Tag Archives: Ghana

How Good Are Datasets on Cropland in African States?

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A number of papers (on agricultural productivity, conflict, food security, and impacts of climate change, for example) use cropland cover data as controls. How good are these data?

Here’s the abstract of a paper (open access) from Wei and co-authors:

Accurate geo-information of cropland is critical for food security strategy development and grain production management, especially in Africa continent where most countries are food-insecure. Over the past decades, a series of African cropland maps have been derived from remotely-sensed data, existing comparison studies have shown that inconsistencies with statistics and discrepancies among these products are considerable. Yet, there is a knowledge gap about the factors that influence their consistency. The aim of this study is thus to estimate the consistency of five widely-used cropland datasets (MODIS Collection 5, GlobCover 2009, GlobeLand30, CCI-LC2010, and Unified Cropland Layer) in Africa, and to explore the effects of several limiting factors (landscape fragmentation, climate and agricultural management) on spatial consistency.cropland

The results show that total crop-land area for Africa derived from GlobeLand30 has the best fitness with FAO statistics, followed by MODISCollection 5. GlobCover 2009, CCI-LC 2010, and Unified Cropland Layer have poor performances as indicated by larger deviations from statistics. In terms of spatial consistency, disagreement is about 37.9 % at continental scale, and the disparate proportion even exceeds 50 % in approximately 1/3 of the countries at national scale.We further found that there is a strong and significant correlation between spatial agreement and cropland fragmentation, suggesting that regions with higher landscape fragmentation generally have larger disparities. It is also noticed that places with better consistency are mainly distributed in regions with favorable natural environments and sufficient agricultural management such as well-developed irrigated technology. Proportions of complete agreement are thus located in favorable climate zones including Hot-summer Mediterranean climate(Csa), Subtropical highland climate (Cwb), and Temperate Mediterranean climate (Csb). The level of complete agreement keeps rising as the proportion of irrigated cropland increases. Spatial agreement among these datasets has the most significant relationship with cropland fragmentation, and a relatively small association with irrigation area, followed by climate conditions. These results can provide some insights into understanding how different factors influence the consistency of cropland datasets, and making an appropriate selection when using these datasets in different regions. We suggest that future cropland mapping activities should put more effort in those regions with significant disagreement in Sub-Saharan Africa.

Here’s what they did:

…. we compared the spatial agreement of cropland to assess the consistency of five datasets in the same location. These datasets were overlapped to generate a new composite map revealing whether and where the original datasets agreed on the same locations (Yang et al., 2017). Pixels of the composite map were assigned values ranging from 0 to 5. The highest value 5 represents the complete agreement, where all five datasets were consistent in cropland identification for a pixel. As the value decreases, spatial consistency between these crop-land datasets decreases. The lowest value with value 1 means that only one dataset identifies the pixel as cropland.cropland_cover

The best consistency of five datasets occurs in Egypt, with the complete agreement value of 47.86 %, while the highest disagreement is in Western Sahara, whose spatial disagreement is 91.08 %.

World Bank Aid and Corruption

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Here’s the now infamous paper that the World Bank is alleged to have tried to censor, actions that led its Chief Economist Penny Golberg to resign in protest. The paper finds that increases in World Bank aid is correlated with the siphoning of cash to offshore financial centres.

Do elites capture foreign aid? We document that aid disbursements to highly aid dependent countries coincide with sharp increases in bank deposits in offshore financial centers known for bank secrecy and private wealth management, but not in other financial centers. The estimates are not confounded by contemporaneous shocks such as civil conflicts, natural disasters and financial crises, and are robust to instrumenting with predetermined aid commitments. The implied leakage rate is 7.5% at the sample mean and exhibits a strong correlation with the ratio of aid to GDP. Our findings are consistent with aid capture in the most aid-dependent countries.

