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Archive for October, 2010

Not so transparent: measuring corruption

Cartoon courtesy of University of Colorado
Transparency International (TI) just released their 2010 Corruption Perceptions Index. For those of you unfamiliar with CPI, its an attempt to measure and rank  corruption in each country based on “expert opinions” from 10 “independent sources”. I think you can see where we’re going with this.

First, let’s see what TI says corruption is.
Transparency International (TI) defines corruption as the abuse of entrusted power for private gain. This definition encompasses corrupt practices in both the public and private sectors.”

This definition, sufficiently broad gives TI the flexibility it needs to examine something as abstract as corruption. However, such a broad view should include a broad, diverse group of sources. But that isn’t the case with TI. TI’s sources are all pretty much on the same side of the political spectrum. Lets see if you can find the similarities:

1) Bertelsman Foundation
2) Freedom House
3) African Development Bank
4) Asian Development Bank
5) World Bank CPIA
6) Economist Intelligence Unit
7) Global Insight
8) IMD International- Switzerland
9) Political and Economic Risk Consultancy
10) World Economic Forum

Oh wait, looks like they forgot to include ANY  nationally-based sources for data. But maybe these guys are the only ones with sufficient data?  Well, not entirely….since a half of these sources gather all of their data by surveying (mostly expatriate) businessmen (IMD, WEF, PERC, IMD and GI).So the ‘perception’ of corruption would appear to be the perception of the ease of doing business.

Other sources that don’t just survey expats still focus on business data for their perception of corruption. Freedom House (already of dubious neutrality), considers an “excessive state presence” in economic affairs as a proxy for corruption. Likewise, the World Bank CPIA and EIU conception of corruption still focuses entirely on the role of state in business. Bertelsman Foundation has likewise come under some criticism for compromising its declared neutrality through neoliberal advocacy (article is in German). This might explain why CPI ranks Singapore as less corrupt than Sweden. Or how South Africa ranks higher than Rwanda, which has nearly draconian anti-corruption laws.

The end result is that TI’s CPI ends up looking a lot like Heritage Foundation’s Index of Economic Freedom, something which few development practitioners or academics take seriously. Can business leaders provide insight into the workings of a state’s commercial, industrial or tax policy? Absolutely. But, given that corruption is also a private-sector phenomenon, should business leaders be given the sole power to judge the integrity of a state? Hell no.

In terms of the actual methodology, TI has been courteous enough to explain that their indicators shouldn’t be used to measure trends, since the sources used for each country change every year.  As a result, you get a snap-shot, not a big-picture analysis.  Even the World Bank, one of CPI’s sources has lambasted the aggregation of dubiously compatible indicators:

“There is a strong desire to quantify the entire concept of corruption into a single index, so that it may be compared across countries and over time. Unfortunately,corruption is such a complex phenomenon that attempts to compress it into a single number lead to results that are imprecise (at best) and misleading (at worst). This is not to say that corruption should not be studied. On the contrary, there is a great need for good measures of governance and corruption.

Organizations such as Transparency International say that corruption indices likethe CPI are a “wake-up call to political leaders and to the public at large to confront theabundant corruption that pervades so many countries.”33 The truth is that governmentsand citizens are fully aware of the corruption which pervades their country. The problem is that the people are powerless to stop corruption.”



Nigeria vs. The World Bank: The Palm Oil Debate

This is, perhaps strangely, not the first piece I’ve written on the topic of palm oil lately. But a recent NYT op-ed  called “The World Bank’s Palm Oil Mistake” caught my attention.  The article calls out the World Bank’s IFC for freezing its funding on palm oil projects while reevaluating its strategy for the environmental and social impacts of palm oil production, specifically due to the freeze’s negative effects on Nigerian producers.  And while I agree with the author on certain points, his attacks fall short.

Oil palms outside of Kuala Lumpur, Malaysia

Why do we care about palm oil anyways?

In a nutshell, it has a variety of uses and nutritional properties from biodiesel to  food products.  Its production can be used to diversify and strengthen developing economies.  On the darker side, palm oil production has been implicated in severe environmental degradation via deforestation as well as the exploitation of socially marginalized groups.

What’s the World Bank’s mistake?

