Waylaid Dialectic

In my last article I made the case for development — human development and human rights. In this article I’m going to look at economic development, by which I simply mean economic growth.

Economic growth has its sceptics. Books have been written on degrowth (the idea that economies should shrink), steady state economics (the idea that economies shouldn’t grow) and doughnut economics (the idea that economies should only grow so far).

There are three good reasons to doubt the desirability of economic development.

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In the early 2000s New Zealand untied its foreign aid. It jettisoned the requirement that a significant chunk of its government aid had to be given using New Zealand companies. It was a good change — part of an international effort to make aid more effective. It’s also one of the few positive changes that has endured since then. Some New Zealand aid is tied again now, but not nearly as much as once was. Most of our aid to the Pacific remains untied.

There are, however, people who would like to put an end to this…read the rest of this post on my Substack: https://terencew.substack.com/p/tying-new-zealand-aid-is-an-awful

It seems implausible that Donald Trump could win an election to a city council, let alone the most powerful country on Earth. But he’s done it. There are underlying sociological reasons — I need to read What’s the Matter with Kansas again. Yet he’s also a master of the tale telling of politics. Dumbed down narratives are currency in most democracies; they’ve been particularly valuable currency in the United States for a long time now. He does it well, albeit in a very macabre way. And he’s got some tricks of his own: people’s memory spans are short; you can bluff your way out of anything if you’re brazen enough; likewise, if you’re brazen enough, lies don’t really matter; and he’s a master of getting the hate on. Good tricks and all the more important in a social media age. And pulling off this stuff is so much easier in a Fox News type ecosystem.

Nevertheless, he lost the last election, why didn’t he lose this one?

Some answers seem pretty simple, prosaic even, but they’re likely the most important ones:

1. Inflation. It’s really unpopular. It might be coming down, and one day people will have forgotten all about the old prices, but for now disinflation doesn’t cut it. Inflation has been a nightmare for sitting governments the world over, including the Democrats. Combine this with the stagnation of real wages, the lingering effects of the GFC, the opioid crises, and you’ve got a bad brew in an economic sense. It’s easy to tell people that their lives were better Before Biden.
2. Immigration. Particularly illegal immigration. People just hate it. It makes them feel vulnerable. It makes the state seem impotent. (As an aside, maybe if the US wasn’t strangling the life out of Venezuela with sanctions, and maybe if it did something constructive in Haiti for a change, immigration would be a lot less, but I digress).
3. Joe Biden’s desperate desire to cling to power. It discredited the Democrats, he looked awful for not doing a Lyndon Johnson and not bowing out earlier on some or other pretext, and it meant the Democrats couldn’t choose the most effective candidate.

Then less important, but still important (I think):

1. The fact that Trump could, despite his obvious flaws, hold the Republican coalition together. The wealthy make sense. The social conservatives baffle me. But my guess is that churches play a role similar to that which unions once played in this.
2. A reluctance to vote for a black person among some voters. And a reluctance to vote for a women.
3. Harris simply wasn’t a very good candidate. Everything from how she spoke at rallies, to the tone of her voice, to her uninspiring interviews, to her inescapable association with Biden.

Of course what is much less clear, and much more important, is what will happen now, with Congress, the Senate and the Supreme Court (and nuclear weapons!) he is in a very powerful position. He’s also got some very nasty people trying to advise him. Yet at the same time he’s a very capricious person. That’s awful on the nuclear weapons front. But on the domestic front, in terms of policy, it may be somewhat different. And projects such as the Heritage Foundation one or Musk’s idea to radically shrink the government will go down awfully with the American public, eventually, when they see what it means for their lives. This, and Trump’s desire to be venerated, may serve as something as a countervailing force on radical economic change. Similarly, courts, including even the Supreme Court, might prevent him from dismantling democracy – might.

That’s only a small consolation when, literally, the fate of the World is in his hands along with the fate of US Democracy.

From a student essay: “It is evident that our laws are not working, our institutions are malfunctioning and our people are just following the wind”.

He was wearing tidy old clothes. Spread out with his feet up on two seats. A skinny, spindly Aussie, with an accent like sandpaper, worn by the years.

His voice was determined though. It arced. The way his words carried through the departure lounge café, he could have been preaching to all of us. Instead, he was hectoring a phone. Lecturing an occasional voice at the other end.

It was the type of intrusion I could have hated, but it was easy eavesdropping. And anxious and unwell, I was limping home, trying not to worry, keen on distractions.

“You look around you at the people in the village darlin’, are they progressing? Are they goin’ forward, like you want to do?”

His voice shrunk the question marks into full stops.

“Remember, Lincy? You know. Lincy Toam. Lincy! Oh. Limsy. Yes Limsy. Well he’s in High school in Port Moresby now. He’s doin’ great. He’s progressing.”

A grandchild in a village somewhere, I wondered? A child? A worker from a hardscrabble mining company?

Ever since it realised it had a neighbour, Australia’s been washing over Papua New Guinea in waves – colonial officials, crooks, businessmen, aid workers, preachers, economists – waxing and waning, succeeding and failing. Leaving bits and pieces along the way.

“You need to progress too darlin’.”

“You need to follow the Lord Jesus. Look where he came from. The stable. He progressed to become perfect. God almighty.”

