September 08, 2006

• Keep in mind though while it may not have helped the "countries" it still may have helped some individuals in those countries.
• Depends on one's definition of terms: Economist William Easterly from New York University wrote in the report that foreign aid has made no positive impact on economic growth in the world's poorest nations. "Usefulness" is defined only by economic growth. By some other metric it may well be useful (dead children?). What metric you choose is probably governed as much by ideology as anything. I've little time for the Fraser Institute, but it sounds here like the problem is not with what the economist who wrote the report but the Grope and Flail's headline.
• The full report is available here. The section that the Globe article is discussing is chapter 2.
• Foreign aid is a politically correct way to subsidize your own industries, while sounding generous. We'll give you X dollars as long as you use it to buy these goods and services from us. Or we'll give you this as long as you eliminate tariffs on these products. Heaven forbid that they should invest in something that will eventually compete with the donor, or provide no benefits to our multinationals. On a related note, I tend to reject anything that comes out of the Fraser Institute as neocon babble.
• Hmmm... wouldn't children surviving be good for economic growth?
• But when my country announces a foreign aid package, it makes me feel good...like I'm somehow responsible for helping poor people and stuff. How am I going to feel generous if my government stops sending money to Africa?
• Funny how some groups are so quick to say that we need to stop giving other countries money but are so hesitant to say that those same countries can stop giving us money to pay for their debt. If you want to get rid of foriegn aid, then get rid of foriegn debt too.
• Seems to me like a bit of both is in order. Sure, absolutely improve the way we do business with developing nations, but that doesn't mean we shouldn't help keep everyone from dying until the effects of the economic reform kick in.
• I'm wary of market fetishists, but I do think that aid should come with different strings attached -- rather than requiring biased access to the internal markets, the aid should come with conditions stipulating required minima of economic growth and measurable levels of improvement in all strata of the society.
• Has anyone stopped to wonder whether free market capitalism is even the best economic system for these countries? Different cultures, priorities, infrastructure, climate, community structure, etc.
• Coincidentally, I ran across this site yesterday via Arts & Letters Daily. The observation that foreign aid has done little to no good in Sub-Saharan Africa is explored from a cultural perspective (and a somewhat libertarian slant), without leaping to the conclusion that the free market is the only answer. In fact, it seems to me he's saying expecting the free market to take root in such a dysfunctional set of circumstances is complete nonsense. As for why we did it in the first place: bribing despots to nominally be on "our side" has a long historical tradition. So does having it blow up in the face of whatever empire was doing the bribing.
• I've had the chance to skim the article over lunch. It's a pretty odd piece. The author uses the term 'collectivists' where I think he really means 'technocrats' or 'bureaucrats.' He also makes what I would think are ill-advised comparisons to the old East Bloc. It isn't obvious to me that the bureaucratic accountability guidelines he talks about are inherently collectivist even if they do seem rather ludicrous (as does a lot at the UN). As far as I can tell, 'economic freedom' is a reification of some sort of multi-factorial measure, but it isn't clear just what it is. It seems that it contains variables based on the distance from the equator and English or non-English legal systems. There are other oddities in the data analysis as well. Fig. 2.4 is a log-log plot, something that usually requires explanation outside the biological sciences. (Biological systems are scale-dependent and thus often best described using log data.) The report is outside my field, but there are enough red flags for me to at least tentatively dismiss it as a political and not a scholarly piece.
• Alright, Chapter 1 along with one of the appendices sets out how 'economic freedom' is calculated. It isn't based on factor analysis but just a crude average of a series of relative ratings. The definition, selection, and even how many of each category are included will have an effect on the overall measure. Overall, bunk. Too bad, since it sounds like there is enough data there for a factor analysis approach.
• I know longer worry or believe what right-wingers think. They have no credibility left and wading through the propaganda to get to the heart of any facts is too wearying.
• One fact that's hard to deny is that Africa and Asia used to be basket cases forty years ago. Now Asia is doing much better, but Africa is getting worse. Foreign aid went to both regions but it would seem that it is not sufficient for success (?)
• open markets economic freedom Would this be the freedom for megacorps to dominate the open markets? Sounds like a good plan for Mexico, which will probably see its sugar industry collapse thanks to dumping of U.S. corn syrup. These right-wing think tanks hardly have to push their agenda as countries are apparently bending over for them.
• Trade agreements have, at best, been mixed blessings to Mexico's economy. The destruction of local industries unable to compete, the dissapearing reality of all those jobs that came here from the USA or other countries (jobs that just as soon leave for India or Eastern Europe, with even lower wages), the social and ecological impact of patented seeds and GM products on thge countryside... society changes and adapts, but many people fall in the cracks of global markets shifting. There are sustainable development strategies based on foreign investment that have helped small industries and communitites, but it's hard to compete againts the megacorporations, even in the local market.
