Category Archives: Foreign Policy

How Does Corruption in the Education Sector Work?

“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 139^th 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 154^th 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 68^th 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.

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!).

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Weekend at Bin Laden’s: Foreign Aid to Pakistan

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The big news of the day is that Osama Bin Laden is dead. Hooray! He was killed in a special-forces operation coordinated and executed by the United States without the knowledge of the Pakistani government or the military. Bin Laden was found in a medium-sized city 35 miles north of Islamabad living in a compound on the outskirts of town that is valued at $1 million and is said to be eight times the size of any other houses in the area, complete with twelve-foot walls surrounded by barbed wire. And the strangest part of it all is the proximity of the late Bin Laden’s neighbor – the largest military academy (the Pakistani equivalent of West Point) – to the place he was killed by U.S. forces. Specifically, it was located 800 meters away.

For the last ten years, the Pakistani military has been on the receiving end of some very generous military aid from the United States government, which was actually intended to aid in the capture of Bin Laden. But now, that aid is in jeopardy:

The presence of Bin Laden in Pakistan, something Pakistani officials have long dismissed, goes to the heart of the lack of trust Washington has felt over the last 10 years with its contentious ally, the Pakistani military and its powerful spy partner, the Inter-Services Intelligence.

With Bin Laden’s death, perhaps the central reason for an alliance forged on the ashes of 9/11 has been removed, at a moment when relations between the countries are already at one of their lowest points as their strategic interests diverge over the shape of a post-war Afghanistan.

For nearly a decade, the United States has paid Pakistan more than $1 billion a year for counterterrorism operations whose chief aim was the killing or capture of Bin Laden, who slipped across the border from Afghanistan after the American invasion.

The circumstance of Bin Laden’s death may not only jeopardize that aid, but will also no doubt deepen suspicions that Pakistan has played a double game, and perhaps even knowingly harbored the Qaeda leader.

When I think about the incentives around capturing Bin Laden, which means that the U.S. military will have less of a strategic interest in building good will and equipping the Pakistani military (which is notoriously difficult to deal with), and harboring him in the country, which means they have a steady stream of $1 billion in military aid every year, it makes sense to me that they hid him as long as they did. Continue reading →

The Silver Bullet of Conditional Cash Transfers

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There is a new paper from DFID (the British overseas development assistance authority) about the usefulness and effectiveness of conditional cash transfers. I have written a few times about this topic in early 2011 and way back when in 2010 (see here and here) and have always been pretty bullish on the use of them as tools for poverty alleviation. Conditional cash transfers effectively pay the poor in exchange for meeting certain requirements regarding healthcare and education. Welfare programs for individuals and families are contingent on achieving certain targets. For achieving a certain school attendance rate for children, a family will receive a certain amount of money. For bringing your child to the doctor a certain number of times per year, you get money from the government.

The advantage of these schemes is that they offset the opportunity cost of keeping your child in school, or the actual cost of bringing your child to the doctor. So, by creating incentives around behavior modification, you can more effectively target the root causes of poverty. Good decision-making becomes in the best financial interest of families, and mitigates the costs of neglect.

What they do not address are systemic problems. For example, within education, conditional cash transfers aren’t going to build more schools, improve teacher training, reduce class sizes, or provide additional jobs for people once they get out of school. Nor will they improve the quality of healthcare delivery or the caliber of physicians. This gives some people pause. This is from the report:

Well-designed and implemented cash transfers help to strengthen household productivity and capacity for income generation. Small but reliable flows of transfer income have helped poor households to accumulate productive assets; avoid distress sales; obtain access to credit on better terms; and in some cases to diversify into higher risk, higher return activities. These intermediate outcomes help draw poor people into the market economy on terms that allow them to benefit from and contribute to growth.…

There is robust evidence from numerous countries that cash transfers have leveraged sizeable gains in access to health and education services…However, transfers have had less success in improving final outcomes in health or education. Cash transfers can help the poor overcome demand-side (cost) barriers to schooling or healthcare, but they cannot resolve supply-side problems with service delivery (e.g. teacher performance or the training of public health professionals). Cash transfers therefore need to be complemented by ongoing sectoral strategies to improve service quality.

The whole notion of a silver bullet is a non-starter for me. Continue reading →

Cutting Foreign Aid: How the Tea Party Is Hurting America

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“We must address the root causes of terrorism to end it for all time. I believe putting resources into improving the lives of poor people is a better strategy than spending it on guns.” – Muhammad Yunus

Today I went to visit a large-scale maize farmer in Wamale, thirty minutes outside of Tamale, the capital city of the Northern Region in Ghana and home to a predominantly Muslim population. We had a discussion in the home of the village chief, who farms 200 acres of land. On the wall of his palace (or compound), is a 2010 calendar with a picture of Ayatollah Khomeini on it and a poster about how to plant maize properly, with the insignia of USAID at the bottom. This is an interesting test case into the relevance of soft power.

