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Thursday, February 25, 2010

The Bureaucracy

Ever wonder why government never seems to get anything done?

Jann Banning's photoseries "Bureaucratics" captures the world's bureaucrats at their desks.

Hat tip to Chris Blattman.

No Hablo Espanol

After 400 years, Spain takes interest in teaching us "Indios" spanish. What gives? I think it's a little bit too late to do that now.
Spain will help the Philippines reintroduce Spanish language instruction at public schools in the southeastern Asian country under an agreement signed Tuesday between the two nations. The study of the language is currently voluntary at public high schools in the Philippines, a former Spanish colony, but the government plans to make its availability widespread from 2012. Under the agreement signed Tuesday, Madrid will help train Spanish language teachers in the Philippines, help develop the curriculum and provide electronic teaching aids as well as technical advice, the Spanish foreign ministry said.
And our national sport could have been football!

What is Corruption?

Especially this election season, we get to hear this big bad C word used often. I sometimes wonder whether we know what it is. And so, I just thought that before we start talking about it, we should be clear on what it means. With the help of google scholar, I looked for the most cited paper on the topic and found this gem of a paper by Pranab Bardhan. He writes about corruption:
In a majority of cases, corruption ordinarily refers to the use of public office for private gains, where an official (the agent) entrusted with carrying out a task by the public (the principal) engages in some sort of malfeasance for private enrichment which is difficult to monitor for the principal.
But I like this clarification the most
Sometimes one invokes legality and almost interchangeably uses the word "corrupt" and "illicit" in describing a transaction. But just as clearly not all illegal transactions are corrupt, nor are all instances of corruption or bribery illegal (as when you tip a maitre d' to get a better table at a restaurant than other customers, or in the much more important cases of gift-giving by lobbyists to politicians, campaign contributions to political action committees, or post retirement jobs in private firms to bureaucrats of agencies meant to regulate them). Similarly, one should keep a distinction between "immoral" and "corrupt" transactions. When you pay a blackmailer, you may consider him immoral, but you are paying to stop him from revealing some information which may be unpleasant for you but which may be neither illegal nor corrupt. On the other hand, one can think of instances of corruption and bribery which some people may not regard as immoral, as when you bribe a policeman not to torture a suspect.
Alright, I admit not having read the paper fully (I am sleepy) but a casual glance convinces me that this is an essential read for those interested in this issue. We do not know a lot about corruption, honestly. All we have right now are perceptions of it, which may not necessarily be related in any way with its actual magnitude. This is what makes the study of it very difficult. And to me, this is what attracts me to study it.

Let me know what you think and I'll catch up reading the paper tomorrow.

Saturday, February 20, 2010

My Anti Corruption Plan

Since no candidate seems to be putting forth concrete policy proposals on how to tackle corruption in the Philippines (the proposals out there have not been concrete enough for me), I will propose mine. I offer two modest proposals for the next administration. We probably cannot hope to rid all of corruption, but we can take measures to lessen it. If I were president...

1. I would do randomized audits of municipalities and cities. The inspiration comes from Brazil's anti-corruption program initiated in 2003. Federico Finan's carefully done study, published in the QJE (the top journal in economics) describes it thus:

...the federal government began to audit municipal governments for their application of federal funds. Each month approximately sixty municipalities are chosen at random and then in- spected by a team of auditors for irregularities associated with federally-sponsored projects or public works, and misappropriation of federal funds. To promote transparency, the results of these audits are disseminated publicly to the municipality, federal prosecutors, and the general media.
And the results?
...the electoral performance of incumbent mayors that were audited before the elections, while slightly worse, was not significantly different from the electoral outcomes of mayors that were audited after the election. However, when we account for the level of corruption that was revealed in the audit, we find that the effect of the policy was considerable. For every additional corrupt violation reported, the audit policy reduced the incumbent’s likelihood of re-election by approximately 20 percent. The effect of the policy was similar for other measures of electoral performance, such as the change in vote share and margin of victory. These results suggest that voters not only care about corruption, but once empowered with the information, update their prior beliefs and punish corrupt politicians at the polls
One, since this happened in Brazil, I am pretty confident it can be replicated well in the Philippines. Second, randomized audits do not have to be expensive. Not all cities have to be audited. The possibility of being audited should just be high enough for officials to fear getting caught. And last, we do not even need the go to court for those caught. This would be handled solely by the executive branch. Simply have the media disseminate the results and voters should, in theory, punish the corrupt politician at the next polls. There's a chance this won't work but since everything else has not worked, why not try it?

2. I would fight for the passage of the Freedom of Information Act. The Act guarantees the public access to data held by the state. In my understanding, this would allow me to sue departments who withhold publicly guaranteed information, like the flow of pork barrel funds to senators, public expenditure on infrastructure projects. The Senate and House now both have versions of the bill. To the next president, please pressure Congress to pass it.

