McSchooling in Kenya

Great story in Wired about The Bridge International and its standardized cheap(ish) private schools in Kenya.

There are now 212 Bridge Academies in Kenya with around 50,000 total students.

Bridge’s CEO, a former Silicon Valley entrepreneur named Jay Kimmelman, compares his company to Starbucks and McDonald’s — organizations that offer a consistent experience no matter where in the world you encounter them. Beyond its 212 branded academies in Kenya, Bridge has set its sights on Nigeria, Uganda, and India. The founders intend to be serving half a million children in 30 countries by 2015, and 10 million by 2025. “We’ve systematized every aspect of how you run a school,” Kimmelman says. “How you manage it. How you interact with parents. How you teach. How you check on school managers, and how you support them.” 

The “catch” is that this schooling costs $5 per pupil per month.

The article touts the good results these schools achieve, but there is no rigorous evaluation presented.

Why is it so impossible to imagine that cheap standardized private schooling becomes the dominant education model in Kenya, with the Government using vouchers to get to universal enrollment for those who $5 a month is too daunting a sum?

Please do read the whole article. It’s fascinating.

Surprising Nicaraguan News

Two stories about Nicaragua caught my eye today.

First, President Daniel Ortega rushed to congratulate the newly elected President of Honduras, Juan Orlando Hernández. This surprised me since Orlando Hernández is from a conservative party and was running against Xiomara Castro de Zelaya, wife of former president Manuel Zelaya.  When Zelaya was booted out of office by the military, Nicaragua was one of his most vigorous supporters at the time.  And lastly, the results were relatively close and Zelaya is rejecting the vote, saying that they were robbed.  Interesting that Ortega would rush to recognize the new president and promise to fortify ties between the two countries.

Second, and perhaps even more surprising, is the fact that Nicaragua has just been ranked by the UN as the second safest country in Latin America (when ranked by # of homicides and assaults).  The fact that Chile was #1 wasn’t too surprising, but Nicaragua as #2?  As one analyst points out, “Nicaragua’s ranking as the second safest country in the region has surprised analysts because the Central American nation shares a border with Honduras, which has been hit hard by drug-related violence.”



Sleep deprived lies the head that wears the crown

In a short article called “C.Africa president who led coup says power ‘too tiring’,” the new president of the Central African Republic complains candidly about the downsides to being the chief executive.  He seems to deaf to the irony of whining about a job he took by force in a “bloody coup” last March.  The article reports that:

In a public meeting with representatives from political parties, Michel Djotodia complained that the assembled group could sleep easy while he lay awake worrying about national security, sometimes even forgetting about his wife lying next to him. “Sometimes you don’t even have thoughts about your wife! Sometimes, I wake up suddenly to ask the security minister what is happening!” he said, describing how ruling a country wracked by sectarian conflict had played havoc with his nocturnal routine.

He goes on to say that he hoped things were getting better so he could cede the job and get back to some better sleep.  Given that French Foreign Minister Laurent Fabius characterized the state of the CAR as “total chaos,” that day might not be too soon.

Here is our coup leader looking a bit sleep deprived:


Political Business Cycles in Mexico

Kevin and I have long been interested in political business cycles in developing countries.  We have a 2000 JLE piece called Political Cycles in Non-Traditional Settings, Theory and Evidence for Mexico, where we find a significant postelection economic collapse but no preelection boom, and that elections create, rather than resolve, inflation uncertainty.

So it was interesting to see the WSJ yesterday remarking on the same phenomena in Mexico in an article called “Mexico’s Curse of Economic Slowdown.” Anthony Harrup puts Mexico’s weak economic growth in 2013 in political context, noting that the first year of a new presidency often brings with it disappointing economic performances.

He lists GDP growth rates in the first and last years of presidential terms.  Presidents can only serve one term in Mexico so a transition always involves a change of leadership.

1994, last year of Carlos Salinas de Gortari 4.7%
1995, first year of Ernesto Zedillo -5.8%

2000, last year of Ernesto Zedillo 5.3%
2001, first Year of Vicente Fox -0.6%

2006, last year of Vicente Fox 5.0%
2007, first year of Felipe Calderón 3.1%

2012, last year of Felipe Calderón 3.8%
2013, first year of Enrique Peña Nieto 1.2%*

* Private consensus estimate from Bank of Mexico survey
Source: Inegi, Bank of Mexico

I didn’t know there was a term for this phenomena, but apparently the economist Jonathan Heath has named it the “sexenio curse” (presidents serve a 6 year term, or sexenio).  It was curious to find such a pronounced political business cycle in a one-party system, but the Mexican political system was unique in creating the incentives for one.  It’s interesting that the phenomena lives on in a democratic Mexico.  Perhaps we should update our paper and see if this new PBC is statistically significant…




Nicolas Maduro: problem solver

After an awkward beginning President Maduro has really found his footing in Venezuela and produced a cogent, succinct, and effective diagnosis of all the troubles facing his beleaguered nation: Opposition Politicians!!

