Category Archives: Development Economics

Insite: A Step Beyond a Needle Exchange

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The following is a guest post by Shawn Zhou, a country program analyst with the Clinton Foundation on the Clinton Health Access Initiative in Shanghai, China.

An interesting progressive model for combating HIV/AIDS has emerged over the past 5-10 years in Vancouver, BC. Once home to the highest rate of HIV infection growth in North America, Vancouver has seen a significant decline in the spread of HIV among its intravenous drug users. The model they’ve implemented encourages drug users to enter a “safe house”  called Insite, where individuals are free to use illicit drugs while being supervised by nurses, and are offered treatment if suspected of suffering from HIV. Insite is trying to provide an aggressive and controversial model of reaching and treating a difficult and high-risk population….and so far it appears to be working.

According to one of the center’s studies, financed by the United States National Institutes of Health, from 1996 to 2009 the number of British Columbians taking the medications increased more than sixfold — to 5,413, an estimated 80 percent of those with H.I.V. The number of annual new infections dropped by 52 percent. This happened even as testing increased and syphilis rates kept rising, indicating that people were not switching in droves to condoms or abstinence. (Full Article)

There are two key foundational beliefs to the creation of this model 1) As one nurse put it: “people are going to use drugs whether they have clean needles or they don’t.”   2) A Test and Treat system where all patients regardless of CD4 count are treated if they are HIV+ (aka….don’t prioritize patients, treat everyone, stop the spread).

This first fundamental belief is probably the biggest sticking point for those opposed to the program. Fundamentally while this model may appear to encourage drug use, as the article suggests, many other cities worldwide have already adopted free needle exchange programs as a means of encouraging cleaner and safer drug use.

A 1997 study in The Lancet found that in 29 cities worldwide with needle exchange, H.I.V. infection dropped 6 percent a year among drug injectors, while in 51 cities without, it rose by about 6 percent.

By funding a safe house for users, monitored under the careful watch of medical professionals, Vancouver has taken this belief one step further and is trying to manage dangerous behavior in a contained and safe environment.

In 2009, the site recorded 276,178 visits (an average of 702 visits per day) by 5,447 unique users; 484 overdoses occurred with no fatalities, due to intervention by medical staff. Health Canada has provided $500,000 per year to operate the site, and the BC Ministry of Health contributed $1,200,000 to renovate the site and cover operating costs. (Wikipedia site)

This is of course a difficult pill for public officials to swallow, since such clinics and programs are costly and goes against conservative principals. However, regardless of its implications on drug use, the model undeniably offers a safer environment for drug addicts than they previous had, and should probably get strong consideration in other communities in the developed world where drug use and the spread of HIV is rampant. I’m curious to see how this all shakes out as apparently Canada’s supreme court is reviewing law suits to close down the facility.

The Many Forms of Corruption

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cor·rup·tion (n.): Dishonest or fraudulent conduct by those in power, typically involving bribery

In Nairobi the other day, the police pulled over my taxi at a checkpoint.  There were four people in the backseat, so the officer beckoned me, seated in the front seat, out of the car and said “You’re breaking the law – what do you want to do about it?” Fortunately, a friend sitting in the back felt strongly about not perpetuating the system of bribery and demanded to see their badge, since he was an employee of the embassy and wanted to report them.  The police officer held up his gun and said “this is my badge,” while my friend explained to the “security officer” for the embassy on the phone that he was being harassed by police officers (I later went to dinner with another friend, who, it turns out, was the “security officer” on the other end of the line).

In Tamale in Northern Ghana, we took an illegal U-turn on our motorbikes and were stopped by a plain clothes police officer.   He took away my friend’s keys and said we were going to the police station unless we gave him something to “make it better.” My friend, who works at the office of the regional coordinating council for the Northern Region, pulled out his phone and showed the officer the phone number of the regional minister, and explained that, because he did not understand what “make it better” mean, he was going to call the minister and ask for some clarity.  We quickly got our keys back and were on our way.

In the Philippines, the 2010 election took place during my stay.  Politicians send emissaries out to the different barangays (communities within a town) to distribute money directly to the people in exchange for votes.  If a politician can’t buy a community, he rents a bus, loads it with booze and fried pork, and brings the members of the community to the beach for a party on Election Day.