• Foreign aid is useless...except to the megacorporations that get the money. Hey, are the dozens of billions being paid to Halliburton to "rebuild Iraq", is that "foreign aid"?
• MIT's Abhijit Vinayak Banerjee on Making Aid Work.
• Nobel laureate Joseph Stiglitz on how "agricultural subsidies and the refusal of the US and EU to phase them out are preventing poorer countries from developing and damaging multilateral trade". Calls for open markets and economic freedom in the developing world ring hollow when we insist on rigging the rules of international trade to the benefit of the rich.
• "I tend to reject anything that comes out of the Fraser Institute as neocon babble." Quite correct! Seconded.
• "Free trade" actually means, "you can't put on any restrictions, not even environmental or safety laws, but we can put any tariffs or subsidies on that we want". Ie. American tariffs on softwood lumbar, on European steel, on anything they damnn well feel like, regardless of what their own trade courts say. Until the US and Europe stop the massive agricultural subsidies, anything any of them say regarding free trade is a load of hypocritical horse hooey. That said, I have a funny story about the Fraser institute. They were running a series of lectures for UofToronto students, and there were two lecture titles that EXACTLY contradicted each other. One was a lecture all about the government ought to let churches run government services, and another was about how the government always screwed things up and Native residential schools were the example. Now, residential schools are a disgrace and national shame (native children were kidnapped, denied their language and culture, physically and sexually abused) -- but they were actually run by the churches.
• From the Banerjee article posted by Abiezer: The culture of aid-giving evolved from the idea that giving is good and the more money the better (what William Easterly calls the financing-gap theory), and therefore—here comes the logical leap—one need not think too hard about how the money is spent. We have now learned that this kind of lazy giving does not work. The article then goes on to suggest they should try doing randomized trials to see what type of aid initiatives do work. Sounds sensible to me!
• I no longer worry or believe what right-wingers think. ... I'm a little jaded when it comes to left-wing, right wing. Isn't it strange to reduce hugely complex issues to a binary divide? The Fraser Institute is right wing, the National Anti-Poverty group is left wing. Who cares? Isn't it more fun to call bullshit on both, as needed? If i had to pick a wing, I'll take the randomized control wing (anti-bullshit squad, probationary). Fuck these stupid platforms, show me the evidence.
• How to you plan on assuring the exchangibility of your treatment and control groups, SB? Match on type of military dictatorship, endemic diseases and availibilty of natural resources? Foreign aid doesn't have to be in the form of giving large sums of money to the government. And god knows it can fuck up a country (hydroelectric dam in Haiti, Unicef throwing in a ton of wells in Bangladesh without realizing the groundwater has large amounts of naturally occuring arsenic). It seems like things like microloan programs to help individuals or small collectives, assured land tenure in the shanty towns, and with that some semblance of infrastructure (ie sources of clean water, some sort of sewage system) can do a lot.
• I've lived long enough to discover that the right-wing is the wing of selfish simpletons. I really don't care any more what they think. The true conservatives are now the moderates. They are the ones who don't want to "redistribute" the wealth to the rich. Is it simplistic? Yes and no. You can not hold the core right wing values and remain a decent human being anymore.
• How to you plan on assuring the exchangibility of your treatment and control groups, SB? *mumble?* :-) Alas, as you imply, this not going to be easy ...but I think that at least the effort be made rather than the patchy guesswork and simple assertions that currently underlie a lot of foreign aid. In cases where RCTs are impossible, at least some analytical investigation would be better than blind aid.
• the right-wing is the wing of selfish simpletons If defined that way, i've no argument! I guess what i was saying is that the two words "right wing" (or left wing for that matter) are too slender to carry the weight of meaning that they're often asked to carry.
• I'm afraid I disagree. I don't know what you mean about the words not being up to the task. They work perfectly well. Right-wing has a very commonly understood meaning, and most people would know exactly the type of politics I am talking about.
• And then there are the ethics of using an impoverished nation for your study if you give them nothing... Not to mention the assumption that there is one set of answers for what works rather than taking into account the specific circumstances of each nation, which is what I was getting at up there.
• Right-wing has a very commonly understood meaning, and most people would know exactly the type of politics I am talking about. This is what i'm not sure about. I generally believe in the power of free markets. Is this right-wing? I believe government has an important role in the situations where markets fail to work (e.g. monopoly, externalities). Is this left-wing? I think the labels are bad for political debate. It allows the wholesale dismissal of ideas based on a single word: "right" or "left".
