Do you like hunting pheasants? Sign up for the Joshua Tent pheasant hunt December 6, 2008, and help support an in important urban youth ministry in the Rosedale area of Kansas City, KS.
Joshua Tent is an Evangelical Covenant Church plant (not far from where I live) with a passion for urban youth and families. My friends David Stanley and Jose Sanchez are co-pastors. Here is a sampling of some their ongoing ministry
To learn more about Josuha Tent, visit their website here. Here is a brochure for the event, although I understand the price has dropped from $400 to $250.
Even if you aren't into pheasant hunting, Joshua Tent is worthy of your support if you have a passion for urban youth.
The Advent Conspiracy (HT: Kairos)
My recommendation for Christmas gifts? Why not try a Kiva gift certificate this year? You can help expand microenterprise in these financially difficult times and you can help acquaint the recipient of your gift certificate with economic development in emerging nations.
For Kiva gift certificates: Click Here
If you don't already know about Kiva: Click Here
Washington Post: U.S. Cancer Rate Declines for First Time, Report Finds
Deaths From the Disease Continue to Drop.
The pace at which Americans are getting cancer has started to decline for the first time, marking what could be a long-awaited turning point in the battle against the disease, according to an annual report that tracks progress in the war on cancer.
Cancer deaths have also continued a decline that began in the early 1990s, meaning that for the first time both trend lines are dropping. ...
New York Times: Digital Sales Surpass CDs at Atlantic
Since MP3s first became popular a decade ago, music industry executives have obsessed over this question: when would digital music revenue finally surpass compact disc sales?
For Atlantic Records, the label that in years past has delivered artists like Ray Charles, John Coltrane and Led Zeppelin, that time, apparently, is now.
Atlantic, a unit of Warner Music Group, says it has reached a milestone that no other major record label has hit: more than half of its music sales in the United States are now from digital products, like downloads on iTunes and ring tones for cellphones. ...
Paul Collier starts of his brief chapter on military intervention in The Bottom Billion this way:
Indeed, others have been critical of Collier’s position here. Last week I linked a lengthy critique by William Easterly (one of my favorite experts on these issues) on just this topic. Still, Collier maintains that intervention can play three important roles: restoration of order, maintain postconflict peace, and preventing coups.
Collier is skeptical about building up local military presence too quickly in a postconflict context. An outside presence that is willing to take causalities is usually necessary. U.N. Peacekeepers that avoid engagement at all costs are useless. The massively expensive and hubris laden efforts in Iraq unfortunately poison the water for intervention strategies. Yet Collier reminds us that the consequences of such reluctance are likely to result in future holocausts like the one in Rwanda a decade ago. Furthermore, there are examples of effective interventions in other regions of the world. Collier lifts up the underreported and little acknowledged success of British troops in Sierra Leone during Operation Palliser. The challenge in the future will be to discern what contexts warrant taking such interventionist risks.
Economix (NYT): Oil Is Cheap. Why Is Gas, Which Is Made From Oil, Even Cheaper?
Christian Science Monitor: Russia's new presence in Latin America
Marginal Revolution: How to give directions Tyler Cowen
I tend to prefer receiving cardinal directions but that is in part because I live in the Midwest where the world is laid out more or less according to a grid. Having also lived in Philadelphia for awhile, I found that cardinal directions were much more challenging. Once you leave the city proper, the gird disappears and landmarks become more important. I tend to give both cardinal and landmark directions when I'm asked for directions, figuring saying things more than one way will improve success.
Probably the most intuitive response to the plight of the bottom billion is for the wealthy to give aid to the poor. Poor people lack resources so let’s give them more resources. The left champions this approach as reparations for colonialism and the right tends to equate aid with welfare for those who won’t do what they need to do improve their lives. As Paul Collier observes in The Bottom Billion, there is a more sane perspective that realizes that it took the west 200 years to transition into prosperity and our aim should be to figure out how to accelerate the process elsewhere. While aid is important, aid alone is generally ineffective. In some cases aid can actually be destructive.
Collier reports that aid is subject to diminishing returns. That means that each additional dollar of aid does slightly less the good than the preceding dollar. At some point each additional dollar is wasted. Economists at the Center for Global Development report that when aid reaches about 16 percent of a country’s GDP, it ceases to be effective. That is not far from where aid is at in much of Africa. Thus, if this analysis is correct, then the much ballyhooed idea of doubling our aid to Africa is not likely to have a significant impact. Countries where governance and polices are already in good shape tend to do much better with the aid they receive but even here excessive aid can actually become counterproductive. Why?