The point I am trying to make is that, in many developing countries, corruption is a problem.  It exists out in the open, in forms that are easy to see and easy to track.  Some estimates place leakage in the Kenyan government due to corruption at 40% of GDP.  As I discussed in a post the other day, the government is embroiled in a scandal over 4bn Kenyan shillings designated for free public education.  Yes, corruption is a problem, and can be a major impediment to economic and social progress.

The western approach to Africa emphasizes good governance, democracy, and transparency in exchange for aid and development (tied or untied).  Ghana is referred to as a “donor darling,” as its history of successful democratic elections has made the government a reliable (if not strategic) partner for donors in terms of economic development.  In contrast, the Chinese approach in Africa has been to provide direct infrastructure investment in exchange for natural resource concessions, irrespective of governance.  To the Chinese government, it is none of their business how another sovereign nation chooses to govern itself, particularly when it is in their interest to maintain the status quo.

Regardless of efforts to stem the tide of corruption, it exists and will likely continue to exist until certain fundamental underlying issues are addressed.  I used to note that Filipinos are some of the most cynical people I’ve ever met about politics.  Corruption is so pervasive in the system that (at least in local elections) people vote for the politician who is most adept at playing the game than the one who vows to change the rules.  And when they talked about this, I used to say that corruption comes in many forms, and the United States is hardly immune.  In fact, I would argue that corruption in the United States is arguably worse than in certain developing countries, if only because it operates under a veil of legitimacy.

K Street is a physical street in Washington D.C.  It is also a euphemism for the lobbying industry, which, for the most part, calls K-street home.  Wikipedia describes how lobbying works in the United States:

Lobbying (also Lobby) is the act of attempting to influence decisions made by officials in the government by individuals, other legislators or government actors, constituents, or advocacy groups. A lobbyist is a person who tries to influence legislation on behalf of a special interest or a member of a lobby. Governments often define and regulate organized group lobbying that has become influential.

Lobbyists use their time both with legislators, to explain the issues of the organizations which they represent, and with their clients to explain the obstacles elected officials face when dealing with these issues. Many of these lobbyists are employed by lobbying firms or by law firms, which retain clients outside lobbying, other lobbyists are employed directly by advocacy groups, trade associations, companies, and state and local governments. In 2007 there were over 17,000 federal lobbyists based in Washington, DC.[1]

Lobbying activities are also performed at the state level, and lobbyists try to influence legislation in the state legislatures in each of the 50 states. At the local municipal level, some lobbying activities occur with city council members and county commissioners, especially in the larger cities and more populous counties.

There are 17,000 people whose sole qualifications are their connections to lawmakers, and whose job it is to influence legislation in exchange for money.  A rose by any other name would smell as sweet, and lobbying smells like corruption to me.  In fact, I am not sure exactly how lobbying can be construed as anything but a legal form of corruption that operates with complete immunity from prosecution.  Legally, politicians are not allowed to accept gifts from lobbyists.  But, they can accept campaign donations to from political action committees (think Swift Boat Veterans for Truth) during a campaign year, increasing their likelihood that they’ll keep their job and their magnanimous donor will encounter what Michael Porter would describe as a “friendly regulatory environment.”

Yesterday, an article in Politico describes what Andrew Sullivan calls “Talk Radio’s Ideological Industrial Complex,” in which prominent talk radio hosts accept money from influential political think tanks in exchange for endorsements:

In search of donations and influence, the three prominent conservative groups are paying hefty sponsorship fees to the popular talk show hosts. Those fees buy them a variety of promotional tie-ins, as well as regular on-air plugs – praising or sometimes defending the groups, while urging listeners to donate – often woven seamlessly into programming in ways that do not seem like paid advertising.

“The point that people don’t realize,” said Michael Harrison, founder and publisher of the talk media trade publication TALKERS Magazine, “is that (big time political talk show hosts) are radio personalities – they are in the same business that people like Casey Kasem are in – and what they do is no different than people who broadcast from used car lots or restaurants or who endorse the local roofer or gardener.”

The Heritage Foundation pays about $2 million to sponsor Limbaugh’s show and about $1.3 million to do the same with Hannity’s – and considers it money well spent.

