My dog, COVID-19 and me

I have been working from home since the lockdown. So I wake up, tend my milk kefir (and drink a glass of it), walk my dog briefly in the countryside behind my house where she tries to chase some ducks, and where I make a wide circle around other humans, I feed the chicken (the shed also has some bats living in the roof) and prepare breakfast with some bacon and sourdough bread.

Chicken fleeing human and dog, afraid to catch a bug.

While eating breakfast and scanning the news, I am distracted by articles from people who see their existing opinions confirmed. Biologists talk about the danger of zoonosis (illnesses jumping from animals to humans): the cause of this zoonosis is an encroachment on natural habitats, forcing animals to live amongst people. For others, the wet markets are the cause of the disaster: wild animals should not be hunted or mixed with farm animals. Meat-eating and industrial meat production are blamed, but also globalization, global trade and tourism. Others blame small-scale, unregulated mixed farming for mixing people with animals too closely.  Anti-globalists, Marxists, nationalists and racists have a field day: Coronavirus confirms all opinions. And indeed, all opinions have seeds of truth. A very partial truth.

Me as an ecosystem

As I eat my breakfast and distract myself from having to start work, I think about how I myself am an ecosystem of lifeforms. The symbionts and parasites living in my gut, in, and on my body make me what I am. So far this morning, I interacted with my gut, dog, chicken, kefir, cow, sourdough bread, a bat, and pigs. Each one of them are diverse ecosystems on their own, but also part of the ecosystem that I am.

The ecosystem in my body is in a dynamic balance, and therefore it can fight off intruders quite well. Because there are so many good bacteria, the bad ones have little chance. 

Viruses evolve everywhere, but humans transmit them to me. 

The bacteria in my gut and their viruses can exchange genetic material, making harmless bacteria suddenly lethal. I remember my professor in Animal Health, years ago, referred to E. coli as “mostly harmless”. This was before nasty, virulent, antibiotic-resistant strains evolved. Evolution can also make bugs more useful, better for us, better at fighting off lethal bugs, better cheese, bread, cider. 

I cough in my hand, my dog licks me, and afterwards, I touch my face again. This is what people do. I was more afraid of the humans during the walk than of my dog. I was not afraid of the bat in the shed. While Covid-19 might have started as a zoonosis, now transmission happens mostly from human to human. 

If you get sick from a transmittable disease, you probably caught it from a human. Normally transmission is easier the more similar animals are. The line between zoonosis and transmittable disease is in some way just a classification. Where do you draw the boundary? When tuberculosis evolves within our human community to a multi-resistant strain, savaging the third world, we don’t give it a new name.   

We co-evolve 

When I look at some past zoonosis—Swine flu (pig), SARS (bat), bird flu (chicken, duck), smallpox (cow)—my dog (rabies) and I were having a dangerous adventure this morning. It was Mad Max just to prepare breakfast. 

When I walk in the countryside, there is fresh slurry on the fields, from the pig farm nearby. It creates a primeval soup where all kinds of microbes can grow, interact, and exchange genetic material.

However, I felt safe. I was safe. I am in a shell formed by my own biome, surrounded by protecting shells of increasingly bigger, biodiverse shells. 

Humans co-evolve with zoonotic parasites. Some of these parasites, such as liver fluke, have a life cycle that is just too cool, as long as you are not part of it yourself. Snails in the water contaminate vegetables we eat. In our gut, the parasite moves to the liver and eats it, and the eggs go back to the gut, to the water, to the snail. Toxoplasmosis is a cat-mouse-human story, rumoured to lead to risk-seeking behaviour in mice so cats can catch them—but also in humans, with perhaps half of the global population of humans infected.   

Most zoonoses are mostly dealt with by our standards of ecosystem management.  Wash hands, slaughter with clean material, cook meat, cook veggies, spray against mosquitoes, don’t swim where there are snails. Most of the time, people don’t die. Often, people do die, and then we mourn but have no choice to keep going. 

Our health systems are co-evolving with the bacteria and germs. As long as evolution is gradual, we don’t even notice. But sudden jumps take our health systems by surprise. 

Burning the bat cave. 

Attention goes to where the news is.  Today, we focus on this new viral zoonosis. This one comes from faraway dark places, where unknown wild animals and strange customs combine to frightening and foreign diseases. Humans (them, not us) should stop encroaching on “nature’ and abandon their evil ways. Industrial agriculture, with its massive factories full of monogenetic pigs, fowl, is spawning new and terrible disease. If close contact between pigs and humans gives us the flu, we would be expected to respond by building more hygienic, impersonal meat factories, not family farms with farmers in harmony with cute and cuddly animals. Health and safety regulations are drafted. 

Likewise, if wild animals give us deadly viruses, the expected response is to exterminate them. If we don’t, if we simply put them away in a nature reserve, the danger would always be lurking, dark and ominous. Similarly, before long, we’ll start burning bats in their caves. 

These responses are, of course, based on some truth. The more animals live together, the more chance there is that a virus develops. The more humans live in close quarters, the faster a virus will mutate. And when you mix animals and humans, there are more chances something new will jump.

We live in a world with bugs and bats and pigs and dogs and humans. And all of them bring their own risks and benefits. Benefits for the whole of the system risks for everyone else too.  And all of them also bring a seed of something that can destroy humanity. 

And yet, to have this worldview requires looking at nature as foreign, harmful and dangerous, something we should control and fix. But there’s another way of looking at the same issue, and that is as nature being part of us. And that kind of perspective starts with our own microbiome. 

Lines of defence: Our own biome is the first step, but not enough 

A new pandemic, out of the blue, transmitted from an animal, is not something you care about as an individual. If you look at the important ones: Covid-19, Spanish Flu, HIV-AIDS, Smallpox, The Plague… The chance that they happen is perhaps one in a billion. Nothing for my dog, nor me, to worry about for ourselves. But humanity should worry. The chances are slim that the bug jumps from this bat to me, here, now. A Chance in a billion, but we humans are billions, and there are a lot of animals, so regularly  a jump of a virus from an animal to a human is bound to happen. And once adapted to humans, transmission from human to human is easy.  Yes, there is a low probability, but a pandemic is can be fatal. It is not a relevant problem to me as an individual, but it is an existential risk for humans as a species. So we need lines of defence, as individuals, and as a community. 

Our first line of defence is our biome. Taking care of a diverse ecosystem in my body and around it. This helps us resist disease and build a tolerance. So we should not put nature in reserves and make our homes and the barn totally aseptic. Because, if there is no diversity, and our guards are down, the bad bug will come in roaring like a dragon. Nothing can stop it. 


But there are still risks. We have to know how to keep the sty, stable, and home relatively clean, and we learn to wash our hands. So we start managing our environment, mindful of keeping the biodiversity while limiting the pathogens. 

Homo sapiens is the knowing one. Knowledge is our strength to work with the environment. Stupid approaches are simple: one bug, one drug. Ecosystem gardening can only happen when we know a lot about the bug, a lot about the environment, and a lot about ourselves. Driven by knowledge, we can change our behaviour as a social group. We learn that washing your hands after going into the garden or the farm prevents diarrhea, not only for ourselves but also for our friends and family. We learn that eating enough fibre leads to more stable gut flora. We learn that we can bring down the probabilities, but that we never have iron-clad security. 

So, the human approach for defence is based on the knowledge leveraged by the different interwoven ways humans interact with each other and the environment.

Community action is a second line of defence. The knowledge that we need to stay at home, wash our hands and to keep the social distance is useless if we don’t apply this as a community. We act as a community and wash our hands even if we are not old and frail because communities take care of all their members. 

People keep an eye out and step in when they see newspapers are not picked up, garbage forgotten. Scouts volunteer to do the shopping for the elderly, we organize the bear hunt for the children. The village doctor/health center gives primary care and refers people to hospitals when needed. Community, experience, research and education is the basis of how we can respond to the crisis. 

Collective action at scale

But things can still go wrong. Sometimes a virus still jumps, or something happens that we previously knew little about—a cholera epidemic, for instance. And our community institutions are totally unprepared. Elderly care homes are unable to keep seniors from getting infected, we don’t have the infrastructure to prevent cholera from spreading in the water system. 

As a last line of defence, we need an organized network from the local level to the global level for observation of trends, rapid reaction, research, local, national, and global response. Like a Tsunami warning system, this network must be kept on its toes, even if nothing happens in a hundred years. This is difficult. In the East, the response to SARS led to preparedness for COVID19. In the West, the preparations for SARS were forgotten and abandoned. Do these lines of defence work perfectly? No. But as we did not go extinct yet, they did the job.  

Luckily, globally, the WHO exists, but it should be expanded, given a bigger mandate, and be more accountable. In so many countries all the necessary institutions are in place—they just don’t have the support and safeguards needed to react in time to a pandemic. In some countries, they were curtailed, and a lot of countries cannot afford them. In the pandemic, we help each other, as an individual, and as a country, because we cannot afford to have one going down and affect the others. But also, because we share our humanity. To fight the pandemic there needs to be sufficient trust that we will not be left behind if we do what is right for the global cause, but hurts us today.   

The pandemic is a good example of how society works: humans are individuals and have agency, but they are also part of a community. For every level of risk in this pandemic personal agency is important, but as an outbreak leads to a pandemic and has increasingly more impact, we need to be organized with common purpose at every level of community: the neighbourhood, transparent global research networks, and governments that can promote and impose legitimate collective action, on health care, economy, social distancing and safety nets.    

For those who can’t bother with the messy politics of collective action, escape is the solution: some plan on moving to Mars. It might be a good idea for some, but not for me.

I like to walk my dog in the morning, and I take the risk.

Posted in General Commentary | 1 Comment

Links I liked

Principled Aid Index: From ODI. The title is very promising. However, the Index is based on the use of proxy indicators that not always very relevant, and more often questionable than they should. Use with care as an instrument. Could it be used for improving our own cooperation? I hope to invite them to have this discussion.

Have Children’s Rights Campaigners lost their Courage?

Form Poverty to Power, the blog managed by Duncan Green of Oxfam, is one of the places to go to think about development. Children’s rights used to be central to much of what Belgium did. Twitterstorms have washed away much of the public support for the foundations itself of this engagement.

Understanding How DFID Makes Decisions – Landscape Report on the Role of Data :

Even at DFID the use of data to make better decisions is often neglected or even absent.  This report focuses on mapping what actually happens in reality, and can inform DGD to look into priorities where the use of data should be feasible, as it was done by others. Programme design, annual review and portfolio strategy could be done with high use of our data systems. Remarkable how higher level learning is less based on data analysis. +

Closing Civic Space: Trends, Drivers and what Donors can do about it

Again From Poverty to Power: the closing civic space. This might be one of the defining issues for the coming years in development. On the space of civil society hinges also the legitimacy for government to government aid, as promotes by the advocates of aid. I mean, the people who push for more aid are those who want more solidarity. They are less enthusiastic about funding autocrats.

Directed Improvisation: The China Model that Other Countries Can Learn From  

The article explaining the governance lessons from the landmark publication “How China escaped the poverty trap” by Yuen Yean Ang. It is valuable to experiment with as an approach to reform governance from within. The article advocates for goal oriented approach, with little micro-management on technical details and being realistic about the capacities: it is the current staff, with the current capacities that will do the trick.

Bill Gates says poverty is decreasing. He couldn’t be more wrong

Now and then there is an article which changes the whole picture of what is the reality. This article, and the subsequent discussion about it in the blogosphere is such an article. Look beyond the readily available numbers, and think about what they really mean.  Do a reality check.

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GDP is rising: Why increase economic growth if you can manipulate the GDP?


