Author: Jason Kerwin

Malawi is currently in the throes of yet another lovely fuel shortage. This is great timing for me, as I am currently in a mad rush to finish data collection for my project on how people’s beliefs about HIV transmission rates affect their sexual behavior.

It’s also maddening because it brings out all kinds of fallacious reasoning about markets and economics. One claim I’ve heard is that shortages like this one are just a standard thing that happens in Africa and/or poor countries. That is easily falsified by the fact that Malawi’s black market in petroleum products is supplied by people going right across the border to Mozambique (a different poor, African country), where fuel is abundant.

No, this shortage, like the others that preceded it, is caused by a price ceiling (or, to be fair, a system of several different price ceilings covering multiple markets). The details are a bit messier than an Econ 101 price ceiling graph like this one from Wikipedia, but it’s a decent first approximation.

I might go into the ludicrous details of fuel markets in Malawi in a future post (and indeed I might write an entire research paper on the topic). That’s a topic for a different rant. This one is about an alleged shortage of foreign exchange, which is the most commonly-cited reason for the fact that I can’t buy gasoline. That is certainly not the cause of the country’s intermittent fuel crises, because there is no such thing as a foreign exchange shortage.

The claim is that there is not enough foreign exchange (“forex”, in the colloquial Malawian English) – that is, dollars – in the country to buy sufficient fuel on the international market to meet demand. Now, there is a sense in which this is true: dollars are hard to come by in Malawi. And this is a story which the government typically likes – a “forex shortage” sounds like an exogenous event like a drought or a plague of locusts, visited upon a blameless country by angry gods. Last year the government blamed forex shortages on donors, who had pulled their funding from the country.

But we need to go beyond the fact that dollars are hard to find in this country, and ask why that is true. To be precise, they aren’t really that hard to find. Plenty of people have them around. Rather, they are hard to buy – last year, in the throes of the alleged forex shortage, there were official waiting times of several years to buy dollars at the official, legal rates. Because it is illegal to pay a price for dollars at which their owners are willing to sell them. The exchange rate between dollars and Kwacha has nominally been floating since this spring. That should mean that you can pay whatever you want for dollars, but the float is evidently closely managed. The newspapers are again full of stories of “black market” foreign exchange purchases. There are official exchange rates available at banks, and that is what you are allowed to pay. These do change gradually, but for at least the past three weeks the actual transacted exchange rate has been 320 Kwacha to the dollar (I observe this rate whenever I withdraw money from my US bank account, because my bank* kicks ass and just gives me the market-middle rate). It is illegal to pay a higher price to obtain dollars. If you do, and you are caught, the state will use its monopoly on violence to take away your money and possibly imprison you.

Dollars are only hard to buy at the artificially-low price the government has set for them. Couldn’t they be hard to find at any price? That’s extremely unlikely, if not outright impossible. Suppose I had twenty dollars, which are supposedly worth MK6400. I’d be unlikely to sell them at that price. What if you offered me ten times that? One hundred? At some price, I’d be able to buy more than twenty dollars worth of stuff in Malawi and sell it elsewhere. This will hold as long as the local currency has any value whatsoever. Even hyperinflation doesn’t overcome this argument: yes, the value of a hyperinflating currency will drop incredibly rapidly, potentially sending my purchased currency toward zero dollars of value even as I try to spend it. But I can simply raise the price even higher to compensate for that fact. In any case, that is far from the situation here in Malawi. The exchange rate should probably be around 20-30% higher, and if it were you could buy all the dollars you wanted.

Now, I’m not trying to argue that floating exchange rates have no problems, or make any policy recommendations at all, really. My point is merely that the current situation is in fact a policy choice. I can understand why the government chooses to frame it differently, though. “There’s a shortage of forex” sounds like a reasonable explanation for the country’s problems, and it definitely seems to be perceived as something outside the control of the government. “We set a binding price ceiling and nobody is stupid enough to sell dollars at a legal price” would be a tougher sell to the public. But it has the virtue of actually being true.

*The bank in question is Charles Schwab Investor Checking. Among their many other virtues, they allow their customers to use any ATM in the world for free, and actually reimburse any fees charged by the ATM. The downside is that they don’t have physical locations, so you can’t go talk to a teller about your feelings (or deposit cash). I won’t link to their site since it would be hard to prove that I’m not getting kickbacks from them, but I swear that they are actually awesome and not paying me to promote them. It’s worth noting that I’m not a very successful marketer: I’ve been touting them at every opportunity for years with almost no success.