This is called the “politico-media complex,” and, to my mind, it is another form of corruption.   The military-industrial complex – Harry Truman’s phrase for the unholy relationship between the defense industry and the government that Dylan sang about – is another form of corruption.  So is the prison-industrial complex, which describes the connection between the drastic increase in the number of incarcerated Americans – by far the largest of any industrialized nation as a percentage of population – to the political influence of the private-sector prison lobby.   Remember the Arizona immigration law?  The one that legalizes racial profiling and is designed to stop “the Trojan horse destroying our country,” as described by Arizona state senator Russell Pearce?  Well, that bill was influenced by, if not drafted by, the private-sector prison lobby, led by the Corrections Corporation of America.  The business model of for-profit prisons is simple: revenue is directly correlated to the number of inmates being housed in the correctional facility.  Illegal immigration – an issue that appeals to people’s basest tendencies, drawing on latent xenophobia and racism – is, frankly, a big market. This, from NPR:

NPR spent the past several months analyzing hundreds of pages of campaign finance reports, lobbying documents and corporate records. What they show is a quiet, behind-the-scenes effort to help draft and pass Arizona Senate Bill 1070 by an industry that stands to benefit from it: the private prison industry.

The law could send hundreds of thousands of illegal immigrants to prison in a way never done before. And it could mean hundreds of millions of dollars in profits to private prison companies responsible for housing them.

Yes, that is corruption too.  Food is another one.  The agribusiness sector in the United States spent $1.3 billion on lobbying between 1998 and 2010, representing ~4% of the total, and the return on that investment has arguably had a greater impact on world hunger than do the corrupt politicians that preside over the hungry populations.  The U.S. senate recently voted to repeal a $6 billion tax credit to ethanol producers, which probably existed in part due to the fact that presidential candidate Newt Gingrich received $300K in campaign contributions from biofuel lobbyists.  Meanwhile, the world is in the midst of a serious food crisis.  Fortunately, Mr. Gingrich and his constituents will not feel the sting, as they do not spend half of their income on food, unlike the 100 million people who were pushed into extreme poverty during the last food crisis back in 2008.

These are all forms of corruption.  I am a realist, as readers of this blog know.  Geopolitics is driven by oil and money, and that is not going to change.  Bribery – financial or otherwise – greases the wheels of capitalism and is part of the game, for better or for worse.  But I do think it is only fair to acknowledge the hypocrisy in demanding good governance from other countries.  Because corruption comes in many forms, and with more complexes than I can count on two hands, the United States would do well to take a hard look at its reflection in the glass house before it decides to throw stones.

How Does Corruption in the Education Sector Work?

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“There’s this standing joke about corruption in Asia: In the Philippines, everything is under the table; in Vietnam, it’s over the table; in Indonesia, it’s including the table.” – The Manila Standard

The Philippines is ranked 139th out of 180 on the Corruption Perceptions Index, registering a 2.3 out of 10 (with 10 being the best).  In 2007, it was the second-worst in East Asia, a few points behind the Indonesia.  My friends in the Philippines used to joke that the only reason it didn’t have the lowest score is because it paid off the judges.  But, in 2008, it re-claimed the top spot, back on top after Indonesia climbed its way up.  Corruption is a major problem in a lot of countries, endemic in all sectors.  But the one that is perhaps the most troubling is the education sector.

The education sector is often one of the top two or three leading sectors in terms of government funding. Unfortunately, in many countries corruption is endemic within education, and the countries are some of the worst (with the exception of Ghana, which I explain below).  In the Philippines, according to my old co-workers, the ministry of education is the rifest with graft. (To learn more about education in the Philippines, read a post I wrote from 2009).

What’s yellow and orange, and red all over? The 2010 Corruption Perceptions Index map from Transparency International.

Kenya is another country that is no stranger to corruption.  It has the dubious distinction of being ranked 154th out of 178 countries (or the bottom 10% percentile).  According the country’s anti-corruption commission, Kenya loses 40% of its gross domestic product to corruption every year.  Today in the Daily Nation, the leading Kenyan newspaper, a front-page article, titled “How free education billions were stolen,” details how more than 100 government officials, including top civil servants, deposited money meant for schoolbooks and teacher salaries into fake bank accounts, only to later withdraw the money and steal the money.

