Politics in Ethiopia

In my father’s house

In my father’s house

There are many mansions.

Enough, for each one of us

For each, as his own wish.

In my Father’s house

In our Dear’s  compound

We have many mansions

Enough for everyone’s need.

The mansions, in our Father’s house

Shine in the morning sun

Dear and beloved

Precious like a pure stone,

Like a diamond.

For each, as his own wish

As per his dreams, and ambitions

And so they are designed

And built, and decorated

And carpeted, and gardened.

In my Father’s house

There are many mansions

Enough for everyone’s need

If it were not so, I would have told you

But it is so, and so rest assured.

September 2011

Kiss

I felt the kiss of her lips 

Touching my cheek in the darkness

And I asked

--

How come I cannot touch your face

Tell me about it please

Is it back or white

Golden or violet?

--

And she laughed

In a melodious whisper

--

You speak so strangely my dear

My face does not have any color

Does perfection have a shape

Or purity any texture?

If you could describe it

It wouldn't be any more perfect

Since then you would toss and roll 

Slice and dice it

Till you find it in fault.

Population Issues: How Economics Rules

Environmentalists ranging from Malthus to Brundtland fret that the earth is exploding from overpopulation. Citing numbers like those depicted in the Figure below, they complain that the earth has reached a turning point. Man has become one pathetic fecund animal that reproduces without limit. In contrast, they contend that the earth’s resources are finite and, and its ecosystem fragile. If the current trend continues, man will not only have insufficient means to survive, but could also destroy the earth’s fragile ecosystem, polluting its water and air resources, and bringing about catastrophic phenomena such as global warming.  

Most environmentalists find enough ground in this to reject economic growth, thus emphasizing a new movement towards ‘economic de-growth'[1]. Some could even trace the roots of unbridled population growth back to the commencement of uninterrupted economic growth, largely since the late 19^th century.

  

Needless to say, the rise in human populations coincides with the era of economic growth. Modern food production that made available abundant, if nonorganic, food supplies significantly reduced deaths from starvation. Similarly, the invention of modern medication from the penicillin to an endless variety of vaccines has significantly lowered child mortality rates and contributed to higher life expectancy. However, to contend that sustainable human population growth can be achieved only by economic ‘degrowth’ is quite unwarranted.

One of the key scientifically established relationships in social sciences is what is known as “the demographic transition.” This refers to the observation that population growth rates fall with economic growth, an observation that can be easily ascertained from the Figure below. How does this come about? There are several ways in which economic growth contributes to lower population growth.

First, better economic growth brings about more and better quality of education. Perhaps there are many ways in which education reduces fertility. But one important mechanism is the feeling of empowerment education brings about, especially to women. With better education, individuals can break the mold of inherited societal roles, and get the ability to envision and plan their own future. This weakens the lethargic perception that adolescence is naturally followed by a family and a lot of children. With the empowerment of education, couples take the future into their own hands, and responsibly plan when and how many children to have.  

Second, and related, economic development makes child rearing an expensive venture. The benefit of having one more children must be weighed against the financial bites ensuing from it. This is what economists call the opportunity cost of time. When having a baby the mother has to stay home for period of at least half a year, and perhaps even longer than a year, which is quite a lot of money lost if she has to stop working. In the meantime, career plans have to be kept on hold. As time goes on more financial costs come in, including the cost for additional accommodation, means of transportation (perhaps a new car), and future costs of child care and education. Not just financially, but even emotionally, child rearing is an expensive business, if both couples are working and come home tired from a full day of work. All this increases the incentive for couples to having smaller and manageable families, with increased emphasis on the ‘quality’ of the child in terms of education and other resources devoted rather than the mere number of children.

There are many more reasons why population falls with economic growth. For example, the incentive for having more children as a means of ‘social security’ declines, since with increased economic prosperity the state often provides support for the retired. Even among families that are not fortunate enough to get the advantages of education and employment, economic growth makes contraceptives more accessible thus making family planning possible.