Most folks in Mwambo haven’t seen many white people before. This usually just means that the kids are at once excited and terrified when I show up. But that’s not the only amusing consequence of their lack of exposure to my kind: they also often have no idea exactly what I am. About 30 to 40 percent of children assume I must be Chinese, or maybe that Chinese and white people are the same thing. So they shout “Chaina” at me, which I guess is the word for a Chinese person, and also repeat things I said in a Chinese accent, throwing in some “chings” and “chongs” for good measure. I actually consider it kind of an honor – who knew I could pass for Asian? – but it would be pretty offensive were I actually Chinese.

Today, a woman out near Lake Chilwa did even better. As I passed by in the project minibus, she shouted “Colored!” at me. In Malawi, “colored” is used the way it is in South Africa, as a term for people of mixed white and African heritage. In the US, such a person would just be considered black, due to the persistence of “one drop of blood”-style reasoning.

Now, I don’t actually look the least bit black. One of my enumerators suggested that the confusion might have arisen from my baseball cap, which shaded my face slightly. But considering my generally dismal failures in attempting to blend in, or at least not be too obtrusive, I see this as a small victory.

Admitting this never wins me too many friends, but I’m not a huge fan of democracy in and of itself. Don’t get me wrong, the empirics indicate that it leads to better results than other systems, much of the time. When that’s true, I’m a big fan, but I don’t see much intrinsic value in having elections. At the end of the day, what matters to me is that the roads are in good shape and the streetlights are on at night and that people have freedom of conscience and speech, not that there are free and fair elections.

Sometimes democracy simply doesn’t work[]. It’s been a while since I pretended at being a political scientist, and even then I had little exposure to domestic US politics, but my anecdotal view is that local politics are pretty much a catastrophe in America. People don’t vote in local elections, unless there’s an important headline race to draw them in, and they have no idea who their local representatives are. Creationists are able to sneak their candidates onto school boards in order to try to strip evolution out of textbooks.

Not only don’t elections for local government in the US seem to work, I’m not convinced that local government itself does a very good job. For one thing, it’s never all that local: the lowest level of government still covers many thousands of people. There is no government official in Ann Arbor that has any idea who I am. I could fix that by befriending people at government buildings, I guess, but what matters is the principle. The actual policy outcomes seem pretty bad too. When I lived in San Francisco, they had a system of parking permits that created a sharp discontinuity on my (non-permitted) block, driving everyone else without permits to park there. The City of Ann Arbor recently shut down the largest thoroughfare through town to build a parking lot. For two years. Another recent accomplishment was the City Council’s attempt to block a development by declaring some houses on my block to be “historic Germantown”.* This gambit resulted in the building of a fairly hideous structure that neither the developer nor the council wanted.

Fine, those are pretty bad outcomes. Does Malawi really do better, at the local level? Given the context, I would argue that it does. Malawi’s lowest level of government is still the unelected headmen* who run individual villages. In much of Southern Malawi, village headmanship is inherited through the mother’s bloodline, just like ethnic affiliation; some men in line to be a village head will take their mother’s surname (which I believe is how things were always done before the British showed up) in order to strengthen their claim. Village heads exercise power through control of land, which they are free to allocate to people from their village. Villagers can claim title to the land they are working by paying a fee to the government to lease it, but this is usually uncommon.***

Village heads don’t tend to have any real budget to work with, so the role of local government in Malawi is pretty different from e.g. Ann Arbor’s city council. A lot of what they do is to serve as conduits for the dissemination of information and the implementation of government and NGO programs. They are tapped to organize the distribution of Malawi’s fertilizer subsidy coupons, for example, and to nominate needy individuals to receive food aid. One aspect of this is that village heads tend to know people and local geography really well. The sampling strategy for my current data collection effort relied on finding out the basic details on every person in every household in each of the 70 villages in the study. There’s no way we could have pulled that off without the help of well-informed village heads; we actually did visit a couple of villages with out-of-touch chiefs and it was a big pain. We rely on village heads in other ways, too: when stories spread that we were coming at night to steal people’s blood, they provide the best way of spreading accurate information to fight those rumors. There are tons of important things that probably could not happen without the aid of these most local of local officials.