The hardscrabble minerals company vanished. I sipped my coffee, and started thinking grumpily about the problem of evil.

He kept on. Blending advice on education and getting out of the village with scripture. Exhorting and exulting, his voice bouncing up and down, up and down, in agitated waves.

“Well, when the Lord likes what you are doing, He will exalt you, and that is when you will get what you want. Later this afternoon, you go and read Matthew…”.

Chapters, verses – he knew the bible. Yet he didn’t sound like the expat ministers I’d met in Melanesia. They didn’t dress like geologists either. And their god was never in such a hurry. Nor quite so personal.

“I know you like the village life darlin’. But you need to progress.”

The voice at the other end of the line was tiring, boring, explaining why it had to go and do something else now.  

All that energy. But Papua New Guinea’s been frustrating Australian energy for years. Absorbing those waves. Changing, just never in intended ways.

Or perhaps it had nothing to do with nation states. Families have complicated geographies of their own.

“Alright darlin’. Well remember to read the bible later like I told you.”

He hung up. Stood up. And strode out of the cafe. Tears tracing their way down his skinny, stubbly cheeks.

Random post taken from a blog comment I left years ago, that I want to keep for the links

Hi ###,

Also see: https://elibrary.worldbank.org/doi/abs/10.1596/1813-9450-6158

I think J&T is the best available evidence because, they run a comprehensive range of regression models, including IV models, and time series analysis. And the also run a good range of robustness tests. In addition to this they use aid data data to disaggregate different types of aid flows. This seems to me more sophisticated than some approaches to date (some which have been simply theoretical, others–dubious–single case studies such as that of Somaliland, and others which have involved regression analysis but less comprehensively).

That said, I’m still aware of the limitations of the type of analysis that J&T undertake. And perhaps their findings will be refuted in further work. (Hence, ‘best available’, rather than ‘definitive’.)

However, in between the J&T findings and some other pretty good work on the relationship between aid and democratisation and the like (see below) my reading of the evidence is that, overall, available evidence shows positive aid/governance relationship. And that it certainly doesn’t show the negative one so central to Deaton’s arguments. Maybe this body of evidence is wrong, but, if it is, the burden of proof ought to fall on those who believe it is wrong to show that it’s wrong, before making claims about a negative aid/governance relationship.

Also, it’s worth noting that J&T aren’t outliers with respect to their findings. Some other related papers with similar (or otherwise interesting) results:
http://dx.doi.org/10.1016/j.worlddev.2014.11.009
http://dx.doi.org/10.1017/S0007123413000264
http://www.personal.psu.edu/jgw12/blogs/josephwright/Dietrich%20Wright%20OUP%20Ch3.pdf
http://dx.doi.org/10.1111/j.1540-5907.2010.00501.x
http://dx.doi.org/10.1017/S0020818304582073
http://dx.doi.org/10.1016/j.worlddev.2014.05.014

cheers

Terence

Special Drawing Rights are issued by the IMF (also see here) and governed by IMF rules. They are meant to serve as a substitute of sorts for the conventional currencies of global exchange (like the USD). They play a currency like role — but they aren’t the selfsame thing as money (they’re closer to a promise among nations: “I’ll help you now if, when I’m in trouble, someone else in our club helps me”).

SDRs cannot be used for all the things $ can be used for for – they can only be exchanged between countries, and some international institutions.

Their utility is that if you are a country with limited foreign exchange and need to pay for imports, you can ask another country to exchange your SDRs for their hard currency (a good hypothetical example is given early in this CDG note). The other country doesn’t have to say yes, although the IMF can compel it too (the IMF hasn’t had to do this since the late 1980s).

SDRs come at a price (low levels of interest levied by the IMF), although only if you exchange them for someone else’s cash. This is done to stop profligate use of SDRs.

SDRs have not typically been a major feature of the global economy. As potential sources of bailouts they have been dwarfed by other resources.

However, with developing countries feeling the pinch in the economic epidemic associated with Covid-19, the IMF baked a very large batch of them and doled them out. See the second chart here.

This didn’t happen without debate, but happen it did, albeit to a smaller amount than some would have hoped, thanks to domestic US politics.

So far so good. But there’s still an issue: SDRs are issued in proportion to countries’ quotas at the IMF. This is a problem because developing countries have received fewer SDRs than they (potentially) need, while wealthier IMF members typically have more SDRs than they need.

As a result people are talking about some process in which wealthier countries lend or grant SDRs to poorer countries (here and here).

Could this work – possibly, but the devil is in the details. See this CGD primer.

But, what about the cost to Australia? Sigh. The cost would be incurred in the interest levied (against Australia) on any SDRs if donated or lent to other countries.

Australia’s SDR holdings are here.

At present the SDR interest rates are low. (0.05% at present). Australia holds 9,587,323,292 SDR. Say it gave away 10% of these (958,732,329). 958,732,329*0.0005=479,366 SDR a year. 1 SDR is about 1.4 USD at present, so Australia might be paying interest of a bit over 670,000 USD, which is next to nothing. But interest rates could change. It still seems like a very small amount to me, but maybe I’m missing something? Over the long term? A maths error?

