Mexican teachers, improving education one strike at a time

The teachers’ unions in Mexico are at it again.  The country faces massive problems in public schooling and a lot of it has to do with how the union runs things (and the relationship between the union and the PRI for much of the 20th century).  Now that the government wants to change things up and actually initiate real reform, the teachers are furious.  Laura Poy Solano writes in La Jornada that the union has put out a “massive call to the teachers of the country to promote an indefinite work stoppage beginning next week.” The unions claim to be coordinating with parents but I’m doubtful about that.

Just in case there was any idea what side they were on, they specifically called on teachers around the country “to join this fight against education reform.” 

Hmm, an indefinite strike, that should really help education levels in the country.


Promises, promises

The New York Times, in A River Runs Over With It, documents how bad sewage treatment is in Brazil. A 1992 UN conference on the environment in Rio caused the Brazilian government to promise big changes when it came to water treatment.  Unfortunately, “after 20 years and more than $1.17 billion in investments from international agencies and the state government, not one of the four treatment stations that were built to process sewage is fully operational.”


The situation is now so bad that less than 55% of Brazilian households have treated water. So what is an eager to please government to do?  More promises of course.  This time they promise to spend $720 million to improve water treatment in Greater Rio, an area where currently “only half of the wastewater is collected and only 4 percent of that is treated.” Another $580 million has been slated for water treatment plants and sewer lines for 16 other cities.

This reminds me of the sad tale of Ghanaian investment at the start of one of my favorite development books: The Elusive Quest for Growth: Economists’ Adventures and Misadventures in the Tropics.  My students are often dumbfounded by the idea that big investments like this might not work out and I think they sometimes like to think that the Ghanaian case as atypical, that perhaps Easterly has cherry-picked an extreme example to get their attention. As the Brazilian example shows though, it isn’t that uncommon.  I’m hoping these next promises will work out better.

Working out the online (educational) kinks

I wrote yesterday about exciting educational reform in India and the UK (Grannies in the Cloud).  Recent news from San Jose State University make it clear that online education is still a work in progress.

Earlier this year, SJSU teamed up with Udacity to offer remedial math and stats courses to anyone could paid $150.  They have since suspended the experiment after the fail rates were off the charts.  About 85% of the students that signed up actually completed the class, which is a high number, but the pass rates only ranged from 20-44%.  Apparently about 75% usually pass the same courses in a non-online setting.

Forbes has a good article detailing some of the reasons that the program might not have worked so well. Ironically, the title of the piece is “Failing Fast,” which I assumed to be (cruelly) referring to the students who failed the course but actually refers to Udacity.

I’m glad that the university is going to work with Udacity to rethink the program and try again in 2014.  A lot of the trouble with the courses seemed to stem from the fact that they were put together in a rush without adequate thought and preparation.

Return to sender?

When Kevin and I visited Madagascar several years ago, we had a tremendous guide who was really smart and really curious about the world.  Unfortunately, he had little access to books, so we sent him a couple that he requested when we returned (one on the Grand Canyon, a French-English dictionary, and one on North American snakes).  I was concerned whether the package would arrive though because there were no traditional addresses in his village.  He told us to put his name and description, guide at Tsingy at Bemaraha park, plus the name of his village.  Shockingly, it arrived because he was able to go to an internet cafe in a bigger town months later and email us a thank you.

The lack of addresses didn’t totally surprise me in Madagascar, an extremely poor country, but I just discovered that this is a problem that plagues many Latin American countries as well. The Christian Science Monitor has a piece about Latin American countries starting to try to rectify the situation. Here is their description of the situation:

“Opposite the church, 500 meters north of the cedar tree, the blue house with a wooden porch.” In many parts of Latin America, these are not just the directions you might be given by a friendly local, but an actual postal address. 

Costa Rica, Panama, and Nicaragua are among the countries that use landmarks, such as schools, parks, or even fast food restaurants, to locate houses and businesses in bizarre address systems that make mailmen “more like detectives,” said one regional newspaper last month.” 

