Thursday, July 31, 2008

Religion, Culture and Tribe are mixed up on Indian Subcontinent

A holy relic, believed to be a hair from the beard of Prophet Muhammad, was displayed before Kashmiri Muslims during special prayers on the occasion of the Islamic festival of Shab-e-Meraj at Hazratbal Shrine in Srinagar, the summer capital of Kashmir.

Pakistanis Aided Attack in Kabul, U.S. Officials Say
American intelligence agencies have concluded that members of Pakistan’s powerful spy service helped plan the deadly July 7 bombing of India’s embassy in Kabul, Afghanistan, according to United States government officials.

Explainer on Turkey Crisis

So people can wear tank-tops to the universities?

Sure, no problem with that. When we talk about Turkish secularism it's almost a misnomer. It's not the secularism that we enjoy here in the United States, where people can wear whatever religious garb they want. In Turkey, the authorities are directly involved in controlling religion. The state is directly involved in engaging surveillance of the public sphere to ensure that religion doesn't enter the public sphere. And that's the difference. It's state control of religion to enforce this principle that religion shouldn't enter the public sphere.

Economic survey of Turkey 2008

Ms. Economy calls Olympics a `Nightmare' for China

Elizabeth Economy Calls Olympics a `Nightmare' for China
Elizabeth Economy, director of Asia studies at the Council on Foreign Relations, talks with Bloomberg's Tom Keene about pollution in Beijing, preparation for the Olympics, which begin Aug. 8, and criticism of China's government.

The Book of Vice: Very Naughty Things (and How to Do Them)

The Book of Vice: Very Naughty Things (and How to Do Them)
by Peter Sagal

More Monica Goodling

Sloppy writing reflects (and advertises) sloppy thinking

Over at MR, Tyler Cowen quotes John Cochrane on the Milton Friedman protest letter; is to me sadder still how atrociously written this letter is. These people devote their lives to writing on social issues, and teaching freshmen (including mine) how to think and write clearly. Yet it’s awful.

Milton would probably have said the same thing as he had said to Gary Becker;
"People often excuse bad writing by saying that they know what they mean, and simply have difficulty expressing it. That is nonsense. If you cannot state a preposition clearly and unambiguously, you do not understand it.I took that lesson to heart. I learned that trying to write something clearly and unambiguously was the best way to find errors and omissions in my reasoning and clarify my own thought.

It was in a letter to Gary Becker in May 1955, when I was in Britain, referring to a draft of his thesis that he had sent to me: Nine times out of ten, I wrote after criticizing his exposition, sloppy writing reflects (and advertises) sloppy thinking.

Milton Friedman on Iraq War
Anecdotes about Milton Friedman

"I Do Not Believe the State Has Any Right to Tell Me What to Put In My Head"

Macro-Modelling for Poor Countries- case of Mali

Going over Mali's Poverty Reduction Strategy Paper's I came over the following under 'Capacity building in macro-economic modelling and analysis';
-Preparation of micro-simulation model (MEGC) for analysis of impacts of exogenous shocks and policy measures on poverty and income distribution (World Bank financing)

-Macro-sectoral forecasts model, as tool for analysis of growth-oriented sectors.

For Comment: How much economic modelling is required before you can reduce poverty?


The country's budget planning gets an 'A' according to one rating;
Mali’s MTEF had the top “A” rating in its 2004 HIPC tracking exercise (question 7). However, a more recent assessment finds inadequate integration among the many tools developed to support reforms, including the MTEF, the sector MTEFs, the macroeconomic framework, the new budget nomenclatures, and the multi-year investment program. Timetables of the different exercises aren’t properly synchronized. Sector MTEFs are prepared mainly to satisfy donors, and are separate from the program budget process.

Promises from the latest Letter of Intent
Mali is vulnerable to external or natural exogenous shocks. Without the fiscal space to respond rapidly to ad hoc demands, there is a risk that macroeconomic stability and the development program will be undermined. The Government considers that in the mediumterm, a zero basic balance is the most appropriate budget target for responding to emergent needs. In 2008 the deficit in the basic balance should be 1.9 percent of GDP, compared with 1.1 percent in 2007, reflecting the budgetary impact of the terms of trade. The aim is to reduce the deficit to 1 percent of GDP in 2009 and achieve balance in 2010. In order to respect the programming of expenditure to reduce poverty, measures have been implemented to correct the downward trend in the tax to GDP ratio observed since 2005....

Improving the quality of public spending remains a top priority. In coordination with our external partners, measures have been included in the Government Action Program for Improving and Modernizing Public Finance (PAGAM-GFP) to respond, among other things, to the conclusions of the Public Expenditure and Financial Accountability (PEFA) exercise. An action plan incorporating PEFA measures has been prepared for 2008. Efforts are under way to pursue implementation of the PAGAM-GFP/PEFA action plan, in particular by completing the connection of authorizing officers (ministries, institutions, regions) to the computerized expenditure system; improving the execution rate of programs by devolving parts of the Procurement Office to the regions; reviewing the Procurement Code; shifting gradually all donors from projects to budget support; and putting in place an economic and financial analysis unit to help strengthen the capacities of the Finance Committee of the National Assembly.

Mali - Public expenditure review

Mali- Creating Fiscal Space
Public Expenditure Management in Francophone Africa: A Cross-Country Analysis

Development of the cities of Mali : Challenges and priorities

Mali budget calendar
  • Ministry review of budget-programmes
  • Preparation of macro-fiscal framework as part of the Medium Term Budget Framework (MTBF)
  • Preparation of Budget Circular (including ceilings and donors disbursement projections)
  • Preparation by sector ministries of draft annual budget estimates, including the detailed budget-programmes, on the basis of sector expenditure ceilings in line with the CBMTMEF review of ministries’ budget requests, including the budget-programmes
  • Budget negotiations and finalisation of draft Budget d’Etat
  • Adoption of draft Budget by Council of Ministers
  • Government submits the draft Budget d’Etat to the National Assembly
  • Examination and adoption of the Loi de Finances by the National Assembly

Doing business 2008 Mali

Happiness is ....

