Author Archives: jdingel

Rich country doctors' stupid moral claims about poor country doctors

Pablo spots stupidity:

Rich countries are poaching so many African health workers that the practice should be viewed as a crime, a team of international disease experts say in the British medical journal The Lancet…“The resulting dilapidation of health infrastructure contributes to a measurable and foreseeable public health crisis,” the article said. “The practice should therefore be viewed as an international crime.”

If anyone contributing to a phenomenon that might impede economic development is a criminal, we’re going to need a few more jails. Michael Clemens has already refuted this brand of moral nonsense:

“Ethical recruitment”, the mis-named practice mentioned in the BBC article of taking steps to block the hiring of African professionals, treats Africa as a homogenous mass because it applies to all countries indiscriminately.

If you think that limiting the movement of Ghanaian doctors is justified by the fact that Ghana doesn’t have enough doctors, ask yourself: Does Ghana have enough entrepreneurs? Does it have enough engineers? Does it have enough wise politicians? The answer is ‘no’ across the board, so the logical conclusion of this sort of thinking is that we will somehow develop Ghana if we stand at the airport and prevent all Ghanaians with any kind of skill from leaving, preventing them from accessing the very high-paying jobs to which most of us living in rich countries have access by birthright alone. That is ethically problematic at a minimum, as well as ineffective — trapping entrepreneurs in Ghana would not produce an efflorescence of investment.

In addition to being ethically questionable, the Lancet’s claim is factually incorrect. Clemens’ post also explains that the international movement of health care professionals is not a binding constraint on improving African health.

Rich country doctors' stupid moral claims about poor country doctors

Pablo spots stupidity:

Rich countries are poaching so many African health workers that the practice should be viewed as a crime, a team of international disease experts say in the British medical journal The Lancet…“The resulting dilapidation of health infrastructure contributes to a measurable and foreseeable public health crisis,” the article said. “The practice should therefore be viewed as an international crime.”

If anyone contributing to a phenomenon that might impede economic development is a criminal, we’re going to need a few more jails. Michael Clemens has already refuted this brand of moral nonsense:

“Ethical recruitment”, the mis-named practice mentioned in the BBC article of taking steps to block the hiring of African professionals, treats Africa as a homogenous mass because it applies to all countries indiscriminately.

If you think that limiting the movement of Ghanaian doctors is justified by the fact that Ghana doesn’t have enough doctors, ask yourself: Does Ghana have enough entrepreneurs? Does it have enough engineers? Does it have enough wise politicians? The answer is ‘no’ across the board, so the logical conclusion of this sort of thinking is that we will somehow develop Ghana if we stand at the airport and prevent all Ghanaians with any kind of skill from leaving, preventing them from accessing the very high-paying jobs to which most of us living in rich countries have access by birthright alone. That is ethically problematic at a minimum, as well as ineffective — trapping entrepreneurs in Ghana would not produce an efflorescence of investment.

In addition to being ethically questionable, the Lancet’s claim is factually incorrect. Clemens’ post also explains that the international movement of health care professionals is not a binding constraint on improving African health.

Latest Doha proposals are (too) conservative

Peter Gallagher isn’t optimistic about the latest set of Doha proposals:

As a rule of thumb, simple deals open markets. The more complex the arrangements, the more likely they are to be ‘fine-tuned’ to minimize their impact on the beneficiaries of protection.

The sixty pages of complex ‘modalities’, conditions, exceptions, second-thoughts and jargon in this paper are likely to deliver much less reform than the ‘headline’ numbers suggest. The complexity of the proposals and of the protection regimes in many developed and developing economies means it’s impossible to be sure about the results without seeing the application of the proposals in detail to each market. But, working from the averages, it’s likely that these proposals will bring about, at most, modest changes and no commercial impacts in some key trades…

HT: Muse

Debunking ag liberalization myths

The IMF’s Stephen Tokarick dispels some agricultural trade liberalization myths in the latest issue of the JEP:

The implicit or explicit argument that often follows hard upon the heels of the inflated estimates of the size of high-income country farm “subsidies” is that the support to farmers in high-income countries is extremely damaging to poor, developing countries— even more damaging than tariffs levied against developing-country exports. However, the effects of liberalizing trade in agricultural products is likely to be both smaller and more heterogeneous than such statements suggest. Some low-income countries are net exporters of agricultural products; others are net importers. The degree of substitutability between foreign and domestic agricultural products also varies substantially.