This blog post from CGD’s Mark Plant has some good ideas (and links to imperfect data) on tracking who’s doing what with their SDRs.

Here’s the G20’s promise of SDR re-allocations.

Useful.

Last night I dreamed I was back in Canberra, on campus. A new PhD wunderkind in my school gave a much anticipated talk claiming to have refuted Chomskian linguistics from a post-structuralist perspective. Anthropologists were going wild in the audience. (The dream was  paying no heed to the fact my school is staffed with economists and dry public policy types.) But then…Noam Chomsky himself raised his hand in question time, and delivered a devastating response! which I couldn’t understand, because nothing stays sensible long in dreams, and I’m not a linguist afterall. From there, things descended into hazy, dreamy chaos.

Classic blocks. Ok, so WordPress has followed the standard software trajectory. Start user friendly, then make yourself unhelpful. Thanks. Anyhow, this is a second best solution: https://wordpress.com/support/wordpress-editor/blocks/classic-block/#add-a-classic-block

This is also vaguely useful: https://wordpress.com/support/dashboard/

Kupang was a trip.

Indonesia was my first time overseas as an adult, first ever in Asia. Before Kupang though, everything had been remarkably cosy. In Bali, I got drunk in nightclubs, ate pizza, slept in, and surfed. My first surf without a wetsuit felt strangely gangly. Otherwise, I was more or less living my life back home.

The ferry ride south east on the Dompensolo was different, sure, but not difficult. I was with two other Wellington surfers. We hunkered down on the deck by our boards. I slept half the way in a hungover daze. The rest of the ride, I watched whitewater on distant reefs, gazed at the blues and greens of the sea, and marvelled at flying fish. Easy. By the time we got to Kupang, I’d already started to imagine myself an old hand.

But Kupang…right from the start. The throng at the port. The battle to heft hulking triple boadbags through crowds. The struggle to get a moment, just a moment, to think, surrounded by touts selling hotels and expensive taxi rides.

Eventually, we found a bemo heading in the direction of our guesthouse. The van was packed to the gunnels, so we piled our boardbags on the roof. My board racks wouldn’t fit, but the hurried driver had a solution. We were bundled into the van and the young guy who collected people’s money perched by the open door holding our boards on the roof with his hands.

It worked surprisingly well – traffic crept slowly through Kupang’s choked streets – until, whomp! the fare collector got clipped by a wingmirror, and went flying. We started shouting. “Boards! Hey! Our boards!” But the driver didn’t stop, not even for his fare collector. Time is money if you drive a bemo. We travelled another block with nothing but the wide roof of the van keeping our boards in place. By then the fare collector, who was clearly built tough, had picked himself up, and caught up, running through the traffic. He resumed his role. We made it to the guesthouse. Shock, I think, shut us up the rest of the ride.

Confidence boosted by boards stashed safely on bunks, we wandered down to the waterfront later, as the afternoon gave way to evening. It was that time of day when the air becomes thick with colour in the tropics. The footpaths bulged with people, vendors and food stalls all competing for space. Unlike Bali, nothing was designed for us, no one was even that interested in us. People pushed past going here and there. Buying and selling. Beside a small park a snake oil salesman hawked cures to a curious crowd. Shouting to attract attention, with flourishes and cries, he pretended to revive a prostrate kid.

Bemos chugged up and down the street, their stereos as loud they could go, with the treble turned right down, and the base right up. Thump, thump, thump. That was the sound of the Kupang night, we discovered, back in the guesthouse later, as we tried to sleep, the whole city sweating once the trade winds had abandoned it.

From Kupang, the ride to the surf was easy. The ferry took a few hours, and we met a French guy who knew where he was going. The bemo across the island was a rural model, which meant our boards were buried on the roof under bags of rice, and everything else, and more or less tied on. Settled in my uncomfortable seat next to a slight, slightly-stooped woman, I imagined I was an old hand again.

An hour or so into the ride, as the van surmounted potholes, I woke from a nap. The woman next to me was spitting blood out the window.

Blood?

It took me a moment to wake up properly. Then, thoughts started to flow.

Blood! D-does she have tuberculosis? Isn’t that infectious?

She spat again.

I tried to get my Lonely Planet Guide to Traveller’s Health out of my day bag. It was right at the bottom though. I’d stuffed it there that morning.

Another stream of red spittle went out the window.

It would be hard to get the book. I was tired. The questions seemed difficult. Difficult wasn’t really my thing. Tired. So, I changed the cassette in my Walkman instead and started listening to Dinosaur Jr.

Later that night in the surf camp, as I regaled the others at the dinner table with my tale of contagion, a kindly old Kiwi surfer set me straight.

“Nah man, that’s Betelnut. She was chewing Betelnut. They chew it round here. Makes your spit red.”

My inner old-hand winced and made a mental note.

Now though, in these mask-clad days, the thing that surprises me most is that, except for a brief flustered moment, I happily travelled for hours next to someone I thought had tuberculosis.

At least up until the point I stopped listening, this was a pretty frustrating discussion of John Rawls. But as I mulled over the arguments, I had one brief lucid moment of my own. I’m not claiming this is original, or necessarily true to Rawls’s thought. But it’s useful for me to type it up.

