Aid Watch » Kenya just asking that aid benefit the poor Tue, 19 Jun 2012 16:00:11 +0000 en-US hourly 1 When Kenya saved Washington DC Sun, 14 Mar 2010 13:57:52 +0000 In today’s NYT :


{It helped} in Washington, D.C., where The Washington Post partnered to build a site to map road blockages and the location of available snowplows and blowers.Think about that. The capital of the sole superpower is deluged with snow, and to whom does its local newspaper turn to help dig out? Kenya.

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Four Ways Brain Drain out of Africa is a good thing Wed, 17 Feb 2010 04:01:01 +0000 Conventional wisdom frets that the exodus of skilled workers—the brain drain—is bad for African countries. The share of Africans with college degrees who live outside their home countries is certainly high: nearly half of Ghanaians, about 40 percent of Kenyans, and about one-third of Ugandans.

The metaphor of the term itself implies that brain drain is a waste, as if all Africa’s most promising minds were being sucked down some global sink, leaving behind a parched continent. But a paper by William Easterly and Yaw Nyarko, published as a chapter in the new book Skilled Immigration Today: Prospects, Problems, and Policies, explores the arguments for and against brain drain, and builds on previous literature to argue four ways the benefits of brain drain could outweigh the costs to African countries.

1. Gains to migrants themselves. Why is this often ignored in brain drain discussions? Perhaps it reflects a neglect of the rights and well-being of individuals and an overemphasis on the nation-state as the object of development. The migrant is better off with higher living standards, not to mention satisfying her revealed preference to live in a country other than where she was born.

2. Gains to migrants’ families. Remittances is the most obvious and commonly-cited benefit of the brain drain. Even using official figures, which likely far undercount the value of remittances by excluding informal channels, remittances sent back by Africans abroad outweigh the cost of educating them at home. Why pass up a high return opportunity (Africans earning high incomes abroad and remitting) and insist on a low return activity (educated Africans underemployed at home)? Not to mention that families also get satisfaction from seeing their offspring realize their dreams.

3. Brain circulation.  Brains don’t just leave Africa, never to return.  Africans who have been educated or worked abroad do come back to their home countries to visit, to establish dual residence, to start businesses and universities, and, sometimes, to stay. These people bring back new ideas and skills—crucial ingredients to economic growth. Similar processes brought enormous benefits already to Asia and Latin America, so why would donors want to shut down this motor of opportunity only for Africa?

4. Stimulation of skill accumulation (“brain gain”). The possibility of migration and the example of role models who find success abroad (the Kofi Annan factor) provide incentives for young students to work hard and gain skills that will help them overcome the hurdles to migration. The authors argue that the new human capital created through these incentives offsets the loss of skilled people who do eventually leave.

If brain drain is not the bogeyman it is made out to be, those who argue for programs that restrict individual freedom in the name of “staunching the flow of brains” from Africa have even less of a case. (For example, the World Bank and the IMF published a 2007 report noting that “countries concerned about a ‘brain drain’ of their trained physicians to OECD markets might be able to reduce risks by setting national training requirements slightly lower than the rich countries’ standards.” The group Physicians for Human Rights has recommended that “[d]eveloping countries and organizations in developing countries should explore possibilities of limiting recruitment from abroad.”)

A better way to help migrants, and the African countries they come from, would be to increase even more the benefits of the so-called drain. For example, scholarship and exchange programs will increase the likelihood of brain circulation. Regulations and technologies to reduce the transaction costs of remittances sent home will be win-win for all.

Would Americans put up with a program that inhibits them from working in London or Paris? Skilled African migrants don’t need international organizations suggesting restrictions on where they should live and work either.

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Hillary offers trade opportunities to Africa – unless we don’t feel like it Thu, 06 Aug 2009 04:00:01 +0000 Hilary-AGOA.png Secretary of State Hillary Clinton had good news for Africa in the Nairobi forum yesterday on the US African Growth and Opportunity Act (AGOA). AGOA offers breaks from quotas and duties on African exports to the US. First enacted under Bush, AGOA is at least a partial success story, with exemplars like textile exports in Lesotho and Madagascar. Secretary Clinton yesterday endorsed new efforts to “maximize the promise of AGOA.” She declared “we are committed to trade policies that support prosperity and stability.”

Except when we aren’t. AGOA privileges can be revoked for political reasons, like if the President and the US Trade Representative (USTR) decide a country does not have sufficient “rule of law.”

Which is exactly what is threatened now with that success story of textiles in Madagascar. Ever since a political crisis and change in government in Madagascar last spring, the USTR has been threatening to revoke Malagasy eligibility for AGOA, which would effectively destroy the Malagasy textile industry (worth between 6.5 and 8 percent of GDP and accounting for 50,000 jobs).

We had a previous blog post on this, which had a dramatically nonexistent effect on USTR actions.

Of course, the USTR implementing AGOA has good intentions – to promote good governance. There are two problems with this: (1) we don’t have a clue how to do this in Madagascar, and (2) why try to do it by punishing private individuals instead of the government?

On (1), Malagasy politics are not really that hard to understand, as long as you have a Ph.D. in Malagasy history, political science, sociology, economics, and familiarity with the byzantine maneuvers of the FOUR way-far-from-perfect quarreling rivals for power. All the US government asks in exchange for continuing AGOA is that these four guys who hate each other come to an instantaneous consensus on early, free, and fair elections. USTR officials confirmed to us on background yesterday that these efforts continue.

It’s not totally clear why USTR is being so insistent, when “rule of law” is so vague as to allow the eligibility of DRC, Guinea, and Guinea Bissau (as we ineffectively pointed out last time). (This arbitrariness is what justifies the snarky title of this post.)

On (2), all I have to say to elaborate on “why punish private individuals”, is – why punish private individuals?

Time is running out for Madagascar, as incentives to invest and produce for advance US orders are disappearing further the longer the USTR dithers. Political risk comes not from the Malagasy or other African governments, but from the US government’s failure to follow any consistent rule of law on how to apply the AGOA rule of law provision. This arbitrariness weakens the AGOA incentives for ALL African countries.

Please USTR, try to make Secretary of State Clinton’s promising words come true, don’t throw away one of our all-too-scarce development policy successes.

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