Ecuador and Colombia have recently embarked on an effort to standardize addresses and reduce the problem of lost mail.  It is estimated that 1.71 million mailed items were lost by the Ecuadorian postal service last year (and $75 million of wasted gasoline on “failed deliveries”).  In Costa Rica, about 25% of all mailed items do not arrive at their destination, a cost to the economy of more than $700 million (a 2008 study).

My two favorite tidbits of the article are the following:

1. An envelope once arrived to the capital city of San Jose’s central post office headquarters addressed: “To the man who is sometimes outside the post office.” That letter did apparently reach its intended recipient.  

2.  Making post efficient in a country with no such tradition will require a “change in culture,”– right down to teaching people “that mailboxes are for putting post in, not trash,” says Ecuador’s National Postal Agency’s (ANP) director Maria de los Angeles Morales, who has overseen Ecuador’s $1.2 million project.

Your “Pacto por Mexico” update

New President Pena-Nieto’s main accomplishment so far has been the surprisingly (at least to me) durable, Pacto por Mexico, a grand coalition of all three main parties (Pena-Nieto’s PRI, the PAN and the PRD) dedicated to making sweeping reforms.

Even though their only concrete accomplishment so far was to throw Elba Esther “La Maestra” Gordillo in jail, given the combative and divisive nature of current Mexican politics, it’s kind of cool that they are still hanging in with the program.

But all is not well with the Pacto.

Issue number one is alleged voting irregularities and vote buying by the PRI in the recently completed state level elections.

At a news conference on Sunday in Mexico City, PAN Chairman Gustavo Madero and PRD chief Jesus Zambrano slammed the PRI for not complying with prior calls to safeguard the polls but said they would remain in the pact if their conditions, aimed at cleaning up elections, were met.

In exchange for remaining in the pact, Madero and Zambrano said they expected the government to perform an “exhaustive” investigation into the July 7 elections, assigning blame to candidates and parties that illegally used public funds to finance campaigns.

They also asked the PRI to approve in an extraordinary session of Congress a pending political and electoral reform aimed at combating bad practices ahead of the next elections, among other measures.

Issue two is the looming PEMEX reform fight. The state oil monopoly is starved for investment. Foreign money is banned and since PEMEX is a cash cow for the state, its earnings do not go into R&D, or capital improvements. As the Economist magazine points out, letting in foreign money and broadening the tax base would help make PEMEX into a more efficient and profitable company and benefit the Mexican economy

However, it’s hard to see the PRD going along with such measures, and Pena-Nieto may have to choose between keeping the grand coalition or trying to ram through energy reform just with a “coalition of the willing”.

The Economist suggests that perhaps the PRI could trade the electoral reform the PRD wants for the PEMEX reform the President wants. That would be quite a feat, a true win-win for Mexico.


Privatization is not for the faint of heart

Pakistan suffers frequent power outages that have a huge negative cost on businesses and general quality of life (story here: “Pakistan utility company fights to power chaotic port megacity“).  Here is why privatization seems like an obvious choice:

1. “Power cuts lasting 12 hours a day or more have devastated Pakistan’s economy. The loss of millions of jobs has fuelled unrest in a nuclear-armed nation already beset by a Taliban insurgency.”

2. “At the state-run Peshawar Electricity Supply Company, the majority of staff are illiterate, most new hires are relatives of existing staff and 37 percent of power generated was stolen.”

In 2008, the government decided to privatize the Karachi Electric Supply Company. The new owners fired about 1/3 of the workers, cut off customers who didn’t pay their electric bills, and cracked down on people illegally tapping into the electric system.

