, August 30, 2008
Mobiles for all!
Jeffrey Sachs writes in an article for Project Syndicate on the spread of mobile phones in the world’s poorer countries:
“market penetration in poor countries is rising sharply. India has around 300 million subscribers, with subscriptions rising by a stunning eight million or more per month. Brazil now has more than 130 million subscribers, and Indonesia has roughly 120 million. In Africa, which contains the world’s poorest countries, the market is soaring, with more than 280 million subscribers.
“Mobile phones are now ubiquitous in villages as well as cities. If an individual does not have a cell phone, they almost surely know someone who does. Probably a significant majority of Africans have at least emergency access to a cell phone, either their own, a neighbor’s, or one at a commercial kiosk.
“Even more remarkable is the continuing “convergence” of digital information: wireless systems increasingly link mobile phones with the Internet, personal computers, and information services of all kinds. The array of benefits is stunning. The rural poor in more and more of the world now have access to wireless banking and payments systems, such as Kenya’s famous M-PESA system, which allows money transfers through the phone. The information carried on the new networks spans public health, medical care, education, banking, commerce, and entertainment, in addition to communications among family and friends.”
“market penetration in poor countries is rising sharply. India has around 300 million subscribers, with subscriptions rising by a stunning eight million or more per month. Brazil now has more than 130 million subscribers, and Indonesia has roughly 120 million. In Africa, which contains the world’s poorest countries, the market is soaring, with more than 280 million subscribers.
“Mobile phones are now ubiquitous in villages as well as cities. If an individual does not have a cell phone, they almost surely know someone who does. Probably a significant majority of Africans have at least emergency access to a cell phone, either their own, a neighbor’s, or one at a commercial kiosk.
“Even more remarkable is the continuing “convergence” of digital information: wireless systems increasingly link mobile phones with the Internet, personal computers, and information services of all kinds. The array of benefits is stunning. The rural poor in more and more of the world now have access to wireless banking and payments systems, such as Kenya’s famous M-PESA system, which allows money transfers through the phone. The information carried on the new networks spans public health, medical care, education, banking, commerce, and entertainment, in addition to communications among family and friends.”
Labels: Africa, development, india, Latin America, progress, technology
Friday, August 29, 2008
Report on global health inequalities
No doubt the new report on global health inequalities by a commission backed by the World Health Organization (WHO) will repay close study. It is a comprehensive work on an important subject. It also looks certain that some will use the fact that there is not a 100% clear correlation between income levels and health as a way of downplaying the importance of economic growth. To quote the press release:
“Wealth alone does not have to determine the health of a nation's population. Some low-income countries such as Cuba, Costa Rica, China, state of Kerala in India and Sri Lanka have achieved levels of good health despite relatively low national incomes.”
Thankfully the report is not as laughably crude as the leader in today’s Guardian which almost reduces the question to unhealthy lifestyles and even low self esteem:
“We know now that people do not only die of coronary heart disease because of a failure on the part of their local hospital. Such deaths reflect unhealthy lifestyles, and unhealthy lifestyles are often connected to poor education, bad housing, low-paid work and the low self-esteem that accompany them.”
The arguments put forward by the likes of Michael Marmot, the chairman of he WHO commission, and Amartya Sen, a member of the commission, are more sophisticated and harder to take up.
“Wealth alone does not have to determine the health of a nation's population. Some low-income countries such as Cuba, Costa Rica, China, state of Kerala in India and Sri Lanka have achieved levels of good health despite relatively low national incomes.”
Thankfully the report is not as laughably crude as the leader in today’s Guardian which almost reduces the question to unhealthy lifestyles and even low self esteem:
“We know now that people do not only die of coronary heart disease because of a failure on the part of their local hospital. Such deaths reflect unhealthy lifestyles, and unhealthy lifestyles are often connected to poor education, bad housing, low-paid work and the low self-esteem that accompany them.”
The arguments put forward by the likes of Michael Marmot, the chairman of he WHO commission, and Amartya Sen, a member of the commission, are more sophisticated and harder to take up.
