Friday’s Australian Financial ReView section (subscription only) runs my review of Bjorn Lomborg’s new book. CT readers won’t be surprised to find a lot of criticisms of the Copenhagen Consensus project that produced the book. But I found a fair bit to praise as well. The review, pretty lengthy, is over the fold. Comments appreciated.
On my bookshelves, I have many works that make a substantial contribution to our understanding of important issues facing the world, and quite a few exercises in political propaganda. Much rarer are books that fall into both categories. The Copenhagen Consensus, a joint initative of The Economist and Bjorn Lomborgâs Environmental Assessment Institute, has produced just such a book.
Lomborg first came to worldwide attention with The Sceptical Environmentalist, a book that claimed to refute a âlitanyâ of environmental woes. In most cases, Lomborg argued that the severity of problems had been overstated or that progress in mitigation had been ignored.
When it came to global warming, however, neither of these claims seemed plausible, and Lomborg adopted a different tack. Rather than disputing the scientific evidence of global warming, he argued that the cost of addressing the problem through the Kyoto protocol would be better spent dealing with more urgent issues, such as the provision of clean drinking water in the Third World.
There are a variety of problems with this argument, one of the most notable being that the most cost-effective approach to mitigating global warming would be a global emissions trading scheme that would require rich countries to buy emissions rights from poor countries, providing funds that could be used for initiatives of the kind Lomborg proposes. Rather contradictorily, Lomborg went on to argue that, precisely because of the large transfers from rich to poor countries they would require, emissions trading schemes would not be politically feasible.
His criticism of the environment lobby led the right-wing Danish government of Anders Rasmussen to establish the Environmental Assessment Institute and instal Lomborg as its director. Ironically, the same government made repeated cuts in Denmarkâs foreign aid program.
It was against this background that, in 2003, Lomborg announced the Copenhagen Consensus project. The idea was that a group of eminent economists would look at priorities for assisting poor countries and try to rank them in terms of costs and benefits. The planned procedure was that an advocate would present a case for each of a number of possible global projects. Two âopponentsâ would then provide a critique. The panel of eminent economists would then distil the arguments and rank the possible projects.
There was an immediate reaction to this announcement. Three of the seven members of the board of Lomborgâs insitute resigned in protest at a project which seemed unrelated to the purposes for which the institute had been established.
At the same time critics (including this reviewer) voiced suspicions of a setup. Criticism began with the composition of the panel. With four Nobel prize winners, it was certainly an eminent body. But the members werenât notable for a focus on the problems of Third World economic development. They included experimentalist Vernon Smith, econometrician James Heckman (who later withdrew), and economic historians Robert Fogel and Douglass North.
Fogel has done important research on population and nutrition, but the other Nobel prizewinners, and most other members of the panel, were not experts in the main fields under discussion. As Jeffrey Sachs (who headed of the Commission on Macroeconomics and Health) observed, the timeline was far too short for the panel to gain requisite expertise, lasting only a few months in total; the background papers circulated for a few weeks, and in the final discussions, the panel had 5 days to review 32 proposals.
The point can be sharpened by looking at some of the Nobel prizewinners who would have seemed like obvious choices for such a panel, including Kenneth Arrow, Joseph Stiglitz, Robert Solow and Amartya Sen, all of whom have made extensive contributions to the debate on economic growth and development.
Comparing the two lists, the omissions are, broadly speaking, towards the left of the economics profession and those who have commented on climate change have supported policy initiatives such as Kyoto. Conversely, the members of the Copenhagen panel were generally towards the right and, to the extent that they had stated views, to be opponents of Kyoto. Indeed, Lomborgâs argument that spending to mitigate climate change would be better directed to aid projects was first put forward by Thomas Schelling, one of the Copenhagen panellists.
The same lack of balance was evident in the selection of âopponentsâ. For Robert Clineâs paper on climate change, Lomborg picked vigorous opponents of Kyoto, Robert Mendelsohn and Alan Manne, and the result was an acrimonious debate. But for most of the other issues under consideration, the differences between the parties to the discussion were matters of emphasis and nuance, to the extent that the âopponentsâ were eventually redescribed as providing âalternative perspectivesâ.
It is clear from reading the papers and the discussion reports that the panellists approached the task in a serious and fairminded way. But, inevitably, the narrowness of the selection meant that many important issues were prejudged or not discussed. Undoubtedly the likemindedness of the panel members assisted in the stated objective of achieving consensus. It is not clear, however, that a consensus confined to a narrow ideological subset of the economics profession is going to be of much help in achieving broad agreement on solutions to global problems.
The real problems, though, were not with the choice of panel members but with the assessment procedure, which was clearly designed to fit Lomborgâs original example of a choice between spending on climate change and on clean drinking water.
The approach adopted was to assume a budget of $50 billion, and then seek to allocate it to those projects which would yield the largest benefit for a given cost. As Jeffrey Sachs points out, this approach is fine for evaluating discrete, project-based interventions, such as improvements in drinking water quality. But with a small budget and an insistence on easily quantified costs and benefits, it is naturally biased against bolder initiatives such as broad-based improvements in health and education.
The problems are even more severe in relation to issues like civil conflict. Stability and peace arenât alternatives to development programs, they are preconditions. Trying to rank such disparate issues makes no sense. In this and some other instances, the Copenhagen panel wisely chose not to make a ranking.
The selection of projects is another fundamental problem. Even if, say, improvements in basic health services rank poorly when compared to action against AIDS, they might rank well by comparison with military spending, or advertising, or cosmetic surgery. Lomborg dismisses these from consideration as being ânot motivated by doing good outside the country concernedâ.
But much the same point applies to proposals to mitigate climate change. Adverse impacts species extinction and loss of biodiversity are mostly of concern to people developed countries, and other impacts such as loss of coastal land affect rich and poor countries alike. Similarly the costs of mitigation will be spread across the economy, not funded from a specific government budget item that could be reallocated to foreign aid. Treating climate change as a foreign aid project fits Lomborgâs own framing of the issues, but it is not an accurate representation of the actual problem.