The response was quite telling.  First, in a sign of how dysfunctional things were before privatization, fired workers offered to work for free because of the profitability of holding the post.  Apparently they don’t know much about efficiency wages.  Management told them no way, so they “camped outside the building for months” and more than “200 actual employees (who were forced to cross picket lines every day) were injured.”
Second, the new boss came under fire (literally) at his home.  Legislators tried to have him arrested for “not attending sub-committee meetings in the capital.” What in the world can these sub-committee meetings be and how could non-attendance be a jail-able offense? They sound instead like a huge waste of time and bureaucratic idiocy.
Third, the wealthy were offended that they might have to start paying for electricity.  In my favorite quote of the story, one wealthy man said “he couldn’t possibly start paying because his colleagues would think he had no influence left.” How would anyone know that he started paying?
Fourth, cracking down on illegal connections is dangerous business.  The mafia controls these connections and utility staff that take them down are often attacked.  Apparently 10 workers were taken hostage because of this last month. And some areas are too dangerous for workers to even enter: “Some slums are held by the Taliban or gangs, and KESC staff can’t even enter. They are experimenting with licensing powerful local businessmen to collect bills and cut off non-payers.”
Despite all of this, privatization actually seems to be working:

Last year the company made its first profit in 17 years. Theft has fallen by 9 percent in four years. Half the city, including two industrial zones, does not have daily power cuts.”

Perhaps the experience in Karachi will convince other cities of the benefits of privatization, although clearly buying and operating these utilities isn’t for the faint of heart.

Hey Good Looking

I recently wrote that too much emphasis was being placed on various development score-cards and indices. I feared that people were confusing the map for the territory and were guilty of practicing cargo-cult science. I argued they were doing more harm than good.

Yesterday, I discovered the work of Matt Andrews, in particular, his distinction between actual good governance and what he calls mere, “good-looking” governance. That is to say countries can make themselves look good on some of these development and governance indices without necessarily improving what actually happens inside their borders.

Matt gives the example of the Open Budget Index, where Afghanistan received a lot of attention for getting the same score as Italy (insert Italy joke of your choice here). However, Matt points out that Afghanistan achieved its ranking by dong well on pre-spending transparency, it did quite poorly on actual spending accountability. He splits the OBI score into parts and produces the following graph:


So Italy actually has a much better spending process than Afghanistan and Uganda, despite the message of the overall OBI score.

Here’s how Matt eloquently puts it:

“while Afghanistan produces great looking budgets, we have very little idea about what it actually does with its money after these budgets are published. Incidentally, the gap is only 1.8 for Italy according to the OBI data. While Italy may not look as good as one might expect for an OECD country, it is just about as good as it looks. Afghanistan, on the other hand looks as good as Italy but what you see is not what you get (wysinwyg).   It has good looking governance but I’m not sure if you can say that this kind of governance is also ‘good’. And this is after a decade of concentrated and expensive reform.”

Matt argues that this phenomenon both non-innocuous and widespread, “By my estimates the vast majority of developing countries have gaps and ‘good looking’ governance problems and the gaps are growing in many countries after reforms—not closing.

I argue in my recent book that this is because many reforms are adopted as signals—to garner better governance scores and ensured continued support from outsiders—and not real efforts to improve governance. This approach to reform results in new laws, systems and processes being introduced that do not fit the local context, demand more capacity, political will and other content than is available, and are led by groups far too narrow to ensure diffusion and deepening of change. The result is a reform limited to changes in form, but without functionality. Good looking governance rather than good governance.”

To put this in Angus-speak, just like Pacific Islanders after WW II ended, the folks who trust in these facsimiles of good governance will be waiting a very very long time for the cargo to fall from the sky.

Mexico: “Disappointing Indeed”

Eric Verhoogen has a very interesting working paper called “Industrial Structure and Innovation: Notes Toward a New Strategy for Industrial Development in Mexico.”

While good policies may be necessary for rapid economic growth, it’s increasingly clear that they are not sufficient (see my paper with Kevin, Only Income Diverges: A Neoclassical Anomaly, for more on this topic).  I think one of the reasons for reform backlash is the fact that the promised benefits haven’t been very forthcoming. Mexico is a perfect example of this.

