Sunday, August 29, 2010
Friday, August 27, 2010
But he is now behaving really quite bizarrely and, I am afraid to say, starting to show signs of a destructive megalomania.
First of all he forced through a change in the Malawian flag because, he said, the country is now developed, and developed countries need a different flag. Aside from the fact that this is non-nonsensical, it shows he is becoming totally out-of-touch with reality. It also suggests that he wants to run the country as his property.
Yesterday, he threatened to shut down 'lying newspapers that are hell-bent on tarnishing [my] Government's image'. Malawi has wonderful press freedom, but THIS is an incredibly stupid and dangerous thing to say.
He says that the press is wrong to report that people are starving since Malawi has a food surplus. He may or may not be correct, but in any case, one does absolutely not preclude the other. Believing that it does suggests a leader who is out-of-touch with both logic and not open to new information if it feels wrong in some way to him.
Besides which, a threat such as this should not come from a President, but should be pursued through the legal system or a Press Complaints Commission.
I thought wa Mutharika would not succomb to that African problem of good leaders being corrupted by power, but he is proving me wrong. It's time to see these warning signs. It's time for wa Mutharika to go.
2/ Confessions of a facebook stalker
3/ Colour photos of Russia a century ago (HT: Aidwatch)
4/ What goes on in the brain when we experience déjà-vu?
5/ Why we are suckers for stories of our own demise
6/ Like it or not, parents shape their children's sexual preferences
7/ Does parenting rewire dads?
Thursday, August 26, 2010
*Part of the Insights into the Exciting Lives of Economists series :)
It is available from the Journal of Developing Areas. Below is a summary:
Theoretical models indicate that relative “power” of the male and female in a household matters for household consumption. In particular, household consumption should be skewed towards the preferences of the more powerful member.
The paper uses three proxies for “female influence” in the household: Female has secondary education or above; De facto female head of household; Female contributes greater than population average to total household income. Greater female influence is associated with increased proportion of household consumption of education; farming; hygiene; women’s clothing; and girls’ clothing. Female influence is negatively associated with consumption of fuel and male clothing.
Heckman two-step consumption function models are run to estimate the impact of male and female income share on each of several household consumption categories. Both relative income and education matter, and results reflect this. For example, as the share of female income in total household income increases, consumption of girls’ clothing also increases. Lower male education results in lower consumption of this category.
The impact of share of male income and share of female income is often non-linear. For example, as the share of household income accruing to the female increases, so does consumption of hygiene products, but this occurs at a decreasing rate.
The results suggest that Governments can use redistributive policies to redirect resources to household members whose preferences tend to be closer to their own policy objectives. For example, this may involve directing benefits towards mothers if child nutrition as seen as an important area to target.
I understand and have a lot of sympathy for this viewpoint. But - as I seem to constantly say - production (of goods, services) matters. These people are now producing things so there are more things in America for people to consume than there would be. That has to be a good thing. Of course, the negative part is that 749,142 are consuming less leisure, so that is a cost. In addition, there might be issues regarding the targeting - are they producing things that people want? If work itself has a value - and I think it does - then this has to be taken into consideration too.
I'm not sure where the balance lies in this case, but in my mind - despite all these things - these seem like expensive jobs to create.
Tuesday, August 24, 2010
2/ The most successful ever Dragon's Den pitch. I *love* THIS product - you can control your TV with a Harry Potter-esque wand!
3/ A Muslim artist was put on an FBI to-be-watched list and responded by putting his *every* move on the internet. (HT: The Daily Beast)
4/ Misadventures in urban planning. This is what poor people need.
5/ China considers executing fewer people. About time. I'd say zero would be the optimum number.
Monday, August 23, 2010
Friday, August 20, 2010
2/ Osborne most popular Conservative chancellor ever. Goodness-that's not one I would have expected.
3/ The BBC summarises well where the cuts will fall across Government. Watch that DfID space...
4/ Are internships institutional exploitation? I have some sympathy.
5/ An economist plays Monopoly (HT: The Lady V)
6/ Fun with serious data. Changing life expectancies. Look at the impact of HIV in South Africa.
7/ How to be a successful psychopath. Successful psychopaths who are company directors, high-ranking lawyers, economists???
8/ How to apologise. Different types of apology work with different people.
9/ Saudi court mulls verdict to cut defendent's spine. After all, it's in the Koran, and that is the literal word of God. Why should humans stop and think?
Wednesday, August 18, 2010
When I moved into the next room and found it was broken with a sorry note next to it. Then I got upset. Why did I get upset over a $5 ash tray?
