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Interesting Links

May 28, 2011

“Almost 90% of the world’s plant activity, by some estimates, is to be found in ecosystems where humans play a significant role…The relevance of wilderness to our world has shrunk in the face of this onslaught. The sheer amount of biomass now walking around the planet in the form of humans and livestock handily outweighs that of all other large animals. The world’s ecosystems are dominated by an increasingly homogenous and limited suite of cosmopolitan crops, livestock and creatures that get on well in environments dominated by humans. Creatures less useful or adaptable get short shrift: the extinction rate is running far higher than during normal geological periods.

The Economist’s answer: Use human ingenuity to fix the planet that we have screwed up…through human ingenuity. Sounds silly but, at this point, what other choice do we have?

If a preindustrial house is a site of production, what does a post industrial house produce? Say that five times fast.

A framework for Africa’s green revolution. More on this later.

Do randomized controlled trials in development have a big problem with external validity? Not compared to other types of micro research says David Mckenzie. He offers 3 main suggestions on how to make RCT’s more useful  1) The researcher must explain why they chose to study in particular setting (other than it was convenient). 2) the researcher should try to understand why something works using a “combination of theory, process evaluation, qualitative interviews, and analysis of the causal chain” 3) Having some evidence somewhere is better than nothing, can be used as a reference (but not a solution) in a different context.

“food market sheds” in Africa. Or why artificial borders are bad and we need to think regionally and promote trade.

“Exceptional People”

May 27, 2011
by

WHEN a Bangladeshi man goes to work on a construction site in the Middle East, his wife typically moves in with her husband’s family. Not all wives enjoy this. They sweat in a strange kitchen, take care of a bossy mother-in-law and see their husbands only for a few weeks each year. And although their husbands send home plenty of money, they often send it to their parents, not their wives. Migration creates losers as well as winners.

But the gains vastly outweigh the losses, as Ian Goldin, Geoffrey Cameron and Meera Balarajan make plain in their new book, “Exceptional People”. If rich countries were to admit enough migrants from poor countries to expand their own labour forces by a mere 3%, the world would be richer, according to one estimate, by $356 billion a year. Completely opening borders would add an astonishing $39 trillion over 25 years to the global economy. That is more than 500 times the amount the rich world spends on foreign aid each year. Migration is the most effective tool yet devised for reducing global poverty.

This is from a review in The Economist for the new book Exceptional People. I look forward to reading it.

A Distinctly African “Green Revolution”

May 26, 2011

…the average farm in China was five times as productive as a farm in sub-Saharan Africa, the average Indian farm twice as productive. Part of this is to do with size and economies of scale, but other factors are at play as well. Farmers in sub-Saharan Africa lack good quality seeds, and the soil they till is often degraded from overuse or lack of irrigation. Even when they do produce a decent surplus, the roads are often so bad it is hard to get the crop to market.

This from the Guardian Poverty Matters Blog is a paraphrase attributed to Matthews Burwell, president of the Bill and Melinda Gates Foundation, which appears to be the main organization, in collaboration with the Rockefeller foundation, beating the drums for greater investment in African agriculture (as well as some NGO’s such as Oxfam International and Bread for the World). Indeed the question is, why when most of the rest of the world has seen rapid agricultural productivity growth in the last 50 years, has sub-Saharan African agriculture fallen so far behind. Many reasons can be pointed to, including high soil and geographic diversity making technological spillover hard, poor infrastructure and marketing capability, and government corruption, but perhaps low investment due to lack of political will is the greatest of them all.

Robert Paarlberg, in his book Starved for Science: How Biotechnology is Being Kept out of Africa, makes a fairly convincing case that the severe under-investment in agricultural technology such as fertilizers, tractors, modern irrigation techniques, better seeds, and GMOs, stems directly from recent  Western attitudes towards agriculture. He points out that productivity in the U.S. and Europe has risen dramatically in the past century, in some cases by a factor of 3 or 4. More recently however, due to the relatively low price of food and the much lower percentage of people employed in agriculture, consumers have stopped caring so much about greater productivity and have started caring more about the cultural and environmental impacts of highly industrialized farming and the potential dangers of biotechnology. He acknowledges many of these concerns are valid for those who already have highly productive agriculture and don’t worry about getting enough to eat. But he bemoans the fact that these attitudes have highly influenced the debate on agricultural development in Africa among both Western aid donors and Africans themselves. Productivity has remained stagnant, and pales in comparison to the rest of the world.

Read more…

“The Story of Economics”

May 26, 2011

“The search to connect a theory of people with a theory of the system, this is economic’s holy grail.”

Kind of cute and philosophical, although I think they neglect the crucial role that government and other non-market actors can play in providing public goods and making the market work better.

