Some Policy Lessons from COVID-19

It’s has been illuminating watching African governments respond to the COVID-19 pandemic. Here are some lessons I have gleaned from their responses. For those interested, the IMF has a neat summary of county-level policy responses.

[1] We need a lot more descriptive studies of African economies:

COVID-19 was slow to spread in African states (a reminder of the Continent’s isolating from global transportation networks. The first concentrated cases were in Egypt, largely among tourists on Nile cruises). But once cases started appearing across the Continent, governments rushed to implement policies that were eerily similar to those being implemented in wealthier economies. Complete lockdowns, tax breaks, business loans, and interest rate cuts were first to be announced. Cash transfers followed, but even then from the standard purely humanitarian perspective and not as part of a well-thought out, politically-grounded and sustainable policy response. Forget that African economies are (1) largely agrarian and rural; and (2) highly “informal” (i.e. under-served and under-regulated). How do you implement a lockdown when 80% of your labor force is dependent on daily earnings and cannot stock up on food for days? And how do you tell people “wash hands regularly” when the vast majority of your population lacks access to reliable running water? Do African states have the capacity to sustainably deliver cash transfers to needy households throughout this crisis?

In short, African states’ policy responses to the pandemic so far are an urgent reminder of the enormous gaps that exist between knowledge production, policymaking, and objective realities in the region. Now more than ever, there is a need for socially and politically relevant knowledge production. To bridge these gaps, African governments should invest in making their economies more legible. Such investments should target better data collection as well as the establishment of strong academic departments with expertise in political economy and economic history, in addition to other economics subfields. There is absolutely no way around this.

For instance, what do we know about recovery patterns after recessions in different African countries? How will the current shutdown impact rural livelihoods? African states cannot afford to continue making policy from positions of ignorance, or to outsource economic thinking and policymaking. Collect the data. Analyze the data. Have the results inform policy.

Such efforts will go a long way in helping craft domestic narratives and counter-narratives of socio-economic transformation, and hopefully entrench reality-based policymaking, in addition to putting an end to ahistorical and apolitical policymaking. Policymakers must understand that their economies are not simply Denmark waiting to happen. 

[2] African governments should strengthen their policy transmission mechanisms: 

One of biggest mistakes in the history of economic thought was the invention of the notion of “formal” and “informal” economic sectors. This arbitrary distinction continues to blind African policymakers, and limits their abilities to craft transformative policies. In most African countries, governments fixate on minuscule “formal” sectors, and spend billions of dollars attracting mythical foreign investors to create “formal” sector jobs (and in the process subsidize transfer pricing and the creation of very costly enclave economies). Meanwhile, the same governments ignore “informal” and agricultural sectors, despite the fact that in most countries they typically account for significant shares of output (see images) and upwards of 80% of the labor force.

 

The failure to adequately serve and regulate “informal” and agricultural sectors leaves African policymakers with a set of very blunt tools when it comes to these sectors. How will African governments ensure that SMEs are not completely wiped out by this crisis? How will farm-to-market systems weather the logistical problems caused by large-scale shutdowns? What will be the impact on food prices?

It makes little sense to lower SME taxes or incentivize bank lending to SMEs if the vast majority of SMEs neither pay taxes nor borrow from banks. “Informal” sector workers are typically also not plugged into any skeletal social safety nets that may exist, such as health insurance or pension schemes.

For example, “[i]n Senegal one 2016 government/Millennium Challenge Corporation study found [that] only 15 companies pay up to 75% of the state’s tax revenue.”

Moving forward, African countries need to jettison the “formal” vs “informal” sectors distinction. As the primary source of employment, the “informal” and agricultural sectors deserve a lot more public investments targeted at both broader market creation (domestic and international) and productivity increases. Such investments would give governments important policy levers during both good and bad times. 

The fact of the matter is that agriculture and SMEs are the mainstays of African economies. It is about time that African states’ economic policies and budgeting reflected that reality. Failure to do so will continue to severely limit the efficacy of policy interventions, and leave governments wasting scarce resources attracting investments with very little multiplier effects in their economies.

[3] Elite complacency in Africa is about to get a lot more expensive: 

One need not be wearing a tinfoil hat to see the many ways in which African leaders continue to act like colonial “Native Administrators”. Some do not even pretend to care about aspiring to govern well-ordered societies. For almost six decades the global state system has accommodated elite mediocrity in Africa. During this period, the collusion between African and non-African elites in the pilfering of the region’s resources was balanced with aid money and other forms of support. 