A Filipino couple made the best of travel in monsoon rains in Manila.

Tuesday, July 29, 2008


Only recently, however, have economists turned their attention to vengeance and tried to measure it in the real world. In a working paper published last month on the Web site of the National Bureau of Economic Research (, Naci H. Mocan, an economist at Louisiana State University, gathered information on 89,000 people in 53 countries to draw a map of vengefulness. What he found was that among the most vengeful are women, older people, the poor and residents of high-crime areas.

“There was a question of whether or not we can quantify vengeful feelings in a scientific fashion,” Mr. Mocan said. “It’s the first analysis of the issue looking at actual data.”

It turns out that personal attributes — age, income, gender — as well as the characteristics of one’s culture and country contribute to a person’s desire for revenge, Mr. Mocan said. “A feeling such as vengeance,” he said, “which can be considered primal, is nonetheless influenced by the economic and social circumstances of the person and the country he or she lives in.”

For economists, Mr. Mocan’s work, while still preliminary, opens up a new area for exploration. “I think this is really important research,” said Daniel Houser, a professor at George Mason University specializing in experimental economics and emotion. “I’m not aware of any work in economics that tries to capture individual differences in vengeful feelings.”

In the last couple of decades a lot of work has shown how important trust and reciprocity are in developing efficient markets, Mr. Houser explained, and what helps to create trust is punishment. Yet punishment can also spiral out of control, and people can get stuck in a retaliatory cycle, just as in a nasty divorce or a longstanding family feud.

“How do you calibrate the proper level of punishment to promote effective market relations?” Mr. Houser asked. It may turn out, he said, that “how much you want to punish is connected to the likelihood of creating a more formal market economy.”

Mr. Mocan collected data compiled by a United Nations Interregional Crime and Justice Research Institute survey from the 1990s and 2000. People were asked what would be an appropriate sentence for a 20-year-old man found guilty of stealing a color television if it was his second offense. The punishments ranged from alternatives to prison through two to six months in jail, all the way to a life sentence. Mr. Mocan tried to take account of the different values of a television in different countries, the effectiveness of the legal system and the going rate, if you will, for other crimes.

In China, Romania and Botswana, for example, nearly 40 percent of participants preferred a prison sentence of four or more years. In South Africa the rate is 25 percent; 18 to 20 percent in Egypt, Ukraine and Paraguay; 16 percent in Canada and Indonesia; 12 percent in the United States and the Philippines; about 4 percent in Norway and Slovenia; and 1 percent in Belgium and Spain.

Within a given country, people who have been victims of the same kind of crime (here, a burglary) tend to be more vengeful, but not if they have been victims of a different crime, like mugging.

Most of Mr. Mocan’s findings confirm what researchers in different disciplines have already found: that vengeful feelings are stronger in countries with low levels of income and education, a weak rule of law and those who recently experienced a war or are ethnically or linguistically fragmented. Anthropologists tend to believe that vengeful feelings were useful in binding a family or group together in early human society. They were protective devices before states were established and did the job of punishing wrongdoers.

“The results make good intuitive sense, confirming what we already suspected,” said Tyler Cowen, the author of “Discover Your Inner Economist: Use Incentives to Fall in Love, Survive Your Next Meeting and Motivate Your Dentist.”

-Calculating Economics of an Eye for an Eye

Can Terrorists be bribed?

A recent book event at World Bank, featuring Fukuyama amongst others;

Terrorism, Economic Development and Political Openness, edited by Philip Keefer and Norman Loayza.

Cross-national evidence identifies a nuanced role for economic development in reducing terrorist activity. Chapters by Blomberg and Hess support policy maker conclusions that poverty drives terrorism, finding that higher incomes impede terrorist activity. Krueger and Laitin, on the other hand, find little economic foundation for terrorist origins. Why the different conclusions? Krueger and Laitin investigate the overall effects of income across all countries. In “From (No) Guns to Butter,” Blomberg and Hess argue that the effects may differ between richer and poorer countries. Looking at these two groups of countries separately, they find that higher incomes significantly reduce the threat of terrorism in poorer countries, while the opposite holds in richer countries. Pooling all countries, the two effects would cancel out. The aggregate result may then mask the important role of economic development to offset terrorist threats to poorer countries. Because of methodological and data challenges, however, we must recognize that the issue is not yet resolved.

In contrast to the lack of conclusive evidence on whether the poverty of nations is a determinant of terrorism, the evidence is more uniform that individual poverty does not make people more likely to support or participate in terrorist activity. In a survey of 6,000 Muslims from 14 countries, the poorest respondents were the least sympathetic to terrorism (Fair and Haqqani 2006). Krueger and Laitin, Laitin and Shapiro, and Llussá and Tavares, in this volume, review evidence showing that individual terrorists are neither poor nor uneducated.

The second question of concern to this volume’s contributors is whether weak governance and closed political systems foment terrorism. Results in Krueger and Laitin and Blomberg and Hess, though using substantially different approaches, coincide in finding that terrorism is more likely to originate in countries that exhibit closed political systems. Their findings lend strong support to policy maker assertions that good governance and political responsiveness to citizens are fundamental deterrents of terrorism.

Krueger and Laitin and Blomberg and Hess also agree that the economic characteristics of countries affect whether they will be the target of terrorist activity. This leads to a provocative dichotomy. The origins of terrorism seem to be in countries that suffer from political oppression; the targets are countries that enjoy economic success....

The conclusion that terrorists are driven not by personal poverty, but by the political and economic climate of the countries from which they come raises new questions. Why should the social environment be more important than individual income? Why are terrorist organizations more common in countries with difficult political climates? In their chapter, Laitin and Shapiro provide reason to believe that the answer lies in the challenges of constructing a terrorist organization. Even though terrorism is not a purely ideological phenomenon, terrorist organizations depend on ideologically motivated, educated recruits. Unlike, for example, trench warfare, terrorism requires individual initiative and the exercise of judgment. Close monitoring by terrorist leaders of their “employees” is not possible. Ideological commitment helps solve part of this contracting problem. So also does an emphasis on recruiting well-educated individuals, who are most likely to come from more prosperous families.

