Median vs Per Capita Income in Africa

CGD’s Anna Diofasi and Nancy Birdsall compiled median income (2011 PPP) data for 144 countries. In the data they find interesting cases of a mismatch between median and per capita incomes:

the median reflects how much the person at the 50th percentile of the income distribution earns (or spends), giving us a better picture of the well-being of a “typical” individual in a given country. Take Nigeria and Tanzania: in 2010, Nigeria’s GDP per capita (at PPP) was $5,123; Tanzania’s stood at only $2,111. This suggests that Nigerians were more than twice as well off as Tanzanians. Yet, if we compare consumption medians, a different picture emerges: a Nigerian at the middle of the income distribution lived on $1.80 a day, while his or her Tanzanian counterpart had 20 cents more to spend, at $2 a day.

I got curious and made maps of median (2011 $$) and per capita (2010 $$) incomes on the Continent.

income differences

What is going on with median incomes in Central Africa from CAR through to Mozambique? Also, what’s up with Zambia?

Asking the right questions in development

When it comes to aid and development, the question we should be asking is not whether aid works (a.k.a the Great Easterly-Sachs Debate), but rather what kind of aid works and under what conditions.

Here’s CGD’s Jonathan Glennie and Andy Sumner on the subject (read the whole paper here):

Part of the problem is the polarised and non-nuanced public policy debate between the ‘aid works’ versus ‘aid is a waste of money’ camps. In our review we are constrained by reviewing how the literature has approached this question. We thus take aid ‘working’ or ‘effective aid’ to mean aid that contributes to, or is associated with, even if only modestly, positive development outcomes such as economic growth and social development. This is not an ideal definition but it is common in the literature and thus a review is constrained in opening this question further. Meanwhile the lack of a counter-factual is the biggest barrier to ever knowing for certain the impact of aid. The idea that aid ‘works’ can be questioned by interested parties, both informed and uninformed; assertions that aid is wholly or in part responsible for impressive improvements in human development in the past couple of decades are questionable. It is also not difficult to find examples where aid has been detrimental to countries and communities and where there may be trade-offs in terms of positive and negative impacts. More modesty is needed in any claims for how aid can contribute to development. However, the evidence, which we discuss in this paper, does suggest that aid has contributed in many countries and, despite its many flaws, can continue to do so.

Read the whole paper here (highly recommended).

How I would not lead the World Bank – Bill Easterly

For those, like me, who still miss Aid Watch, here is Easterly over at FP:

I would not appoint U.S.-educated elites vetted by their autocratic home governments to represent the underrepresented peoples of the world. I would not negotiate the contents of World Bank reports with governments in either the West or the Rest, except possibly for correcting typos.

I would not lead the World Bank by perpetuating the technocratic illusion that development is something “we” do to “them.” I would not ignore the rights of “them.” If the New York Times should happen to report on the front page that a World Bank-financed project torched the homes and crops of Ugandan farmers, I would not stonewall the investigation for the next 165 days, 4 hours, 37 minutes, and 20 seconds up to now.

More on this here.

And for more on leadership selection at IFIs see CGD’s policy brief here.