Effects of Conditional Vs. Unconditional Cash Transfer

Baird, McIntosh and Ozler have an upcoming paper in the QJE investigating the differential impacts of conditional and unconditional cash transfer in Malawi:

Starting with schooling outcomes, we find that although dropout rates declined in both treatment arms, the effect in the UCT arm is 43% as large as that in the CCT arm. Evidence from school ledgers for students enrolled in school also suggests that the fraction of days attended in the CCT arm is higher than the UCT arm. Using independently administered tests of cognitive ability, mathematics, and English reading comprehension, we find that although achievement is significantly improved in all three tests in the CCT arm compared with the control group, no such gains are detectable in the UCT arm. The difference in program impacts between the two treatment arms is significant at the 90% confidence level for English reading comprehension. In summary, the CCT arm had a significant edge in terms of schooling outcomes over the UCT arm: a large gain in enrollment and a modest yet significant advantage in learning.

The paper then gets nuanced:

When we turn to examine marriage and pregnancy rates, however, unconditional transfers dominate. The likelihood of be- ing ever pregnant and ever married were 27% and 44% lower in the UCT arm than in the control group at the end of the 2-year intervention, respectively, whereas program impacts on these two outcomes were small and statistically insignificant in the CCT arm.

……….. Our findings show that UCTs can improve im- portant outcomes among such households even though they might be much less effective than CCTs in achieving the desired behav- ior change.

Check it out here.

Projects Without Development

Guest Post by Erin Pettigrew (PhD Candidate, Stanford University)

       Naked Palm Trees and Other Failed Development Projects in Senegal

La Pointe des Almadies is Dakar’s wealthiest neighborhood and it teems with expat NGO workers and the palaces of government officials. Recently, the construction of an immense statue, “The African Renaissance Monument”, a 27 million dollar project commissioned by Senegal’s president, Abdoulaye Wade, has transformed the neighborhood’s landscape. The imposing bronze figure of a muscled man, one arm protectively wrapped around a woman, the other triumphantly holding up his infant child, sits atop a hill overlooking the city.

Source: Wikipedia

The statue and Wade’s current projects for the construction of the “Seven Wonders of Dakar” (a section of the capital which will include a  new National Theater, Museum of Black Civilization, National Library; the School of Fine Arts and the School of Architecture and Music Palace) are seen as wastes of government money spent to satiate the President’s desire for a legacy rivaling Senghor or even the grand public projects of France under past presidents Chirac and Mitterand.  Growing discontent with Wade’s attempts to stay in power past the current two-term limit and with what is perceived to be his inability to ensure reliable infrastructure to his country’s population has culminated at times with criticism of “The African Renaissance Monument”.

Most of Dakar’s neighborhoods experience daily power outages and terrible traffic due to poorly maintained and inadequate roads. However, Wade has somehow scraped together enough money to build bronze statues and to build a second national theater to replace the centrally-located and historical Théâtre Daniel Sorano in downtown Dakar.

I am not an expert in development. I am a historian whose interest in West Africa began as a Peace Corps Volunteer in neighboring Mauritania but I have found myself progressively less optimistic about prospects for change in the daily lives of most West Africans I know. On a recent research trip to the northern Senegalese city of Saint-Louis, I was struck with how much more run-down the city seemed to me than it had my first time there in 2003. While Saint-Louis can be picturesque from afar, with its 350 year-old colonial facades built on its central island, the reality is that its infrastructure is disintegrating.

A government building in Saint-Louis (picture by Erin)

Despite the presence of NGOs (visible by the many white SUVs and walled compounds marked by their painted slogans of “Espoir” and “Aide”), it’s hard to see signs of successful projects.  As I walked through the city, I couldn’t help but notice numerous failed plans. I passed dead trees protected by reed fencing where someone had thought plantings along the streets of a popular neighborhood would be a good idea. Talibés (students, or little boys sent out to beg for money and food by some unscrupulous marabouts) are an ever-present part of Saint-Louis streets despite heavy investment by NGOs to provide the boys with reliable food and housing. The shores of the city are lined with old tires, plastic bags, and fish remains.

As I looked in at a dark closet where thousands of colonial documents sit waiting to be organized and made accessible to the public, the regional archivist also told me that plans to build a much needed space to securely house the country’s archives had been shelved years ago in favor of the construction of the Piscine Olympique, Dakar’s largest swimming pool.

Riding in a crowded bush taxi and hitting the crawl of traffic on the way back to Dakar, I couldn’t help but wonder what prevents these initial investments in tree plantings, child welfare protection and road construction from being maintained. From this perspective, much of the failure of such development projects seems to be explained by a lack of investment in the maintenance of current projects.  Perhaps this can be explained by the framework of funding and the reluctance on the part of donors to provide for anything other than new projects. (After all, it’s much more exciting to say that Dakar will benefit from a new, state-of-the-art performance space than the rehabilitation of its old theater space.) Or maybe funding agencies and donors find it difficult to collaborate on projects such that one agency might undertake an initial trash clean-up while another would ensure that a second clean-up is planned a month later.