Because the majority of palm oil production occurs in Asia, specifically Malaysia and Indonesia, the environmental issues arising from palm oil are often Asia-centric and may fail to take the specificity of other nations into account.  After all, the funding freeze occurred after complaints from “smallholder and indigenous groups in Indonesia” –a far cry from the Nigerian context.  By freezing investment in all countries, producers in Nigeria are put in a difficult economic bind.

But the article’s reasoning lost me right about here:

“According to the bank itself, since its inception, life expectancy in developing countries has risen by more than 20 years. Adult illiteracy in poor nations has been cut in half since 1980. And over the past two decades, the number of people living on less than $1 a day, while unacceptably high, has dropped for the first time.”

An interesting observation that of course tells us nothing whatsoever about causal impacts.  The piece then goes on to advocate that, because of this success, the World Bank should focus more on poverty reduction and less on issues such as environmental sustainability.  Ignoring this question for the time being, I looked a bit deeper into the research behind these claims.  A survey of Nigerian palm oil producers in recommendations to the World Bank revealed the following:

“With respect to a potential environmental harm (widespread clearance of forests, massive CO2 emissions and the theft of indigenous peoples’ lands) three-quarter of palm oil producers surveyed (75 percent) have never noticed any potential environmental harm caused by the palm oil production. In addition, they are not convinced that palm oil production can be a potential threat to the environment.”

Well, unfortunately, just because I don’t notice my CO2 emissions from flying in a plane doesn’t mean they don’t exist.  I’m being a bit harsh (note that the Nigerian method of production is generally less wasteful than others) but only to illustrate the point that there seems to be an inherent bias in a methodology that  surveys palm oil producers.  So, while I’m sympathetic to the argument that it’s unfair to lump Nigeria in with Indonesia on the basis of social marginalization, the existing research doesn’t hold much water.  Just like advocates can be accused of greenwashing and blackwashing to lobby for environmental causes, facts shouldn’t be exaggerated to make the opposite case either.

Prioritizing the issues

This brings us back to the question of whether poverty reduction should come before environmental sustainability or vice versa?  The author lambasts the World Bank for pandering to lobbyists and becoming “captured by environmental extremists” who put the needs of the environment before those of the poor. Yet both poverty and environmental concerns should go hand in hand to avoid creating negative consequences on one another.  I think this is the strategy the bank is attempting to adopt by reevaluating its investment policies altogether.   Is it a little drastic to freeze all investments completely?  Perhaps.  Should they take more regional specificities into account?  Definitely.   And should they keep funding Nigerian producers?  Sure, contingent on increased clarity about the environmental effects of doing so.  Palm oil has been a great engine for growth in Malaysia and Indonesia and, if given the chance to be farmed sustainably, it could provide the same opportunities for Nigeria and others in the region.

[Photo credit: the author]

Bringing Back Commodity Fetishism!

I know, I know….Marx is terrifying! Thanks in part to Fox News. But seriously, it seems that any literature with the slightest reference to the old philosopher with the tweed suit and shaggy beard still makes goose bumps crawl on to the skin of the mainstream. Nevertheless, I say we should venture into the haunted house of Marxist cultural theory and search for some mental tools for development practitioners to keep in mind, particularly the idea of commodity fetishism. Its defining characteristic, for our purposes, is that the world’s current practice of labor, trade, and market relations creates a false reality and this has damaging sociological impacts. It might seem broad to extrapolate these ideas to development, but it is important to challenge our assumptions and perspectives.

So what is commodity fetishism?
Celia Lury tells us that: ‘Marx used the term fetishism of commodities to describe the disguising or masking of commodities whereby the appearance of goods hides the story of those who made them and how they made them.’