….In this paper, we study aid diversion by combining quarterly information on aid disbursements from the World Bank (WB) and foreign deposits from the Bank for International Settlements (BIS). The former dataset covers all disbursements made by the World Bank to finance development projects and provide general budget support in its client countries. The latter dataset covers foreign-owned deposits in all significant financial centers, both havens such as Switzerland, Luxembourg, Cayman Islands and Singapore whose legal framework emphasizes secrecy and asset protection and non-havens such as Germany, France and Sweden.Screen Shot 2020-02-18 at 9.22.48 AM

Equipped with this dataset, we study whether aid disbursements trigger money flows to foreign bank accounts. In our main sample comprising the 22 most aid-dependent countries in the world (in terms of WB aid), we document that disbursements of aid coincide, in the same quarter, with significant increases in the value of bank deposits in havens. Specifically, in a quarter where a country receives aid equivalent to 1% of GDP, its deposits in havens increase by 3.4% relative to a country receiving no aid; by contrast, there is no increase in deposits held in non-havens. While other interpretations are possible, these findings are suggestive of aid diversion to private accounts in havens.

The paper finds that project financing (which is arguably easier for the Bank to monitor) is associated with more leakage than general policy financing. The poorest countries see the most leakage.

Our estimates suggest a leakage rate of around 7.5% for the average highly aid-dependent country.

Read the whole thing here.

UPDATE: The World Bank has since agreed to publish the working paper. 

h/t Matt Collin

Africa-China Fact of the Month

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This is from the China-Africa Project:

In purely economic terms, China matters a LOT to Africa but Africa is effectively meaningless to China. Last year, China did more than $4.14 trillion in total global trade. So that means Africa represents just 4.8% of China’s global trade balance, effectively a rounding error for the world’s second-largest economy.

For some additional context, consider that China does more trade with just Germany ($225.7 billion)  and about the same with Australia ($194.6 billion) than it does with all of Africa.

More on this here.

 

Why has economic growth reduced poverty in some African states but failed in others?

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This is from an excellent paper by Rumman Khan, Oliver Morrissey and Paul Mosley:

Between 1990 and 2012, for most of the developing world, poverty has halved or more than halved except in sub-Saharan Africa (SSA). The simple poverty headcount fell from about 60% to 15% in East Asia; 50% to 25% in South Asia; 20% to 10% in Latin America; but only from 57% to under 43% in SSA (Beegle, Christiaensen, Dabalen and Gaddis, 2016: 21- 22). This is despite more than a decade of impressive growth in SSA, averaging 5-6 per cent per year since the late 1990s (Devarajan, 2013: S9). Some countries did (almost) halve poverty, such as Ghana (McKay and Osei-Assibey, 2017) and Uganda (Kakande, 2010), and many achieved significant reductions. In contrast, populous countries such as South Africa and Nigeria, on the available evidence, have not achieved significant poverty reduction.

The authors note that the effects of growth on poverty reduction across Africa has been bimodal. And this is their explanation:

povertyTo explain variation within SSA in poverty reduction, we consider aspects of colonial experience associated with the emergence of differing potential for redistributive policies to emerge after independence. Following the approach of Myint (1976) and others, we classify SSA countries into two groups according to the economic strategies used by the colonial authorities, using pre-independence data on factors such as inequality, land ownership by Europeans and political participation by Africans (the process is detailed in Appendix A, with validation by cluster analysis). In smallholder production economies, African agricultural smallholders had economic and some political participation. In contrast, extractive production economies dominated by foreign-owned mines and large-scale farms fostered the emergence of an elite politics characterised by urban bias and capital-intensive production technologies. During the colonial period African economies became clustered around a bimodal structure, which provided better opportunities to the poor in countries whose production was based on the development of labour-intensive smallholder exports than in countries whose growth strategy was based more on capital-intensive mines and large farms. We then test if the growth elasticity of poverty differs between these two groups of countries, using available (PovcalNet) poverty data since 1985, noting that mean growth rates for the two groups were very similar. The analysis shows that the smallholder group significantly outperformed the extractive group, smallholder experience is a significant predictor of poverty reduction, and inclusion of other potential explanatory variables does not alter the conclusion.

