Some people like talking dirty, fewer admit publically that they do, and a rare few will admit that they’re quite good at it, but rarest are people who just like to talk dirt. That’s a problem when more than 860 million people in the world suffer from chronic hunger - a number that is climbing due to the ongoing food crisis. You don’t have to be internationally defined as poor to conclude that food prices are rising faster than China’s Olympic Gold Medal count.
If you want to know why that’s happening, you’ll have to dig beneath all the noise about climate change, rising corn-based ethanol demand and increasing food consumption from the massive and growing economies in China and India. Such things matter, but agricultural sectors around the world have...
It is not uncommon for high school history classes to introduce China as the world’s longest standing state. Aside from a short stint under the Mongol empire (and maybe British opium merchants), it has carried different names but the political entity that we know as China has existed independently and continuously for over six thousand years. Such continuity is remarkable, given China’s officially recognized 56 ethnic groups and numerous dialects - which are incomprehensible to each other in spoken form.
What’s even more remarkable is that all those dialects share a single, common writing system, the Han Zi. All 5,000-plus characters.
This context presents an interesting test for the famed Coase theorem, which states that as long as property rights are assigned,...
A widely cited report from the International Labor Organization (2002) estimates that 70 percent of workers in developing economies operate in the informal sector. Throughout the 1990s the sector generated a majority of jobs across Latin America, a story with which CIPE is very familiar. A new story in Good Magazine renews the vivid, dynamic informal economy that emerged from the “shadows” thanks to Hernando de Soto and others. It’s a story set in Paraguay’s Ciudad del Este, but recurring around the world:
A fat Lebanese man emerges from a room behind the cash register holding an AK-47 as though it were a full cup of coffee.
“Four fifty,” he says, sucking on a toothpick. “American. And if you want help getting it across the border, that can be arranged.”...
Just recently, the EU approved the extract of the baobab fruit as an ingredient in foods in Europe. If you're like me, until today you had never heard of the boabab fruit (pictured right). According to the proprietor of the African Kitchen Gallery Restaurant in central London, "It is very nutritious, full of vitamin C and vitamin A. It has a very special flavour, but the closest I can get to it is jackfruit, which is like melon." That doesn't sound too bad to me.
Over at the Cheetah Index, blogger Chido Makunike has a mixed reaction to the EU's approval (Hat tip: Global Voices Online): There are many things about this developing export niche that will only become clear with time. I don’t think anyone yet knows what the potential size of this new export niche will be...
Transparency International has just released its annual corruption report, and this year's focus is on corruption in the water sector. Undoubtedly, the 398-page tome will draw a lot of attention to what Transparency International makes clear is a crisis:In developing countries, about 80 per cent of health problems can be linked back to inadequate water and sanitation, claiming the lives of nearly 1.8 million children every year and leading to the loss of an estimated 443 million school days for the children who suffer from water-related ailments.The report takes a relatively agnostic view on public versus private provision of water (at least the parts I managed to read - did I mention it's almost 400 pages?). Much of it is devoted to looking at how corruption in the water sector, whether...
The Legal Empowerment of the Poor (Hat tip: CIPE Development Blog)
The Commission on Legal Empowerment of the Poor, co-chaired by Madeleine Albright and Hernando de Soto, just released this report on Tuesday. The report looks at creating property rights at the bottom of the economic ladder. From the executive summary:
???[I]t is not the absence of assets or lack of work that holds [the poor] back, but the fact that the assets and work are insecure, unprotected, and far less productive than they might be???In too many countries, the laws, institutions, and policies governing economic, social, and political affairs deny a large part of society the chance to participate on equal terms.
Petrostate: Putin, Power, and the New Russia (Hat tip: Johnson???s Russia List)
On a...
In just the last two days, two articles have pointed to growing pressure for greater state control of energy resources. In Brazil, the state-owned oil company Petrobras (subscription required) has been pressuring the country???s Congress to change the rules of the game to its benefit. Currently, foreign oil companies bid in auctions for exploration rights, paying a combination of an upfront fee and royalties on any discoveries. However, a huge discovery last year by Petrobras has upped the stakes. Petrobras wants to force all new explorations to be carried out as joint ventures, a la Venezuela and Nigeria.
