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Published: Thu, 27 Apr 2017 00:00:00 -0400

Last Build Date: Thu, 27 Apr 2017 16:44:43 -0400


A Universal Basic Income in Africa

Mon, 27 Feb 2017 16:10:00 -0500

Foreign aid has traditionally taken the form of in-kind assistance: sending meals or medicine, helping build houses or schools, and so on. This can lead to all kinds of unfortunate side effects, as when free food from abroad undercuts local farmers. There is also a recurring mismatch between what the planners in aid agencies think a community needs and what the people on the ground actually want. And so a small group of forward-looking aid workers has embraced a cheaper, more flexible, and less paternalistic approach: Just send people cash instead. The leading player here is GiveDirectly, a U.S.-based charity buoyed by the rise of mobile payments, which have made it much easier to send people money without passing through political or bureaucratic middlemen. The group has been sending conditionless cash aid to East Africa for several years, with encouraging results. It is now preparing an ambitious experiment in a universal basic income. In this setup, everyone in several Kenyan villages, not just the neediest citizens, will be eligible to get money. (I reported on this privately funded experiment back in December, and you can read that story for an outline of the plan.) Now The New York Times has published a dispatch from the first village to get the funds. Here's an excerpt: The villagers had seen Western aid groups come through before, sure, but nearly all of them brought stuff, not money. And because many of these organizations were religious, their gifts came with moral impositions; I was told that one declined to help a young mother whose child was born out of wedlock, for example. With little sense of who would get what and how and from whom and why, rumors blossomed. One villager heard that GiveDirectly would kidnap children. Some thought that the organization was aligned with the Illuminati, or that it would blight the village with giant snakes, or that it performed blood magic. Others heard that the money was coming from Obama himself. But the confusion faded that unseasonably cool morning in October, when a GiveDirectly team returned to explain themselves during a town meeting. Nearly all of the village's 220 people crowded into a blue-and-white tent placed near the school building, watching nervously as 13 strangers, a few of them white, sat on plastic chairs opposite them. Lydia Tala, a Kenyan GiveDirectly staff member, got up to address the group in Dholuo. She spoke at a deliberate pace, awaiting a hum and a nod from the crowd before she moved on: These visitors are from GiveDirectly. GiveDirectly is a nongovernmental organization that is not affiliated with any political party. GiveDirectly is based in the United States. GiveDirectly works with mobile phones. Each person must have his or her own mobile phone, and they must keep their PIN secret. Nobody must involve themselves in criminal activity or terrorism. This went on for nearly two hours. The children were growing restless. Finally, Tala passed the microphone to her colleague, Brian Ouma. "People of the village," he said, "are you happy?" "We are!" they cried in unison. Then he laid out the particulars. "Every registered person will receive 2,280 shillings"—about $22—"each and every month. You hear me?" The audience gasped and burst into wild applause. "Every person we register here will receive the money, I said—2,280 shillings! Every month. This money, you will get for the next 12 years. How many years?" "Twelve years!" To read the rest, go here. To see some testimonials from the villagers, go here. And stay tuned—I've been writing a feature for Reason on the long, messy history of the basic-income idea. It'll cover GiveDirectly and a great deal more.[...]

A Privately Funded Experiment in a Universal Basic Income

Thu, 08 Dec 2016 14:25:00 -0500

(image) A U.S.-based group is preparing a pilot program in Kenya that will test the effects of a universal basic income—the increasingly popular concept of giving virtually everyone in a community unconditional payments on a regular basis. Unlike past large-scale experiments of this sort, this one is being run and funded privately.

The organization behind the effort is GiveDirectly, a charity whose work in Africa is based on the idea of giving people cash without restrictions on how the money can be spent. (The underlying anti-paternalist principle is that the needy know their needs better than outsiders do.) That outlook led naturally to an interest in the basic income, and so the organizers conceived a randomized control trial:

• In one set of villages, every adult will receive monthly payments equivalent to 75 cents a day for two years.

• In another set of villages, every adult will receive such payments for 12 years.

• In yet another set of villages, the adults will receive a single lump-sum payment equivalent to what the two-year group will be receiving.

• The last set of villages is the control group, so they don't get any money at all.

The aim here, GiveDirectly's Ian Bassin explains, is "to isolate the effects of what most people consider a 'basic income'—that is, a permanent payment over time—from something resembling more traditional temporary supports. For example, when someone knows they have a long-term, guaranteed floor below which they cannot fall, do they take more risks like starting a business or going back to school? And does that security produce greater overall returns?"