Applied to contemporary culture, some seriously weird things are commodifed (even Marx’s corpse) due to a variety of factors that determine value from labor to transaction costs to preferences. If we stick with an anthropological interpretation, Marx provides the challenge that, in the absence of natural and direct producer-consumer relations, we buy into another level of commodity fetishism that heavily impacts our psyche through our distant versions of monetary exchange for physical products in particular. All of this causes a distorted and falsified reality. Support for this can be seen in contemporary advertising in particular. According to Axe body spray, scent takes on sexuality, power and voice, pretending to have additional objective use value by exhibiting the human traits of attraction that the product apparently heightens

So how does this relate to international development?
Unfortunately, these concepts of commodity fetishism in contemporary culture link consumption with international aid. Here’s just one type of example to illustrate the point:

The institution of development aid is supposedly responding to challenges that threaten human welfare, particularly for the world’s poor. Aid has truly globalized, with multinational institutions, massive NGOs, and government agencies working worldwide with presence felt virtually everywhere on the planet. Consumers (reminder: you and I) fund these development actors through institutions they either directly or indirectly support and even through conscious personal donations of capital. Aid itself, is commodified. A great example that illustrates this line of thought can be see here in the Product RED campaign.

The way international aid discourse is portrayed through media, television advertisements, and other visual stimuli such as logos is damaging public perceptions about the realities of poverty, oversimplifying vastly multidimensional human development problems, and doing so through the medium of consumption culture to an overwhelming degree. This approach in part decontextualises livelihoods and reciprocates ineffective policy approaches to development both at the production and consumption ends of the commodity spectrum.

Most importantly perhaps, it is essential for development practitioners to think about the psychological impact that Western goods (from the Coca-Cola in a rural village to the NGO land cruisers) and services (from the physical presence of your typical expat in the field to imagined impact as policy makers for ex.) have on communities in developing countries. An additional problem is that the international aid industry is exporting its ideals surrounding consumption en masse with a particular relevance to cities in the global south.

What do we do now?
The point here is to challenge our normal way of thinking with another paradigm. If we understand the ever-changing manner of our global systems, it can hopefully result in more conscious and informed choices.

For example, promoting local sourcing of necessary resources in your community by directly buying your groceries at farmers markets is a start. For the development practitioners…begin deconstructing the context of the work you do in the developing world and examine the various impacts you have. Talk to others and spread the importance of critical thinking. Advocate for specific changes in the treatment of commodities through speaking to your politicians. If there is to be systemic change addressing these issues of consumption, equality of opportunity instead of equality of outcome must be both promoted and lived. Marx’s lens of commodity fetishism is a useful, and often misunderstood, lens that allows for materialism to show its true colors as the opposite of idealism and we must act on that which it reveals.

Alan Partridge on Agriculture


Overnight hunger?

World Food Day recently passed without too much hubub. The coming of every WFD tends to be replete with your run-of-the-mill self-congratulatory prattle of policy-makers, miserabilist reports from NGOs and the always encouraging celebrity appeal.

But what’s changed? It’s been nearly 30 years since Amartya Sen wrote his famous essay on famine and democracy and seven since Alex De Waal wrote on “New Variant Famine”. While both of these works have sufficiently entered the mainstream, it looks like the core message has been forgotten.

Famine and hunger are not events–they’re a process. Famines don’t occur in vacuums and you can usually see one coming from literally, years away.

Take for example Western Chad which, as the FAO explains it, is “slipping into famine”. Global Acute Malnutrition (GAM) is shockingly high at 26%….but what few mention is that this has been happening every year for decades. You’ll notice that GAM hasn’t slipped below 18% in 16 years. Yet World Food Programme and Action Against Hunger have pretty much been the only actors there for around twenty years, responding every year like it was an emergency. The blame isn’t on their shoulders, since they’re both emergency actors. We can’t really expect them to don their development hats and start digging at structural issues like infrastructure, price fluctuations, women’s social capital and agricultural policy that are probably at the root of this chronic emergency.

Why do policy makers cream their jeans at the chance to respond once the word ‘famine’ is used to describe a crisis, yet not so when the numbers are exactly the same, just without the arbitrary title of ‘famine’? Compare the GAM numbers on the chart for the dates of both appeals.

Famines are the result of a structural process that often involve years of declining productivity, policy choices, input access, seasonal volatility and market vulnerability among a host of other factors. Most importantly, they’re preventable. This year’s Sahelian food crisis, which currently totals 860,000 malnourished children could have been stemmed years ago if we accepted the fact that hunger  does not occur overnight. Nor is it sensible to argue ignorance. It’s not as if the alarm bells have not been rung over and over (and over) again during the past 5 frickin years.