Overall, economic development is perhaps the best answer for the ills of overpopulation the earth is facing. As one famous person said before, it is indeed true that "development is the best contraceptive."[2]

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[1] Seek the Wikipedia article http://en.wikipedia.org/wiki/Degrowth

[2] Karan Singh as quoted in :David N. Weil (2004). Economic Growth. Addison-Wesley. p. 111. 

Homeless Nile

There is an old saying in Ethiopia that roughly translates as “Nile has no home of its own, and yet it carries much luggage with it.” That is to imply that, knowing nothing of its destination, it assumes the burden of additional responsibility.

No doubt an Egyptian would disagree with that. Yes, it is true that Nile carries so much luggage with it. While meandering through the rugged Ethiopian highlands, the Nile washes down the fertile volcanic soil that give it its peculiar dark brown color. The annual flooding of this rich water has formed the backbone of the ancient Egyptian river valley civilization. And yet, while the Nile carries much luggage, an Egyptian would say, it is nothing but homeless. Its home is the Mediterranean, Egypt.

I have always wished to visit Egypt, a dream that has not yet come true. But even without visiting it, it is easy to imagine the precarious dependence of this desert country on the Nile. Without the rich gush of water that streams from the Ethiopian mountains, Egypt is but a patch of uninhabitable wasteland. Thanks to the Nile, though, it is home of an amazing ancient civilization. Although upwards 85% of the Nile waters come from Ethiopia, in the end most of it goes to the service of Egyptians that remain at the mouth of the river. This is the case today, as it has been for thousands of years.

There is an increasing controversy about Ethiopia’s plans to dam the Nile river. This issue has been simmering for years, but now that the actual physical work has started, it has grown to outright confrontation. And the media is awash with opinions from both sides. The first thing that startled me about these opinions is that the majority from both sides claim full privilege over the river. Sitting at different ends of the Nile, it appears that both Ethiopians and Egyptians claim the whole river for themselves. But the fact remains that the Nile starts in Ethiopia and ends in Egypt. Unavoidably, the Nile is a shared river.

To say that Egypt has ‘historical right’ over the Nile is as true as saying that Ethiopia has a ‘physical right’ on the river. Both are totally true, but do not necessarily contradict with each other. Although the Nile has not been ‘historically’ used in Ethiopia, taming the unharnessed Nile has been a dream Ethiopians have long itched to write in their history books. Now that this is becoming a reality, a significant change in perspective is expected from Egypt, a country that has for centuries dominated the Nile river and seems, even today, to naively assume that it can continue to do so. In the meantime, Ethiopia too should recognize that the Nile is shared, and a physical control on its source is not tantamount to complete ownership.

This time seems a critical juncture in the relationship between these two countries that have been from the beginning tied by the umblicalcord of the Nile, although both have so far failed to appreciate this fact. Given the rapid population growth and potentially frequent draughts from climate change, every drop of the Nile will become more valuable in the coming century. The relationship between the two countries will head in two potential courses of direction in the coming decades. Hopefully, both countries will come to terms with the fact that the Nile is a shared river, which needs to be jointly managed and developed. However, there is another scenario that worries me as a likely development. Faced with polarized politics and extreme poverty at home, politicians from both sides could use the Nile as smoke screen to externalize their problems. I am afraid that the Ethiopian and the Egyptian, who for thousands of years drank from the river Nile, will fail to recognize the value of their joint possession, and fall victim to hatred and anger towards each other. I can only hope that time will prove this fear wrong.

June 7, 2013

*********

 Nile river

 Blue Nile Falls, Ethiopia

 A map of the Nile

 Airial picture of the Nile Delta, Egypt

Sunset on the Nile 

And there was light… and poverty

Perhaps you had once wondered why all countries within the tropics are poor or almost poor. If you take a look at the map again, you will observe that all of the world’s wealthiest countries, with the exception of the tiny island of Singapore and the sub-nation of Hong Kong, lie within the temperate zone. Of course not all non-tropical countries are rich; but it pretty much appears that year-long sunshine does not go hand in hand with riches. (Too bad for some of us, who would have liked to have it both, sunshine and money.)