With the new cuts from the US federal budget, the most politically-expedient entity – foreign aid – is slated to get the axe. There is an interesting back and forth discussion between two experts on the subject – for and against – at NPR. In an article titled “Cutting Foreign Aid Doesn’t Help,” Joseph Nye makes the case that slashing the aid budget is a bad idea:

It sounds like common sense, but smart power is not so easy to carry out in practice. Diplomacy and foreign assistance are often underfunded and neglected, in part because of the difficulty of demonstrating their short-term impact on critical challenges. The payoffs for exchange and assistance programs is often measured in decades, not weeks or months. American foreign-policy institutions and personnel, moreover, are fractured and compartmentalized, and there is not an adequate interagency process for developing and funding a smart-power strategy. Many official instruments of soft or attractive power — public diplomacy, broadcasting, exchange programs, development assistance, disaster relief, military-to-military contacts — are scattered around the government, and there is no overarching strategy or budget that even tries to integrate them.

The obstacles to integrating America’s soft- and hard-power tool kit have deep roots, and the Obama administration is only beginning to overcome them, by creating a second deputy at State, reinvigorating USAID, and working with the Office of Management and Budget. Increasing the size of the Foreign Service, for instance, would cost less than the price of one C-17 transport aircraft, yet there are no good ways to assess such a tradeoff in the current form of budgeting. Now, that progress may be halted.

Now, over to former UN ambassador Ken Adelman, who thinks that the “soft power” impact of foreign aid is overrated: Continue reading →

A Lesson about Statistics in Development from David Simon

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David Simon, the creator of the greatest television show ever made, The Wire, is interviewed by Bill Moyers in Guernica magazine. The topics vary, but one particular answer to a question about the relevance of “facts” in understanding the nature of a problem – or the progress and impact of the solution – resonated with me.

One of the themes of The Wire really was that statistics will always lie. Statistics can be made to say anything. You show me anything that depicts institutional progress in America: school test scores, crime stats, arrest reports, anything that a politician can run on, anything that somebody can get a promotion on, and as soon as you invent that statistical category, fifty people in that institution will be at work trying to figure out a way to make it look as if progress is actually occurring when actually no progress is. I mean, our entire economic structure fell behind the idea that these mortgage-backed securities were actually valuable, and they had absolutely no value. They were toxic. And yet they were being traded and being hurled about, because somebody could make some short-term profit. In the same way that a police commissioner or a deputy commissioner can get promoted, and a major can become a colonel, and an assistant school superintendent can become a school superintendent, if they make it look like the kids are learning and that they’re solving crime. That was a front-row seat for me as a reporter, getting to figure out how once they got done with them the crime stats actually didn’t represent anything.

I have not spent long in the world of development, but I have had a chance to understand the mechanics of this world. I believe that my own project- one that has taken an innovative market facilitation approach to agriculture economic development – is making the right moves. But through conversations with career development workers who have been part of the system for a long time and have seen how the sausage is made at the highest levels, I have found that the same principle largely holds true in the world of aid and development.

Typically, the way it works is that governments allot a certain amount of money to be used for development in countries chosen based on the strategic interest of the donor in the country and the broader region. Aid is often used as a carrot to gain leverage in a country. For food aid (much is which is necessary in certain cases), developing countries serve as a repository for food surpluses from the donor country. The other day someone told me that a certain affluent Asian country (not China) is obligated to purchase rice from other countries as part of a WTO agreement. This country is self-sufficient in rice and is an exporter itself, and the rice farmers in that country would be very angry if imported rice from other countries was brought in and sold to consumers. So this country buys rice from other countries, as part of its obligation, and then ships it to developing nations, flooding the local market with cheap, low-cost rice. In doing so, the local rice farmers become uncompetitive serving the domestic market, and are forced to sell at a loss or switch to another crop. As the cycle continues, these recipient nations become more dependent on foreign food aid, as opposed to moving in the direction of self-sufficiency. In addition, the local consumers gain a taste for imported rice, which may or may not be readily available or even well-adapted to local growing conditions. The end result? Dependency.

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The UN’s Successful Intervention in Cote D’Ivoire

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I hear people badmouth the United Nations…a lot. “What the hell is the point of a United Nations? They don’t actually do anything.” In the back of my mind, I always sort of disagreed, but wasn’t really sure because I actually didn’t have any tangible examples to back up my position. The World Food Program maybe? The UN High Council on Refugees? I have always felt that an open and transparent forum to discuss global issues between countries, even if the best resolution they have to offer is usually non-binding, isn’t a bad thing. And, as a matter of principle, I disagree with with former US ambassador to the UN, John Bolton, on every single issue, from foreign policy to favorite season of the Wire. He famously said in 1994 – a full decade before taking up the post of UN ambassador – this about the institution:

There is no such thing as the United Nations. There is only the international community, which can only be led by the only remaining superpower, which is the United States.”^[60] He also stated that “The Secretariat Building in New York has 38 stories. If you lost ten stories today, it wouldn’t make a bit of difference.”^[

Such an asshole.