Not surprisingly, the Copenhagen panel concluded that implementing the Kyoto protocol was not a good a use of scarce funds. All of the doubts raised about the Copenhagen Consensus project have been confirmed by the use Lomborg has made of the results. He has said almost nothing about the positive merits of the options favored by the panel. When it emerged, in December 2004, that none of the money promised by the Bush Administration for the fight against AIDS1 had actually been spent, he was silent.
By contrast, Lomborg has repeatedly stressed the panelâs negative findings about climate change. A typical example is an article in The Australian, reprinted from The Telegraph. More than half the article was devoted to the importance of not allocating significant resources to fighting climate change. None of the priority issues identified by the panel got more than a few sentences.
In summary, the Copenhagen Consensus project was created as a political stunt. It was designed, in every detail, to produce a predetermined outcome. Having got the desired outcome, the organiser has shown little or no interest in pursuing any of the other issues raised by the project.
With all of these criticisms, it would be easy to conclude that the entire exercise was a waste of time. In fact, however, the project has made a valuable contribution. If we disregard the ranking exercise, and set the debate over Kyoto and climate change to one side, what remains is a set of well-informed papers, and thoughtful comments, dealing with some of the most serious problems facing the world, and assessing some possible responses.
The participants were nearly all economists, and this is reflected in fairly tight adherence to a standardised cost-benefit framework. The lack of alternative perspectives from natural scientists and public health specialists is a major weakness of the Copenhagen Consensus considered as a policy initiative. On the other hand, it gives the resulting publication a degree of consistency that would otherwise be hard to achieve in a single volume.
The chapters on specific initiatives to prevent disease fit most neatly with the constraints imposed by the ranking procedures. Anne Mills and Sam Shilcutt give an excellent overview of the problems of communicable diseases, focusing on the big killers, HIV/AIDS and childhood diseases, and on malaria, which not only kills millions each year but is a huge source of chronic morbidity.
In comparing fatalities with chronic illness, the standard economists approach is to measure impacts in terms of disability adjusted life years (DALYs), which may then be converted into dollar terms in various ways. However a monetary valuation is done, the invariable answer is that a life in a poor country is worth less than a life in a rich one. Rich country governments, and the voters who elect them, implicitly make this judgement every time they point tax cuts or domestic health services ahead of foreign aid. Nevertheless, it is jarring to see the same judgement made explicitly. Mills and Shilcutt address some of the difficulties, and they are taken up further in the discussion by David Evans.
The chapters on water and sanitation and on malnutrition and hunger follow a similar pattern. They provide an excellent overview of the limited progress that has been made towards providing people with their basic needs for adequate food and clean water (as an aside, the tone is considerably more sombre than the upbeat treatment of the same issues in The Sceptical Environmentalist). As discussant Peter Swedberg observes, the main cause of malnutrition and hunger is poverty. Only reductions in global poverty are likely to produce large-scale reductions in hunger, though some specific micronutrient deficiencies may be addressed . The same is largely true in relation to water supply, though again there is some scope for local initiatives.
The discussion of education is rather disappointing. In both developed and developing countries there has been vigorous debate about the impacts of increased inputs to education, and particularly reductions in class sizes, on educational outcomes. Experimental and macroeconomic studies have generally produced favorable results, while microeconometric analyses using test scores as a proxy for performance have shown little or no impact. But the debate is not joined here, since both the challenge paper author, Lant Pritchett, and the discussants, are supporters of the microeconometric approach, which suggests that there is little that can be done in this field, beyond a nod to such free-market nostrums as charter schools and vouchers. Even these limited recommendations look fragile since more recent US research, using the test score approach, has found that charter schools donât do much better than ordinary public schools and may even do worse. If progress is going to be made on this topic, it will probably be necessary to look beyond test scores as a measure of achievement.
The remaining chapters are on topics that donât fit well into the project-based approach of the Copenhagen Consensus, but are essential to an understanding of the problems facing the world, particularly with respect to relationships between more and less developed countries. These issues include trade, migration, international financial flows, governance and corruption and civil conflict. They cannot be addressed simply by allocating a line item in a budget, and they raise important questions of sovereignty.
Understanding these issues, and the interactions between them, is crucial to any assessment of the way forward in resolving the global problems associated with poverty and deprivation. The contributors, notably including Kym Anderson, Barry Eichengreen and Susan Rose-Ackerman, make an importatn contribution to our understanding of these issues.
In summary, this is a book that belongs on the shelf of anyone concerned with the crises facing the world. But, because of the dubious process by which it was generated and the dishonest uses to which that process has been put, it ought to be sold with a warning label, something like âIt Ainât Necessarily Soâ.
1 There is an error here. As reported here it is funds promised for the Millennium Declaration Account that have not been spent. Money for AIDS was promised separately and some money has been spent, though there is a lot of smoke and mirrors
This is by way of a followup to Chris’s comment on Nick Cohen’s article on the pointlessness of providing disaster relief to governments who don’t care about their citizens. I’ve never been a big fan of Sen’s dictum that “democracies don’t have famines” – I’ve always regarded it as being a slogan on a par with “no two countries which have a McDonalds have ever gone to war with each other”. I was originally just going to point out that the only African country which has managed to stay clear of famines entirely since independence is Kenya, which has not been a democracy and leave it at that, but I ended up looking up the original quote from Sen’s “Development as Freedom” and this ended up expanding somewhat into a more general piece on the subject of democracies and developmental states. I’m actually pretty sympathetic to Sen on most of the issues he writes about, and I hope readers will bear that in mind, because it is more or less impossible to resist making a few harsh remarks when you find out that the original quote, from page 16 of the paperback edition of Development as Freedom is, verbatim:
“It is not surprising that no famine has taken place in the history of the world in a functioning democracy – be it economically rich (as in Western Europe or North America) or relatively poor (as in postindependence India, or Botswana or Zimbabwe)”
Emphasis added, of course. I’d make it clear from the outset that I am not playing “pin the anachronism on the donkey” here; Development as Freedom was originally published in 1999, and the paperback edition I have is from 2001; there don’t appear to have been any changes made for the paperback but there could have been. Mugabe joined in the civil war in Congo in 1997, faced riots in 1998 and began stealing farms in 1999, the year in which the Movement for Democratic change was formed (for what it’s worth, the MDC was formed in September 1999 and the latest citation I can find in the book is to a newspaper article from June 1999). So it is clear that when Sen refers to Zimbabwe here, he is referring to Mugabe’s one-party state, and not to some immediate postcolonial Nirvana of the development studies literature. I’d emphasise, however, that this slogan only appears twice in the entire book and not at all in the two chapters which actually deal with democracy and famines. Almost all of the analysis below is actually cribbed from Sen’s book; I’m arguing against his slogan, not against him.