The notion that climate affects economic performance, or “environmental determinism” as some people call it, is an age-old concept. The 18^th century French enlightenment thinker Montesquieu was among those who saw a link between climate and human behavior[1]. However, the role of climate on economic performance is out of fashion in current economic thinking, perhaps because of its deterministic and simplistic appearance. Nonetheless, it remains true today as much as ever that poverty is more prevalent in the tropics.

Figure 1 provides a scatter plot and a linear regression fit of average annual temperature on GDP per capita for a sample of 94 countries. The significance of the correlation is remarkable as is its strength: for every rise of annual temperature by 1 degree Celsius, GDP per capita falls by 6%. If Uganda, a country on the Equator, were as cold as Switzerland (a large 17 degrees fall in average temperature), its GDP would double, raising its income to the level of Pakistan. An alternative estimation gives the equally remarkable result that GDP increases by 13% for every one more month with below zero average temperature. The model does over- and under- shoot in predicting the income of some countries. Singapore is too rich for its climate, and Kyrgyzstan should have been much richer given its climate. But it does a good job for many countries; for example the incomes of countries like Canada and Argentina can be almost perfectly predicted once we know their climate.

Is this relationship totally a fluke or is there some sensible reason why income should be lower in the tropics? Thanks to the pure exogenous nature of climate, the standard critique of endogeneity cannot apply here. Could it be that this is purely coincidental? The fact that the economic significance of climate is raised by early thinkers and confirmed by recent data warrants that it deserves a closer look.

I think there are at least two reasons why climate can affect economic performance. Firstly, the potentially heavy winters in the temperate parts of the world could provide unique incentives for innovation and encourage forward looking behavior. If necessity is the mother of invention, I would say the European and northern Asian winter must have begotten a host of inventions[2].

Major examples are of course those innovations that directly tackle the physical needs related to the winter[3]. The radiator, central heating, and many more household items had to be invented for the purpose of surviving the winter. The cold climate of England might have increased the popularity of coal, especially for domestic heating, since the 14^th century. Coal later played the central role of powering steam engines during the industrial revolution. It can be conjectured that the first horse drawn carriages appeared with the aim of avoiding the shrill chill of horse riding in the winter. Several centuries later the carriage was upgraded to the car and the train while the tropical traveler never imagined the need to change the ride of his horse or camel.

The lack of winter in tropical areas meant that the inhabitants were not pressed to develop similar innovations. What is important here is not the innovation itself, but the process of innovation and the culture of systematically solving the constraints imposed by nature. This is not to say that the there are no natural constraints in tropical areas, but I believe that the winter specially stands out as a unique natural challenge with an existential threat. Because of the winter, people have to plan ahead, save a certain fraction of income throughout the year, and invest on items that are required during the winter. It follows that people in temperate climate have adopted a long term oriented perspective to life that emphasizes thrift and a systematic application of knowledge for problem solving.

Secondly, the winter can have a role in the way society is structured. I believe the presence of cold winters provides people with the incentive to cooperate in order to counteract its effects. When I was a young boy growing up in Ethiopia, I sometimes used to run away for a day when I quarreled with my parents. I then went fishing with my friends to the farthest river, or set out to climb one of the nearby mountains. Of course my parents would be even more upset when I returned very late, but I knew that they were also worried. To avoid escalating the case further, they would pretend nothing happened and it was soon forgotten. But a 10 year old Dutch boy in my place could never play the same trick in a winter month. He has to sit down and talk to his parents and resolve the differences. By forcing people to stay inside the house, the winter can bring the family together, and compel them to undertake the challenging task of talking to each other and arriving at compromise.

What evidence is there for the direct effect of climate on culture? Figure 2 provides a scatter plot and a linear regression fit between an index of “long-term orientation” and average temperature. “Long-term orientation” is a cultural indicator that measures the extent to which a society plans ahead in the future. This indicator was developed by Geert Hoefstede and has been used a lot in scientific research.

The figure depcits an unmistakable negative correlation between the culture of long-term orientation and average temperature. The index of long-term orientation, which varies between 0 in Guinea-Bissau (PUE) and 100 in South Korea (KOR), falls by 1.5 percent when average temperature increases by 1 degree Celsius.