There are few systems of effective accountability in most poor nations. Collier offers a recent example of unrestricted aid received by Chad from the European Union. Chad’s Ministry of Finance set aside money for rural health clinics. Less than 1 percent got to its intended destination. Meanwhile, Chad experienced considerable expansion in its military sector. Any guesses where that money might have come from? Collier estimates that about 11 percent of aid ends up funding military functions in Africa but aid as much as 40 percent of Africa’s military funding comes from aid.
Furthermore, consider a poor nation that is getting government to government aid. Most nations depend on their economic sector for funding government operations. Therefore, there is attentiveness to the countries business sector. When significant portions of a nation’s revenue come from aid, government officials turn their attention toward the source of the aid and neglect their local economy. Aid actually becomes a barrier to developing a growing sustainable economy.
With regard to the Conflict Trap, Collier acknowledges that aid can actually make situations worse. Those who control the government control the aid. Aid becomes a funding source for a patronage system where those with power solidify their control over society. Interestingly, Collier notes that while the Resource Trap tends foster popular rebellions, aid tends to foster coups. The difference is likely due to the fact that with resources you need only to capture control of the resources to win, while with aid you need control over the government.
That said, aid can also help with the Conflict Trap. To the degree that aid works to stimulate economic growth it can counter one of the principle causes of the Conflict Trap, namely a stagnant economy. Unfortunately, Collier’s studies report that the investment is usually not worth the results. He says this is primarily because aid is pumped into contexts of poor governance and weak policies. The big exception is when aid is used for security purposes in postconflict situations. Here the stability created by aid gives a more favorable environment for economic reforms to take root. Collier’s bottom line is that if aid is going to be effective, then it is going to have to be designed for implementation in societies with poor governance and poor policies.
Collier sees aid as ineffective for addressing the Natural Resource Trap, except in cases where a nation is undergoing significant reform efforts. By contrast, Collier believes aid is not only effective but essential for landlocked nations. He argues that there is not fast track for these nations and what these nations need is a sense of stability (even with dependency) until their neighbors improve.
Finally, with the Bad Governance Trap, Collier sees some important roles for aid. Aid must be used as an incentive for developing better governance. It should be conditional on quantifiable accomplishments. Collier writes that, “The key objective of governance conditionality is not to shift power from government to donors but to shift power from government to their own citizens.” (110) He also notes, “We have to accept that there are severe limits to what aid can do to improve governance. But we are not yet at those limits.” (111)
Collier champions aid in the form of skills transfers. Many poor nations are simply without the governance skills that are needed to effectively run governmental and societal institutions. While nations are in transition it makes sense to have skilled outsiders working for a time alongside the officials of poor countries to equip them with the skills they need.
Collier discusses other technical considerations at some length. He notes that aid can have the same detrimental impact to developing exports in poor nations that the Natural Resource Trap has. (i.e., The value of the currency goes up making exports more difficult to sell and excessive revenue from resources/aid diminishes incentives to develop export revenue.) He proposes that some of this effect could be offset by helping the export sector through the improvement of infrastructure at ports.
Wrapping up the chapter on aid, Collier writes:
New York Times: The New Deal Didn’t Always Work, Either (Tyler Cowden)
Christian Science Monitor: Rape's vast toll in Iraq war remains largely ignored
My Myers-Briggs inventory has been pretty consistent over the years. I come out as an e/iNTJ. I have always come out in the middle of the first variable and at the extremes on the next two. However, over the years I've moved away from a strong J and toward the middle. So the blog analysis would seem on track. However, both Scott and I do lots of news aggregating, which means a significant portion of our content is not our writing. So who knows what this actually means.
Do you have a blog? What type are you?
I recently installed FoxSaver with my Firefox browser. It's a screen saver feature that periodically updates with new images. One that is on my machine now is this:
This picture is begging for a caption. What is it?
We’ve now taken a glance at the four poverty traps listed in Paul Collier’s The Bottom Billion. To summarize, Collier writes concerning the people of the bottom billion:
Collier then spends the second half of the book reviewing various options from addressing the poverty the bottom billion. He suggests that challenge is going to be more difficult for the remaining poor nations and that globalization actually increases the barrier. A few decades ago there was a small community of nations with wealth and most of the world was in varying degrees of poverty. Presently there are more wealthy nations and an array of countries that at various places on a continuum moving toward greater wealth. These are the nations that are integrated into the global economy. The remaining poor nations are stuck at the bottom of the continuum as the rest of the majority of the world pulls away. Metaphorically, we could say the low hanging fruit as been collected and even some of the fruit just above it. Now we are compelled to climb up into the tree after the fruit that is the hardest to reach.