That is changing. Western elites and publics have began to question the utility of foreign aid. Forgetting that the aid is what buys elite-level African alliances, they have come to expect loyalty from African states as a pre-ordained birthright. Many Western countries have also seen significant deterioration in the quality of their political leadership in the recent past, thereby exposing them to a range of domestic crises that will likely distract them into the medium term. China, the other major global player, is not ready to step into the void. 

And so African elites will be forced to step up. What do you do when, after decades of presiding over abominable public health systems that are totally dependent on the generosity of foreigners, you cannot get on a plane to seek medical care abroad? And how do you deal with a pandemic that hits the entire globe at once?

It is no secret that the Global Public Health architecture was built to police and contain disease outbreaks in low-income countries. This has allowed African governments to routinely globalize their public health emergencies and therefore get away with poor governance and lack of dependable healthcare systems.

The combination of an inward orientation of the “international community” and likely recurrence of truly global pandemics will mean that African states will have to build robust and sustainable domestic healthcare systems. It will no longer be a given that the American CDC or the WHO will swoop in with solutions. Under these conditions, failure to plan will likely lead to mass deaths in African states. 

[4] African progressivism needs a reset:

As Toby Green documents in A Fistful of Shells, modern African progressivism (defined as working towards broad-based transformative change) has a long history — going back to the 18th century. Men like Usman dan Fodio reacted to what they perceived to be elite complacency and moral depravity by organizing and seizing power. However, it is fair to say that the postcolonial variant of  progressivism in the region has run out of steam. In nearly every country, it has become permanently oppositionist and anti-establishment. Life out of power has infused it with a streak of expressive performativity that is increasingly divorced from the political and economic realities in the region, and sorely lacking in intellectual rigor (there are exceptions, of course). Arguably, the Thomas Sankara administration (with warts and all) was the last truly progressive administration in the region.

It is about time that African progressivism focused not just on criticizing those in power, but also on developing viable political programs that can win power. This will require organization, political education and communication that resonates with mass publics, genuine openness to knowing “the realities on the ground”, and a dose of principled ideological promiscuity pragmatism. The habit of waiting for perfectly enlightened voters and politicians under perfect institutional conditions effectively concedes the fight to the region’s shamelessly inept water-carriers. 

After 60 years in power, Africa’s ruling elites have become perhaps the most complacent lot in the world. Their destruction of higher education and the region’s intelligentsia in the 1970s allowed them to limit the role of ideas in politics and policymaking. It also helped that they found willing “apolitical” development partners in the “international community.” Even the most “progressive” among them care more about their countries’ rankings in the World Bank’s “Doing Business Index” than in the state of their “informal” and agricultural sectors. 

It is time to infuse African leadership with new thinking and moral foundations of social contracts. Only then will the region’s states be in a position to build the necessary resilience to weather emergencies like COVID-19, and provide necessary conditions for Africans to thrive at home and abroad.

World Development symposium on RCTs

World Development has a great collection of short pieces on RCTs.

Here is Martin Ravallion’s submission: 

….practitioners should be aware of the limitations of prioritizing unbiasedness, with RCTs as the a priori tool-of-choice. This is not to question the contributions of the Nobel prize winners. Rather it is a plea for assuring that the “tool-of-choice” should always be the best method for addressing our most pressing knowledge gaps in fighting poverty.

… RCTs are often easier to do with a non-governmental organization (NGO). Academic “randomistas,” looking for local partners, appreciate the attractions of working with a compliant NGO rather than a politically sensitive and demanding government. Thus, the RCT is confined to what NGO’s can do, which is only a subset of what matters to development. Also, the desire to randomize may only allow an unbiased impact estimate for a non-randomly-selected sub-population—the catchment area of the NGO. And the selection process for that sub-sample may be far from clear. Often we do not even know what “universe” is represented by the RCT sample. Again, with heterogeneous impacts, the biased non-RCT may be closer to the truth for the whole population than the RCT, which is (at best) only unbiased for the NGO’s catchment area.