Laitin and Shapiro emphasize that terrorism is not simply the direct outcome of irrational behavior. Terrorism is a complex strategy to achieve economic and political goals, having roots in distinct cultural and religious differences and using ideological commitment to sharpen its organization. Their conclusion is not surprising and could extend to the role of cultural and religious factors in social conflict throughout history. The One Hundred Years War is just one example of prolonged conflict in the West in which religious motivations were intertwined with other serious economic and political differences.

Their argument explains why terrorists themselves are rarely poor and why terrorist organizations are most likely to emerge in politically closed countries. On the one hand, terrorist organization is difficult and requires individuals with substantial human capital, which is more prevalent in families rich enough to educate their children well. On the other hand, to persuade such well-educated, relatively prosperous individuals to join a terrorist organization in democratic countries is difficult: the ideological payoffs are fewer and peaceful alternatives to terrorist methods are more abundant and effective. This also explains the paradox that individual poverty is less associated with terrorist activities than national poverty. National incomes and the political responsiveness of national governments are closely related: political environments that are repressive enough to facilitate terrorist recruitment are less likely to attract substantial investment and entrepreneurial activity.

The Riddle of Terrorism
Economics and Terrorism: What We Know, What We Should Know and the Data We Need

Terrorism and Civil War

Kto Kogo?: A Cross-Country Study of the Origins and Targets of Terrorism

The secret report about food prices?

A note on rising food prices;
Summary: The rapid rise in food prices has been a burden on the poor in developing countries, who spend roughly half of their household incomes on food. This paper examines the factors behind the rapid increase in internationally traded food prices since 2002 and estimates the contribution of various factors such as the increased production of biofuels from food grains and oilseeds, the weak dollar, and the increase in food production costs due to higher energy prices. It concludes that the most important factor was the large increase in biofuels production in the U.S. and the EU. Without these increases, global wheat and maize stocks would not have declined appreciably, oilseed prices would not have tripled, and price increases due to other factors, such as droughts, would have been more moderate. Recent export bans and speculative activities would probably not have occurred because they were largely responses to rising prices. While it is difficult to compare the results of this study with those of other studies due to differences in methodologies, time periods and prices considered, many other studies have also recognized biofuels production as a major driver of food prices. The contribution of biofuels to the rise in food prices raises an important policy issue, since much of the increase was due to EU and U.S. government policies that provided incentives to biofuels production, and biofuels policies which subsidize production need to be reconsidered in light of their impact on food prices.

Your Congress at Work

Army of Sucide Bombers?

C.I.A. Outlines Pakistan Links With Militants

Latest IMF Survey

IMF Survey - July 2008

Commodity Price Surge Impact
Impact on African Economies
Factors Behind Oil Price Surge
Jeddah Meeting on Oil
Policy Response to Price Surge
Haiti Interview
Norway’s Sovereign Fund
Mexico: Achieving Full Potential
Switzerland’s Monetary Policy
Mauritius: New Growth Miracle?

Human Nature meets Mother Nature

Encounters at the End of the World- a great documentary

A review from NYT;
One of the beauties of “Encounters at the End of the World” is that all the furry and floating animals are no more wondrous than the bipeds tramping through and around McMurdo: the linguist turned philosopher, the banker turned bus driver and the female adventurer who, for drama and odd entertainment, likes to have herself zipped up in a carryall bag. (She’s her own baggage.) Mr. Herzog opens his mind, heart and eyes to all these wayfarers who — despite the persistent strain of melancholy that touches each and every person who appears on camera — seem eerily at peace at the bottom of the world. One reason may be that, like Mr. Herzog, more than a few evince a deep-felt pessimism about both the present and the future.

If this were a nature documentary like any other, the casual talk about global warming and other calamities might cast shadows across this bright expanse. But there’s something about Mr. Herzog — including the accidental if now well-practiced comedy that colors even his most dramatic pronouncements — that inevitably keeps his pictures from growing too dark. One reason is beauty, which in his hands has a way of keeping the worst at bay; it is, after all, hard to fully despair in the face of so much of the natural world’s splendors. Another reason, I think, has to do with Mr. Herzog’s seemingly unshakable faith in human beings, who for all their misdeeds at times reach a state of exaltedness. They soar — just like that jellyfish.

Monday, July 28, 2008

Career Advice from Google's Chief Economist

Statisticians, sexy career of the next decade
- Hal Varian

I found his comments about 'apprenticeship model' of learning quiet interesting.

And a suggestion for a great course- QMSS, Columbia

Albinos in Tanzania

dozens of albinos have been murdered and their bodies dismembered as some witch doctors claim that the use of albino body parts can help people to become rich

The Hammer Against Witches

Bush and Batman quotes


Chart of the Day: 9/11 Vs. Subprime Shocks

World Bank Report on Public Sector Reforms - What works and Why?

How can we end poverty? The determinants of development

From Good to Great … to Below Average

Islam and apostasy

Do economists need brains?

Chance of Obama-Clinton Ticket Is Seen as Unlikely

Uganda-A grumpy kingdom

Zimbabwe to lop zeroes off currency

Too Big to Fail?

Summers Vindicated (again)

Global Financial Stability Report Market Update

NYT vs WSJ on gender issues

The Origin of African Checks and Balances

Something we often forget

Quote of the Day on government public financial reforms;

Even when developed to the ultimate stage of perfection, governmental accounting cannot become a guaranty of good government. At best, it can never be more than a valuable tool for promotion of sound financial management. It does not offer a panacea for all the ills that beset representative government; nor will it fully overcome the influence of disinterested, uninformed citizens. It cannot be substituted for honesty and moral integrity on the part of public officials; it cannot eliminate the demands of selfish interests, whether in the form of individual citizens, corporations, or the pressure groups which always abound to influence government at al levels-(Mikesell, 1956: 10).

World Bank Support for Public Financial Management: Conceptual Roots and Evidence of Impact by Clay G. Wescott

via IMF PFM blog

Recently from IFC

Measuring Impact Framework;
The resulting Measuring Impact Framework is designed to help companies understand their contribution to society and use this understanding to inform their operational and long-term investment decisions and have better-informed conversations with stakeholders.