So what are the instruments for breaking the bottom billion out of their poverty? Collier offers four and they are not without controversy.
We’ll turn to these next.
Private Sector Development Blog: Entrepreneurship - the key to prosperity?
The fourth of Paul Collier’s poverty traps in The Bottom Billion is the Poor Governance in a Small Country Trap. Collier writes:
He goes on to observe:
Governance is especially critical in landlocked, resource poor nations. Where a costal, resource rich country may be able to get along well with less than stellar governance, citizenry in landlocked poor nations are more dependant on government for effective distribution of resources. Furthermore, as we saw earlier, good governance relative to neighbors is one of the few competitive advantages a poor landlocked nation can cultivate.
There is a high correlation of substandard governance and poverty. The problem is that sustained turnarounds in such nations is notoriously difficult to achieve. He makes this sobering observation:
“Overall we find that the probability of a sustained turnaround starting in any year is very low: a mere 1.6 percent. Countries are therefore likely to stay as failing states for a long time. Indeed, from this annual probability we can calculate something called the mathematical expectation, which is the average length of time it takes to get out of being a failing state. It comes out as fifty-nine years.” (71)
Ironically, some the greatest opportunities for turnarounds come on the back end of internal conflicts.
Collier believes that with intelligent and targeted intervention, developed nations can do things that will help shorten the transition time. More on that later. But what this hopefully shows is that good governance is not a silver bullet to eliminating poverty. Even with good governance and high growth rates of 5-10%, it would still take a couple of generations for a nation to emerge from poverty. On the other hand, dumping aid into a country without good governance is futile. It is likely an exercise in lining the pockets of the countries elites. Similarly, opening trade with such a nation will generally result in a bonanza for the wealthy elites with little impact on the masses.
Good governance is a force stabilizing a society so productive forces can take root but it can not drive the growth itself.
Several days ago Scot McKnight had a post about the merits of fair trade coffee. During the discussion that ensued, a commenter named Edwin Martinez offered his insights. Good stuff!
Presbyterian Outlook: Survey: Megachurches more intimate, believers less gullible
The third poverty trap in Paul Collier’s The Bottom Billion is the “Landlocked With Bad Neighbors Trap.”
The overwhelming majority of the world’s population lives in nations with access to the oceans. Yet Collier reports that 38% of the bottom billion live in landlocked countries and all but 1% of these folks are in Africa. Africa has an unusually high number of such nations.
Being landlocked is not always destructive. There are landlocked countries around the globe that have succeeded. There is Switzerland and Austria in Europe. They have benefited from existing in partnership with good neighbors. Botswana in Africa has performed better than most African states through the successful exportation of a variety of natural resources. However, landlocked nations with few natural resources and bad neighbors are severely hampered. Why?
Collier writes, “If you are costal, you serve the world; if you are landlocked, you serve your neighbors.” (57) Bad neighbors make international trade problematic for landlocked nations. If neighbors are without adequate infrastructure, embroiled in chaos, or governed by corrupt leaders, then landlocked nations are isolated from the global economy. Healthy regional trade is paramount for landlocked nations, yet Collier notes that most of these nations are either inward-looking or focused on world trade. Only through regional development can landlocked nations hope to become part of the global economy.
Collier lists the following nine strategies to address the problems faced by landlocked nations:
With all that said, Collier paints a rather grim picture. He notes that landlocked Uganda and Burkina Faso have had good growth rates over the past decade but that is partly because the have risen from such horrible circumstances. He writes, “But I can find no example of a landlocked, resource-scarce country with bad neighbors that has made it to middle-income status.
Religious News Service: Thirty years later, ghosts of Jonestown live on
Adam Smith's Lost Legacy: Self Interest and Selfishness
Self interest is not selfishness. When I look both ways before crossing the street, eat three meals a day, and put in thirty minutes of exercise, I'm exercising self interest. Jesus repeatedly appeals to our self interest with instructions like those where he tells us to store up treasure for ourselves in heaven rather than on earth. Selfishness is when we place our wants and needs above all else. Self interest is not selfishness but there can be blurring that makes discernment difficult.
Markets where virtuous people pursue self interest do not result in perfect efficiency or fairness but they do remarkably well at this compared to other alternatives humanity has yet seen emerge. Thus, merely identifying that markets are imperfect is insufficient justification for heavy intervention. The law of unintended consequences is an ever recurring theme. Thus, overconfidence in either markets or government control is risky. Prudence is the key.
A family of three was also recovered at site. This photograph was buried with them.