And here is David Mckenzie’s take: 

A key critique of the use of randomized experiments in development economics is that they largely have been used for micro-level interventions that have far less impact on poverty than sustained growth and structural transformation. I make a distinction between two types of policy interventions and the most appropriate research strategy for each. The first are transformative policies like stabilizing monetary policy or moving people from poor to rich countries, which are difficult to do, but where the gains are massive. Here case studies, theoretical introspection, and before-after comparisons will yield “good enough” results. In contrast, there are many policy issues where the choice is far from obvious, and where, even after having experienced the policy, countries or individuals may not know if it has worked. I argue that this second type of policy decision is abundant, and randomized experiments help us to learn from large samples what cannot be simply learnt by doing.

Reasonable people would agree that the question should drive the choice of method, subject to the constraint that we should all strive to stay committed to the important lessons of the credibility revolution.

Beyond the questions about inference, we should also endeavor to address the power imbalances that are part of how we conduct research in low-income states. We want to always increase the likelihood that we will be asking the most important questions in the contexts where we work; and that our findings will be legible to policymakers. Investing in knowing our contexts and the societies we study (and taking people in those societies seriously) is a crucial part of reducing the probability that our research comes off as well-identified instances of navel-gazing.

Finally, what is good for reviewers is seldom useful for policymakers. We could all benefit from a bit more honesty about this fact. Incentives matter.

Read all the excellent submissions to the symposium here.

People Are Brains, Not Stomachs

Alex Tabarrok over at MR has a fantastic summary of some of the works of this year’s three Nobel Prize winners in Economics. This paragraph on one of Michael Kremer’s papers stood out to me:

My second Kremer paper is Population Growth and Technological Change: One Million B.C. to 1990. An economist examining one million years of the economy! I like to say that there are two views of humanity, people are stomachs or people are brains. In the people are stomachs view, more people means more eaters, more takers, less for everyone else. In the people are brains view, more people means more brains, more ideas, more for everyone else. The people are brains view is my view and Paul Romer’s view (ideas are nonrivalrous). Kremer tests the two views. He shows that over the long run economic growth increased with population growth. People are brains.

Here is the abstract from Kremer’s QJE paper:

The nonrivalry of technology, as modeled in the endogenous growth literature, implies that high population spurs technological change. This paper constructs and empirically tests a model of long-run world population growth combining this implication with the Malthusian assumption that technology limits population. The model predicts that over most of history, the growth rate of population will be proportional to its level. Empirical tests support this prediction and show that historically, among societies with no possibility for technological contact, those with larger initial populations have had faster technological change and population growth.

Read Tabarrok’s entire post here. Highly recommended.

Since Sunday I’ve been asking around if the Prize got any mention on local radio in Busia, Kenya — the cradle of RCTs, if you will, and where Kremer conducted field experiments. No word yet. Will report if I hear anything.

The disaster that is Kenya’s new “competency-based”curriculum

This is from Business Daily:

….. a Grade Two student at a private primary school in Kiambu County, gets upset every evening that his father, Joseph Mutiga, returns home without a printer.

His homework involves printing assignments almost on a daily basis, and his dad has promised him that he will buy a colour printer to make it easier for him to deliver on the assignments.

print outs must be done in full colour.

The Mutiga household’s story is replicated in most Kenyan households that have school going children in Grade Three and below, who are undertaking the new Competency-Based Curriculum (CBC).

The curriculum, which is set to replace the 8-4-4 system that was criticised for being too theoretical and exam-focused, has won admirers and critics in equal measure.

A small home colour printer costs about Sh10,000, which Mr Mutiga says is a new item on his budget. He is also contemplating installing a home internet connection that will add about Sh2,500 to his monthly budget.

Critics, including the Kenya National Union of Teachers (Knut), have however warned that the new curriculum will entrench inequalities where only children of the rich and middle class families will afford to provide their children with the relatively expensive learning materials.

Public schools, and especially those in rural areas and urban slums, are most affected as their student populations cannot afford the materials required for the new curriculum. In Kirinyaga County, Jerry Mworia says his son previously brought home class assignments that only required him to use a pencil and a book. After the new curriculum took effect, he is now regularly required to buy items that are not stocked in his neighbourhood shops such as modelling clay.

“I had to make a two-hour round trip to Kerugoya, the nearest place I could find plasticine (a brand of modelling clay). I bought a kilogramme for Sh150.

Kenya’s CBC is a caricature of isomorphic mimicry. Teachers are not ready. Parents are not ready. The government is not ready. It all sounds like a sophomore project gone awry.