Yes, as it turns out it’s Henrique Capriles (who may or may not have actually won the election that put Maduro in office) who’s causing the many crises the nation faces!

Check out the airtight case Maduro offers:

“They’re stealing your electricity. They’re stealing your food. They’re stealing your peace. No more violence.” 

Apparently Mr. Capriles was found in his condo with 500,000 porterhouse steaks and running 250,000 window air conditioners full blast (plus he had 300,000,000 rolls of toilet paper stacked up in his garage!).

Here are the posters the government is putting up around Caracas:





Cudos, Mr. President!



Take a walk on the wild side

San Diego is giving new meaning to the idea of cross-border cooperation.  After 20 years of discussion and planning, the airport in SD is now constructing a 525 foot pedestrian bridge to the Tijuana airport, allowing ticketed passengers to pay a small fee and clear customs directly in the airport rather than the usual route of hiring a taxi to take you to the usual border crossing (note: taxi drivers are not happy with this project).

The idea first came about when the South County Economic Development Council surveyed the Tijuana airport parking lot and found that many US citizens were using the Tijuana airport as a cross-border commuter lot.  The council originally proposed a terminal where planes could taxi on both sides of the border, but that apparently was too problematic. The pedestrian bridge project is being funded by private investors from both the US and Mexico, although they still need to figure out how to cover costs like paying for customs agents.

The benefits to Mexico are debatable.  The mayor is actually on record saying that travelers can now bypass Tijuana completely and go direct to San Diego (it seems the opposite argument would also be true, but perhaps that’s not what most travelers are looking for).

The director of the Tijuana airport, Guillermo Villalba, disagrees, arguing that there are numerous benefits to the plan, namely that it will send “a message that the border region is prosperous and safe, will attract more business to the border region, will put Tijuana on the world map, attracting investment, tourism and economic development that will benefit not only Tijuana but the state and the entire border region.”  

I’m not sure I agree with the director about the message this project is sending with regards to TJ, but I do agree that it will give the city a lot of publicity given the uniqueness of the plan.  It will be interesting to see how well the bridge works and what kind of effects it will have on both cities.

The great RCT bubble of 2013?

Check out this awesome blogpost where Lant Pritchett cogently argues that Randomized Control Trials are nearing “peak hype”:

 I think there is little question that randomized techniques were underutilized in development practice and research in 1993.  I also think there is little question that in 2013 RCTs are now in an overvaluation bubble and nearing the Peak of Inflated Expectations.  (Of course one of the true signs of the peak of a bubble is the increasing vehemence with which people who invested their financial and human capital into the bubble deny that it is a bubble).    

At a World Bank Symposium on Assessment for Global Learning  last week Jishnu Das estimated there are in the neighborhood of 500 evaluations of education interventions underway at a cost of between 200K and 500K each.  Assuming a typical cost of 300K this is $150 million dollars being spent on RCTs in just one field of development.  It is hard to make the case that, of all things that could be spent on to improve global education this is the right allocation.  In fact it is impossible to make the case with evidence.  One of the bemusing ironies of the RCT fad as a component of “evidence based policy” movement is that its advocacy has been evidence free. 

The full post is self-recommending.

US concerns about Mexican migration & security

Alfredo Corchado has a good article in the Dallas Morning News about newly declassified US government documents about the security and migration situation in Mexico.  Here are a couple of the most interesting tidbits:

“US officials expressed concern that the Calderón government’s actions were leading to “unintended consequences,” noting that the capture or killing of several top cartel leaders “has allowed less experienced and undisciplined personnel to fill the leadership vacuum, contributing to the spike of drug-related murders.”

The documents provide some new information and raise troubling questions of why more was not done then by either government to take preemptive action that might have prevented the killing of vulnerable migrants, whose only fault was traveling through a perilous region in hopes for a better life in the U.S. In fact, far from trying to help migrants, authorities, especially immigration officials, tried to cover up the extent of the carnage.”

The JDE is on fire

The November issue of the Journal of Development Economics is a blockbuster.  A quick look at the table of contents leads me to want to read the issue cover to cover.  There are too many good ones to list, but here are some titles and abstracts of the ones I found most intriguing.

1. “Institutions and the long-run impact of early development” by James B. Ang

We study the role of institutional development as a causal mechanism of history affecting current economic performance. Several indicators capturing different dimensions of early development in 1500 AD are used to remove the endogenous component of the variations in institutions. These indicators are adjusted with large-scale movements of people across international borders using the global migration matrix of Putterman and Weil (2010) to account for the fact that the ancestors of a population have facilitated the diffusion of knowledge when they migrate. The exogenous component of institutions due to historical development is found to be a significant determinant of current output. By demonstrating that the relationship between early development and current economic performance works through the channel of institutions and that better institutions can be traced back to historical factors, the results of this paper shed some light on how history has played a role in shaping long-run comparative development.