This ought to raise suspicions right from the get-go, of course. If the “democracies don’t have famines” factoid is a proposition that can have Zimbabwe advanced in its favour, then it is clear that it is a bit of a David Lewis gambit - a proposition which has been cunningly constructed so as to have no counterexamples. And a proposition like that is unlikely to bear as much empirical weight as one might want to place on a useful-sounding slogan like “democracies don’t have famines”. These suspicions are entirely justified, because it appears to me that Sen was entirely correct to include Zimbabwe on that list in 1999 and 2001 and (even more strongly) I suspect that if he was being consistent, he’d have to leave them on the list if he brought out a revised edition of Development as Freedom in 2005. Two simple reasons for this:
1. On the criterion Sen appears to be using, Zimbabwe is a democracy. Since the word “democracy” has been abused by the “democratic people’s republics” of the world (and indeed by the “liberal democracies”) so much as to have lost all meaning, it’s easy to forget that it can be used in a descriptive as well as a normative sense. Nobody but a fool or someone being contrary for the sake of it would argue that Mugabe’s Zimbabwe is anything other than a horrible despotism, or that what we normally regard as “democratic freedoms” are respected there. But … they do have elections. Horribly corrupt elections, but elections in which an opposition party stands (note that this isn’t a necessary condition for being a democracy for Sen; Zimbabwe was a one-party state between 1988 and 1999). An opposition party which has to be incredibly brave to stand up to the despicable treatment it receives from the government, but one which nevertheless wins seats, took Mugabe within an ace of losing the last Presidential election and actually beat him in local elections in 2003.
Zimbabwe even has a free press. Not a free press in the sense in which you or I would recognise it; journalists are regularly harassed both through the courts and through physical intimidation, and censorship is rife. But nonetheless, the censorship is not total, and the newspapers are not state-controlled in one important sense. That sense is the one alluded to in Nick Cohen’s article linked to by Chris; if there was a famine going on in Zimbabwe, the Zimbabwean press would print that there was one, and this is an important qualitative difference between them and, say, the Burmese press.
So, Zimbabwe is a democracy in the only objective sense which matters for Sen’s theory, which is that Mugabe can’t keep on ruling it if the people don’t want him to (and the same applies to his designated Zanu-PF successor). This was actually how Zimbabwe got into the current mess; Mugabe started grabbing farms not because he wanted to, but because he needed to do something for his political base after the Congo disaster. If there was a serious famine in Zimbabwe, Mugabe would not be able to hold on to power and he knows it.
[at this point, it is understandable to raise the issue of the disgusting practice of withholding food aid to political opponents, which Zanu-PF apparatchiks definitely did, and which there is decent evidence that government bodies directly controlled by Mugabe did in the 2002-03 food crisis. I would make two points here. First, there wasn’t a famine in Zimbabwe in 2002-03; it was averted (as it was in borderline democratic Malawi and Zambia, democratic Senegal, democratic but dysfunctional Kenya and entirely undemocratic Ethiopia and Eritrea). Second, the information that if a democratic government can identify a subset of its citizens that it doesn’t care about, it can starve them to death was already available to Sen; presumably he is aware of the Irish famine and does not regard it as a counterexample to his theory.]
and the second reason …
2. On the criterion Sen is using, Zimbabwe has never had a famine. No really. Zimbabwe has not had a famine since independence and has not had one in the last ten years; I will bet large sums of my own money on this proposition if the term “famine” is defined as it is in Development as Freedom. Zimbabwe has, since 1999, seen an economic collapse, a collapse in food production, an epidemic of malnutrition and a shocking increase in mortality rates. But it has never had a famine; an episode of mass deaths due to starvation rather than malnutrition. It looked like they were going to have one in 2002, but the UN’s World Food Programme and the Consortium for Southern Africa Food Emergency (an umbrella group of charities, since renamed the Consortium for Southern Africa Food Security) managed to avert it.
This second point is a rather important one, which goes to the heart of why I think “democracies don’t have famines” is a bad slogan. It sounds awfully like “the poor are better off under democracies”, but it doesn’t mean that at all (and indeed Sen spends two chapters of his book explaining that it doesn’t. It’s a statement about one particular kind of misfortune that can befall the poor, famines, and doesn’t directly say anything about malnutrition, AIDS, malaria, gender-selective infanticide, cholera or any other of the silent killers that account for the majority of excess deaths in poor countries. Peter Griffiths in his book “An Economist’s Tale”, which so help me I will review soon, suggests that “famine” is more of a television producer’s concept than a development economist’s one and there is a great deal of truth to this. Like tsunamis, famines are big dramatic events, and like tsunamis they are situations where a clear plan of action suggests itself, usually involving the organisation of the movement of lots of objects relative to the surface of the earth. For this reason, aid agencies and the man in the street is correct to focus on them for good Hayekian reasons; because these are situations where the diversion of resources from the market into a planned operation can clearly do identifiable good. Solving the problems of malnutrition and malaria would certainly save more lives than anything we can do for the tsunami victims, but a population’s state of being vulnerable to malnutrition and malaria is in general the result of complicated social arrangements which are extremely difficult to make plans about1.