Labels: development, health, inequality
Thursday, August 28, 2008
Worldwrite to launch news channel
Worldwrite is to launch an online monthly video news channel called Worldbytes at 7pm (London time) on Friday 5 September. More details to follow but it promises to be a must watch programme with its staunchly pro-development stance and irreverent attitude to growth scepticism.
Labels: development, inequality, television, Worldwrite
Wednesday, August 27, 2008
World Bank promotes new poverty measure
The World Bank has launched its new $1.25 a day poverty measure (see post of 25 May 2008). Under the new measure a greater number of people are classified as poor although the proportion of people living in poverty is still falling over time.
The number living in poverty is 400m more than previously assumed but, according to the release:
“New poverty estimates published by the World Bank reveal that 1.4 billion people in the developing world (one in four) were living on less than US$1.25 a day in 2005, down from 1.9 billion (one in two) in 1981.”
A new paper by Martin Ravallion and Shaohua Chen discusses the changes in more detail.
The number living in poverty is 400m more than previously assumed but, according to the release:
“New poverty estimates published by the World Bank reveal that 1.4 billion people in the developing world (one in four) were living on less than US$1.25 a day in 2005, down from 1.9 billion (one in two) in 1981.”
A new paper by Martin Ravallion and Shaohua Chen discusses the changes in more detail.
Labels: development, economics, inequality, progress
Sports stars back degraded development
The United Nations Development Programme is recruiting sports stars to promote the Millennium Development Goals. It is running full page ads in prominent newspapers featuring a large picture of Maria Sharapova (photogenic Russian tennis player) and LeBron James (basketball player). The campaign is evidently also backed by two footballers: Zidane and Ronaldo (the Brazilian one rather than the Portuguese player with the same name).
At some point I would like to write an expose of how celebrities are used to win support for campaigns which embody such low horizons.
At some point I would like to write an expose of how celebrities are used to win support for campaigns which embody such low horizons.
Labels: celebrities, development
Monday, August 25, 2008
Upgraded links
I have added to and updated the list of useful links on the left hand bar at the side of this site. New links include China Digital Daily, Climate Debate Daily, Culture Wars’ world development pages, the Future Cities Project and Indur Goklany’s papers. Any suggestions for further links or material for posts please email me HERE.
Labels: china, cities, climate, development, progress
London lecture on trade and development
Supachai Panitchpakdi, the secretary general of the United Nations Conference on Trade and Development, will present The Trade and Development Report 2008 at a public lecture at the London School of Economics on the evening of Tuesday 2 September. The theme of this year’s report is "Commodity Prices, Capital Flows and the Financing of Investment”. I am planning to attend.
Labels: development, economics, finance, trade
Saturday, August 23, 2008
Me debating at Battle of Ideas
I will be debating Ha-Joon Chang of Cambridge University, Paul Mason of BBC Newsnight and Martin Wolf of the Financial Times in a session on the pros and cons of economic dynamism on 1 November. It is part of the Battle for Prosperity strand at this year’s Battle of Ideas festival in London.
Labels: development, economics, growth, speeches
Tuesday, August 19, 2008
Celebrate Brazil’s agricultural surge
In this climate of gloom and low expectations it is fantastically refreshing to come across anyone with a positive “can do” spirit. This is certainly the case in relation to Brazilian agriculture which, according to an article on BBC online, has enjoyed a productivity surge in recent years. As a result it has grown from being a marginal player to a position as a large international supplier of food and biofuel. What is more only 70m - 80m hectares of a potential 350m hectares of land available for agriculture is being used.
No doubt the Brazilian President Lula has his limitations but his aspirations should not be faulted:
"We have more Chinese people eating, we have more Indians eating, we have more Africans eating and we have a lot more Brazilians eating.
"All this, which is treated by the press as if it were a crisis and is sold to the world as if it were a crisis," he said.
"Without any arrogance or self-importance, we Brazilians need to confront what for others is a crisis, as an extraordinary opportunity to truly transform ourselves into the granary of the world, as many people have long predicted."
