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1641. Blunt Instruments: On Establishing the Causes of Economic Growth

Author:
Michael Clemens and Samuel Bazzi
Publication Date:
05-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Despite intense concern that many instrumental variables used in growth regressions may be weak, invalid, or both, top journals continue to publish studies of economic growth based on problematic instruments. Doing so risks pushing the entire literature closer to irrelevance. We illustrate hidden problems with identification in recent prominently published and widely cited growth studies using their original data. We urge researchers to take three steps to overcome the shortcomings: grounding research in somewhat more generalized theoretical models, deploying the latest methods to test sensitivity to violations of the exclusion restriction, and opening the “black box” of the Generalized Method of Moments (GMM) with supportive evidence of instrument strength.
Topic:
Development, Economics, and Political Economy

1642. The Impact of Microcredit on the Poor in Bangladesh: Revisiting the Evidence

Author:
David Roodman and Jonathan Morduch
Publication Date:
06-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The most-noted studies on the impact of microcredit on households are based on a survey fielded in Bangladesh in the 1990s. Contradictions among them have produced lasting controversy and confusion. Pitt and Khandker (PK, 1998) apply a quasi-experimental design to 1991–92 data; they conclude that microcredit raises household consumption, especially when lent to women. Khandker (2005) applies panel methods using a 1999 resurvey; he concurs and extrapolates to conclude that microcredit helps the extremely poor even more than the moderately poor. But using simpler estimators than PK, Morduch (1999) finds no impact on the level of consumption in the 1991–92 data, even as he questions PK's identifying assumptions. He does find evidence that microcredit reduces consumption volatility. Partly because of the sophistication of PK's Maximum Likelihood estimator, the conflicting results were never directly confronted and reconciled. We end the impasse. A replication exercise shows that all these studies' evidence for impact is weak. As for PK's headline results, we obtain opposite signs. But we do not conclude that lending to women does harm. Rather, all three studies appear to fail in expunging endogeneity. We conclude that for non-experimental methods to retain a place in the program evaluator's portfolio, the quality of the claimed natural experiments must be high and demonstrated.
Topic:
Development, Economics, Foreign Aid, and Foreign Direct Investment
Political Geography:
Bangladesh, South Asia, and Asia

1643. Organizing for a Complex World: The Way Ahead

Author:
David J. Berteau, Guy Ben-Ari, and Matthew Zlatnik
Publication Date:
04-2009
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies
Abstract:
Complex defense and network-centric systems have proven to be difficult to develop on time and on budget, a consequence of the complexity inherent in both the systems and the acquisition environment. Complexity in turn results from non-linear, unpredictable interaction of elements combined in new ways, in order to try to create unique capabilities. Complex development programs pose governance and management challenges for a range of systems-integration models, and it is difficult to know in advance the program-management model most suitable for a given program. This paper proposes ways to measure or assess success in managing complex programs. It also addresses ways that the challenge of picking the proper development model can be partially bypassed, by seeking to cultivate flexibility and resiliency (F) within the organization. Through the ability to understand and adapt to changes in the internal and external environments, a program-management organization can thrive in a development environment in which unanticipated events will certainly occur.
Topic:
Security, Development, Globalization, and International Cooperation

1644. The Environmental Impacts of Soybean Expansion And Infrastructure Development in Brazil's Amazon Basin

Author:
Maria del Carmen Vera-Diaz, Robert K. Kaufmann, and Daniel C. Nepstad
Publication Date:
05-2009
Content Type:
Working Paper
Institution:
Global Development and Environment Institute at Tufts University
Abstract:
For decades, the development of transportation infrastructure in the Brazilian Amazon has been the government's main social and economic development policy in the region. Reductions in transportation costs have not only opened the agricultural frontier to cattle ranching and logging but have also caused more than two-thirds of Amazonian deforestation. Currently, soybean cultivation is a new economic force demanding improvements to roads in the region. Profitable soybean crops have spread over the Mato Grosso's cerrados and now head toward the core of the Amazon rain forest. One of the main constraints for soy expansion into the Amazon has been the poor condition of roads. In this study, we analyze the effect Amazon transportation infrastructure programs have on soybean expansion by lowering transport costs. The analysis is based on spatial estimates of transportation costs for the soybean sector, first using current road networks and then projecting changes based on the paving of the Cuiabá-Santarém road. Our results indicate that paving the Cuiabá-Santarém road would reduce transportation costs by an average of $10 per ton for farmers located in the northern part of Mato Grosso, by allowing producers to reroute soybean shipments to the Santarém port. Paving the road also would expand the area where growing soybeans is economically feasible by about 70 percent, from 120,000 to 205,000 km2 . Most of this new area would be located in the state of Pará and is covered largely by forests. A Cost-Benefit analysis of the road project indicates that the investments in infrastructure would generate more than $180 million for soybean farmers over a period of twenty years. These benefits, however, ignore the project's environmental impacts. If the destruction of ecological services and products provided by the existing forests is accounted for, then the Cuiabá-Santarém investment would generate a net loss of between $762 million and $1.9 billion. This result shows the importance of including the value of the natural capital in feasibility studies of infrastructure projects to reflect their real benefits to society as a whole.
Topic:
Agriculture, Development, Economics, Environment, and Infrastructure
Political Geography:
Brazil, Latin America, and Amazon Basin