2. “The rise and fall of (Chinese) African apparel exports” by Lorenzo Rotunno, Pierre-Louis Vézina, Zheng Wang

During the final years of the Multifiber Agreement (2001–2005) the US imposed quotas on Chinese apparel while it gave African apparel duty- and quota-free access. We argue that the combination of these policies led to a rapid but ephemeral rise of African exports that can be explained in part by ethnic-Chinese firms using Africa as a quota-hopping export platform. We first provide a large body of anecdotal evidence on the ethnic-Chinese apparel wave in Africa. Second, we show that Chinese exports to Africa predict US imports from the same countries and in the same apparel categories but only where transhipment incentives are present, i.e. for products facing US quotas and in countries with preferential access to the US unconstrained by rules of origin. Our estimates indicate that direct transhipment may account for around 22% of Africa’s apparel exports during 2001–2008.

3. “Trade and thy neighbor’s war” by Mahvash Saeed Qureshi

This paper is the first to examine the spillover effects of regional conflicts, defined as internal or external armed conflicts in contiguous states, on international trade. Our empirical findings—based on different measures of regional conflict constructed using alternate definitions of contiguity and types of conflict for 145 countries over 1948–2006—reveal a significant negative effect of both intrastate and international conflicts on the bilateral trade of neighboring countries that may not be directly involved in any conflict. The impact increases with conflict duration, and is persistent—on average, it takes bilateral trade 3–5 years to recover after the end of a regional conflict.

4. “Exogenous volatility and the size of government in developing countries” by Markus Brückner & Mark Gradstein

This paper presents instrumental variables estimates of the effects of GDP per capita volatility on the size of government. We show that for a panel of 157 countries spanning more than half a century, rainfall volatility has a significant positive effect on GDP per capita volatility in countries with above median temperatures. In these countries rainfall volatility has also a significant positive reduced-form effect on the GDP share of government. There is no significant reduced-form effect in the sample of countries with below median temperatures where rainfall volatility has no significant effect on GDP per capita volatility. Using rainfall volatility as an instrumental variable in the sample of countries with above median temperatures yields that greater GDP per capita volatility leads to a significantly higher GDP share of government.

5. “International competition and industrial evolution: Evidence from the impact of Chinese competition on Mexican maquiladoras” by Hale Utar and Luis B. Torres Ruiz

Effects of the competition between two South locations (Mexico and China) in a Northern market (US) are analyzed. By employing a plant-level data set that covers the universe of Mexican export processing plants (maquiladoras) from 1990 to 2006 and relying on an instrumental variable strategy that exploits exogenous intensification of Chinese imports in the world in conjunction with the WTO accession of China, the empirical analysis reveals a substantial effect of intensified Chinese competition on maquiladoras. In particular, competition from China has a negative and significant impact on employment and plant growth, both through the intensive and the extensive margin. As the negative impact is stronger on the most unskilled labor intensive sectors, it triggers significant sectoral reallocation. Suggestive evidence on industrial upgrading among maquiladoras in response to competition with China is also provided. Overall the results provide additional insight into the way low-wage competition shapes the evolution of industries.

6. “Good countries or good projects? Macro and micro correlates of World Bank project performance” by Cevdet Denizer, Daniel Kaufmann, & Aart Kraay

This paper investigates macro and micro correlates of aid-financed development project outcomes, using data from over 6000 World Bank projects evaluated between 1983 and 2011. Country-level “macro” measures of the quality of policies and institutions are strongly correlated with project outcomes, consistent with the view that country-level performance matters for aid effectiveness. However, a striking feature of the data is that the success of individual development projects varies much more within countries than it doesbetween countries. A large set of project-level “micro” variables, including project size, project length, the effort devoted to project preparation and supervision, and early-warning indicators that flag problematic projects during the implementation stage, accounts for some of this within-country variation in project outcomes. Measures of World Bank project manager quality also matter significantly for the ultimate project outcomes. We discuss the implications of these findings for donor policies aimed at aid effectiveness.

7. “Mass education or a minority well educated elite in the process of growth: The case of India”  by Amparo Castelló-Climent, Abhiroop Mukhopadhyay

This paper analyzes whether mass education is more growth enhancing in developing countries than having a minority well educated elite. Using Indian Census data as a benchmark and enrollment rates at different levels of education, we compute annual attainment levels for a panel of 16 Indian states from 1961 to 2001. Results indicate that if the reduction in illiteracy stops at the primary level of education, it is not worthwhile for growth. Instead, the findings reveal a strong and significant effect on growth of a greater share of population completing tertiary education. The economic impact is also found to be large: a one percent change in tertiary education has the same effect on growth as a 13% decrease in illiteracy rates. A sensitivity analysis shows the results are unlikely to be driven by omitted variables, structural breaks, reverse causation or atypical observations.