To Read

Two exciting new books are coming out in the next two weeks or so. These two books, as heralded as they are, represent the credit that randomized experiments have garnered in the field of development economics.

If we have limited resources (we do) and can choose only one thing to buy, should we buy bednets, textbooks or deworming medicine for poor children in Tanzania? Randomized control trials in economics help us to understand the real effects of interjections such as these. By employing this method of looking at differences in differences we can allocate aid funds most effectively ie. with the greatest positive impact and the least negative one. (If our ends were to get more education happening, it turns out deworming is the most effective, who knew? This feeds from a recent post on indirect aid sometimes being the most effective. )

The question of extrapolation is a pertinent one. Deworming worked well in Kenya, but will it work as well as say, bed nets in other more malaria-ridden circumstances? Luckily some very bright people are working in this field, and I figure extrapolation is well considered and rarely taken as given throughout the field.

These two books mark the forefront of the effort to make aid more effective and less defective....and it seems, in a very digestible way! (Who doesn't like digestible forefronts!?). I hope they can deliver to the UAE.

Click on a book to find out more:

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Check em out:

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A five star Hajj

The following is a guest post by JLD.

How fascinating to see the degree of opulence that this year has become possible during the pilgrimage of The Hajj, a momentous occasion for all Muslims who are fortunate enough to get there: to Makkah, Saudi Arabia.

It is to be the great leveller of occasions in the spiritual life of millions of devotees of Islam, evident in the same white attire that is worn by all pilgrims. And all are to participate in the rituals in similar fashion, while walking, praying, stoning the symbols of evil, and other aspects that have rich spiritual meaning.

What is interesting to the observer is the introduction of the glamorous accommodations provided by the enormous new Fairmont Hotel Makkah Clock Royal Tower, pictured above. Their least expensive room is currently a thousand dollars per night, while the most exclusive of suites is a mere $4,000 --- per night, yes. The pilgrims are, apparently, segregating themselves according to wealth. Some Africans, for example, many of whom can afford only the fare to get there, are often found asleep on the ground, their prayer mats providing perhaps some meagre protection and comfort, whereas those pilgrims of wealthy (Arab?) nations, perhaps, who partake of the luxury and accept the Fairmont's steep tarriffs --- are no doubt the primary consumers.

Hmmm... what does this suggest to the world about the commitment to a commonality among the pilgrims during this---for most---once-in-a-lifetime experience? How about supporting those pilgrims less fortunate by providing basic, comfortable, convenient living arrangements at no cost --- and truly share the wealth?

JGK: [Can anyone else see any symbolism in the Fairmont casting a pointed shadow over the Grand Mosque at certain times of the day? The word penetration comes to mind...]

The UAE is a bad country

Here is the Human Rights Watch page for UAE.

The situation is absolutely terrible.

I keep saying to myself that people would not keep coming if the abuse wasn't worth the extra income. While perhaps it is true, I no longer think this is an acceptable position. This state is filthy rich. It can afford to treat people decently.

Here is Amnesty International's page.

Although you sometimes hear claims about 'bolstering efforts' and 'renewing commitments', the UAE has yet to sign any major international treaty on human rights.

On the other hand — when it comes to human trafficking, in Qatar you need your employer's permission to leave the country. Now that's a lot of power in the employer's hands. In the UAE, if you make it to the airport and request a flight home, you're given a ticket and told to never return. Is that at least a little justice?

A dollar a day keeps the doctor away

The arbitrary measure of poverty that the World Bank concocted out of thin air several decades ago, and the language that surrounds that famous "dollar a day", is unfortunately stuck in our discourse on poverty.


Widespread efforts have been made to redefine poverty, focusing on access to basic amenities such as health care, habitation and education. A broader view, as encouraged by Aramrtya Sen among others, would analyze poverty in terms of an "individuals potential to function", which is to focus on what can be achieved with a certain level of income and the barriers to opportunity. This highlights constraints beyond access to basic necessities, such as broader monetary conditions and power relations.


These ideas, although pushing the concept in the right direction, often miss the blaring problem that the language of the World bank has created. 


"A dollar a day": doesn't it sound like a magic dollar arrives at the doorstep every day? Ok, perhaps you don't explicitly think like that, but the phrase certainly misses the biggest problem with income for the poor; the risks associated with uncertainty and inconsistency. 


As Eleni G. Medhin, the director of the Ethiopian Commodities Exchange, once suggested, the risks that a poor farmer must bear are greater than any speculator, investor or human being on earth. If the rains fail, people will die. (For those relying on income from medium sized firms, unpredictable policy changes seem to be most crucial.)


Buzzing around the Kenyan countryside with my friend Teddy, I came upon this cow carcass.  Prior to my visit the rains did not come, and then they did not come again. As Teddy put it, "This Maasai was a millionaire, now look at what he has got."

Where is the next dollar coming from? Who is it owed to? These are critical questions for those living with no social safety net.

Thoughts on Migration Innovation

Migration is a major issue. Yet is seems to always take a back seat to other issues, such as climate change, trade, aid, and so on. Ok, migration does recieve attention from the media and some political elites, but innovation of the concepts and practices of migration and migration law is scarcely heard of.

Lant Pritchett is one of my favourite authors on the subject of migration and a true innovator. Here and elsewhere argues that the world ought to adopt a system that is more like the UAE (without the widespread abuse).

 I agree with him, there ought to be more international migration in the world. I don't know exactly how this ought to happen, but Dr. Pritchett has some good answers. I understand that tensions can arise when immigrant populations threaten the livelihood of domestic citizens, but in most cases the benefits to migration far outweigh the costs.

Here in the UAE, foreigners (migrant workers) make up around 70% of the population. It is uniquely the highest per capita population of expatriates in any country on earth. The legal system that governs foreigners and their rights, is just as unique.

Basically, we have no rights. No right to a fair trial, no right to free speech, no right to freely associate, nothing. As such, human rights are frequently violated. But what are the benefits to this system? Over the next few days I will ponder this question and post when I come up with any insightful ideas.

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The bottom line is that the restriction of international migration has a critical, depressive effect on the wages of the poorest people in the world. 

A story I heard once will help to illustrate my point. In California during the 1950's, many Mexican migrants worked the tomato fields. In the late 50's a new international migration law was passed which restricted the flow of workers across the border. As a result the owners of the fields could not afford to produce tomatoes any more and the Mexicans were out of work. 

For a short while the fields fell fallow. Quickly, though, a machine was invented that mechanized the process that once relied on the hands of labourers. Tomato production went through the roof, profits to California land owners soared and the wages of the poor in Mexico fell accordingly.

One could argue that this was in fact good for the world because the migration law forced innovation and led to higher returns. However, this labour saving technology, which is akin to restricting labour movements across boarders, depresses the wages of the poor. Which is more concerning, the returns to land in California or the wages of the worlds poorest people?

Until we can all move freely to wherever best suits our tastes and abilities, labour saving technology is bad for the world. Restrictions on migration not only keep poor people poor, but in light of modern innovation, also hurt the prospects of wages rising, ever.

Its also unfair! Just ask people:

SuthEfrica

This video doesn't mention the 'tin can town' outside of Cape Town that I posted about earlier. South Africa has been building oppressive structures since the 1930s and somehow cant stop. They plan out places for poor people to live that will keep them poor. With no space for society, no space for creativity and no space for business, these oppressive designs have kept and will keep poor black people poor.