Better Than We Thought

March 2, 2010 9:32 PM

"The conventional wisdom that Africa is not reducing poverty is wrong." [PDF, 339.97 KB]

"Our main conclusion is that Africa is reducing poverty, and doing it much faster than we thought. [...] We also find that the African poverty reduction is remarkably general: it cannot be explained by a large country, or even by a single set of countries possessing some beneficial geographical or historical characteristic."

"Moreover, contrary to the commonly held idea that African growth is largely based on natural resources and helps only the rich and well‐connected, we show that Africa’s income distribution has become less rather than more unequal than it was in 1995, and therefore, that a great deal of this growth has accrued to the poor." (via FP Passport Blog)

posted by SpringAquifer (21 comments total)

Yeah, those graphs are impressive, but what happens when they have exported the last log? Where will they get their income from then?
posted by turgid dahlia at 9:38 PM on March 2, 2010 [1 favorite]

Ghana has a growing IT sector. Nigeria and Angola rely on oil revenues. Botswana has diamonds. South Africa (with 25% unemployment) has a mixed economy.
posted by KokuRyu at 9:40 PM on March 2, 2010 [2 favorites]

Yeah, those graphs are impressive, but what happens when they have exported the last log? Where will they get their income from then?

A T.G.I. Frydays? Applebee's? That's what we do for money round here since the mill shut down. That and the Wal-mart.
posted by nola at 9:58 PM on March 2, 2010 [2 favorites]

Great link. The Gini Co-efficient graph is the most illustrative, I think, followed by the extra/intra inequality. That's some real gains there that cannot be explained by inflation etc. $1 a day is a bit too arbitrary to me.

The 'slave state' graphs are also fascinating. I've read that theory before and kinda sorta subscribe to it myself, but to see it presented so starkly is quite amazing.

I love the variables they've tried to control, and the frank admittance about what can and can't be gained from the data - even though I do think they're a shade optimistic about the the robustness and implications at times.

I'm sure the Eastman crowd will be eager to attribute this to the success of market principles, and NGOs, the opposite. Whatever the reason, very good news.
posted by smoke at 10:00 PM on March 2, 2010

Yeah, those graphs are impressive, but what happens when they have exported the last log? Where will they get their income from then?

They'll rely more on human capital than before, just like most countries do as they develop.
posted by ripley_ at 10:12 PM on March 2, 2010 [3 favorites]

This is why I refuse to read books like Dead Aid and the dearth of others who are trying to make the case that development and relief assistance has hurt Africa. The proof is in the data - Africa is rising out of poverty at rates that dwarf the development rates that most of the first world countries ever had (i.e. countries like Mozambique have done in the last 50-60 years what took most of Europe the entire Middle Ages to accomplish). The development index indicators (things like infant mortality, average life expectancy, etc.) play these poverty figures out in real life every day on the ground - in the lives of Africans who would otherwise still be in (more) dire straits. Real change is possible. I continue to believe there are more than enough resources held in the first world to raise the third world into a more developed state. Thanks for this post.

"Overcoming poverty is not a gesture of charity. It is an act of justice." - Nelson Mandela
posted by allkindsoftime at 12:03 AM on March 3, 2010 [7 favorites]

The book Africa Rising explores the idea that Africa is beginning to work economically, for whatever reason.

The author is an Indian who makes the interesting point that when India and China started their explosive growth runs few were predicting that they would take off and suggests that something similar may be starting to happen in Africa now.
posted by sien at 12:14 AM on March 3, 2010

Before we get things started here, let's get the internet armchair brigade's reactions out of the way first. There's going to be four major responses:

A. "Oh Noos! The data is wrong, or they are crypto-neocon liars, or even worse, optimists!"

B. "Oh Noos! This will only benefit the elite and multinational corporations!

C. "Oh Noos, the report is completely correct, and Africa will keep developing...increasing global warming and depriving our already resource-starved world of badly needed raw materials!"

D. "Oh Noos! The report is correct, meaning the U.S. Will fall even further behind!"

Now, with the standard reactions of the "It will be a crapsack world" bloggers aside, I'm just really happy that there's another bit of evidence for James Nicoll's Horrifying Future (where Things Fail to go Wrong).
posted by happyroach at 12:38 AM on March 3, 2010 [6 favorites]

But do they know that correlation does not equal causation?
posted by litleozy at 2:06 AM on March 3, 2010

But do they know that correlation does not equal causation?

You're being sarcastic, right? Please tell me you're being sarcastic.
posted by smoke at 3:07 AM on March 3, 2010

I notice that this mostly deals with the period of growth from 1995-2006. It doesn't really take into account the devestating effects of rising food prices that began in 2008, or the effects of the global financial crisis which are likely to reverse much of the progress that has been made toward the MDGs. It is a common problem with economic research that realiable data is usually two or three years behind.
posted by moorooka at 3:11 AM on March 3, 2010

But do they know that correlation does not equal causation?