In the previous post we reviewed the Conflict Trap, the first of four poverty traps presented in Paul Collier’s The Bottom Billion. Now we turn to the second trap: the Natural Resource Trap.
It is common for folks to assume that the way out of poverty for a poor nation is to discover natural resources that are in demand in the global economy and export them. Ironically, a national economy dominated by the production and sale of such resources is usually detrimental to widespread economic growth. Why?
Imagine a nation that neither has valuable natural resources for export nor receives aid. If people are going to significantly improve their lot, then they must improve their domestic economy and engage in trade with other nations. Trade means they must be able to produce something worth trading with other nations. That means efforts toward an improving labor force, an investment in technology, and a stable governmental environment that is conducive to the evolution of an array of industries.
Now imagine this same nation when vast oil deposits are discovered. Oil exports quickly become 20% of the economy. Our hypothetical nation’s currency rises relative to other currencies making exports more difficult (i.e., exported goods become more expensive relative to the alternatives.) Resources that might have been invested to improve a range of skills and technology are diverted to the skills and technology to service one industry. Domestic industry becomes severely hampered and imports become far more attractive because they are now relatively cheaper to domestic goods. Government begins to largely ignore all other domestic industry. But this is not all.
Most impoverished nations have very weak governance, if not outright corruption. An elite minority frequently has the ability to control the production and export of the valued resource. They are able to pocket most of the economic bonanza for themselves. Some authoritarian powers widely distribute enough of their resources to minimize discontent among the masses. Others do not and simply use coercive force to keep control of the resources.
Some countries will nationalize the resource industry, attempting to achieve a just distribution of resources to the rest of society through democratic means. This inevitably sets up tremendous power struggles between political factions who want to preside over a very wealthy and powerful government. Politicians compete through evermore expansive handouts to the populous. The absence of taxation as the means to raise government funds leads to less scrutiny by the citizenry. Unlike an autocratic state where at least long-term consideration is being given to proper investment in the resource industry, democratic government officials look no further ahead then the next election, often making irresponsible investments in useless projects and under investing in legitimate ones.
Collier emphasizes the importance of having not only democracy but government restraints provided by checks and balances of power in society and government. He is particularly keen in freedom of the press. He writes:
Wealthier nations are not immune to some of these same dynamics. Those with longer histories of restrained governments are more resistant to these difficulties. However, when wealthier economies stagnate, they usually do so with people at a higher economic level. Therefore, while the Natural Resource Trap is not entirely unique to poor nations it is significantly more devastating.
The New York Review of Books: Foreign Aid Goes Military!
This is a book review of the Paul Collier's The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It by William Easterly, the author of The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good. I think Easterly's book is still the best of the books I've read on Africa. In this lengthy review, Easterly takes Collier to task for his openness to military intervention in failing nations. I don't think Easterly's criticism invalidates the basic themes coming from Collier's research but I think it does provide a helpful check on how we move from research to policy.
Carpe Diem (Mark Perry): Two Very Dangerous Words: "Fair" and "Fairness"
New York Times (David Brooks): Bailout to Nowhere
This just came in a press release from the PCUSA Office of the General Assembly:
Peace to Robin, Bruce, and the whole family. Please remember them in your prayers.
While I've been keeping up with my news aggregating activities this week, I haven't made much headway on on my own posts. I spent Monday in the hospital having a test done. I discovered I have hypothenar hammer syndrome. That means that my ulnar artery in my left arm is blocked at the wrist, causing my fourth and fifth fingers to go numb at times. We're working on that one. Tuesday and Wednesday I was in Louisville (again) for some Presbyterian stuff. Last night I went to the opening of a writers conference that will occupy me through Saturday evening. Hopefully I will get back to the blog next week. Meanwhile, I'm docking the Kronicler's pay for this week. :-)
Quotidian Grace: 10 Most Annoying Presby-Phrases Revealed
The Economist: Redesigning global finance
Christianity Today: The Leadership Cult
Christian Science Monitor: Brazil becomes antipoverty showcase
Christian Science Monitor: Farming superpower Brazil spreads its know-how
Urban Perspectives: Religious Tourism
(This is from Bob Lupton's October newsletter, republished here with permission.)
Jesus the Radical Pastor: Jesus as an Emergent Talker
This one is just hilarious!
Those of you who have read my blog for over the last three years know that I have gray striped shadow named Isaac that follows me all over the house (a.k.a. Mr. Snookums, Sweet Pea, Cat Boy, Stinker Puss, Your Royal Stripedness, … well, you get the picture.) A few months ago Isaac, who is coming up on his seventeenth birthday, was diagnosed with a thyroid problem. So the vet prescribed some pills for him, the same thyroid medicine given to humans.