No doubt the Brazilian President Lula has his limitations but his aspirations should not be faulted:
"We have more Chinese people eating, we have more Indians eating, we have more Africans eating and we have a lot more Brazilians eating.
"All this, which is treated by the press as if it were a crisis and is sold to the world as if it were a crisis," he said.
"Without any arrogance or self-importance, we Brazilians need to confront what for others is a crisis, as an extraordinary opportunity to truly transform ourselves into the granary of the world, as many people have long predicted."
Labels: development, food, Latin America
Tuesday, August 12, 2008
Celebrate China’s Olympian achievements
The following comment by me - written during the opening ceremony for the Olympic games - appeared in this week’s Fund Strategy.
The Beijing Olympics symbolises the most important and positive development in the world in decades: the rapid economic development of China. Those who whine so noisily about the Olympics and China reveal more about their own insecurities than about the Asian giant.
China’s rapid growth over the past 30 years has raised more people out of poverty than any other development in world history. Its population is benefiting enormously from rising prosperity in a country where the scourge of famine was until recently a frequent occurrence. It is true that inequalities within China are widening, but in absolute terms living standards are immensely higher than in the past. China’s rapid growth has also led to a welcome reduction in the inequality gap between the developed world and emerging economies.
Given that China’s population is 1.3 billion, a fifth of the world’s, its internal development is hugely important. But it has also brought immense benefits to the rest of us. The global economy would have grown far more slowly in recent years if it were not for China’s contribution. Its rapid growth has played a key role in keeping the world economy going in the midst of an economic slowdown in the West.
If China’s development is so positive, why does it elicit so many complaints? It is hard to escape the conclusion that the West feels threatened by China’s emergence. Although China’s growth strategy is pragmatic, the western countries are worried they could lose their privileged place in the world.
The nauseating double standards applied to China confirm the point that the criticism is driven by western anxieties. No doubt the Chinese regime is deeply autocratic, but many critics forget, or at least downplay, anti-democratic trends at home. Try drawing breath in any British city without being filmed by CCTV cameras. Or how about detaining suspects for 42 days without charge? Those who complain about Tibet seem to forget about British troops in Afghanistan and Iraq. Defenders of such measures might point to the threat of terrorism and crime, but Beijing could do the same.
Rather than carp about the Olympics and China, it is time to enjoy the spectacle of the greatest sporting event on Earth.
The Beijing Olympics symbolises the most important and positive development in the world in decades: the rapid economic development of China. Those who whine so noisily about the Olympics and China reveal more about their own insecurities than about the Asian giant.
China’s rapid growth over the past 30 years has raised more people out of poverty than any other development in world history. Its population is benefiting enormously from rising prosperity in a country where the scourge of famine was until recently a frequent occurrence. It is true that inequalities within China are widening, but in absolute terms living standards are immensely higher than in the past. China’s rapid growth has also led to a welcome reduction in the inequality gap between the developed world and emerging economies.
Given that China’s population is 1.3 billion, a fifth of the world’s, its internal development is hugely important. But it has also brought immense benefits to the rest of us. The global economy would have grown far more slowly in recent years if it were not for China’s contribution. Its rapid growth has played a key role in keeping the world economy going in the midst of an economic slowdown in the West.
If China’s development is so positive, why does it elicit so many complaints? It is hard to escape the conclusion that the West feels threatened by China’s emergence. Although China’s growth strategy is pragmatic, the western countries are worried they could lose their privileged place in the world.
The nauseating double standards applied to China confirm the point that the criticism is driven by western anxieties. No doubt the Chinese regime is deeply autocratic, but many critics forget, or at least downplay, anti-democratic trends at home. Try drawing breath in any British city without being filmed by CCTV cameras. Or how about detaining suspects for 42 days without charge? Those who complain about Tibet seem to forget about British troops in Afghanistan and Iraq. Defenders of such measures might point to the threat of terrorism and crime, but Beijing could do the same.
Rather than carp about the Olympics and China, it is time to enjoy the spectacle of the greatest sporting event on Earth.