I recommend you read the whole paper (including the very rich appendix).

On external interventions to improve village-level governance and development: The DRC Edition

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This is from an excellent JDE paper by Humphreys, de la Sierra and der Windt:

We study a randomized Community Driven Reconstruction (CDR) intervention that provided two years ofexposure to democratic practices in 1250 villages in eastern Congo. To assess its impact, we examine behavior in a village-level unconditional cash transfer project that distributed $1000 to 457 treatment and control villages. The unconditonal cash transfer provides opportunities to assess whether public funds get captured, what governance practices are employed by villagers and village elites and whether prior exposure to the CDR intervention alters these behaviors. We find no evidence for such effects. The results cast doubt on current attempts to export democratic practices to local communities.

Here’s a description of the program:

Our study takes advantage of a large UK funded CDR program, called “Tuungane,” implemented by the International Rescue Committee andCARE International in 1250 villages throughout eastern Congo. The program had as a central goal to “improve the understanding and practice of democratic governance ….”

… Over a four year period, the program spent $46 million of development aid, reaching approximately 1250 villages and a beneficiary population of approximately 1,780,000 people. A large share of this funding was used for facilitation and indirect costs, with only $16m, 35% of the total program costs, going directly towards infrastructure. These shares reflect the fact that the main focus of the intervention was institutional change, not the use of existing institutions to deploy development funds.

This very cool paper raises important questions about the role of elites in African development (read it to get a better understanding of the futility of these kinds of “democracy promotion”, too).

It might seem logical to assume that short-circuiting elite power, whether at the local or national level, may lead to accelerated development. However, because a lot of “development” is often elite-driven, an explicit agenda of effective elite disempowerment might actually yield suboptimal outcomes. All else equal, elites are often better organized, better-placed to take risks (on account of having more economic slack), better able to protect their property rights, and routinely deploy the state to further advance their economic interests. $46m in the hands of a powerful and secure elite class might yield jobs in firms that provide economic stability for whole districts. It is also true that less powerful or stable elites are likely to squander it on consumption, quick profit schemes, or stash it abroad.

These observations are not unique to African states.

Overall, when I look at most African states, what I see are a lot of very weak elites lacking social power, constantly unable to bend their societies to their will, and resigned to low-equilibrium forms of  political and economic organization (for example, by being mere middlemen in lucrative global commodity markets). In the case of the DRC, this is true whether one looks at Kabila/Tshisekedi or the leaders of armed groups in the east of the country. The same goes for so-called “traditional” leaders. Throughout the country and in the wider region, such elites lack infrastructural power in profound ways. Importantly for economic development, many often lack the ability to protect their own property rights. Our stylized idea of the nature of societal power relations on the Continent needs some updating. Consider this paragraph:

Eastern Congo is a well-suited environment to examine the adoption of democratic practice in local governance. The state has largely with-drawn from the rural areas of the east and enjoys low legitimacy. Local governance is often described as “captured” by traditional chiefs and vulnerable to corrupt practices by state officials. These features are not unique to the Congo. Multiple accounts suggest that in many Sub-Saharan states, colonial rule used pre-colonial institutions to create “decentralized despots” in ways that are detrimental to development.

topographies.jpgAre local elites in the modal African country this powerful? Is this the sense one gets traveling in rural Ghana or Zambia? Do these (mostly) guys look like they are in charge? As the paragraph notes, “traditional leaders” often lack the means to coerce their constituents (the state is largely absent). Despite Mamdani’s persuasive (Rwanda) story, these are not powerful and unchecked “despots” in the standard sense.

At times Africanist scholarship on state/elite society relations can seem schizophrenic: Africa is the land of “imperial” big men elites who can scarcely project their power on account of state weakness (see here, here, and here). Since the early 1990s, a lot of effort has been put into taming the allegedly imperial political elites in the region. Missing in our analyses and in donor programs have been attempts to understand the structural weakness of these same elites and the attendant consequences. The presence of an erratic and parasitic elite class might be the proximate cause of underdevelopment in the region. However, I would argue that a deeper cause is persistent elite weakness in the region. Catherine Boone’s book (see image) is the best I’ve ever read on African elites’ strategies of power projection in a context of state weakness (Boone is easily the most underrated Comparativist of her generation).