Some measures to stimulate “economic growth” don’t address underlying economic strengths and weaknesses. Instead they are skewed in order to manipulate – or “game” – the GDP indicator. The focus on GDP becomes a perverse incentive for short term bubble growth that benefits rent-seekers. Public debate on economic growth should focus on the underlying aspects of growth (ie. jobs, education, production) instead of doctoring the overarching measurement.

Economic growth is widely seen as a necessity for improving society, and GDP (Gross Domestic Product)  growth is taken as the main indicator for measuring economic growth. This article will focus on the abuse of   GDP, NGDP (Nominal GDP), and GNP (Gross National Product) as a perverse indicator and argue that it is not a useful as an indicator for economic growth beyond theoretical academic purposes. Indeed, when GDP growth is used as the measure of economic growth it transforms from being “just an indicator” to a goal. The goal of economic policy becomes an increase in GDP growth, as a proxy for “economic growth”, or even “economic development”. As a result, governments game the indicator, taking measures that lead to the GDP number to grow, without actual sustainable economic improvement. In this way GDP creates a perverse incentive to develop policies that lead to short term GDP growth, while undermining the long term perspectives for the economy and sustainable welfare.

Is gaming of the GDP a policy choice, or just driven by perverse incentives?

1. Indicators and goals

1.1. Briefings and media releases concerning the economic forecasts

I just read the economic forecasts for South-East Asia over the next few years from some major banks and multilateral institutions.

The organizations responsible for these documents have done a deep analysis, but the media and mainstream publications do not consider the details of these reports. The takeaways for the public are a focus on GDP it is forecast to go up by extrapolating from current GDP growth, adjusted to longer term trends.. The vital underlying economic analysis is deemed less important than the uphill tick of the GDP fetish.

Little media attention goes to whether China is getting out of the crisis or taking policy measures that make it worse in the long run. No comments are made on the reliability of the statistics for China. Little is said about how the 2 major growth countries in the region – Vietnam and the Philippines – increasingly build their GDP growth on remittances. When the GDP rises because of the remittances, it can lead to complacency, as everything seems fine. .

All eyes are fixed on the GDP numbers. As trust in a country depends on the expectations of the business community in that country, much is at stake. If GDP grows, business confidence goes up, leading to more Foreign Direct Investment, better conditions for trade, cheaper loans, etc.

A government is represented by its GDP grade in the world. The GDP is the indicator, the report card of a government and a country.

1.2. Perverse incentives: driving change in unexpected ways

Indicators work. Well chosen indicators are useful to get results . Measuring the number of children vaccinated against polio leads to fewer cases of polio, and eventually to the eradication of the disease. However, statistics can be falsified. Nurses can lie about the numbers of children vaccinated and doctors can fail to report cases. In the health system, the collection and use of quality statistics is of capital importance.

A perverse incentive is an incentive that has an unintended and undesirable result which is contrary to the interests of the incentive makers. The targets set on indicators used for measuring performance are easier reached by “gaming” the indicator than by doing what was intended.

Performance indicators in the banking sector rewarded risky behaviour by linking risky behavior to pay. Selling mortgages to people who could not afford them looked good on paper, but it led to the banking crisis of 2008. Performance measurement in the private sector seems so often gamed by management and staff, that HR experts question its usefulness.

More often than not, performance indicators are invitations to cheat, by employees but equally by companies and institutions,  especially when financial consequences are attached to the Key Performance Indicator

Do performance indicators in the economy have the same effect? Could they be gamed?

1.3. Goodhart’s Law: When indicators become goals

Goodhart’s law is named after the economist who originated it, Charles Goodhart. Its most popular formulation is: “When a measure becomes a target, it ceases to be a good measure.”

The original formulation by Goodhart, a former advisor to the Bank of England and Emeritus Professor at the London School of Economics, is this:

“As soon as the government attempts to regulate any particular set of financial assets, these become unreliable as indicators of economic trends.”

Goodhart’s Law is specifically written for economic policy making: an indicator used for steering policy stops to be useful for steering the policy built on it, as people find ways to aim for the indicator without any positive effect for the underlying goal.

A very good take on Goodhart’s Law and GDP can be found on Phil Ebersole’s blog:

The aim is evidence-based policy. The result is policy-based evidence.

1.4. Aggregate indicators or disaggregated data

GDP is a typical aggregate indicator. It brings together information from all sectors, all layers of the population, all markets in an economy. This means that for policy purposes, the number is useless. Indeed, the different movements in each layer can mean different things: cutting 100 year old trees is GDP growth, taking a reusable bag to the shop shrinks it. Policy will seldom be general, so the underlying data should be used instead of the general number. However, if the aggregate indicator becomes the target itself, policy will be directed to move the general number. It will be aimed at the sectors in order to move the aggregate indicator, not specifically to have a sound policy for the specific sector. An aggregate indicator strengthens the effect of Goodharts’ law.

Due to the complex nature of economic growth it is impossible to attribute exactly the cause and effect of policy measure in the short-term. The effect on GDP is easier to measure. One of the underlying problems is the use of a composite indicator: Using one parameter with many degrees of freedom is not conducive to an informed public, policy, learning and steering. It leads to choosing the policy with maximum effect on the indicator rather than on economic development, which should be the real goal. Using disaggregated data on aspects of economic growth is more useful for measuring economic growth, and leads to less perverse policy incentives.

Confronted with the inadequacy of GDP to catch sustainable economic growth, former French President Sarkozy created a commission to study the question of indicators of economic growth. The report of this  Commission on the Measurement of Economic Performance and Social Progress, the “Stiglitz commission”, proposed to ditch the GDP and replace it with a dashboard approach, with a set of indicators instead of just one number.  

2. The GDP as a goal

2.1. GDP is a black box economical model

GDP is an economical model on its own. The model takes the different data from different sources, and spits out one number. The higher the number the better. It is based on a lot of assumptions and estimations. These assumptions give weight to some activities, and not to others, they are judgment calls. Estimating and including the rising quality of computers gives a seal of approval to digital progres but other improvements – like better schools results – are not included. So, when GDP is used as a target, the components that lead to the outcome are hidden. A growing GDP does not advertise the underlying assumptions and the improvement or deterioration of the non-measured aspects of the economy, nor whether this growth was sustainable or not. Growth coming from investment in residential housing, might mean the prices are driven up by speculative markets, or might mean that valuable additional houses are being build. In fact, for little elastic markets, adding infrastructure might lead to lower total market value, lower GDP when selling and buying. 

As the GDP number hides the underlying realities for everybody except the data crunching experts, it acts as a black box. The public does not really knows what caused the growth, except maybe after a crash, with hindsight. This makes it very tempting for policymakers to game the indicator and introduce policies that promote specific interests and balloon the GDP while not contributing to a sustainable economy nor social welfare.

2.2. Perverse incentives for gaming the GDP indicator

Geoff Edwards, in “Political Arithmetick: Problems with GDP as an indicator of economic progress” concludes:

GDP does not detect symptoms of fundamental economic malaise such as an unbalanced penetration of imports into strategic industries; the sinking of household and public savings into economically terminal consumption rather than infrastructure and asset regeneration; starvation of research or sunrise industries; rising defensive expenditure on remediating pollution or social decay; rampant speculation on asset prices such as real estate or the stock market; the accumulation of private or public debt; or the transfer of assets to foreign investors.

He concludes: “By misleading those responsible for public policy about the nature of desirable economic activity, GDP drives perverse economic policies throughout the industrialised and developing world.

By using GDP growth as the goal of economic policy, the policy makers have options. They can pursue policies that will lead to long-term sustainable growth, such as widening and deepening education. They can promote productive investment and infrastructure investment with long-term growth effects, such as the building of railways, ports or social housing. All these policies are known to promote GDP growth in the long-term, probably with the first effects during the legislature of the successor.

In order to grow GDP fast, and getting re-elected, other measures work faster, while benefitting only a subgroup of the society, a subgroup with a lot of lobbying power: stimulating a real estate bubble or a stock market bubble; giving a free rein to extractive industries, leading to the Dutch disease and less competitive industries.

The real estate market is a prime example: residential investment alone is generally around 5 % of GDP, while housing services average around 12 to 13 %. This is a 6th of total GDP. During the bubble years (2005-2006) the residential fixed investment in housing was 6% of the GDP, During the crisis (2008-2009) this fell back to 3-3.5 %. When “normal” growth of the economy is around 1.5-2.5 %, the role of the bubble in the growth of GDP is important.

The crisis of the seventies was about gaming GDP on the demand side. The crisis of 2008 was about gaming the supply side:

  • The post war governments created one of the major post war crisis by applying increasingly the Keynesian stimulus to generate growth during recession and boom. The initial stimulus in creating valuable infrastructure, was escalated to ever less efficient deficit spending. The infrastructure stimulus  raised the GDP, created employment, and made the developers filthy rich. 
  • The neo-liberal supply side economics since the Reagan years escalated in gaming the GDP with ever more irresponsible banking deregulation and risk appetite, until the crash followed. “Only the bonuses were real money”

There are clearly options for “gaming” the GDP instead of taking measures for sustainable economic growth. And it is clear that some groups have an interest to push for this kind of measures as it benefits them directly.

It is more difficult to prove whether this gaming is a policy choice, or just driven by the perverse incentives

3. Why bad behaviour is almost always good politics*: The hijacking of the policy agenda through GDP growth.

The measures that form the basis for long-term economic growth are known: efficient and maintained infrastructure, generalised education of good quality up to university level, rule of law and antitrust legislation, an inclusive society, so all talents can be used in the economy and consumption does not dry up.

In a time when interest rates are negative, investments in infrastructure, maintenance, education, all of these investments have a very high return on capital.

This is not the policy we see around us. Instead we see austerity measures.

On April 15th, I read two blogs, One by Brad DeLong, the other by Tyler Cowen. Both refer to the gaming of the GDP by the elites for short-term rent seeking:  

Brad De Long:

” […]

One way of looking at it is that two things went wrong in 2008-9:

Asset prices collapsed.

And so spending collapsed and unemployment rose.

The collapse in asset prices impoverished the plutocracy. The collapse in spending and the rise in unemployment impoverished the working class. Central banks responded by reducing interest rates. That restored asset prices, so making the plutocracy whole. But while that helped, that did not do enough to restore the working class.

Then the plutocracy had a complaint: although their asset values and their wealth had been restored, the return on their assets and so their incomes had not been. And so they called for austerity: cut government spending so that governments can then cut our taxes and so restore our incomes as well as our wealth.

But, of course, cutting government spending further impoverished the working class, and put still more downward pressure on the Wicksellian neutral interest rate r* consistent with full employment and potential output.

And here we sit.”

Tylor Cowen:



The simplest China model for 2016 is this.  Due to the prevalence of SOEs and state influence in the economy, the country can in fact (for now) achieve almost any gdp target it wishes, at least within reason.  But it trades off the quantity of gdp for the quality of gdp, and this time — again — the Party opted for the relatively high growth figure.  That is bad news, not good news.


GDP growth is apparently being gamed as a matter of course. It has become a silly goal and a bad indicator for real life economic growth.

From the examples it seems some groups are proposing the short-sighted policies for gaming the GDP on purpose, because they benefit from it directly. This gaming is facilitated by the fact that the GDP-indicator contains perverse incentives for the policy makers to choose the bad policy, leading to easy, instant GDP rise, inequality and bubbles, above the better policy, which would require a real political and economical strategy and would lead to rising economic welfare, but only in the long-term.

Does it really matter if it is a conspiracy?

The policy makers and the elites can claim to the public and themselves that they are doing it for the good of all, and they can prove it:  The GDP is rising.


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Going for Zero

This is a repost from Uneven Earth, a conversation about environmental justice.