1645. The Romanticisation of the Local: Welfare, Culture and Peacebuilding

Author:
Oliver P. Richmond
Publication Date:
03-2009
Content Type:
Journal Article
Journal:
The International Spectator
Institution:
Istituto Affari Internazionali
Abstract:
The key feature of the dominant liberal approach to peacebuilding is the neoliberal marketisation of peace, rather than engagement with civil society and the agents and subjects of this peace. This is a particularly Western, liberal, and Enlightenment-derived discourse of peace, which is far from culturally and socially appropriate or sensitive, and has little chance of establishing a locally self-sustaining peace. This represents a "romanticisation of the local", of civil society, and of the liberal culture of peacebuilding. Its cultural engagement, including its support for civil society development, is therefore little more than instrumental and is used to defer responsibility for the welfare of the local.
Topic:
Development

1646. A Brief History of U.S. Farm Policy and the Need for Free-Market Agriculture

Author:
Monica Hughes
Publication Date:
06-2009
Content Type:
Journal Article
Journal:
The Objective Standard
Institution:
The Objective Standard
Abstract:
The most important and most overlooked energy issue today is the growing crisis of global energy supply. Cheap, industrial-scale energy is essential to building, transporting, and operating everything we use, from refrigerators to Internet server farms to hospitals. It is desperately needed in the undeveloped world, where 1.6 billion people lack electricity, which contributes to untold suffering and death. And it is needed in ever-greater, more-affordable quantities in the industrialized world: Energy usage and standard of living are directly correlated. Every dollar added to the cost of energy is a dollar added to the cost of life. And if something does not change soon in the energy markets, the cost of life will become a lot higher. As demand increases in the newly industrializing world, led by China and India, supply stagnates -meaning rising prices as far as the eye can see. What is the solution? We just need the right government "energy plan," leading politicians, intellectuals, and businessmen tell us. Of course "planners" such as Barack Obama, John McCain, Al Gore, Thomas L. Friedman, T. Boone Pickens, and countless others favor different plans with different permutations and combinations of their favorite energy sources (solar, wind, biomass, ethanol, geothermal, occasionally nuclear and natural gas) and distribution networks (from decentralized home solar generators to a national centralized so-called smart grid). But each agrees that there must be a plan-that the government must lead the energy industry using its power to subsidize, mandate, inhibit, and prohibit. And each claims that his plan will lead to technological breakthroughs, more plentiful energy, and therefore a higher standard of living. Consider Nobel Peace Prize winner Al Gore, who claims that if only we follow his "repower American plan"-which calls for the government to ban and replace all carbon-emitting energy (currently 80 percent of overall energy and almost 100 percent of fuel energy) in ten years-we would be using fuels that are not expensive, don't cause pollution and are abundantly available right here at home. . . . We have such fuels. Scientists have confirmed that enough solar energy falls on the surface of the earth every 40 minutes to meet 100 percent of the entire world's energy needs for a full year. Tapping just a small portion of this solar energy could provide all of the electricity America uses. And enough wind power blows through the Midwest corridor every day to also meet 100 percent of US electricity demand. Geothermal energy, similarly, is capable of providing enormous supplies of electricity for America. . . . [W]e can start right now using solar power, wind power and geothermal power to make electricity for our homes and businesses. And Gore claims that, under his plan, our vehicles will run on "renewable sources that can give us the equivalent of $1 per gallon gasoline." Another revered thinker, Thomas L. Friedman, also speaks of the transformative power of government planning, in the form of a government-engineered "green economy." In a recent book, he enthusiastically quotes an investor who claims: "The green economy is poised to be the mother of all markets, the economic investment opportunity of a lifetime." Friedman calls for "a system that will stimulate massive amounts of innovation and deployment of abundant, clean, reliable, and cheap electrons." How? Friedman tells us that there are two ways to stimulate innovation-one is short-term and the other is long-term-and we need to be doing much more of both. . . . First, there is innovation that happens naturally by the massive deployment of technologies we already have [he stresses solar and wind]. . . . The way you stimulate this kind of innovation-which comes from learning more about what you already know and doing it better and cheaper-is by generous tax incentives, regulatory incentives, renewable energy mandates, and other market-shaping mechanisms that create durable demand for these existing clean power technologies. . . . And second, there is innovation that happens by way of eureka breakthroughs from someone's lab due to research and experimentation. The way you stimulate that