The current plan is for 41 villages to go on the 12-year plan, 80 to go on the two-year plan, 80 to get the lump sums, and 100 to be in the control group. (The size of each category could shrink if GiveDirectly doesn't hit its fundraising target.) To answer the first question that probably popped into your minds: No, a villager can't change which deal he's getting by moving from one town to another. Once enrollment has started in a village, no new arrivals can take advantage of the payments there. Conversely, if you're already enrolled in the program, you still get the money if you leave your village. After all, one potential outcome the researchers want to look for is whether people will use their payments to move somewhere with greater opportunity.

The group expects the experiment to cost about $30 million, and they have thus far raised around $23 million toward that. (The lump-sum payments are being funded separately, with the money coming from GiveDirectly's ongoing efforts in Kenya. They expect the costs there to be a little higher than $6 million, which is well within the program's usual annual budget.) One village in the 12-year group is already receiving funds—sort of a test case to work out any logistical kinks in advance. If all goes according to plan, the rest will start receiving their money early next year.

Happy Birthday, Botswana

Tue, 04 Oct 2016 07:00:00 -0400

Last Friday, Botswana celebrated 50 years of independence. The former Bechuanaland Protectorate gained independence from Great Britain on September 30, 1966 and has thrived ever since. In far too many African countries, "Independence Day" has been a cause for lamentation, not celebration. Regrettably, African independence came at the worst possible moment. The 1960s was a decade when many Western countries seemed to have suffered a collective mental breakdown. In contrast, the USSR seemed to be doing rather well. The Soviets eclipsed the United States in the Space Race and, following the Cuban Revolution, communism gained a permanent foothold in the Americas. Appalled by the injustices of the colonial rule—and ignoring some of its benefits—Africans cast away the European yoke along with some of its more beneficial features: representative democracy, property rights, rule of law, free enterprise, and international trade. Understandably, but catastrophically, many African countries opted for the opposite of what the West had to offer and embraced socialism instead. Not so with Botswana—a country that has been politically and economically freer than the rest of Africa for much of the last half-century. Why? Seretse Khama, the first president, was a tribal chief who maintained the tradition of public meetings, or kgotlas. Kgotlas were the traditional way in which Africans made local decisions. It was a good way in which to keep the chiefs honest and accountable. When I visited the country in 2007, a game warden I spoke to in the Chobe National Park reminisced about standing behind the minister of education in the line for groceries. A shop manager recognized the minister and motioned her to the front of the line. The minister flatly refused. The exceptional humility of Botswana's politicians is just one positive consequence of such "grassroots democracy." Khama's economics were also out of step with the times. He maintained a relatively "hands-off" approach to the economy, which was, for decades, the freest in Africa. Personally, I think that Khama, in addition to being a highly educated man (he was a graduate of Balliol College, Oxford) was prevented from economic experimentation by geopolitical necessity. Back then, Botswana was surrounded by the immensely powerful South Africa in the south, South Africa–dominated South West Africa in the west, and Rhodesia in the east. Neither government would have tolerated a Marxist state in its midst. And so Khama did a couple of sensible things—he kept the market economy he inherited and did not even bother to waste money on an independent military. Today, the prosperity and stability of Botswana is a testament to his enlightened leadership. Economic freedom in Bostwana has constistently been higher than the African average. Thanks to this higher economic freedom, Botswana's per-person GDP has increased rapidly. It passed the African average in the mid-1970s and has made steady progress since. Botswana's life expectancy quickly recovered from the HIV/AIDS epidemic, rising to retake its place above the continental average. While autocracy mired many of its African neighbors, Botswana maintained a relatively high level of democracy for the continent. Botswana has managed to control corruption within its borders better than Africa as a whole. Enabling much of this progress, Botswana's rule of law has also exceeded Africa's for decades. [...]

The Universal Basic Income: Innovative Social Welfare Reform or Satanic Plot?

Mon, 12 Sep 2016 12:15:00 -0400

(image) The more sour critics of the basic-income movement have occasionally called it a cult, but I didn't think any of them meant that literally. Until now.

