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August 7, 2012

Latest Posts from Economist's View

Latest Posts from Economist's View

Posted: 20 Jun 2012 03:33 AM PDT
Jim Hamilton, in a post called Peak oil and price incentives:
... We like to think that the reason we enjoy our high standards of living is because we have been so clever at figuring out how to use the world's available resources. But we should not dismiss the possibility that there may also have been a nontrivial contribution of simply having been quite lucky to have found an incredibly valuable raw material that for a century and a half or so was relatively easy to obtain. Optimists may expect the next century and a half to look like the last. Benes and coauthors are suggesting that instead we should perhaps expect the next decade to look like the last.
Posted: 20 Jun 2012 03:24 AM PDT
Today we visited a maternity ward in a poor area of Nairobi to get a sense of the scale of the population explosion in Kenya, and the level of care for this population.
The charge for maternity care at this hospital is 3,000 shillings for a normal birth, and 6,000 shillings for a C-section, plus 400 shillings per day for room charges. (If you cannot pay at the end, they keep you for two weeks -- room charges accumulate -- then eventually release you. About 2% do not pay, and that comes to around a million shillings per month.)
Maternity Ward 004Entrance
I was interested in a comment made during a presentation prior to the visit that health care for the poor is allocated by a voucher system. The vouchers cost 100 shillings, or a $1.25, That doesn't seem like a lot, but the population we visited yesterday, for example, is excluded by this practice (secondary options for care are not very good).
Maternity Ward 022Post-natal training
I asked the government official making the presentation why they chose to allocate care in this way. The money they collect is nothing -- that can't be it -- it seems like an intentional exclusion of the lowest income population. The answer: they can't afford to cover everyone. Then why exclude this population? Why not adopt a different allocation mechanism that targets very specific areas of need? Why do they think this is the best way to allocate the money? There was an answer, but it didn't really address the question, and it left as many questions as it answered.
Maternity Ward 008These will be occupied soon
I was left wondering how the voucher system came to be in the first place. I asked, again words were spoken, but there was no answer. Is this, for example, the result of some donor saying funds will be given, and insisting on an allocation mechanism that involves vouchers (it worked in Kenya, and it can work in the US too!)? Was it from economists in Kenya? I wish I had the answers.
Maternity Ward 017I bet this is really effective
Another comment made by the director of the maternity ward interested me as well. We were told that every other hospital gets 2 million shillings per month to cover maintenance, gardening, and other expenses, but this one does not. We asked why, and the answer was: he wished he could tell us, but he didn't know. I suspect the money is ending up in someone's pocket, but who knows? Another puzzle is that they receive very little donation money (though this could have been a pitch to donors that exaggerated the conditions so that we would write about it -- there was no way to tell). But this is a place where donations could do a whole lot of good, and it's hard to imagine that some NGO wouldn't want to do this (there is a funder on the trip who thought donors should be salivating over this place). But donors do check before giving money, especially very large sums, and if the money is not epected to end up where it was intended to go, then they would be hesitant to begin a relationship. We were all puzzled by why donors shied away, and we tried hard to find out why. But, once again, there was no good answer, only more questions.
I'm finding that a lot here.
[We also had a presentation on female genital mutilation, or female circumcision as some insist on calling it, and it seemed to me it could be characterized, at least in part, as a multiple equilibrium, collective action problem with tipping points. So I asked what they knew about tipping points -- the point where the social pressure switches from doing it to not having it done as fewer and fewer have the procedure done to them, but that will have to wait -- we have to catch a plane to Lake Victoria to meet the CDC and see other things, like hippos coming to get water (apparently like clockwork) and we depart at 6 am. That's in five hours.]
Posted: 20 Jun 2012 03:06 AM PDT
A progress report on jobs, justice, and equity for Africa:
The Africa Progress Panel Report — Jobs, Justice and Equity for Africa , by Kevin Watkins, Brookings: In the bullish environment at last week's World Economic Forum (WEF) on Africa in Addis Ababa, the launch of the Africa Progress Panel report stood out as an island of balanced reflection and cautious optimism.
Chaired by the former UN Secretary General Kofi Annan, the Africa Progress Panel (APP) includes leaders from government, business and civil society. This year's report, focused on jobs, justice and equity. The panel takes a long, hard look at Africa's recent record on economic growth, democracy and governance. It provides a hefty dose of good news. More than any other region, Africa's economies have demonstrated great resilience in withstanding the worst effects of the global recession. The WEF host country, Ethiopia, has been posting higher growth rates than China; Mozambique has been out-performing India. Over 70 percent of the region's population lives in countries growing in excess of 4 percent a year.
The record on democracy and governance is also encouraging. Multi-party democracy has emerged intact from disputed elections in Cote d'Ivoire and Senegal. Several governments have moved to strengthen anti-corruption measures. And budget transparency is improving.
Set against the positives, the APP does not pull its punches on the downside of the progress report. Launching the report, Kofi Annan told a crowded room of journalists that African governments were failing to tackle what he described as "ethically indefensible and economically inefficient" inequalities. "Disparities in basic life chances – for health, education and participation in society – are preventing millions of Africans from realizing their potential, holding back social and economic progress in the process," Mr. Annan said.
While the talk in the WEF corridors has been all about the investment opportunities created by growth, the expansion of the middle class and commercial agriculture, the APP turns the spotlight on issues that are conspicuously absent from the wider WEF agenda. It warns that much of the economic growth of the past decade has been jobless, raising the specter of rising youth unemployment. The report cautions that restricted access to education and low levels of learning achievement are reinforcing social disparities and hampering employment creation. And, citing data from research at Brookings, it says that claims made about the growth of an African middle class have been exaggerated.
Taking up a theme that NGOs like Oxfam have addressed, the report also urges African governments to draw a sharper distinction between productive foreign investment in agriculture and what Mr. Annan and his co-panelist and celebrity activist, Bob Geldof, described as speculative land grabs. The report warns that failure to prioritize smallholder agriculture will leave millions of Africans trapped in a cycle of poverty and food insecurity.
Looking ahead, the report calls for a renewed focus on equity and jobs creation, with education placed at the center of national strategies...
Posted: 20 Jun 2012 12:24 AM PDT
Brad DeLong:
I used to--six years ago--be certain that ... economics had a powerful technocratic core and a powerful set of analytical tools that helped to make sense of the world.
But the treatment that the world has gotten from the Lucases, Cochranes, Famas, Kocherlakotas, and many others, not to mention the Prescotts--none of whom seems to have made any effort to mark their prejudices to reality--has shaken my confidence to the core. They seemed to me and seem to me to have simply not done their homework, and not be trying to do their homework.
Posted: 20 Jun 2012 12:06 AM PDT

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