I’m not the only researcher who has come to this conclusion, either – it seems to be pretty common for people who have done fieldwork in Africa to have a high opinion of village heads. When Tristan Reed presented his paper “Chiefs” at WGAPE this past spring, many of the political scientists in the room leapt to the defense of village heads, worried that the paper would be used as ammunition by people who dislike them. (It shows that public goods provision drops when there are fewer checks on their power, but also that a measure of “social capital” goes up, implying that some heads are capturing local social structures).

This view is challenged by recent work by Mansuri and Rao, who show that development aid is more likely to be wasted or stolen if channeled through local governments than national ones. But that’s not the right comparison, really – the question is whether we can do better. Would an elected local government be less corrupt? Are local goverment officials in the US more above-the-board than village heads in Malawi? We don’t know much about the answer to the former question, at least in Malawi. As for the latter, if you’re leaning toward “yes”, there are several million Chicagoans who would like a word with you. Corruption sucks, but I’m not convinced that moving to village-level elections would fix it, and am worried about losing some of the practical benefits of hereditary village heads in terms of logistics and social networks.

*I never once noticed these historically-important buildings until they were torn down.

**And often headwomen (to break with the traditional sense of “-man” meaning a person of either gender in a particular profession.) Malawi has a sizable number of female village heads, who are often referred to as “mfumukazi”, an amalgam of the words for “chief” and “woman”. People in this position are often called “chiefs”, but that term rubs me the wrong way for the same reason that I’m not a fan of “tribe”. Malawians don’t seem to find the term odd at all. The best term is probably the gender-neutral “village head”, so obviously no one ever says that.

***My source for much of this is informal conversations with locals and so the specifics might be different.

A recent study in Zambia and Malawi has found that growing Gliricidia trees on maize farms boosts yield by 50%. This happens because the Gliricidia trees fix nitrogen from the air and, as I understand it, some of it comes out from their roots, benefiting the maize; this is a substitute for fertilizer. This could be a boon to Malawi especially, since the country’s program of fertilizer subsidies is increasingly hard for the government to afford.

Peter Aagard’s comments are thoughtful but I think maybe incorrect – he points out that you can’t just look at the agronomic benefits of planting the trees; this is an economic problem, and it must be both profitable and affordable within household’s credit constraints: “Researchers tend to focus on the agronomic benefits of technologies, while ignoring whether they are actually doable by labour-constrained households.” Labor constraints are a legitimate concern, but in general Malawian farmers are anything but labor-constrained. For a large part of the year (including most of the 5-odd months I’ve been here this time) they have nearly nothing to do. They are labor-constrained around planting and harvest time (and maybe in between, too, I’ve never been around during that period). The key question is whether those short periods when labor is at a premium overlap with the two or three times per year you need to prune the trees. If not, this innovation seems eminently affordable.

aidnography is critical of the way One Laptop Per Child has presented the results of an experiment where they dropped off Android tablets in a village in Ethiopia, and the kids quickly learned to use them. They reasonably point out that saying “I thought the kids would play with the boxes” feels a bit elitist or even racist. No question.

But then they go farther. The penultimate paragraph begins “The biggest question I have is whether through ‘dropping off laptops’ children will really be learning skills that are valuable for their community, helping them making their community more resilient.” That seems like a reasonable standard, no argument here. However they continue: “and also helping them to stay in the local area.” Slow the hell down. “Helping people stay in the local area” is an awful goal for a development program. If they want to, of course they should stay put, but the idea that we should push people toward staying put is somewhere between foolish and offensive. As I’ve argued before, meaningful development is impossible unless people leave the countryside. And what if we had focused on helping Oklahomans stay in the local area during the 1930s? The best-case scenario is that the US would still have an enclave of incredibly poor subsistence farmers in Oklahoma. The worst case is a famine. Or imagine the mass death that would have occurred if the Irish hadn’t been allowed to leave their home country during the mid-19th century.

This attitude comes from treating communities as if they were sentient beings with rights and feelings, and, even worse, that their rights and feelings supersede those of actual people. I find this approach so alien and confusing that it’s almost incomprehensible, since it seems to imply that we should feel bad if a village ceases to exist, even if all the people from that village moved on to nicer areas and better jobs.