It is this “plannability” of famine mitigation which is at the heart of Sen’s argument about famines and democracy. The actual reason why “democracies don’t have famines”, according to Sen, is as simple as pie. Think about it this way; it would be a very bad famine indeed that killed even as much as 10% of the population. The 10% of your population who are vulnerable to a famine are usually the poorest 10%, so their consumption is often as little as 3% of your GDP. And the famine comes about when their consumption drops below subsistence level, not when it disappears entirely. So basically, it is reasonable to suppose that the famine-vulnerable population could be brought back to their original level of consumption by diverting as little as 1.5% of GDP, and a government which can’t divert one and a half per cent of a country’s output is not a government worthy of the name. So, Sen’s thesis about democracies and famines is based on the fact that it is actually very easy to prevent or mitigate a famine if you really want to. (It is an important irony that the way in which a democracy goes about preventing a famine is to start acting like a planned economy; interfering with the price mechanism, diverting resources and even commandeering private property. But this is only a contradiction for people who have made the mistake of wholly identifying “democracy” with “liberal democracy” and “liberal democracy” with “laissez-faire economy”. And I suspect that it would take only a couple of missed suppers to cure these people of their error).
The really interesting point is that it is only democratic governments which really have any interest in preventing famines. If you aren’t accountable to the population and only care about your own wealth, then you will not typically prevent famines. Why not? (I cribbed these from Peter Griffiths’ book, btw, which is sort of a novelisation of Development as Freedom and a much more exciting read)
1. A famine is usually the result of significant movements in the prices of important commodities. It is really quite easy to profit from these price movements if you are in control of the supply of the commodities and know that the famine is coming.
2. If you get early warning of a famine and start taking steps to prevent it, then the outside world will usually give you food aid in kind, to move through your distribution network until it reaches the needy. If, however, you wait until people are dying in front of the television cameras, then you will get aid in cash, in order to buy food locally (which is quicker than shipping it in from donor countries) and to set up the distribution network. Cash is easier to steal than rice.
3. If you are a genuinely undemocratic regime, then it is quite possible that even if you fundamentally like the people and don’t want them to starve, then nobody will tell you that there is a famine going on, because they are yes-men and scared of telling you the truth2. This was apparently always happening in Malawi; the leadership of the Women’s Movement of Malawi prevented at least one famine because they were the only group who felt able to tell the truth.
So, “democracies don’t have famines” should really read “there is no excuse for having a famine if you are a government which cares about its population and is in control of its territory”. This is less catchy, but it has two important advantages.
First, it doesn’t make any presumptions about democracies. Sen is certainly right to emphasise that, empirically, democracies are much more likely to care about the deaths of their citizens than any other kind of regimes (and are good for many, many other reasons; for people who want to peek at the end of “Development as Freedom”, he’s in favour of them both). But there are countries like Kenya which have a very good record in famine prevention and which haven’t been democracies for much of their history. If you start judging countries on the basis of a sweeping rule about “democracies” rather than on their actual record, then you’re doing the development equivalent of Coase’s “blackboard economics”, and you end up with nightmare ideas like “rights-based lending3.
And second, by pointing out that there are two real issues here - the ability of the government to act as well as than its willingness – we draw attention back to an important caveat in Sen’s original formulation of the slogan which is not always preserved in quotation; that history does not provide examples of famines in functioning democracies. There are lots and lots of non-functioning or barely-functioning, kinda-sorta democracies in the world (Africa is full of them), and they have famines just like their neighbouring states. Since my cynical assessment is that the mission to the world which the neoconservative movement and its allies on the “decent left” have embarked upon is likely to leave us with a lot of non-functioning democracies which are not in physical control of the territory assigned to them on the map, we probably shouldn’t be surprised when they continue to have famines and should make plans to deal with them when they do.
Footnotes:
1Plain speaking bores who were just winding up for a long post about “Hah! The postmodernist fool Davies thinks that malaria is a social construction!” are cordially invited to go and have a wank instead. Malaria is a disease caused by an organism spread by mosquitoes. The condition of being vulnerable to malaria is a property possessed by some people and not others. The chief influences on whether someone has the property of being vulnerable to malaria are what kind of house they live in, where it is located and whether they have access to antimalarial measures like treated mosquito nets, DDT sprays and chloroquine. The factors which determine whether you live in a mud hut or a house with windows, and whether your pharmacist will give you chloroquine are in general related to your wealth and social status and these in turn are determined by social facts, not physical ones.
2Democracies can sometimes get the opposite problem; not so long ago, Senegal had to hand back a load of aid and apologise to the donor community after local media reports had got out of hand and led the government to believe that the country was facing famine when it wasn’t.
3This link, and the one in the introduction linked to the word “Zimbabwe”, are to previous CT posts by me on various subjects. I seem to remember that Timothy Burke added very useful comments on the opposing side to both of them and hope he will again.
Nick Cohen has a very good column in today’s Observer about the way in which natural disasters play very differently depending on whether or not governments are genuinely responsive to their peoples via democratic institutions. There’s much to think about in what he writes. He rightly gives due credit to Amartya Sen for this key insight and excoriates Mao Zedong — who inexplicably still continues to be admired in some quarters — as the vicious Stalinist butcher that he was.
Via Norm , I see that the United Nations Human Development Report 2004 is out. Most of the headline coverage is about various country rankings in the Human Development Index. Oil-rich Norway comes top, the US is 8th, the UK 12th, and France has slipped to 16th with Germany down at 19th. But, for the high-income nations, this is not particularly meaningful. As the report warns:
The HDI in this Report is constructed to compare country achievements across all levels of human development. The indicators currently used in the HDI yield very small differences among the top HDI countries, and thus the top of the HDI rankings often reflects only the very small differences in these underlying indicators. For these high-income countries an alternative index—the human poverty index (shown in indicator table 4 and discussed in Statistical feature 1, The state of human development)—can better reflect the extent of human deprivation that still exists among these populations and help direct the focus of public policies. (p. 138)
So what rankings (p. 151) do we get for high-income countries on the human poverty index?