Labels: china, development, Fund Strategy, growth
Tuesday, July 22, 2008
The world economy and Chinese inequality
The recent BBC Radio 4 Analysis programme by Martin Wolf, the chief economics commentator at the Financial Times, was particularly interesting. He looked at the significance of the increasing importance of the developing world.
Justin Lin, a contributor to the programme and chief economist of the World Bank, has also recently had an interesting sounding chapter published on Chinese inequality. It is part of China's Dilemma, a collection of papers co-published by the Australian National University and the Asia Pacific Press.
Justin Lin, a contributor to the programme and chief economist of the World Bank, has also recently had an interesting sounding chapter published on Chinese inequality. It is part of China's Dilemma, a collection of papers co-published by the Australian National University and the Asia Pacific Press.
Labels: china, development, economics, inequality
Sunday, July 20, 2008
Me on China on Friction TV
You can see me talking about China and the environment at the recent Battle for China conference by clicking the link.
Labels: china, development, environment, media appearances, television
Tuesday, July 15, 2008
The West’s distorted view of China
Frank Furedi has a piece on spiked today looking at how perceptions of China are distorted by the West’s own anxiety about modernity. He argues that hostility to China is one of the few issues that binds the contemporary right and left. One is fearful of a sinister new enemy while another treats Chinese business as uniquely malign. Furedi goes on:
“China has become a kind of environmentalists’ vision of Sodom and Gomorrah. Its population growth, brash materialism and indifference to the dogma of sustainability go directly against the precautionary attitudes that dominate public life on both sides of the Atlantic. It appears that the cartoon Chinese villain Fu Manchu is alive and well in the Middle Kingdom – only this time he is using his fantastic powers to pursue a variety of eco-crimes. Of course China’s real ‘crime’ is that, unlike some its liberal critics, it is still unambiguously wedded to modernity. It has not yet adopted the risk-averse and precautionary culture that prevails in Europe and America.”
“China has become a kind of environmentalists’ vision of Sodom and Gomorrah. Its population growth, brash materialism and indifference to the dogma of sustainability go directly against the precautionary attitudes that dominate public life on both sides of the Atlantic. It appears that the cartoon Chinese villain Fu Manchu is alive and well in the Middle Kingdom – only this time he is using his fantastic powers to pursue a variety of eco-crimes. Of course China’s real ‘crime’ is that, unlike some its liberal critics, it is still unambiguously wedded to modernity. It has not yet adopted the risk-averse and precautionary culture that prevails in Europe and America.”
Labels: china, development, spiked
Friday, July 11, 2008
The new development consensus
Dani Rodrik of Harvard University has written a summary of the new pragmatic development consensus in the Guardian (10 July). He focuses it on the Spence Commission on Growth and Development (on Spence see posts of 24 April 2007, 13 April 2008, 23 May 2008 and 15 June 2008).
Labels: development, economics, growth
Thursday, July 10, 2008
Battle for China preparation
Some last minute preparation for my Battle for China session on China as a “green peril”. An article by Elizabeth Economy and Adam Segal in Foreign Affairs (July / August 2008) argues that China’s inability to provide safe food and clean air for the Beijing Olympics shows its political weakness. And a Newsweek cover story on measuring global environmental progress includes a piece arguing that China lags behind other countries with similar income levels.
Labels: china, development, environment, speeches
Sunday, June 22, 2008
New Oxfam book on development
Oxfam has published a book that looks likely to become highly influential in the development debate. Although From Poverty to Power, written by Duncan Green, probably says little original it codifies the current development consensus. It has a foreword by Amartya Sen and is endorsed by, among others, Dani Rodrik of Harvard. An accompanying website includes a full download of the book, background papers and a blog. The New Statesman (23 June) has already carried an article on it.
Labels: book, development, economics, inequality
Thursday, June 12, 2008
Free marketeers equivocate on growth
Martin Wolf, the chief economics commentator of the Financial Times, argued in a feature in yesterday’s paper that sustaining economic growth is the century’s big challenge.