The current approach to COP21 is not realist or moderate, but quite extremist as it postpones effective action. If we consider the real facts of climate change, moderation means fighting the fossil fuel economy on every level, everywhere, now.

by Sam Gardner

The multilateral approach to climate change: denial and delay

The intergovernmental process to fight climate change leads up to COP 21, the upcoming meeting in Paris. This time, unlike all the last times, hopes are high that an agreement will be reached. It should limit the greenhouse gas levels in the atmosphere to an amount that would cause a global warming to 1.5-2 degrees Celsius. Nobody knows if this is a safe level, but the intergovernmental process concluded it might be safe enough.

The negotiations follow a pattern you might expect in a negotiation game where everybody wants to bargain a good deal for themselves: poor countries want to maximize support, the rich want commitments from all the others, and there’s as little commitment on funding as possible.

National Contributions would only start in 2020. Another 5 years lost. Most participants agree with what is in the documents of the International Panel on Climate Change. Yet this knowledge does not translate into drastic measures. Action is limited to long-term negotiations on the international level and prudent changes on the national policy level. In the day-to-day choices we make to frame our lives, the urgency isn’t there – it’s not even on the radar. Roads for diesel or gasoline cars are still being built, public transport suffers from budget cuts, and coal power plant construction permits are still legal. Investments in sustainable energy and alternative transport are not guided by the climate change imperative but by economic, strategic, and political arguments. Fossil fuel is still subsidized in most countries. Natural gas is a midway investment to make the shift to fossil free more gradual. These investments will be guzzling gas for the next 30 years.

The current approach is seen as the reasonable and moderate pathway. Everything else is deemed unrealistic. As a result, emissions will continue rising above current levels for some time to come. But the total level of emissions required to stop heating the climate is less than zero.

Redefining moderation

If we keep going along this route, we will be in crisis mode within decades. The situation will be so urgent that all use of fossil fuel will have to be taxed at prohibitive levels or banned. Denial will be impossible. Major powers will consider climate change as an existential, military threat, and may be ready to respond to it militarily if need be. After all, a country’s carbon footprint goes down after being bombed.

In an environment of strict rationing, massive use of private fossil fuel-powered cars will be unacceptable. The new highways that are planned now will be redundant before they are fully operational. Even those that are built right now will depreciate faster than calculated. Coal power plants and buildings needing heating or air conditioning will be considered extravagant in a strictly rationed world. Waiting until the crisis is acute is irresponsible. We need to redefine what is realistic. Realistic planning is to go as quickly as possible – right now – to zero emissions. Every delay is irresponsible. In every part of the society, on every level of the administration, there are already people who fully realize what the crisis entails and have internalized it in their actions. However in general they are marginal: their “moderate”colleagues implore them to be “reasonable”. What we need is a mainstream acceptance that “There Is No Alternative” . Remember the Thatcherite revolution? Her – ruinous – thinking on economics was accepted as mainstream and labelled as the only option in only a couple of years. The same must happen with “going for zero” climate change thinking. Unfortunately, this time there really is no viable alternative to going for zero asap. It is at this point that we should redefine “moderation” and “realism”:

Moderation is to accept reality and what has to be done to avoid a global humanitarian crisis. Realism is to accept that any additional investment in a carbon world is a waste and a crime, and act accordingly.

The course we’re on now is the true extremism.

All current long-term fossil fuel-based investments (power plants, roads, ships, house heating) should be considered unacceptable, and should not happen. There are millions of options of how we could get to zero carbon, but There Is No Alternative to the fact that we need to go to zero now.

So we should redefine “moderation” and “reasonable” as: going to zero now.

Turning the tables

Are the engineers who design, the bosses who approve, the politicians supporting policy changes, the person buying a car, the family buying a house in the suburbs, consciously choosing to make the wrong decision? Greenhouse gas emission growth is not the fruit of a big evil master plan. It involves millions of individual decisions, an environment of decisions. To roll back emissions it will be these decisions that make the difference. The current approach to climate change is a negotiation where individual countries try to limit change for themselves and maximize it for the others. The incentive structure of these negotiations encourages minimizing change, rather than maximizing it. It does not create an environment that leads to exponential change beyond the agreed-upon indicators. The complicated interrelations of the economy, the climate, political power and society cannot be managed simply with top-down international agreements. Under the new definition of moderation, this is an extremist tactic, putting lives and livelihoods at risk. These are incapable of the imagination and flexibility needed to go to zero fast enough. The real change will be the result of the political economy at the local level.

The strategy: going for zero

We shall fight on the beaches, we shall fight on the landing grounds, we shall fight in the fields and in the streets, we shall fight in the hills; we shall never surrender. (Churchill)

Every single decision matters. Like in wartime, the theater is everywhere. The battle against a coal power plant investment is never lost: construction could be planned, but the municipal permit can be revoked. The permit is given but the imminent domain procedure is not successful, it can be started and never finished as investors disinvest. It can be built and never used over environmental concerns. It can be taken out of production early. As every investment is composed of a chain of decisions that need to be taken one after the other, by tackling the individual decisions, accumulatively, change can happen faster, as changes are exponential rather than linear. Within a moral and long-term economical timeframe, every person anywhere must stop any investment in fossil fuel-heavy products now. Realism makes every person who has internalised climate change an ally. Office workers, like myself, will have to find alliances with politicians, communities, and action groups. Like-minded groups will need to work together bringing down the traditional barriers and creating a new normal. The objective is to stop every single individual investment in fossil fuel use. Most struggles will initially be lost. It is the war that counts. With every resistance it becomes more difficult to present business as usual as an option, as “moderation”.

Individuals will need the backing of a mass movement to find the strength to resist and to have access to the knowledge to make a case. As the powers that be in the energy sector will resist, other instruments, like manifestations, petitions, civil disobedience and boycotts will be necessary.

Every decision already taken can still be stopped, overturned, or postponed at every level. Losing a struggle is only a step in winning the war, and losing the war is beyond imagination.

Every person who is asked to sign, to design, to propose, to make concrete, to breathe the air, will need to act on the knowledge that it is not worth it to continue with the old model. Recognize that for the world, the children, votes and for their career, it is better not to do this.

The action plan for the Paris Agreement

Chances are there will be binding agreement concluded at COP 21. The agreement will confirm the climate crisis, and the commitment to keep the temperature rise to only 1.5-2 degrees. Attached to the agreement there will be Nationally Determined Commitments (NDCs) that will be insufficient. These NDCs will be irresponsible and amount to climate terrorism. The proposed measures should happen now, not in 2020.

The going for zero strategy should be the legitimate implementation of the Paris agreement. The agreed principles in the agreement should be strong and binding enough to form the legal basis to reject every unacceptable investment and go directly for zero. If the going for zero strategy is implemented, investments in alternatives have a future and fossil fuel-based infrastructure has none.

‘Going now for zero on every decision possible, will lead fast to tipping points where fossil fuel investments become less attractive economically, environmentally, and politically. An exponential change happens.


As emissions plummet immediately, every cap and trade system would implode too.

Sam Gardner is a development and humanitarian professional with field experience in Central and South Africa, Central America and Asia.

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Pre-palaeolithic policies in development and diplomacy


A more aggressive approach to defend a division of labour based on comparative advantages against the belief in holistic approaches is necessary. I propose to refer to policies who are negating the benefits of division of labour, and praise a holistic consensus approach, as pre-palaeolithic as it is the kind of thinking about productivity that was common before the Palaeolithic.

Adam Smith described the mechanism of division of labour brilliantly, but division of labour predates by far the enlightenment. Simple things as maintaining and catching fire, making simple stone tools are only possible when there is division of labour in society. Division of labour is necessary to make a well crafted stone tool. Only a craftsman, someone fully dedicated to it, and provided for by the others, could make a good stone tool. The craftsman has the comparative advantage on making stone tools: he needs the least work (and food) to make a good stone tool, and the tool will be better. Compared to the toolmaker, the others have a comparative advantage to offer food. Their tools would suck anyway, and it takes them way longer to make even one tool. Only with division of labour a fire could be maintained. Without division of labour, we could not enter the paleolithic, we could not even get into the caves. We would still be pre-paleolithic. To make even simple modern goods, like a toaster,  there is a need for a staggering amount of contributions from people from all over the world. Productivity is mainly the fruit of increased division of labour (and of course also other elements such as innovation).  Division of labour is the result of expertise and competition. It is based on the comparative advantage. Real division of labour does not work if it is imposed top down. It is the invisible hand compared to the planned economy.

However, in politics, diplomacy, development and administration, flexibility, coördination, integration and holistic approaches are often valued more than the efficiency gains that can come from division of labour. Meetings and joint programming are seen as good in itself, while it is a failure of division of labour. Coordination is believed to be more important than competition. Overlap is regarded as the highest form of waste, while in industry and governance redundancy opens op more efficient pathways for innovation and keeps abuses in check. The multidisciplinary team tries to arrive at a consensus view to impose a top down division of labour encased in grant strategies, instead of letting the battle of interests run transparently leading to a more dynamic and iterative balance.

One of the examples of this thinking is the 3-D approach: Defence, Development and Diplomacy one policy, rightfully considered by Easterly for the price of the worst development idea ever. Lumping all objectives together, all indicators together to one big meaningful mess until practical results are not relevant anymore. Or like in the case of Afghanistan, claim all objectives are important, but in reality the military objective trumps everything. Ranting about the failure of the Afghan war seems like flogging a dead horse; but why do donors repeat the 3D-approach in the Sahel when it worked so badly?

I admit, coördination is often necessary and subpar. However, the root of efficiency is more often than not a lack of division of labour, rooted in competition. It is not the lack of meetings among top brass or top down planning amongst generalists that holds back the world. Why do we organise development aid based on “best practices”or “international standards” and seldom as  a competition of bottom up approaches and ideas in a localised context, based on localised expertise, with advice of external ressource persons? In developed countries, we see well honed silo’s in the form of one-sector ministries divided in well separated departments. However, donors promote in the developing world comprehensive, integrated, over the board approaches.

My praise for division of labour based on comparative advantage is just another lens looking at the world of complex systems approach as discussed by Owen Barder, Tim Harford, and William Easterly with his “seekers” versus “planners”approach. Taking it one step further, we see the arrogance of modernism, where leaders believe expert top down planning with micromanagement of the underlings is the way forward (James C. Scott, Seeing like a state).

I would like to launch the term of pre-palaeolithic policy for a policy that values the benefits of generalist approaches (buzzwords: generalist, holistic, joint strategies, joint programming, consensus, coördination, cartels, monopolies, corporatism, 3d approach, public private partnerships, Ujamaa, ubuntu, Buzan, Paris agenda, participation) higher than the benefits coming from competition and division of labour (buzzword: competition on basis of comparative advantage, selection, expertise, tender procedures, protest, emancipation).

Pre-palaeolithic policies make us play development like small children playing soccer: everybody chasing the ball.

The dream of doing everything together as one big family, with one vision, everybody the same skills and capacities, and everybody doing the same in unison, was a good idea while it lasted, let us say for the first few 100.000 years, but most people value at least some of the luxuries form the palaeolithic and beyond, and don’t want to go back.