Interesting Links

May 25, 2011

Are sweatshops better than the alternative? Perceptions of sweatshop workers in El Salvador

“I have seen for myself just how vital cotton is for millions of farmers in west Africa and the damage caused to their livelihoods by developed country subsidies.”  US subsidies amount to $24 billion over the past ten years, despite the WTO ruling it illegal.

Are “social businesses” the key to improving nutrition in poor urban “food deserts?

What is the best way to know what people in the developing world need? How about listening to them? And furthermore, are development efforts really hampered by lack of knowledge of “what works”, “or is it a lack of respect for local initiatives and understanding about complex power dynamics that impede authentic relationships among development partners?”

In Shinyanga, Tanzania, men and women split into two separate groups to discuss the causes of hunger, its impacts, and how people respond: Some notable differences:

Men

Causes: lack of fertilisers, infrastructure and seeds; drought; environmental mismanagement
Impacts: hunger; sickness; death; street kids; rising crime and poverty
How people respond: reduce the number of meals; do more day labour on other farms; sell off cattle and assets; borrow money and as a last resort, split the family up and send members to places where they can find food (eg with relatives elsewhere in Tanzania).

Women

Causes: drought; deforestation; lack of tools; infidelity, prostitution and drunkenness (which all deprive families of income)
Impacts: disease; divorce; ignorance (kids dropping out of school)
How people respond: women look to friends and family for support, men try to find other women; women forced to start unprofitable petty businesses; children forced to beg.

A corresponding interview with a women named Thelezia Salula gave some insights into her challenges as a small scale farmer. She does all the farming work yet her husbands name is on the village lease? They cannot get a title deed which isn’t susceptible to appropriation. There are no good options for rice storage and therefore must sell when prices are low and buy when prices are high. They cannot access regional markets where prices are better. Global warming (presumably) is making the rains more unpredictable and the younger generation  wants to leave farming and move to the city.

Readings on Africa, Pt. 1

May 25, 2011

When I start my PhD, much of my research will be set in sub-Saharan Africa. I know very little about its history, so I have set out to book-learn as much as I can before I engage in research purporting to help “explain” what’s happening and “improve” policy. I am especially interested in the history of agricultural/development policies and political economy more generally. It’s always hard to know where to start, so I have used the reading list laid out by Chris Blattman and Elliot Green as a starting point.

This is the first in a multiple part series briefly describing these foundational (for me) reads.

Markets and States in Tropical Africa: The Political Basis of Agricultural Policies, by Robert H. Bates. Written in 1981, this book was one of the first (so he claims) to apply the ‘rational choice’ model to evaluate the political economy of African agriculture, and proved to be highly influential in setting (maybe unintentionally) the ‘structural adjustment’ atmosphere of the 80’s and 90’s. His basic argument was this: After gaining independence, African governments pursued an industrial, urban-centric model of development to the disadvantage of the rural and especially small-scale agricultural sector. In order to pacify their much better organized urban populations and promote industrial development, they effectively taxed farmers by forcing them to sell to “agricultural marketing boards” at artificially low prices. The outcome of this was to discourage agricultural investment and prevent longer term food security. Bates described in some detail how these policies hurt small farmers more than large farmers, and how farmers have responded by shifting cultivation away from state sponsored exports, paying bribes to local officials, and selling to informal (black) markets at a higher price.

This book was very interesting in that it avoided demonizing certain groups responsible for failed policies, instead showing how these policies were logical outcomes of the incentive structure facing different actors. It also gave me some perspective on why the IMF and World Bank insisted so heavily on ‘structural adjustment’ in the 1980’s (other than the typical explanation of pure evil). The governments were highly corrupt,  fiscally unsustainable, and most of all ineffective at guiding long-term development. The subsequent failures of ‘structural adjustment’ is covered very well in the next book I will cover.

Sometimes Less is More

May 24, 2011

I recently attended a game theory conference where Gerd Gigerenzer presented his work on heuristics.  It was a bit strange to have him present since his work in this area seemed to run contrary to that of nearly all the other game theorists presenting.  The essence of his work on heuristics is that people can make good decisions by ignoring causally relevant information.  Sounds crazy right?  I mean, doesn’t more information always lead to better decisions?  This isn’t just a ‘common sense’ belief, entire disciplines, most notably economics, are founded on this principle. The problem is, in many situations, less information leads to better decisions.  For instance, in picking stock portfolios, research has found that choosing stocks on simple name recognition yields better results than market indices.  This isn’t to say that we should ignore information in all decision making.  In situations where the problem is well defined and variables are relatively few, more information is better.  There are a lot of situations, however, that do not fall in this category.  Heuristics provides a good way of analyzing decision making in such situations.

Here’s some more info on Gigerenzer’s work on heuristics:  http://www.edge.org/3rd_culture/gigerenzer03/gigerenzer_print.html