A declining demand for equality?

Can we just assume that people desire a more equal world? Contrary to expectations former socialist countries do not express a great desire towards equality. A recently released working paper by the World Bank entitled Attitudes to Equality. The Social Legacy Revisited concluded that in countries of the former Soviet Union there may be little political or social consensus for moving towards greater income equality.   Thus, the unequal outcomes observed may not be 

the consequence of limited administrative capacity of the state to redistribute incomes, or different levels of confidence in ability of the state, but the lack of a political consensus that it should do so.  

Do we see signs of a trend? Not only in capitalist countries such as the UK (see earlier post Does rising inequality lead to a higher demand for redistribution.), but now also in former socialist countries equality does not seem to be that much on peoples' minds.  

Any studies on the attitudes of Africans to equality?

What can South Africa learn from Kenya?

A hotbed of high expectations for change fuelled by poverty, inequality, elitism and tribalism made Kenya explode (see earlier posts on this blog).

Fast forward. A hotbed of high expectations for change fuelled by persistent poverty, rising inequality, elitism and racism made South Africa.... 

The comparisons are already been made: An Ugandan perspective: After Kenya, could South Africa be next?

There are certainly risks.  Whether the anger will spill into the streets of South Africa will need some careful analysis.

It is a plausible scenario that the changes started in Polokwane will continue with the election of a more leftish leaning president (whether this is Mr Jacob Zuma or not). In such a scenario, this is where the comparisons with Kenya's misfortune will most likely stop (and South Africa be faced with other kinds of questions). 

If for some reason, the expectations of the poor masses are not met by these changes there are a few very important differences with Kenya.  South Africa has invested in a massive insurance policy in the form of basic needs provision and social grants. Despite the fact that unemployment remains very high, and inequality is increasing, up to 12 million people (mostly children though) receive grants from the state. Angry, unemployed drop outs from school, usually in their late teens and twenties, are not covered.  This remains a big risk. The persistent challenge remains for the economy to absorb them.

However, with most basic needs covered, the question remains whether relative deprivation will make the crowds angry enough to turn into violent mobs.

The Sustainability of Nations

A new working paper by Pilarizetti & van den Bergh published by the Tinbergen Institute in the Netherlands revealed surprisingly high variability in aggregate sustainability rankings when different measurements are used. The paper quantitatively compares three aggregate indicators of sustainability: the World Bank’s ‘Genuine Savings’ (GS) measure, the ‘Ecological Footprint’ (EF) and the ‘Environmental Sustainability Index’ (ESI).


Top African countries:
All: Namibia, Central African Republique
GS: Morocco, Lesotho
EF: Gabon, Mauritania, Namibia, Botswana, Zambia
ESI: Gabon.


Bottom African countries:
All: Algeria, Egypt, Burundi, Zimbabwe, Nigeria
GS: Zimbabwe, Sudan, Malawi, Nigeria, Angola, Mauritania, Congo Rep
EF: Libya
ESI: Zimbabwe, Burundi, Ethiopia, Sudan


More interesting are those countries that score well on economic growth as well as sustainability indicators. Gabon and Botswana must be doing something right (see also earlier post Go Gabon).

Unmasking Africa's seven success stories

A report from the Belfer Centre for Science and International Affairs at Harvard University (Robert I. Rotberg, Africa’s Successes: Evaluating Accomplishment, Belfer-WPF Report 43, Program on Intrastate Conflict (Cambridge, MA, 2007) evaluated the achievements of seven of mainland Africa's success stories: Botswana, South Africa, Zambia, Ghana, Tanzania, Mozambique, and Uganda (in order of 2006 annual GDP per capita).

Success it turns out is relative:
Although all of the seven countries are growing, they are each dependent on primary commodity exports, not on invisible earnings or manufactured products. Unlike the Asian tigers, and arguably Botswana, none has entered a steady state of sustainability, not even South Africa (where population growth continues to outstrip net job creation). The Asian tigers perform well for their peoples—they provide quantities and qualities of the seven essential political goods. In the seven African cases, only Botswana and South Africa begin
to match such levels of performance, and South Africa’s high crime rate makes it the most insecure country among the seven.