Hat Tip: Development Impact

Today’s xkcd is a work of subtle comic genius. The strip’s regular readers will all understand it as a reference to a debate about validity of FiveThirtyEight’s election-forecasting technique. For anyone else, read on.

For stat-heads like me, the most exciting part of Tuesday’s vote was not the outcome itself, because anyone who looked at the data seriously realized that President Obama was an overwhelming favorite for re-election. Rather, it was the resolution of a silly debate between the innumerate majority of the blogosphere* and media and a small number of data-based forecasters, most prominently Nate Silver of FiveThirtyEight. Tons of people called the election a “tossup”, and critiqued Silver for calling Obama the favorite. A lot of this exhibited a misunderstanding of statistics. A 90% chance of victory does not mean that Obama will win for sure. It means that in 9 out of 10 runs of the election we’d expect him to win, with the remaining 1 in 10 being due to last-second shifts in the electorate toward Romney compared with the polls.

So how did Silver do? Unfortunately I can’t find a way to permalink to the results, but as of 9:10 AM Central African Time on November 7th, MSNBC’s results have Silver correctly predicting every single state that has been called, and correctly forecasting the leader in the states yet to be decided. That includes Florida, where a naive state-level polling average predicted a Romney win – but Silver adjusted those polls to account for recent movement toward Obama nationally.

This is an absolutely dominating performance. It is a triumph for the use of data over hand-waving, and for statistics as a field. If anything, Silver’s track record is such that his predictions were too modest. For many swing states, he only predicted the victor had a barely-better-than-50% chance of winning. If he was correctly judging his margin of error, he’d have made a couple of mistakes tonight. He was hedging against the chance that the polls were biased but in fact these days polls are pretty damned accurate.

Tomorrow morning, I want to see virtually every political commentator and all those crazy dudes running websites forecasting Romney landslides to admit that they were wrong, and that analyzing the data and using it to form the best possible forecasts not only works, but works spectacularly well.

*There were also critiques by fairly smart people, pointing out Silver’s lack of transparency and arguing that using 3 significant digits for the probability of an Obama win is unreasonable. This post is not about them.

The official Chinese Communist Party term for the catastrophic Great Leap Forward, which led to economic collapse and a famine that killed as many as 45 million people, is “the three years of economic difficulty.”

Most followers of this blog are probably aware of Section 377 of the Indian Penal Code, a law written by the British government of colonial India and then exported to their other colonies. It bans “sodomy”, which back in the day meant any sex other than vaginal, and even banned oral sex between straight couples in the past. In Malawi, it is most famous as the legal pretext for the sentencing of a homosexual* couple to hard labor in 2010; the two were later pardoned.

This awful law has evidently been overturned, according to a Times of India article from this morning. If true this is excellent news and a big advance for human rights in the country.

I have been very impressed with the apparent change in attitudes towards homosexuality here this year. There are regular columns in the newspapers exploring the challenges facing gays and lesbians, and rarely written in a judging or admonishing tone. Most of the people I have met this year also have also expressed fairly tolerant attitudes towards homosexuals, although I suspect that to some extent they are bullshitting me because I am always the mzungu and frequently in charge as well. I’m looking forward to the results of research by Tara McKay and kim dionne , in the field this summer, that measures attitudes toward homosexuality in a systematic and representative way – and I’m optimistic that the situation is better than people watching Malawi from the outside think.

Hat tip on the Times of India story: Nancy Marker

*The description of the couple as homosexual is sometimes contested because Tiwonge Chimbalanga was a biological male transsexual who was living as a woman.

Jed Friedman at Development Impact summarizes a new paper by De Vreyer, Guilbert, and Mesple-Somps that measures the effect of locust swarms on human capital formation in Mali. I very much like the idea behind this paper – early childhood health and nutrition shocks strike me as an increasingly important sub-field of development economics, and the literature on them motivates my own predominant focus on health. The authors find big effects on educational attainment: young boys who experience a locust swarm and the attendant local agricultural catastrophe end up finishing half a year less school than they would have otherwise, and for girls the effect is a full year. Their approach is a difference-in-difference method, which means they compare the changes in educational attainment in locust-affected regions with changes in other areas.