Apart from the fact that I was already having a bit of a down day, it was worth a lot more than $5 to me. In classical economics, you buy something because you must value at *at least* the price you pay. If you value it less, then you won’t buy it. But there is no upper limit. In fact, I would have paid more than $5 for it.
So right from the start, if it broke, my feeling of loss would be more than losing $5. But then there are other factors. When I bought it, I had lots of other potential souvenirs to choose from. By the time I left Zim, I had only that (and several trillion Zim dollars). That pushed its value up further.
Then, I owned it. Economic psychology shows that when we own something, we automatically put a higher value on it than if we did not own it. This is not 100% logical in the pure, classical sense. But it may have evolutionary reasons.
I started to wonder how much I would be prepared to pay to get that ash tray back. That would then be a good representation of how much it was worth to me. I reckon around $30 to $40. Another way of putting it is that I was about as upset to see that broken ash tray as I would have been to have lost $30 to $40 from my wallet.
That is quite a lot for an ash tray for a non-smoker.
*$5 US, not Zim.
We have a nameless donor here which gives money rather generously to the Government of Lesotho. One of the things it funds is training sessions for civil servants. This is good. But it asks for the exact number of people who will attend first. If fewer people attend then money spent on, for example, lunch is expected to be returned.
This makes sense since why should it pay for people who were not there? It is also useful since it does want to account for all its money and minimize corruption opportunities.
But it makes it practically impossible to organize any training session. For example, if 25 people sign up to any course, then it is highly unlikely that 25 people will attend. There are many genuine reasons for this; for example, people get sick here, regularly and at short notice. People also often have to look after other sick people at short notice. Cars are not of the highest quality and regularly break down preventing people from getting to work. Emergencies happen at work and people have to do something at very short notice. Meetings that have to be attended are called at short notice and people often don’t know until the last minute that they have to go abroad for work. All this means that, there will never be the 25 people who were expected at the course.
So funds have to be returned but there is no Government money to fill the gap. The paperwork is tiresome. And, all in all, it probably isn’t really worth the effort.
Unfortunately, this donor, is seeking to minimize corruption opportunities to almost zero and to ensure that organization is at 100%. But neither of these are optimal.
Risk should be optimized, not minimized.
For example, I choose to cross the road, despite the fact that there is a risk. I get in a car, eat in restaurants, drink more than I should. I sometimes even take the risky decision to leave my house in the morning – and that despite the impact on my blood pressure of going to work, some days! All this because taking some risk is worth it for the benefits.
In this case, the result of minimizing the risks is that the training doesn’t happen – so there are no benefits either.
Secondly, if only total perfection is acceptable, we wouldn’t do very much.
I see this constantly in the Ministry of Finance. Partly due to other people being constantly critical of work, there is a culture of ensuring that everything that is done, is as perfect as it can be. This means that a long time is spent perfecting documents. The cost is high in terms of time but there is very little value added usually. The concept of diminishing marginal returns doesn’t really sink in. So everyone produces very little work but makes sure that when something is done, there is very little to criticize on it, or – more likely – involves either management or a large group of people so that no one will take any criticism. That also ensures that any work will take a long, long time to do.
It is a real pity that donors, which should be setting good examples, are sometimes worse that Government in terms of stupid petty rules that encourage laziness by giving excuses not to do anything, discourage taking the initiative – indeed punish it, and being cautious to the point of not getting anything done.
Why even bother?
Friday, August 13, 2010
I think we need to go back to some basics here. In the world, and in a country (in the long run) we can only consume what we produce. Our wages allow us to purchase the product of other people's hard work. But in exchange, they can purchase the product of our hard work.
If I earm more money then I can buy more things that other people have produced. But wait - where are the extra things I am buying coming from? You have to work harder to produce them (thank you very much).
But what do you get out of it? Probably more of my money. What will you do with that? You will want to buy more of the things I make and so I will have to work harder to make them. What is happening is that we all have to produce more things - either through harder work or through smarter work (we can call it 'productivity' if we like).
So, it seems that we can all have higher wages if we all produce more and there is no problem. And this is what happens in real life; Wages and productivity are very closely linked.
What happens though, if we don't produce any more? We all have more money (great), but we have no more things to buy (less great). With a limited supply of 'things', but lots of cash floating around, you will want more of my cash to sell me the product of your hard work. And I will want more of your cash. So we all raise our prices. This is inflation.