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Tesla : all your patents are belong to us

Tesla will open up all its patents, free to use with only one condition: ” Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology.” I would argue that this is a first shot in a technological war – litigation by other means – and not a nice act of altruism by Tesla. This opens up an exciting chapter in technological innovation.
The companies that use Tesla its patents are not allowed to?sue Tesla when it uses their patents.
However, the car makers who use Tesla’s patents could still sue each other. As Tesla is the technology leader and has a “wall of patents” on electric car making, low-cost carmakers wanting to go electric can adapt Tesla technology at low-cost in R&D.
However, Tesla does not compete with low-cost?carmakers. Tesla is market leader in the technologically fast-moving sector of high-tech luxury cars with a clear brand recognition. By pooling patents with other innovative technology driven brand car makers (such as BMW) the speed of innovation is?stepped up. By pooling R&D and division of labour, the cost of innovation goes down. So when the cars come to the market, the innovation is for the market leaders already yesterdays’ news. Tesla is confident they have technology the others will want to adapt as a standard, so they are the king of the hill. A market is created where the technology leaders pooling with Tesla compete on the knife’s edge, pre-patent, while the?car makers who don’t contribute much R&D compete on price, driving prices of cars down and acceptance of the electric car up in large segments of the market.
What with the car makers who don’t pool their patents with Tesla? Being part of a smaller ecosystem, their relative R&D costs will rise. They might even choose to stay carbon based. They still could licence Tesla technology though. In the fast developing market for innovative technology driven luxury brand cars, the Tesla effort is a declaration of war to other luxury brands: innovate fast on electric cars, or be a has been. For car makers aiming for mass production cars, they get access to a goldmine of innovation, on condition they accept to live in the Tesla world. A world where Tesla is not only a car maker, but also the market leader in standards for charging, battery replacement technology, etc. Just like Google is the search company giving away Android for free, Tesla is the car company entering the market of service standards. It is like Bill Gates said: open source is like a virus, making all IP open source it touches.

The citizens and cities craving for better air quality can only be happy about this.

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The Olympics I don’t watch

Although I have a  TV, with lots of channels including sports channels , I don’t watch the 2014 winter olympics in Sochi .

Some of my reasons:

  1. I cannot see the athletes I know and I see a lot of coverage to no interest to me
  2. So I lost interest in winter games some time ago, especially as I come from a country with little winter.
  3. The blatant, competitive nationalism it embodies is repulsive to me. Especially because it is not my countries’ nationalism.
  4. The wasteful spending irritates me. The money flows baffle me.
  5. I find the presence of presidents who don’t respect the basic human values abhorrent, and they get airtime before, during and between events as if they had legitimacy
  6. The choices being made on the Olympic games prove that sport is not foremost on their mind.
  7. I did not start yet on the moral reasons why I should not look.

Some additional information on the points

  1. The Olympic Committee is soaked in Stupendous wealth because they sell exclusive broadcasting rights to national broadcasters. In this country, only the national rights holder will have the right to broadcast on internet, cable and air. This means also that they show only the sports and series that are of national interest. As I lived in a number of small countries all over the world, and I am now in another small country, the chances are slim that I see anybody I know. The broadcasting does not incite to internationalism, to the contrary, it narrows the view of the public to only its own athletes, while pretending they look at the “Olympic Games” as they are. As an American you can live with it (most events have Americans).
  2. So every four years, my interest waned a bit more, until it arrived on the current level.
  3. The Olympic games don’t preach a “this land is your land” nationalism. The Olympics, the setup, the presidents and politicians attending, even the publicity, all preach an exclusive, competitive nationalism. An approach of  “us against them”.  It is what researchers call an imagined community. There is nothing that really binds you with those athletes. You don’t know them personally. You don’t know whether they merit to win. You don’t know the story of their competitors. Why, you are probably not even from the same city, so you don’t have a real link with the places where this athlete lives. It is the sort of romanticising of imagined common identities that brought us some very dark moments in our history. Why don’t we compete on other aspects of our identity? Height? Blood group? first letter of our last name?
  4. The wasteful spending irritates me. The main cost of the Olympics falls on countries who are tricked to think it is important (nationalism, investment for future? who knows) to build an oversized infrastructure for sports nearly nobody plays. This is not at all innocent. The economical estimations are questionable. They are also rather financial estimations (looking at cost and benefit) , than economical  (what alternative investments could be made?).
  5. Apart from the athletes, there are also VIPs. Presidents, prime ministers, kings, princes. Apart from the problems with nationalism, I notice some unsavoury figures, who are known for doing “bad” things.  These people distract me from the sports. Did we not create an international criminal court? What baffles me even more is that these people are presented on the same level as the elected leaders of democratic countries that respect human rights. Does this mean that our leaders feel they belong to the same group as these other people? Or do our leaders just bestow legitimacy on them? If you live under one of those thugs, seeing this will make you doubt your future.
  6. In “The Dictator’s’ Handbook” they use the Olympic Committee as an example of an institution gone awry. The way the institution selects its members and leaders, you cannot expect clean governance.  This was so before Sochi. Sochi just brought it to a new level.
  7. This brings us to the moral reasons. These have been quite well covered: according to the Olympic Committee the universal values are subservient to having a spectacular sporting event. Olympics can support leaders, but other leaders should not use the event to criticise, Homosexuality, Chechnya, Pussy Riot, etc.

Any more reasons?


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Thinking fast and slow about disaster preparedness

Book: Thinking, Fast and Slow Author: Daniel Kahneman

Getting back to my notes from “Thinking Fast and slow” by Daniel Kahneman, I am still amazed by the diversity of new insights the book provides on how (most) humans think .

Some findings are also relevant for the current thinking in humanitarian assistance on disaster risk reduction (D.R.R. for the incrowd): an important part of the book is dedicated to the human approach to risk, which is not in line with statistical analysis nor economical reasoning.

When talking about risks, the greatest risk seem to be a disaster with a huge humanitarian impact. The book deals specifically with the approach to catastrophic risk by humans, in contrast to the Homo economicus or the statistician. As the political agenda of the humanitarian sector moves towards more investment and more attention to disaster risk reduction and disaster preparedness it might be good to look at his insights. I will heavily rely on quotes from the book.

Humans tend to be very bad at estimating risks and probabilities. We make decisions based on stories, not on a balanced analysis.

“ We pay more attention to the content of messages than to information about their reliability, and as a result end up with a view of the world around us that is simpler and more coherent than the data justify.”

“ Many facts of the world are due to chance, including accidents of sampling. Causal explanations of chance events are inevitably wrong.”

When working in Humanitarian assistance, your mandate is to save lives, alleviate suffering and maintain dignity when the local government is unable or unwilling to act or is overwhelmed. Roughly 80 % of the work will be in complex crises, the crises that are caused mostly by human interaction, like civil war, usually exacerbated by some bad luck on the side of the natural causes. However, it is the big natural disasters, giant floods or tsunamis and earthquakes that catch the imagination. Within the natural catastrophes, there is a rise in small disasters, with a limited number of victims, that is passing mostly under the radar. DRR is in the first place aimed at these 20 % of the investments, as we do now how to prevent natural disasters to become human catastrophes, but do not really know how to prevent civil war.

As humanitarians, we are tempted to argue that you will save more lives by preventing the catastrophes, and so it might be within our mandate after all. But are we sure of this? The question Kahneman asks is: will humanitarians be the right people to judge the importance of investments on disaster risk reduction compared to other priorities for the society (such as the army, education, etc.)

When you do not ignore the very rare events, you will certainly overweigh them.

The humanitarians are focused exactly on the very rare events and it is their explicit job to advocate for increased attention on these rare events. But what happens when we manage to put a risk squarely on the agenda? Some quotes picture a scenario with ever increasing importance to DRR:

Your judgment of probability was ultimately determined by the cognitive ease, or fluency, with which a plausible scenario came to mind. (Disaster risk reduction seems very plausible just after a catastrophe)

Adding irrelevant but vivid details to a monetary outcome also disrupts calculation.(The figures on the risk are intermingled with media pictures of the human suffering during the catastrophe)

The work of disaster prevention is more complicated by the human approach to “worry” and “regret” :

Reducing or mitigating the risk is not adequate; to eliminate the worry the probability must be brought down to zero.

Here again, people buy more than protection against an unlikely disaster; they eliminate a worry and purchase peace of mind.

So how to go about deciding on the importance of risk reduction within the complete spectrum of priorities?

The dilemma between intensely loss-averse moral attitudes and efficient risk management does not have a simple and compelling solution.

Especially just after there was a disaster or a near disaster:

The typical short-term reaction to bad news is increased loss aversion.
The taboo tradeoff against accepting any increase in risk is not an efficient way to use the safety budget.

There is an important risk of overinvestment in disaster risk reduction, leading to a framework that is just not affordable for the country:

The intense aversion to trading increased risk for some other advantage plays out on a grand scale in the laws and regulations governing risk.

Perhaps the humanitarian sector should see themselves just as one actor with a set of specific skills: humanitarian action, perhaps statistics on probabilities and risk analysis. As an inside actor they might be badly placed to take multiple roles and study, plan and finance the DRR approach:

Nothing in life is as important as you think it is when you are thinking about it.

Because as humanitarians we always think about disasters, we are not the best judges when it concerns the allocation of the scarce resources of partner governments or partner communities to DRR. A more humble approach, where the humanitarians leave the planning explicitly to the local partners and only add some seed money and knowledge might be indicated. The world is always risky for the poor, even when there is no disaster: illness, unemployment, accidents, land loss, localized weather phenomena, can be higher on the agenda of the poor family than well known disaster risk.

In summary:

Nothing in life is as important as you think it is when you are thinking about it.

This is also a stark warning for the humanitarian community to keep full attention to the core mandate of saving lives when governments are unable to act. For the moment a lot of the attention is drawn towards DRR away from access, Humanitarian Law and humanitarian delivery to everybody in need. It might be necessary to pay attention to DRR, but it is sure that the focus on it by the humanitarian community has negative effects for the core mandate, as the most scarce resource in humanitarian action is management attention. Is DRR really worth it? It seems to me that this is a political question that should be answered by the local communities, and not by external humanitarian actors.

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Thinking, fast and slow and the transparency agenda in development

I was reading “Thinking, fast and slow” by Daniel Kahnemann. It is a very good book. It challenges conventional wisdom and is so full of meaning that it asks for a regular reread to discover more hidden treasure.

He explains how humans actually think, and not just how we think we think. He doesn’t really believe these insights will change anything: he considers it mostly an enrichment for water cooler discussions. As our illogical ways are hard-wired, even when we know we are illogical, we can not help it but to proceed on the beaten path. The Homo sapiens and Homo economicus are 2 entirely different species.

However, this will not stop me from trying to apply some of his insights.

One theme from the book of direct relevance for development work is our relationship with data. I will touch on 2 aspects: how to predict success of an intervention and how to convince people an intervention is a success.

Apparently, a conviction is formed when the story behind the conviction is convincing. Now apparently a story is convincing when it is in the first place coherent. Real life stories however (what some people call the reality) are never very coherent: a lot of things happen that blur the story. People have lots of reasons, not just one, and the one they tell you might not be the one that is relevant. So to be convincing, only the coherent data should be presented. Otherwise, the conviction will be weaker.

The prime example of this effect is of course the diplomatic cable: a coherent and short analysis is explicitly required. Clarity and conciseness are cardinal virtues. A political decision taken on the basis of this kind of analysis will of course be convincing. Meanwhile the simplifications in the analysis yielding to the demands for a coherent story can lead to important errors. Only the elements mentioned in the cable will be taken into account. Kahnemann says: “what we see is all there is”. This might be why sometimes bad choices are made in foreign affairs.

Closer to the development world is the International Aid Transparency Initiative.

The International Aid Transparency Initiative (IATI) aims to make information about aid spending easier to find, use and compare.

Those involved in aid programmes will be able to better track what aid is being used for and what it is achieving. This stretches from taxpayers in donor countries, to those in developing countries who benefit from aid.

Improving transparency also helps governments in developing countries manage aid more effectively. This means that each dollar will go as far as possible towards fighting poverty.

