31 July 2009

Top 10 annoying things about people who complain about economists...

Alright Kelsey it's on.

#1 - That is because "The consequences for human welfare involved in questions like these are simply staggering: Once one starts to think about them, it is hard to think about anything else. (Lucas, 1988, On the Mechanics of Economic Development)

#2 - I might just give you this one. But then all jargon is boring, just sadly sometimes useful.

#3 - That's because they can, obviously.

#4 - Um, because they are, obviously (except maybe nuclear physicists or something).

#5 - And you don't enjoy annoying people?

#6 - Sorry - you lost me on this one...

#7 - Robert Shrimsley nails this: "So the question, your Majesty, is not why did we fail to predict the crunch but why did you all fail to incentivise us to predict it?" (thanks Tom)

#8 - Science is about creating and testing theories. That's what economists do. Therefore economics is a science. QED.

#9 - I'm afraid Truman beat you to this by about 50 years

#10 - This is the most important and misunderstood point. I was very much a rationality skeptic (I went to SOAS remember?) until Marcel Fafchamps swung me around. Below is his explanation of why economists believe in rationality, it's well worth a read. It convinced me.


"Economics as a science is based on two fundamental axioms:

1. People pursue their self-interest.
2. People act rationally.

These axioms obviously cannot be a complete description of human behavior. There are many instances where people selfessly seek to help others, their children for instance. There are also many instances where people are not rational, get angry, make mistakes, and the like. But they are certainly a better starting point for examining human interaction than assuming that people do NOT pursue their self-interest and do NOT think about the consequences of their actions.

The main reason why economists continue to base most of their thinking on these two axioms is probably due to Adam Smith. He remarked that, through market interaction, people's pursuing their self-interest results in the good of all. The cobbler makes shoes to earn money for food, and the farmer produces food to earn money for shoes, and in the end the work for each other without knowing it. The market keeps track of how much each has done for society by allocating money to each individual according to the level of their contribution to other people's welfare. To this day, this fundamental insight remains the foundation of economics as a science.

Another reason why economists maintain a fascination for models of the world that assume people to be selfish and rational is that policies based on such models are likely to be robust. We know, for instance, what happens to communists revolutions when they call upon individuals' revolutionary spirits to work hard for the good of society: it may work for a while, but the quality of the work suffers and a repressive apparatus is required to keep the system going. In contrast, the market works without coercion since everyone feels they are working in their own self-interest. We also know what happens to policies that rely on the irrational side of our nature: fear, envy, anger, lust. They often lead to wars and conflict and a lot of destruction in property. Eighteenth century philosophers who invented economics as a science were looking for a better way of organizing society that would rely on logic and science, not lies and superstition. Hence their desire to organize economics around human rationality.

Finally, economists often feel that what distinguishes human beings from, say, animals is their capacity for reasoning. You can fool some people some of the time but not all people all of the time. We may not always reason right, but given time, example for others, and sufficiently high stakes, we are all capable of figuring out how best achieve a particular outcome. Thus, although rationality may be violated in small ways everyday, it should hold in the large, that is, for large enough stakes and a long enough time frame. Rational people cannot be fooled and policies and mechanisms that assume people to be rational are both more robust (they will not collapse when people realize they are being fooled) and more intellectually and ethically satisfying. Again, this is very much an eighteenth century "enlightened" view of the world. It lives on in economic science.

This is not to say that economists never explore violations of these axioms. There is excellent work on altruism by economists, e.g., Becker. There is also excellent work on bounded rationality and various deviations from full rationality, such as time inconsistency, loss aversion, trembling hand equilibrium, etc. Economists have also managed to include practices such as addiction, crime, and mistakes in "rational" models by adding high impatience or high costs of computing rational outcomes. Though these efforts may not always be fully convincing, they indicate that the economic paradigm is alive and well. Explanations of human behavior that simply rely on self-interest and rationality are inherently more intellectually satisfying than explanations that call for people to either systematically act against their own welfare or be perpetually fooled."


If that didn't satisfy you I would also highly recommend Tim Harford's books, and A Very Short Introduction to Economics.