Read this site for between 3 to 5 minutes and you will not only know it, it will have been stuffed down into your face with the force of a thousand charging cockwits who think they are pointing out something original. Later on, the Simpsons crowd will be along to add a little predigested wit if you are very, very lucky.
posted by Wolof at 4:26 AM on March 3, 2010 [5 favorites]

There's going to be four major responses:

Wait! Wait! You're forgetting:

E: "Oh Yesssss! This means our strategy of imperial resource extraction is working! No one think critically about the sustainability of this arrangement! Or else I will pigeon hole your well founded objections!"
posted by symbollocks at 4:54 AM on March 3, 2010

Yeah, those graphs are impressive,

Leaving all the defaults in Stata turned on makes baby Jesus cry.
posted by ROU_Xenophobe at 6:30 AM on March 3, 2010 [1 favorite]

I'm skeptical of development, although I'm not overly skeptical that things have gotten better since a decade or so ago. Things probably are better.

The reason I'm skeptical is that it remains to be seen whether the changes that have occurred are sustainable. That is, whether or not they depend on cheap energy or cheap credit... things that might not be available in the future and shouldn't be necessary for maintaining good standards of living in these countries. That means not depending on exports.

They talk about GDP growth as the primary function of poverty reduction. Unfortunately this isn't very insightful. They don't talk about what makes up that GDP growth. And whether or not it's a good idea for poverty reduction to depend on continuous GDP growth so entirely. After all, it's possible to reduce poverty without continuous GDP growth and it makes countries who do so much less vulnerable to the rumblings of the global economy.
posted by symbollocks at 7:18 AM on March 3, 2010

Oil leads the way in Africa's 10 fastest growing economies
posted by ahughey at 7:54 AM on March 3, 2010

This is incredibly uplifting for me... I didn't search yet but was going to post this in case anyone's interested; Vice magazine finished posting their travel guide to Liberia a couple (months?) ago. Everyone should see it:
(link to part one)

Watching that little documentary and then reading the hideous blog of Martin Ssempa posted above (in the Ugandan homophobe thread) - I was starting to think that Africa was well and truly doomed.

Thanks for posting this, you brightened my day.
posted by Baby_Balrog at 8:13 AM on March 3, 2010

This is why I refuse to read books like Dead Aid and the dearth of others who are trying to make the case that development and relief assistance has hurt Africa. The proof is in the data....

First, I agree wholeheartedly that Moyo is likely entirely wrong with the assertion that all development aid hurts Africa. However there are more reasonable voices in this debate who would suggest that the positive results indicated in this article don't prove anything about the effectiveness of development assistance to stimulate economic growth and poverty alleviation. The proof can't be in the data (at least, this data) because this research doesn't address aid or development assistance, or the causes of this poverty alleviation at all. For all we know some of these remarkable success stories are successful despite their receipt of aid, not because of it.

(This isn't a "correlation isn't causation" argument, because there isn't even a second variable here to correlate)

I would agree that this offers hope that growth and poverty reduction is possible, even in the most dire circumstances, and if anything this may encourage more aid rather than less as Moyo & co. suggest.
posted by Adam_S at 11:26 AM on March 3, 2010

Ghana has a growing IT sector

It does, but the investment is really in MINING projects and in developing the NATURAL GAS reserves.

One thing Ghana really has going for it in the not-exploiting-NATURAL-resources industries is its relative political and financial stability and SECURITY among English-speaking West African countries. Nigeria, for example, though it is the largest market and there is lots of money around, is a really tough place to do business and is just not as safe, easy, or approachable for Western companies looking to enter the Anglophone* West African market. Enter Ghana!

There is a lot of opportunity there, and many people in younger generations are finally able to take advantage of it. Various IT learning stuff is really popular, and a lot of kids are eager even to work in administration and offshore calling center type work to improve their skills: it's regular, indoors, and internationa.

Anyway, Ghana is cool!**

* Because of trade agreements (same ideas as NAFTA), the former British colonies still have easier trade with other former British colonies; same goes for the French.
** (The region's not all rainbows and unicorns though - there are other countries that are not going to come out as "pulling their weight" in reducing poverty, like Togo, just to the East of Ghana.)
posted by whatzit at 11:43 AM on March 3, 2010 [1 favorite]

allkindsoftime-

I haven't read Dead Aid yet, but given my understanding of the book's premise, and umpteen hours logged in Sala-I-Martin's lectures, I think he's more or less in agreement with Dambisa Moyo. Compare the book's editorial reviews and the mission statement of Sala-I-Martin's nonprofit.

They're suggesting that there's a more effective way to deliver aid, which might reduce the risk of kleptocracy, lower overhead, and foster stronger local institutions and economies, rather than dependence on INGOs and governments. (Think things like microfinance, or supporting existing communities and networks rather than imposing new ones according to an academic model.) They're also holding IGOs (like the WTO) and governments to task for inequitable trade policies.

tl;dr: They don't think aid is wrong, or useless. They're pointing out that successful aid involves a lot more than throwing money at a problem. In other words, they're not the jerks that you think they are.
posted by evidenceofabsence at 12:26 AM on March 4, 2010

Shah-vi-eh. Shah-vi-eh.
posted by evidenceofabsence at 12:28 AM on March 4, 2010