Monday, 28 June 2010

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Monday, 14 June 2010

Growth in Developing Countries

The ever-brilliant Chris Blattman whose blog I follow has these "musings".

Thanks to him also for this find: International Growth Centre

1. You’re mayor of a large and growing industrial town. You have investors who want to build plants or commercial farms. You have national funds to build an airport. All will benefit generations of your citizens. But where do you put the firms and airport? You have to buy out or push out farmers, who don’t know another way of life. Land elsewhere is scarce. You can pay them generously, but five years from now a good number will have lost the cash, and then you have a political problem. You could give the farmers bonds, but you’d better inflation-protect them. Now you need a liquid financial market. You think to yourself: man, enclosing the commons is a bitch in the era of human rights.

2. If people aren’t used to drinking juice, and you happen to open a juice factory, it turns out it is very, very hard to get them to drink juice. You lie in wait, half hoping Coke will decide to blast open the market with a marketing barrage. You feel vaguely guilty.

3. Large manufacturers grow from being medium or small manufacturers, right? Not necessarily. In Ethiopia, half the large firms were started by traders: import-export firms. Why? Managerial know-how. Access to finance. An understanding of foreign markets. And international sales channels. Precisely three Ethiopian manufacturers have gone from small to large.

4. You know how to run a business, and have a pile of cash. The firm down the street is mismanaged and cash poor. Why not buy an ownership stake, get it profitable, and sell the now valuable shares to other local investors?Then use the cash to do the same thing four more times? Sounds great. Now I just need accountants to do the audits, I-bankers to do the due diligence, lawyers to write up the contracts. A whole class of financial professionals who… basically don’t exist. Crud.

5. Ethiopia is fertile and well-farmed. Food processing and agribusiness ought to be a growth sector, right? So strives the national economic strategy. Unfortunately the coast is far away and transport costs alone exceed the international price of most food products. Plus the coasts are controlled by your enemy, a failed state, and a greedy mini-state eager to charge you through the nose. Time to focus on high value-add products?

6. In a year, the average small firm is more likely to shrink than grow. Productivity and value added tend to double every time you jump up the scale from micro to small, small to medium, medium to large. Maybe small is no longer beautiful?

7. Too many economists dismiss industrial policy as ‘picking winners’. This strikes me as either intellectually lazy or ideological (or both). If we think of government policy like a technology, shouldn’t we be thinking of experimentation, innovation, and advancement?


Source

Monday, 7 June 2010

US Army CGSC Youtube Channel

http://www.youtube.com/USArmyCGSC

Easterly v Singer

http://bloggingheads.tv/diavlogs/24804?in=00:00&out=46:02

Sunday, 6 June 2010

Andrew Exum's Reading List

http://www.cnas.org/blogs/abumuqawama/2007/10/counterinsurgency-reading-list.html

Uncomfortable Questions

Some of his tough questions:

Why are we actually in Afghanistan?

Is the availability of "sanctuary" (in a world of myriad sanctuaries) really important?

Do the benefits of denying sanctuary in Afghanistan fit into any cost-benefit logic for the U.S.? (vs. benefits of Afghan sanctuary to the terrorists)

Are we confusing sunk costs with future investment decisions?

Do we truly understand that successful COIN is a means toward an end -- rather than an end in and of itself?

And most importantly: Are our actions in Afghanistan and the region reducing the terrorist threat to the U.S.?

Source:

Saturday, 5 June 2010

Constructive COIN: How Development Can Fight Radicals

Summary: The United States' current approach to counterinsurgency centers on protecting the population, with a special emphasis on political and economic development. But does that development-based strategy work? In a study we conducted using data on reconstruction spending and violence in Iraq, we found that the provision of certain government services does lead to a reduction in violence.

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Our data suggest that reconstruction money works when projects are small, troops have a good working relationship with noncombatants, projects are chosen in consultation with local officials, programs are administered by local contractors, and a provincial reconstruction team is nearby to provide guidance.

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Another study we recently completed casts doubt on short-term job creation as a counterinsurgency tactic. During periods of insurgency in Afghanistan, Iraq, and the southern Philippines, the correlation between employment rates and violence is weakly positive, and certainly not negative. In other words, the more jobs there are, the greater the violence -- a puzzling result.

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When it comes to counterterrorism, however, the suggestion is more specialized. By providing the same services as a terrorist group’s parent organization, a government can effectively undermine the organizational capacity of the local terrorist threat.

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Eli Berman

http://www.foreignaffairs.com/articles/66432/eli-berman-joseph-h-felter-and-jacob-n-shapiro/constructive-coin

Get Medeeval!

"The weakness of President Hamid Karzai that has led many journalists to dub him the 'Mayor of Kabul' is little different structurally from those medieval European kings, who also held their capitals but did not rule their people. Similarly, Karzai's adoption of a patrimonial model of the state, in which offices and resources are redistributed on a personal basis to buy the support of existing power-holders or play them off against one another has more in common with the Holy Roman Empire than the European Union. In some ways, therefore, a thorough understanding of medieval power politics and how rulers came to centralize state authority would be of greater value to the international advisors sent to the Karzai government than a background in constitutional law or regulatory reform. At least in medieval Europe, the centralized state emerged victorious."

http://www.foreignpolicy.com/articles/2010/06/02/is_afghanistan_medieval?page=0,2