Is Rwanda a Potemkin village?

Susan Thomson, an assistant professor of Peace and Conflict Studies at Colgate University had an interesting article recently about Rwanda.  The piece was originally published in the Conversation and re-published by the Huffington Post as “Democracy Rwanda Style: You Can Have any President You Want, As Long as Its Paul Kagame.”  While the main gist of the article didn’t come as any surprise, there was one nugget in the article that I found intriguing.  Thomson writes:

“Kagame devotees are quick to point out the country’s economic successes, using reports produced by the Rwandan government itself to back up their claims. In recent years, the World Bank has indeed found Rwanda to be among the easiest countries in Africa in which to do business. But in 2006, when the same World Bank found data that did not support the narrative of economic growth in Rwanda, that data was destroyed and the foreign researchers were expelled. Since then everything from the World Bank on Rwanda has been positive. Suppressing dissent knows no bounds.”

She links to a paper by Bert Ingelaere called “Do We Understand Life after Genocide? Center and Periphery in the Construction of Knowledge in Postgenocide Rwanda.”  It’s a fascinating paper and work checking out in full, but here are some of the parts that I found noteworthy.

a.  There is a Potemkin village aspect to Rwanda where the state carefully manages how much access researchers have to villagers as well as the villagers behavior and thoughts (at least the ones that are voiced) about progress.  One anecdote involves the government trying to make villagers look less poor by wearing shoes.  Ingelaere writes:

“Not wearing shoes means exclusion from public places such as markets and being turned away from official government functions. Yet peasants often do not have the financial means to adhere to this rule, and sometimes end up in the local cachot (jail) as a result. Obligatory fines of 10,000 Rwandan francs are not adjusted to the circumstances of rural life, and thus the only strategy for regaining freedom is to borrow money from family and friends, resulting in debt and more poverty.

Another strategy is to follow the spirit, if not the letter, of the policy and participate in the project of image control. During fieldwork we noticed men and women walking to official gatherings and carrying their shoes on their heads. The purchase of new shoes as required by official policy had represented a serious investment, and these possessions had to be handled with care. Only when approaching the area where government officials were located (sometimes in the company of foreign visiters inspecting a “project” or some other “developmental” initiative) would they put on their shoes. Then, after the meeting and out of sight of the eyes of the state and the foreigners, the shoes would be removed and placed back on the head.”

b. The story on the World Bank data is a bit more complicated.  Rwanda was to make up one of many countries that the Bank was studying to chart Amartya Sen’s “expansion of freedoms,” where development is measured by more than just income, including things like “the exercise of basic rights, and the success or failure of democratic institutions in different countries.”  You can tell from that quote that the Rwandan government was not going to be pleased with the results.

After six months of surveying Rwandans, the government put a stop to the study:  “The Rwandan security forces seized at least half of the data on the pretext that ‘genocide ideology’ lurked in the research design and study content. Rwandan participants were questioned by the police, and foreign researchers implementing the study were summoned by the Criminal Investigations Department (CID). After a long period of negotiation between high-level World Bank representatives and several Rwandan ministers and other government officials, the decision was taken to destroy all the data and abandon the research project altogether.”

Alrighty then…I guess the Bank got the message.

World Bank to Dismantle Itself?

From the official World Bank twitter feed this morning, we have this eye popping revelation:

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They even have a logo for the dismantlement!

Oh wait…if you click on the link, the first line reads “Fighting poverty in all of its dimensions lies at the core of the World Bank’s work.”  So the key to ending poverty is not in the hands of citizens?  But make sure to RT if you agree.  That’s important–I’m sure that will really bring down global poverty rates.

Kicking away the ladder

The World Bank recently announced that it would no longer provide funding for coal plants, except under extraordinary circumstances (basically for very poor countries with no other options).  This comes after the announcement last month by the US government that it would no longer be funding coal plants internationally.  I’m surprised first that the WB would time their decision so close to the Obama administration’s.  That should certainly (and correctly) provide more evidence for the argument that the US essentially runs the bank.

I don’t have any problem if the bank no longer wants to fund coal plants, but what concerns me is that the reason they give.  They will instead finance “will focus on scaling up cleaner natural gas and hydroelectric dams in order to deliver electricity to hundreds of millions of people around the world who still don’t have it.”  I’m all for reducing carbon emissions and helping the environment, but I wonder if the developing countries see this in the same light.

Amazingly, the new World Bank president, Jim Yong Kim, stated that the “world’s top priority must be to get finance flowing and get prices right on all aspects of energy costs to support low-carbon growth.”  I’m surprised that as WB president that is what he thinks the world’s “top priority” is.

He does back off some though when discussing the possibility of funding a coal plant in Kosovo: “Climate change and the coal issue is one thing,” he said in April, “but the humanitarian issue is another, and we cannot turn our backs on the people of Kosovo who face freezing to death if we don’t move in.”

 

The World Bank: Unmatched at “Delivering” BS

People this is almost self parody by Jim Kim and his bank. Filling the investment gap didn’t work, getting the prices right didn’t work, increasing school enrollment rates didn’t work, fighting corruption didn’t work, so now the Bank wants to practice “the science of delivery”.

Deep in the West Village, in an obscure hipster coffee shop, Bill Easterly’s head must be exploding.