This is quite personal to me because many times I have been frustrated with getting data on government expenditure, which Senators are getting money, etc. I am doing a research project that aims to estimate "the price" of political opposition. When the scandal on GMA erupted, one can suspect how the money flowed from those who opposed her to those who supported her. The flow represents the "price" of opposition, since the scandal can be seen as an exogenous shock. Luckily for me, the DPWH publishes information on road construction using pork funds from 2000-2008.

You can imagine a monitor being set up by a Philippine think tank or a university that simply keeps track of how the presidential discretionary funds are distributed. In my limited experience of think tanks here in DC, I have observed that this somewhat works. There are many possibilities.

What do you think? I would love to hear reactions, objections on the comment box below. To anyone of influence reading this, please steal my ideas.

Tuesday, February 16, 2010

What's the Value of the Human Development Index?

This one's old news, but still fascinating enough to be worth sharing. The Freakonomics blog produced a scatterplot of the HDI against GDP per capita for all countries. The correlation, it appears, is 95%!

What then is the value added of the Human Development Index, if it pretty much measures the same thing as income per capita? I do not know.

By now, the limitations of GDP as a measure of welfare are well-known (or at least should be). A country can have a high income per capita and yet suffer from low educational rates and poor health outcomes, high inequality, and bad environmental management. But at this point, I'm hesitant of having it replaced in favor of other measures like the Happy Planet Index. For one thing, GDP is simple to calculate and having it calculated in a timely manner is useful for policymakers. For another, GDP is still strongly, albeit imperfectly, correlated with other outcomes of interest like education, health, and possibly the environment (I'm not so sure about the last). It may not be perfect, but it will do. And many countries, especially in Africa, still have growth as their main problem.

So my stance is, do not abandon GDP yet. But use it with the recognition of its limitations and in tandem with other indicators like education levels, health outcomes, etc.

Monday, February 15, 2010

Solving social problems with a nudge

Compelling TED Talk by Sendhil Mullainathan, applying the insights of behavioral economics to development. This is good follow up material to my previous post, Development through the Lens of Psychology.

Mullainathan is a MacArthur awardee (also known as the "Genius" grant for it is granted only to geniuses and so they say). He is also the founder of Ideas42, a think tank, with an awesome description here, based on the Hitchhikers Guide to the Galaxy. Among other things, he is also author of the most cited paper about corruption of driver's licenses in India.

Met this guy once, and he probably thought I was a fanboy as I approached him from nowhere and told him how much I admire his work and how I would like to do the same. This was back when I was creepy.

Sunday, February 14, 2010

Err.. Kung walang corrupt, walang mahirap?

Am I the only one bothered by this tagline? It is not true. A government rid of corruption does not necessarily better the lives of the poor we see on the streets. We can have a benevolent government which is inefficient; leaders who intend to do well but do not deliver and even sometimes unintentionally contribute to the mess.Is the Aquino campaign sure it wants to sell this message, making things in effect this black and white? Corruption is a big problem, but it is not the one and only true source of poverty, as this tagline suggests. For if that were the case, then let us dissolve government and there won't ever be corruption - the use of public office for private gain - ever again. Nobody would agree that that would be a great anti-poverty policy.

Taglines that are brief and catchy are at a premium in the campaign - I agree. But a tagline can be both, while also being true. I just don't like the message that this one gives, especially since we want voters to vote intelligently. The tagline is unintelligent. Perhaps if we expect people to start voting with their heads then we should start giving them thoughtful pieces, not just statements that sound good but are in fact false.

Perhaps I'm being too harsh? You say, I should probably look at the bigger picture, that this simply signals Aquino's willingness to tackle the issue. But the truth is, no where does the campaign spell out the policy steps needed to tackle the issue. You won't find it in the website. Nor in the speeches except when it is said "We have very good laws, but they are not being implemented" or "Kung may gumawa ng kasalanan, kailangan may certainty of punishment" or let's give lower taxes (?) or let's create objective criteria for infrastructure projects. These signal to me that while corruption is the centerpiece of the campaign, it has been thought of very little. Where is the plan?

Good intentions are not enough. That's such a great sentence, I wish I could name this blog after it -- if only it wasn't already taken by another blog.

Thursday, February 11, 2010

So you want to do a randomized trial?

These xkcd strips just never fail to make my day.

In a previous post, I wrote how randomized trials are all the rage now in evaluating development interventions. Designing them, however, can be tough.

A random thought: I think there is no better way of looking at development than as an experiment. I believe we don't really know what works (and if ever we know, we don't know in what conditions they do work). But if we try new ideas, and cancel out those that we find are bad ones, then we are bound to come up with something that works. The courage to try out wrong ideas though is what we need.