Now we can connect the dots and, using the relationships exhibited in Figure 1 and Figure 2, show that average temperature lowers GDP per capita through its effect on culture. Figure 3 shows the relationship between the index of long-term orientation and GDP per capita. The values for the index of long-term orientation used in this Figure are predicted values using temperature. Therefore, this relationship is akin to the standard instrumental variable estimation.

Well, the results are all there to see. Predicted values of the index for long-term orientation have a clearly strong positive effect on GDP per capita. Since we are using only the part of variation of “long-term orientation” that is explained by the average temprature, this is a clear evidence for negative effect of climate on GDP per capita. There is enough here to say: It is the climate stupid!

You may say that this is an awful news for tropical countries. But does the result show that a country’s level of income is preordained by its distance from the Equator? I do not think so. To say that climate matters is not equivalent to saying that economic performance is determined forever as implied by “enviromental determinism”. Let me explain.

Figure 1 shows that more than three quarters of the total variation in GDP per capita remains unexplained. So yes, climate is an important determinants of income, but there is plenty room for other factors too. Picking up the earlier comparison, Uganda could double its income if it were as cold as Switzerland. But the income gap between the two countreis varies by a huge factor of 40; thus even after its income doubled Uganda would remain 20 times as poor as Switzerland. This clearly illustrates that even if Uganda’s climate were perfect, there is much to be done before its income gap is totally iliminated. The point is that there is enough room for imporving economic performance by fixing changeable policy and institutional vriables.

Related to this, Figure 1 illustrates that climate is not an important determinant of income at least in a few countries. Singapore and Hong Kong are worth mentioning again as examples of countries which grew inspite of their tropical climates. The Figure also shows that many countries such as Luxumberg, Malta, and even the USA have larger incomes than their climate would warrant. Many of the new Asian Tigers that are growing ferociously, including Malaysia, Thailand and Indonesia, are tropical countries. This is because, although climate is predestined, clulture can clearly change. People are adaptive and, if given the opportunity, it does not take long for a society to catch on the benefits of long term oriented customs such as thrift and education.

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[1]  Although, I must admit, the generalizations he makes in his book “The Spirit of Laws” are in many ways overblown, and potentially biased.  

[2] In Aldous Huxley’s book “A Brave New World” the World Controller asks Mr. Watson where he would like to be deported to. “By the way, Mr. Watson, would you like a tropical climate? The Marquesas, for example; or Samoa? Or something rather more bracing?" Mr. Watson replies "I should like a thoroughly bad climate. I believe one would write better if the climate were bad. If there were a lot of wind and storms, for example …"

[3] It is reasonable to conjecture that people in temperate climates were the first to start wearing clothing and shoes, although it is difficult to definitely prove it due to the long time distance ever since. In the Adventures of Tom Sawyer, Mark Twain describes Tom as “the first boy that went barefoot in the spring and the last to resume leather in the fall,” reminding us that even in the 19^th century, shoes were mostly parts of a winter wardrobe.

The Boston Bombings and Why Nations Fail: A Tale of Two Tales

I was as usual drinking coffee while watching the CNN news coverage this morning. Like yesterday and the days before, CNN was exclusively covering the tragic Boston Bombings that claimed three lives and wounded hundreds during the ill-fated marathon contest. There was breaking news announcement that the manhunt for the perpetrators of the dreadful bombing incidents have come to a successful conclusion. The TV-screen was flooded by the pictures of the two Tsarnev brothers from Chechenia, the 26 year old Tamerlan, who had been killed in the hunt, and the 19 year old Dzhokhar, who had been wounded and captured alive. A reporter had immediately flown to Dagestan, the birthplace of the brothers, and presented interviews with their father and shots of their former primary school. Several correspondents took turns reporting the reaction of Bostonians and the officialdom on the conclusion of a week-long nightmare.