30 July 2009

In Memoriam

Dr. John Garang de Mabior
June 23, 1945 – July 30, 2005

29 July 2009

Plain English Please

Matt Ranil at Aid Thoughts has a great post about aid jargon (the choice quote being "buzzwords, and their satanic progeny, acronyms").

I think we need a Plain English Campaign for aid; with a charter and everything. The British version has, I think, done a reasonable job of pestering government whenever they talk jibberish, and has attracted lots of media attention. They even have a cool online "Drivel Defence" software. Might have to see how some aid projects fare!

Alanna Sheikh also has a great series of posts on the subject here.

Incidentally, the word gobbledygook, meaning nonsensical language, was coined by Maury Maverick actually referring to civil service jargon. Maury was also the grandson of cattle rancher Samuel Maverick who coined the term "maverick" because he didn't brand his cattle.

Of rivers, international law, scandals and media

I really know very little about international law, but seriously, Ethiopia, Sudan, Kenya, Tanzania, Uganda, Rwanda, Burundi and the Democratic Republic of Congo are all limiting their consumption of the water from a river in their own country because of an agreement signed between Egypt and Britain in 1929!?!

What. the.....???!

What don't I get? Why don't they just do it anyway and tell Egypt where to go?

Makes you wonder why Egypt even cares about Southern Sudanese secession
when they have this foolproof 1929 colonial agreement to fall back on.

Meanwhile - more on the Southern Sudanese grain scandal. The Sudan Tribune is on a roll today! Memo to international media - um.. hello.. anyone there...??

Assorted Links

Number of the day: More than 3,000 donkeys have been mobilized to deliver ballots for Afghanistan's upcoming presidential election. (via Foreign Policy)

"Research" Discovery of the Day: Chinese Brothels in Dar

Invention of the Day: Kenyans invent bike phone charger - somebody give these guys some money! (via BBC)

Quote of the Day:
"22 years of warfare have demonstrated to most Sudanese that lasting resolutions to
intractable problems are more easily achieved around a negotiating table than
through the barrel of the gun." - Salva Kiir Mayardit, President of the
Government of South Sudan, 22 July 2009. via Sudan Watch
Sudanese cooking trivia of the Day
"For some reason cooking oil just won’t do – the cow brain is sautéed and used like butter to keep the kisra from sticking to the iron skillet." Green Shakes in Sudan

27 July 2009

The Good Life

Rob Crilly is leaving Kenya and reminds me of some of the good things about life in Africa.

"Stars - the night sky is completely different here, with barely a spot of
darkness between the fine mist of white dots and bright galactic smears."

There are plenty of Cons to living here - no constant electricity (only a small diesel generator), which means no fridge, and a pretty limited range of food in the local markets anyway, the heat and the dust, the mosquitos, and all of this whilst paying London prices for many goods and services.

But one of the benefits of that lack of electricity is the amazing stars. And the heat I can bear because the sun puts a smile on my face. In England on the first day of spring the whole country is immediately in shorts or skirts and gets a huge grin on its face. I get that almost every day. Or when I don't it's because of an awesome, monumental, apocalytic storm. I get to drive home at night (thanks to my $100 New Sudan driving licence - I have no UK licence) through the deserted roads, blaring music. And live in a big house with a vegetable garden, with domestic help (no washing dishes or clothes!), and play poker in bars to pay for my dinner (illegal in the UK).

Yeah life is good.

Is any of this convincing you Karuna? x

Possibly the coolest working paper title ever

Guns and Roses: The Impact of the Kenyan Post-Election Violence on Flower Exporting Firms CSAE Working Paper, Christoper Ksoll, Rocco Machiavello, Ameet Morjaria

As a teaching assistant Machiavello once told my friend that his essay had to be "absolutely less nerdy". Perhaps this is what he had in mind.

24 July 2009

My part in Sudan's downfall

Here is Harry Rud whining about his expat guilt in Afghanistan. TH thinks we are also guilty here in Juba. I'm not so sure. I'll take Harry's points one by one.