From what was explained above, we understand that the transparency towards the taxpayers will not lead to more trust in the expenditures and trust in the whole venture of development aid. To the contrary: the full exposure to all the data will probably lead rather to more distrust, because the simple story we need to convince of the good aid does, will get complicated. For every straight success story, there will be more lots of maybes, and too many unfortunate failures. Full disclosure is perhaps necessary for moral reasons and to keep the practitioners honest, but will not lead to more trust by the public.

More to the core of our work is how we predict the success of an intervention. Experts, it seems, can be very good at analysing complex situations, but most of them seem unable to predict what will happen next. His prime example concerns newborn babies. Before, it was the gynecologist who would decide how to care for the newborn. When they started to base the decision on simple indicators that can be gathered by every nurse, infant survival started to improve. Apparently, when the feedback loop is not immediate, statistics and simple indicators are more accurate in guiding what to do than experts. The anaesthetics get direct feedback from their work, and develop very good gut reactions, less so the gynaecologists when deciding on what to do with the newborn.

This seems to be very relevant for the approval process of projects and other interventions. The approval process is normally a mixed bag of expert analysis and some indicators. The indicators are not really chosen because they predict success, but because they measure political priorities, such as the mainstreaming of women’s issues and environmental awareness.

Experts who analyse projects for approval are seldom around when the results are obtained, and evaluations happen even later, too late to inform the next phase. Moreover, as political priorities shift, chances are that, even when the results are good, attention shifted a long time ago and we won’t continue the project.

This is a typical situation where, according to Kahnemann, expert advice is next to worthless. An alternative should be to use simple indicators that are known from the statistical analysis to predict success.

We know about some of the main elements that can predict success in development: proven interventions (de-worming etc, the whole CRT stuff) interventions done by trustworthy partners, and interventions tackling in a serious way the main issues at stake. Most of these elements are quite straightforward, and could form the basis for a simple analysis based on indicators. But not a lot of elements are available for analysing the substance of the project.

And here the IATI comes in. We just don’ t have the statistics on interventions to go beyond the most simple results predictions. IATI should strive to offer these statistics asap.

Perhaps humanitarian assistance, with its short feedback loop, the urgency to get the results right and existing standards, would be a good place to start.

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The hunger games, the Paris agenda and political sciences.

I read the 3 parts of the Hunger Games trilogy in only a few weeks. A book that captivates so well its readers cannot be all bad.

What amazes me most  is how “fantasy”writers seems to be better at captivating the realities of the power relations, social interactions and power impact analysis than the drafters of international agreements, like the Busan outcome document. What is real and what is fantasy?

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The silent revolution: is the electric bike a black swan?

The media and the public are staring at the lacklustre growth in the sales of the electrical car, and meanwhile it seems they miss the revolution happening under their nose.

For mobility in the city or the suburbs, the ideal traffic jam-beating device is not the electric car with limited radius. The electric car just solves the exhaust problem, but not the traffic jam. The added value is slim compared to the cheaper gas-guzzlers.

The electric bike extends crucially the use of the bike as preferred option. In a hilly city, biking just becomes this bit easier. For mid-life crisis professionals, it lets you work out without breaking a sweat, while commuting to work. In a clogged city, bikes are as fast as a car. If you feel comfortable biking 6 miles, the electric bike takes you double this distance, to the suburbs, home. This is why some cities do subsidise the purchase of electric bikes. Taking into account the cost of traffic jams and pollution, this is probably a good investment.

The drivers for this change are not the young and chattering classes. It is the silent majority. The pensioners who want to keep getting somewhere while they keep in shape. It are the people who have a house and a family, and start worrying about their health and lifestyle, and the world their kids will live in.

This is the group that normally delivers the momentum for sustainable policy change. Cities on the East coast and the West Coast are getting bike friendly fast, meaning better and faster commutes for bikers . In Europe the infrastructure is changing so fast all over the place that cars drivers are sometimes feeling excluded.

Taking this movement further the electric bike could be a catalyst for livable cities and more concentrated living. Preparing the ground for a quantum leap in carbon economy. The ideal commuter car is a bike. transforming not only the commute in a breeze, but also the suburb and the city in a place with better air, space and green. It takes little space, makes little noise and produces no pollutants. It uses nearly no energy, compared to the competition.

The technology that is still not good enough for cars is very well adapted for bikes. A battery charge brings you easily 40-50 km away, and a recharge is less difficult than with a car. After 80 km of biking, you need a little snack, don’t you? Moreover, the research for cars is bringing fast relief for bikes: better, lighter batteries, faster engines.

The radius of electric bikes makes it the preferred mode of transport for slow tourists in hilly areas, like the Dales or even the Alps.

Already there are more electric bikes than cars driving in China. Up to 30 million bikes are cruising the cities. This creates a mass market, so electric bicycles can be jump-started cheap in the rest of the world. Globally, sales are expected to grow importantly over the next decade. In Europe in some countries up to 53 % of the commuters claim they would be interested in replacing their current commute by public transport or car, by the electric bike.

The most important factor in my assessment is the eagerness the elderly take up the electric bike. Reasonably fit pensioners are the backbone of the electorate in many countries, and the really love their bikes. They will demand their safe roads and bike stalls all over the place.

What do you think?

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Busan Aid Effectiveness, Power Impact Analysis and the Rights Based Approach

The use of big words and capitals in capitals

I just used a title where most of the words seem to call for capitalization. It just shows how the development bingo is still in full swing, and we take ourselves so seriously. It is also typical of the kind of message coming from the centralised decision making processes. In development speak: from capital.

Busan has transformed from a city in Korea known from crossword puzzles to a development milestone. I lump this milestone to the latest trend: just like in the sixties we talk about power relations again, power in the sense it was analysed in the Marxist political thinking. Only now this analysis is called political science. The Rights Based Approach is where the empowerment thinking has been hiding while the OECD-led government ownership approach has been running the donor capitals.

Busan Power Impact Analysis

The main gist of Busan is the strengthened “country ownership”. This is good right? It depends of how you see the world. Do you think that countries are people too? Countries don’t have ownership, people in countries have. Who exactly in the development countries and in the donor agencies get more power?

When looking at the Busan outcome document with the instruments offered by the Dictators’ Handbook, we see a document that strengthens the power of the undersigning parties. The reinforcement of the central power, in practice, the president or the minister of finance of the recipient government, is the overarching theme of the outcome document. Now power relations are seldom win-win. More central power means automatically less power for the “others”. From the Handbook (another capitalization) we know that for the Dictator this power allocation is crucial and deliberate. We know also that every leader is a frustrated potential Dictator. This transfer of power to the central recipient’s government seems very risky from the donors’ side if development is the goal and not just international relations. Using the tools from the Handbook, and for the sake of simplicity, it seems like the right thing to conclude that we can use “country ownership” and “wishes of the president” interchangeably.

The Handbook explicitly warns for putting individuals in “gatekeeper” positions, where they can keep everybody else hostage to their designs. Busan promotes this practice and calls it country ownership, while in fact it strengthenes the powers that be, not “we the people”. In a democratic country, this is not a problem, as there are checks and balances. But where exactly the lack of democracy is the problem (as is underlined in the rest of the outcome text), this principle can be expected to block every democratization effort.

Now why would the donors do this? Different hypothesis can be construed and accepted or rejected using the Handbook’s tools:

  1. The objective of development assistance is not helping the poor but advancing the interests of the donor. Meaning of course in the first place good relations with the recipient country, trade advantages, and the odd joint public events and lip service to themes dear to the donor’s heart like gender and reproductive health. This reasoning is an example from the Handbook itself.
  2. Donors are just gullible, and really believe third world leaders are there only to help the poorest. As donor bureaucrats have their own politicians too, it seems not realistic that such ideas would get a lot of traction
  3. Donors think that the rest of the Busan document will manage to steer the leaders to better behaviour. This is a plausible explanation, and seems to be confirmed by the circus surrounding the Paris and Busan agenda.
  4. The Busan agenda, like the Paris agenda before, gives a few strong donors a central bagaining position  at the table, and authorizes small donors to be at the high table too to free ride on the tails of the bigo ones without more than a semblance of expertise. This seems a strong argument. The World Bank has a near monopoly of negotiations with the national governments on budget aid issues, with only DFID having some clout to match their capacity in some countries. Smaller donors can play with the big boys without really having much capacity for doing so. Everybody wins.

Arguments 1 and 4 seem convincing, while argument 2 is heavily used for the public sphere and argument 3 keeps the conscientious bureaucrats motivated at their job. Especially for them there is more to Busan than country ownership alone. However, from the Handbook, we know that every conditionality fails that is not enforced automatically. So it will not happen.

A set of additional principles (conditionalities by another name) will guide the actions and might balance the first principle: Focus on results, inclusive development practices, transparency and mutual accountability.

The results agenda has not been the panacea everybody hoped for.  While the MDGs have given a sense of direction, Paris nor Accra have been very useful to promote this agenda. Indeed, results are best measured on the lowest level, while Paris and Accra rather operate on the aggregate level. Measuring aggregate results is not easy. In most development agencies,  there is an important passive resistance against the “results craze”. Moreover there is a tendency of eliminating power elements from the equation. This could lead to a “sustainable poverty” approach: there are some basic MDG results, but not enough to lead to real empowerment of the poor or even of the middle class. Of course if evaluation is serious and integrated in the way things work, there will be a pressure for improvements. The track record is scary: donors in general hop from paradigm to paradigm, with scant attention to evaluations coming too late or leading to doing the wrong thing righter. More importantly, there is a also preference for political re-engineering instead of just correcting practices step by step, often in line with the electoral cycle at the World Bank or in the UK.

Inclusive partnerships are vague. They seem to fit the description of elections under Lenin in the Handbook: there is no real binding process, and it can be used to divide and rule an ragtag of stakeholders.  It authorizes the President, according to his wishes to set up the processes for participation that fits his purpose. Moreover, the “inclusive agenda” on its own is a more complicated concept than it seems. Does it mean that also the powerless, women, poor, minorities should be included? Or does it mean there should be a consensus approach where real challenges to the conventional wisdom (the wishes of the president) can be sidelined? Is there room for oppositional thinking, with genuine representation, or do we have unelected or self-elected groups vying for attention? The way the inclusive partnership approach works in real countries who have been receiving budget aid without having a multi-party democracy, like Rwanda and Uganda, can shed a light on this.

Transparency and accountability to each other is a fun principle. Transparency is nice and does not hurt anybody, but the added value of just publishing the data is limited. I would agree that it could be the basis for the work of different groups in the civil society to put pressure on the President.What works here of course is not the transparency in itself but the documented pressure.  Transparency could also be the basis for the President to know what everybody, including pesky civil rights groups are up to and are funded for. Mutual accountability is a strange concept. Money goes from the donor to the President. Accountability works the other way. As there is no power in the other equations (to the respective citizens, the intended beneficiaries, constituents and shareholders), we can ignore them. However, this principle introduces the “intended beneficiaries” which might be a weak basis for a rights based approach. The principle might also open the door for conditionality on the basis of some form of participation, but this will be very difficult to enforce, as there is no real definition of what accountability to the intended beneficiaries might mean. As we know, with Dictators, just like with children, it is important to be specific on what exactly is expected from them. And they rarely voluntarily part from power.

When moving thorough the rest of the document, all the right noises on democratic governance, anti-corruption, gender, evaluation,  and other issues are made. It also is rather detailed in its requests for data, monitoring and evaluations. At the same time, a strategic comprehensive and planned approach to development as a whole is promoted. In the reality of the field, these streams are rather exclusive: the iterative approach needed for a really inclusive and democratic process with good evaluations along the line, does not go well with comprehensive 5 year plans on a national level. The approach rather leads to what Aid on the Edge calls “ official views”. The different, and often mutually competitive goals and methods of work make the outcome document difficult to enforce and give a lot of room for politickering, except for the central part:

  1. Country ownership (meaning according to the wishes of the President)
  2. Through the promised transparency: full control on what happens by whom where.

