Sunday, July 17, 2005

African aid: Weak incentives of good intentions.

An earnest call for aid to Africa occurred in the 1960s with the conviction that lack of savings in third world countries hampered these economies from making the investments needed to take the first step in the ladder to sustainable growth.

More than four decades later the question is, ‘has aid helped?’ According to the CATO institute Africa has received 450 billion dollars worth of aid from 1960 to 2000 and yet the average GDP per capita of the continent has declined at a rate of 5.9 percent per year. They put this statistic into perspective by comparing the progress made in South East Asia for a fraction of that aid. The report of recommendations presented to the Secretary General by Jeffrey Sachs and the UN Millennium Project also brings attention to this disparity in performance between the emerging economies in Asia and the ones in Africa.

Even though it is unanimously accepted that corruption and the disruption of free markets and trade are the chief causes for the lack of progress in eliminating poverty, there is debate over whether corruption can be reduced by asking for good governance conditions in return for aid.

Empirical research done by the World Bank on 10 countries that receive aid suggests that there is little correlation with the amount of funding and constructive policy change needed for economic prosperity. Some of the 10 countries made very good policy changes, some made negligible reforms while others made no changes or went from bad to worse. The disparity in results suggests that aid has no average impact on policy reforms.

The World Bank study shows that although aid has greatest effect in reducing poverty in countries where there is good governance, donors continue the ill-advised practice of providing greater sums of aid to governments that repeatedly fail to reform while reducing aid to governments who implement good policies.

In a Washington Post article World Bank economist William Easterly comments that broad ranging reforms, what he calls ‘utopian social engineering’, like the ones proposed by the Jeffrey Sachs and the Millennium Project are far too complex to control and implement effectively and costs are great when they fail. Instead, he argues for an alternative ‘piecemeal approach’:
The piecemeal reform approach (which his book opposes) would humbly acknowledge that nobody can fully grasp the complexity of the political, social, technological, ecological and economic systems that underlie poverty…Large-scale crash programs, especially by outsiders, often produce unintended consequences. The simple dreams at the top run afoul of insufficient knowledge of the complex realities at the bottom…Nor can you hold any specific agency accountable for their success or failure. Piecemeal reform, by contrast, motivates specific actors to take small steps, one at a time, then tests whether that small step made poor people better off, holds accountable the agency that implemented the small step, and considers the next small step.
But according to the Millennium Project report, the reason for past failures is the lack of commitment to big broad ranging plans with broad goals. They imply that the goals of piecemeal approaches have not been sustainable due of the interdependency of various problems. Funding money into specific issues is not enough, as related issues around it have not been solved. The effect is that eventually the good work done on a particular project will be diluted. It also criticises the short-term perspective adopted by piecemeal advocates, saying that the unstable and so far unsatisfactory influx of funds cannot lead to sustained development, i.e. even if the goals were broad enough, commitment to it was lacking.

They also comment on the lack of systematic frameworks for looking at countries and political systems on an individual basis, the result being a generic and inaccurate approach to African poverty. Each country has it’s own unique social, economic, geographical and political problems. For example some countries seem to enjoy fairly competent governments while most others are corrupt to the core. These differences are not being adequately factored in aid provision strategies.

In The Cartel of Good Intentions, William Easterly makes a comprehensive criticism of aid agencies, including the new Millennium Development Goals, which he sees as a re-branding of the same old mistakes. His main thrust is that top-down broad approaches have the usual problems of an inflated bureaucracy not driven by market motivations. Beginning by covering the myriad of administrative processes and informational requirements involved in getting funds to cover a simple task of fixing a road he illustrates the problem of taking on too many tasks in a centralised manner:
Within the World Bank, the transport economist must try to convince the desk economist that a Road Maintenance Loan that would repair this particular pothole merits higher priority than some other project, like say an Education Reform Loan pushed by the education economists…
Easterly tries to explain why it is that aid bureaucracies are finding it hard to change their persistent and ineffective practices. The problem comes from a conflict in incentives. “It is very hard for aid bureaucracies to get constructive feedback from past mistakes because admission of past failure is a threat to getting new aid resources to dispense in the future.” The problem with not learning from past mistakes is that those mistakes are more likely to be repeated.