In early 2010, the United States and Britain suspended aid for the education sector (particularly the funding for clep test prep for the downtrodden and reprobates) of Kenya after reports that more than $1 million had gone missing.  The report on the front page of today’s Daily Nation places the figure at 4.2 billion Kenyan shillings, or a little more than $50 million, between 2005 and 2009, about half of which was “brazenly stolen, because when the Treasure followed the paper trail to the schools where the money was supposed to have been disbursed, it emerged that the money ‘did not reach the schools.’”

It is unfortunate that money meant for public education is diverted into the bank accounts of corrupt bureaucrats, and that teachers are underpaid, and that students end up paying school fees when school is supposed to be free.  There are a lot of ways to steal money meant for the education sector.  In Kenya, they divert the money into phony bank accounts.  But there are plenty of other less detectable ways to get that money.  U4, the anti-corruption resource center, provides a few:

  • Illegal charges levied on children’s school admission forms which are supposed to be free.
  • Embezzlement of funds intended for teaching materials, school buildings, etc.
  • Sub-standard educational material purchased due to manufacturers’ bribes, instructors’ copyrights, etc.
  • Schools monopolising meals and uniforms, resulting in low quality and high prices.
  • ‘Ghost teachers’ – salaries drawn for staff who are no longer (or never were) employed for various reasons (including having passed away). This affects de facto student-teacher ratios, and prevents unemployed teachers from taking vacant positions.
  • High absenteeism, with severe effects on de facto student-teacher ratios.
  • Licences and authorisations for teaching obtained on false grounds via corrupt means.
  • Inflated student numbers (including numbers of special-needs pupils) quoted to obtain better funding.
  • Bribes to auditors for not disclosing the misuse of funds.
  • Embezzlement of funds raised by local NGOs and parents’ organisations.
  • Politicians allocating resources to particular schools to gain support, especially during election times.

There are other ways to steal that are not mentioned in this list.  Some of these examples are at the individual school level; others at the national level.  But these forms of corruption do not exist in a vacuum and must be examined in tandem, as corruption at each level of the bureaucracy influences corruption at other levels.  The less money a school receives from the Ministry of Education, the more its teachers and administrators must be entrepreneurial, so to speak, to make up for the deficit.  Leakage throughout the system creates mistrust and anger among parents, who have to scrape together money for school fees that shouldn’t exist in the first place.  And, at the end of it all, ones on the losing end of it all are the students, who receive a sub-par education, if they are lucky enough to afford one at all.

Ghana is an interesting one, however.  When I speak with other Africans, be it from Nigeria, Kenya, Zimbabwe, or another country, they all have much respect for Ghana and the government it has created.  In 2010, Ghana scored 4.1 on the CPI, or 68th out of 178.  It has had a track record of successful democratic elections for the last twenty years or so, after Jerry Rawlings, a former fighter pilot for the Ghanaian military, took control by force in a coup in 1979, ruled the country as a military dictator until 1992, and because the first (and second) democratically-elected leader of the republic he created, stepping down willingly in 2000.  His party, the NDC, lost in a free and fair election, turning the reigns over to the MPP until 2008, when the NDC reclaimed the thrown, again in a free and fair election.  It is unclear if the success of Ghana’s democracy is the reason for its high level of economic development, or vice versa, but it is certain that these two factors have given the people a voice that can express its frustrations with corruption loudly and openly.  It is no surprise that the country ranks so high on the Corruption Perception Index.

mHealth in Northern Ghana

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This post originally appeared on Next Billion.

“Some women feel they want to hide their pregnancy at the early stages. Maybe because they fear the ‘the evil eye,’ miscarriages, the unknown or visiting a midwife. These fears are normal. Here are some tips to help you deal with them: Seek healthcare even before traditional rites are performed. Nothing should prevent you from going to see a midwife at the early stages of your pregnancy.”