If you’re taught only the basics of Rawls, like I was at university, you’re told that his famed Veil of Ignorance works as follows.

Imagine you are behind a Veil of Ignorance; you’re yet to be born; you have no idea what your future economic circumstances will be. You cannot influence your own individual circumstances in the world you will one day be born into. But you can, in this magical yet unknowable place, decide how resources will be distributed once you are actually alive. What would you choose the distribution to be?

Rawls’s is answer is that you would choose a distribution that maximised the well-being of the least well off person (or something analogous, like the wellbeing of the lowest quintile). You would do this — you are told in the pocket summary version you get in first year — because you’re somewhat risk averse, and you know there’s a risk you might end up in this position in society. It’s quite possible. (You are only a hypothetical you, with no idea what nature or nurture will gift you. So it is a greater risk than might seem to be the case from your comfortable position in an undergraduate lecture theatre.)

This is a very helpful way to think about a just income distribution. It’s seems fairer than the let them eat cake approach that has dominated most of human history. Yet it also avoids a major flaw in the equality at all costs approach of utopians: it’s not willing to bear all costs in the name of equality. If a desire for perfect equality causes the economy to collapse, or even just grow very slowly, the lives of the least well off would be less well off than they would be if we tolerated some inequality. The distributional vision that emerges from behind the Veil of Ignorance is a practical one.

The objection you hear though, almost inevitably from one of your affluent undergraduate colleagues, is one to do with empirics: but how do you know that’s what people would choose behind the Veil of Ignorance? Maybe they’d be willing to tolerate a risk of being worse off at the bottom if they knew that, were they to end up at the top, they’d be very well off indeed? And surely we need to know something about probabilities? If the risk I’ll end up at the bottom is high, no doubt I’d feel different from if it was actually quite low? And so on.

My moment of clarity today (my personal one, tapping into previous less clear thoughts, and merely something others will have understood this long ago, no doubt) was that it is a mistake to think of the Veil of Ignorance as in any way akin to an empirical matter, that we can debate with arguments about the actual risk tolerance of members of our species. It’s not the sort of thought experiment that could be turned into a real psychological experiment if we could just magic a suitably sized sample of real human beings behind the Veil of Ignorance.

Rather the Veil of Ignorance is (at least it seems to me it is) simply a tool for illustrating something akin to the Golden Rule (do unto others, as you would have them…) or Kant’s Categorical Imperative (this part at least). It is an attempt to illustrate what reason and logical consistency should lead us to choose, even if we end up fortunate. Do unto the less fortunate as you would have them do unto you, if they were more fortunate, and you less so. If you choose anything else you are not being logically consistent.

If you were guaranteed to be at the bottom of the distributional heap you would want your poverty eased as much as possible. You’d want that to be the guiding rule. And if you’re being logically consistent — rather than simply creating rules to suit yourself, which is not a just basis for rules — you should want that to be the guiding rule even if though turns out that you’re actually quite well off.

I’ve got nothing against the people of China, but I’m no fan of the country’s government. It represses the rights of its own people. Its repression in Tibet, Hong Kong and Xinjiang is horrific. Our own security agencies are so opaque it’s hard to fully trust anything they say, but it seems reasonable to think there’s truth in the claims that China is a cyber security threat, and that Chinese money may be a threat to the political economies of our democracies. I’d be very happy if we lived in a world with a peaceable Chinese government that respected human rights.

And yet here we are. China’s big, it’s rapidly growing rich, it has nuclear weapons, and it isn’t going anywhere.

This raises the practical question: what are we to do? How should we engage?

The answers aren’t necessarily easy, but it is frustratingly easy to see how bad the West gets it wrong.

We are blinded by the inconvenient truth that we have (or at least Western great powers) have ignored the world’s needs, and the global rules based order whenever it has suited us (for example, Iraq, climate change and so on). How do we expect China to engage when we demonstrate time and time again that rules are for the weak?

We’d do much better too if we admitted that, from a Chinese perspective, our track record is so bad that even when we are genuinely concerned about something like human rights it no doubt appears as nothing more than strategic posturing on our behalf.

Maybe it’s too late to start, but if the West simply engaged internationally in a good faith manner, we might find it surprisingly easy to bring China into a constructively globalising world. Sure, they wouldn’t be perfect, but they might improve. And given our empty rhetorical tub-thumping is achieving nothing, it would be a start.

To give one simple example that’s on my mind for obvious reasons at present: why is Covid-19 such a problem? China’s tardiness in taking early action was a contributing factor. But then again the failures of the UK, US and Brazil to tackle the disease properly have amplified the pandemic. Yet Western politicians have tried time and time again shoulder all the blame on China. Is anyone surprised that, in this environment, China isn’t being entirely forthcoming with information as international investigators study the origins of the pandemic? If we really wanted to learn, we’d wait until the topic was less sensitive and then set up a genuinely collaborative learning-oriented process, rather than something that no doubt feels at the Chinese end like a massive bad-faith endeavour. Who knows, even in the best of times the authoritarian Chinese government might stymie real attempts at learning, but my guess is they’d engage more constructively if our own intentions didn’t seem so dubious.

Sincerity and good faith may seem like strange weapons to level against a large, well-armed, superpower, but compared to the impotent, unscrupulous squawking that emits from most important Western governments, sincerity and good faith could hardly make matters worse.