While CNN spent hours and hours of expensive airtime on the Boston bombings, much has been going on in the world. In the week since April 15, several bomb blasts have killed more than 40 people, including a single one that claimed 32 lives, in the unending violence in Iraq. The grueling war in Syria that has so far claimed 70,000 lives is still raging. Just today, 157 were reportedly killed in an earthquake in Sichuan province of China.

Why is that, ignoring all these tragedies, CNN focused exclusively on the Boston bombings, directing all its resources and reporters on this comparatively smaller incident? Which brings me to the seemingly unrelated question: Why Do Nations Fail?

This is the title of a bestselling book I finished reading just a week ago. One of the co-authors of the book, Professor James Robinson, visited our department, and gave a public lecture on the same theme. There was also a question and answer session in which he received questions about his book. I actually got the chance to ask why nations, particularly African nations, fail. Is it because of war, diseases, revolutions, crime, culture, climate, corruption, starvation, lack of resources, inequality, organizational failure, isolation, political infighting, what else?

Professor Robinson has a simpler answer: institutions. Forget everything else; it is for lack of proper institutions that nations fail. More specifically, we need inclusive political institutions to avert the collapse of states. His story envisions three layers of institutional arrangements. A necessary condition for the emergence of inclusive political institutions is the existence of a strong and centralized state. Without a strong central organ that exclusively exercises power and the “monopoly for violence”, law and order would be lacking, thus inhibiting any sort of social organization. But this centralized authority should be of an inclusive type if it is going to promote sustainable economic growth. In other words, it should have a reasonably fair representation of the broad masses. Only an inclusive (or democratic) type of political government can promote economic policies that encourage entrepreneurship, investment, creativity, education and hard work. To sum up, a nation can rise only when it has a sufficiently centralized government that is representative so that it can promote economic policies that are conducive for growth.

Though at different levels, both CNN and Professor Robinson tell us stories about what the world looks like. But what is it that they have in common? If you have not got me yet, the similarity between the two is that they tell stories in their own ways.  Both are extremely selective in their presentation, and offer simple explanations for complex problems. For CNN the only major world event this week was the Boston bombing and for Professor Robinson nations fail just because of bad institutions.

Of course, both CNN and Professor Robinson know that much more is going on in the world. Their positions can be described as  at best simplistic and at worst biased and partial. Why is that a top ranked news channel as well as a professor in the world’s best university offer such simplistic answers while knowing the reality is much more complex?

The answer is what psychologists call the “bounded rationality” problem. This means that human analytical (thinking) power is by nature limited and thus cannot grasp a complex problem in its entirety. In other words, to be understood, a solution for a complex problem should be abstracted and robbed of its complexity, so that it is presented only in its bare basic form. According to Professor Robison, “a framework that [has] 17 factors… is no framework at all.” And thus the best story should have only one variable; one simple, clear story is the answer.

The first striking thing about this approach is that it sacrifices content merely for the sake of presentation. Surely nations fail for more than one reason. The mere fact that we can properly understand only one variable does not guarantee that in reality there is a single solution for the problem. The fact that CNN’s mainly Americanized viewers can best identify with the story of the Boston marathon bombings does not qualify the event as the single most important incident of the week.

The tragedy of the bounded rationality problem is that it works two-ways, that is it affects both the storyteller and the listener. It is not just readers of Professor Robinson’s book that would fail to understand a more complex model of state failure. If Professor Robinson had built a much more realistic model by sacrificing its simplicity, he himself would probably have hard time grasping how the model works. Similarly, for a given amount of resources CNN cannot efficiently report ten different stories at the same time without compromising the quality of its reporting. The logic of efficiency is thus against a more inclusive story, both for the professor and the news channel.

Where does this leave us, as readers of books and followers of TV channels? My opinion is that we should be conscious of not only what we read and watch, but also what we do not read and do not watch. The storyteller will make all appearances of certainty, and the story itself might be appealing in its elegance and simplicity. Nonetheless, however well told, a single story is in the end only half-true, until the other half is told. It is thus presumptuous to assume to watch ‘world news’ by following one TV-channel, as it is disastrous to formulate policy in the image of one school of thought.