This is also why we don’t see much work being done in projects that are hard to ‘show off’ to donors, like stocking and maintaining already built facilities. These endeavours have low observability and it looks like not much is being done:
Aid reports for many decades have bewailed the tendency of donors to finance new capital investment projects (easily observable at a point in time) and the neglect of operating supplies and maintenance after the project is completed. Donors consistently refuse to finance maintenance, with the idea that this is responsibility of recipient governments.
There are estimations that suggest that the benefit of spending on books is much higher than actually building new physical facilities, but donors still prefer to fund the later because it looks like they are doing a lot more.

The main source of this bureaucratic dysfunction is that these agencies do not have enough market feedback. They are monopolies and as such they have the same problems that afflict normal monopolies, i.e. they have less of an incentive to provide the quantity of services for relatively low price as a competitive firm.

The article continues on to discuss how the current set-up of the aid system also gets the stick end having multiple agents and multiple principles. It becomes very difficult to pinpoint the actual problem and which party is responsible. There is also a weakening of incentives when multiple principles are being served. There is also a tendency to collude, as agencies are terrified of being outcasts bringing about an increasing likelihood of being blamed for future failures by the rest of the cartel.

‘Something has to change’ is what I get from all this. If this crippling ineffectiveness of aid continues, donors will eventually get fed up with the wastage and funds will dry out. Then it will be too late for any reforms.

The real tragedy of all this is that just in the time that I spent today reading the various papers and writing up this review and just generally wasting away my Sunday, another 10 000 people have died due to starvation.

Thursday, July 07, 2005

Blogger v Spaces

I read somewhere that it was a challenge for software designers to lessen the daunting learning curve for newbies while at the same time providing the functionality they might want once they get past the initial experience.

Obviously MSN Spaces are very easy to set up and run. Unfortunately however, this means trading off high functionality for a low learning curve. This strategy is understandable when we consider its target group.

As a regular user of MSN Messenger, my introduction to MSN Spaces came via the button in Version 7. After doing a few test entries and liking the therapeutic feel of writing it became natural to just stick with it.

However I don’t use it for the purpose of sharing details with family and friends. Just by reading my blog and profile I don’t think you would be able to gather too much about my personal life. I use it as a sounding board to bounce off my thoughts about the state of affairs as a way to test the coherency and consistency in views. Getting comments from people who question those thoughts are an added bonus.

And I like customisation. I like to play around with the look and feel of the site and in that department Spaces is getting a little stale. So I decided to take a relatively closer look at Google’s by populating it with some entries that I made earlier.

I actually signed up for an account fair whiles back, purely out of curiosity, but I never got past the first few entries. They were having some problems with updating the blog on time and new entries failed to appear for days. Now it seems like those issues have largely been resolved and most of the entries that I made went through almost immediately.

The best thing about blogger is that they allow you to edit the template file, and this provides unsurpassable customisation ability, which I am pretty happy about. I actually started with one of the standard templates, changed the colours and a couple of graphics, and I ended up with this.

The biggest downside for a lot of people is that you need to know some basic html to make substantial modifications to the standard selection of templates. But in my case this is actually a positive since this provided me with a motivation for learning html.

They even have some great hacks. For example it is possible to implement a drop-down comments feature like the one we get in Spaces when you use IE. It is also possible to implement expandable entries so that interested readers can see the full text of very long posts while casual surfers can skim through an uncluttered interface. All the tags, both the general tags and the markup for these tricks are well documented.

One of the worst things about MSN Spaces is keeping track of comments. If it's a particularly busy period for your blog, comments get lost. Blogger solves this problem by providing an email notification system so that a copy of every comment pops up in my inbox.

MSN Spaces do have some features that Blogger doesn’t have. An external application is need to maintain a photo album on Blogger, but that is really not an issue for me. The very useful ‘categories’ feature at Spaces cannot be replicated at Bloggers and I will miss that. They also don’t have Lists, but you don’t really need those at Blogger where you can just as easily construct your own list by editing the template.