Note to self: this is a good blog post on the empirical turn in economics.

I opposed the invasion of Iraq. I joined giant marches. I took part in small protests. I wrote futile, angry letters to the paper.

The invasion was monstrous…

The invasion was monstrous. And yet a part of me doubted it. Part of me doubted my opposition. Saddam Hussein wasn’t a threat to us. But he was a threat to Iraqis. That’s where my doubt came from. Not invading meant, in effect, preserving tyranny inside Iraq.

My doubt wasn’t helped by some other left-wing opponents of the war. There were those, like George Galloway, who seemed to believe Hussein wasn’t actually a problem. There were others who acknowledged Hussein was a tyrant, but then failed to explain clearly why he should be left in power. And there were others who adopted positions — opposed to this invasion but keen to see Hussein removed subsequently by a UN-led force — which involved alternatives that were never going to happen.

Over time, sadly, my own doubts about opposing the war faded away. Faded because it became clear that — no matter how awful Hussein was to his own people — the invasion made most Iraqis’ lives worse.

I can’t say I told you so…

I can’t say I told you so, because I didn’t tell anyone in 2003. I didn’t know. But time has made it clearer why the invasion of Iraq was wrong. And these are lessons worth remembering, because invasions are always on the cards — on someone’s cards.

International law…

Some people opposed the invasion of Iraq because it violated international law. This was as good a reason for opposing the invasion. I don’t think outcomes would have been any better if the invasion had been conducted with the blessing of the Security Council. Indeed, I would have still have opposed the war. But, in a globalising world, rules and collective action need to become global too. It wouldn’t have helped the people of Iraq, but a meaningful global order is a necessary, albeit not sufficient, condition for successfully navigating the world we’re now in. And by setting the global rule book on fire, the US and its allies made the task of tolerable globalisation that much more difficult.

Iraq was a complicated place…

I didn’t know much about Iraq at the time of the invasion. I didn’t know much about the country’s history, or ethnic divides. I also didn’t understand how much Islamic extremism loves a vacuum.

I didn’t know, but someone must have. And anyone who did, could have predicted that winning the peace in Iraq would be much harder than winning the war.

Maybe truly knowledgeable people were hard to find, but any serious nation thinking about invading another would have sought knowledge. Yet the US and its allies didn’t. Rather, they believed in myths and ran with a plan along the lines of: let’s privatise everything (because that worked so well in Eastern Europe), make instant enemies through De-Ba’athification, and from Iraq democracy will flow. That was never going to end well.

With the worst of intentions…

I don’t think the Iraq War was all about oil, or all about Israel. I don’t think it was about any one thing. The alliance to invade Iraq in Washington was a coalition of different groups with different motives. The crucial point though, was that while some individual supporters may have genuinely held humanitarian motives, the meta-motive that emerged from the Washington milieu, and which propelled the invasion, wasn’t one of humanitarian concern. (That much we can infer because in a world full of problems, genuine humanitarian concerns would have led to something somewhere less costly and risky than an invasion).

Motives mattered because, in something as difficult and violent as an invasion and occupation, if you’re not trying to help people, you usually won’t.

Give peace a chance…

Mostly my opposition to invading Iraq was guided by a simple opposition to war. I don’t think I was alone in this. It was a simple motive. It didn’t quiet my concerns about leaving Saddam Hussein in power, but time has shown the simple impulse was right.

Even when they go well, wars are awful. If the invasion of Iraq had gone well, it still would have still led to the deaths of many Iraqis and some invading troops.

If the invasion had gone well, this may have been a price worth paying, but it would have been a real cost, nonetheless.

And — of course — the invasion of Iraq didn’t go well. Just like Vietnam didn’t go well, or Libya, or Afghanistan. In the best of circumstances war comes with a terrible cost. It is also a huge gamble.

Sometimes the risk and the cost is justified. World War 2, obviously. Rwanda would have been too, I think. But the circumstances in which the uncertainties of war, and the horrors of war, are worth it are rare. Usually, they are only situations when war is already afoot, or when catastrophe looms. Otherwise, it’s better to engage in the long slow process of helping in peaceful ways.

The situation in Iraq was bad prior to the invasion, but it wasn’t bad enough to justify an invasion, given the costs and risks.

And so…

It was better to tolerate an awful status quo. Better because the alternative involved war. A war led by politicians and ideologues who didn’t care, and involving a country they knew little about. A war that demonstrated so clearly to China and Russia that international rules are mostly a fiction.

I was right to oppose the invasion of Iraq. I get no satisfaction from it. I’d get more though, if you could convince me that someone, somewhere close to power had learnt the right lessons.

Even if I was immune to Corona virus, I’d be social distancing. Half-baked stupidity isn’t good for your health. Op-ed pundits, academics, podcasts, friends. It’s painful.

So, to self-medicate, I’m going to look at the options the New Zealand government had when it put the country into “lock-down”.

1. Throw granny under the bus.

Under this approach we would have done nothing. To save the burden on our economy, we would have kept everything open. To save the burden on our health system we wouldn’t have treated those with the virus.

The best justification for this is some sort of utilitarian calculus: it’s a pity about the people who will die, but the cure is worse than the disease; we’ve just got to let people die.