1 Sweden
2 Norway
3 Netherlands
4 Finland
5 Denmark
6 Germany
7 Luxembourg
8 France
9 Spain
10 Japan
11 Italy
12 Canada
13 Belgium
14 Australia
15 United Kingdom
16 Ireland
17 United States
Cold comfort for the advocates of the “anglosphere”, “anglo-saxon capitalism” etc etc. one would have thought. No doubt they’ll be posting shrill comments: “It just isn’t trooo!” etc.
If I were to criticise James Wolfensohn as a World Bank President, then I’d say that if he has a failing, it’s probably that he errs on the side of being a worthless globetrotter far more adept at schmoozing politicians than getting his hands dirty with policy issues, blaming his staff for failures while taking personal credit for successes and that his nine years at the WB have been associated with a general slump in morale that would make Field-Marshall Haig look like Anthony Robbins. Apart from that, he’s pretty much sucked.
So when I saw his name in the story linked above, I thought to myself “I wonder if this might possibly be a plausible-sounding think tank idea which pushes a lot of currently popular political hot-buttons but which is regarded by anyone who knows a bit about the subject area with abject terror?”. Ladies and gentlemen, let me introduce to you the concept of “Rights-Based Lending”.
“Rights Based Lending” is what used to be called “Politicisation of the Aid Process”, but with the cuddly face of a modern humanitiarian intervention. The idea is superficially plausible; that the World Bank should only lend to countries with a good human rights record (or in its stronger form, only to actual democracies). It’s an idea which has a certain amount of support, usually from dissidents in middle-income countries and it appears to be gaining some traction on the soft left in the developed world.
As the title above implies, it’s an idea which looks sensible but isn’t. “Don’t lend to tyrants” is a good slogan, but that fact is that tyrants are the government of a very large proportion of the poorest people in the world. If anyone is seriously advocating rights-based lending, then they have to look through this list1 and tell us with hand on heart that they think the world would be a better place without some or all of these projects.The principle that “human rights are good business” is already observed by the World Bank in many ways; you may notice that Liberia, the Democratic Republic of Korea, Somalia, Zimbabwe (except regional biodiversity programs) and Cuba are missing from the list above. This is because they have no currently active World Bank projects, because the World Bank does not lend in countries where it does not believe that it will be able to retain reasonable control over the funds committed. In the countries listed above, for the most part what we are looking at is dedicated World Bank field employees attempting, often under impossible conditions, to make a difference to the lives of extremely poor people. I think that a conservative estimate of the number of lives lost if we were to cancel all the programs above would be in the hundreds of thousands.
The reason that Wolfensohn’s suggestion of a rights-based approach to lending has been opposed by “countries as diverse as the UK and Chile” every time he has mentioned it in the past is that it is a bad idea. In principle, one might be able to design an approach which carried some element of rewards for reforms without making people suffer (although the IMF would be the more obvious vehicle for this, as it makes policy loans to governments rather than project loans). But such an approach would require very careful design of a specific proposal, coupled with the very best possible political will in the world to make it work as a force for human rights rather than an instrument of the foreign policy of the largest World Bank board members. Such a proposal and such political goodwill is entirely lacking at present. Therefore, I’d urge anyone who is looking for a Big Idea to use international institutions as a force for good, to think twice, three times before writing a blank check of political support to the latest bright idea from the poor man’s Henry Kissinger.
Footnotes:
1 List compiled by making a short list of countries that get a bad write-up from the Human Rights Watch website, then cross-referencing with the World Bank website. For each country, I sorted by “project status” so as to filter only active projects and then chose the one with what I considered to be the most heartstring-tugging name. Some countries on the list (most notably, Venezuela) don’t actually have that bad a writeup, but I’ve included them because everyone (particularly anyone supporting rights-based lending from a “left” perspective) needs to take into account how it will actually be used. I’ve omitted the World Bank’s projects in the West Bank and Gaza for the same reason.
The deaths of nineteen Chinese illegal workers who were cockling on the treacherous sands of Morecambe bay has generated much comment in the British press. Much of that comment has focused on their illegality, the exploitation of such workers by gangmasters, the need or otherwise for tighter immigration controls, globalization and so on. Indeed. There was a similar burst of indignation when some immigrant workers were hit by a train back in July . But one thing that needs saying is that such tragedies are a normal and predictable consequence of capitalism and not simply the result of coercion and abuse by a few criminals. In his Development as Freedom , Amartya Sen discusses two examples where workers, in order to assure basic capablities (such as nutrition and housing) for themselves and their families, have to expose themselves to the risk of injury or death. Jo Wolff and Avner de-Shalit have a paper on this theme (Word format) that is on the programme of the UCL’s School for Policy Studies for this Wednesday, they recount Sen’s examples:
The first is from the southern edge of Bangladesh and of West Bengal in India, where the Sundarban [forest] grows. This is the habitat of the Royal Bengal tiger, which is protected by a hunting ban. The area is also famous for the honey it produces in natural beehives. The people who live in the area are extremely poor. They go into the forests to collect the honey, for which they can get a relatively high price in the city. However, this is a very dangerous job. Every year some fifty or more of them are killed by tigers. The second case is of Mr. Kader Mia, a Muslim daily labourer who worked in a Hindu neighbourhood in Dhaka, where Sen grew up as a child. Mr. Mia was knifed on the street by Hindu people, and later died. While he was deeply aware and concerned about the risk of going to look for a job in a Hindu neighbourhood in troubled times, Mr. Mia had no other choice but to do so because his family had nothing to eat.
Those are third-world examples. But it is not be hard to add to the list of disadvantaged workers who take dangerous jobs to secure the means of life for their families. Whilst some of them involve illegal workers at the margins of society, not all of them do or have done. Mine workers get trapped underground even in advanced capitalist countries and many workers in the oil and chemical industries run a greatly increased risk of death or injury. And many people who have worked with asbestos now face a slow, lingering death.