Yet millions of Kenyan pupils will be subjected to this disaster of a policy. It is not hard to see how the new system will worsen class-based differences in education outcomes. The curriculum is totally divorced from the lived experience of the vast majority of Kenyans.

Now it would be one thing if the Kenyan government had the capacity to pull it all off. However, the government merely implemented what “consultants” and “advisors”, many of whom obviously had very little local knowledge, suggested. It has done precious little to prepare the country for the policy.

Most reputable education professionals in Kenya oppose the shift.

The textbooks are a disaster. Teachers have not been trained.

Add this to the list of failed “development” projects that are completely divorced from the objective realities of their intended beneficiaries.

Roll-out of the curriculum has taken off poorly, especially in public schools that do not yet have books and other learning materials. Teachers in some public schools were yet to get instruction kits as of late last week. “From the CBC training, we are required to take videos, pictures and in some lessons use the television as a teaching tool, but we do not have any of the supporting equipment and books at my school,” said Mrs Jackline Mueni, a Grade Three teacher in a public school.

Recall that it is the same Uhuru Kenyatta administration that came up with the hair-brained idea to give a laptop to every Standard One pupil. The plan was later shelved, after reality set in.

The clock is ticking on the CBC.

 

Claims About “Good” Institutions

This is from Yuen Yuen Ang’s excellent book on How China Escaped the Poverty Trap:

When foreign experts enter developing contexts and insist that there is one standard of good institutions — namely, that found in wealthy societies — this by itself imposes a lethal impediment against localized adaptation. Imagine “good governance” in medieval European communes being measured according to how closely they approximated institutions in the future. Then imagine foreign consultants dispensing praise and conditional aid to these European communes based on how well they score in good governance alongside contemporary countries; such an index would be titled “Worldwide and Timeless Governance Indicators” (WTGI). Further imagine medieval commune leaders and merchants being herded into classrooms to be taught about the technicalities of replicating institutions from the future in their current communities. Could this be an environment that empowers medieval actors to improvise fitting solutions for the needs of their time?

Highly recommended.

Is malaria responsible for underdevelopment in Africa?

According to a paper by Depetris-Chauvin and Weil, the answer is no.

Here is the abstract:

We examine the effect of malaria on economic development in Africa over the very long run. Using data on the prevalence of the mutation that causes sickle cell disease, we measure the impact of malaria on mortality in Africa prior to the period in which formal data were collected. Our estimate is that in the more afflicted regions, malaria lowered the probability of surviving to adulthood by about ten percentage points, which is twice the current burden of the disease. The reduction in malaria mortality has been roughly equal to the reduction in other causes of mortality. We then ask whether the estimated burden of malaria had an effect on economic development in the period before European contact. Using data at the ethnic group level, we find little evidence of a negative relationship between malaria burden and population density or other measures of development.\

And here’s a summary of the main finding:

With estimates of the extent of malaria mortality in hand, we then turn to look at the impact of the disease on economic development. We present regressions of a number of measures of development within Africa on a malaria burden measure that we create based on sickle cell prevalence. Of particular note, we apply our analysis to a data set measured at the level of ethnic groups as an alternative to more common country-level analyses. We present simple OLS results, as well as results in which we instrument for malaria burden, using an index of climactic suitability for malaria transmission. The result of this statistical exercise is that we find no evidence of malaria burden negatively affecting historical economic development.

Read the whole paper here.

And here, here, and here are related posts on mosquitoes and malaria.

Aliko Dangote lunches with the FT

This is Pilling in the FT:

As a rule, I don’t get worked up over oil refineries. But the one gradually taking form on 2,500 hectares of swampland outside Lagos, Nigeria’s Mad Max commercial capital, is so big, so audacious and so potentially transformative that it is like Africa’s Moon landing and its Panama Canal — a Pyramids of Giza for the industrial age.

If Aliko Dangote, the billionaire businessman behind what even he calls his “crazy” $12bn project, can pull it off, he will go down as the continent’s John D Rockefeller, Andrew Carnegie and Andrew Mellon combined. And once he’s built it, he intends to treat himself to a small indulgence: he’ll buy Arsenal, his favourite football club.