The article, which was partly a review of the new book by Jeffrey Sachs and partly a discussion of the recent growth commission report, started by asking:
“Is it possible for the vast mass of humanity to enjoy the living standards of today’s high-income countries? This is, arguably, the biggest question confronting humanity in the 21st century. It is today’s version of the doubts expressed by Thomas Malthus, two centuries ago, about the possibility of enduring rises in living standards. On the answer depends the destiny of our progeny. It will determine whether this will be a world of hope rather than despair and of peace rather than conflict.”
As a free marketeer Wolf says that his inclination is to argue that problems raised by economic development can be resolved. But later on he admits to developing some sympathy with environmentalism:
“it has become evident, at least to me, that the human impact on the planet on which we depend has risen to enormous proportions. We have treated the global commons as if they were free. Self-evidently, they are not.”
Evidently free marketeers cannot be relied upon to give an unequivocal defence of economic growth.
The article, which was partly a review of the new book by Jeffrey Sachs and partly a discussion of the recent growth commission report, started by asking:
“Is it possible for the vast mass of humanity to enjoy the living standards of today’s high-income countries? This is, arguably, the biggest question confronting humanity in the 21st century. It is today’s version of the doubts expressed by Thomas Malthus, two centuries ago, about the possibility of enduring rises in living standards. On the answer depends the destiny of our progeny. It will determine whether this will be a world of hope rather than despair and of peace rather than conflict.”
As a free marketeer Wolf says that his inclination is to argue that problems raised by economic development can be resolved. But later on he admits to developing some sympathy with environmentalism:
“it has become evident, at least to me, that the human impact on the planet on which we depend has risen to enormous proportions. We have treated the global commons as if they were free. Self-evidently, they are not.”
Evidently free marketeers cannot be relied upon to give an unequivocal defence of economic growth.
Labels: development, economics, environment, growth, Malthus, progress
Against celebrating indigenous lifestyles
A useful article by Rob Johnston in Tuesday’s spiked on why it is wrong to romanticise the lifestyles of indigenous peoples.
Labels: development, spiked
Sunday, June 08, 2008
Cars and popular aspiration
The current discussion of the Tata Nano, India’s “people’s car”, reminds me of the brilliant “sculptor” advert by Peugeot a few years ago for its 206. Whoever made the commercial, with a catchy backing track by Bhangra Knights, caught the popular aspiration for a better life in a clever and witty way. Only as an advert it was geared towards selling a particular product rather than making a more general point.
I was also struck to read recently that first production model of the Ford Model T, the car that popularised motoring in America, was assembled in October 1908. In other words India is about a century behind America in that respect. Henry Ford had many faults but he fulfilled his promise to “build a motor car for the multitude”.
I was also struck to read recently that first production model of the Ford Model T, the car that popularised motoring in America, was assembled in October 1908. In other words India is about a century behind America in that respect. Henry Ford had many faults but he fulfilled his promise to “build a motor car for the multitude”.
Labels: America, consumption, development, india, progress
Sunday, May 25, 2008
Revisiting Chinese pollution
Last year the New York Times ran a series of articles on pollution in China entitled “Choking on growth”. Today Nicholas Kristof, a regular Times columnist, has a comment headlined “Where breathing is deadly”. No prizes for guessing which country he was talking about.
Kristof refers to one of the earlier articles which estimates that between 300,000 and 400,000 Chinese die prematurely every year as a result of pollution. These estimates could well be accurate but, as is often the case with statistics, they can be misleading in isolation. No doubt a rugged statistical model could be constructed to show that many millions of Chinese die every year as a result of poverty. If China had living standards and infrastructure on the same level as the richest countries no doubt its people would live longer and healthier lives.
To be fair to Kristof he does add some balance to his article: “China has been better than most other countries in curbing pollution, paying attention to the environment at a much earlier stage of development than the United States, Europe or Japan. Most impressive, in 2004, China embraced tighter fuel economy standards than the Bush administration was willing to accept at the time.”