1. Living in a house modest by many expat standards but that has still helped lead to a huge rise in house prices in Kabul, benefiting a few but forcing out many more from affordable housing in their own city.
Yeah maybe, but I'd like to see your evidence. Supply constraints are probably more important here in Juba.

2. Tempting qualified Afghans out of service to their own government with hugely better pay at an INGO.
I agree completely, but then I don't work for an INGO...

3. Failing to build the capacity of those people, in a position that will be filled by another expat rather than someone I have trained to replace me.
Capacity-building is difficult, it takes time. Also the government of what is probably Africa's most successful country was pretty relaxed about this:
"In stark contrast to most other African countries after independence, the BDP [Bechuanaland/Botswana Democratic Party] resisted all calls to 'indigenize' the bureaucracy until suitably qualified Batswana were available. thus they kept in place expatriate workers and freely used international advisers and consultants. The initial development plan of 1966 conservatively phasing out all expatriate by 1991, a target that has not been achieved... In his first speech as President Seretse Khama announced that "My Government is deeply conscious of the dangers inherent in localizing the public service too quickly."
quote from Acemoglu, Johnson and Robinson, An African Success Story: Botswana , from Rodrik's In Search of Prosperity

4. Failing to even have the common decency of learning the local languages, and having only the scantiest knowledge of a country on which I am experimenting with ill-informed development projects.
Arabic is really hard!

5. Taking a large cut of the budget of those development projects as my salary, most of which I will take home with me.
International staff work in an international job market. If you want them you have to pay them the going rate, that's just the way it is, nothing to feel guilty about.

6. Treating my life as more valuable than those of my staff.
Not really.

7. Drinking in an Islamic country and generally being a bad influence as well as an example of the debauchery and gross-oppulance of the West. Not good for long-term cross-cultural understading that one.
You mean spreading the universal values of liberalism and human rights, right?

8. Flying about too much and demanding electricity from the generators and generally contributing to a lot of carbon emissions in a country that will probably be devastated by climate change.
Blah blah, I refuse to be guilty about flights, they're only 1-5% of global emissions, and technological innovation will save the day anyway (insh'allah!!!).

9. Eating scarce food when others around me starved.
Bollocks. Amartya Sen. Exactly. So shut up. All your food is imported so it's not exactly scarce is it?

10. Bitching about all and sundry, how various policies will lead to the downfall of this country, but doing nothing to suggest better alternatives.
Because anyone would listen to your better alternatives?

23 July 2009

Big News in Sudan

Apparently there was some kind of court ruling yesterday. Whatever. Far more excitingly the IMF released its latest monitoring report on Tuesday!!

It seems that the North wasted its oil windfall last year.
"The report reveals a sharp drop in Sudan’s foreign exchange reserves across the years from $2 billion in mid-2008 to $300 million in March 2009, which covers only 2 weeks of imports for the East African nation." Sudan Tribune
Here's the full report.

22 July 2009

Great ideas

A couple of interesting ideas I came across last night - Alan Beattie, the FT's trade editor was talking on Development Drums, and one point in particular stood out. He puts the blame for the thousand year stagnation of the Middle East not with Islam but with the Mongol invasions, which instituted a dictatorial top-down style of leadership, a style which subsequent Islamic leaders stuck to and twisted Islam to fit. Beattie argues that the test of this hypothesis would be a Christian country also invaded by the Mongols, and that this country exists - Russia. I'm not quite sure that this standard of evidence would get you into a top economics journal, but it's an intriguing idea.

Secondly, Paul Romer, one of the inventors of modern growth theory, argues in this lecture (via the Economic Principals Blog) that the answer to China's thousand year long stagnation was institutional experimentation. Specifically, he argues that it was Hong Kong, with its cutting edge (British) institutions and governance, that motivated China to experiment with its own "special economic zones" along the coast, successes which led to further liberalisation, and ultimately the greatest ever anti-poverty programme.

Which finally leads me to Romer's proposal, which is that just like in competitive markets, competition between countries about rules and institutions needs to allow for new entry to be truly effective. We need to be able to experiment with new institutional forms, including the idea of foreign countries or groups of countries running a city-state in a poor country.