Basic-income proposals come in several forms, but the key idea is to center social welfare policy around giving people cash, without attaching conditions that restrict how the money can be spent. GiveDirectly, a U.S.-based charity, has spent several years distributing funds in different East African communities in this anti-bureaucratic manner; one of their aims is to measure the idea's effectiveness. (So far, the results have been positive.) Last month they extended their operations to Homa Bay, a county in Kenya.

There they hit a snag. Elsewhere in Africa, only 5 or 6 percent of the people asked to participate in the program have said no. In Homa Bay County, nearly half turned them down. "As it turns out," Will Le recounts on GiveDirectly's blog, "these challenges have been common for NGOs working in the area. Other development programs focused on HIV, water and sanitation, agricultural development, education, and female empowerment have also faced community resistance."

In Homa Bay County, apparently, the locals are more likely to suspect ulterior motives when someone shows up and says he'll give them something for free. "Potential recipients find it hard to believe that a new organization like GiveDirectly would give roughly a year's salary in cash, unconditionally," Le writes. "As a result, many people have created their own narratives to explain the cash, including rumors that the money is associated with cults or devil worship."

I know virtually nothing about Homa Bay County's culture and history, so I won't speculate about why the people there are more suspicious than in the other communities GiveDirectly has helped. But I can say pretty confidently that it isn't the only place where outsiders bearing gifts won't be trusted, and that any experiments in such transfers' effects will eventually have to take those cultural differences into account. Business Insider reports that GiveDirectly is now thinking about "comparing results across villages where acceptance rates have differed." That's certainly sensible, but a bit of digging into why those rates are different would be wise as well.

(Clarification: While GiveDirectly has plans to launch a full-fledged basic income pilot program, in which members of an entire community receive a long-term income that is enough to live on, the program sparking rumors in Homa Bay County is a more modest set of conditionless cash transfers aimed at the neediest families in the area. I tend to use the phrase basic income loosely—maybe too loosely—as a catchall term that covers a range of related policy ideas; I don't want to conflate these two projects in the process.)

Bonus video: ReasonTV interviewed GiveDirectly co-founder Paul Niehaus last year:

src="" allowfullscreen="allowfullscreen" width="560" height="315" frameborder="0">

South African Ruling Party Suffers Worst Results Yet in Local Elections

Tue, 09 Aug 2016 07:00:00 -0400

South Africa held local elections last week. The African National Congress, which has dominated South Africa's politics since the first all-race democratic elections in 1994, has suffered its worst result yet. While the party polled at more than 50 percent nationally, the ANC lost majority control on city councils in Pretoria, the country's capital, Johannesburg, the country's economic powerhouse, and Port Elizabeth. If the ANC fails to entice other parties into forming governing coalitions at the local level, control of some of South Africa's main cities will pass to Democratic Alliance, an opposition party that has, hitherto, only controlled Cape Town. Most observers agree on the reasons for the ANC's poor showing: incompetence and corruption. Below, I look at 10 indicators of institutional quality as measured by the World Bank, Transparency International and World Economic Forum. As can be seen, institutional quality in South Africa is either poor or declining when compared to Botswana, one of the best run African countries, let alone the United States. 1. The World Bank's rule of law indicator shows South Africa's rating declining from an all-time high in 2006. 2. Transparency International's Corruption Perceptions Index shows the country's corruption rating in permanent decline. 3. The World Bank's Government effectiveness indicator has also been declining since 1996. 4. According to the World Economic Forum, favoritism in decisions by government officials has worsened since a high point in 2009. 5. Similarly, the World Economic Forum has found that government spending has grown increasingly wasteful (though not as wasteful as that of Botswana). 6. Irregular (i.e., undocumented extra) payments and bribes have also been on the rise in South Africa. 7. Moreover, illegal diversion of public funds to private companies, individuals and groups has been increasing. 8. Transparency of government policy making has also suffered, though not as much as that in Botswana. 9. Reliability of policing has actually improved since its nadir in 2009, but still lags behind that of well-run Botswana. 10. Not surprisingly, perhaps, public trust in politicians declined to an all-time low in 2014 and has remained poor. It is that mistrust in politicians that partly explains the ANC's poor performance at last week's polls. The next general election will be held in 2019. By that time, the ANC may be sufficiently weakened and relegated to the opposition benches. A birth of "normal" politics that see a regular turnover at the top will be good for South Africa's democracy as well as for the health of the country's institutions.[...]