A case in Russia is also pointing to continuing pressure for state control of the energy industry (subscription required). TNK-BP, a joint venture of British Petroleum and...
The Commission on Legal Empowerment of the Poor, co-chaired by Hernando de Soto and Madeleine Albright, has just launched its final report “Making the Law Work for Everyone.” This report addresses the challenge of legal empowerment, or the process through which the poor become protected and are enabled to use the law to advance their rights and their interests, vis-à-vis the state and in the market.
The Commission has conducted 22 national consultation processes with representatives from local governments, academia, civil society, and grassroots movements during the past three years. The final report reflecting all these efforts is a fascinating and insightful document detailing how legal empowerment of the four billion excluded poor world-wide is the key to unlocking vital...
Hernando de Soto is famous for his work on reducing the size of the informal sector and paving the way for people to be part of the formal economy and to participate in a democracy. But to us at CIPE he is also known as the first person - literally - who walked through our doors when we opened back in 1984. A program with Hernando’s Institute for Liberty and Democracy in Peru was our very first project. And since that first project he remained a good friend of CIPE, a committed supporter of market reforms and democratic institutions around the world.
De Soto gained a lot of global visibility since we first met him in the 1980s - some may even say he has a celebrity status these days. He advises presidents; he is known worldwide for offering economic solutions to terrorism;...
In 2006, the income of Chinese urban residents was 3.28 times that of the rural ones, where 700 million farmers or 56 percent of total population live. The newest survey from the Cato Institute shows how secure land rights can reinvigorate China's rural economy. The graph (below) displays a correlation between issuance of contracts and certificates and farmers' mid and long-term investment in land.
The report also contains an analysis of a Property Law aimed at creating greater land-tenure rights passed in March of 2007....
At 00:01 GMT, the World Bank released its annual ranking of the ease of doing business in 178 economies.
Ordered by the time and cost required to set, run and close a business, Eastern Europe and Central Asia were the fastest reforming region this year. Latin America and East Asia were the slowest, with the exception of China, who implemented new private property rights and a new bankruptcy law.
Business climate rankings matter to women. Higher scores correspond to a higher number of women entrepreneurs and employees in an economy. Forty-one percent of women in Rwanda run a small business but only 18 in the Democratic Republic of Congo, where women need their husbands' consent to start a business.
Interestingly, though Brunei, Liberia and Luxemburg joined the list, nothing has...
Should we get rid of TRIPs? Arvind Subramanian clarifies his view after Dani Rodrik and Nancy Birdsdall respond to his last post....
Economic development requires tariffs, regulation of foreign investment, permissive intellectual property laws, and other policies that help […] producers accumulate productive capabilities Says Ha-Joon Chang, a Cambridge economist and the author of "Bad Samaritans: Rich Nations, Poor Policies and the Threat to the Developing World." He argues that rich countries should not deny the poor ones the very same route they had once themselves taken to develop. [The] truth of the matter is that [developing] countries have grown significantly more slowly in the "brave new world" of new-liberal policies, compared with the "bad old days" of protectionism and regulation in the 1960sa and the 1970s. Growth has failed particularly badly in Latin America and sub-Saharan Africa, where neo-liberal...
During a three-year period, over 20 million plots in Ethiopia, covering the majority of rural lands, received land certificates. The benefits included an increase in bargaining power for women, stronger incentives for investment and more efficient transfer of land through decentralization of rental and sale transactions.
A new World Bank paper analyzes a nation-wide household survey which measures what individual titling of land can do for poverty reduction, even when funds are limited: This scope for improvements notwithstanding, the massive scale and relative success of land certification in Ethiopia demonstrates that technical problems or lack of resources alone can not explain the failure by African countries to put the innovative aspects of recent reforms to their land legislations...
In a forthcoming paper, Harvard's Lakshmi Iyer and Quy-Toan rebut Hernando de Soto's argument that the major barrier to prosperity is the inability to convert property into usable assets.