The tenures of Africa’s Amins, Mobutus, and Bongos took the form they did in no small part because these were structurally weak leaders (long leadership tenure is not synonymous with state capacity). Throughout their times in office they did all they could to destroy any and all alternative centers of power (including institutions such as legislatures). Their failures reinforced their respective counties’ two publics problems whose legacy is chronic elite weakness that is obvious for all to see. To this day, very few African countries have stable economic elite classes with easily identifiable immovable assets in-country. Most operate like little more than Olsonian roving bandits.

I am yet to see a clear theory that links greater vertical accountability to state/elite capacity. The historical record suggests that democracy works best in contexts with pre-existing state/elite capacity. In my own work, I’ve shown how strong autocratic legislatures beget strong democratic legislatures.

This is not a defense of autocracy. It is a reminder that the processes of state and political development, while related, often run on separate tracks and should therefore be decoupled in programs such as the one above and in our studies.

Public Debt in African States

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This is from the IMF:

Screen Shot 2018-11-23 at 10.27.45 AMCountries in sub-Saharan Africa accumulated external debt at a faster pace than low- and middle- income countries in other regions in 2017: the combined external debt stock rose 15.5 percent from the previous year to $535 billion. Much of this increase was driven by a sharp rise in borrowing by two of the region’s largest economies, Nigeria and South Africa, where the external debt stock rose 29 percent and 21 percent respectively.

Export growth is not keeping up with rising levels of external debt:

….In 2017, the ratio was largely unchanged from the prior year, at an average of 138 percent. However, this ratio was close to double the average of 70 percent in 2010. Moreover, the average ratio masks wide disparity between countries. At the end of 2017 54 percent of countries in the region had an external debt-to-export ratio over 150 percent, as compared to 28 percent of countries in 2010 and the number of countries where the ratio surpassed 200 percent more than doubled, from 6 countries to 14 countries, over the same period. Most of these countries are ones that benefitted from HIPC and MDRI relief, including Burundi, Ethiopia, Niger, Senegal and Tanzania.

Bond issuance is dominated by a handful of countries:

Bond issuance by sovereign governments and pub- lic-sector entities in the region rose to $27 billion in 2017, a more than fourfold increase over 2016, driven to a large extent by a surge in issuance in South Africa to $19 billion from $4 billion in 2016, 70 percent of bond issuance in the region last year. An important factor was non-resident purchase of bonds issued in the South African domestic market. Bond issuance by other countries in the region totaled $8 billion, a tenfold increase from 2016, reflecting continued investors’ confidence and search for yield. Issuing countries in 2017 were Nigeria ($4.8 billion), Cote d’Ivoire ($2 billion), Senegal ($1.1 billion), and Gabon ($0.2 billion). Nigeria’s $3 billion Eurobond issuance marked the country’s largest such operation to date, and at end 2017, bond issuance accounted for one third of the country’s outstanding external debt.

Overall, while the data suggests that things may not be as bad as they were over the lost long decade (1980-1995), the trends are not encouraging. Total reserves as a share of external debt peaked around 2010 and have been in decline since. Screen Shot 2018-11-23 at 10.54.37 AM

It’s getting easier to do business in Africa

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At least according to the World Bank Group:

Sub-Saharan Africa has been the region with the highest number of reforms each year since 2012. This year, Doing Business captured a record 107 reforms across 40 economies in Sub-Saharan Africa, and the region’s private sector is feeling the impact of these improvements. The aver- age time and cost to register a business, for example, has declined from 59 days and 192% of income per capita in 2006 to 23 days and 40% of income per capita today. Furthermore, the average paid-in minimum capital has fallen from 212% of income per capita to 11% of income per capita in the same period.