In my short time playing around with Blogger it has been a positive experience barring the following minor issues: Firstly there is sometimes a slight delay before the blog gets updated, and there is a mismatch in the timing of the update between the addresses and I find that the later address updates quicker than the former, so on rare occasions we have two versions of the blog online, one being the older version and the other being the never version.

Secondly the stats are temporarily down and that screws up my profile page. So I had to make it private for the moment until they sort that out.

Thirdly, although posting pictures with your articles are easier with Blogger, the pictures that you upload and the old blogs that you’ve deleted still remain on the server. This isn’t as much of a problem as there is no limit to the amount of pictures you can upload, but it just seems like a waste of space. And some users might get a little suspicious about Google holding their pictures indefinitely.

Fourthly you need to get Haloscan for trackbacks. But trackbacks aren’t big deal for me yet so that issue is largely irrelevant.

So am I going to make the switch? Well, not yet. I am just going to simultaneously post entries to both blogs. This shouldn’t be too much of a problem since I only expect to post an entry every two days or so anyway.

Take the MIT Weblog Survey

Monday, July 04, 2005

A hit, a very palpable hit

Deep Impact has just hit Tempel 1 about 30 seconds ago. Been following it on NASA live TV. The TV camera was on the controllers and not on the actual image of the impact as it occurred. So I was looking at everyone getting really exited about the something off screen, making me yell out at the camera guy to turn his camera to the right.

A lot of jumping up and down and clapping and screaming going on in the control room.

Impactor team are wearing red t-shirts and Flyby team in blue

Someone just commented: ‘wow, and we were expecting something subtle!”

Finally, they are replaying the actual image of the impact

Wow. That was pretty huge.

Someone, possibly the mission manager, said “Ok folks we have another vehicle to worry about, so let’s settle down.”

No one is settling down.

Some interesting commentating going on now, with great images of the comet pre-impact from the Impactor itself. The guy is saying how “the navigation was perfect”, “the explosion was much larger than what we expected”.

A few congressmen walking through the room shaking everyone’s hands and congratulating them.

Ok medium resolution image of the impact from the flyby.

‘Flawless’ according to the commentator who is now going to interview a few scientists. I am going to go listen.

Saturday, July 02, 2005

Well, everyone else has blogged about this

No prizes for correct guesses as to the story that had flooded my news aggregator this morning.

Now I must admit to ignorance when it comes to American judicial politics, partly because I had this na├»ve notion that there wasn’t much politics involved in the judiciary and mainly because I am not American. The only thing I knew about Justice Sandra Day O'Connor before today was that she was meant to be at the centre of a divided SCOTUS and that she was one of the dissenting judges from a disturbing majority decision in that property rights case from a two weeks ago.

So I spent a couple of hours this afternoon reading various articles and listening to a couple of interviews on her life and her approach to the job and I must say, I dig this chick.

This feeling of admiration is probably due in part to the sympathy I feel for those who get accused of being wishy-washy when in fact they really are trying to be as consistent as possible in their values but realise the complexities and individuality of each circumstance and problems that they encounter.

I think this was evidenced in an answer she gave in an interview to NPR’s Nina Totenberg who asked: “what are your feelings about being so often described as a decisive fifth vote?" O’Conner replied, “I think it is ridiculous because all nine people have to cast a vote and there is no way to single out one as being more significant than another.”

Totenberg pursued: “If the court is divided somewhat ideologically and it’s very clear that one person is sitting in the middle and whichever way she or he casts the vote decides the outcome…”. But O’Conner was having none of it: “I am not sure it’s very clear if it’s going to be one way or the other but for one vote, so I get a little impatient with that notion.”

Such faith in the justice system and in her fellow justices after being so involved for so long is quite inspiring.

Of course with her resignation comes all the speculation about the next appointment and I just thought I’d take this opportunity to bring your attention to one of my favourite political bloggers; Jay Cost, who ran the most insightful commentary on the last American presidential election. Now blogging over at his advice is that the President would be better served by a smooth nomination through the Senate. Check out his entry and check out some of the comments below, which argue that maybe a long hard fight is exactly what the President needs right now to remobilise support.