If you are a pregnant woman in the Upper East region of Ghana who has registered with MOTECH, you will receive this message during the fifth week of your pregnancy. Started in 2009, MOTECH is an mHealth platform created in partnership between the Ghana Health Service, Grameen Foundation, and Columbia Mailman Public Health School, with funding from the Bill and Melinda Gates Foundation.  It is designed to facilitate better medical information dissemination to rural areas and improve operational efficiency at community- and district-level health centers in one of the poorest regions of the country.

MOTECH is currently in its pilot phase, with plans to expand throughout Ghana in the future. The Upper East is one of the smallest and least urbanized regions in Ghana, with 85 percent of the population living in dispersed communities throughout the rural areas. The low population density and infrastructure barriers create a challenge for health care delivery, necessitating a community-based approach. Over the past decade or so, Ghana has been operating its CHPS (Community Health Planning and Services) program, which utilizes traditional institutions and social networks with support from outreach nurses employed by the Ministry of Health to reach as many people in the rural areas as possible. It is on these CHPS centers and the nurses who work there, in particular, that MOTECH focuses its efforts.

I had the opportunity to visit a few of the CHPS centers myself with Williams Kwarah, the program officer for Grameen Foundation in Ghana. Together we visited a few of the nurses and I asked them about the system.

MOTECH offers two main applications: mobile midwives and the nurse application. For mobile midwives, pregnant women and their families register for the service through the CHPS centers. They receive weekly time-specific messages about their pregnancy, including alerts and reminders regarding visits to the local CHPS center, actionable information and advice about best practices, and educational info to ensure a healthy pregnancy. MOTECH customers have the option of receiving messages via SMS or voice, though, due to the low literacy rate in the region, 99 percent opt for voice. Text messages are sent at a set time, three times a week. The voice messages are sent at a time specified by the women. If for some reason they miss the call, the women can “flash” the system (call and quickly hang up to avoid charges), and MOTECH will immediately call back, ask for the patient ID number, and deliver the message to the client. The pre-written script provides pre-natal information for 42 weeks and the first week of life of the baby. MOTECH is increasing the frequency to include the first year of the life of the baby.

The nurse application allows the CHPS centers in the rural areas to collect patient data via mobile phone and update the medical records via SMS. Each patient is given a MOTECH ID number. The nurse collects the data and uploads it to the MOTECH system, which stores the information in a central patient electronic medical records system (EMR). The system analyzes the patient data against a clinical regimen and the medical staff develops a program based on the protocols of the Ghana Health Service. The patients are then sent messages based on the schedule, similar to the mobile midwives program. For children under five, the parents receive reminders on tetanus vaccination and immunization schedules, while recent mothers receive information on post-natal care for mothers and babies.

The nurse application also offers a robust electronic reporting tool that is designed to replace the old system of pencil and paper. Nurses are required to submit monthly reports detailing all patient visitations to the sub-district supervisors and the district health management team in their areas. The manual reporting process is time intensive, consuming up to two days each month. With the MOTECH system, nurses enter the data into the phone at the time of visitation, and it is stored and submitted to the EMR in bulk (each entry takes up less than 1 KB). At the end of the month, MOTECH generates an electronic report and submits it to the sub-district supervisor, who delivers the hard copy to the nurses at CHPS centers for verification. After three months of 85 percent accuracy, the nurses no longer need to produce manual reports. What used to take two days now takes ten minutes.

In addition, the nurse application sends reminders to the nurses themselves about patients who are overdue for a consultation. Because the system tracks the schedule of immunizations, for example, it automatically alerts the nurses when a mother is late in bringing her child to the CHPS center. Based on this data, they can schedule a home visit to ensure that the proper care is administered.

Many mHealth programs try to improve the efficiency of their systems and maximize the impact of medical professionals serving rural areas. One of the main concerns in rural areas is Pulse Vascular — vascular surgeon are making use of this mHealth program to keep track of the development. Telemedicine, for example, allows doctors to see patients from a distance.  Through its nurse application, MOTECH increases efficiency, to be sure. But it also gets patients to think consciously about their health. By maintaining a weekly connection with the patient and getting them to actively contemplate their health, it makes them more likely to visit the CHPS center, regardless of whether they are told to do so by the system.   Through constant communication, MOTECH can change the way people think about their own health and the health of their families.