How Hate Speech Laws Actually Work

Tue, 08 Dec 2015 12:00:00 -0500

The most baffling thing about the people—mostly liberals—who push for laws against "hate speech" is their apparent inability to imagine these bans backfiring. In their zeal to punish those who spread sexist, racist, transphobic, or otherwise unfashionable speech, they too often ignore the ways tools of censorship—including hate speech laws—are used to suppress religious, social, sexual, and political minorities around the world. Consider Kenya. "There is growing evidence that the government is using prosecution for hate speech as a tool to silence its opposition critics," John Onyando writes in the Nairobi Star. "The norm is incendiary speech by pro-government politicians and online activists going unchecked while law enforcement agencies enthusiastically pounce on the mildest expressions by critics." Kenya's agency tasked with enforcing laws against hate speech is the National Cohesion and Integration Commission (NCIC), formed in 2008 to address ethnic conflicts in the nation. In practice, the agency mostly homes in on those who speak out against the Jubilee Alliance, the political coalition associated with President Uhuru Kenyatta and Deputy President William Ruto. The NCIC has prosecuted Sen. Johnstone Muthama, a leader of the Coalition for Reform and Democracy, which stands in opposition to the Jubilee Alliance; Allan Wadi Okengo, a student activist who criticized Kenyatta on Twitter; student leader Seth Odongo; and blogger Robert Alai, who called Kenyatta an "adolescent president." Okengo, Alai, and Odongo were all sentenced to time in prison. Moses Kuria, a Parliament member from Gatundu South—home constituency of President Kenyatta and his father, former President Mzee Jomo Kenyatta—was also arrested. But the NCIC invited Kuria to participate in a reconciliation program in lieu of trial, an option the other men were not offered. Only after Kuria continued to post inflammatory material online during the proceedings did the commission rescind its reconciliation offer. And no action was taken when, on national television, Kuria told a group of young people whom he had given knives to "cut up someone if you feel like it." "One can't avoid the inference that hate speech is an actionable crime only when perpetrated by opposition leaders and activists," Onyando concludes. Perhaps you think such a selective use of hate speech laws can happen only in countries with especially corrupt or unstable governments. Think again. Because "hate speech" is not narrowly defined, it's up to those in power to decide what qualifies as hate and what doesn't. That often depends on who the speaker is and who has powerful people's sympathies. In 2012, a British teenager who denounced British military actions in Afghanistan was arrested and charged with "a racially aggravated public order offense." The First Amendment theoretically pre-empts such laws in the United States. But a lot of Americans favor them nonetheless. A 2014 YouGov poll found that nearly equal numbers of Americans support and oppose laws that would "make it a crime for people to make comments that advocate genocide or hatred against an identifiable group based on such things as their race, gender, religion, ethnic origin, or sexual orientation." Fully 51 percent of Democrat respondents voiced their support. Meanwhile, colleges and universities—even the public ones that are supposed to follow the First Amendment—have been using the specter of hate speech to justify banning controversial speakers, institute prior review of student newspapers, and implement other forms of censorship and intolerance. At Berkeley, there have been pushes for restrictions on everything from student editorials to fraternity party themes. At Dartmouth, student leaders recently called for a "full inquiry" into a "hate speech" incident involving campus flyers advertising merchandise bearing the school's former sports mascot, the "Dartmouth Indian." Muc[...]

Terrorism Today: Boko Haram Bigger Than ISIS; Most Western Deaths Have Nothing to Do With Islam; & More

Tue, 17 Nov 2015 15:46:00 -0500


The Global Terrorism Index for 2015, which has tracked the number and severity of terrorist attacks on the planet since 2000, has just been released. Among its findings:

  • The number of terror-related deaths rose by 80 percent from 2013 to 2014, with almost 33,000 deaths in the latter year.
  • Iraq remains the biggest scene of terrorism, with almost 10,000 deaths in 2014 from terrorism.
  • Nigeria's terrorism toll increased 300 percent in 2014, mostly due to the actions of Boko Haram.
  • The Islamic State (ISIS) and Boko Haram account for 51 percent of terrorism deaths, and Boko Haram is the deadlier of the two groups.

Read the full report here.

Between 2006 and 2014, the report notes that about 70 percent of deaths from terrorism in Europe and North America come not from religiously motivated actors who are connected to international groups but from politically motivated "lone wolf" types.