Possibly there is also a lack of coordination between funding agencies and local governments who, once the preliminary heavy investment has been made by development agencies, could then continue the programs with less funding but with longer term results. Projects initiated by African governments also need to consist of more than an initial flood of money but should also include funding to be set aside for the continued and regular maintenance of such projects so that they remain relevant and useful.

Dakar (picture by Erin)

To emphasize this point and to return to my original starting point of La Pointe des Almadies, one only need to look at the pathetically barren palm tree trunks lining Dakar’s prettiest drive from downtown to the “Renaissance” statue that overlooks the Atlantic Ocean.  Abdoulaye Wade requested the planting of hundreds of palm trees along this drive to welcome delegates of the Organization of the Islamic Conference who met in Dakar in 2008. Now, three years later, the majority of these tress are simply reminders of another failed project. Inadequately or never maintained, the trunks stick out of the ground, their tops bare and exposed, they stand isolated and quivering no longer serving a purpose.

I’m sure they looked beautiful in the first weeks they were planted but have become symbols of the emptiness of similar endeavors. I know that there are successfully sustained projects out there but it’s difficult not to feel disheartened by the many visibly failing projects aimed to satisfy a short-term goal or donor stipulations rather than the actual needs of a struggling population.

Erin Pettigrew is currently conducting dissertation research in Senegal and Mauritania.

The private sector is betting that Kenya will survive 2012

As I occasionally care to point out, Kenya is making meaningful progress towards institutionalization of government. According to Joel D. Barkan, the Kenyan parliament is the strongest in Africa. Its judiciary has just undergone radical reforms which saw outsiders from civil society appointed to the country’s newly created Supreme Court. The country’s provincial administration (with pith helmets and all), in the past the key tool of executive repression and control, is in its twilight and will be replaced by a devolved system of counties. The counties will elect their own assemblies, governors and will be funded directly from the consolidated fund.

But many fear that all these reforms could go up in flames in next year’s general election. President Kibaki is term limited and will be stepping down. The frontrunner is Raila Odinga. But new electoral rules – requiring a majority of 50% +1 – complicates matters a bit. Ethnic arithmetic point to an inevitable second round which will be closely fought between pro and anti-Raila factions. Raila is perhaps the most divisive figure in Kenyan politics. Most people tend to either love him or hate him, with a passion.

The prospect of another closely fought election has got many observers worried. 2007-08 is still fresh on many people’s minds.

That is why it is encouraging that the private sector is sending signals that they have confidence in the political system. Multibillion Shilling projects in construction, manufacturing and retail such as this and this are signs that businesspeople do not see that much political risk moving into next year.

These investments are also a vote of confidence in the nation’s property rights regime. The outcome of next year’s general election being unclear, it is significant that businesspeople have faith that their investments will be protected regardless of the outcome.

africa is open for business

There has been a lot of positive talk about business in Africa lately.

Mckinsey came out with its big report in June 2010. That was followed by the release of Steve Radelet’s Emerging Africa, a story of the 17 African countries that have the political and economic fundamentals right. Most recently the Economist has highlighted the fact that among the top ten fastest growing economies in the world over the next decade, seven will be African.

Keeping in the same vein the innovative African Leadership Academy has organized a conference at the Stanford Institute for Economic Policy Research (SIEPR).

The keynote address this morning was by Jeff Sachs via skype. Sachs noted that microfinance was oversold to the global south and that the current backlash is sort of warranted, but that it is overblown.

He also pointed out, rightfully, that pro-poor growth as currently understood “cannot refashion the economy.”

I oftentimes disagree with Sachs’ proposals for ending poverty, but on this point (and as I have written before) he is right. The eradication of poverty in Africa is contingent on sustainable job creation by SMEs and big business.

Other big names at the conference include the Bank’s Devarajan, Mckinsey’s Leke, Africa.com’s Clarke, Chris Udry of Yale, Paul Romer of Stanford, among others.

The conference website is here.

More on this later tonight (west coast time).

second hand clothes

Thanks to a view from the cave I just found out that there is an Oxfam study out there on the effects of second hand clothes (SHC) in the African markets. The findings are largely predictable: the poor benefit from the trade, the trade has created opportunity for fraud and most importantly, it has contributed to the death of local textile industries. The big question then is how to transition from the over-reliance on SHC.

In my view textiles is a sector in which countries would be justified in going nationalist and financing or facilitating the financing of local firms and industries. It is unacceptable that up to 90% of Ghanaians buy second hand clothing despite high unemployment and abundant cotton in the West African region.

Here are some snippets from the Oxfam paper:

The trade has clear consumer benefits. This is especially in countries with low purchasing power, and for poorer consumers, though in many sub-Saharan African countries it seems that almost ALL socio-economic groups are choosing to buy SHC. …. over 90% of Ghanaians purchase SHC.

The trade supports thousands of livelihoods…. These include jobs in trading, distributing, repairing, restyling and washing clothes. Oxfam’s research in Senegal estimates that 24,000 people are active in the sector in that country…. 1,355 people work in formal sector textile/clothing in Senegal.