MOTECH is currently in a pilot phase, and has had to adapt the system to fit the cultural context.  As a result, its evolved over time, and shared many of the lessons learned recent report.  The program is not without its shortcomings.  For one thing, the cost of sending SMS and voice messages and distributing handsets to nurses currently subsidized.  Sustainability of the project will depend on finding funding to maintain the system and pay for the communications costs.   It certainly will be an mHealth program to watch in the future, as it is potentially a scalable model applicable to rural areas around the world.

M-PESA and Mobile Money in Kenya

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I’ve now been in Nairobi for two weeks and have settled in well.  I moved into my fairly upscale apartment in Kilimani, a section of Nairobi that is the beating heart of the tech and social enterprise scene here.  Up until last Saturday, I was sleeping on a mattress on the floor.  The landlord wanted to deliver a new bed frame, so I needed to let the movers into the apartment.  It was a total gong show getting this frame up the stairs, and I had to help them move it.  When it was all done, I was instructed to call the landlord and confirm that the job was finished.  After I hung up, the phone of the lead mover made a sound, they all smiled and went on their way.  In the ten seconds that elapsed after my call, the landlord successfully paid the movers via M-PESA, the ubiquitous mobile money platform in Kenya.

For those have never heard of mobile money, it is exactly as it sounds: money that can be transferred from on cell-phone to another via an SMS platform.  The most popular platform is called M-PESA, offered by Safaricom, the leading telecom provider in Kenya with almost 80% market share.  Created in March 2007, M-PESA is a dominant force in the country.  As of late 2009, an estimated two-thirds of the households in Kenya had at least one person using M-PESA.  A recent report titled “Mobile Money: The Economics of M-PESA” details a research effort that surveyed 3,000 users.  Here, the authors, William Jack and Tavneet Suri, describe the model:

Safaricom accepts deposits of cash from customers with a Safaricom cell phone SIM card and who have registered as M?PESA users. Registration is simple, requiring an official form of identification (typically the national ID card held by all Kenyans, or a passport) but no other validation documents that are typically necessary when a bank account is opened. Formally, in exchange for cash deposits, Safaricom issues a commodity known as e?float or e?money, measured in the same units as money, which is held I an account under the user’s name. This account is operated and managed by M?PESA, and records the quantity of e?float owned by a customer at a given time. There is no charge for depositing funds, but a sliding tariff is levied on withdrawals (for example, the cost of withdrawing $100 is about $1).

E?float can be transferred from one customer’s M?PESA account to another using SMS technology, or sold back to Safaricom in exchange for money. Originally, transfers of e?float sent from one user to another were expected to primarily reflect unrequited remittances, but nowadays, while remittances are still a very important use of M?PESA, e?float transfers are often used to pay directly for goods and services, from electricity bills to taxi?cab fares. The sender of e?float is charged a flat fee of about 40 US cents, but the recipient only pays when s/he withdraws the funds.

It is effectively a system of cashless payments and money transfers without the need for a bank account.  In essence, it functions as either a replacement for or a compliment to a traditional current account.  Much of the country, however, has limited access to bank branches or ATMs, making M-PESA the alternative to opening an account with a bank that may be located far away.

Customers can register for service on their phones and deposit money at one of the 25,000+ agents located throughout the country.  Agents can be independent retailers, stores, or any other business establishment.  The person gives the money to the agent, who then transfers the e-money to their phone.  The person can then transfer money to another M-PESA user or pay for goods or services rendered from a business.  Some people use it to pay school fees, or electric bills, or even taxi fare.

The impact on the country has been significant, and will continue to be a model for future mobile money programs.  According to the authors, M-PESA has had several rippling effects that have changed the way the country operates. Continue reading →

The Role of the Celebrity Activist

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Aaron Burr vs. Alexander Hamilton.  Nas vs. Jay-Z.  And now, Easterly vs. Bono.  In an attack reminiscent of Jon Stewart’s epic takedown of the sheepish Jim Cramer after the financial crisis, Bill Easterly, a well-known development economist who favors bottom-up approaches to development rather than top-down technocratic solutions, uses the 30-year anniversary of the assassination of John Lennon to lament the decline of good celebrity activism.  Summing up the comparison in a sentence, Easterly pens:

Lennon was a rebel. Bono is not.