Try their EXCEL toolkit.

The Debate - Is Google Making us Stupid

Herb Simon, "a wealth of information creates a poverty of attention."

Is Google Making Us Stupid? by Nicholas Carr

Conversation continues on Britannica Blog, The Edge

For sense on the topic listen to this podcast on EconTalk with Hal Varian

God, Guns + Gays- hiring score for US Attorneys

Gonzales Aides Broke Laws in Hiring, Report Concludes

A longtime prosecutor who drew rave reviews from his supervisors was passed over for an important counterterrorism slot because his wife was active in Democratic politics, and a much-less-experienced lawyer with Republican leanings got the job, the report said.

Another prosecutor was rejected for a job in part because she was thought to be a lesbian. And a Republican lawyer got high marks at his job interview because he was found to be sufficiently conservative on the core issues of “god, guns + gays.”

The report, prepared by the Justice Department’s inspector general and its internal ethics office, centered on the misconduct of a small circle of aides to Mr. Gonzales, including Monica Goodling, a former top adviser to the attorney general, and Kyle Sampson, his former chief of staff. It also found that White House officials were actively involved in some hiring decisions.

Sunday, July 27, 2008

Institutions vs. collaboration

Clay Shirky at TED

Lecture of the Day- Time Management

Another lecture from the late Randy Pausch;

Questions about the need for fiscal rules

Over at Stumbling and Mumbling an interesting question;

Which raises the question: why do we need external rules to do this? Why can’t the electorate do it? Younger voters should see that big borrowing is merely deferred taxation, and punish governments for imposing it. And older voters who care about their children and grandchildren should also punish governments.

So why don’t they? One possibility is that our electoral system is just too clumsy to permit them to express their discontent; we are only ever offered a choice of job-lots of policies, not individual ones.

Another possibility is that, for all our drooling and drivelling, we as a nation don’t actually care about our children.

Whichever it is, let’s be clear. If we need fiscal rules, it is only because of moral and/or political failings. But are technocratic constraints really an adequate substitute for adequate political structures or more sophisticated moral sensibilities?

Economic Loss of Cyclone Nargis

The total economic losses amount to about 2.7% of the projected 2008 GDP, with the effects of the cyclone concentrated on a region important for agriculture and fishing in Myanmar.

Recovery needs, which are estimated at just over a total of US$1 billion over the next 3 years, include the most urgent priorities of significant food, agriculture, housing, basic services and support to communities for restoring their livelihoods and rebuilding assets

-First comprehensive picture and analysis of the impact of Cyclone Nargis in Myanmar

My Guantánamo Diary

My Guantanamo Diary: The Detainees and the Stories They Told Me
by Mahvish Khan

The Last Lecture

Professor Aimed 'Last Lecture' At His Children ... and Inspired Millions
The Online Legacy of Professor Pausch

India and Pakistan conflict explained by The Onion

via Sepia Mutiny

Saturday, July 26, 2008

Have a Great Weekend!

Assorted on Reading and Books

Literacy Debate: Online, R U Really Reading?
“Learning is not to be found on a printout,” David McCullough, the Pulitzer Prize-winning biographer, said in a commencement address at Boston College in May. “It’s not on call at the touch of the finger. Learning is acquired mainly from books, and most readily from great books.”

Ben Casnocha: What I've Been Reading

Business Books

Economic Gangsters: Corruption, Violence, and the Poverty of Nations
by Raymond Fisman , Edward Miguel

Reading the OED

The Book Show

Brand Obama

Obama's grandmother stands by a campaign sticker

How to brand ... a presidential candidate

Headline of the Day

US man charged for shooting mower;
A 56-year-old man from the Midwestern US state of Wisconsin has been arrested after shooting his lawn mower in his garden because it would not start....

Police officers said Mr Walendowski had told them: "It's my lawn mower and my yard, so I can shoot it if I want."

Caption Contest: What do you think Paulson is thinking?

Can Hank Paulson Defuse This Crisis?

Economic Attribution Error

Freakonomics Blog and Parental Control

The internet access I use have parental control. Guess the reason they give for blocking the NYT's Freakonomics Blog- weapons-websites which promote legal weaponry such as firearms, knives, swords, or related items. These sites may offer sales, collection or maintenance information, or promote legal ownership of weapons.

Book recommendation

Mohamed El-Erian discuses his book, When Markets Collide: Investment Strategies for the Age of Global Economic Change

Please listen to his comments about Bill Gross (45th to 48th minute).

Podcast of the Day

Harvard's Glaeser Says Home Prices Need to Fall Further

Housing Supply and Housing Bubbles

Why Globalization is good for Music

From Devendra Banhart's Smokey Rolls Down Thunder Canyon ;

Thursday, July 24, 2008

Why Israel should attack Iran

A great Israeli economist explains why war is rational;

But one Israeli columnist writes;

For or against bombardment, Israel never thinks in terms of beyond tomorrow. It acts like a person who puts buckets in a house with a leaky roof instead of thoroughly fixing the roof. So we bombard Iran, and even if it is successful and we do not have to pay a heavy price for it - a dubious scenario - what happens then? What will happen when Egypt wants a bomb? Will we bomb again? And Saudi Arabia, Jordan, Syria and Iraq? And perhaps Hezbollah has some "dirty bomb" or other? And will we "allow" Turkey to go nuclear? Will we bombard and bombard, and live forever by bombardment?

And a minister, says alternatives to attack on Iran running out

Using Bombs to Stave Off War
Iran’s leaders would do well to rethink their gamble and suspend their nuclear program. Bar this, the best they could hope for is that Israel’s conventional air assault will destroy their nuclear facilities. To be sure, this would mean thousands of Iranian casualties and international humiliation. But the alternative is an Iran turned into a nuclear wasteland. Some Iranians may believe that this is a worthwhile gamble if the prospect is Israel’s demise. But most Iranians probably don’t.

For Your Comments
; What do you think are the odds of Israel attacking Iran before the end of this year.

