Post-liberation governance, aid effectiveness, and a less dismal science

On the difficulty of running a post-liberation government, with applications to Rwanda, Uganda, and South Sudan: 

the central challenge for power holders is often not economic, but political. Former rebels continue to use the informal mechanisms that suited them so well when conspiring outside government. Power consequently resides in a shadow state, characterised by the personal and reciprocal arrangements which developed in the struggle. … though optimists point to economic progress, the reality is one of intense intra-elite competition with incredible violent potential, as has been witnessed in all three countries in the past and as might soon occur again in Rwanda and South Sudan.

Last month’s violence in South Sudan between rebel groups and the government.   

“Satellite images released by US pressure group the Enough Project, appear to back up claims of troop reinforcements and northern ‘fortified encampments inside Abyei.’ … With the referendum over, [former peace] deals [between southern groups] are now falling apart as groups jockey for power.”

The ‘consensus’ still seems to be that outright war is unlikely, that enough people want to avoid it … but they don’t yet have the trust and social capital to make it a nonissue.

The Africa News Blog cynically posits that the lessons to be learned from Gbago’s fall are not the ones we might wish: don’t hold elections unless you know you’ll win, don’t let the news get out if they don’t, and do your election rigging well in advance (prevent opposition from getting out their voice) rather than trying to stuff ballot boxes.

How effective is aid in Madagascar? Aid doubled between 2008 and 2010 with few noticeable results.

How effective is aid in Haiti? Well, people would rather stay in the tent cities where conditions are much better thanks to the aid. Is that a good thing or a bad thing? It’s just a good thing we don’t have to actually talk to poor people to find out how to do this kind of work (/sarc)

Over lunch two weeks ago, I wondered at the fact that media don’t run more positive stories about Africa like the successful, peaceful, free, and fair elections that happened recently. After all, since the West expects bad news, reporting more bad news is just “dog bites man,” it’s not news. When things go right, why don’t we see more news announcements “Something Goes Right in Africa.” … Might make an interesting blog title, that. 

One answer to why not is because, among the people who have information about the continent, it’s in very few people’s interest to widely spread good news. Another name for it is the Tragedy of the Commons in Selling Tragedy by Kenny, who has a book out trumpeting development successes: Remember Tolstoy’s maxim: “happy families are all alike; every unhappy family is unhappy in its own way.” From its introduction, Kenny writes that

the proportion of the population of sub-Saharan Africa affected by famine averaged less than three-tenths of a percent. The proportion who were refugees in 2005 was five-tenths of a percent. The number who died in wars between 1965 and 2001 averaged one one-hundredth of a percent.

For instance, on the plus side the Somali government prevented the trafficking of a pair of endangered lion cubs. See, occasionally the news in Africa really is about lions!

Willingness to Pay: Livestock

Awono, Dupraz, and Vermersch, (2011) “Consumer willingness to pay for attributes of west-African poultry: using the microeconomics of implicit price,” GREDI Working Paper 11-01.

By west-African they mean Cameroon. They estimate a hedonic function to get at consumers’ willingness to pay for each attribute. They find that the most important attributes are low cost, being sold in separate parts, and distance to find it (the further the distance, the greater the desire for separate, ready-to-cook parts). This gives frozen chicken – imported from Europe or Brazil – a decided advantage over local “wet” market chicken grown locally. Attributes that were not significant included: taste, product quality, household size or occupation, or education. Imported chickens are blamed with putting many local poultry farmers out of business. The main item in favor of local chicken is that you can haggle over prices.

That apparently is not so much the case in China: “They insist on having the animal killed in front of them so they can guarantee it’s fresh. They need to see the gleam in the animal’s eye so they know the merchant is not cheating them.” Oh, the importance of a marketplace based on trust and enforced quality standards!

Among desirable attributes for meat in general is a certain degree of safety. Food safety is significantly increased by cooking your meat thoroughly. One article claims that we have gotten much better at getting rid of pathogens and contaminants in our pork supply chain, so we ought to be able to cook pork at lower temperatures while maintaining adequate safety, as we do with better cuts of beef. But the culture is so accustomed to only well-done pork that there is little call for recipes with medium-done pork.

Behavioral economics has some interesting things to say about willingness to pay in development contexts. Glennerster and Kremer present a handful of interesting conclusions, based largely on RCTs. For one thing, conditional cash transfers (CCTs) are more effective than we think … and often on “control” groups: Malawi varied up the amount of the conditional cash transfer and even the smallest amount was enough to get the average effect, families in Mexico and Columbia who are near the cutoff for receiving the CCT are also more likely to send their children to school without receiving a penny themselves, scholarships for the best-performing girls in Kenya also induced greater effort from boys. Despite all this wonderfulness, the most cost-effective way of getting more students into school was providing information (in Madagascar) while CCTs in Mexico were the least effective. They have similar fun with health research on intervention uptake. Small incentives matter for individual behavior.