The whole thing is worth reading. Dangote is a fascinating individual with a very interesting life story (are there any bios out there?) This paragraph caught my attention:

There is not enough industrial gas in the whole country to weld everything together, so Dangote will build his own industrial gas plant. There aren’t enough trucks, so he’s producing those in a joint venture with a Chinese company. The plant will need 480 megawatts of power, about one-tenth of the total that electricity-starved Nigeria can muster. You guessed it. Dangote is building his own power plant too.

Memes on State-Led Industrialization

The graph on the right is popular among pop development economists. But it doesn’t tell us what most people think it does.

In addition to experiencing a different form of colonialism than Ghana or India did, receiving lots of Western aid for geopolitical reasons, and having access to markets in Japan and the US, South Korea also had a much longer history of ethnically and socially unified statehood than either Ghana or India before colonization.

Here is a summary of the mechanisms involved from Bockstette, Chanda and Putterman (2002):

A longer history of statehood might prove favorable to economic development under the circumstances of recent decades for several reasons. There may be learning by doing in the ways of public administration, in which case long-standing states, with larger pools of experienced personnel, may do what they do better than newly formed states. The operation of a state may support the development of attitudes consistent with bureaucratic discipline and hierarchical control, making for greater state (and perhaps more broadly, organizational) effectiveness. An experienced state like China seems to have been capable of fostering basic industrialization and the upgrading of its human capital stock even under institutions of government planning and state property in the 1960s and 1970s, whereas an inexperienced state like Mozambique sowed economic disaster when attempting to pursue similar policies a few years later. Such differences may carry over to a market setting — contrast, for instance, the late 20th century economic development of Japan and South Korea, modern countries with ancient national histories, with that of the Philippines, a nation that lacked a state before its 16th century colonization by Spain.

More on the apparently *transient* effects of unconditional cash transfers

Berk Ozler over at Development Impact has a follow up post on GiveDirectly’s three-year impacts. The post looks at multiple papers analyzing results from the same cash transfer RCT in southwestern Kenya:

First, on the initial studies:

On October, 31, 2015, after the release of the HS (16) working paper in 2013, but before the eventual journal publication of HS (16), Haushofer, Reisinger, and Shapiro released a working paper titled “Your Gain is My Pain.”  In it, they find large negative spillovers on life satisfaction (a component of the psychological wellbeing index reported in HS 16) and smaller, but statistically significant negative spillovers on assets and consumption. The negative spillover effects on life satisfaction, at -0.33 SD and larger than the average benefit on beneficiaries, imply a net decrease in life satisfaction in treated villages. Furthermore, the treatment (ITT) effects are consistent with HS (16), but the spillover effects are not. For example, the spillover effect on the psychological wellbeing index in Table III of HS (16) is approximately +0.1, while Table 1 in HRS (15) implies an average spillover effect of about -0.175 (my calculations: -0.05 * (354/100)). There appear to be similar discrepancies on the spillovers implied for assets and consumption in the HRS (15) paper and HS (16). I am not sure what to make of this, as HRS (15) is an unpublished paper – there must [be] a good explanation that I am missing. Regardless, however, these findings of negative spillovers foreshadow the three-year findings in HS (18), which I discuss next.

Then on the three-year findings:

As I discussed earlier this week, HS (18) find that if they define ITT=T-S, virtually all the effects they found at the 9-month follow-up are still there. However, if ITT is defined in the more standard manner of being across villages, i.e. ITT=T-C, then, there is only an effect on assets and nothing else.

… As you can see, things have now changed: there are spillover effects, so the condition for ITT=T-S being unbiased no longer holds. This is not a condition that you establish once in an earlier follow-up and stick with: it has to hold at every follow-up. Otherwise, you need to use the unbiased estimator defined across villages, ITT=T-C.

To nitpick with the authors here, I don’t buy that [….] lower power is responsible for the finding of no significant treatment effects across villages. Sure, as in HS (16), the standard errors are somewhat larger for across-village estimates than the same within-village estimates. But, the big difference between the short- and the longer-term impacts is the gap between the respective point estimates in HS (18), while they were very stable (due to no/small spillovers) in HS (16). Compare Table 5 in HS (18) with Appendix Table 38 and you will see. The treatment effects disappeared, mainly because the differences between T and C are much smaller now, and even negative, than they were at the nine-month follow-up.