Obama captures Berlin

Obama in Berlin: We’re a People of Improbable Hope

Obama’s Speech in Berlin;
People of Berlin – and people of the world – the scale of our challenge is great. The road ahead will be long. But I come before you to say that we are heirs to a struggle for freedom. We are a people of improbable hope. With an eye toward the future, with resolve in our hearts, let us remember this history, and answer our destiny, and remake the world once again.

Where he was before

Angus Maddison on Chinese Growth

Measuring China’s Economic Performance (subscription required)
Angus Maddison & Harry X. Wu
China is the world’s fastest growing economy and is also the second largest. However, the official estimates of the Chinese National Bureau of Statistics exaggerate GDP growth and need adjustment to conform to international norms as set out in the 1993 System of National Accounts (SNA). This paper presents and discusses the necessary adjustments. The two major contributions are new volume indices for the industrial sector and for "non-material" services. Finally, in order to measure the level of Chinese GDP in internationally comparable terms, the authors use a measure of purchasing power parity (PPP) instead of the exchange rate.

Marketers help with developing healthy habits in Africa

A FEW years ago, a self-described “militant liberal” named Val Curtis decided that it was time to save millions of children from death and disease. So Dr. Curtis, an anthropologist then living in the African nation of Burkina Faso, contacted some of the largest multinational corporations and asked them, in effect, to teach her how to manipulate consumer habits worldwide.

Dr. Curtis, now the director of the Hygiene Center at the London School of Hygiene & Tropical Medicine, had spent years trying to persuade people in the developing world to wash their hands habitually with soap. Diseases and disorders caused by dirty hands — like diarrhea — kill a child somewhere in the world about every 15 seconds, and about half those deaths could be prevented with the regular use of soap, studies indicate.

But getting people into a soap habit, it turns out, is surprisingly hard.

To overcome this hurdle, Dr. Curtis called on three top consumer goods companies to find out how to sell hand-washing the same way they sell Speed Stick deodorant and Pringles potato chips. ....

he companies that Dr. Curtis turned to — Procter & Gamble, Colgate-Palmolive and Unilever — had invested hundreds of millions of dollars finding the subtle cues in consumers’ lives that corporations could use to introduce new routines.

If you look hard enough, you’ll find that many of the products we use every day — chewing gums, skin moisturizers, disinfecting wipes, air fresheners, water purifiers, health snacks, antiperspirants, colognes, teeth whiteners, fabric softeners, vitamins — are results of manufactured habits. A century ago, few people regularly brushed their teeth multiple times a day. Today, because of canny advertising and public health campaigns, many Americans habitually give their pearly whites a cavity-preventing scrub twice a day, often with Colgate, Crest or one of the other brands advertising that no morning is complete without a minty-fresh mouth.

A few decades ago, many people didn’t drink water outside of a meal. Then beverage companies started bottling the production of far-off springs, and now office workers unthinkingly sip bottled water all day long. Chewing gum, once bought primarily by adolescent boys, is now featured in commercials as a breath freshener and teeth cleanser for use after a meal. Skin moisturizers — which are effective even if applied at high noon — are advertised as part of morning beauty rituals, slipped in between hair brushing and putting on makeup.

Via Nudge

A World Free for Tigers

From the World Bank;

Hoisted from Comments by Tony Whitten;
As one of the Bank's team which organized the Tiger Event on June 9 and the author of the blog to which you link, let me give my perspective on this reasonable question. I regard biodiversity protection (e.g. of tigers) as an integral part of development and is part of our obligation to support countries which have signed the Convention on Biological Diversity. The continued survival of wild tigers is a good indicator of sound forest management, rural development strategies, infrastructure development, and governance. The conservation of biodiversity (and other global public goods is a major part of the sustainability agenda) and this is clearly recognized in the MDGs. Biodiversity conservation can also produce significant co-benefits to communities living in and around natural habitats. All the biodiversity work we support is done with a view to social condition and social impact and as such is an integral part of poverty alleviation and economic growth. Details of our large portfolio of biodiversity projects can be found on

Lecture of the Day

Tyler Cowen lecturing on globalization and music

Here's the podcast


One of the best Cuba books

Havana Nocturne: How the Mob Owned Cuba and Then Lost It to the Revolution

"... The mobster arranged for Kennedy to spend an afternoon with "three gorgeous prostitutes." Unbeknownst to Kennedy, the suite was outfitted with a two-way mirror that ..."

"... At the Comodoro-the hotel where Senator Kennedy had his afternoon orgy-an exhibition was sometimes held for special guests. Attorney Frank Ragano remembered being taken there by Martin ..."

IMF progams bad for your health?

International Monetary Fund Programs and Tuberculosis Outcomes in Post-Communist Countries
These findings indicate that IMF economic programs are associated with significantly worsened tuberculosis control in post-communist Central and Eastern European and former Soviet Union countries, independent of other political, health, and economic changes in these countries. Further research is needed to discover exactly which aspects of the IMF programs were associated with the adverse effects on tuberculosis control reported here and to see whether IMF loans have similar effects on tuberculosis control in other countries or on other non–tuberculosis-related health outcomes. For now, these results challenge the proposition that the forms of economic development promoted by the IMF necessarily improve public health. In particular, they put the onus on the IMF to critically evaluate the direct and indirect effects of its economic programs on public health.

See the IMF reply

Wednesday, July 23, 2008

Lewis Black on state of the economy

Predictably Irrational


Kashmiri Muslim women returned home from work in a boat on the Dal Lake in Srinagar, the summer capital of Kashmir

Yes Afghanistan is a Narco-State

The United Nations Office on Drugs and Crime was arriving at the same conclusion. Later that year, they issued a report linking the drug trade to the insurgency and made a controversial statement: “Opium cultivation in Afghanistan is no longer associated with poverty — quite the opposite.” The office convincingly demonstrated that poor farmers were abandoning the crop and that poppy growth was largely confined to some of the wealthiest parts of Afghanistan. The report recommended that eradication efforts be pursued “more honestly and more vigorously,” along with stronger anticorruption measures. Earlier this year, the U.N. published an even more detailed paper titled “Is Poverty Driving the Afghan Opium Boom?” It rejected the idea that farmers would starve without the poppy, concluding that “poverty does not appear to have been the main driving factor in the expansion of opium poppy cultivation in recent years.”