Bono is an interesting character.    I am not completely sold that he is not a completely negative force in terms of development, but I do think that he has the tendency to do more harm than good.  First, he aligns himself with a particular school of thought regarding how foreign aid should be delivered.  Then again, I do the same thing (the opposite school of Bono), so I don’t know if I can completely knock him for standing behind what he believes, even if I think he is wrong.  Second, he provides a public face for institutions and organizations that are often disingenuous when it comes to impact, as I have written about in this post about Project (Red) and the trend of cause marketing.  But Easterly sums up my thoughts nicely in his post.  Here, Easterly describes what he sees as the problem of celebrity activism in general:

Bono is not the only well-intentioned celebrity wonk of our age – the impulse is ubiquitous. Angelina Jolie, for instance, is a member of the Council on Foreign Relations (seriously) in addition to serving as a U.N. goodwill ambassador. Ben Affleck has become an expert on the war in Congo. George Clooney has Sudan covered, while Leonardo DiCaprio hobnobs with Russian President Vladimir Putin and other leaders at a summit to protect tigers; both actors have written opinion essays on those subjects in these pages, further solidifying their expert bona fides.

But why should we pay attention to Bono’s or Jolie’s expertise on Africa, any more than we would ask them for guidance on the proper monetary policy for the Federal Reserve?

I agree.  Raising awareness is important, and I like to see celebrities shining a light on critical issues.  I understand the desire and sense of need to use your celebrity for good, but, just like I don’t want to see Bill Easterly dance, I don’t want to hear Bono be a technocrat or an economist.  This, according to Easterly, is the role of a true celebrity dissident:

True dissidents – celebrity or not – play a vital role in democracy. But the celebrity desire to gain political power and social approval breeds intellectual conformity, precisely the opposite of what we need to achieve real changes. Politicians, intellectuals and the public can fall prey to groupthink (We must invade Vietnam to keep the dominoes from falling!) and need dissidents to shake them out of it.

True dissidents claim no expertise; they offer no 10-point plans to fix a problem. They are most effective when they simply assert that the status quo is morally wrong. Of course, they need to be noticed to have an impact, hence the historical role of dissidents such as Lennon who can use their celebrity to be heard.

We need more high-profile dissidents to challenge mainstream power. This makes it all the sadder that Bono and many other celebrities only reinforce this power in their capacity as faux experts. Where have all the celebrity dissidents gone? It’s not a complicated task. All Lennon was saying was to give peace a chance.

Amen.  Keep it simple.

Does Per Capita GDP Matter?

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There are various ways of measuring the level of a country’s development.  Choosing the right methodology for quantifying economic status is critical for thinking about the problem of poverty effectively.  On a macroeconomic level, the most common indicator is per capita GDP.  But I am not sure if per capita GDP is really a good measuring stick for the relative prosperity of a country.

This thinking stemmed from a conversation I had this afternoon over lunch comparing Ghana, where I used to live, to Kenya, where I now reside.  Ghana is technically middle income status already, based on per capita GDP figures.  My friend, who had also spent time in both countries, raised this point when someone asked about the differences between the two countries.   People bring up this statistic a lot when talking about Ghana, without taking into consideration the relative concentration of wealth (or maybe doing so, but not saying it).

The obvious example is with Equatorial Guinea, a tiny country of 600,000 people in Sub-Saharan Africa.  The country has a GDP of USD $6bn, for a GDP per capita of around $10,000 GDP.   Yet, still 80% of the population lives on less than $2 a day.  It is still classified as one of the 48 LDCs (least developed countries), and is a recipient of donor funding from other governments (though, according to the Istanbul Programme of Action, the product of latest UN conference on LDC development, Equatorial Guinea, along with its neighbor Angola, is eligible for graduation – sweet!).