Part of this argument involves a discussion of space, which is where do we put all of these new urban city-states, when we can expect 5-8 billion people to be moving to cities over the medium-long term. He then shows a slide of Africa at night - empty.

Which is almost the same as what Abhijeet has been saying for months, the solution to all of Southern Sudan/Africa's problems is importing Indians. Voila!

21 July 2009

Ministry of Careful Planning and Organisation

I've been laughing at international organisations a bit over the last week so I think it might be the government's turn. A Presidential Advisor very sadly passed away yesterday. To commemorate his passing, the Ministry of Public Service decided that today and tomorrow will be public holidays. Chaos and hilarity ensues, as half of the office decides that this is ridiculous and carry on with work/chatting, whilst the other half decided to go home. OK so it's not that chaotic or hilarious, but finalising the government's plan for next year's budget this week just got a little more challenging.

Update: I'm now told that the advisor is an excuse, and that the holiday is really so everyone can go home and pray for the "right" outcome from the Abyei arbitration tomorrow. And the office is steadily emptying out.

Update Update: Completely coincidentally there was a big SPLM rally on wednesday.

20 July 2009

Fun and Games!

Today is a holiday so I will be mostly listening to techno (How to make international public sector accounting standards sound cool - UN Dispatch), playing computer games (Somali pirate game via Ethan Zuckerman, and maybe Marcel Fafchamps' Welcome to Africa game if it still works), reading comics (The Adventures of a Would-be Arms Dealer, again via Ethan Zuckerman), and watching Matt Dillon movies.

Monday Links

1. Thank god it's not only me: http://www.purgetheurge.com/ - HT: Oliver Burkeman

2. Sara Pantuliano (ODI, whoop whoop!) and Luka Biong Deng (Minister of Presidential Affairs) talk Abyei on Al-Jazeera - from Michael Kevane

3. The economics of The Wire (yes I'm a few years behind on this one, just finished season 3), which also reminds me of a discussion I read somewhere about Goodfellas perfectly summarising IR theory...

4. And finally, Hamas expose sexy zionist chewing gum plot

The Church of UN-tology

The new head of a UN agency here seems to be trying to make his mark on the place. I suppose its natural, the new Minister of Finance is also giving his Ministry a new lick of paint (literally), but I think the UN are probably winning in the crazy-stakes.

Apparently they had an away-day bonding type experience last week in which everyone had to swear allegiance to the UN, hand-on-heart and everything. Too funny.

18 July 2009

New evidence against the Summers hypothesis on gender and innate scientific aptitude

""in those countries where more people held stereotyped beliefs about gender and science, girls tended to under-perform at science relative to boys."
Psychology Research Digest Blog

Mwenda on Obama

Andrew Mwenda, a big critic of aid, the Ugandan government and editor of Uganda's quality news magazine The Independent, is not impressed by Obama's speech. This quote is bang on:
"He thinks that Africa has failed because its leaders – either out of stupidity or bad judgement – made wrong choices. In focusing largely on the personality of individual presidents, Obama misses the incentives that make Africa's rulers make choices that harm/hurt their citizens. From this wrong premise, Obama proceeds, thinking that Africa's rulers can change their ways through moral exhortations."
Of course, leaders can choose to make good decisions, but why should they when all their incentives point them otherwise? The challenge is fixing those incentives.

HT: Blattman

17 July 2009

Central Equatoria State Police at it again

After a number of Sudanese girls were arrested and beaten in Khartoum earlier this week for their "provocative clothing", it seems the Juba authorities are not about to be outdone, despite Salva Kiir telling them to stop this nonsense the last time they tried it. Today a girl from my office was beaten for wearing trousers. Being a clued in government employee she went straight to the Ministry of Internal Affairs (central government, above the state government who run the police) to register a complaint. Hopefully someone will sort them out.

16 July 2009

Economists in International Agencies

Great quote from a lifer OECD economist (Stephen Morris) from 1986.
"Working for a long time at two or three removes from actual decision making, people working in international organizations can easily get out of touch with political reality and become over impressed by their own supposed omniscience. At the same time, because they do not have the power of a national government behind them, and can never be sure what real influence they have, they can become overly sensitive, defensive, or defensively aggressive."
Sounds kind of familiar.

