Grading Aid

I just learned about the Aid Transparency Index and it is a very cool undertaking.  The group grades all major aid organizations across 22 indicators.  In 2013 they started taking into account not only how accessible the data is, but also how accessible the format is in which it is provided.  Click here for more on the indicators, here for their methodology, and here for the 2013 results. 

 

Speaking of accessibility, I wish I could reproduce the graphics they have showing the results.  It is one of the flashiest, yet totally clear, illustrations I’ve seen.  So what’s the lowdown on the 2013 results.  They find that:

“The top ranking agency is U.S. MCC, scoring 88.9%, while China takes the last place scoring only 2.2%. At the top end, MCC (88.9%), GAVI (87.3%), UK DFID (83.5%) and UNDP (83.4%) are all nearly 10 or more percentage points ahead of the next highest donor. The average score for all organisations is comparatively low at 32.6%, with 25 organisations scoring less than 20%. As in previous years, larger organisations generally perform better overall. Multilaterals as a group tend to score higher than bilaterals, although the performance of individual organisations within each group varies significantly.”

The group recognizes though that this is just the beginning of the challenge.  They note that understanding how and why people use this data will continue to be a goal for all development actors – and will mean working closely with diverse partners to make a real difference.”

Hijacking the African statistical development program

African Arguments has an interesting article on the intersection of academia and politics.

The economist Morten Jerven has an excellent new book out called Poor Numbers: How We Are Misled by African Development Statistics and What to Do about It.  Jerven was supposed to give a speech Tuesday at the United Nations Economic Commission on Africa (UNECA) about his work but it was cancelled for political reasons.

Jerven alleges that Pali Lehohla, South Africa’s Statistician General, issued an ultimatum to UNECA that “if they let me speak he would withdraw all South African delegates from the UNECA meetings.” 

yellow_suit

Lehohla, pictured above in the yellow suit, admitted his disagreement with Jerven’s work.  Apparently it has touched a nerve throughout Africa.  Here are some allegations:

1.  Lehohla argues that Jerven  “has not done his research” and “that we agreed as statisticians that we shall not engage him any further until he can demonstrate that he has done scholarly work on Statistical Development in Africa.”

2. Mr Lehohla adds that “Morten Jerven will highjack the African statistical development programme unless he is stopped in his tracks.”  Given what I’ve read of African statistical agencies in Jerven’s work, I can only hope that he does highjack their program.

3.  Dimitri Sanga, former Director of the African Centre for Statistics at the UNECA, characterizes Jerven’s work as “sulphurous.” I’m not even sure what that means but it sounds like an insult.
4. The Zambian Statistical Office accuses Jerven of “sneaking 

into CSO premises and collecting information on such a big institution without any authorization at all.” As if that weren’t slanderous enough, the go on to add that

It is clear that Mr. Jerven had some hidden agenda which leaves us to conclude that he was probably a hired gun meant to discredit African National Accountants and eventually create work and room for more European based technical assistance missions.”

Jerven took the high road in the controversy and stated that “It is unfortunate that some people perceive my book as a criticism of the people working in African Statistics, when my intent is to elevate the discussion on how to support African countries in improving their statistical systems.”

It is rare that academic work makes such waves in the real world and I think the backlash is actually encouraging because it opening up debate (and shedding more light) on issues that rarely get discussed.  It reminds me a bit of the reaction that Krugman got in East Asia when he compared growth in the region to the Soviet experience, arguing that much of the growth was fueled by factor accumulation and not productivity.  The initial reaction was sharply negative but a couple of years later Krugman was invited to Singapore to discuss ways in which the country could raise productivity.  Hopefully something similar will happen in this case.

Why is New Jersey so corrupt?

Filipe Campante and Quoc-Anh Do have a fascinating new working paper called “Isolated Capital Cities, Accountability and Corruption: Evidence from US States.”

They find strong evidence that states with geographically isolated capital cities are also more corrupt (we’re talking about you Albany, Annapolis, Jefferson City, Trenton, and Springfield).  On the other hand, they do not find evidence that isolation prevents political capture. They note that “isolated capitals are associated with more money in state-level campaigns…[and]…that isolation is linked with worse public good provision.”

In short, having an isolated capital city offers a triple whammy of bad repercussions: more corruption, less public good provision, and more capture.  Could this be a reason why autocratic rulers are so fond of building new capital cities in the boondocks?

 

Transparency..you’re doing it wrong!

I think all development economists and practitioners would agree that transparency is crucial in the distribution and spending of funds.  After reading this article about President Museveni in Uganda, though, I question whether everyone is using the same definition of transparency.

Yoweri Museveni, Ronald Kibuule

Here is the now infamous photo of Museveni giving $100,000 worth of cash in a white garbage bag to a youth group.  Note that he also gave out a minibus, a truck and 15 motorcycles at the same gathering.  The photo has stirred outrage in Uganda, as it is an obvious tactic to buy the youth vote in an area of the country where the president is weak.  The government, however, declares that the bag of cash was done in the name of transparency:

“Minister for the Presidency Frank Tumwebaze defended the donation, ‘Quite a few times people have requested the president for money and have stolen it. Giving it in broad day light means that the youth can see who has their money,’ he said. ‘The president is not taking the money to Las Vegas, he’s supporting income-generating schemes.'”

Unfortunately, Museveni has never shown a lot of respect for transparency.  For instance, he typically runs out of money halfway through the year and asks for supplemental funds.  The article notes that “Lawmakers approved $23 million for the president’s official household in the last budget, but at least $74 million has already been spent and more will be needed before the year is up, according to lawmakers handling the presidency’s latest budget proposal.”

The critics, making some sound counterpoints, note that:

a. “It sets a bad example in a country that depends on foreign donors to finance about 25 percent of its budget.”

b.  “There should have been a system to make sure the youth spend the money properly.”

c.  “There’s no system of accountability to make sure we get it back if these youth mismanage it.”

Indeed, it’s one thing to show the donation in public, it’s another to just hand over bags of cash with no accountability, no bureaucratic system of fund distribution, and no follow-up.

Tax Reform in Mexico: transparency versus viability?

Reuters published an interesting interview with Luis Videgaray, Mexico’s Finance Minister.  Videgaray is credited to a large extent in helping Pena Nieto become President.

One big problem in Mexico is the fact that the government (from independence on) has been unable to collect taxes very effectively. The country only collects about 6-8% of its national income in taxes, a rate quite a bit lower than any other OECD country.

The new administration has promised a fiscal overhaul, including finding a way to reduce the informal part of the economy, get states to raise more taxes, and close loopholes. So far so good.

The interesting part of this story is the way in which officials have chosen reform viability over government transparency.

For instance, LV states: “We’ve made a decision not to talk about fiscal reform yet, not even to the ratings agencies. It’s important to have a good technical design but also to be quite sensitive to the political needs of the fiscal reform. The first to know about the design of the fiscal reform … should be Congress.” “We have some very good progress on what we are planning to do on fiscal reform .. (but) we are not talking about it yet.” “It will be large.”

This reminds me of privatization in Mexico, when President Miguel de la Madrid forbade any administration official from using the dreaded word privatization. Instead, they were to call it “redimensionamiento (re-determining of the size of the public enterprise sector) & disincorporación (liquidation, transfer, merger, or selling of state enterprises).” That tidbit is from Judith Teichman’s excellent book Privatization & Political Change in Mexico (University of Pittsburgh Press, 1996). Highly recommended.