• Do you self-identify as a right winger? Is free markets exclusively a right-wing trait? Of course not. You don't like the polarization. I get that. It doesn't mean the words don't have meaning or that they can be stretched to do whatever you want. Its like "Christian". Does that mean you believe in transubstantiation? No. But everybody knows what you mean when you say someone is a Christian.
• As for this, I find that conservatives are generally in favor of free markets and against giving money to people except when their company is being pushed under by cheap textiles from China. This isn't to say there may not be a grain of truth in the article. I'm just saying that right-wing think tanks have no credibility left with me, and I'll wait until a less biased group does a study.
• I can’t say much that Northern Exposed, The Underpants Monster, Flagpole, et.al. haven’t said. I would like to note though that there’s been much ado about the telecoms flourishing in Somalia. Apparently cell service is cheap and well-run and competative between three or four companies. This bit of entrepreneurism in anarchy aside, I have to wonder if that’s not a product of the lack of government services. Sure it’s great that cell service is cheap and reliable. But then, it sort of has to be because you can’t really take the bus to see grandma or drive without risking violence, etc. There seems to be a similar dilemma here as to the right mix of aid and the installation of stabile markets. Coke has built a plant in Somalia because the situation has gotten more stable, but given that as one of the effects of stability (investment by major corporations) is that a good thing? So, the Somali’s get Coca-cola. They get jobs. They drink more Coke and get fat, dumb and happy and get used to that lifestyle and maybe fight to protect it. So instead of war in anarchy you have war from fascism. There’s much to be said about setting up stable markets so folks can help themselves and attract big investors, but there are downsides too. I dunno tho. If I did, I'd be a banker.
• I'm just saying that right-wing think tanks have no credibility left with me What is it about the Fraser Institute that makes the it a right-wing think tank? (Trying to zone in on meanings once again). I don't know too much about it other than its advocacy of free markets.
• And then there are the ethics of using an impoverished nation for your study if you give them nothing... How about the equivalent of a cohort study, except with countries as subjects? After some more digging around, I ran into a surprise: the world's fastest growing economy over the past 30 years is in Africa. Lessons From Botswana: Africa’s Economic Dynamo. "As I prepared for my travels to Botswana two years ago, I bought into the negative information I was fed. Western "experts" in Washington, D.C., told me to boil water before drinking it, avoid eating any fruits and vegetables, and stay inside after dark. Some of my well-educated, well-traveled American friends even asked me if people in Botswana still practiced cannibalism. However, what I found when I arrived in Botswana’s capital, Gaborone, were BMWs buzzing by on paved roads. The quality and variety of dining options was outstanding. The water was safe to drink in both the capital and in rural areas. Shopping malls in Gaborone were full of affluent Batswana (the proper name for citizens of Botswana) ..."
• Their primary purpose is to promote what they call Economic Freedom. "The extent to which one can pursue economic activity without interference from government. Economic freedom is built upon personal choice, voluntary exchange, the right to keep what you earn, and the security of your property rights." Clear enough? No regulations on commerce. A core right-wing value.
• Anyway, you're probably right. Maybe they aren't right wing. I'm sure they are pro-social justice, and support restrictions on economic practices that keep people oppressed, hurt the environment and exploit the poor. But, I don't see it anywhere in their mission statement. You see what I'm getting at? And add to that that the results of their study are exactly in line with their mission statement. We think the world needs more economic freedom and hey, things would be a lot better if we had more economic freedom. Q.E.D.
• I also see from their front page that they find that when unions decline the economy is doing better. What a surprise. Give me a break. I'm sure slavery would be good for the economy too so long as you had a large enough supply of slaves.
• I can't believe I'm the first one to notice the title says Usless. U.S.-less, geddit?
• Wikipedia talks about their leanings
• Thanks for the pointer to the wiki. I should have checked it earlier! No regulations on commerce. A core right-wing value. Is this the same as economic freedom? I wouldn't want to live in a country that had a slave-based economy. China and Russia are examples of unfettered capitalism but when you look at where they are on the Institute's Economic Freedom Index, they don't rank high. "Hong Kong retains the highest rating for economic freedom, 8.7 out of 10, closely followed by Singapore at 8.5. New Zealand, Switzerland, and the United States tied for third with ratings of 8.2. The United Kingdom and Ireland are tied for the 6th place. Canada receives a score of 8.0 and ranks 8th. Iceland and Luxembourg are tied for 9th place. The rankings of other large economies are Germany, 17; Japan, 19; France, 24; Italy, 45; Mexico, 60; India, 53; China, 95; ...and Russia, 102." In a way, this is somewhat contradictory to conventional opinion. China and India are both conventionally touted as free-market miracles but here, they're placing near the bottom in "economic freedom". Interesting.