From the executive summary:
Africa’s seven successful countries are all growing reasonably rapidly. Yet, job creation still lags behind promises and expectations, underlining the persistence of poverty. Moreover, where there is growing indigenous wealth, there are also severe income inequalities. Several countries will be benefiting from new resource finds, and broad improvements in GDP could eventually flow into the seven countries from such discoveries. But the exploitation of these
finds, and other commercial advances, is being deterred in every case by serious shortages of electric energy. Every country has outrun its available power supplies; several years will pass in each case before these shortages can be met. Moreover, nearly all, except Botswana and South Africa, have road and rail networks that are inadequate for the industrial and agricultural growth on which their economic advances depend. Likewise, each country in our sample is being dragged down economically by the scourges of tuberculosis, malaria, and
HIV/AIDS.

I do not like what I read. Maybe I must not write about this. Maybe I must ask for self-censorship and only focus on good news stories in future. Maybe I must be more afraid to face reality. Or, better, develop models that just ignore it.

Reporting on randomised trials

From The Lancet a suggestion how to report on randomised trials:

For clinical trials, clear, transparent, and sufficiently detailed abstracts of journal articles and conference abstracts are important because readers often base their assessment of a trial on such information. Some use an abstract to decide whether to seek more information about a trial. However, in some parts of the world, health professionals often have access to the abstracts only, so health-care decisions are made on the basis of abstracts of randomised trials

It can be a life and death issue:

In 2006, Arthur Amman, President of Global Strategies for HIV Prevention, made a disquieting remark: “I recently met a physician from southern Africa, engaged in perinatal HIV prevention, whose primary access to information was abstracts posted on the internet. Based on a single abstract, they had altered their perinatal HIV prevention program from an effective therapy to one with lesser efficacy. Had they read the full text article they would have undoubtedly realized that the study results were based on short-term follow-up, a small pivotal group, incomplete data, and unlikely to be applicable to their country situation. Their decision to alter treatment based solely on the abstract's conclusions may have resulted in increased perinatal HIV transmission.”

What about a similar protocol for randomised trial studies in development economics?

Economics for a better world

After that damning post yesterday on the plunge of economics into insignificance, I need to post something to make it up. I started searching for evidence that economics postively impacts on the worst problems we face. One of them is poverty.


Interestingly enough it seems as if many economists agree which economists were managing to do influential work on the crucial questions facing modern society. In a survey of economists, conducted by David Leonhardt and reported on in the NY Times... the small group of economists who work at the Jameel Poverty Action Lab at M.I.T., led by Esther Duflo and Abhijit Banerjee, were mentioned far more often than anyone else.


According to their website ...the Abdul Latif Jameel Poverty Action Lab (J-PAL) serves as a focal point for development and poverty research based on randomized trials (and here).


As pointed out by Urbanomics, randomized trials can be very useful in shaping policy, but they have to deal with a mind-numbing diversity between and within developing societies, and their possible responses to the specific strategy or approach could (and will) itself exhibit similar diversity. Dani Rodrick argues that this way of thinking about development policy is radically different from more traditional approaches as it admits much greater diversity and heterodoxy. In his words: It is humble about the extent of our knowledge but optimistic about our ability to learn.


Randomised trials have been applied in many fields, most notably in healthcare. Although there are many pitfalls in applying randomised trials, most notably its potential ethical impacts, it can provide insights on how the (developmental) system behaves. Given the lessons from clinical trials in healthcare (such as mentioned here), one needs to be cautious in only relying on such results without a contextual bigger picture understanding on how development paths look or ought to look like.


Go economists! The real world is waiting.

Saving economics from a rapid plunge to insignificance...

Economists working on environmental issues have a lot of work to do, and that is not only because natural resources and environmental good and services are becoming scarcer.

According to an article in Environment and Development Economics by Paul Ehrlich ecological economists are well-placed to save the economics profession from, in his words, a rapid plunge to insignificance.

Wow! Just when I thought that life-work balance is slowly becoming a reality...

Biofuels: from science to politics

From African Agriculture:


Scientists and NGOs across Africa are calling for a moratorium on new biofuels projects as millions of acres of prime agricultural land in sub-Saharan Africa are switched from food to fuel...