See the 2019 Doing Business Report here.

Here are some questions from last year on the integrity of the Doing Business Index.

Colonial education, social status, and social mobility in Uganda

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This is from an exciting paper by zu Selhausen et al. in Economic History Review:

This article uses Anglican marriage registers from colonial and post‐colonial Uganda to investigate long‐term trends and determinants of intergenerational social mobility and colonial elite formation among Christian African men. It shows that the colonial era opened up new labour opportunities for these African converts, enabling them to take large steps up the social ladder regardless of their social origin. Contrary to the widespread belief that British indirect rule perpetuated the power of African political elites (chiefs), this article shows that a remarkably fluid colonial labour economy actually undermined their social advantages.

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conditional probability of entering Class I (Kampala)

Sons of chiefs gradually lost their high social‐status monopoly to a new, commercially orientated, and well‐educated class of Anglican Ugandans, who mostly came from non‐elite and sometimes even lower‐class backgrounds. The study also documents that the colonial administration and the Anglican mission functioned as key steps on the ladder to upward mobility. Mission education helped provide the skills and social reference needed to climb the ladder in exchange for compliance with the laws of the Anglican Church. These social mobility patterns persisted throughout the post‐colonial era, despite rising levels of informal labour during Idi Amin’s dictatorship.

Status inversion/disruption during colonialism is significantly under-appreciated as a cause of elite political instability in post-colonial Africa (paper on this coming soon). Ghana, Nigeria, and Uganda are paradigmatic examples of this phenomenon of educated “commoners” butting heads with established pre-colonial ruling elites following independence. 

The authors also call for a more nuanced understanding of political power under British indirect rule:

Although many Ugandan chiefs were appointed as administrative officials under indirect colonial rule and in this way exercised both political and economic power over the local population, our micro‐evidence portrays a society in which access to secondary education and a labour market seemingly based on meritocratic criteria caused chiefs’ colonial power gradually to disappear. This shift, which was helped by colonial land reforms and increased African access to Kampala’s formal labour market, challenges the perception of British indirect rule as ‘decentralised despotism’. It also illustrates how mission education did more to foster social mobility among our sampled grooms than to entrench the traditional privileged classes.

Read the whole paper here (gated).

 

 

Religious offerings as insurance?

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This is from Auriol et al.

This paper presents experimental evidence exploring how insurance might be a motive for religious donations by members of a Pentecostal church in Ghana. We randomize enrollment into a commercially available funeral insurance policy and let church members allocate money between themselves and a set of religious goods in a series of dictator games with significant stakes. Members enrolled in insurance give significantly less money to their own churches. At the same time, enrollment in insurance reduces giving towards other spiritual goods. We set up a model exploring different channels of religious based insurance. The implications of the model and the results of the dictator games suggest that adherents perceive the church as a source of insurance and that this insurance is derived from beliefs in an interventionist God. Survey results suggest that community-based material insurance is also important and we hypothesize that these two insurance channels exist in parallel.

…. Our findings add to the literature on the economic functions of religious organisations by providing experimental evidence that a religious institution can be used as a substitute for a formal financial service in an environment where obstacles to the functioning of the formal market are high. Furthermore, the experimental findings add nuance to the literature on religious institutions as coordinating platforms by demonstrating that adherents might care as much about spiritual insurance (affecting outcomes through signalling to an interventionist God) as they do about material insurance (accessing transfers of goods and services from other church members).

The paper, of course, provides micro evidence of wider country-level correlations between income (which maps onto financial access) and religiosity.

Religion_economy.png

 

Memes on State-Led Industrialization

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click on image to enlarge

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.