All of these “normal” examples should give us some perpective on the image of the heroic risk-taking entrepreneur, who typically risks a great deal less than any of these workers do. Those who consider Marx outmoded and are amazed that anyone should take him seriously (scroll to comments) would also find that Capital volume one attends rather more closely to this enduring feature of capitalism than do more conventional accounts.
Trade unions, the Health and Safety Executive and other bodies such as local authorities and the police certainly need to do more to protect people as vulnerable as the Chinese cocklers who died at Morecambe. But we mustn’t forget that the root cause of many such tragedies is that poor people need to risk themselves in order that they and those they love may live. Unless they cease to be poor, and cease to face such unpalatable choices, such events will happen again and again.
UPDATE: See Felicity Lawrence in the Guardian .
I’ve just finished watching Sorious Samura’s documentary Living with Hunger on the UK’s Channel 4 . It seems to be screening worldwide over the next few days including on CBC in Canada and repeatedly on Discovery/Times in the US. It is an extremely vivid portrait of how some of the world’s poorest people live, how hard they work, and their dignity in conditions tougher than most of us will ever face. Highly recommended.
The US administration defends the rights of its citizens to be untroubled by discomforting information. Why? Do they think people will listen to WHO? Question for those who know more about this than I do: does obesity cost governments money all things considered, or does it save them money by causing earlier death resulting in lower claims on social security/pensions etc?
I’ve just reached Amartya Sen’s chapter “Famines and Other Crises” in Development as Freedom . He has some discussion of the great famines that depopulated Ireland from 1845 onwards. The potato blight had destroyed the crop but the Irish peasantry lacked the resources to buy alternative foodstuffs which continued to be exported:
ship after ship — laden with wheat, oats, cattle, pigs, eggs and butter — sailed down the Shannon bound for well-fed England from famine-stricken Ireland. (p.172)
Sen argues that cultural alienation (or even hostility) meant that
very little help was provided by the government of the United Kingdom to alleviate to destitution and starvation of the Irish through the period of the famine. (p. 173)
Interesting, because Natalie Solent , who has been writing about famines recently links to an essay in the National Review Online by the awful John Derbyshire on the subject. Derbyshire asks why the
British government did not organize adequate relief, or prevent the export of foodstuffs from Ireland while Irish people were starving.
and answers
it was not within the nature, philosophy or resources of Anglo-Saxon governments to do such things in the 1840s.
Contrast Sen, who knows the facts:
… by the 1840s, when the Irish famine occurred, an extensive system of poverty relief was fairly well established in Britain, as far as Britain itself was concerned. England too had its share of the poor, and even the life of the employed English worker was far from prosperous …. But there was still some political commitment to prevent open starvation withing England. A similar commitment did not apply to the Empire — not even to Ireland. Even the Poor Laws gave the English destitute substantially more rights than the Irish destitute got from the more anemic Poor Laws that were instituted for Ireland.
So contra Derbyshire, who is probably just making it up as he goes along (but then gets quoted and circulated around the network of misinformation that is the blogosphere) it was “in the nature” of Anglo-Saxon governments, even in the 1840s to do “such things”. Just not for the Irish or the Indians.
Sen also provides us with this striking portrait of Edward Trevelyan
the head of the Treasury during the Irish famines, who saw not much wrong with British economic policy in Ireland (of which he was in charge), point[ing] to Irish habits as part of the explanation of the famines. Chief among the habitual failures was the tendency of the Irish poor to eat only potatoes, which made them dependent on one crop. Indeed, Trevelyan’s view of the causation of the Irish famines permitted him to link them with his analysis of Irish cooking: “There is scarcely a woman of the peasant class in the West of Ireland whose culinary art exceeds the boiling of a potato.” The remark is of interest not just because it is rather rare for an Englishman to find a suitable occasion for making international criticism of culinary art. Rather, the pointing of an accusing finger at the meagreness of the diet of the Irish poor well illustrates the tendency to blame the victim. The victims, in his view, had helped themselves to a disaster, despite the best efforts of the administration in London to prevent it. (p. 175)
Blaming the victim, bad choices, poor diet — I’ve heard those explanations before somewhere. And cultural alienation from those suffering from acute poverty? Plus ca change, plus c’est la meme chose .
Marko Attila Hoare has a review essay in the latest Bosnia Report on books on the left about the NATO intervention in Yugoslavia. I won’t attempt a crisp summary here (Hoare’s judgements won’t secure everyone’s agreement though I largely concur with them). One passage was of particular interest to me though:
The journal New Left Review (NLR) commissioned the present author in October 2000 to travel to Belgrade to write an article on the popular rebellion against Miloević that was then taking place. NLR paid my air-fare and I arrived in Belgrade on the day that Miloević fell. But when I produced my report NLR refused to publish it: editor Susan Watkins [that’s Mrs Tariq Ali by the way - CB] explained to me that the editorial board objected to my article’s implied support for the Hague Tribunal and for Serbia’s integration into European institutions - these views were considered politically unacceptable. I was reminded of this some months later while reading Michael Parenti’s To kill a nation: The attack on Yugoslavia , published by NLR’s sister organization, the publishing house Verso. The book is simply an outright apologia for Miloević and his regime. Period. Thus while it would appear that supporting the prosecution of war-criminals at the Hague Tribunal is unacceptable to NLR/Verso, actually supporting the principal war-criminal himself - orchestrator of the worst acts of imperialist aggression and racial mass-murder in Europe since the death of Stalin - is entirely acceptable. Lest any reader believes I am exaggerating Parenti’s views, his book recently appeared in Serbian translation (Majkl Parenti, Ubiti Naciju: Napad na Jugoslaviju , Mediagraf, Belgrade 2002) - with a foreword by none other than Slobodan Miloević himself.
Full disclosure here: I’m a former member of the NLR editoral committee and resigned along with Hoare’s parents and blogger Norman Geras (and most of the rest of the EC) following an office coup in 1993. I’m also a former employee of Verso. Our resignation statement, heavily self-censored for legal reasons, is here (the full story might get disclosed to people buying me enough beer in the right circumstances).