Using household-level surveys taken before and after the 1993 Land Law of Vietnam, the authors find "no evidence that [11 million] land titles increased access to credit on the part of rural household, neither were they significant determinants of land market activity."...
On Tuesday July 31st at the Cato Institute, Tim Hanstad, the president of the Rural Development Institute (RDI), will discuss how the lack of land rights affects 230 million households worldwide. RDI has land reform programs in seven countries, including China, India, and Indonesia.
Audio and video will be available here....
On Tuesday July 31st at the Cato Institute, Tim Hanstad, the president of the Rural Development Institute (RDI), will discuss how the lack of land rights affects 230 million households worldwide. RDI has land reform programs in seven countries, including China, India, and Indonesia.
Audio and video will be available here....
In a forthcoming paper, Harvard's Lakshmi Iyer and Quy-Toan rebut Hernando de Soto's argument that the major barrier to prosperity is the inability to convert property into usable assets.
Using household-level surveys taken before and after the 1993 Land Law of Vietnam, the authors find "no evidence that [11 million] land titles increased access to credit on the part of rural household, neither were they significant determinants of land market activity."...
During a three-year period, over 20 million plots in Ethiopia, covering the majority of rural lands, received land certificates. The benefits included an increase in bargaining power for women, stronger incentives for investment and more efficient transfer of land through decentralization of rental and sale transactions.
A new World Bank paper analyzes a nation-wide household survey which measures what individual titling of land can do for poverty reduction, even when funds are limited: This scope for improvements notwithstanding, the massive scale and relative success of land certification in Ethiopia demonstrates that technical problems or lack of resources alone can not explain the failure by African countries to put the innovative aspects of recent reforms to their land legislations...
Creditor rights protection has often been heralded as fostering financial and economic development. Recent research questions this, showing that more creditor-friendly bankruptcy systems result in inefficiently low innovation levels in industries that need it most.
A graphic illustration comparing debtor-friendly U.S. and creditor-friendly Germany drives the point home, showing the large degree of innovation in the U.S. in biotechnology, computing and medical instruments, while Germany seems to have the innovative edge in the textile and apparel industry (graph shows the ratio of patents in computing relative to patents in textile industry).
But do not get carried away! It turns out that firms that are randomly assigned a more debtor-friendly judge in a U.S. district court...
A child publication of our Doing Business Report series was launched today – covering 8 countries and 22 cities in South Asia: Doing Business in South Asia 2007.
The elephant in the region is India. The chapter on India has some surprising city rankings.
Afghanistan has the most unfriendly business regulations in the region, with low scores globally for registering property (most private land doesn't even have clear title); low scores for getting access to credit (there's no way to enforce collateral – legally); low scores for the red-tape required to trade – in a country where up to 80% of firms import, it takes 88 days and 11 forms to ship in goods.
Overall the region scores worst on cost of firing and enforcing contracts. Small wonder, then, that India for example has only...
Now in its second week, the UN Climate Change Conference (UNFCCC) in Nairobi is focusing on three issues:
the creation of a climate change adaptation fund
a better geographical distribution of the Clean Development Mechanism (i.e. there’s too little of it in Africa), and
the transfer of clean technologies from North to South.
Although the last point is considered here a governmental issue, I would argue it is truly a private sector one. Why? Previous governmental attempts have failed: years ago the World Trade Organization started looking at intellectual property issues in technology transfer. It went nowhere, simply because intellectual property belongs to private businesses that ain’t gonna give it away for free.
Here at UNFCCC, the proposal is for governments to buy...
The Indian government has approved proposals for 170 special economic zones (SEZs) and counting. SEZs can invite foreign direct investment, provide jobs, and promote the development of secondary industries to service firms. Why, then, the spirited outcry over India’s recent moves in this direction? For one thing, many of the approved sites are located on prime agricultural land – leading to complaints that the SEZs are more of a coordinated land grab by the rich than coordinated economic development.
Creating so many SEZs would seem to exacerbate widening inequality in India – both in terms of individual income and national infrastructure. We’ve already seen the results of the technology revolution emanating from Bangalore: isolated areas of development with limited benefit to...