Patchwork Leviathans? Pockets of Excellence in Otherwise Dysfunctional States

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This is from Erin Metz McDonnell:

Within seemingly weak states, exceptionally effective subunits lie hidden. These high- performing niches exhibit organizational characteristics distinct from poor-performing peer organizations, but also distinct from high-functioning organizations in Western countries. This article develops the concept of interstitial bureaucracy to explain how and why unusually high-performing state organizations in developing countries invert canonical features of Weberian bureaucracy. Interstices are distinct-yet-embedded subsystems characterized by practices inconsistent with those of the dominant institution. This interstitial position poses particular challenges and requires unique solutions. Interstices cluster together scarce proto- bureaucratic resources to cultivate durable distinction from the status quo, while managing disruptions arising from interdependencies with the wider neopatrimonial field. I propose a framework for how bureaucratic interstices respond to those challenges, generalizing from organizational comparisons within the Ghanaian state and abbreviated historical comparison cases from the nineteenth-century United States, early-twentieth-century China, mid- twentieth-century Kenya, and early-twenty-first-century Nigeria.

…… Monolithically dysfunctional administrations are the exception, not the rule— albeit the exception that has long captured popular and academic attention (Evans 1989; Helman and Ratner 1992). Instead, many states regarded as uniformly ineffectual have great internal variation, with agencies spanning a continuum from ineffectual quagmires to competently achieving organizational man- dates in the public interest. These state “leviathans” are patch-worked: they are cobbled together from scarce available resources, with organizational diversity sewn loosely together into the semblance of unity. In such states, adapted Weberian-style bureaucracy exists in interstices—niches within predominantly neopatrimonial administrations.

The sociology of state and nation building, and development in general, is underrated.

Read the whole thing here.

Answers to Some of Team Trump’s Questions on Foreign Aid to Africa

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A piece in the New York Times highlights some of the Africa-related queries posed by Team Trump to the State Department. Sub-Saharan Africa’s 48 countries get $8b in U.S. aid each year. The average country receives far less than critical U.S. allies like Afghanistan ($5.5 billion), Israel ($3.1 billion), Iraq ($1.8 billion) and Egypt ($1.4 billion).

Here are some answers to Team Trump’s questions.

With so much corruption in Africa, how much of our funding is stolen? Why should we spend these funds on Africa when we are suffering here in the U.S.?

 First of all, corruption is not the biggest impediment to success in the aid business. Often, it is poor planning and execution. And most of the time this tends to be the fault of the donors themselves. Research shows that aid works best when complemented with strong local capacities. This requires knowing what those capacities are, or investing in their long term development.

I would suggest that the administration worries more about planning and execution. How can you make your aid agencies better at identifying and executing on projects? How can you help African countries improve their absorption capacity of aid dollars without too much distortion of their local political economies? How can you move away from projects predicated on good will, and into ones that are anchored on self-interest and value creation?

Africans want jobs. Not handouts. And the 0.2% of the U.S. budget that goes to this region each year can be a powerful tool for shifting incentives in the right direction as a far as job creation is concerned. Want to export more GM cars or carrier air conditioning units to Lagos? Then help create the demand by creating jobs in Lagos.

The new administration should also end the double talk of financing corruption and condemning it at the same time.

screen-shot-2017-01-14-at-2-17-58-pmTake the example of security assistance. If you want to reduce corruption in military procurement, I would suggest that you channel all assistance through the normal appropriation processes in African legislatures. More people will know how much money is going where, thereby increasing the likelihood of greater accountability. The same applies for budget support. Strengthen existing constitutional appropriation processes so that bigger constituencies get to own the aid dollars.

Leaders do terrible things all the time for political reasons, and not because of an inherent failure in moral judgment. Learn to respect and trust your African counterparts. Know their interests. Don’t think and act like it is 1601.

We’ve been fighting al-Shabaab for a decade, why haven’t we won?

Well, for a number of reasons. Kenya, Ethiopia, the U.S., and the other TTCs are working at cross-purposes. The first best option would be to strengthen Mogadishu as the center of a strong unitary state. But no one wants that. Not the Somalian elites running the state-lets that make up the federal state. Not Kenya — whose goal seems to be no more than creating a buffer stable region in Jubaland. Not Ethiopia — whose elites are more concerned about Pan-Somalia irredentism and their own domestic politics. And certainly not the TTCs — who are largely in it for the money and other favors from Washington and Brussels. The second best option would probably be to localize the Al-Shabaab problem and then strengthen the Somali state-lets so that they can be able to fight the group. However, by globalizing the “war on terror” the U.S. has largely foreclosed this option. Also, Mogadishu would not want to cede too much military power to the states.