I’ve been reading Amartya Sen’s magnificent Development as Freedom this week. A more bloggable books would be hard to find: startling facts and insights jostle one another on every page. Even when you already know something, Sen is pretty good at reminding, underlining and making you think further about it. So this, for example on the life prospects of African Americans:
Even though the per capita income of African Americans in the United States is considerably lower than that of the white population, African Americans are very much richer in income terms than the people of China or Kerala (even after correcting for cost-of-living differences). In this context, the comparison of survival prospects of African Americans vis-a-vis those of the very much poorer Chinese or Indians in Kerala, is of particular interest. African Americans tend to do better in terms of survival at low age groups (especially in terms of infant mortality), but the picture changes over the years.
In fact, it turns out that men in China and in Kerala decisively outlive African American men in terms of surviving to older age groups. Even African American women end up having a survival pattern for the higher ages similar to that of the much poorer Chinese, and decidedly lower survival rates than then even poorer Indians in Kerala. So it is not only the case that American blacks suffer from relative deprivation in terms of income per head vis-a-vis American whites, they are also absolutely more deprived than low-income Indians in Kerala (for both women and men), and the Chinese (in the case of men), in terms of living to ripe old ages.
Shocking, for the strongest economy on earth to create these outcomes (which, as Sen reminds us, are even worse for the black male populations of particular US cities).
UPDATE: Thanks to Noumenon for a link to this item . I closed the comments thread because I didn’t want to spend my weekend fighting trolls. But email suggests that there are some people who have worthwhile things to say so I’m opening it again (though I won’t be participating myself).
Time for another “Globollocks Watch piece, surveying Doug Henwood’s piece in The Nation, which appears to have been taken by some among the neoliberal axis as evidence of a climbdown by a once-proud supporter of the Seattle rioters
Full disclosure: Although DH and I have never met, we’ve corresponded for quite a while and I consider him a mate. For this reason, I’ve decided that integrity requires me to be extra harsh in applying the patent Crooked Timber “Globollocks Scale”. I repeat my earlier point that the Globollocks ratings apply to individual pieces, not to entire ouevres and certainly not to people. The purpose of the scale is at least partly to point out how difficult it is for anyone, no matter how solid their command of the issues, to write anything short about neoliberal policy which doesn’t end up materially oversimplifying. Since I’ve never knowingly lit a candle while cursing the darkness was an option, don’t expect me to subject any of my own work to this scale any time soon.
I award “Collapse in Cancun” 8 Globollocks points and 2 cliche points. The breakdown is as follows:
Globollocks points:
Mention of Korea “without qualification” — 3 points. This is probably harsh - as I say, I’m intentionally erring on the side of harshness - as there are a lot of nuances to the analysis. However, the central point this was meant to pick up is that Korea owes a lot of its success to ignoring the WTO agenda, and in the opinion of the judges, this point was not made. To be honest, 3 points seems a bit much for this, so I might rejig the scores a bit.
A single sentence in the final paragraph - “The most troubled part of the world is Africa, a continent that is substantially underrepresented in global trade and capital flows” - picked up two points; one for “reference to capital flows in abstract without reference to actual capital flows” and one for “general equivocation between trade and capital flows”. I tend to operate a harsh standard on this, because I do think it’s terribly important that trade and capital issues be kept distinct. By rights, at least one of these points should be won back for getting the reason for the collapse of the talks (the G22 refusal to accept discussion of the Singapore issues), but I didn’t make any provision for that.
I awarded 2 points for “argues back and forth between general statements about trade and specific statements about currently live negotiations” (out of a possible 4); I discuss this in more detail below, because it’s the crux of my disagreement with Doug on this one.
And a final 1 point for “mentions farm subsidies in an article without mentioning textile subsidies”. This could also be seen as a fundamentally misdesigned criterion, since the original point of it was to pick up closet Europhobia. However, I went ahead and awarded it anyway, partly to demonstrate scrupulous fairness, and partly because there seems to be a pretty straightforward equivocation in the paragraph on Korea between arable farming (which is probably a silly thing to do on high, cold inhospitable land) and livestock farming (which is not necessarily such a silly thing to do in such an area; consider Welsh lamb).
Cliche points:
Both of these enormously unfair in the context of DH’s entire work, but as I say above, these points are awarded on a piece-by-piece basis because you never know what kind of use will be made of something once it’s cast on the waters. One point for “the antiglobalisation movement is better at saying what it’s against than what it’s for”, and one for “is it OK to put a Brazilian steelworker out of work to preserve an American job?”, which looks too much like a species of “keeping poor countries poor” to avoid the points.
Judges’ comments: An exceptionally harsh score under the circumstances. If I were to reduce the tariff on Korea to equal “unqualified mention of India/China” at 1 point, and allow one of the capital/goods equivocation points to be won back for getting the point right elsewhere, that would take the score to 5 Globollocks points.
Assessment
Doug does have a valid point here; it’s just that I disagree with it, or more specifically, I disagree with the wisdom of expressing it in this way. The WTO is much less virulent than the IMF or World Bank. I personally don’t take the egalitarianism of its “one-country-one-vote” convention particularly seriously, but there is room for differing opinions here too. As I indicated above, the crux of the matter for me is whether it’s possible to be in favour of free-trade in the current environment without, to coin a phrase, objectively being on the side of the whole neoliberal bill of goods.
The thing is, nobody in their right mind who understood the issues could be against free trade in goods, in principle and in good faith. I simply can’t think of any legimitate reasons why one might be against “free trade”. The trouble is, as I mentioned earlier, nobody seems to be interested in free trade at the moment. Although I don’t doubt that there are a lot of sincere and well-meaning people who support the neoliberal cause, there are also a lot of the other kind; people who are only interested in things like the extrajudicial enforcement of patents and copyrights, and in gaining treaty protection for their overseas investment strategies. Neither of these have anything to do with the interests of developing countries, and it looks very much to me as if the Evil wing of the neoliberal movement is firmly in the driving seat. (If you doubt this, consider how quickly TRIPS was passed, compared to farm subsidy and textile tariff reforms).