Monday, February 8, 2010

If We Build It, Will They Come? A Critique of Noynoy's Education Agenda

Check out Noynoy's policy note, 10 Ways to Fix Philippine Basic Education. It is a commendable document, if only because it is rare for Philippine politicians to spell out their policy views. I am, however, somewhat disappointed at the proposals: they lack imagination, and more importantly, they fail to address what I think is the problem of the demand for education in our country.

To begin with, there is nothing essentially new with what Noynoy proposes. Let's build more schools and classrooms -- PGMA strove for that. Let's change the curriculum -- didn't we just do that with the Makabayan system? President Arroyo also once said we will upgrade math and science teaching in basic education. Not sure what that amounted to in the end. Plus, isn't the Madrasah (Madaris?) system already being applied in basic education? It's the same old things.

What Noynoy seems to be saying is we should strive even harder for these same old goals. I'm not saying this is wrong but what if, despite how hard we try, this approach just doesn't work? Evidence from history seems to point in this direction. It will be hard to convince me that Noynoy would do any better, unless he tells specifically, how different he would do it this time.

Moreover, all of the proposals suggest that the problem of education in the Philippines is one of supply. It's all about building schools, revamping the curriculum, correcting textbooks -- as if the children who used these things do not matter. The assumption is that if we build it, make it, change it, the children will come.

But they might not. In my tiny experience with interacting with the poor, I have found that households choose not to send their children to school because the returns to education are low. That is, because getting a job after college is highly variable, and the pay regardless is low, why bother with education at all? And so parents, an essential component to education, do not themselves encourage education. None of Noynoy's policy proposals address this important problem.

Why not try something new? In my readings, I have heard that conditional cash transfers have worked wonderfully to solve this demand problem. In rural Mexico for instance, it is documented that Progresa Poverty Program's cash transfers was causally able to raise attendance rates and subsequently lifetime earnings. Applying conditional cash transfers in health, the program was also able to reduce the illness rates of treatment children by 39.5 percent after 24 months in the program. And these results are causal (not just a correlation) because they employed a randomized trial as a design. My prior is that this program can also work well in the Philippines. At the very least, it's worth the try.

It is my belief that the next administration should try something new, different. And Noynoy, as a candidate, can do much better than his 10 ways to fix basic education.

UPDATE: Looking forward to the "10 ways to eliminate corruption" note. There better be one.

Wednesday, February 3, 2010

The Great Discrimination

As expected, the appeal of my boss to open the borders of the US by even just a little bit to ailing Haitians drew furious comments from Americans. Here are some examples of them:

From an email:

You America hating scum. Millions of people out of work and you want more uneducated, unskilled people to flood America. … We have given billions of dollars to Haiti. Poverty is not to blame. The corrupt government is to blame. … Is Mao one of your favorite people also? You don’t care about these people. But why waste a disaster, right. Use them to your convience [sic]. And destroy America while doing it. You turn my stomach. You are where you are because of America and yet you will help destroy it.

The comments from the editorial itself show the same sentiment:

msmart2 wrote:
That's the problem with this country now. When I look out my window, it looks like I've migrated to a foreign country. Let's start sending some people back where they came from.
Clemens is a blithering IDIOT!!! Just what this country needs- more uneducated, unskilled non English speaking people to bleed off of the US taxpayers. Hey Clemens stuff you column where the sun don't shine!!!

dummypants wrote:
"How about a 2 to 1 trade?? Send back 2 of the illegal Mexicans who take everything free and for granted and refuse to learn English and come in legally for admitting each Haitian who will be grateful to melt into the melting pot and adapt!!"

As an immigrant myself, these struck me as deeply offensive. The irony of course is that these people making these comments, if they just look back a couple of generations, come from families of immigrants themselves. For who in America is really a native? America has always been a nation of immigrants.

In the aftermath of Hurricane Katrina, nobody would ever think of blockading highways to prevent the people of New Orleans to move to Phoenix or Houston. But for some reason, Americans think it morally acceptable to turn away Haitian boats at the border with armed guards. Simply because they are Haitian?!

Sure, I agree that nation states have the right to decide who may come and live in one's country to protect the interests of its citizens, in the same way that companies have the right to hire whoever they want. But nobody in this day and age would think it acceptable for a company not to hire black men, simply because they are black, or for that matter, not to hire women, simply because they are women. But why do people find this acceptable in the case of nation states for foreigners? Why is it acceptable for America to actively turn away the suffering, simply because they were not born in the country? Haitians didn't choose to be born in Haiti, in the same way that black men didn't choose to be born black! I find these two things completely analogous.

And Americans say they believe in equality. Be doubtful of this. They believe in equality for Americans, the British, French, and the Italians. But they do not mean this for Mexicans, Haitians, Filipinos, and so on...

This is the great discrimination. Now perhaps we should start another civil rights movement...