So, if you want to ask your employer for more money, you'd better work harder or smarter. Else all you are doing is creating inflation. Or maybe making your employer go bust and making yourself unemployed. Fun.
Click on image to enlarge.
I got out of my car and asked him if he'd broken down. "No."
- So your car works?
- So you can move it?
- Yes. I just need to sort this out.
He was looking at a little scratch on his roof. I've no idea what happened. The barrier didn't come down on him. Maybe a security guard threw something and it hit his car. Maybe something fell down.
I got really angry. Had the man noticed at all the *huge* queue of cars building up? I doubt it.
- I'm sorry for whatever's happened to your car, but there will be accidents on the Kingsway (main road) if you don't move your car,
I said. Water off a ducks back. I repeated rather more angrily. Slowly other people started to get out of their cars. The security guard repeated to him what I said in Sesotho. He begrudgingly got back into his car and moved it.
The man has an office down the corridor from me and I normally say Hi to him. But that total lack of consideration for other human beings (did he even notice other human beings existed?) and the danger he was posing (not that that would have entered his mind for even a second, probably), got me pretty annoyed.
Thursday, August 12, 2010
The aim is noble - the method is stupid.
If the aim is to reduce water use on farms, then increase the price and trust the farmers to know what is the best and most efficient use of the resource. It's not rocket science.
Every quarter a bill is supposed to be put in my letter box for local taxes - they are supposed to pay for services like rubbish collection. In fact, since I got here, this is only the second one I have received. I lost the first one and assumed it would be added to future bill, but no future bill came during the fiscal year.
This time, after asking three people where the correct building was to pay my tax, and then asking further people in there where to go, I finally managed to speak with someone.
Unfortunately, it was lunch time. And I can't pay my tax during lunch hours. No. What I have to do is to take time off work and pay it during working hours. Of course, if I take time off work, there is less production in Lesotho and the country is poorer as a result.
But that's okay. That is the choice that has been made. Less wealth, more leisure. It's the same choice Europeans make compared with Americans. It's just a pity that here, less wealth means less education, less health, less roof on house, less basic food stuffs.
Of course, equally unfortunately, it is also reasonably likely that production won't actually be impacted upon very much as many people are taking time out of doing very little work anyway.
Tuesday, August 10, 2010
2/ The Multi-Dimensional Poverty Index (MPI) and its origins.
3/ How economists see Government and How economists advise the President.
4/ Factory work is nearly as good as marriage.
5/ Mother-Baby Pack model helps prevent mother-to-child HIV transmission in Lesotho.
6/ Coalition has learnt Mandelson's spin tricks.
7/ Hatred against a Tunisian singer because he performed in a Tunisian synagogue. (Although the article doesn't have the guts to give it this headline.)
Friday, August 6, 2010
2/ Count the passes - how you can miss really important things.
3/ Goldman Sachs bans swearing
4/ In defence of the macroeconomic forecasters (thank you!)
5/ Professions with the highest depression rates. Apparently not the Development Set.
Their letter reportedly states: "How can a Masters degree holder report to someone with an Associate degree in Mass Communication, or whatever?". At first this seems kind of a fair point. But really, education should not be the only thing that determines position. Other skills matter too. In particular, soft skills such as ability to communicate well with others, work hard, think logically, persuade others etc. matter.
There is absolutely no reason why a competent person with a lower level of education should not be the boss of someone with more education but who is less competent. In the Lesotho civil service, it is, in fact, illegal to promote someone based on merit. Only education, training and longevity matters. The result is that incompetent people who contribute little but have masters degrees can get promoted above competent hard workers. Of course, we eventually lose the competent people - either because they get fed up and find work elsewhere or because they become so demoralised that they stop contributing much.
The article also reports the letter as saying: "This is a university; it has to be managed by doctors and professors."
I'm sorry? Having a PhD makes you a good manager? The skills you need to get a PhD and be a useful academic are totally different from those required to be a good manager. A good manager is a good communicator, a good motivator, highly organised, has great inter-personal skills, knows how to praise and punish, has an intuitive understanding of people and their psychology, and can see the bigger picture.
A good academic has to spend long hours working alone, is highly specialised. My experience of academia (I have a PhD) is that many academics are not good communicators and not great at interacting with other people - indeed, they are in academic precisely for this reason. Many are also badly organised - think the crazy professor with hair flying everywhere.
In addition, it takes many years and a lot of money to become a good academic. There are more managers in the world and many of their skills are intuitive.
Of course, it is possible to be a good academic and a good manager - but, in general, should doctors and professors really be managing a university?