Last month I was at the pharmacy and the pharmacist informed me that if we were to pay $20 and sign up Isaac for the prescription discount plan we could save ourselves a bunch of money. I looked into it and he was right.
The sign up process was bit tricky. The pharmacist’s assistant couldn’t figure out how to indicate Isaac is cat (something Isaac himself is unaware of) but we eventually got it all figured out. Frankly, I thought it was much easier getting him registered to vote. Now all I have to do is figure out how to get him to sign the back of the card.
Anyway, here is Isaac with his new prescription card (with account number covered.)
Paul Collier, in The Bottom Billion, identifies four traps that have prevented the poorest nations from emerging to higher standards of living. The first trap is the conflict trap.
Conflict is common to all societies but nations that are home to the bottom billion have in ordinate share of violent internal conflict. Collier estimates that seventy-three percent of these of the bottom billion have recently been through, or are presently experiencing, a civil war. Developed nations have had their civil wars in the past but unlike the poorest nations they have not remained trapped in an endless cycle of violent confrontations.
So what are the factors that tend to breed internal conflict. First, societies with stagnant low-income economies have a greater propensity for war. Collier suggests that if you halve the income of a given society you double the chances for civil war. But one could ask about the direction of causality. Does poverty lead to civil war or does civil war lead to poverty. The answer is that both are true, creating a cycle of destruction
Second, these poorest societies have a substantial number of alienated uneducated young men with no dependents. This means there is an inordinately large supply of potential rebel recruits. The small chance of a big payoff for these men by participating in rebel actions is worth the risk. Collier says that research indicates that people with a sense of grievance are no more likely to engage in violence than those without one. It seems that rebel violence may be more a symptom of insufficient societal restraints on violence, rather than an inevitable expression of seeking justice.
Third, many poor nations are heavily dependent on commodity exports (ex. oil and minerals) and there is a correlation between this type of economy and civil unrest. With so much of the economy confined to a few concentrated enterprises, the ones who can control those enterprises stand to profit a great deal. International buyers of the commodities tend to back whoever is in control of the resources. If rebel forces might render a better economic outcome, then the international players may fund and equip rebels.
These three causes help us understand the trap but Collier gives greater nuance. For example, rebel movements may begin as noble challenges to oppression but they tend to quickly morph into something more sinister. There is always a small percentage of any society that has a thirst for brutality and violence. As a rebel movement grows, it inevitably becomes a draw for these folks. Idealistic visionaries find it virtually impossible to hold the rank and file in line. Eventually, the social justice grievance becomes cover for a thirst for power and violence. Collier writes that, “A flagrant grievance is to a rebel movement what an image is to a business.” (25) The point isn’t that governments who become the objects of rebellion are necessarily just and unworthy of protest. Rather it is an acknowledgement that many of these civil conflicts quickly sink into unjust governments battling unjust and opportunistic rebels.
Collier notes that studies do not support the conclusion the ethnic diversity leads to proneness toward civil war. More correlated are nations that have a majority ethnic group but one or more significantly large minority groups. Most of the poorest nations do not match this criteria, although notable exceptions of poor nations like Rwanda and Burundi that are examples of this dynamic.
Another observation is that countries with the population dispersed around the edges of their territory or with mountainous terrain seem to be more at risk than densely populated flatland nations. Collier speculates this is because it gives rebel forces more places form and hide.
The conflict trap is particularly devastating. While most international conflicts last six months on average, civil wars tend last five years. Then when the war is over, a wave of homicide usually ensues. These wars usually generate significant numbers of refugees. As these weakened and malnourished folks travel about they begin to pick up diseases and spread them with them where ever they go. Collier points out as much as half of the societal cost of civil war accures after the war is over.
Sub-Saharan Africa has a high concentration of nations the are caught in the conflict trap. However, Collier notes that, “Africa does not have more coups because it is Africa; it has more coups because it is poor.” (36) Furthermore, he notes that attempts to establish democratic rights have seemingly little impact on reducing a nations risk coups and civil war. At the end of his discussion on the conflict trap he writes, “I do not wan to claim that only economy matters, but without [economic] growth peace is considerably more difficult." (37)
US News & World Report: A Decisive but Not Overwhelming Victory for Barack Obama
Presbyterian News Service: PNS reporter Evan Silverstein dead at 42
Those of you who are regular followers of the Presbyterian events have undoubtedly come across Evan's work. He has a been a regular face at events I've been a part of over the last four years. Evan's passing is a real shock to the Presbyterian Center community. His family, friends, and colleagues are in my prayers.
Wall Street Journal: A New Dawn