Competing paradigms: Human rights based or country ownership based

The paradigm in UN-development activities is a human rights based approach, where rights are owned to individuals. This is why the MDG- approach becomes effective: you check whether any individual baby got its right to life, aggregate data, and check the result, count the children denied their right to schooling. The rights based approach respects country ownership, or rather country responsibility, but the development activities are aimed at the “one and indivisable” individual human rights. Each right has its own advocates fighting for this right, and its own budget for strengthening the advocacy. UNICEF for children’s rights, Oxfam for the right to food, UNHCHR for Human rights, ILO for labour rights, and so on. The wishes of the president are not above the rights of the individual.

The OECD approach is a government centered approach, with a centrally planned or coordinated working method, steered from Paris to Accra and further to Busan. In essence, it does not deal with “aid effectiveness”, although it uses the term, it only deals with streamlining procedures for government to government procedures. The wishes of the President are above the rights. It ignores the fact that, from the french revolution on, every advance in governance has happened by  wrestling power from the government, not by strengthening them. it is the accountability structure that strengthens institutions.

In this sense Busan is a “means oriented approach” although it uses the term “results based approach” throughout the text. The main question is: does Busan support the human rights based approach, which is essentially empowering, or does it work against it? Asking the question for every single intervention under Busan goes a long way to find the answer.

Finally, the Busan Outcome seems to be an effort by the major development players to force a global “official view” on the others that suits their interest. This view will compete with an innovative, evidence based approach to reaching the global “official goals”.


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David Brooks and the Art of Linear Thinking

In The New York Times, David Brookstackles the Fertility Implosion, the fact that , when women have access to reproductive rights and reproductive health services (like general health services but also anticonception) on average, they don’t like to spend their life as baby factories. This seems to lead in every country to a fall in the number of babies, which in the long run (when the last babies of the fertile years become pensioners, so in some 60, in the future probably rather 70 years) leads to a shrinking workforce.

His starting point is the falling fertility in the Arab countries.

Then he moves further to lament the cost of and aging population, the Grey Tsunami coming over us, with as notorious examples the Chinese, European and Indian.

As a final warning he talks about the declining fertility in the US.

I don’t want to write a long post on this, but as this reasoning combines top down planning of the most cherished choices of individuals with a lack of scientific knowledge, I would like to call immediately Godwin’s law and eugenetics. Talking about diminishing fertility rates while only showing it as an issue, not an opportunity is for me an important misrepresentation:

  1. Being the master of your own fertility is a basic human right. Writing, talking about fertility without referring to this right in a tone of “we are in danger” incites to social engineering without respect for this right.
  2. It is not the fertility of women going down, it is the average fertility rate: the number of children they choose on average to have. Biology stops being destiny. Is it ethical to start manipulating the wishes of people?
  3. The major cause and effect of this decline is the empowerment of women. Is there a misogynist agenda here? Instead of having 8 children from the age of 16, woman do sometimes chose to study, take a few years off for children, and with all respect, do with their life what they want including raising children. The women with a good degree will be way more productive than the unschooled from before the empowerment.
  4. Some 16 years after the fertility declines there is a window of opportunity for a booming growth: young people enter the workforce, and there is no need to scale up a lot of services like health and education anymore, just to keep up with population growth. It takes another 40 years or more before they reach retirement. The Asian Tigers fully enjoyed this window. The Arab countries might be there in only a few years. Please include this fact also in your reasoning.
  5. Retirement financing is indeed a problem of adaptation, but not a problem that cannot be tackled. It is rather a problem of planning and saving for a rainy day, than a substantive problem. Indeed, David, planning for it is a good idea.
  6. Linear thinking does not come close to predict the future. The population is not a mass of people all doing exactly the same. Women abused and raped by their husband would have a fighting chance of not bearing child after child in the new world, but the same reproductive health services help loving couples to get the children they want or single women to fulfil their wish to be a mother. Subcultures that are more child friendly, like loving parents, back to earth ecologists or orthodox faiths (not a scientific list), will out-breed the others. Without going into details: when looking into the population in detail, some groups will show a rising fertility, while others a declining fertility rate. Over time this leads to the numbers inching up again, problem solved. Why doesn’t Brooks refer to Sweden?
  7. Perhaps one of the major concerns is how society changes if children are really wanted. When looking at the countries who are further up the curve, like Sweden and other Scandinavian countries, this might not be bad at all. Societies like this seem to attach more importance to the quality of life. The parents want their children to grow up in a nice world. However, this might be due to other factors than only demographics.just think about it: people who don’t like children in a society die out in a society where you get children only when you wan them.

There must be more, but hey, I am angry.

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Peak Oil, the problem or the solution?

I was reading the three futures black swan posting by Paul, and wondered whether Peak Oil would really be such a disruption to the way we work. It seems indeed that Peak oil is now mainstream in the public debate, but the consequences of it are rarely thought through. The camps seem to be divided between believers, predicting catastrophe, and unbelievers. Even in the most oil-dependent country in the world, the discussion on energy policy seems mostly superficial. In this it reminds me of the Climate change debate. It seems that there is scant real planning for the future going on, just doomsayers and deniers.

The debate going on, it looks like even normal economic concepts, like demand and offer, are forgotten.

A marginal revolution

Wikipedia defines Peak oil as the point in time when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline. I would like to use a different concept. The peak production as defined above depends on the price, and we could imagine prices to be higher, so much higher that a lot of now uneconomical fields go into production. So “ peak oil” is in fact only defined at a certain price. Of course, in the end production will eventually have to go down, but it will go down first because extraction is not cost effective at the price people are ready to pay for it, not because there is no oil left anymore. In the end, oil will never run out, only the price will rise so high nobody will buy it anymore.

For this blog, I will use the definition of peak oil as the price of oil where major alternatives become as viable as oil itself. Within this definition, peak oil is reached for different uses at different prices. Taxes and subsidies are equally part of the picture.

Most of these alternatives need investments and constant demand, making them a bad bet when prices are just fluctuating, leading to peaks and troughs in demand for the new resource (while for oil these investments are in place). It is not worth investing in the alternatives that risk to be uneconomical for most of the years to come. However, once the prices move to a long term high, the picture changes.

For home heating, peak oil is already reached: for a price of 100 US$ a barrel, it is apparently worthwhile to build a passive house in a temperate climate, as people are doing so in droves. So the energy bill of the house for heating becomes approximately zero. You only have to calculate the depreciation of the system. Even for older houses, insulation is cutting the bill with up to 3/4. The move from petrol-based heating (gasoline) to gas or even heath pumps (nuclear) is general, thanks to a little subsidy left or right. Indeed, this is taking into account the subsidies, but as heating oil in general is not taxed like other goods, this argument cuts both ways.

For decentralised electricity production the use of solar power in sunny countries with a low cost of roof space and a high cost of energy transport, might already be reached. Wind energy is not far behind. When prices are high, the use of bio-fuels seems to be economical in countries with a good year round vegetable production potential.

For centralised electricity production nuclear energy seems to be an alternative I am reluctant to support, and as much as a loath it, coal is still around.

For fueling cars the production of bio-diesel based on palm oil seems to be economical at high price points (perhaps 120 USD/barrel, we saw it already happen a few years ago), but in the long run the use of electricity as a plug-in option for hybrids or as a full electrical option seem relevant. The problem with electricity seems to be more the infrastructure and the upfromt investment cost than the economical use of energy (just like with the passive houses). Indeed, if highways would be standard providing a “third rail” like for subways, we would be wondering who authorized the use of dangerous inflammable technology like the internal combustion engine.

Overall, there are many alternatives for oil, and more to come, each of them economical from a different price point. The most promising for the moment is energy savings (house insulation, less consuming cars, less car use, etc.). However, as prices rise, innovation will explode.

In the long run, under constant incentives from prices and government propaganda, the silent hand of alternative choices shows up: what about changing a house with 4×4 in the countryside for an apartment in a livable city and all the money for holidays you can imagine? What about just using a plastic case instead of aluminum?

Lack of price elasticity is worse than high prices.

For the moment, the price of energy is linked to oil: the other energy sources, coal, nuclear energy, wind-energy, bio-fuel, solar energy, sell their energy on a market where the price is more or less set by oil.

It seems like oil production is on average rather stable, while prices are not.



Total global oil production, in millions of barrels per day, annual 2002-2010 (data source: EIA)

With an economy at full swing, the demand for oil grows and so do prices, as production lags. If suddenly oil prices go up, there is a problem. More fuel economical machines are not installed on the spot: the demand for oil stays fixed until some buyers drop out of the market and essentially close shop: a crisis. Prices of products go up, demand for products goes down: crisis. Less demand for fuel.

Also when oil production is under thread (you know, the Middle East), prices will skyrocket, with a serious risk of a recession. As oil production is not very flexible, prices will go up suddenly and come down crashing.

The roller coaster ride in the price evolution are a systemic risk to the global economy. But also to the national economy and the household. I did not do any simulations, but it seems reasonable to put that the economy would be able to hum on more nicely at a predictably and steadily rising price.
This calls for a policy by the government to protect the economy by diminishing the risk posed by petrol price peaks.

Peak oil and global warming.

So what do we do?

We can chose to ignore global warming AND ignore the whole peak oil debate.

In the case of global warming, this will probably not help, as the scientific consensus on it is quite huge and, moreover, if you visit the Alps you can see the glacier’s decline. At a certain stage the warming will impose itself. it will be way to late to stop any of it, but in any case, there will be a need for investments in air-conditioning, roof insulation, storm and water works. Meanwhile, we could expect the oil prices not to come down at the 20 US$/barrel anytime soon, as the whole world seems to be getting out of poverty. With a fast growing demand, even with unlimited reserves, it will be difficult to pump fast enough. As most of the oil sits in dangerous countries, the current roller coaster of prices seems to be inevitable.

A policy trying to limit the impact of oil shocks would even in this case be good policy. Just drilling more would not change the prices a lot, but making the economy as a whole less dependent on oil, or energy if possible, would. What are these measures? The same as what you would do if you believe in global warming.

What kind of society?

If we know global warming is coming and oil prices are expected to go up, an active policy to go for oil and coal independence is urgent.

With the current technology, it might be possible to nurture decentralised systems or go for evermore centralisation. Solar panels on the roof or fusion energy.

Or we could hedge our bets. We don’t want to nuclear power providers get into a powerful position like the Arabs are, so the development of more diffuse power production is a necessity to balance the centralised powerhouses.

Indeed, big oil, big energy and big finance have a similar track record. They wield enormous power. They are able to resist reform, even if the systemic risk becomes too high. Democratic control is often failing.

Concluding, as any response to the increasingly unstable petrol prices will take time, I would agree with Paul that the first ten years of Peak oil will be rough.

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Geo-engineering: ready or not, here we go

Climate change is a reality, and it means humans are in charge of the climate now.

Putting carbon in the air used yo be a simple process called cooking, now it is geo engineering, as we know it changes the climate.

Fine tuning our energy use and milk consumption to diminish global warming, is geo-engineering.

Painting mountains white, is the same process of geo-engineering, but using more parameters.

The genie is out of the box. We have to take responsibility.

If only it was so simple that we needed only to look at our carbon consumption. It is a very wide field, with lots of hard choices to make.

We can cut carbon by making heating for the poor more expensive, or we can paint our roads or roofs white. Some choices will have consequences for the most vulnerable, others are untested and might have unintended results. What balance do we want between moral outcomes, environmental risks and social impact?

In the end, these choices should be made as a policy choice, and should not be forced upon us by events.

The last thing we need is a principled stance on what instruments to use while ignoring the moral consequences of the other choices.