Eric shows that a wide variety of countries have performed better than Mexico in the 1980-2008 period, including Chile, Malaysia, Thailand, Indonesia, Turkey, Hungary and Bulgaria.  Instead, he argues that “Mexico is in a league with Brazil, Argentina, the Philippines, and Romania, none of which has adhered as faithfully to orthodoxy. Mexico convincingly beats only Venezuela. Disappointing, indeed.”

A lot of reasons have been put forth for why Mexico has not lived up to expectations, but Eric has a different perspective.  He argues that Mexican manufacturing have specialized in areas with “low rates of innovation.” While this might have been consistent with Mexico’s comparative advantage, it isn’t a strategy that will fuel economy-wide growth nor move Mexico up the development ladder:

“Mexico has been facing a generic problem of industrial development in middle-income countries: how, in the presence of market failures in the learning process, to continue to move up the ladder of quality and technological sophistication, while staying ahead of poorer countries trying to move up the same ladder. It is not clear that market processes alone would have solved this problem.”

On a more optimistic note, he finds that things are already starting to change and that a different industrial strategy could lead Mexico to much brighter economic future.

Making immigration reform personal



The NY Times has a good article today called “Immigrants Reach Beyond a Legal Barrier for a Reunion.”  The above photo, taken from the article, is heart wrenching. It shows the reunion of a young woman and her mother at the border in Nogales. The mother was deported 6 years ago and the daughter isn’t allowed to leave the US and legally return. There were three such reunions that day between deported parents and kids left behind in the US.

The children are part of a group called Dreamers, which advocates for immigration reform. As this article explains, they are “commonly referred to as “DREAMers” because they comprise most (though not all) of the individuals who meet the general requirements of the Development, Relief, and Education for Alien Minors (DREAM) Act.”

The good thing about sad photos such as this is that it makes immigration reform real and personal to many Americans who might be against reform (or at least are neutral).  The more people recognize that these are real families that are being torn apart by our immigration policies, the more support I think there will be for serious change. Or at least I’m hoping so.

The dinosaurs fight back

The Economist recently published a good article called “The PRI’s long tail,” which documents a brewing battle between Mexican President Peña Nieto and the traditionalist dinosaurs of his party. There has been tension between the reformers and the dinosaurs at least since Carlos Salinas in the late 80s and early 90s.  But, as Jorge Chabat of CIDE (mine and Kevin’s old stomping grounds) points out, Salinas managed to enact  significant economic reform without fundamentally changing how party politics worked.  Things may be different this time, however:

“The next round of Mr Peña’s reforms, which have already sought to bust taboos in education and telecommunications, is likely to affect areas that could directly challenge the PRI’s grip on regional power. This is uncharted territory. The proposed opening of the energy industry, which will hurt the pro-PRI oil workers’ union, and the clampdown on electioneering, could mean Mr Peña will “crash headlong into the model of the old PRI,” Mr Chabat says.

The pacto, which is an agreement between the major political parties of Mexico to pursue serious reform, was thrown for a loop recently when it was discovered that at least part of the PRI was back to business-as-usual. Specifically,  “video footage showed [party officials] apparently planning to use handouts from federal anti-poverty programmes—which one official called “gold dust”—to buy votes in upcoming local elections.”

The pacto seems to be back on, for now at least, but the president may face the greatest push back from his own party.  Tax reform, which seeks to move collection from local to state authorities, could be strongly resisted by local PRI officials.  Héctor Aguilar Camín,editor of  the magazine Nexos, put it best when he states that “All the risks [of reform] will be plain to see. All the benefits will be in the future.”

President Obama was recently in Mexico and argued for a new, less corrupt Mexico, albeit in a less than diplomatic fashion (He said that “whether you’re looking for basic services, or trying to start a new business, we share your belief that you should be able to make it through the day without paying a bribe.”) For this to be true, and for Mexico to have any hope of serious reform, the dinosaur faction of the PRI needs to go for good.