And then this:

If we’re trying to say something about treatment effects, which is what the GiveDirectly blog seems to be trying to do, we already have the estimates we want – unbiased and with decent power: ITT=T-C. HS (18) already established a proper counterfactual in C, so just use that. Doesn’t matter if there are spillovers or not: there are no treatment effects to see here, other than the sole one on assets. Spillover estimation is just playing defense here – a smoke screen for the reader who doesn’t have the time to assess the veracity of the claims about sustained effects.

Chris has a twitter thread on the same questions.

Bottom line: we need more research on UCTs, which GiveDirectly is already doing with a (hopefully) better-implemented really long-term study.

 

 

Is the government of Rwanda massaging statistics on growth and poverty reduction?

This is from the latest installment in the debate over whether Rwanda’s official statistics on economic growth and poverty reduction can be believed:

All poverty lines yield similar trends when used consistently over time, indicating that poverty increased between 5% and 7% points between 2010 and 2014. All changes are statistically significant at the 5% level.

It should be noted that our results differ from those obtained by simply updating the poverty line for inflation using CPI data, as was done by NISR in their 2016 trend report (NISR, 2016). In principle, if the data are of good quality and sufficiently disaggregated, both methods should be equivalent and should not yield significantly different results. This therefore raises questions about the quality / reliability of official CPI data, and/or the quality of price data collected by the EICV. In either case, this would undermine our ability to correctly estimate poverty levels in Rwanda. The discrepancies found here should invite us to more closely scrutinize official statistics coming out of the Rwandan statistical office. GDP growth figures appear to be incompatible with the findings of the EICV survey, given than agriculture still accounts for about one third of GDP and two thirds of the labour force.

More on this here.

The idea that Rwanda is growing without reducing poverty is concerning because it means that the implicit bargain inherent in the country’s political economy — growth in exchange for controlled political development — is not working. It is also likely that the benefits of the country’s recent impressive economic performance are accruing to only a few people, perhaps along ethnic lines. That, again, would be a source of serious concern.

If these data are to be believed, one wonders if Paul Kagame’s refusal to step down is informed by an understanding that the implicit bargain might not hold if he steps down because it was all a mirage to begin with.

More generally, what this means is that Rwanda is developing like any other poor country in which the initial beginnings of rapid growth will be accompanied by rising inequality. The singular problem for Rwanda, of course, is that its history and political economy mean that following this trajectory comes with serious risks to continued political stability.

Cash and Markets in Development

This is from a story in Kenya’s Standard Newspaper:

Martin Wepukhulu is a small-holder farmer in Trans Nzoia County, popularly described as Kenya’s breadbasket. To produce a two-kilogramme tin of maize known as gorogoro here, he spends about Sh25 on land preparation, seeds and fertilisers on his one-acre farm.

Some 270 kilometre away in Turkana County, one of Kenya’s poorest counties, is Loseny Nguono, a goat keeper, with two wives and 13 children. Turkana is one of the 23 counties affected by drought which has left close to 4 million people in danger of starvation.

Loseny receives Sh8,000 after every two months from the national government through the national safety net programme. He is willing to pay Martin a decent Sh70 for his gorogoro of maize. Unfortunately, neither Martin nor Loseny will get his wish. A reclusive government, ruthless cartels, dilapidated roads and marauding bandits conspire to ensure that while Martin sells his cereals at a low of Sh40, Loseny buys it at a high of Sh150.

Read the whole thing here.

It is great that Loseny has cash; and that unconditional cash transfers for social protection are increasingly becoming a mainstream policy option (notice that the story doesn’t even acknowledge the awesomeness of this reality). But the other lesson that we can learn from the story is that in order to get Loseny out of poverty we need good roads, properly functioning markets, and security. All these are public goods that must be provided through collective action, above and beyond the improvements in Loseny’s private consumption.

Economics in Low-Income Countries

I came across Ingrid Kvangraven‘s very thoughtful review of Alternative Theories of Economic Development over at Developing Economics. The book sounds like a rehashing of the standard critiques of contemporary research in the field of development economics, some which tend to fall squarely in the caricature column. That said, caricatures can sometimes be useful in forcing us to reconsider core assumptions. In particular, I think the field of development economics has yet to deal with the problem of being “a tool-driven profession, where the tools determine the types of questions that are possible to ask as well as the type of analysis possible to carry out.”

For instance, I love most of the exciting micro work in development economics, but would certainly be interested in reading more books or papers covering big picture macro topics in developing countries. I also realize that economists from developing countries are the best-placed (in terms of incentives and access to information) to try and answer some of the big picture questions that do not always lend themselves to empirical analyses.