The U.N. reports shattered the myth that poppies are grown by destitute farmers who have no other source of income. They demonstrated that approximately 80 percent of the land under poppy cultivation in the south had been planted with it only in the last two years. It was not a matter of “tradition,” and these farmers did not need an alternative livelihood. They had abandoned their previous livelihoods — mainly vegetables, cotton and wheat (which was in severely short supply) — to take advantage of the security vacuum to grow a more profitable crop: opium....

That is where we are today. The solution remains a simple one: execute the policy developed in 2007. It requires the following steps:

1. Inform President Karzai that he must stop protecting drug lords and narco-farmers or he will lose U.S. support. Karzai should issue a new decree of zero tolerance for poppy cultivation during the coming growing season. He should order farmers to plant wheat, and guarantee today’s high wheat prices. Karzai must simultaneously authorize aggressive force-protected manual and aerial eradication of poppies in Helmand and Kandahar Provinces for those farmers who do not plant legal crops.

2. Order the Pentagon to support this strategy. Position allied and Afghan troops in places that create security pockets so that Afghan counternarcotics police can arrest powerful drug lords. Enable force-protected eradication with the Afghan-set goal of eradicating 50,000 hectares as the benchmark.

3. Increase the number of D.E.A. agents in Kabul and assist the Afghan attorney general in prosecuting key traffickers and corrupt government officials from all ethnic groups, including southern Pashtuns.

4. Get new development projects quickly to the provinces that become poppy-free or stay poppy free. The north should see significant rewards for its successful anticultivation efforts. Do not, however, provide cash to farmers for eradication.

5. Ask the allies either to help in this effort or stand down and let us do the job.

-Is Afghanistan a Narco-State?

Dawkins Legacy

A Natural Selection

Tuesday, July 22, 2008

Photos from America for Europeans

Children of God

Mauritius Economic Update

Recently from the Fund;

Mauritius: 2008 Article IV Consultation-Staff Report

Mauritius: Selected Issues

I'm waiting to see Fazeer's comments on the IMF's review.

The Changing Middleast

In Jordan, God's Work on Modernity's Doorstep

Islam and Economic Development
Religion as the solution to collective action problems

The Dollars Fall and its implications

The U.S. dollar has depreciated by about 25 percent in real effective terms since early 2002, in what has been one of the largest sustained episodes of dollar depreciation in the post-Bretton Woods era. The largest previous such episode-where the dollar depreciated by over 30 percent in real effective terms-took place between 1985 and 1991, also against the background of a large U.S. current account deficit. In both episodes, the pace of depreciation was relatively gradual, with daily changes below 2-3 percent in nominal effective terms. In both cases, the US currency in broad terms moved in line with shifts in interest rate differentials. Moreover, in the earlier case, the dollar depreciation episode ended with the U.S. currency's level roughly consistent with broad, medium-term equilibrium, as per Fund calculations. Following the post-2002 decline, we assess that the U.S. currency today is the closest to its medium-term equilibrium value in a decade.

During the 1985-91 episode, the US current account deficit narrowed from a high of 3½ percent of GDP in 1987 to about balance in 1991. In contrast, the current episode has not been associated with a quick and sharp adjustment in U.S. current account balances. Indeed, in the recent episode, the current account widened initially to reach an all time high of nearly 7 percent of GDP in late-2005. It began to moderate only in 2006, and remained at around 5 percent of GDP in the first quarter of 2008. This modest shift has created doubts about the impact of exchange rate flexibility. However, when the change in the current account balance over the two episodes is deconstructed, accounting for some lags to adjust for the timing of the export and import responses to the depreciation, it becomes clear that two key factors are driving the difference in the behavior of the current account in the two episodes.

· The first is the oil trade balance. In the previous episode, the price of oil initially fell and then remained roughly flat in US dollar terms. This led to an very modest improvement in the oil trade balance of 0.1 percent of GDP between 1987 and 1991. By contrast, oil prices have risen rapidly over the past few years to a record high. Thus, between 2004 and 2008, the U.S. oil balance is expected to have deteriorated by 1.3 percent of GDP.

· The second key factor underpinning the difference in the current account behavior is the receipt of large transfers associated with the first Gulf War in 1991-amounting to as much as 0.7 percent of GDP. Similar transfers have not occurred in the current episode.

The implication is that, after stripping out the oil trade balance and war-related transfers, the change in the US current account between the two episodes in fact appears to have been roughly similar. The "underlying" current account (excluding oil and transfers) improved by 2.7 percent of GDP in the previous episode, compared with 2.4 percent in the current period. Moreover, in the earlier episode, the depreciation was more "front loaded", with the bulk of the depreciation occurring between 1985 and 1989. In the current episode, half of the depreciation has taken place since 2006. Given the long lags (up to 2 years) in the current account response to exchange rate changes, we expect to see further improvement in this "underlying" current account in the coming years.

-Perspectives on the Global Economic Landscape and the Role of the Dollar


The Dark Knight and Game Theory

The Joker’s Trap

Chris Blattman On Writing reading list

Are We a Nation of Financial Illiterates?

Deterring Suicide Bombers

Ask an Agricultural Economist

What Is the Most Racist City in America?

Do Cell-Tower Climbers Have the Nation’s Deadliest Job?

China paper

David Friedman, Barack Obama, and the Game of Telephone

Question for teachers: How do you nudge students to work harder?

The News you need

It's the Economy Stupid



World Bank's Ravallion Sees Growth Constraints in Africa
and admiration for China

Frankel Says Euro May Replace Dollar as Reserve Currency

Doug Rivers on polling

The Pirate's Dilemma

Modern miracles; a history of medicine

The story of highways

History of the Popes

The Wisdom of Water
The popular advocate and water expert, John Archer, has turned his attention to the waters that flow through almost all the spiritual traditions of the world. From clouds and rivers and rainbows, to dew-drops and thunder, water is a universal and ancient motif in religion

The great grammar debate
Is learning formal grammar essential to becoming a good writer and communicator? Or is it more important to develop a feeling for language that can be applied in different contexts?

