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:

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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.

Your 21st Century Socialism Roundup

1. Due to shortages of basic, price-controlled commodities, Venezuela has introduced a rationing system that limits the quantities people can buy in supermarkets. People being people, have started buying the max quantity in one supermarket and then going to another and buying more. So the government is piloting a web-based system that registers all purchases of rationed items and supposedly will prevent duplicate buying (the article is very short on details of how this would work, it may just be cheap talk / jawboning). Among the 20 rationed goods are “leche, arroz, aceite, harina, azúcar, papel higiénico, crema dental” (milk, rice, cooking oil, flour, sugar, toilet paper, toothpaste). Yikes!

2. The Venezuelan government is trying to gauge international interest in a bond sale to raise dollars to buy….toilet paper? Plenty of other snarky tidbits in the article including the fact that while the (recently devalued) Bolivar officially exchanges at 6.3 per dollar, the black market rate is around 28 per dollar.

3. Finally, an amazing article about political feuding inside post-Chavez Chavismo by the excellent Alma Guillermo-Prieto in the NY Review of Books.

Top Down versus Bottom Up Development

Planned cities are typically touted with tons of hype and fanfare, but they are often far from where people actually want to live and there are all sorts of infrastructure and transportation problems.  A Daily Mail article on the subject noted that in China, “some estimates put the number of empty homes at as many as 64 million, with up to 20 new cities being built every year in the country’s vast swathes of free land.”  Here is a photo of one of these ghost towns:

chinese_ghost_town

Click here for many more amazing satellite photos.

Apparently China is not alone, as there are now several recent ghost cities that have been created in Sub-Saharan Africa. In a blog post entitled “Developers are failing new African cities,” Faustin Moukala writes:

“Let’s’s also look at Hawkwood properties, which, in 2009, promised to construct a world-class urban centre on 375 hectares of islands in the Democratic Republic of the Congo (DRC). Proposed as the “future of Kinshasa,” La Cité du Fleuve was supposed to host luxury housing, schools, parks, a marina, hotels, and more. But four years have passed since the engines began to claim land from the Congo river, and the result today is very far from the tropical Manhattan shown in the company’s 3D architectural life footage: Only modest residential blocks are emerging along the single paved street.

or a case of the Nova Cidade de Kilamba in Angola.  Moukala notes that the city is “located 30km out of the capital…[and]…was designed to accommodate half a million people. But to date, nearly two years after its official completion, this ghost town is home to barely a tenth of that number. Too expensive and too far from Luanda, the project that failed to meet the needs of Angolans is today a mocked white elephant, a must-see for foreign journalists.”

It is unclear to me what the role of the government is in these examples, but it is does seem like whoever is involved needs to have a much better understanding of why top down development doesn’t work.  Personally, I’d recommend they read Bill Easterly’s The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good or anything by the excellent Ghanaian economist George Ayittey.