SHC trade in recipient countries is mainly informal and is poorly regulated. In some instances it has facilitated considerable customs fraud, as new clothing imports have been passed off as used clothing.

textual presence

Google has digitized more than 5 million books in a project that also enables users to track changes in scholarly attention to particular topics. I did a few searches and came up with these results. They obviously do not mean much and are only useful in knowing what scholars paid more attention to at any given time.

There was a time when Africa was cooler than Asia

 

 

 

 

 

 

Positive trends: investment outbids aid

 

 

 

 

 

 

institutions beat democracy?

 

the mdgs

Since everyone is currently talking about the MDGs and how they may or may not be achieved on time here is a nice piece from Bill Easterly.

According to an Oxfam study, eliminating US cotton subsidies would “improve the welfare of over one million West African households – 10 million people – by increasing their incomes from cotton by 8 to 20 per cent”.

I may not always agree with Bill but I think his basic approach to development is spot on. Just like in most human endeavors (politics, economics, sports) systems based on human goodwill are bound to fail while those based on self-interestedness thrive. There is no magic bullet in development, but there is definitely a better approach than is currently being employed. Lets not forget that aid is supposed to eventually lead to self-reliance.

It is already clear that the goals will not be met by their target date of 2015. One can already predict that the ruckus accompanying this failure will be loud about aid, but mostly silent about trade. It will also be loud about the failure of state actions to promote development, but mostly silent about the lost opportunities to allow poor countries’ efficient private business people to lift themselves out of poverty.

Bono has a slightly less realistic more hopeful take on the progress towards achieving the MDGs.

blair commission on african poverty recommends more billions in aid

The Blair Commission set up to find British solutions to African poverty has recommended that the Continent get more billions in aid. There is no doubt that Africa needs all the money it can get, aid cynics’ criticisms notwithstanding. But that money, if it ever comes, should come with new ideas.

Perhaps for a change the money slated for development programs should be channeled as credit to the nascent African middle class. I have previously criticized pro-poor development initiatives for their habit of merely keeping the poor afloat (Think of your average mother of six selling vegetables in a generic African slum). What Africa and its development partners need to do is channel the little development money it has in releasing the talent and aspirations of the middle class to create more jobs. This is not to slight Africa’s poor for lack to talent. It is a mere acknowledgment of the fact that it is the middle class that oftentimes has the education and connections to grow their small start-ups into businesses that create even more jobs.

And in other news, Kenya has struck commercially viable gold. The hunt for oil and gas in the north and north east of the country is still on. One hopes that all the exploration craze will be accompanied by an even greater craze when it comes to investing in Kenya’s human capital.

And yeah, I appreciate the irony in writing about foreign aid and Africa’s vast mineral wealth at the same time.

back in business…

Dear readers, sorry for the long silence. I blame it on the super-slow internet connectivity offered by Safaricom in western Kenyan. Back here in Nairobi things are a bit more normal. Over the next few days I shall post a series of blogs that I wrote but never published for one reason or another.

As promised, here is the comparison between Siaya and Bondo.

Siaya is the older town, and has been district headquarters in the wider Alego and Ugenya areas for quite some time. Bondo on the other hand is a “younger” town (I use ‘young’ here loosely, I don’t quite know when it was founded) and only became district headquarters due to the influence of the Odinga family which calls it its home town. A son of the older Odinga, Raila Odinga, is Kenya’s Prime Minister.

The contrast between the two towns is a lesson in African/Kenyan political economy of development. Siaya, lacking a big man in the capital (Aringo was forever in the opposition and Yinda and Weya are total non-starters) has lagged behind Bondo in many respects. Bondo has a teachers’ training college that has recently been made into  a university college. It has a nice tarmac road linking it to Kisumu, the provincial capital. Right now the roads within Bondo are being done. The road linking Bondo and Siaya is also being done. But within Siaya nothing is happening as far as the roads are concerned, despite the sizable motorcycle and matatu traffic. The road linking Siaya and Kisumu is full of pot holes. The lesson here is that it matters to have someone high up in Nairobi.

The similarities, to me at least, are more interesting. Both towns are filled with small scale shops selling the same stuff – small dukas and “supermarkets”, bicycle and motorcycle repair shops, hardware stores, mobile airtime shops etc. Diversification has not taken root in either town. Even the good roads do not appear to have helped Bondo in this respect. There is also a serious shortage of green vegetables in both. I am told the shortages in kales in particular last between August and March (Kenyan entrepreneurs, are you reading?). I asked if there is a close place nearby where one can source vegetables but was told that the best way to go about it is to “import” the stuff all the way from Nairobi.

My two-day focus on this vegetable thing has taught me that the problem appears to be the fact that all the vegetable farming in this area is rain-fed and are therefore highly seasonal. No one has so far bothered to go large-scale and use some irrigation. Digging a borehole or pumping water from a nearby stream is not that hard. The cost of digging a borehole in the village is no more than $ 800. It is not the cost that is prohibitive, it is collective action that remains elusive – even in this ethnically homogenous part of Kenya.

Just as an aside, my experiences in Siaya so far have made me come to the conclusion that poverty and underdevelopment are, to a large extent, a state of mind. I have mingled with a few local people from Nairobi’s upper middle class and even they seem to traffic in the notion that it is the duty of government and God to run their lives.