is by increasing government-funded research. . . . The problem with such plans and claims: Politicians and their intellectual allies have been making and trying to implement them for decades-with nothing positive (and much negative) to show for it. For example, in the late 1970s, Jimmy Carter heralded his "comprehensive energy policy," claiming it would "develop permanent and reliable new energy sources." In particular, he (like many today) favored "solar energy, for which most of the technology is already available." All the technology needed, he said, "is some initiative to initiate the growth of a large new market in our country." Since then, the government has heavily subsidized solar, wind, and other favored "alternatives," and embarked on grand research initiatives to change our energy sources-claiming that new fossil fuel and nuclear development is unnecessary and undesirable. The result? Not one single, practical, scalable source of energy. Americans get a piddling 1.1 percent of their power from solar and wind sources, and only that much because of national and state laws subsidizing and mandating them. There have been no "eureka breakthroughs," despite many Friedmanesque schemes to induce them, including conveniently forgotten debacles such as government fusion projects, the Liquid Fast Metal Breeder Reactor Program, and the Synfuels Corporation. Many good books and articles have been written-though not enough, and not widely enough read-chronicling the failures of various government-sponsored energy plans, particularly those that sought to develop "alternative energies," over the past several decades. Unfortunately, the lesson that many take from this is that we must relinquish hope for dramatic breakthroughs, lower our sights, and learn to make do with the increasing scarcity of energy. But the past failures do not warrant cynicism about the future of energy; they warrant cynicism only about the future of energy under government planning. Indeed, history provides us ample grounds for optimism about the potential for a dynamic energy market with life-changing breakthroughs-because America once had exactly such a market. For most of the 1800s, an energy market existed unlike any we have seen in our lifetimes, a market devoid of government meddling. With every passing decade, consumers could buy cheaper, safer, and more convenient energy, thanks to continual breakthroughs in technology and efficiency-topped off by the discovery and mass availability of an alternative source of energy that, through its incredible cheapness and abundance, literally lengthened and improved the lives of nearly everyone in America and millions more around the world. That alternative energy was called petroleum. By studying the rise of oil, and the market in which it rose, we will see what a dynamic energy market looks like and what makes it possible. Many claim to want the "next oil"; to that end, what could be more important than understanding the conditions that gave rise to the first oil? Today, we know oil primarily as a source of energy for transportation. But oil first rose to prominence as a form of energy for a different purpose: illumination. For millennia, men had limited success overcoming the darkness of the night with man-made light. As a result, the day span for most was limited to the number of hours during which the sun shone-often fewer than ten in the winter. Even as late as the early 1800s, the quality and availability of artificial light was little better than it had been in Greek and Roman times-which is to say that men could choose between various grades of expensive lamp oils or candles made from animal fats. But all of this began to change in the 1820s. Americans found that lighting their homes was becoming increasingly affordable-so much so that by the mid-1860s, even poor, rural Americans could afford to brighten their homes, and therefore their lives, at night, adding hours of life to their every day. What made the difference? Individual freedom, which liberated individual ingenuity. The Enlightenment and its apex, the founding of the United States of America, marked the establishment of an unprecedented form of government, one established explicitly on the principle of individual rights. According to this principle, each individual has a right to live his own life solely according to the guidance of his own mind-including the crucial right to earn, acquire, use, and dispose of the physical property, the wealth, on which his survival depends. Enlightenment America, and to a large extent Enlightenment Europe, gave men unprecedented freedom in the intellectual and economic realms. Intellectually, individuals were free to experiment and theorize without restrictions by the state. This made possible an unprecedented expansion in scientific inquiry-including the development by Joseph Priestly and Antoine Lavoisier of modern chemistry, critical to future improvements in illumination.18 Economically, this freedom enabled individuals to put scientific discoveries and methods into wealth-creating practice, harnessing the world around them in new, profitable ways-from textile manufacturing to steelmaking to coal-fired steam engines to illuminants. . . .
Topic:
Development
Political Geography:
United States and America

1647. Democratic Talk and the Democratic Walk: Superficial Versus Sincere Support for Illiterate Voting Rights in Lebanon