The late great physicist Richard Feynman

The expressive side of the face

60% of people turn their head when asked to pose for a portrait. A prime example is that of Mona Lisa. So why does this bias exist? When people try to express emotion, they turn the left side of the face

Can science teach us anything about morality?

Speed cleaning for your soul

Central banks ‘key’ to stop recession
Economist Professor Stephen Nickell, a former member of the Bank of England’s Monetary Policy Committee and one of this year’s honorary graduates at Warwick, says the UK could see a severe recession but that will depend on the action of the Bank of England and other central banks around the world

McMafia: A journey through the criminal underworld

International Development Happy Hour?

I wonder what would Dani Rodrik, Chris Blattman and Easterly think of this crowd.

Confessions of a Subprime Lender

Confessions of a Subprime Lender: An Insider's Tale of Greed, Fraud & Ignorance

Saturday, July 19, 2008

Markets in Everything- The G-Shot

These services add up to what he calls a “boutique cosmetic gynaecological laser surgery programme”, because customers will often have several at once. He does hymen repair, but doesn’t talk about it since receiving death threats from religious groups.

His latest product is the G-Shot. This is when a quantity of collagen — the same stuff that goes into lips — is injected into the rough area inside the vagina that is supposed to constitute the G-spot. It costs £955 (£1,290 for a double hit), and lasts four months before being reabsorbed. Matlock also ships G-Shot kits to doctors all over the world.

-The man who wants to reshape your private parts

Silly regulation?

Bmi, Britain's third largest airline, will fly near-empty "ghost flights" in order to keep valuable take-off and landing slots at Heathrow.

The company admitted it would continue flights, despite an expected slump in passenger numbers, in order to avoid losing the multimillion-pound slots.

Government "use-it-or-lose-it" rules mean airlines must use 80 per cent of their scheduled slots, or forfeit them.

The rise in fuel prices and an expected slump in passengers after the summer break will force many airlines to cancel flights. However, bmi said it will go to extreme lengths to ensure it does not lose any of its coveted slots.

Tim Bye, deputy chief executive of bmi, said the airline would prefer to cancel uneconomic flights, especially midday flights from London to Scotland and northern England, but were forced to fly the routes eight of ten times to avoid losing the slots.

"We have to keep flying to preserve our slots," he said. "What might have been a marginal service in most winters will become even worse, partly because of the price of fuel and partly because of the drop-off in demand that the general economic cycle will bring. Economic pressures will drive the demand down even more than airlines would normally expect."

Thursday, July 17, 2008


Make decisions like Spock in a downturn

Global Diseases Alert Map

Israel's nuclear logic

How Many Bumper Stickers Make a Bad Driver?

Creative Capitalism

How Chicago shaped Obama

How We Drive

Walk Score

Media mapping of Iran’s missile range

Trying to Track Mortgage Mess

Room Eight

Graduate Junction

Changing Trade

Source of the Chart Junk: The Economist

World Trade Report 2008: Trade in a Globalizing World

Should we make condoms a free good?

via Presentation Zen

Volcanic Rocks can save us from Global warming?

A group of scientists at Columbia has used deep ocean-floor drilling and experiments to show that volcanic rocks off the West Coast and elsewhere might be used to securely sequester huge amounts of carbon dioxide, a greenhouse gas, captured from power plants or other sources. In particular, they say that natural chemical reactions under 78,000 square kilometers (30,000 square miles) of ocean floor off California, Oregon, Washington and British Columbia could lock in as much as 150 years of U.S. carbon dioxide production.

World Economic Outlook Update

Policymakers face a difficult environment. They need to head off rising inflationary pressure, while also being mindful of downside risks to growth.

Many central banks have tightened monetary policy stances but interest rates in emerging and developing economies generally remain negative in real terms, particularly in countries where exchange rate management has limited monetary policy flexibility.

The risk of second-round effects from the surge in commodities prices and continued stress in financial markets complicates the response to the slowdown, particularly in advanced economies. The case for policy tightening in these economies is stronger than before the recent oil price increase but still not established, given that inflation expectations and labor costs are projected to remain well anchored and growth momentum is weak. However, inflationary pressures need to be monitored closely. In many emerging economies, particularly those that continue to operate above trend growth, monetary policy needs to be tightened combined with greater fiscal restraint and, in some cases, with more flexible exchange rate management, in order to reverse the recent build-up in inflation.

-Global slowdown and rising inflation

Is the World Bank a Bank?

The World Bank's early reflections on development : a development institution or a bank?

Summary: Until the late 1960s, the World Bank presented itself as an institution devoted to making sound and directly productive project loans. Yet, during its very early years, some discussions developed inside the Bank regarding the possibility of issuing different types of loans, namely (i) loans aimed at tackling social issues ("social loans"), and (ii) loans aimed at providing foreign currency to address disequilibria in the balance of payments ("impact loans"). This paper brings together historical analysis and theories of organization development to study the housing issue as a case in point. The analysis reveals that the Bank was unwilling to lend for housing programs not because these were not sound - in fact, they were - but because they were geared toward achieving social welfare objectives and were not directly linked to productive investment projects, such as dams, power stations, and railroads. This early decision had a significant impact on the subsequent development of the Bank's view of policy-making: it locked the institution into a particular lending pattern, and deprived it of important intellectual resources. It was not until the late 1960s that the Bank began to take social issues into consideration, rather late compared with other multilateral institutions.

Tuesday, July 15, 2008


When the going gets tough, central banks hope for a miracle

Fed Chief Bernanke Has How Many Friends On Facebook?

Sacking Mugabe

Deterring Suicide Bombers

Can Art Be Rated From 1 to 1,000?

Why Children Are Not ‘Little Adults’

Older Americans May Be Happier Than Younger Ones

Ohne Muslime kein Europa

Toynbee to Huntington: Globalization Gone Too Far?

Ellis on the American Creation
He said the founding had two tragedies and five triumphs. The tragedies were slavery and the plight of the native Americans. The first he called a Shakespearean tragedy, meaning it could have been avoided by human agency. The second he called a Greek tragedy, meaning it couldn't.