The majority of terrorist attacks in the West are not carried out by well-organised international groups. Instead, the terrorist threat in the West largely comes from lone wolf terrorism. Lone wolf terrorists are individuals or a small number of individuals who commit an attack in support of a group, movement, or ideology without material assistance or orders from such group. For example, the Boston bombings would be a lone wolf attack as the two brothers committed the attacks without any outside support. These types of attacks account for 70 per cent of all deaths in the West from 2006 to 2014.

By contrast, about 19 percent of deaths in Europe and North America came from terrorists motivated by Islamic fundamentalism.

The report, put together by the Institute for Economics and Peace, also estimates that Iraq's economy is only about two-thirds of what it would be absent all the terrorism that places it at the top of the index.

(image) To put some of this in context, it's worth looking at the leading causes of death in Syria, the country whose civil war is not only a battlegroud between ISIS and various Western armies but the cause of millions of refugees in the Middle East and beyond. In the first seven months of this year, ISIS killed around 1,000 Syrians. That terrible number pales in comparison to the nearly 8,000 killed by the Syrian regime led by Bashar al Assad.

That disparity also makes helps explain why the situation in Syria is so complicated. While the United States is currently focused on ISIS in Syria and Iraq, our government has also called for regime change. Iran and Russia are simultaneously fighting ISIS and supporting Assad. French strikes in the area are focused on ISIS as well, which is also an enemy of various Sunni Gulf States (Saudi Arabia and the like) who are otherwise enemies of Iran and Syria. 

US Troop Deployment in Cameroon Partially a Consequence of Libya War

Thu, 15 Oct 2015 14:51:00 -0400

(image) The U.S. intervention in Libya got a brief mention at Tuesday night’s Democratic presidential debate. Hillary Clinton, the frontrunner, defended the decision of the Obama administration, while she was secretary of state, to launch a military campaign in Libya, calling it a humanitarian intervention done at the behest of European and Arab power and an example of “smart power at its best.”

Responding to criticism about the intervention from Jim Webb, another Democratic presidential candidate, Clinton said Obama “made the right decision” on Libya because it brought democracy to the country, which, she noted, held its first free election since 1951. The elections last year were marked by low turnout and clashes between government forces and militants in Benghazi.

A United Nations report released last year, meanwhile, warned of a “considerably deteriorated” security situation in Libya, with the unsecured arms of the former Qaddafi regime (“we came, we saw, he died,” Clinton joked in 2011 even as the Obama administration insisted regime change wasn’t a goal of the intervention) making their way across the region, from Nigeria to Syria, exacerbating conflicts in the region.

Today, in announcing a halt to the U.S. withdrawal in Afghanistan, with 5,500 troops slotted to remain through 2017, President Obama said that the “opportunity for a stable and committed ally” in Afghanistan was worth the extra effort.  "I do not support the idea of endless war, and I have repeatedly argued against marching into open-ended military conflicts that do not serve our core security interests," he told military personnel that may now return to Afghanistan, telling them he wasn’t sending them into harm’s way lightly.

Yet, as Libya illustrates, the decision about whether a war is open-ended, or even endless, isn’t in the hands of Washington. The Libyan war has been painfully open-ended to Libyans themselves. The U.S. campaign in Yemen, similarly, has been more open-ended than U.S. war planners planned, with a proxy war breaking out in Yemen between Saudi Arabia, a U.S. ally, and Iran, after the U.S.-backed regime was overthrown.

And now President Obama has informed Congress he would send 300 troops to Cameroon, to conduct surveillance, intelligence, and reconnaissance missions against Boko Haram, a Nigerian Islamist militant group that has extended its reach in West Africa.  Boko Haram militants became more adept at being more violent after returning with new weapons and tactics from the battlefields of Mali, Mali being among the first countries to become destabilized in the wake of the U.S. intervention in Libya from which Hillary Clinton and the Obama administration are showing they’ve learned nothing.