All to say that the U.S. cannot win the fight against al-Shabaab, certainly not by raining fire from the air.

Somalians, with some help from their neighbors, are the best-placed entity to win the war. But for this to happen, all actors involved — and especially Ethiopia and Kenya — must have an honest discussion about both short-term and long-term objectives of their involvement, and the real end game.

Most of AGOA imports are petroleum products, with the benefits going to national oil companies, why do we support that massive benefit to corrupt regimes?

Again, you should not approach this problem from the perspective of a saintly anti-corruption crusader. Moralizing from the high mountains is boring, and does not solve anything. I thought the Trump Team would be into dealing with the world as it is. Appeal to the specific interests involved. Think creatively.

It turns out that public finance management is a lot harder than most people think. Don’t expect people to be honest and patriotic. Help design PFM systems that are robust to the worst of thieves.

Here, too, I would suggest a move towards mainstreaming resource sector transactions into the normal appropriation processes. For instance, the administration can introduce greater transparency in the oil business, and create stronger links between oversight authorities in the host countries and the American firms involved. This will not end corruption, but it will serve to disperse power within the oil producing countries. And that would be a good thing.

Also, a quick reminder that AGOA involves more than just oil. Africa’s tiny textiles sector benefits too. Doing more to develop this sector would create tens of thousands of jobs, thereby reducing aid dependence.

We’ve been hunting Kony for years, is it worth the effort?

Nope.

The LRA has never attacked U.S. interests, why do we care? Is it worth the huge cash outlays? I hear that even the Ugandans are looking to stop searching for him, since they no longer view him as a threat, so why do we?

I have no idea.

May be this has been used as a way of maintaining ties with the Ugandan military in exchange for continued cooperation in central Africa and in Somalia? May be it is a secret training mission for the U.S. military in central Africa?

I honestly have no idea.

Is PEPFAR worth the massive investment when there are so many security concerns in Africa? Is PEPFAR becoming a massive, international entitlement program?

PEPFAR has saved millions of lives. And I would argue that it is probably America’s most important investment in soft power across Africa.

I would suggest a few modifications, though. The new administration should think creatively about how to use PEPFAR dollars to strengthen African public health *systems* in a manner that will allow them to provide effective care beyond HIV/AIDS. Malaria and GI diseases kill way more people. These need attention, too.

How do we prevent the next Ebola outbreak from hitting the U.S.?

By strengthening public health systems in countries that are likely to experience Ebola outbreaks.

How to Eliminate Malaria

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Sri Lanka is the latest country to be declared malaria free by the WHO.

How did they do it?

According to the New York Times:

In 2000, outside the rebel-controlled areas in the northeast, malaria cases began dropping as the government, with donor help, deployed a mix of indoor spraying, bed nets, rapid diagnostic kits and medicines that combined artemisinin, an effective treatment, with other drugs.

The government also screened blood samples drawn — for any reason — in public clinics and hospitals for malaria infection, and officials established a nationwide electronic case-reporting system.malariaeradication

In war-torn areas, the disease retreated more slowly, although the Tigers often cooperated with malaria-control teams because their villages and fighters also suffered.

Nonetheless, in a population of 20 million, it took years to get rid of the last few hundred annual cases. Most were soldiers and itinerant laborers, often from India, who worked in remote slash-and-burn farming areas and in logging and gem-mining camps.

Someone tell African policymakers that bed nets and behavior change are not enough.

Every other region of the world appears to be willing and able to combine vector (mosquito) control with other strategies of containing malaria with success (and enthusiastic donor support). But for some reason mosquito control is still lagging in Africa, even in otherwise strong and stable states. In some instances this has been due to environmental concerns while in others it has been due to the misplaced priorities of public health officials, donors, development agencies, and academic researchers.

