Do we need evidence-based policy making for health and development policies?

High amounts of aid are flowing from the developed to the developing world. Low overhead- and administration costs try to ensure that most of the aid really arrives in developing countries rather than petering out in (western) administrations. From this perspective, program evaluation is often seen as a squeamish scientific exercise with limited value for the real world where best-practices seem to be more important. The World Bank even published the book ‘Empowerment and Poverty Reduction: A Sourcebook’ with an extensive list of best-practices and seemingly effective poverty reduction strategies but without any evidence whether the recommended approaches actually work. A lack of program evaluation replaces evidence-based with intuition-based interventions. In the usually complex contexts of developing countries, intuition is often wrong with the result of wasted aid money in the best case and significant adverse effects in the worst case. For example, a well-meant free distribution of T-shirts can disrupt the local market for clothes ruining the local clothing industry (as happened by an initiative from Jason Sadler and also by WorldVision). Evidence-based decisions about the allocation of resources demand an investment into impact evaluation, which will improve the overall effectivity of aid.

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Why should wealthy countries give aid?

Aid plays an important role to improve health in developing countries. Why should we give aid? Are we morally obliged to give aid? Can we derive the obligation from human rights? Or should we invest in aid for health because it is a global public good? Answers to these questions have important implications. A moral obligation would emphasize individuals as donors. Health as a global public good would imply a significant role of the state. A negative answer to all questions would reduce giving aid to an individual preference without any obligation. Given the critical implications, each question is scrutinized below. This allows a comprehensive assessment of the arguments to give aid. Read more of this post

Good Governance for Development?

The Washington consensus prescribed market liberalization for sustainable growth in developing countries. With the absence of successes, it became apparent that something crucial was missing: institutions. After establishing that institutions are important for development (Hall and Jones 1999; Acemoglu, Johnson et al. 2001), the focus shifted towards ‘good governance’ to support the free market. The agenda contained formalized property rights and democratic institutions for accountability and lower corruption with the ideal of institutions in developed western countries. If countries would implement these institutions, the free market would lead to sustainable growth. Therefore, the agenda is also called market-enhancing governance while alternative agenda of an interventional government as practiced in Asian countries was ruled out because of insufficient government capacities and capabilities in Sub-Saharan Africa. Does good governance lead to growth? Read more of this post

Do hospital investigations alter patients’ choices?

In the UK health care system, the Care Quality Commission can conduct high-profile investigations of hospitals. In a recent article published in Health Affairs, we investigated the impact of such investigations on patients’ behavior. For three investigations, we analyzed the trends of non-emergency patient admissions and other utilization indicators. Controlling for secular trends and using a control group, we employed a difference-in-difference approach. We found that the investigations only had an impact for one hospital with significant declines in inpatient admissions, outpatient surgeries, and in numbers of patients coming for their first appointment, but the effects disappeared six months after publication of the investigation report. Apparently, the publication and dissemination of the highly critical report does not have a sustainable impact on patients’ behavior like avoidance of the hospital. Assuming that hospitals implement improvements also without the threat of losing patients, public reporting has no adverse effects on the number of patients for the hospital.

Research for ICT4D

ICT4D

ICT4D stands for Information Communication Technology For Development. The main examples usually are mobile phone applications or Internet to boost sustainable development especially for the poor in developing countries. A technically driven wave of ICT4D in the last decade mainly failed to reach this goal [1, 2].

Two common examples are usually adduced to support this claim. An initiative to establish tele-centers aimed to educate and empower citizens by providing public access to information and communication technologies. Lack of sustainable funding, lack of local technological support and infrastructure as well as lack of demand resulted in a failure of the project. Also the One Laptop Per Child (OLPC) initiative to equip children in developing countries with a robust laptop with learning software stayed behind its goals. The project suffered from technical problems, unsustainable power generation with worn out solar mats and required Internet access for many functions. Moreover, both projects can be questioned whether they are using aid most effectively. Are the most severe problems tackled? Or could aid be used more effectively in other (non-technological) projects?