His best insights into slavery were that none of the founders tried to justify slavery as being consistent with the ideals of the founding and that everyone expected the slavery phenomenon to die a natural death to be followed by the expulsion of the Negro. No one foresaw a multiracial coexistence. Ellis argued that the the unforeseen invention of the cotton gin ignited the Southern economy and increased the demand for slaves.

History podcast- Tacitus

“The story I now commence is rich in vicissitudes, grim with warfare, torn by civil strife, a tale of horror even during times of peace”. So reads page one of The Histories by the Roman historian Tacitus and it doesn’t disappoint.

Tacitus’ Rome is a hotbed of sex and violence, of excessive wealth and senatorial corruption. His work is a pungent study in tyranny and decline that has influenced depictions of Rome, from Gibbon’s Decline and Fall to Robert Graves’ I, Claudius.

But is it a true picture of the age or does Tacitus’ work present the tyranny and decadence of Rome at the expense of its virtues? And to what extent, when we look at the Roman Empire today, do we still see it through his eyes?

How to Misuse Governance Indicators

The worldwide governance indicators and tautology : causally related separable concepts, indicators of a common cause, or both ?
Summary: Aggregate indexes of the quality of governance, covering large samples of countries, are widely used in research and in aid policy. Few studies examine the validity of these indexes, however. This paper partially fills this gap by examining empirically the dimensionality of the Worldwide Governance Indicators. The six indexes purportedly measure distinct concepts of control of corruption, rule of law, government effectiveness, regulatory quality, political stability, and voice and accountability. Using standard statistical techniques for testing measurement validity, the analysis concludes that the six indexes do not discriminate usefully among different aspects of governance. Rather, each of the indexes merely reflects perceptions of the quality of governance more broadly. An implication of the findings is that the Worldwide Governance Indicator indexes are frequently misused in research and policy applications, where it is commonly assumed that the indexes provide distinct measures of different aspects of the quality of governance. A further implication is that Transparency International's even more widely-known aggregate index similarly reflects perceptions not only of corruption, as intended, but of the quality of governance more broadly.

Empirics of Governance

An interesting discussion series from World Bank on governance indicators;

The seminar "Empirics of Governance" was held on May 1 to 2, 2008, at the World Bank Headquarters in Washington D.C. This seminar was organized by the Office of the Chief Economist and Senior Vice President, Development Economics (DEC). One important question which the seminar aimed to address is how to help practitioners “use the right indicator for the right job”.

More specifically, the following objectives were set for the seminar: firstly, creating common understanding among the various stakeholders of the complexity of the issues and the need to move ahead when perfection is not attainable, and deepening the interaction between producers of indicators, researchers and operational users; and secondly, helping develop an operational/research agenda going forward. The latter includes development of indicators, their operational use within the Bank, and priority research activities.

Speakers included nine academics and five experts from outside the Bank who are involved in the production of governance indicators, representatives from International Financial Institutions, and a number of Bank staff. A special effort was made to capture a range of experience and views. A number of staff and advisors to the Executive Directors participated in discussion.

The first day of the seminar focused on “Governance Indicators: Issues of Measurement and Use in Research and Policy”. Four types of governance indicators were discussed during the four sessions: broad-expert based indicators, narrow/actionable expert-based indicators, indicators based on representative household and firm surveys and aggregate/composite indicators

Can somebody please explain.

The costs of war keep increasing

Mr. Dwyer died last month in North Carolina. He was 31 and very sick. For years he had been in and out of treatment for post-traumatic stress disorder and addiction. He was seized by fearful delusions and fits of violence and rage. His wife left him to save herself and their young daughter. When the police were called to Mr. Dwyer’s apartment on June 28, he was alone. They broke down the door and found him dying among pill bottles and cans of cleaning solvent that friends said he sniffed to deaden his pain.

-Losing Private Dwyer

My Plan for Iraq - Obama

Book Recommendation

The Street Porter and the Philosopher; Conversations on Analytical Egalitarianism
Sandra J. Peart and David M. Levy, editors

Include essays by:

* James M. Buchanan
* Tyler Cowen,
* Eric Crampton, University of Canterbury, New Zealand
* M. Ali Khan, Johns Hopkins University
* Thomas Leonard, Princeton University
* Deirdre McCloskey, University of Illinois, Chicago
* Warren J. Samuels, Professor Emeritus, Michigan State University
* Gordon Tullock, George Mason University

NY Fact of the Day

“The city should not be in the business of deciding what goes on, whether there is dancing or not dancing,” Mayor Michael R. Bloomberg said in 2004. “We have dance police. This is craziness.'’

The mayor was referring to the city’s 1926 cabaret law, which forbids dancing by three or more people in any establishment that does not have a valid cabaret license — even if the business serves alcohol and plays music. In the past, bars have been padlocked when a few patrons were caught swaying to music, and the Giuliani administration often used the law as a tool against clubs deemed nuisances.

-A New Effort to End the ‘Dance Police’

Blog of the Day

Habermasian Reflections

Sunday, July 13, 2008

Quote of the Day

How the discipline of economics fares in revealing previously unrecognized social relations depends on the competition of disciplines in terms of both subject matter and techniques, as Coase has noted. I expect economics to fare well in this competition, but in the end to reveal, describe, and explain no more than an island in man’s behavior.”
-G. Warren Nutter 1979, p. 268.

cited in How to Buy, Sell, Make, Manage, Invent, Produce, Transact, Consume, Marry with Words by Deirdre McCloskey

Friday, July 11, 2008

Quote of the Day

Chinese Ambassador Wang Guangya, whose nation is one of Zimbabwe's major trading partners, expressed similiar sentiments, saying Zimbabwe should be allowed to resolve its political crisis on its own.

''The development of the situation in Zimbabwe until now has not exceeded the context of domestic affairs,'' Wang said, adding that sanctions would ''interfere with the negotiation process.''

-Russia and China Veto U.N. Sanctions on Zimbabwe

Is it true what they say about the Chinese? The effects of China’s lending in Africa