The result:

About 3.2 billion people – nearly half of the world’s population – are at risk of malaria. In 2015, there were roughly 214 million malaria cases and an estimated 438 000 malaria deaths. Increased prevention and control measures have led to a 60% reduction in malaria mortality rates globally since 2000. Sub-Saharan Africa continues to carry a disproportionately high share of the global malaria burden. In 2015, the region was home to 89% of malaria cases and 91% of malaria deaths. 

214 million malaria cases amount to lots and lots of lost productivity. Also, losing one Miami every year in deaths is simply unacceptable.

More on this here. 

Mozambique may have squandered up to $2b of borrowed money

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Public Finance is emerging to be one of the biggest development challenges of our age. Here’s Africa Confidential on Mozambique’s hidden loans, which may amount to more than $2b.

Screen Shot 2016-05-12 at 1.38.32 PMSources close to Rosário Fernandes, ex-head of the revenue authority, the Autoridade Tributária de Moçambique, have told us of systematic diversions of taxes straight into the pockets of the Frelimo elite, especially in the later years of President Guebuza’s term of office, when he exercised enormous patronage. Massively inflated contracts were commonplace. The latest to emerge is the extravagant, nearly complete, Bank of Mozambique building in Maputo, which boasts a helicopter landing pad on the roof. Originally estimated to cost $90 mn., the final cost is reckoned at at least $300 mn., with kickbacks and ‘commissions’ accounting for the cost inflation, say Frelimo sources.

Guebuza engaged in an ultimately doomed attempt to extend his term of office, which ended in October 2014, and this partly explains the extraordinary scale of his liberality towards loyalists, sources formerly close to him told us (AC Vol 53 No 18, The Putin option). The schemes became increasingly brazen, and the creation in 2013 and 2014 of three companies – Empresa Moçambicana de Atum (Ematum), Proindicus and Mozambique Asset Management (MAM) – was the culmination of this programme. The companies, which received the totality of the $2 bn. now owed by the state, were mainly in the field of maritime security, even though it was the intelligence and security services that provided the management. They bypassed parliament, illegally, and defence procurement, effectively privatising, as one commentator put it, national security while lining the pockets of the elite into the bargain. Yet the ill-equipped companies could not cope and quickly collapsed. Ematum, which originally claimed to be focused on tuna fishing, is no longer operating its few licensed vessels because it cannot pay salaries (AC Vol 56 No 24, Nyusi’s nightmare).

Kenya, Zambia, among others, have also borrowed enormous amounts of money that have not been properly accounted for. Several of these countries have recently gotten cover from the IMF that all is well. But the IMF has strong incentives to save face and maintain confidence that it does its job.

If Mozambique could do it, what stops more sophisticated treasuries elsewhere on the Continent?

I am increasingly convinced that Africa’s newfound love with international creditors is a bond bubble waiting to happen. The 1980s and early 1990s sucked. And we might be headed for a repeat if the African states floating eurobonds continue on the same path.

This graph doesn’t tell us what you think it does (Because stateness matters)

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You probably saw this graph in your undergraduate development class — almost invariably as a demonstration of South Korea’s massive growth relative to countries that were allegedly at similar levels of “development” in the early 1960s.

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But were these countries really at the same level of development as South Korea?

The simple answer is no.

And to know why you need to read States and Markets: The Advantage of an Early Start:

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.

Development is not just about income. It also involves a lot of intangible socio-political variables. Going back to the graph, a key difference in 1960 between Ghana, India, and South Korea was the degree of coherent stateness. On this measure South Korea was way ahead of its developing country peers.

For more on this Dani Rodrik has a delightfully concise take on how South Korea and Taiwan grew rich.

Even within Africa, historical stateness makes a difference in development outcomes. A neat recent example can be found in Ethiopia’s ability to build a light rail in Addis in record time as Nigeria floundered.