• Whoops, China is near the bottom, India is sorta midway.
• I don't think its the same as economic freedom. I'm not exactly sure what economic freedom really is. Does that mean that someone HAS to accept my money if I wish to purchase something? I mean, if they can deny my ability to buy something, am I really economically free? It sounds like a buzzword to me. What they mean, it appears, is that government should stay out of the affairs of business. While they are socially liberal (they claim), how can you be socially liberal when the policy you are promoting de facto means the poor do not have equal access to resources and industry can run roughshod over the environment. They may be more libertarian than "right-wing" but I consider more rabid libertarians "GOVERNMENT BAD" to be right-wingers.
• Or, if you think that government must restrain the baser desires of business (because you don't think vested self-interest can be counted on to do it when quarterly profits are at stake), are you a left-winger? Yeah yeah, I'm starting to see your point. To rephrase my first post, this group is too "fiscally and politically" conservative for me to take seriously. At least they are consistent in wanting people to be able to buy things that are bad for them.
• It's too complicated! Yeah, this is my beef with the political labels. On another policy front, the Fraser Institute would like us all to have open access to marijuana! (Those lefty righties?)
• Dug more into this whole Economic Freedom concept of theirs. It apparently is a meld of five indices that measure: 1. Size of Gov't 2. Legal Structure and security of property rights 3. Access to sound money 4. Freedom to exchange with foreigners 5. Regulation of Credit, Labor and Business This gives the breakdown of the index for all countries
• StoryBored -- the Fraser Institute is anti-Government social programs, and for Religious Institutions taking them over. That's pretty right wing in the way politics is structured in North America (in both the small government sense, and the socially conservative sense). See my above example, which also shows how they are capable of misusing evidence (ie, that residential schools for Native Canadians - which were run by the major churches - were a Government program, and the Churches would never do such a bad thing).
• Also, they have pretty firmly aligned themselves with - or perhaps have indeed attracted to themselves - prominant right-wing Canadians. Right and left wing are very flexible terms, worse even than fascist (though not as often so badly misused). In Europe, the right wing tends towards anti-immigration, in Britain, to anti-immigration and anti-European. Britain actually seems to have two, very different right wings within their own Conservative Party. One is old fashioned, socially conservative, reads the telegraph, possibly estate owning. The other is Thatcherite - totally different. But they like being in bed together. ---------------- But please feel free to going back to talking about development, which is more interesting. I'm going to go read the Botswana article.
• Fraser Institute: See my above example, which also shows how they are capable of misusing evidence . Yes, and there are also holes in the methodology for their calculation of Tax Freedom Day. What I'm saying is that we should call bullshit on these examples but at the same time if they have something worth looking at, we should look at it. Also, they have pretty firmly aligned themselves with - or perhaps have indeed attracted to themselves - prominant right-wing Canadians. This is a big mistake on their part if they wish to contribute to non-partisan debate. Curiously enough, the partisanship was not part of their founding philosophy when they started.
• And apologies to the thread for being anal on the whole "right-wing" thing...:-)
• Aid: Can It Work?
• Talk of synchronicity, I just ran across Easterly's book yesterday and reserved it at the library. Looking forward to reading it. From the review posted by HW, this quote about why free aid sometimes fails was interesting: Likewise, one perennial problem has to do with getting poor people to use mosquito nets in order to prevent malaria. I've often been to villages where nets had been handed out for free but were put aside and not used. Aid workers often find that it is better to sell things than give them away, because people don't assign value to what they get for nothing. Easterly praises a program devised in Malawi by Population Services International, based in Washington. PSI sells the nets for a token charge of fifty cents each to pregnant women at prenatal clinics because pregnant women and babies are most at risk from malaria; the nurse making the sale keeps nine cents for herself as an incentive. That means that the nets stay in stock and are actually sold. Meanwhile, PSI sells the nets in the cities for $5 each and uses the profits to pay for the subsidized nets in the clinics. "PSI's bed net program increased the nationwide average of children under five sleeping under nets from 8 percent in 2000 to 55 percent in 2004, with a similar increase for pregnant women," Easterly writes. "A follow-up survey found nearly universal use of the nets by those who paid for them."
• Hey, HW, do you have an account over on the Blue? This article is good FPP material. If you don't I'd like to post it (with credit to you), if that's okay.
• Go for it, StoryBored.