Today is World Habitat Day. In 2050, six billion people will live in urban areas. That's two-thirds of the projected population. In 1950, one-third of us lived in urban areas. Wow.
While slum upgrading is important, we must ramp up efforts to prevent them in the first place as the developing world prepares for ever more megacities (with more than 10 million inhabitants). The status quo in water and sanitation delivery, housing finance, public transportation and environmental standards in developing countries will not be able to withstand this exodus from the countryside....
If it's possible for an economist to keep a roomful of people on the edge of their seats, Joseph Stiglitz came reasonably close yesterday. He presented his newest book, Making Globalization Work, to a packed house at the World Bank. (By packed, I mean that seats in the overflow room went so quickly that well over 100 people were standing in the back.)
The theme was the ways in which globalization has contributed to rising inequality, both across and within countries, and what to do about it. Rather than a rising tide to lift all boats, globalization is better described as "a riptide that can destroy lots of small, unprepared boats". Plenty has already been written about the book (see openDemocracy, Pienso, and Poverty and Growth Blog), so I'll just pull out a few of his comments:...
As the protesters among you certainly know, the IMF-World Bank Group annual meetings are underway in Singapore. Tomorrow, look for the release of the World Development Report: Development and the Next Generation. In line with its youth theme is a debate concluded yesterday on the BBC, Are African youths enterprising? One commenter from Kampala said:High interest rates on loans from microfinance institutions and the demand for collateral security in Uganda is 'killing' the youths endeavours for enterprises of their dreams.Economists at the Bank are doing more and work on collateral laws, such as this policy note and book on reforming collateral laws to expand access to finance. The main message?Firms have assets that could easily be used to secure loans—movable assets such as the goods...
Survival International, which helps tribal peoples protect their land, created a satirical cartoon book that skewers the development community. Among the targets are those private sector partnerships which are nothing more than thinly veiled attempts to take land and resources away from tribal peoples.
It's true that well-intentioned development projects sometimes have disastrous consequences. Large infrastructure projects, such as dams, are not entirely innocent against charges of destroying traditional livelihoods and disrupting communities. It's crucial that the legal community work to protect land and other rights of indigenous people.
And yet...globalization is an unstoppable force, and it's naive to suppose that even the most isolated group can avoid its currents. To me, the...
Okay, maybe not quite yet. But in an article on TCS Daily, AEI's Roger Bate argues that trading water rights would be much more effective than the bureaucracies who now decide who gets water and at what price. The main water allocation problem is the result of Soviet-style management over agricultural water. In most places around the globe, governments decide who gets how much water, when they can use it and often what for, and if they don't use their allocation (regardless of how they use it) they will lose it. Once governmental allocations are made, officials rarely reallocate, even when massive changes in agriculture, industry, mining, domestic and rural demand occur. The result is politically favored allocation and grotesque situations where farmers often pay 100 times less than other...
The prophet Mohammed was an early proponent of property rights. When a famine in Medina brought sharp price increases, people implored him to less the hardship by fixing prices. He refused because, having once been a merchant himself, he believed the buyers’ and sellers’ free choices should not be overridden. “Allah is the only one who sets the prices and gives prosperity and poverty,” he said. “I would not want to be complained about before Allah by someone whose property or livelihood has been violated.” From John McMillan’s ‘Reinventing the Bazaar.’ See a previous post from the same book....
"We usually do day and night surveys to see how crowded the street is before deciding to start selling in one," said Tabroh, a 60-year old seasoned stall owner in Ampera, South Jakarta. "All you need to do after you decide to stay in one place is contact the local district officer, and, you know ... give them a contribution," he saidâ?¦
"One can do well with Rp 5 million as a start, to have the stall built and shop for first stock," he explained."Now, I only pay Rp 5,000 a day for electricity and a security fee of Rp 10,000 a month." The security fee is for assuring that his stall -- and whatever is stuffed in it -- is safe from thieves.The Jakarta Post claims these â??magic boxesâ?? can make between Rp 300,000 to Rp 600,000 a day. A nice...