Deliverology seems to be a fancy way of saying “just do it”. Here’s the Head Deliverologist, Sir Michael Barber:

“It is a very simple process, but if you go through things rigorously you will make progress. What are the priorities for the World Bank Group as a whole? Kim has been clear: ending poverty and achieving shared prosperity.  What does that mean in a particular country? . . . At the moment there is insufficient connection between the World Bank headquarters and aspirations and what happens country by country. That is the delivery chain. How do you need to change the delivery chain — the line of sight between the front line and here [Washington]? Kim is aware of that as a major issue.” 

Can I get an LOL? What a steaming pile of jibberish.

And what exactly is Jim Kim doing to enact change at the Bank?

Kim also has tried to tame the bureaucracy by first creating more of it. He’s set up the Office of Change Management, created a new vice president’s post to run it and appointed 30-year bank veteran Pamela Cox to the job. She is now coordinating the work of perhaps a dozen task forces.

Ah yes, the office of change management. Good move. Nothing creates change in a hidebound bureaucracy like more bureaucracy.

The plain truth is that the World Bank has been a colossal failure when it comes to development or even poverty alleviation (Grandpa Deng’s market reforms in China have done more for poverty reduction than all the WB programs over the same time period combined).

Embracing pseudo-scientific mumbo-jumbo will neither change or hide that fact.

The poverty of World Bank poverty reduction

The World Bank’s latest PR campaign is that “for the first time in history” we can “eliminate extreme poverty” (for the hubris of this claim and the many times it’s been said before see here).

Lost in the fine print is the disclaimer that “extreme poverty” is defined as $1.25 / day.

And there has been some progress on that front (clic the pic for a better image):

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However, since virtually all the decline from 1981 to 2009 is from China, I’d give the credit largely to “state capitalism” and not to any top down multilateral agency development program.

And, if we raise the bar on extreme poverty to, say, $2.00 per day, the situation is far from rosy (clic the pic for a better image):

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At $2.00 China’s progress is not as great, India is regressing, as is SSA and overall, the number barely budges in the last 25+ years.

So, yes, there are a lot fewer people under the $1.25 level today than in 1981, which means it’s easier to lift the rest of them. However, in my opinion, the World Bank will have very little to do with any of the actual lifting.

Overall though, the number of very poor people living on less than $2.00 is rising outside of China, and China’s progress here is not large enough to drive the global number down much at all.

No wonder China feels like it can push the Bank around.  If it wasn’t for China, the Bank couldn’t make up ANY arbitrary poverty reduction statistics to rationalize their continued existence. Even with the Chinese miracle, the Bank has to be very selective in picking a number to make it look like things are improving at the global level.

The graphs come from here, and the hat tip goes to “Mr. Inequality”, @BrankoMilan.

Cargo Cults: not just in the South Pacific?

Smithsonian magazine just ran a piece on a cargo cult in Vanatu

These cults started during WWII as the US air-dropped material all over the South Pacific. Well after the war ended, Islanders would create “runways” and build wooden planes and conduct ceremonies to induce the air-dropped riches to re-appear.

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Daniel Ellerman claims that the World Bank has systematically encouraged developing countries to practice a similar cargo cult religion, by encouraging them to adopt the outer trappings of rich countries and assuring them that wealth would follow.

Get the institutions right, increase your school enrollments, get a stock market going, privatize, get the prices right, create a competition authority, enforce intellectual property rights.

In practice, are these injunctions (which by and large poor countries have followed without the promised success) so different from the hollow planes and ceremonies of the South Pacific culters?

I don’t think they are.

Isn’t the WB guilty of practicing cargo cult science?

I think they are.

What do you think?

Brazilian Bottlenecks

In its early years, the World Bank mostly financed large infrastructure projects.  After some (probably accurate) criticism over their handling of dams and village displacement, the Bank moved away from these types of projects and towards ones that focused on health, agrarian reform, education, etc.

More recently though the Bank has come full circle and has started to fund more infrastructure projects because there is a realization that these are some of the most effective ones they’ve funded.  Personally, I think that infrastructure is an understudied topic in development.  It’s clearly crucial to development but it’s something most economists seem to leave to urban planners to solve.

I was reminded of this when I read about Brazilian infrastructure woes with the port of Santos, a city of 530,000 about 40 miles from São Paulo.  Santos is the continent’s largest seaport and the incredible growth in commerce (particularly in soybeans) is causing massive logjams there.  Recently there was a 64 kilometer traffic jam of trucks who wanted to unload their soybean cargo in Santos.  The delay was so bad that China’s biggest importer of soybeans had to cancel an order of 2 million metric tons.

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I’m sure there is no easy solution to this problem, but it is funny how everyone seems to be blaming everyone else for the situation.

Blame the politicians: They have passed legislation that has limited the amount of hours that truck drivers can operate

Blame the weather:  Massive amounts of rain has slowed work at the port.

Blame other transportation systems: A port authority official notes that, “Capacity over the past 10 years has more than doubled but the rail, highway and river access networks are overwhelmed.”  He points out that soybean is perfect for rail transport but that only 25% of soybeans are transported in that manner.

Blame storage facilities: The aforementioned port official also complains that Brazil lacks the necessary storage facilities for soybeans: “Brazil in general can store around 60 percent of its harvest in the producing area. In the United States, they have 130 percent capacity, meaning that they can store in the producing areas the entire harvest plus 30 percent of the next one.”

Blame a shortage of trucks:  Producers want more trucks to transport the soybeans.

My guess is that all of these complaints are valid.  Infrastructure is a complex issue and while everyone can agree that developing countries should “improve infrastructure,” it seems a lot more complicated than that.