Just as the bonanza is getting into full swing, the scientific argument that biofuels mitigate climate change is collapsing. Last week, the journal Science published a major study concluding that biofuels contributed to climate change as the environmental cost of land conversions generated more carbon emissions than it saved


Not everyone agrees. The Wall Street Journal reports:

In a letter to Sciencexpress, which published the original article, Dr. Wang, of the Argonne National Laboratory, and Dept. of Energy colleague Zia Haq take issue with the Science study, which sought to explore how using more land for growing biofuels could end up spewing more carbon dioxide into the atmosphere.


With the rising costs of energy as well as food, regulatory environments already developed or in process of developing in support of biofuels, and large vested interest groups in the production of biofuels this debate has all the elements to propel to the top of many political agendas.

The art of constructing an official poverty line

In his budget speech Mr Trevor Manual referred to South Africa's new official poverty line, expected witin a few weeks from Statistics South Africa. A bit of deja vu - in last year's budget speech it was noted that an official poverty line was expected in the second half of 2007 (M&G).

While we wait, a few snippets on poverty and poverty lines:

• The poverty threshold, or poverty line, is the minimum level of income deemed necessary to achieve an adequate standard of living. (Wikipedia)
• Zimbabwe's poverty line is a staggering Z$100 million per month!! (Fin24)
• China's official poverty line is reported to be Yuan 640 ($85) per capita per year, a figure far too low for subsistence and much lower then the international bencmark of $1 per capita per day (Share The World's Resources)
• There is very little consensus on how to define poverty let alone measure it (eldis)
• The following map from UNDP (Data source: United Nations Human Development Report 2007-2008. Available at http://hdr.undp.org/en/) indicates percentage of people living on less then $1 per day:

Poverty is a politically sensitive. Measurement is an open game. As in the case of China all the incentives are there to manipulate the outcome. One can only hope that the much anticipated South African official poverty line does not not fall prey to such shortsightedness.

Paying for environmental services: one step closer to mainstream?

Payments for ecosystem services is slowly gaining ground as evident by carbon sequestration, national forest conservation and watershed level initiatives. Formidable obstacles remain, not least the measurement of ecosystem goods and services and the actual changing of behaviour.

An article in Resources, as referred to on the Environment for Development website explains:

A promising concept that has received considerable attention, Payment-for-ecosystems- services has the potential to become a conventional environmental management tool.

Forests and farms supply a wide array of valuable ecosystem services including sequestering carbon, harboring biodiversity, and preventing soil erosion. Yet forest and farm managers rarely, if ever, receive a financial reward for these services. As a result, from society’s perspective, they may be too quick to clear trees and engage other activities that disrupt ecosystem benefits. An increasingly popular approach to this problem is to pay land managers for the ecosystem services their parcels provide. Payment-for-ecosystem-services (PES) programs have been established in a number of places around the globe, and they function at a variety of geographic scales. Emerging markets for carbon sequestration credits constitute an international program; national forest conservation programs are operating in Australia, Costa Rica, and Mexico; and the World Bank, among others, has piloted watershed-level initiatives in a several countries.

Challenges remain:
A promising concept that has received considerable attention, PES has the potential to become a conventional environmental management tool. Its ability to live up to its early
billing, however, will depend on the ability of its proponents to develop strategies and methods for targeting payments to ensure they actually change behavior, and for more precisely
measuring ecosystem services to ensure that payments are as cost-effective as possible.

Environmental fiscal reform: 2 cents per KwH

In the Budget speech 2008 presented today, Min. Trevor Manual announced a new environmental tax on electricity use. A full extract of the speech:

Supporting sustainable development
...I have indicated that we also have to focus more clearly on our longer term responsibilities.
The Treasury circulated a draft policy paper on environmental fiscal reform to key
stakeholders in 2004, and then published it as a revised discussion paper in April 2006.
Since then, the United Nations International Panel on Climate Change, in which a South
African team led by the Department of Environmental Affairs and Tourism played an
active role, has added impetus to the need for policy change.

Options that will now come under scrutiny for implementation include the use of
emission charges and tradable permits, tax incentives for cleaner production
technologies and reform of the existing vehicle taxes to encourage fuel efficiency. A
proposal to encourage biodiversity conservation by private landowners through an
income tax deduction is under consideration.