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Development: The dictator’s handmaiden; Is bad aid almost always good politics?

I have just finished reading the Dictator’s Handbook, by Bruce Bueno de Mequita and Alastair Smith. I immediately reread some chapters. The book gives you an insight you feel you have known all along, but you just could not act upon it because you don’t want to be seen as a spoil sport, cynic and nutcase.

From reading the book, I think adding a power impact assessment (PIA) before committing to development interventions is necessary.

The book makes a very convincing case that political economy, driven by personal interest, is the major motivation for leaders and potential leaders (surprise). The main objective of a leader is to get and keep power. Good public policy is not more than a distraction in this pursuit.  Leaders ignoring their main objective, will have only a short stint at the top.  So the leader will try to get as much loot from the state and its subjects as possible, and pay just enough to his essential backers for them to stay loyal to him. The rest is preferably stashed away for bad times. She must try to rely on as few possible backers as possible, who should each always need to scramble to keep her favor. The formula is really quite simple, but please, just read the book, I will limit myself to ponder some consequences of this reality of power ( “the world like it is, and not how we would like it to be”) on development assistance.

Easterly is an optimist
The Handbook gives a very black view of the world. We all know a politician or leader who would never act this way. The book however comes close to predict the real choices made by most of the world leaders who manage to stay in power (unlike the gullible friends of ours).

This means that development money that is embezzled by the leader and its cronies is not a bug, it is the main feature of cunning leadership. The whole government ownership agenda is very misguided in this light. It is probably true that the local government knows best what can work and what not. However this is not very relevant if the interest of the local leader in development funding is limited to the use of these funds to help her to stay in power.
Indeed: if the objective of the able leader is to keep the money and distribute it only to his essential backers,  anybody who is not an essential backer will not get anything.

It is also a positive message: understanding this mechanism makes it possible to use strategies to change the incentive structure and change the system.

Forget Paris.

Some types  of development assistance will be very much in demand by autocratic leaders.

  • Infrastructure leads to  excellent corruption and patronage possibilities. Moreover, in the form of big dams, it gives the dictator absolute power on who gets power and who does not.
  • Military support is even better. You can pay your essential generals and distribute bribes. Paying the rank and file is optional: they can “harvest” their own salary from the population.
  • Basic services are necessary to keep the population just intelligent enough to work hard. This is only important in countries without natural resources or without big aid flows. Anything beyond primary education will only lead to emancipation and other trouble. The leaders love basic services provided by NGOs: it authorizes the leader to spend less on the poor and more on themselves. Moreover, it transforms education from a right that the government is accountable for, to a gift from a foreign benefactor.
  • Disaster relief provided through the government services. It authorizes the dictator to embezzle most of it, while giving the rest only to the essential coalition.
  • Dept cancellation will only lead to the dictator strengthening her hold. Dept cancellation should be more conditional to democratic reform, or even better, used after democratic reform happened.  Apparently dept cancellation only works in democracies anyway.

The writers seem to have written the Handbook from a very serious concern to improve the effects of development assistance for the real world, not for the world we would all love to live in.

Their main piece of advice on development is to go for “cash on delivery”. Pay a non-inclusive government only for goods and services it has delivered, not for the process. Indeed even simple processes as capturing a terrorist bring in more loot for the cronies if they are dragged on eternally.

From poverty to power

The main lesson  I take from the book is the need to expand the coalition in power. If the leader has to rely on a wider coalition to stay in power, the kleptocracy deludes into a state delivering public services for most of the people. Indeed by growing the coalition needed to reign, there is a tipping point when it is cheaper for the leader to provide public services than to pay a bribe to the ever-growing number of essential backers.

The book goes in detail on the issue of inclusive governance structures, and ways that are used to limit the power of the public to hold leaders accountable. It proves that the nuts and bolts of the democratic system we use matters, and this as well for governing a country as for a public company or even a club.
While in a democracy a Government theoretically needs the backing of more than half of the voters, in reality this is often much less. The writer explores how the leader can find innovative ways to limit the number of people with actual power in different systems. In a multiparty first past the post-system a group can grab power with as little as 10 % of the total population backing them, just by gaming the system.

All this means that we need a radical emancipation strategy to deliver on development, where expanding the essential coalition in a country is seen as the main goal of interventions. Delivering services in non-democratic countries will not lead to a long-term development agenda; widening the coalition to include the middle class and the poor does. If some services must be delivered, theoretically the cash on delivery system should work.

To take home
Power and incentives matter. In the real world, they might matter more than the moral high ground. However, just like the rational choice is too simple to explain all economics, rational dictators are probably too simple to explain power. It is a start, and it would help us to be less gullible.
This is why I propose to add to each intervention a Power Impact Assessment (PIA), just like an environmental impact assessment.

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Planning for collapse: making development interventions too big to fail and vulnerable to systemic risk.

The financial collapse in 2008 following the collapse of Lehman Brothers was enthusiastically prepared by the political and economical decision makers. In the 70s and 80s, in the name of more efficiency and free marked, regulations were more and more seen as a restraint on the development of companies. With less regulation, the market would be more efficient with less transaction costs. The firewalls between savings and investment were torn down, as the memories of the thirties were deemed irrelevant and “this time it is different”. Indeed economic growth followed. Financial markets seemed more efficient. The business cycle seemed to have disappeared.

Companies became more and more interlinked and financial products became more sophisticated. Risk was shared among more actors, all of them with a AAA rating. The risk vaporised in the system. Until it suddenly was there again. The dew point was reached. And the lack of firewalls took down the system, including some governments who believed the hype, like in Iceland and Ireland. As I am not an economist, I would like to refer to Tim for a better explanation of the crisis. His explanation in his book “Adapt” is enlightening and suits my point well.

So the financial system became so integrated that risk became systemic. All actors were linked up so much that the failure of one hurt all of them. The financial innovation went so fast and the system became so complex that nobody could assess the overall risk anymore.

Development is a risky complex system.
Development is a risky business. Success is elusive and failure frequent. Moreover the “transaction costs”, the difference between what the donor wants to give, and what the ultimate recipient gets, is high. There are important inefficiencies: unaccountable partners, overlaps, gaps, lack of results, lack of knowledge what works and what not, not forgetting stubbornness in repeating things that failed over and over again like swedow.

The way to make changes in a complex system is best described by “do no harm”: a prudent and evolutionary approach. Make small changes, and with a short feedback-loop check on the effects on the system as a whole. Make another change. Innovations should be never too big too fail. Innovation should be tested before bringing it to scale. Indeed, this is our world, our ecosystem. We should not take systemic risks with the lives of poor. As it is impossible to predict what will work or not, it is better to have a lot of initiatives and not to pre-empt the outcome.

A development system based on these principles should be expected to be very conscious of the risks that go with large-scale intervention, and focus on the value chain from innovation to bringing to scale.

The development system that exists however has the Paris agenda and the humanitarian cluster approach. The 3D approach (development, diplomacy and development), linking relief to development and integrated missions. The items on the international agenda are aiming to link the different systems to each other. Does this lead to more efficiency or to unacceptable systemic risk?

Some examples where this clustering of agendas seems to have led to collapse due to systemic risk: :

  • In Afghanistan the West has tried the 3d approach, it did not seem succesful.
  • In Uganda, donors have linked themselves into a budget aid logic, meaning that to punish the parliament for a gay law, children will probably not get their vaccine anymore.
  • Madagascar textile lost their jobs, because the duty free regime for their country was withdrawn after the politicians squabbled too much.
  • In DRC and Sudan, the UN integrated missions make the UN-humanitarian agencies de facto not neutral, affecting their efficiency in a serious way.
  • In Somalia the mixing up of the humanitarian and anti-terrorism agenda was an element in the current crisis.

From these examples I would like to conclude that systemic risk for the whole aid effort in a country can exist if agendas are lumped together. If an approach does not work, the most logical explanation could be that the approach is not a good one, and different options must be explored. The alternative narrative, that it did not work because we did not try rigorously enough, seems dangerous.

An alternative: nimble aid (agile aid, mindful aid)
Nimble aid would consist of independent interventions, each very limited in its objectives and conscious about the unpredictability of externalities. Like a bird in a flock, each programme would be able to steer itself in full consciousness of the effects it has on its environment. It is the evolutionary approach to development. If every objective is diluted in a wider technocratic programme, nothing is really happening. Trying to be responsive in a wider programme just leads to more meetings and more lemming thinking on development.

Vaccination programmes in humanitarian settings do just that: saving the life of thousands of children, leading to healthier and more productive lives for the beneficiaries. An effect that can be traced over up to 100 years.
New agricultural practices are tried one by one on a small scale, until there is one that works well, and everybody adopts it. Like the use of maize in Africa, long before colonisation, and varieties resistant to plagues now.

It is a development agenda which is less ambitious in the short term, but revolutionary in the long term.

A prerequisite for this approach to work is information sharing. Not information about what happened, but information on what is happening. So all actors know what others do by reading this information and can adapt their interventions to what is already happening around them. The actors can only correct their actions if they know what is happening around them. This is very much like obliging public companies to publish essential information , development actors should to post essential information on their activities. Information sharing should not be confused with going to meetings nor coordination.

Keeping the firewalls
In the consensus thinking, a compounded indicator will tell you about success of failure (like the human development index). This means that each value, each objective is not important enough to fight for on its own. You want to raise the overall index. In a nimble approach there is a tension between overall goals and each objective. There is a specific programme assuring that child mortality is down. Even if the government does not have the institutions or intentions to do it themselves yet. Good child mortality work will always strengthen the local institutions when the objectives are both long-term and short-term.

This is why I would like to argue to keep the firewalls between the values that are important. This does not mean to work in an ivory tower, It means that there are some objectives you just don’t negotiate away.

Moreover: fund what works
There is a lot of evidence on interventions that do work, even on a large scale. Getting rid of funds is not a problem for the agencies even if they would limit themselves only to evidence based interventions. Just a few examples that work in some circumstances if done well:

  • Basic economical infrastructure
  • Basic health services
  • Cash support for the poorest
  • Water and sanitation
  • Most humanitarian interventions if done according to the Sphere Standards.

And so much more. In the cases of decent accountable local institutions, even some forms of budget aid seem to work.

In conclusion

Of course, coördination and coherence are important. But they are only means for reaching results. Sometimes other means, like innovation or competition, might work better. When coherence becomes an objective of the aid, however, the level of systemic risk for the development system might just be too high.

Finally, transparency will always be beneficial for planning interventions, as well in a coherent as in a competitive environment.


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Admitting Failure: Join the Posse (Only for real Men)

I am all in favour of evolution in development practice and thinking, where normally, it is more important to cull downright dismal failures than to select only the best, as evolution needs variability to work its magic.

Admitting mistakes or difficulties is also part of every professional relationship between partners. Part of the reputation of ICRC is generated by its tendency to speak rather bluntly about its own capacities in private, while the toeing of the party line by the staff of other organisations (say UNICEF) lessens the confidence in the organisation. However, when looking at the public image, it might be the other way round. It might seem that, when you need direct funding from the broader public, admitting failure is not the best practice.

I have some serious questions on the trend to focus on admitting failure. I will focus on elements:

  1. Who can admit failure?
  2. What does this failure say about the respect organisations have for beneficiaries?
  3. The posse rides again, where do we ride it to?

Who can admit failure?
When I look at who is leading the charge in “admitting failure”, it seems to me that big failures can be admitted by organisations who interact mostly with a more sophisticated donor public: governments (World bank) or better informed people (who supports engineers without borders?). For these organisations it seems to me to be fully in line with the analysis of Marc: it is just something to run with the posse, without a real cost. It is signaling credibility. However, if they need a separate thematic line to treat with failure, what have their (transparent) evaluation and monitoring departments been doing until now? An aspect that cannot be addressed with the failure approach is the recognition that systems are inherently complex.