Continue reading →

The Challenges for Public Education in Ghana

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For my last three weeks in Ghana, I have been, in the words of my brother Kwesi, absolutely chilling out and taking in as much of what this great country has to offer before I leave.  One of those incredible places was Cape Coast and Elmina, two towns a few kilometers apart in the Central Region of Ghana, where much of the citrus production takes place.  Both are beautiful towns.  On his first trip to Africa, Obama came here to speak.  The economies revolve around fishing, and fishing towns, in my experience, tend to have a pleasant atmosphere.  Cape Coast and Elmina are no exception, though they have a notorious and checkered past.   They are home to the notorious slave castles that, for hundreds of years, functioned as the last stop for African slaves before boarding the slave ships for Europe and the Americas.  The brutality with which the slaves were treated and the conditions in which they were kept is appalling.  It is hard to believe that human beings could treat one another in such a despicable way.  It is an important time in history to understand and to never forget.

When I wasn’t seeing the castles, I was either relaxing at my guesthouse, the Stumble Inn, on the beach or wandering around the town, taking in the fishing town atmosphere and digging on the vibes.  The guesthouse, a diamond in the rough with cheap rooms and an island feel, is affiliated with a charity that fields short-term volunteers from Europe and the States to work at a local primary and junior secondary school nearby.  A British girl arrived the same time as me, and I decided to go along with her one day and volunteer at the school to get a better understanding of the state of public education system in Ghana, and also to mess around with some little kids.

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Develop Economies Moves to Kenya

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As loyal readers may have noticed, the postings on Develop Economies have been sparse of late.  That is because I have been running around Ghana, seeing friends and sights and beaches that I missed while I was working.  But now, six months after my arrival in this great country, I am on my way out again.  Tomorrow morning I’ll be flying to Kenya – Nairobi, specifically – where I’ll begin to work in social enterprise (I don’t have a job lined up yet, so if you’ve got any leads, it would be much appreciated).

Over the past six months, I have learned a lot of things about more than I could have ever imagined.  I delved deep into the agriculture sector in the country, analyzing the forces and dynamics, both external and internal, that have led to the industry that exists today.  I have thought about supply chains in rice, maize, soya, and fruits, and thought about how information is delivered to and received by farmers.  I’ve thought about different agri-business models and which are the best positioned for scale.  It has been a great learning experience, I’ve met smart and interesting people here, and it is going to be sad to leave.

Tomorrow I fly to Kenya to begin the next chapter.  From there, I will cut my teeth in the world of social enterprise in East Africa.  It is an exciting time, and it will be a pleasure to keep my readers posted about what I learn.

The Economics of Solar Lanterns with Mobile Charging Stations

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Develop Economies is back after a brief hiatus.   I have finished up my work on my current project and am now taking some time to appreciate some of the aspects of Ghana I hadn’t had a chance to enjoy previously.  I spent a few days living with a rice farmer about 45 minutes by motorbike from Atsusuare in a small community along a lake fed by the Volta River.  I did some work in the field (very minor – I can’t say I’m a great farmer), came across two cobra snakes, and biked an hour each way to the next village with electricity to charge my cell phone and camera.  It was the first time I have ever actually experienced rural living, with no electricity, no running water, limited transportation (you have to call a motorbike to pick you from the neighboring town), and the persistent threat of snakebites, malaria, and other calamities that hang around waterlogged fields of paddy rice.  I have discussed on this blog the different solutions to the problems of rural energy delivery and distributed power generation, to the problem of inefficiency of burning charcoal and the use of clean-burning cookstoves, and others.  But I had never actually seen any of it or experienced it with my own eyes.

In terms of solar lanterns with mobile phone charging capacities, there is a huge need.  People have to travel an hour each way to get to the nearest community that is connected to the grid.  Once there, they have to pay 50 pesewas (about 30 cents) to charge their phones, and need to wait for two hours for the charge to complete.  They do this routine three times a week.  That means that 12 hours out of every week are spent on the activity (unless they couple it with a trip to the market, where they may also have electricity, or to see Manchester United play Chelsea, which is also necessitates the trip).   That is 12 hours of lost productivity, plus $1.20 for charging the phone each week.

For lighting, they use battery-powered lanterns, which provide a lot of good light.  They cost 3 Ghc (~$2) and require two batteries, which cost 80 pesewas (~$0.50) for the pair.  The batteries last for three weeks.  So, the upfront cost of the lantern is low, but the all-in cost per year is closer to $15.  That is relatively low for a quality source of light, and has a low weekly cost, which is amenable to the cash flow of farmers and other people living in rural communities and working in the informal sector. Continue reading →