Coats, A.W., The Role of Economists in Government and International Agencies: A Fresh Look at the Field, History of Economics Review

Former Finance Minister in SDG 6.2 billion ($2.4bn) Scam

If there are 8.2m people in Southern Sudan, then this equates to about $290 per man, woman and child.

14 July 2009

Small luxuries

"one of the benefits to living and working in a place like Southern Sudan is that you learn to appreciate the small luxuries in life that many people take for granted on a daily basis. I am sure that I fell in love with Spain partly because of where I've been living for the past couple months."
Indeed. That's how I fell in love with Kampala and Addis (and London all over again).

The value of everything and the price of nothing

The World Food Programme runs a school-feeding programme in Southern Sudan.

In a country where primary enrolment is well below 50% this is clearly a fantastic initiative. However for government to effectively plan for its own activities it needs to know what its partners are doing.

WFP has not reported this programme during the government's planning process, because it DOESN'T KNOW HOW MUCH THE FOOD IS WORTH. And this despite being actively involved and attending meetings for the planning process. Presumably the food is donated in-kind - but seriously the WORLD FOOD PROGRAMME can't put a best guess on the cost of a quantity of FOOD?!!!

FAO are not much better. They have designed a survey on farming and fisheries, which includes a question on the respondent's preferences for types of fish. They questionnaire then lists 35 species of fish, along with their scientific names. The sampling strategy is also terrible. Their plan to sample more areas than exist in some counties is apparently due to the Census being incorrect, not their strategy.

10 July 2009

Office Hawkers

A couple of years ago I spent the summer working in the office of a Microfinance firm in Uganda. One of the great features of office life there was the lady who would come by once a week with shoes or accessories to show to the women in the office. I was very jealous that I don't like ladies shoes or accessories.

In Juba the newspaper guy is pretty regular which is nice, the only trouble being that the writing isn't exactly going to be winning any prizes anytime soon. Today though, I did my first proper office-based shopping, a guy came round selling flash drives just when I've lost both of mine and I'm too busy to make it into the shops in town.

07 July 2009

UK aid

DFID becomes UK Aid? Really?

As Lant Pritchett says about USAID
"The name of the United States Agency for International Development (USAID) is too clever by half. By forming the acronym "aid" it attempts to create popularity (who could be against "aid" broadly interpreted as "assistance" to the world's poorest?) at the expense of perhaps confusing everyone, including itself, about its actual mission."
TH wonders if this is the largest academic-inspired aid programme ever. I'm not so sure, as Keynes or somebody said, men of action are always slaves to some dead man of ideas.

Anyway more substantively, I do like the Collier-esque reorientation of spending towards security. You really notice the importance of security in places like Sudan. Why would anyone bother invest in the future when all hell might break loose at any moment? So yeah, lets spend more on security. But the Tories, they're bat-shit crazy "£9.1bn of overseas aid on funding for private schools"??? If the private sector is so awesome why does it need such huge subsidies? Wouldn't that destroy all their competitive cost-pressures which makes them so efficient in the first place? Obviously, what you want to do is subsidise the kids. Which is why I am interested by their voucher idea, even though my friend Alan ridicules it
"vouchers! why didn't anyone think of that before? 
then they can pop down to the local sainsburys and exchange those vouchers for essentials! lets sign them up for Nectar cards while we're at it! gosh - aren't these poor people lucky!"


And finally

1. Free SOAS cleaners - "the man", picking on the little guy
2. And I love the dutch

06 July 2009


I now have a twitter account. I'm not quite sure what to do with it yet. Very few of my friends are on it. I've so far just responded to a couple of interesting comments by others.

I was very skeptical when I first heard about it. It sounded stupid. But then so did facebook and blogs when I first heard about them. So I was skeptical but curious.

And then all my favourite blogs started talking about twitter, and then I realised that a load of my favourite bloggers were also on twitter. So I finally caved. My god is this the end?