But this week can be chalked up as a win for the institution, since Cote D’Ivoire’s recalcitrant, thuggish big man former president, Laurent Gbagbo was sheepishly captured in his basement and is now going to be tried in the International Criminal Court. Continue reading →

Islam is a Religion of Peace

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On long bus rides and flights (of which there have been many during the last 18 months of traveling through Asia and Africa, for a combined total of at least 200 bus-hours), I listen to podcasts. It is a way of depositing knowledge into my brain while still admiring the scenery. The one I listen to the most is an NPR podcast called “Intelligence Squared.” It is described as “Oxford-style debating on America’s shores.” It is both intellectually-stimulating and fits well with my strict “Buy American” policy.

Most recently, I made a 13-hour bus ride from Accra, the capital city of Ghana, which lies on the coast of West Africa, to Tamale, the capital city of the Northern Region. In West Africa, the percentage of Muslims increases as you get closer to North Africa. So, in order to stimulate the brain waves and get mentally prepared for being in a predominantly Muslim area, I listened to an episode of Intelligence Squared in which teams of two debated the following motion: “Islam is a religion of peace.” The debaters ranged from a former jihadist turn peace activist who realized, after going through a period of anger, that his interpretation of Islam as providing a mandate for militancy was all wrong. On the other side of the debate, a Somali immigrant who had lived under the terrible influence of Al Shabab stressed the point that many passages in the Koran advocate violence and any interpretation of the religion must take this salient point into account. It was an interesting debate.

My personal opinion has always been that Islam is a religion of peace. To pull particularly violent passages from the Koran and use them as evidence of Islam’s fundamental commitment to violence is fair, I suppose. But applying the same rubric to the Old Testament of the New Testament leads to the obvious conclusion that Judaism and Christianity are also not religions of peace. And looking at Christianity’s long history of violence, like the Crusades, leads to the same conclusion. Another argument presented as evidence against the motion is that a religion is judged by the actions of its followers. Even if most of the Muslims in the world are moderate in ideology and peaceful in nature, the actions of Jihadists and fundamentalist Muslims speak for the religion as a whole. Again, looking at Sinn Fein in Ireland and the violence between Protestants and Catholics, or at the Jewish Defense League, which is effectively a terrorist organization, leads to the same inevitable conclusion. So, in short, the arguments may be salient, but the ultimate conclusion is that no religion is one of peace. (Actually, the bible has twice as many violent passages of the Koran, but, on a percentage basis, the Koran actually wins).

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Product (RED) and the Dishonesty of Cause Marketing

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There is a good blog post on Aidwatch, Big Willy Easterly’s cynical aid-takedown machine, about the role of celebrities in promoting development and their relative benefits. This post is just Bill being Bill, railing against the status quo. In this post, two guest bloggers, Lisa Ann Richey and Stefano Ponte, who have just authored a book about the topic, titled Brand Aid, discuss the problem of “cause marketing”:

In the book, we examine what happens when aid celebrities unite with branded products and a cause. The resulting combination—what we call “Brand Aid”—is aid to brands because it helps sell products and builds the ethical profile of a brand. It is also a re-branding of aid as efficient and innovative, based on “commerce, not philanthropy.”

In the case study of Product (RED), a co-branding initiative launched in 2006 by Bono, we show how celebrities are trusted to guarantee that products are “good.” Iconic brands such as Apple, Emporio Armani, Starbucks and Hallmark donate a proportion of profits from the sale of RED products to The Global Fund to finance HIV/AIDS treatment in Africa. In essence, aid celebrities are asking consumers to “do good” by buying iconic brands to help “distant others” —Africans affected by AIDS. This is very different from “helping Africa” by buying products actually made by Africans, in Africa, or by choosing products that claim to have been made under better social, labour and environmental conditions of production.

In Product (RED), celebrities are moving attention away from “conscious consumption” (based on product information) and towards “compassionate consumption” (based on emotional appeal). To us, this is even more problematic than the risk of negative media attention that celebrities bring to development aid.

This reminded me of an article in the New York Times from 2008 about Project (RED), which revealed this tidbit of information about the project:

In its March 2007 issue, Advertising Age magazine reported that Red companies had collectively spent as much as $100 million in advertising and raised only $18 million. Officials of the campaign said then that the companies had spent $50 million on advertising and that the amount raised was $25 million. Advertising Age stood by its article.

I remember not being so surprised when I read this, but still a little ticked off. My take on corporate social responsibility is that it can often be disingenuous, dishonest, or, as worst, deliberately misleading. I like the idea of money in development that is not politically-motivated, which is also, frequently, dishonest and disingenuous. I also like the idea of profit-oriented businesses with not much tolerance for wasting money allocating resources to some of these causes. But I think it masks some of the real problems, which are systemic and global, and provides a cover for the perpetrators of those problems. “Cause branding” is a relatively low-cost and easy investment for a business to make, without actually having to produce the results it needs. For Starbucks, a $100 million campaign is pocket change, and to raise only $18 million to the Global Fund – an organization that has been recently skewered in the press for corruption and waste – is a travesty. (My intention is not to villify the Global Fund, which has seen much of its funding put on hold because $34 million, or 0.3% of the total, was potentially lost due to corruption – which is pretty damn good considering the track record of other projects). Continue reading →