This makes it a lot more difficult to know what to do. Are the neoliberal institutions (broadly, the IMF, World Bank and WTO) so far gone that the only thing to be done is to campaign for their destruction, or can something be salvaged from them? There’s surprisingly little disagreement on this question when it comes to the IMF and World Bank; pretty much everyone to the left of Joseph Stiglitz or to the right of George Bush agrees that they’ve never done any good that couldn’t be done without them at much lower cost. (I’ve always liked Jude Wanniski’s advice that you could dispense with the CIA and just follow the general rule of thumb that any country where the IMF has put a program in place will have a significant anti-American movement within five years of signing). But the WTO is a much more ambiguous call. Doug (I think, after talking to Jagdish Bhagwati) is apparently of the opinion that it’s potentially an arena in which something worthwhile could be achieved.
It’s a judgement call; I’m less sure after the Cancun/Singapore debacle that there’s anything worth keeping there myself, but I could be wrong. But the reason I’m worried about the uses to which this piece is already being put is that, whether or not we want to keep the WTO, we should always, always, make sure that the bastards can smell the grapeshot while they’re holding their meetings.
The history seems plain to me; the TRIPS draft on the table in Seattle would have made it illegal for South Africa and Brazil to provide generic AIDS drugs to their populations, this draft would most likely have passed if the Seattle talks hadn’t collapsed, and the fact that the Seattle talks collapsed allowed the developing countries to develop a negotiating strategy that resulted in a much better deal. Ergo, the Seattle rioters can be thanked by a grateful world for breaking up the Seattle round of talks. I don’t necessarily condone every brick that was thrown in Seattle, nor do I necessarily agree with the agenda of everyone at the protests. But I think it can be established beyond doubt that the presence of the protestors at every WTO round has an entirely salutary effect on the debate, because it emboldens the developing countries and makes the developed negotiators nervous. It’s true that a lot of anti-WTO rhetoric is the most fearful AntiGlobollocks, and also true that the WTO cops a lot of flak from ill-informed people which should more rightly be directed at the IMF and WB. But the importance of the protestors is not so much what they say as the fact that they’re there. What we need is a WTO that’s effective enough to stop the US and EU from abandoning it in favour of a divide-and-conquer strategy of bilateral deals, but not cocky enough to push the Singapore agenda. And I’m, for the moment, not convinced that the pendulum’s swung so far that the protestors aren’t still a progressive force.
This should be classified as “playing with numbers” rather than serious economic analysis, but I found it interesting at least. Basically, following on from Chris’s demographics post earlier in the week, I thought I’d follow up an idea I’ve had for a while and carry out some “financially adjusted demographics”. The idea is quite simple; there’s two ways in which you can add to a country’s effective labour power:
1. Increase the population
2. Acquire overseas assets, effectively giving you a claim on the population of other countries.
It’s always struck me that demographic analyses (particularly those carried out by people looking at pensions issues) tend to fixate on the first and ignore the second. Turns out that it doesn’t make a huge difference to the numbers, but it does make a difference.
Basically, my modus operandi was this; in any given year, the current account balance is (by accounting identity) equal to the net amount of financial claims acquired on the outside world. If you have a surplus, you’re piling up claims. If you have a deficit, other people are piling up claims on you. Easy enough.
I then made a monstrous but superficially attractive simplifying assumption; if you take the GDP per capita and the life expectancy of a country, then you can calculate the capitalised present value of the GDP produced by an average person over his or her life for that country. This allows you to convert the dollar amounts of assets and liabilities into rough population terms. So the idea is, say, that if the capitalised value of the GDP produced by an Elbonian is $1,000,000 over his life then in principle, whenever Elbonia has a net external debt of $1,000,000, then that’s equivalent to having one Elbonian spending his life working for foreigners. I got the idea from the people who calculate “Tax Freedom Day”.
I’ve set out the calculation for the G5 below. You’ll note that for each of the economies, I’ve assumed that the long term growth rate is equal to the discount rate used for capitalising the GDP. This is because I can’t think of any other relationship between the two that makes sense, but I guess if you really wanted to, you could email me and I’ll send you the spreadsheet so you can put your own numbers in. Note that the data comes from the CIA factbook, and the current account figure given is a fairly simplistic net exports measure, but it ought to be ballpark. If a thing’s not worth doing, it’s not worth doing properly, that’s what I say.
The USA still comes out far and away the best. Still, it’s a sobering thought that more than a twentieth of the population growth is required to finance the current account, and this is mainly because of the very high GDP per capita; if you took the US down to the G5 average, it would be more like one in ten. The UK looks really bad; our growth rate isn’t that good to begin with, and even a quite small deficit makes a material difference. Germany manages to rescue what would be an absolutely horrendous population growth rate with a substantial surplus, ending up merely worrying.
The bottom three rows do the same sort of calculation, but as their base they use the international investment position rather than the current a/c balance. The IIP is basically the stock equivalent of the balance of payments; it’s a measure of domestic ownership of foreign assets net of domestic ownership of foreign assets. And the results (because we’re of necessity dealing with bigger numbers) are a bit more interesting. The USA jumps out the page as the only net debtor, to the tune of a cool two trillion dollars. And this is the equivalent of over 800,000 US productive lives. It’s a John Birch Society nightmare; if the United Nations had demanded that nearly a million Americans be forced to work for other countries for their whole lives, there would I imagine be a bit of an outcry, but the last ten years’ trade deficit has accomplished the economic equivalent. Japan has got 600,000 foreigners already under harness to work at financing their pension timebomb and is recruiting more at a rate of 180,000 a year. And the British Empire (in the sense of foreign lives controlled by the UK economy) has dwindled to a measly 6,706 souls. That wouldn’t even fill a football stadium.
(By the way, for God’s sake don’t show this to your economics professors. I must reiterate that it’s as spurious as hell, although no more spurious than a lot of things you see in the newspapers).
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