I’m a utilitarian. But I’m not that stupid. There are costs to the lock-down. Economic suffering will bring human suffering. This matters – it should be taken into account. But, in the long run, human well-being is helped most by a just social contract. One in which we don’t abandon a large slice of the population to an epidemic. Lock-down will cause suffering. Doing nothing would have caused more. You have to help people who are ill.

That brings me to the next option.

2. Throw the health system under the bus.

Under this option New Zealand would have treated people with COVID-19 but done little to prevent the spread of the virus. The obvious problem with this is our health system wouldn’t have coped. Northern Italy probably had a better health system than New Zealand, and it was completely overwhelmed.

This is true, regardless of debates about how deadly the virus actually is. At present, we don’t know how lethal Corona virus is because we don’t know how many people have caught it and been effectively asymptomatic. Maybe the virus is less likely to cause serious illness than is currently thought. If that’s the case, it’s much more virulent than currently thought. And either way, the short-term consequence for the health system is the same: overwhelmed.

An overwhelmed health system isn’t just tired doctors and nurses. It means people dying of Corona virus who would have otherwise lived. It means people with other health problems also dying.

And that would continue until either a vaccination, very good treatment options, or herd immunity (currently estimated at about 50 per cent of population; so a lot of suffering until we get there).

3. Fiddle while Rome burns.

An alternative would have been to try and contain the virus using the low impact techniques we had been using. Nice idea, but it wasn’t working. The first chart below is daily cases. Blue is pre-lock down. Red is after. Data are from the Ministry of Health.

(Data downloaded 18/4/20.)

The next chart compares New Zealand’s disease trajectory with a select group of countries. The y-axis shows total cases. It’s on a log scale. As a rough approximation, the slope of the curve shows you how fast the illness is spreading.

The x-axis shows days since the 50th case. The period covered for all countries is the first 27 days since the 50th case. Different dates, same period in the epidemic’s growth. New Zealand hit the 27 day mark yesterday. Other countries hit it earlier and so their lines are truncated.

The vertical red line is when New Zealand entered lock-down.

Data come from the European Centre for Disease Control, and are based off WHO data.

Our trajectory was very similar to Great Britain’s. Now (although it’s not covered in the chart) they are in lock-down. But too late. Many more people have died in the UK. They will likely be in lock-down much longer than us. It took a few days, but as you can see, after we entered lock-down our fate diverged from that of the UK – a lot.

It is true that many of our early cases were acquired overseas (presumable also true everywhere but China). But even when you chart cases that were definitely locally acquired, as I’ve done in this link (based on my interpretation of Ministry of Health data) we had a real issue.

Sweden is sometimes talked of as an example of how we could have kept the country running. The chart below (once again ECDC data) compares New Zealand and Sweden.

4. Take a punt on Australia

The final alternative to New Zealand would be to do as Australia has done. Contrary to the way it’s sometimes portrayed, although it took a while, Australia ultimately engaged in a similar approach to New Zealand. A lot is closed in Australia, many people are working from home, or not working, and the government still feels the need for a huge stimulus package. But more is open. In Canberra, to give you one example, cafes are closed, but you can get takeaway coffee. If you use ECDC data to compare epidemic curves for Australia and New Zealand, this is what you see.

Australia took it’s time, but it has managed to slow the spread of the illness. It’s doing about as well now as New Zealand.

This may show we could have quashed the spread of COVID-19 with fewer constraints. It might also be trying to tell us something else: perhaps lower population densities in Australian cities help? Perhaps, a warmer, drier climate helps?

Or perhaps not. We could have taken a punt on the Australian approach. And we may have gotten everything we currently have with less suffering. Or we might not.

Imagine you’re where our government was when it put New Zealand in lock-down. The virus is spreading rapidly. You won’t throw granny under the bus. You can’t throw your health service under the bus. The approach you were taking wasn’t working. So you do something likely to work. Perhaps you could have done a little less. Australia, wasn’t an example then though.

So you opt for lock down. It will cost the economy, and this will hurt people too, but you can act to reduce those costs. And — as a panel of the world’s most eminent economists thinks — doing nothing would likely have hurt the economy more.

So you opt for caution. This is exactly what a responsible government should have done.

I had plans. Friday. The weekend ahead. I was going to escape the city to the always-blue sea. The thought propelled me, pedaling as fast as I could, out of campus in the late-evening dark. I was on the same path I always cycled, past the courtyard, across the alley, speeding by the bushes, around the corner and then… overlapping fences straight across the path!

A safety feature, they must have gone up during the day, designed to slow cyclists. The only way through was weaving at a crawl. I wasn’t crawling. I had no way of knowing. The bushes obscured them. The warning signs would go up a week later. I pulled on both breaks, my wheels locking on the gravel. Futile.

There was no time to do anything. No time for anything, except the fastest flash of thought: ‘What’s going to happen? How will it end?’

Fence, me, path, bike, speed. Obviously not good, but how bad? In what way? I still remember the flash, part thought, part feeling.

Years later now. I live in New Zealand. I’m feeling something like I did in that moment, except stretched over weeks… months.

The first cases of Corona virus are here.