Here's What the Guy Who Paid $50,000 to Kill Cecil the Lion Can Learn from the Guy Who Paid $350,000 to Kill a Black Rhino

Fri, 31 Jul 2015 15:23:00 -0400

Days after the news of the death of Cecil the Lion broke—and weeks after the actual hunt—the Internet is still in an uproar. The dentist/hunter who killed the beloved big cat has shuttered his business in Eden Prairie, Minnesota, and seems to have gone missing. Everyone from Betty White to Zimbabwe's minister of the environment is pissed. At least part of the outcry seems to be focused on the fact that Walter Palmer regularly paid big bucks to go on big game hunts. From CNN: "As troubling as it is, the rarer these trophy hunted animals become, the more hunters are willing to pay to kill them—like the American hunter who recently paid $350,000 to kill a critically endangered black rhino in Namibia," said Jeff Flocken, the [International Fund for Animal Welfare]'s North American regional director. But the problem isn't that Palmer paid a lot of money to hunt a lion, it's that he didn't pay enough money, he paid it to the wrong people, and he killed the wrong lion. As far as I can tell, Palmer screwed up by using dodgy guides who in turn used illegal practices to lure an animal that should have been off-limits for many reasons, including that it lived on protected land and that he was part of an Oxford research project. In a public statement, Palmer has said he believed his guides were on the up-and-up and that all his permits were in order, but he should have been more meticulous about checking out the legitimacy of the operation, especially since he already had a felony record for botching a bear hunt. It's unclear how much he was involved in the coverup when it became clear that the lion was not a legitimate target. But too much of the coverage has elided of the fact that hunts like the one Palmer says he thought he was on can be carried out perfectly legally and, more importantly, are a huge boon for wildlife conservation. Here's the story of even more expensive and high-profile hunt, flawlessly executed: American Corey Knowlton paid $350,000 for a permit to hunt a black rhino in Namibia under the auspices of the Dallas Safari Club back in January 2014. Black rhinos are critically endangered, and Knowlton received death threats after the permit auction, but the details of his hunt are likely to win over all but the most ardent hunting opponents. For starters, the money will go to fight poaching. (That's right: this pay-to-play hunt will help fund efforts to prevent exactly the kind of crappy practices used by Palmer's team) The permit from the Namibian government authorized only the killing of one of 18 elderly male black rhinos, which are actually considered a net negative for overall species survival, since they are past their breeding years but remain territorial and are therefore a threat to the younger males. Knowlton and his well-vetted team whittled that list to just four animals and were obsessively carefully about finding the right rhino to kill.  At one point during the hunt, they felt visibility wasn't good enough to be sure they were getting the right animal, so they headed to a new location to hunt one of the approved rhinos, only to discover that it has beaten them to the punch by dying of natural causes, likely old age–related.  Yet according to an account from a CNN journalist who rode along on the hunt, the kill was no less thrilling for its careful targeting and elderly quarry and when it was over Knowlton felt he had done the right thing: Knowlton walks up from behind the rhino and when he's certain it's over, he kneels next to it. "Any time you take an animal's life it's an emotional thing," Knowlton said. The Namibian government official assures Knowlton it is the rhino on the approved hunting list. The trackers smile with relief and shake hands. I ask Knowlton if he still feels that killing this black rhino was the right thing to do [...]

