A collection of papers discussing American Federalism, written since the time of the writing and signing of the US Consitution in the 1780s. http://www.wepin.com/articles/afp/index.htm
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Thursday 23 July 2009
The Bottom Billion
Just started reading this book. 2 years old already but it still seems to be a must-read. Quite an easy going book so would recommend it. The first part of the book is talking about dividing the world into the bottom billion, whose economies have not been growing. The other 5 billion in developing countries have experienced rapid growth through the 70s and 80s, and particularly 90s. The "bottom billion" nations (a convenient distinction) have experienced economic stagnation and decline in relative and absolute terms.
Also the difference between development biz - the business side of development (the NGOs), and development buzz - helpful noises made by rock stars etc. Development biz tends to want to focus on global development as it's nicer to spend time in developing China rather than Chad. But countries like China and India are not in the bottom billion and don't need the help. The NGOs are therefore likely to reject the thesis of tBB out of self interest. Development buzz is useful for setting the agenda but is a heart without a head.
The book says there are 4 main traps that cause persistent poverty. These are the conflict trap; natural resource trap; being land-locked with poor neighbours and poor governance.
On conflicts, being poor makes a country more susceptible to conflict. There is evidence the direction of causality is 2 way, and has not been mistaken. Rain (harvest) shocks that made poor countries poorer increased the risk of war, even though they couldn't have been anticipated. (So it is not the anticipation of war that makes a country poorer, though it might contribute). Another case study was post-colonialisation countries, emerging from a period of enforced peace. The effect held here.
The idea is raised that time may be running out for tBB countries, the example given of Mauritius that started to develop in the 80s and rocketed away, vs Madagascar, 20 years later, which is growing much more slowly. This idea isn't really expanded in the book. Another justification for a call for urgency in a fashionable book is not surprising. Much of the book seems to have been made to sell - including the tendency to be deliberately slightly controversial in order to attempt to grate on certain people.
The effect of having resources may be slightly counterintuitive. Basically, a country can only make good use of its resources if it is a democracy with proper checks and balances. Without these, government will end up wasting the resource money on poor investments and patronage politics. Dutch disease is a persistent threat to other export industries in the economy.
An autocracy is likely to be better at managing resource riches than a democracy without checks and balances, however, autocracies can only remain stable under certain circumstances. An ethnically diverse population tends to make an autocracy less stable and less efficient.
The main methodological issue to take with the book is that it always and everywhere relies on GDP data as a measure of progress. Charles Kenny takes issue with this and he is writing a counter-argument. GDP data could of course be wildly inaccurate, particularly in countries with large informal sectors. If GDP doubles but everyone goes from earning $1/day to $2/day, but quality of life is reduced through disease etc, why is this an improvement?
It is also inherently globalist, free trade leaning, with no discussion as to why this improves the lot of the bottom billion. One example is the cursory approach to trade policies, whereby free trade is advocated but given but a few paragraphs of support. The Collapse of Globalism by Ralston Saul should be read in conjunction.
Perhaps the book has to rely on conceptually narrow methodology because its aims are very ambitious. Regardless of the use of GDP data, the outcome is still the same and ignoring the details (which may well be misleading), the broad message is that the bottom billion in Africa are the most important to focus on. Whether or not this book really strengthens that case through reasoned argument is uncertain, but it has succeeded in raising the profile of the cause somewhat. (more)
Also the difference between development biz - the business side of development (the NGOs), and development buzz - helpful noises made by rock stars etc. Development biz tends to want to focus on global development as it's nicer to spend time in developing China rather than Chad. But countries like China and India are not in the bottom billion and don't need the help. The NGOs are therefore likely to reject the thesis of tBB out of self interest. Development buzz is useful for setting the agenda but is a heart without a head.
The book says there are 4 main traps that cause persistent poverty. These are the conflict trap; natural resource trap; being land-locked with poor neighbours and poor governance.
On conflicts, being poor makes a country more susceptible to conflict. There is evidence the direction of causality is 2 way, and has not been mistaken. Rain (harvest) shocks that made poor countries poorer increased the risk of war, even though they couldn't have been anticipated. (So it is not the anticipation of war that makes a country poorer, though it might contribute). Another case study was post-colonialisation countries, emerging from a period of enforced peace. The effect held here.
The idea is raised that time may be running out for tBB countries, the example given of Mauritius that started to develop in the 80s and rocketed away, vs Madagascar, 20 years later, which is growing much more slowly. This idea isn't really expanded in the book. Another justification for a call for urgency in a fashionable book is not surprising. Much of the book seems to have been made to sell - including the tendency to be deliberately slightly controversial in order to attempt to grate on certain people.
The effect of having resources may be slightly counterintuitive. Basically, a country can only make good use of its resources if it is a democracy with proper checks and balances. Without these, government will end up wasting the resource money on poor investments and patronage politics. Dutch disease is a persistent threat to other export industries in the economy.
An autocracy is likely to be better at managing resource riches than a democracy without checks and balances, however, autocracies can only remain stable under certain circumstances. An ethnically diverse population tends to make an autocracy less stable and less efficient.
The main methodological issue to take with the book is that it always and everywhere relies on GDP data as a measure of progress. Charles Kenny takes issue with this and he is writing a counter-argument. GDP data could of course be wildly inaccurate, particularly in countries with large informal sectors. If GDP doubles but everyone goes from earning $1/day to $2/day, but quality of life is reduced through disease etc, why is this an improvement?
It is also inherently globalist, free trade leaning, with no discussion as to why this improves the lot of the bottom billion. One example is the cursory approach to trade policies, whereby free trade is advocated but given but a few paragraphs of support. The Collapse of Globalism by Ralston Saul should be read in conjunction.
Perhaps the book has to rely on conceptually narrow methodology because its aims are very ambitious. Regardless of the use of GDP data, the outcome is still the same and ignoring the details (which may well be misleading), the broad message is that the bottom billion in Africa are the most important to focus on. Whether or not this book really strengthens that case through reasoned argument is uncertain, but it has succeeded in raising the profile of the cause somewhat. (more)
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