How will it end? How will it unravel? I’ve got all the time I need to do the calculations, but there are too many variables, and only one future. Will our government and people coordinate to control the spread? Can they do it for this wave of the disease? The next wave? Every wave until there’s a vaccine? Will the health system cope? What about the second-order effects? Does China come chugging back to industrial life? Does that save global supply chains? Does that save our exports? Can the state prop up the economy if needed?

It’s easy to imagine a perfect storm: the economy on the rocks, services struggling, community struggling as the government tries to use quarantines to quell the spread of illness. More modest scenarios are also very possible. Disease stopped fairly easily through infection tracing. China’s economy bouncing back. Most other countries also holding the virus in check. A bad year in it’s way, awful in places, but soon, elsewhere, it’s only a memory as life trundles on.

And that’s the strange thing, I thought, this morning as my wife and I went to a typically busy cafe, got a coffee and went for a swim in the sea. We’re waiting on the edge of something, but what? Nothing to do for now but wait and wonder. The edge of something. But what? The edge of something. What?

Who knows how, but I cleared the fence that night. I vaulted it with one arm. A twist mid air. An almost landing as my bike clattered into the posts and wire. An impossible move for a middle-aged guy, but I did it.

“Jeeze mate. Are you alright. That was a real stack mate.”

“Yeah. I am. I think. Just my wrist a bit sore.”

I collected my bike. It was in one piece too. I got shakily onto it and rode home. Just as planned, I surfed the next day.

I’m hoping for that ending this time round. Of course. I can’t tell if that’s already impossible though. Fanciful thinking. So — instead of flying through the evening air — like everyone else, I wait.

Are here and here. From article here.

Does foreign aid work? Are free markets the best path to better lives? Is globalisation good or bad?

Two decades ago, these were big debates in development. The intervening 20 years have been awful for their various protagonists.

Read the rest at Devpolicy.

If you were a conspiracy theorist, you’d think aid agencies made just enough information available to plead transparency when someone complained, but never enough information to actually allow anyone to find anything useful.

I’m not a conspiracy theorist of course, but I do get frustrated by long battles with awful websites. So here a few useful links for myself:

1. As of 11/1/2020, New Zealand’s country-level aid budget is here.

2. Links to NZ’s IATI data on the MFAT website are here. The metadata pdf is helpful too.

3. Links to evaluations can be found in the right-side menu here. 2018 evaluations are here. The PNG renewable energy evaluation (highlight Enga) is here.

Seeing as I mentioned IATI, am I the only person on earth who thinks making aid data available in XML (the IATI standard) is about as useful as sealing it in a vault under the ice in Norway? To New Zealand’s credit (they don’t have to do this) they link their data to a CSV conversion tool. This is a great idea. Unfortunately the data that emerge at the other end still aren’t easily amenable to analysis, but it’s a start I guess.

A journalist emailed asking why fires in Australia seemed to be eliciting so much more concern than equivalent disasters, like the current Indonesian floods. In preparing to respond, I’ve been typing notes, based on my understanding of an evolving body or research (not my area, but close to one which I do specialise in: public opinion about aid). I’d like to think about this more. And it seems a pity not to save these notes somewhere. So here they are:

If we’re talking about Australians themselves donating more to a domestic disaster, this isn’t surprising: people tend to show greater concern for their compatriots than for people in other countries.

But we’ve also got the question of international donations flooding in. Why is the world paying so much attention to Australia and not to crises elsewhere?

Research shows the most important driver of donations to disasters is media coverage. If a disaster receives high-profile media coverage, which emphasises tragedy, donations go up. This begs the question: what drives media coverage? Often media coverage is determined by the magnitude of the disaster. Sometimes magnitude will simply be the number of people killed, but in the case of the bushfires, I think it’s fair to say coverage has been boosted by things like the intense visual imagery (plumes of smoke, firestorms), as well as the tales of heroism and tragedy. The bushfires are a telegenic catastrophe.

On top of this, people’s desire to donate is influenced by something called the “identifiable victim effect”. People are more likely to respond to descriptions or images of individual suffering than to facts and figures. We’ve had many poignant examples of individual tragedy in the Australian Bushfires. Firefighters killed in their trucks. People who have died defending their homes. People are affected by these sorts of stories. It motivates them to donate.

Speculatively, it seems to me that Australia’s charismatic fauna have also contributed to international concern – the suffering of Kangaroos and Koalas, animals that are international icons, appears to be capturing attention.

Then there’s the question of norms: people are more likely to donate if they know people around them are donating. As a result, you get cascades of concern at times. High profile campaigns from celebrities often boost donations from ordinary people. With the bushfires it’s likely these campaigns have also boosted involvement from other celebrities. One high profile campaign has spawned another. Quite possibly this has been facilitated through social media networks.

One final point: the Australian Bush Fires are a so-called natural disaster – they don’t involve a war – in general, studies show people are more inclined to donate to natural disasters than to those that they see as having a human cause, such as conflict.

My comments aren’t normative. I’m not talking about right or wrong. I’m not commenting on the way the world should be. These are simply descriptions of the way it currently is.

The Australian government is about to start lending money to the Pacific as part of a new aid initiative intended to help with infrastructure in the region. With Australia poised to start lending, the question needs to be asked: are the loans likely to work? Our analysis of the effectiveness of loans in the Pacific has led us to conclude Australia needs to proceed with considerable care.