Mormons in Africa series

The Church of Jesus Christ of Latter-day Saints put out a series of news reports last week on the church's activity in Sub-Saharan Africa. The Church's Africa Fact Sheet can be found here. There are nearly 320,000 Mormons in Africa, roughly 100,000 of them in Nigeria. The fact sheet also provides statistics for the church's humanitarian aid. The initiatives are described in more detail here and I regularly link to more information.

Elder Richard G. Scott, a senior member of the Quorum of the Twelve Apostles, visited Mozambique in January. In his last visit in 1999 there were 40 Mormons in Mozambique, while there are now over 5000. He spoke to members in several meetings, with some members traveling two days for a chance to be there, as well as to doctors and nurses teaching neonatal resuscitation techniques to 53,000 medical professionals so far. His message was one of hope, reassurance, and encouragement. Another apostle, Jeffrey R. Holland, prophesied in Burundi that “Africa will someday be seen as a bright land full of ... hope and happiness.” Several African Church leaders tell their stories here.

This article tells several personal stories: one from a rural family in Madagascar who spent 27 years searching for religious truth and two accounts from South Africa. One of them describes the love expressed by white and black members for each other during Apartheid:

Dominic had never seen that type of affection generated from a white person toward someone of darker skin. “You don’t understand how big that was, how amazing it was to see that — how shocking. It went against everything society had taught me.” ... He was baptized and started attending church and was again amazed by the acceptance he felt. “They taught the same thing to me as the white boy sitting next to me at church. That broke a lot of boundaries for me. That said to me in my heart and mind that we are equal.”

This is a first-hand account by an LDS Kenyan journalist. Another article talks in a very introductory way about the 7,000 members in Uganda. The fastest Church growth currently is in the Democratic Republic of Congo.

The Church runs a program called the Perpetual Education Fund which provides low-interest loans to help people to receive education, usually in order to secure better employment. PEF is helping 2,300 people in Africa so far. The average loan in Africa is $1,200 for a year of schooling. 570 people have finished their education with the program and have seen large increases in income. Funds come from donations by members, myself included, and is run by volunteers.

Most genealogical records are preserved orally in Africa. The Church's FamilySearch program is attempting to record and preserve these family history records. The article quotes a Ghanaian proverb: When an old man dies, it is as if a library has burnt down.

Lit in review: 2 of 7 on Food Prices

(2) Coady, Dorosh, and Minten (2009), "Evaluating Alternative Policy Responses to Higher World Food Prices: The Case of Increasing Rice Prices in Madagascar," August, 711-22, ungated

Rice prices increased 43% in 2004 just as Madagascar devalued its currency. The import parity price for rice increased 113% in the first half of 2004. This study compares the welfare effects of reducing the 20% import tariff and/or the 21% ad valorem tax (total: 45% tax). A partial equilibrium model. Taxes are transferred to households lump-sum. People are weighted in a utilitarian social welfare function either as the ratio of their income to a representative households (ie - if I have half the income, I get twice the weight), or as that ratio raised to the 5th power (if I have half the income, I get 32 times the weight - high inequality aversion!).

Decreasing the tariff decreases prices, redistributing income from net producers to net consumers. 90% of the poor (bottom 3 income deciles, consumption less than ~45k francs) are rural. 87% of urban households and 66% of rural households are net consumers. Smallholders have less than 0.25 ha of rice land. Only large landholders (39% of households) are net sellers.

They conclude that, because the upper-half of the income distribution consumes a lot more rice, they capture almost 98% of the welfare gains from lowering rice prices. "Lower rice tariffs essentially involve a redistribution of welfare from higher-income net producers to higher-income net consumers, with little absolute impact on lower-income groups... ." Depending on how large imports are, however, smallholder rice farmers stand to gain a lot from efficiency gains with lower taxes.

How does it affect transfers? They estimate that 20-30% of each transfer dollar gets to a poor person. That's ... rather more than 2%.

If the efficiency gains are low, transfers are a more efficient way to help the poor than lowering tariffs. As inequality aversion increases, the case for transfers improves. They disagree that one conclusion is to increase tariffs - other taxes would be less distortionary. The case for transfers over tariff reductions as a poverty alleviation policy would be improved, they argue, if reducing tariffs also reduces unskilled wages or employment. A dynamic analysis that includes longterm improvements in efficiency would push the analysis the other way, at least somewhat.