It’s an intuitively plausible approach, but it’s tricky to get right: in a simple “diff-in-diff” you need to assume “parallel trends”, which is that the rate of increase in educational attainment is the same across the locust-hit areas and the unaffected areas. When you can control for other factors, then you need to have parallel trends conditional on those observed, controlled-for factors. The authors have some nice data on school infrastructure that allows them to control for one potential concern: what if more schools were built in unaffected areas, maybe because the government invested more heavily in the places with the best payoff? This turns out not to affect their results.

Another check people usually do when they run a diff-in-diff is a “placebo test”. For example, if you have lots of years of data, then you can look for effects on affected areas the year before the actual event occurs. This is what Jensen and Oster do in their paper on Cable TV and women’s empowerment in India. De Vreyer, Guilbert, and Mesple-Somps do something different: they want to confirm that this is an effect caused by the locusts, and that it is a direct effect and not a general equilibrium or macroeconomic impact. To do this they look at impacts on kids in affected cities. I am hesitant about two aspects of this approach. First, if there are macroeconomic effects I’d expect them to impact the entire country, and not to be particularly concentrated in locust-affected regions. So it’s not clear that we learn anything about macroeconomic effects (or spillovers, as I’d call them) from this.

Second, the more compelling aspect of this is to use the urban areas as a validity check: if this is an effect of the locusts, and not some other correlated phenomenon, then it should impact rural areas alone (barring spillovers). And indeed that’s what they find – there are no effects on children from urban locations. But I’m a bit dubious of this distinction for a typical heavily-agrarian developing country. First, the authors identify 340 “cities” in their data, and the use of scare quotes here is their choice but I agree with it. Mali has an average personal income of $1,127 in purchasing-power-parity dollars, which puts it just ahead of Malawi in terms of economic development. I don’t know a ton about the Malian economy, but Wikipedia also tells me that agriculture is the dominant sector, which stands to reason given its level of development. I would venture that most of those 340 cities are fairly small trading posts (some are evidently neighborhoods of the geographically-larger urban locales, although Bamako, the capital, is excluded from the paper). In that case, I would bet a decent sum of money that these, too, are fairly rural areas in the sense of the importance of agriculture. Just go to a trading center in sub-Saharan Africa and walk around, looking for crops.

Even if these are “true” cities, one thing I’ve noticed during my time in Malawi is that under the surface, almost everyone is still a farmer. In informal conversations, I often try to get at where people’s livelihoods come from, and many Malawians who live and work in cities still maintain farms, either on the outskirts or farther afield. So I’m not sure I’d expect a zero impact from locusts in urban areas, and I’d definitely expect some spillovers. This speaks to one of the big advantages of modern development economics’ focus on fieldwork: there is a lot you can learn just by going to the place you are studying and talking to people. Perhaps this is obvious, but as best I can tell it’s something that economists still rarely do. Could Mali be different, such that the assumption that urban areas aren’t engaged in agriculture is valid? Indeed it could – and one of the best ways to find out is to go there.

The BNL Times has a story about a former professional “sex cleanser” who was hired to have sex with widows:

‘I started performing the duties of cleansing widows way back in 1985. I slept with widow after widow and each time I was hired to do the activity I pocketed around K4,000 in addition to sharing with the widow the property left behind by her deceased husband,; said Aniva.

He claims he does not know his age although he believes he should be in the 50s.

Widow cleansing (kupita kufa), commonly practiced in Nsanje, requires a widow to sleep with her in-laws before her dead spouse is buried, in the belief that this pleases the departed soul. In some cases, men, like Aniva, are hired at a fee to perform this ritual on behalf of the in-laws.

My understanding is that widow cleansing (which I’ve also heard called “widow inheritance”) is required because it is believed that otherwise the widow will die as well. I didn’t know that it could be done by proxy, but I’m not surprised that some people are taking advantage of that option – it’s reasonable to worry about HIV in a situation like that. However, the proxy thing challenges my initial read on the practice, which is that it was really just an institutionalized way of letting in-laws take sexual advantage of women. Even if that’s the source of the practice, people take the mystical aspects seriously enough to pay other men to have the actual sex.

Aniva himself has come clean and is campaigning against the practice. That’s an unmitigated good thing, but it makes me a little more dubious of the factual accuracy of his claims; he now has an incentive to play up the practice and make it seem more extreme.