Here are some excerpts:

The editors also emphasize the increasing focus on methods in the field of development economics, rather than theory and history (in line with my own observation). The editors argue that the field has developed into a tool-driven profession, where the tools determine the types of questions that are possible to ask as well as the type of analysis possible to carry out. For example, as pointed out by Viner (1937), increasing returns was removed from international trade theory because it was not compatible with equilibrium. As Paul Krugman (1991) puts it: Economics came to “follow the line of least mathematical resistance”.

screen-shot-2017-02-14-at-3-49-26-pmThe editors also find that the basic fact of uneven development tends to be reduced to models of “dualism,” which implies less attention to the differentiation internal to sectors, and patterns of interaction of different groups of classes within and across sectors. Furthermore, when it is discovered that certain institutions are different from “the norm” in developing countries, they are highlighted and explained using the same basic analytical tools developed for the norm. This type of Economics is what the editors call a National Geographic view of the broader process of development, as only snapshots of particular institutions or economic activities are separated for the analysis.

You can read the whole thing here.

A Kansas City High Schooler’s Development Questions

I regularly receive emails from readers with all sorts of questions and requests. This one caught my eye:

Hello Dr. Opalo,

My name is [redacted] and I am a senior in high school in Kansas City, MO. I am currently working on an exhibition regarding poverty in sub Saharan Africa. My essential question is: What are the factors that contribute to ongoing poverty in sub Saharan Africa. I was wondering if you would be willing to answer a few questions to assist me in my research.

1. How would you describe the current state of poverty in sub-Saharan Africa?

2. What can be done to solve the feminization of poverty?

3. Is Time Poverty a large factor in ongoing poverty and how can time poverty be solved?

4. How can safety be maintained in sub-Saharan Africa through policy?

5. What can an average American do to help end poverty?

Thank you for your time!

If you have answers to any of these questions, let me know in the comments section. I plan to write back before the student’s exhibition is due…

J. D. Vance’s Hillbilly Elegy and Economic Development

Hillbilly Elegy has been touted as a the guide to understanding Donald J. Trump’s overwhelming support among working class European-Americans.

It also has important lessons for students of development. Take this excerpt, for example:

Despite its reputation, Appalachia – especially northern Alabama and Georgia to South Ohio – has far lower church attendance than the Midwest, parts of the Mountain West, and much of the space between Michigan and Montana. Oddly enough, we think we attend church more than we actually do. In a recent Gallup poll, Southerners and Midwesterners reported the highest rates of church attendance in the country. Yet actual church attendance is much lower in the South.

This pattern of deception has to do with cultural pressure. In southwestern Ohio, where I was born, both the Cincinnati and Dayton metropolitan regions have very low rates of church attendance, about the same as ultra-liberal San Francisco. No one I know in San Francisco would feel ashamed to admit that they don’t go to church (In fact, some of them might feel ashamed to admit that they do.) Ohio is the polar opposite. Even as a kid, I’d lie when people asked if I attended church regularly. According to Gallup, I wasn’t alone in feeling that pressure.

The juxtaposition is jarring: Religious institutions remain a positive force in people’s lives, but in a part of the country slammed by the decline of manufacturing, joblessness, addiction, and broken homes, church attendance has fallen off. Dad’s church offered something desperately needed by people like me. For alcoholics, it gave them community of support… For expectant mothers, it offered a free home with job training and parenting classes. When someone needed a job, church friends could either provide one or make introductions.

This is not a political book. Instead, it is simply a powerful narration of a story that is often ignored: that America has millions of poor European-Americans, a good number of whom feel economically and culturally isolated from the public sphere. Vance suggests that this feeling of isolation may have been rendered more acute by the ongoing erosion of the idea that European descent ought to be an automatic ticket to material stability and high social status.

I read this book hoping to get an insight into Hillbilly politics, but the key lesson that I came out with is that people organize out of poverty.

Atomization is disorienting. Stable homes, communities, and well-ordered societies make a huge difference for material outcomes from generation to generation.

History teaches us that the only means of inter-generational persistence of material advancement is through stable and resilient organizations — family units, churches, investment clubs, firms, capable and responsive governments, etc.

I highly recommend the book, whether you are interested in American politics or not.