Kristof refers to one of the earlier articles which estimates that between 300,000 and 400,000 Chinese die prematurely every year as a result of pollution. These estimates could well be accurate but, as is often the case with statistics, they can be misleading in isolation. No doubt a rugged statistical model could be constructed to show that many millions of Chinese die every year as a result of poverty. If China had living standards and infrastructure on the same level as the richest countries no doubt its people would live longer and healthier lives.
To be fair to Kristof he does add some balance to his article: “China has been better than most other countries in curbing pollution, paying attention to the environment at a much earlier stage of development than the United States, Europe or Japan. Most impressive, in 2004, China embraced tighter fuel economy standards than the Bush administration was willing to accept at the time.”
Labels: china, development, environment
Rethinking poverty measures
This week’s Economist includes a discussion (subscription required) of the World Bank’s $1 a day poverty line – its official measure of absolute poverty. However, the World Bank is rethinking this measure, which first emerged in the 1990 World Development Report, as it does not take into account relative deprivation. Evidently two new working papers (Dollar a day revisited and China is poorer than we thought) from the World Bank suggest a new poverty line of $1.25. The Economist concludes:
“For practical purposes, policymakers will always care more about their own national poverty lines than the bank's global standard. The dollar-a-day line is more of a campaigning tool than a guide to policy. And as a slogan, $1.25 just doesn't have the same ring to it. A better option might be to reset the poverty line at $1 in 2005 PPP, which would line up reasonably well with at least ten countries in the authors' sample. In adding a quarter to the dollar-a-day poverty line, the researchers may cut its popular appeal by half.”
As it happens such measures are generally arbitrary. But, in the absence of better data, they give some indication of trends in poverty and inequality.
“For practical purposes, policymakers will always care more about their own national poverty lines than the bank's global standard. The dollar-a-day line is more of a campaigning tool than a guide to policy. And as a slogan, $1.25 just doesn't have the same ring to it. A better option might be to reset the poverty line at $1 in 2005 PPP, which would line up reasonably well with at least ten countries in the authors' sample. In adding a quarter to the dollar-a-day poverty line, the researchers may cut its popular appeal by half.”
As it happens such measures are generally arbitrary. But, in the absence of better data, they give some indication of trends in poverty and inequality.
Labels: china, development, economics, inequality
Friday, May 23, 2008
Pragmatic support for growth?
A leader in today’s Financial Times includes a useful summary of the just published Growth Report from the Commission on Growth and Development:
“The “Washington Consensus” – stabilise, privatise and liberalise – is dead. Long live the new pragmatism. That is the message of “the growth report” released this week by the commission on growth and development chaired by the Nobel laureate, Michael Spence.
“No single recipe will secure sustained and rapid economic growth in poor countries, it argues. Governments have to choose from a variety of ingredients. Yet only governments can do so. They “are sometimes clumsy and sometimes errant”, but “active, pragmatic governments” are indispensable.
“This pragmatism is one of the two principal contributions of this report. The other is its focus on growth itself. This is not to suggest that growth alone matters. But without it sustained improvements in human welfare are impossible: one cannot redistribute nothing. The report forces us to refocus attention on this overriding goal.”
I suspect the support for growth is more qualified than the comment suggests. However, since most of the commission’s members are developing country policymakers it is likely to be more pro-growth than if it was composed mainly of Westerners.
“The “Washington Consensus” – stabilise, privatise and liberalise – is dead. Long live the new pragmatism. That is the message of “the growth report” released this week by the commission on growth and development chaired by the Nobel laureate, Michael Spence.
“No single recipe will secure sustained and rapid economic growth in poor countries, it argues. Governments have to choose from a variety of ingredients. Yet only governments can do so. They “are sometimes clumsy and sometimes errant”, but “active, pragmatic governments” are indispensable.
“This pragmatism is one of the two principal contributions of this report. The other is its focus on growth itself. This is not to suggest that growth alone matters. But without it sustained improvements in human welfare are impossible: one cannot redistribute nothing. The report forces us to refocus attention on this overriding goal.”
I suspect the support for growth is more qualified than the comment suggests. However, since most of the commission’s members are developing country policymakers it is likely to be more pro-growth than if it was composed mainly of Westerners.