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Interventions against a dictator

The Arab Spring, a wave of revolutions in nondemocratic countries in North Africa and the Middle East, forced some dictators to flee from their countries while others stayed and one faced intervention by an international coalition. Using a stylized game-theoretic model, this article analyzes the decision-making process of a dictator and explains the different outcomes. A rational dictator only leaves the country if the expected costs from punishment outweigh the benefits of staying. For the international coalition, the model identifies a trade-off between the cost of the intervention and the potential for economic benefit from a successful intervention. A higher number of participants in the coalition increases the probability of the intervention’s success. However, if the intervention fails, coalition participants lose all economic benefits. Therefore, an intervening country benefits from the participation of other countries because it lowers the risk of failure. If the intervention succeeds, the economic benefits are shared among all intervening countries. Thus, an intervening country has the most to gain if it acts alone. Furthermore, a country can deliberately abstain from an intervention to benefit from higher shares of economic profit if the intervention fails and coalition members lose all economic benefits. The model can help explain the rarity of unanimous votes for an intervention and the complex and tedious bargaining process surrounding decisions to intervene. Read the full article here at the Journal of International Affairs.

Greece: Growth after Collapse!

In my recent post, I argued that Greece as a peripheral Euro country will suffer severely from a collapse of the Euro. Depreciation of the new domestic currency will extirpate national savings – this expectation will trigger a bank run and a capital flight leading to bankruptcies in the private sector especially for banks. Workers will suffer from low real wages and high unemployment. Also the government’s burden of liabilities denominated in Euro will grow by the devaluation of the domestic currency; a default of the government is not unlikely. Still, Greece will return to economic growth a few years after the crisis!

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Is trade liberalization good for the Democratic Republic of Congo?

In the 1960 at the time of independence, the Democratic Republic of Congo (DRC) was one of the most industrialized countries in Africa – only surpassed by South Africa. After two major wars and five million deaths, its economy is devastated, it lost its leading position and fell back to place twenty in GDP (PPP) ranking in 2010 in Africa. Should the government adopt strong trade liberalization policies now to return to its leading position in Africa? Although trade theory claims that no country can get worse off by allowing free trade, this conclusion depends on crucial assumptions. For the DRC, imperfect capital and prohibitively high transportation costs suggest that trade liberalization can have adverse effects. Rather, measures of protection for selected industries would allow the creation of a competitive manufacturing sector ensuring sustainable long-term growth – similar to policies in Asia in the last decades. Read more of this post

Costs of a collapse of the Euro

A collapse of the European Monetary Union (EMU) and a return to their previous currency for each member country would have severe economic impacts. With focus on monetary effects, I will discuss the pros and cons of a collapse of the EMU. Based on these effects, costs can be estimated and put into perspective to a bailout. Costs of a collapse of the EMU significantly outweighs costs of a bailout.

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MPA at LSE and SIPA

The Master of Public Administration program at London School of Economics (LSE) and School of International and Public Affairs (SIPA) at Columbia University in New York allows to pursue a dual degree option with the first/second year at the partner institution. Some more institutions like Hertie School in Berlin, Lee Kuan Yew School of Public Policy at National University of Singapore  and Science Po in Paris participate in the program. Since I studied my first year at LSE and the second year at SIPA, I will only compare those two – hoping that this is helpful for students considering the dual degree option. To begin with, I am very convinced that attending two schools with all their differences rather than one school is generally very advantageous. It broadens the perspective, exposes you to different cultures and personalities and allows to pick / focus whatever each school is best at. Therefore, I would always go for a dual degree option if I have the chance. And as I will explain in more detail below, I would recommend to study the first year at LSE because of its rigorous training in fundamental skills and switch to Columbia for the second year because of its applied perspective and good career services. Read more of this post

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