There is much to be done to develop specific and practical measures to support
sustainable development, both on the tax and the spending side of the budget. I hope
that this House will encourage an energetic debate – if that is the right word – and we
have to work hard at developing an understanding between very diverse groups of
people: scientists, environmental activists, engineers, businessmen, workers, policy
advisors, regulators, and every one of us who enjoy the ordinary privilege of having
access to light, heat, cooling, television, transport, communications and so much else,
at the flick of a switch or the press of a button.

As a first step towards appropriately targeted fiscal environmental measures, and in
support of the required demand-side response to power supply shortages, a new levy
will be introduced this year on the sale of electricity generated from non-renewable
sources, at a rate of 2 cents per kWh. It will be collected at source from the electricity
generator, and is expected to raise about R2 billion in 2008/09 and R4 billion a year
thereafter.

Madam Speaker, we know that the introduction of a new tax is never a popular move.
However, this is an instance where we hope that people will succeed in avoiding the
tax. Households and businesses who reduce their consumption by 10 per cent or more
will find that this levy does not affect their monthly costs.

Carbon dioxide vs radioactive waste?

What is worse: coal fired or nuclear power stations? Is this a false choice? While these questions are heavily debated some have already made the decision. According to an article in The News&Observer:


As Progress Energy looks for new power sources amid shifting environmental rules, the Raleigh utility has decided that coal is out and nuclear is in...Its decision favoring nuclear energy is driven largely by uncertainties in public policy. Legislators and regulators increasingly are focusing on the environmental threat posed by global warming. Penalties on carbon-dioxide emissions are widely expected from Congress, a policy that could significantly increase the operating costs of coal plants by taxing coal's byproduct: the greenhouse gas that is blamed for overheating the planet.


South Africa plans to add around 28500MW of coal fired power stations to the national grid by 2025. Nuclear power generation is also expected to grow strongly. Whether the environmental threat posed by global warming will have an impact on these plans remains to be seen.

Given international climate agreements and trade rules, what are the risks that South Africa will not be able to follow a carbon-intensive development path?

Farmers - time to adapt

A new study by Prof Blignaut from the University of Pretoria, as reported on in Farmer's Weekly, indicated that farmers in South Africa are receiving less rain and have to cope with higher average temperatures.

This has important implications on how farms and water resources are managed in future.

Poverty impacts on neural development of children

According to an article 'Poverty is Poison' in today's New York Times:

neuroscientists have found that “many children growing up in very poor families with low social status experience unhealthy levels of stress hormones, which impair their neural development.” The effect is to impair language development and memory — and hence the ability to escape poverty — for the rest of the child’s life.

Poverty News Blog reports on the same study:
Studies by several US universities have revealed the pervasive harm done to the brain, particularly between the ages of six months and three years, from low socio-economic status.

Martha Farah, director of the University of Pennsylvania’s centre for cognitive neuroscience, said: “The biggest effects are on language and memory. The finding about memory impairment – the ability to encounter a pattern and remember it – really surprised us.”

Interventions in the first few years of a child's life is vital:

Jack Shonkoff, director of Harvard University’s centre on the developing child, said policymakers had to take note of the research because “the foundation of all social problems later in life takes place in the early years”.“The earlier you intervene [to counteract the impact of poverty], the better the outcome in the end, because the brain loses its plasticity [adaptability] as the child becomes older,” he said.

What happens if this small window of neurological adaptability is lost?
Once poor, always poor?

When willingness to pay for conservation falls short

Cameroon wants to lease pristine tropical forest to conservationists. Conservationists are not willing/able to pay (see contingent valuation) the desired amount.

How serious are we really about conservation? Read the full story in The Economist.

Economic policy for South Africa in the balance?

Since Jacob Zuma became president of the ANC the question whether South Africa will change its economic policy direction became more pertinent. What do you think? Vote on this blog.

Here are a few snippets from the last few days:

In today's Mail & Guardian Online 'Mbeki on tightrope as left influence rises':
South Africa's left is riding high as the government prepares to unveil a budget that is expected to raise spending on social programmes and shift policy more towards fighting unemployment and poverty.Powerful trade unions and the South African Communist Party (SACP) have seen their influence within the ruling African National Congress (ANC) rise since the election of the populist Jacob Zuma as party president.

President Mbeki in the 2008 State of the Nation address:
At the macro-economic level, we will continue to maintain a fiscal posture that supports continued economic growth and development and reducing our external vulnerability.