Our analysis involved a global dataset of nearly 18,000 aid projects. [Read the rest of this post on Devpolicy.]

Just because I’ve got to put this somewhere:

Using the transpose formula to do fancy concatenation.

All sorts of tools for reshaping data in Excel.

A revised version of this blog post is now published on East Asia Forum. You can read it here.

(more…)

The last time I felt like this was in the wake of 9/11. My partner at the time was from the US. We were living in Sydney. For several days we walked around like confused ghosts, trying to work out what it meant, where it came from, what was to come. We compulsively bought newspapers, even when we knew they wouldn’t tell us anything new.

Now it’s Twitter. More diverse than newspapers, but rapid fire, clippings, half thoughts, short sharp shouting matches, confusing. This is me trying to get my head around it.

Sorry

Thread through everything, attempts at understanding, bursts of anger, is sorrow. Sorrow — even though I didn’t know anyone directly affected. Sorrow — even though I know the fact the crime happening in my home country makes it no different from terrorism on the other side of the earth. I hurt for the people affected. I’m sorry.

Anger

The alleged terrorist is Australian. A rightwing member of Australia’s senate tried to blame the crime on immigration. Australian media broadcast the beginning of the footage the perpetrator filmed from his head-cam. The footage stopped before the killing started. But even so. This was done despite requests from the New Zealand police not to publicise the footage. It would be easy to be angry at Australia. Just as some people blame all Muslims for 9/11. But New Zealand has its own stock of far right loons. Most Australians are appalled by the crime. And a 16 year old Australian teen bravely egged the aforementioned senator. If my twitter feed is anything to go by, the broadcasting of the head-cam footage is offensive to a lot of Australians too.

Causes

In my Twitter feed plenty of attention is also been paid to the politicians and media organisations (particularly in Australia, but also in NZ) who have been dog-whistling Islamophobia for years. I’m not so sure they’re the cause of this crime. My guess is that their main effect is on frightened elderly voters. And that Neo-Nazis would exist and commit crimes regardless of the squawking in parliaments and newspapers. I’m not completely certain, but don’t think Andrew Bolt, or Rob Hosking, or Don Brash are gateway drugs. That doesn’t mean they aren’t utterly vile though. Nor does it mean that they don’t cause harm. The fear and suspicion they foster might not cause people to pick up guns, but it undermines democracy and civil society nonetheless. If they truly care about their countries they could do one thing to show this — they could shut up.

Solutions

I’ve read tweeted allegations that New Zealand and Australia’s secret services have been so fixated on the left and on the risk of Islamist terrorists that they’ve ignored the far right. The evidential base for these claims is fairly weak. But that’s always going to be the case — secret service work by its nature doesn’t leave much evidence. What we need from now is clear reassurances that the threat of far right terror is being taken seriously. Actually, we need more than reassurances: we need evidence. We need action and then evidence from our governments.

The government also needs make it illegal to own semi-automatic weapons in New Zealand. (The conservative prime minister) John Howard bravely did this in Australia despite concerted opposition from the gun lobby in the 1990s. Jacinda Adern has promised similar changes for New Zealand. All power to her. And if the gun lobby resists we need to stand up to them.

Solving things

If there’s one silver lining to this very dark cloud, it has been the way New Zealand has come together. Prime Minister Adern has been a real leader. Indeed, it seems from my confused perch here in Canberra that most New Zealanders have been real leaders. Kindness, flowers, donations. Tears. Unity. It feels like a country pulling together.

Terrorists want division. Hate grows amidst divides. There’s no undoing the tragedy. But for now, at least, New Zealand seems to be doing its best to stop hate spreading.

[Update – my views on the above are changing a bit. Specifically: I’m now inclined to think that dog-whistling politicians and media commentators did contribute in their own indirect way, even if they were far from the central cause. All the more reason for them to give it a rest. Also, NZ politicians have basically come out and said intelligence services were under-prepared re the alt right etc. All the more cause for a major attitude shift.]

Elections are coming to Solomon Islands. Predictions are never easy in politics but here’s what I think the elections will bring (coupled with my degree of confidence in brackets, ranging from confident to completely confused).

The election will be run fairly well (quite confident)

Recent elections in Solomon Islands have been pretty well run. [Read the rest at Devpolicy].

Picture this if you will. The depths of last winter, the orthopedic ward in Canberra Hospital. Halls filled with harried nurses and unstable patients taking new hips for test drives. Televisions talking loudly to themselves. There’s one exception to the bustle: an anxious looking man, hooked up to several blood-thirsty devices, staring quietly at a laptop.

That was me. The devices, as well as the stay in hospital, were thanks to something called compartment syndrome (not recommended). The laptop had a different purpose. I was updating a programme I’d made to help Australian NGOs compile funding information. Hospital was unexpected, and I didn’t want to hold the process up. Updating the computer code was also a merciful distraction from daytime TV.

The labour also meant I’d eventually be able to examine trends in donations to Australian aid NGOs and offer — at least tentative — explanations for them. I’ve now done this. Donations are on the slide. Why? Find out in this Devpolicy blog post.