Those who oppose agricultural trade liberalization have their own favorite misstatements. One common claim often made by European trade negotiators is that if high-income countries cut agricultural tariffs worldwide, this step would erode the special treatment— often called “trade preferences”—that high-income countries currently make available to many of the lowest-income countries. As a result, they argue that the lowest-income countries could end up worse off as a result of agricultural trade liberalization. However, analysis shows that the magnitude of this effect, if it exists at all, is likely to be very small, and not nearly enough to counterbalance the more positive benefits of agricultural trade liberalization.

Of course, if you are a regular reader of Trade Diversion, you already knew that Oxfam’s big numbers conflate subsidies with tariffs and quotas, liberalization won’t have massive benefits for LDCs, the effects will be heterogeneous, and liberalization gains will exceed preference erosion losses.

Here’s a previous episode of myth-busting.

Microfinance in the United States

Well, this is ironic:

Bangladesh’s Grameen Bank has made its first loans in New York in an attempt to bring its pioneering microfinance techniques to the tens of millions of people in the world’s richest country who have no bank account.

The bank’s entry into the US, its first in a developed market, comes as mainstream banks’ credibility has been hit by the mortgage meltdown and many people are turning to fringe financial institutions offering loans at exorbitant interest rates.

Growth accelerations and replicating research

It would be interesting to see Dani Rodrik respond to this article (pdf) by Richard Jong-a-Pin and Jakob de Haan in the latest issue of Econ Journal Watch:

Economists treat replication the way teenagers treat chastity—as an ideal to be professed but not to be practiced (Hamermesh 2007, 1).

HPR’s [Hausmann, Pritchett, and Rodrik’s] finding that a political regime change increases the probability of an economic growth acceleration is wrong and the result of a data error. When we correct for this error and stick to the definition of political regime change as a three-unit change in Polity, we find that regime changes do not affect the probability that a growth acceleration occurs. We also find some evidence that economic liberalization increases the probability of a growth acceleration (sustained or otherwise)…

The work represented here was submitted, of course, to the Journal of Economic Growth, although in that version of the paper we had not yet pinpointed the data-description error in the Polity IV manual. The paper was rejected on the basis of the argument that our note is a “welcome correction, however, of limited significance for the main contribution of the original paper.” However, in their abstract, HPR state that one of their main conclusions is that “Political regime changes are statistically significant predictors of growth accelerations.”

Jakob de Haan blogs about the experience:

As our paper was a comment on a previously published paper in the Journal of Economic Growth, it is unlikely to be accepted by another journal. However, a relatively new electronic journal called Econ Journal Watch, recognizes the importance of replication in economics. The editor of that journal, Dan Klein, was therefore happy to publish our paper. It will be published in the first issue of 2008. Of course, HPR get the opportunity to reply to our critique.

Even though I am very happy with this new outlet, I feel that editors of all scientific journals should pay much more attention to replication. A starting point is that authors of published empirical research should commit to make their data available to anyone interested. Unfortunately, even this is not common practice.

Admittedly, the primary achievement of the Growth Accelerations paper was to change how we think about identifying economic growth in a relevant manner. I certainly didn’t recall the regime change finding when I thought of the article. Nonetheless, a data coding error seems like a substantive correction, and I haven’t seen any reply from Hausmann, Pritchett or Rodrik.

I should also note that the Hamermesh paper is interesting in itself.

Rodrik on growth accounting

What use is sources-of-growth accounting?

Aside from all kind of measurement problems, these accounting exercises say nothing about causality, and so are very hard to interpret. Say you found it’s 50% efficiency and 50% factor endowments. What conclusion do you draw from it? You could imagine a story where the underlying cause of growth is factor accumulation, with technological upgrading or enhanced allocative efficiency as the by-product. Or you could imagine a story whereby technological change is the driver behind increased accumulation. Both are compatible with the result from accounting decomposition. Indeed, I have yet to see a sources-of-growth decomposition which answers a useful and relevant economic or policy question…

So here is a contest for economist (or wannabe economist) readers of this blog: can you come up with an interesting question to which a sources-of-growth decomposition is the answer?

NAFTA will liberalize sugar

NAFTA prevails:

The sugar industry announced Friday it was abandoning efforts to insert a provision in the federal farm bill that would renew restrictions on the sugar trade between the United States and Mexico.

The decision came in the face of staunch opposition from the Bush administration, the corn sweetener industry and industrial sugar users.