Further to accelerate our economic growth and development we will implement the Industrial Policy Action Plan. Government will continue our industrialisation programme and continue to create opportunities for growth and employment-creation. In this regard, R2,3 billion has been budgeted for industrial policy initiatives and a further R5 billion in tax incentives over three years will support industrial policy.

In Polity.org.za 'Political risk rising in SA - Fitch':
Zuma won the race to lead the ruling African National Party in December, making him frontrunner to succeed Thabo Mbeki as the president of Africa's biggest economy.
However the left-leaning Zuma's trade union links are causing unease among investors and businesses who fear a Zuma-led government could reverse the liberal reforms of the past decade.

Climate risks start to bite Eskom's planned coal fired power stations

Pricing carbon is not a new idea. Emissions Trading Schemes and carbon taxes have been discussed and implemented throughout the world.


This time there is something new. The Bank of America has decided to start factoring a cost of carbon-dioxide emissions into decisions whether to underwrite debt for new coal-fired plants, according to an article on WSJ Environmental Capital. The shadow price is set at between $20 - $40 per ton of CO2.

Eskom currently emits around 210Mt of CO2 per annum at a rate of around 0.9 kg of CO2/Kwh sent out.

It is not a distant American or European challenge only. Financing Eskom's planned expansion is already under pressure, and one of the reasons is the climate risk (see Business Report):

Steve Lennon, Eskom's resources and strategy managing director, says both the Medupi and Bravo stations will use state-of-the-art climate change technology for higher efficiencies. Both plants will be built to ensure they are ready for carbon capture and storage technologies that may be established in time, he says.

However, South Africa may not have the appropriate geological formations for carbon storage. It is this kind of uncertainty that may influence the rate at which Eskom can borrow.

The utility is already feeling the pinch of funding constraints.

Its credit quality is being questioned. Standard & Poor's says the utility's credit rating may be downgraded in the next three months because of the absence of a funding plan for the R300 billion Eskom plans to spend building generating capacity over the next five years. In addition, global markets are increasingly averse to risky economies, as liquidity is being distributed far more circumspectly.

Coal fired power stations are planned to contribute around 28500 MW of capacity by 2025 (75% of the planned expansion to 80000MW from the current 42000 Mw).

Clean coal technology research suffered a major blow when the US Dept of Energy pulled the plug on FutureGen (see articles in Reuters and here).

At an average emission rate of close to 0.9kg CO2/Kwh and a price for carbon between $20 and $40 per tCO2 start penciling in an additional cost of between 14-28 cents per Kwh ($1 = R7.5). To place this in perspective Business Day reports: Eskom is understood to have guaranteed the Coega project electricity at 14c/kWh.

Who pays the rest?

It may not happen tomorrow, but it seems as if the accumulation of these potential liabilities is a bit too much for some to stomach.

Mobile teledensity

This blog has reported a few times on the cellphone revolution sweeping across Africa. (See for example the bright future of mobile, Mobiles and the digital economic boom)

Here is a neat graph to illustrate this. South Africa is rapidly nearing the number of one mobile phone per person. The rest of Africa is also growing rapidly but there is still a lot of potential.

Source: Posted on Resilience Science

Six photos on Antarctica in a warming world

The Guardian presents six pictures on how ice shelfs in Antarctica are impacted by a changing climate.

Hot Stress?

From a contribution on the William Briggs blog:

“A belief that mankind causes every bad event, excessive hand-wringing, frequent bowel movements, a tendency to lurk on internet message boards and post things such as, ‘There is a consensus! There is a consensus!’, an irrational desire to measure one’s personal ‘carbon footprint.’” But the most worrying of all is the, “Urge to make idiotic comments in public tying global warming to any event.”

Recognise any of this? You may well be suffering from GWSS (global warming stress syndrome).

Might have seemed plausible apart from the fact that the term does not yield any real tangible results on Google, nor the psychologists who said this. The only link is to the same post on Free Republic and this is what they are all about:

Free Republic is the premier online gathering place for independent, grass-roots conservatism on the web. We're working to roll back decades of governmental largesse, to root out political fraud and corruption, and to champion causes which further conservatism in America. And we always have fun doing it. Hoo-yah!

So, we will treat this a (funny) rubbish until proven otherwise.