Author:
Daniel Corstange
Publication Date:
05-2009
Content Type:
Working Paper
Institution:
Kellogg Institute for International Studies
Abstract:
Who supports illiterate voting rights? In the diverse societies of the developing world, suffrage restrictions on illiterate people can have both class and ethnic ramifications because illiteracy correlates with poverty and often with ethnic group membership. I demonstrate how examining the overlap of ethnic population distributions helps to identify individuals for whom satisfying material interests comes at the expense of identity interests and vice-versa. The salience of ethnicity in public discourse requires people to articulate identity demands that may be inconsistent with their material interests, opening up the possibility that what they say and what they think will diverge systematically. Empirically, I use an augmented list experiment in Lebanon to distinguish between superficial and sincere support for illiterate voting rights. I show that a direct question yields a sectarian answer in which Shiites are more supportive of those rights than are Sunnis or Christians, whereas an unobtrusive question produces an answer about material deprivation in which poor people are more supportive of illiterate voting than rich people.
Topic:
Democratization, Development, and Social Stratification
Political Geography:
Middle East, Arabia, and Lebanon

1648. Speed Kills: Analyzing the Deployment of Conventional Ballistic Missiles

Author:
Bruce M. Sugden
Publication Date:
07-2009
Content Type:
Journal Article
Journal:
International Security
Institution:
Belfer Center for Science and International Affairs, Harvard University
Abstract:
Should the United States deploy conventional ballistic missiles (CBMs) in support of the prompt global strike (PGS) mission? Most important, do the political-military benefits outweigh the risks of CBM deployment? The United States, if it works to mitigate the risk of misperception and an inadvertent nuclear response, should deploy near-term CBMs in support of the PGS mission. The prompt response of CBMs would likely be sufficient to defeat many time-sensitive, soft targets, provided actionable intelligence was available. Near-term CBMs, those options capable of being deployed prior to 2013, would have the required attributes to defeat their targets: payload flexibility, throw weight, and accuracy. More specifically, the U.S. Navy's Conventional Trident Modification is a cost-effective, near-term PGS option that would mitigate the concerns of CBM opponents. The large-scale use of midterm and long-term CBMs against mobile targets and hard and deeply buried targets, however, will require a wider range of technologies that have yet to mature. Thus, the United States should continue investing in research and development for a broad portfolio of PGS options to cover the emerging target set.
Topic:
Development
Political Geography:
United States

1649. The Use of Force against Terrorists

Author:
Christian J. Tams
Publication Date:
04-2009
Content Type:
Journal Article
Abstract:
Whether states can use force against terrorists based in another country is much discussed. The relevant provisions of the UN Charter do not provide a conclusive answer, but have to be interpreted. The present article suggests that in the course of the last two decades, the Charter regime has been re-adjusted, so as to permit forcible responses to terrorism under more lenient conditions. In order to illustrate developments, it juxtaposes international law as of 1989 to the present state of the law. It argues that the restrictive approach to anti-terrorist force obtaining 20 years ago has come under strain. As far as collective responses are concerned, it is no longer disputed that the Security Council could authorize the use of force against terrorists; however, it has so far refrained from doing so. More controversially, the international community during the last two decades has increasingly recognized a right of states to use unilateral force against terrorists. This new practice is justified under an expanded doctrine of self-defence. It can be explained as part of a strong international policy against terrorism and is part of an overall tendency to view exceptions to the ban on force more favourably than 20 years ago. Conversely, it has led to a normative drift affecting key limitations of the traditional doctrine of self-defence, and increases the risk of abuse.
Topic:
Security, Development, International Law, Terrorism, and United Nations

1650. Piracy, Law of the Sea, and Use of Force: Developments off the Coast of Somalia

Author:
Tullio Treves
Publication Date:
04-2009
Content Type:
Journal Article
Abstract:
Attacks against ships off the coast of Somalia have brought piracy to the forefront of international attention, including that of the Security Council. SC Resolution 1816 of 2008 and others broaden the scope of the existing narrow international law rules on piracy, especially authorizing certain states to enter the Somali territorial waters in a manner consistent with action permitted on the high seas. SC resolutions are framed very cautiously and, in particular, note that they 'shall not be considered as establishing customary law'. They are adopted on the basis of the Somali Transitional Government's (TFG) authorization. Although such authorization seems unnecessary for resolutions adopted under Chapter VII, there are various reasons for this, among which to avoid discussions concerning the width of the Somali territorial sea. Seizing states are reluctant to exercise the powers on captured pirates granted by UNCLOS and SC resolutions. Their main concern is the human rights of the captured individuals. Agreements with Kenya by the USA, the UK, and the EC seek to ensure respect for the human rights of these individuals surrendered to Kenya for prosecution. Action against pirates in many cases involves the use of force. Practice shows that the navies involved limit such use to self-defence. Use of force against pirates off the coast of Somalia seems authorized as an exception to the exclusive rights of the flag state, with the limitation that it be reasonable and necessary and that the human rights of the persons involved are safeguarded.
Topic:
Security, Development, Government, and Human Rights
Political Geography:
Kenya, United States, United Kingdom, and Somalia