When other organisations publish failures, it is closer to a “lessons learned” story: we know this works, we applied it there, we overlooked this element, it did not work). What is being talked about by these organisation is not failure, but evaluation and short feedback loops, in order to be able to correct early in the project. Small NGOs don’t have official evaluation strategies, they just learn their lessons the hard way, and take them on board.

Admitting failure looks very much like extremely badly conceived monitoring and evaluation when described this way. Indeed I fear this failure posse might interfere with the other posse towards professional and transparent evaluation and results measurement. The World Bank should know better.

Please some respect
The stories about failure often describe projects that were implemented and afterwards it seemed not to work, because of a simple aspect not taken on board. The Merry-go-round water pump is the case in point. I notice that the evidence base of this project was weak, and implementation at a large scale happened before a decent assessment was made.

This echoes the discussion on the Millenium Villages in the Guardian where do-gooders rush into implementation of everything they think will help the villagers, claiming it would be immoral to let them wait until an evidence base is established. I sympathise with them, but a minimum of monitoring must be possible between a pilot or startup phase and full-blown execution. Of course, the victims of all this activism are poor, and poor are by definition powerless. The organisation can just move on, looking for fresh victims. There are enough of them : “the poor will always be with you”. With enough failure, we can assure they stay that way.

The posse rides again: where to ?
Failure looks to me like the spin off from a good tendency. The tendency to professionalism, to stop looking at the world as it should be, but as it is. The need for evaluations and feedback loops. The need for research and evidence base. The need to document what works and what not. Part of this professional approach is that failure is just another piece of transparent information from every actor.

However, like we saw the “program approach” coming instead of making good projects, it might be that the Posse on Failure attracts more riders than the one of professional information and risk management.

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CSR and Public – Private partnership: before, we used to call this propaganda, corruption or tender procedures.

This my contribution to the first Aid Blog Forum on Corporate Social Responsibility.

When I look at the different contributions on CSR, the negativity of the academia and practitioners oozes from my screen. For good reason. Who pays the piper calls the tune. And the tune  set by a private partner is seldom purely “needs based”. There will be need for visibility and publicity (CSR is mostly about signallingand branding, Marc Bellemare). The moneyshark will come with his own ideas of what is important and what not (please add at least a micro credit chapter). And you will have to say yes.

What annoys me most is the blurring of the lines. How fast does CSR become single sourcing? How much of what we call CSR can be classified as propaganda, how much are the lines of good procurement procedures blurred by it?

Corporations have an identity, with different concentric circles. In the outer segment, we see branding and marketing. These signal the view of the corporation as they want us to see them. At the core, there is the real identity: cutting corners or maintaining quality even if business is slow. Some companies treat their employees well, some don’t. I could well imagine that CSR fits in the core of a company. When a soccer club sponsors UNICEF, I might believe it is. When a clothing giant campaigns on HIV/AIDS, it looks like marketing to me. It degrades the Cause and puts everything at the service of the bottom line.

Just like developing countries are victim to fickle donors looking for visibility,  CSR campaigns that are aimed to be marketing will sell the soul of their partners, and run off with the next posse.

humanitarian action should act like an insurance including preventive care. It should not depend on the media when aid comes, it should be send when you hit rock bottom. Of course, this kind of assistance acts before children are dying. Very seldom star-based initiatives support flexible funding to UN-bureaucracies. However, this is what we probably need. Prevention is more efficient. Needs based allocation is better than media based allocation. We have standards for servicing the affected populations we can be held accountable to.

Institutional philanthropists and some CSR companies do support such an approach. Most private donors however, don’t. In humanitarian assistance, most CSR seems to follow the flow, and create political incentives against Good humanitarian Donorship. Bono criticized countries for not giving “as much as IKEA” to the Horn of Africa. As far as I know, Ikea does not contribute to the Central Emergency Response Fund.

Somewhere, we must draw the line.
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Humanitarian needs and the way we fund the Horn of Africa

Some important annual milestones for needs based humanitarian donor budgeting just passed: the publication of the 2011 Global Humanitarian Assistance Report and the Mid Year review of the OCHA Consolidated Appeals.

The GHA report analyses the available data on humanitarian funding. It informs you on the reality of funding, in contrast with the fluidity of donor declarations and promises. Donors with a high media visibility might turn out to have low commitments . As an operator in the field, it tells you who funds what where. Compared to other sectors, funding seems to move in a direction where, according to the GHD consensus, more efficient humanitarian assistance is possible. The mid year review gives a snapshot of the needs and funding shortfalls in the different crises, as it is reported through the UN-system.
One of the aims of both documents is to get a better allocation of resources, to have more predictability and better match the donor budgets with the needs.

Indeed, the unspoken consensus on humanitarian assistance is that humanitarian assistance is a moral imperative, a human right, stronger than the “human rights”. When the shit really hits the fan, we will come and help you out. You can count on it. Everywhere. Anywhere. You will get at least what is promised in the Sphere standards. We will not let you sink lower. Your life and dignity will be protected.

Therefore, humanitarian assistance should be organised more like an insurance than like a charity. What is the current mechanics of humanitarian funding, and how is the political economy now, and what should change to become more like an insurance?

The mechanics: The budget cycle
The donor budget cycle starts for most government donors in march of the year before. The first draft of annual (or rolling multi annual) budget is prepared before the mid-year review is received. The only data on needs available are those from the year before. The budget is approved around November in countries with a working government, meaning before Common Appeal is even shared. The input for the budget cycle comes from the common appeal for the year before the budget. Even the review comes too late. The budget cycle is conducive for stable, long term investment in an insurance like scheme, with stable funding.

The mechanics: sudden disasters: the additional funds delusion
When a sudden overwhelming disaster strikes funding of the humanitarian budget is redirected to this new need. Most donors provide with a reserve of 20 % of their budget for sudden onset disasters.
Calls will be placed to liberate “additional funds”. These funds will come in the first place of course from the budgets within the same programme: the allocations for flexible funding or for complex crisis response that was not yet paid in the same year.These other crises will be “forgotten”: all attention goes to the media hog.
If the situation is politically overwhelming, the head of the humanitarian department will have a good hand to fight for additional budgets from other programmes. These will normally be development budgets. Unspent development funds will be transferred to humanitarian assistance. It is extremely rare budgets from outside the development sphere (e.g. unemployment benefits) get transferred to the humanitarian budget for a crisis.

Political economy for budgeting based on sudden disaster spending
This approach leads to an incentive structure for the level of the humanitarian budget that runs against the consensus on humanitarian assistance as a right:
The visibility of complex crisis and predictable funding is limited
The politically experienced needs are mostly in sudden onset disasters.
When it comes to “important crises” the voted humanitarian budget is irrelevant. You could as well accept the need for flexibility, and scrape the money together when disaster strikes. It will make you look good.

The political economy of spending in sudden onset disasters pushes against the principles of Good Humanitarian Donorship and pushes the long term budget provisions down.
Why would you have a high humanitarian budget if you can have a cabinet meeting with media coverage and add from other budgets when there is a political need? In this reasoning, the humanitarian needs are secondary.
It is indeed remarkable that countries with a “presidential” approach to humanitarian spending have lower annual budgets, but also have troops on standby when CNN is filming.

It is normal that the public and even most politicians think humanitarian assistance happens meanly in natural disasters, while in reality 80 % of the funds is spent in complex crises, mostly in civil war zones.

However, something more is at work. I like to call it the incredible moral fibre of the humanitarian donor and agency administration. In some countries, the flexible funding of needs based allocation mechanisms is and stays well funded. Moreover, disaster preparedness and prevention get a good funding, inspite of the political economy.

An alternative approach? Funding instruments
The humanitarian operations by the main actors have moved fast towards an accountable system trying to deliver services according to standards.

Donors should fund instruments that build up reserves and allocate towards the most important needs today in the shifting humanitarian crises. These instruments should be accountable and look for efficiently delivered effectiveness.

There is already an interlocking system with enough redundancy that does just this:
The CERF, DREF and ICRC core funding act as a global system of insurance for humanitarian needs. They can act in sudden disasters and fund forgotten long-term crises.
Most humanitarian agencies have a flexible fund for allocation according to needs. The UNICEF thematic fund for humanitarian assistance, IRA at WFP, SFERA at the FAO, etc.
ECHO acts like one giant needs based fund, with good management practices, oversight and quality control.
There are country level pooled funds and Emergency Response funds.

Apart from funding “needs based”instruments a donor will have to keep some hands on presence in crises that are perceived as important: human solidarity must be done and must be seen to be done. This should not obscure that working through insurance-like mechanisms is far superior when talking about efficiency and effectiveness.

However, there is little political gain in funding these instruments: when the list comes out of donor support for disaster relief, the budget will be spent, and there are no more funds available for bringing your country in the spotlight. Responsible donors and agencies manage however to keep up this kind of funding.

One fund or interlocking systems ?
Politically, the creation of one big fund seems interesting. . It would simplify the message and management for the donors. One check every year. However, in order to have an innovative, learning system, with enough redundancy to pick up the slag when one actor fails, a further development based on interlocking and sometimes competing mechanisms seems indicated.

Insurances need assurances: blank checks or value for money?
However, there is one issue with these instruments: most of them start from the hypothesis that all actors in humanitarian assistance deliver quality and value for money. Comparative evaluations and competitive bidding on value for money are rare. Most attention goes to effectiveness, not to efficiency within a certain quality standard for effectiveness. The instruments for creating instruments for assurance on value for money exist however: there are standards for service delivery and accountability, that could be used for diving prices down and quality delivery up.

These assurances will be the cornerstone towards an insurance-like system

Including preparedness and prevention
Like every insurance, there should be in-build incentives for preparedness and prevention spending, as one of the most efficient humanitarian approaches.

Pushing Good Humanitarian Donorship
The gatekeepers for information should brainwash the politicians and the general public by highlighting the positive contribution of flexible accountable and needs based instruments. The current practices by the main humanitarian actors are more geared towards monetising sudden onset crises, hoping it sticks into the general budget. This should be an active approach, worth a significant portion of the budget.

Some possibilities are obvious:
Ocha should, for every crisis, mention first the contributors to CERF; the same could be requested from ICRC for core and IFRC for DREF. There should be an effort also by teh EU to highlight the importance of flexible funding above ad hoc funding.
Pressure should be as little as possible on “additional funding” the pressure should be to increase the budget for needs based funds. Even pressure for flexible funding to agencies does not have the necessary flexibility to respond exactly to the needs.
The overall budget should be used in rankings. This is why GHA is so important. Rankings per crisis are important, but should be presented always with overall rankings.
To move to an insurance thinking, contributions could be presented preferably as a part of the GNP or per capita, instead of on an absolute basis.

What matters for increasing the humanitarian budget?
An increase in the humanitarian donor budget will not be directly caused by an increase in humanitarian needs. It will depend in the first place on the importance a donor country gives to humanitarian assistance in general. It will be based on the conviction that Humanitarian assistance is a right. It will depend on conviction of the politicians and the general public that assistance should be given more, and that the money is well spend.

This means that the moral case for assistance must be promoted until it becomes a consensus, first in each country, second globally.

It also means that vetting humanitarian partners is necessary. An insurance type of coverage is only possible with decent standards. Standards for service delivery, accountability and evaluation make it possible to compare the operations of the different actors, Multilaterals and INGOs. It does not mean that data or evaluations will convince anybody, it means that those advocating the moral case can do so from the high ground, knowing the tax payers’ money will be well spent.

The biggest enemy for this approach could be the NGO, or multilateral that can make a killing with ad hoc funding.

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