Dodd-Frank at 5: How Financial Reform Led to Bloodshed in the Congo

Tue, 21 Jul 2015 16:05:00 -0400

The Dodd-Frank financial reform act turns 5 today. It was signed into law by President Obama on July 21, 2010. In the two years immediately following its passage, violence in the Democratic Republic of the Congo (DRC) nearly tripled. Think those two things are unrelated? Think again. According to a working paper from Dominic P. Parker of the University of Wisconsin and Bryan Vadheim of the London School of Economics, there's strong evidence to suggest that "conflict mineral" regulations in Section 1502 of Dodd-Frank directly led to an increase in looting in affected regions of the Congo. I spoke with Parker about his study. Here's what I found out. Section 1502 of Dodd-Frank was supposed to make life better for people in the DRC. In the words of Barney Frank, one of the bill's sponsors, reducing the demand for conflict minerals would "cut off funding to people who kill people." To that end, the provision required U.S. companies to report the sources of any tin, tantalum, and tungsten—the so-called 3T metals—used in any of their products. (Technically, gold is also a conflict mineral, but according to the working paper, it's nearly impossible to track and has therefore enjoyed a de facto exemption from the boycott.) As PriceWaterhouseCooper explains on its website, embargoing 3T metals from the DRC has far-reaching implications for American companies. Practically every electronics product contains some conflict minerals. Tin is even found in the zippers of many apparel items. Thus, in 2010, all these manufacturers suddenly had to find alternative sources for their metal needs. The result was a drop in demand that caused the DRC's tin, tantalum, and tungsten mines to become much less profitable. Section 1502 succeeded, in other words, at "cut[ting] off funding" to the region's militias. But the militias responded to the change by hurting more innocent people instead of less. According to Parker, violence increased on two fronts: First, some of the militias in the 3T regions left for greener pastures—in this case, the regions containing gold rather than tin or tungsten mines. They then went to war against the established militias in those places, vying through violence for control of the now-more-lucrative flow of gold. But other militias saw a different path to replacing their lost income: looting local villages. Indeed, Parker and Vadheim found the incidence of looting increased by nearly threefold in the two years after Dodd-Frank was enacted. As a side-effect, violence against civilians shot up as well. But cash-strapped militia groups could still generate revenue "by roving—taking civilian assets in unpredictable ways and at unpredictable times, which makes them quite dangerous," Parker tells me. "Our evidence suggests that Dodd-Frank caused militia groups to choose this more violent option." In economics terms, Parker says, conflict mineral regulations converted many of the DRC's militia groups from "stationary" bandits, which extract taxes from people but otherwise do little harm, into what are known as "roving" bandits. This, it turns out, is much worse for the people on the ground. "The roving bandit doesn’t have a long-run stake in the economic productivity of a place," Parker says, "so he takes what he can get now with little regard for how his [ransacking and stealing] will affect future productivity." Meanwhile, stationary bandits have every incentive not to hurt too many people. For a quintessential example, think of the American mafia. "Because the mafia taxes economic activity, it wants the neighborhood that it controls to be safe and productive," Parker says. "So you get this low-violence situation that will persist as long as the mafia group finds it advantageous to remain stationed in the neighborhood, rather than moving to challenge other[...]

Is China Winning the Race for Resources?: Ronald Bailey at Cato Unbound

Tue, 07 Jul 2015 11:07:00 -0400

(image) This month Cato Unbound is hosting a discussion on the question: Is China Winning the Race for Resources? The first essay on the topic is by economist Dambisa Moyo, author of the New York Times bestsellers Dead Aid: Why Aid is Not Working and How There is a Better Way for Africa and How the West Was Lost: Fifty Years of Economic Folly and the Stark Choices Ahead. Her third book is Winner Take All: China’s Race for Resources and What it Means for the World.

In Moyo's initial essay, "Winner Take All: China and the Global Race for Resources," she argues:

Over the last decade, China has been buying up mountains and mines, agricultural land and oil fields, thus ensuring that it will have the upper hand in the future struggle for the world’s resources. Scarce, finite, and rapidly depleting global supplies of land, water, energy and minerals – the inputs to foodstuffs, automobiles, mobile phones, computers, and other products of higher living standards – cannot match the demand emanating from a rising world population, rapidly increasing global wealth, and urbanization.

Despite the recent declines in commodity prices, the consequences of long-term fundamental supply and demand imbalances remain; the two most serious are substantially higher commodity prices and the rising risk of violent resource-based conflict. In the aftermath of the 2008 financial crisis, commodity prices increased 150 percent, and already there are around 25 conflicts raging around the world with their origins in commodities, with many more likely to occur over the next decade.

Besides me, the other participants in the discussion that will unfold over this month are Justin Logan, Cato's director of foreign policy studies and Ian Bremmer, the president and founder of Eurasia Group. The schedule of responding essays is by Justin Logan, July 8, Ian Bremmer, July 10; and Ronald Bailey, July 13. Discussion to follow through the end of the month.

Just a hint at my take: The current economic supercycle is now on the downward side and China's neo-imperialist version of mercantilism will turn out to be economically futile.

Angola Arrests 13 Dissidents for Planning Protests in Continuing Government Crackdown on Opposition

Wed, 24 Jun 2015 13:35:00 -0400

The interior ministry of the Southwest African country of Angola said police arrested 13 citizens "who were caught red-handed as they prepared to carry out acts aimed at disrupting public order and security in the country," as Agence France Press reports. According to the Angolan Revolutionary Movement, a youth group that's organized a number of protests since 2011 and been the systemic target of police brutality during that time, police raided a meeting in Luanda, the capital city, on Saturday, arresting up to 20 people. Among the arrested, AFP reports, was Luaty Beirao, a rapper who's emerged as a leader of the youth movement, and Manuel Alves, a man who was imprisoned for 3 months for printing t-shirts with messages opposing the president. Protests in the Southwest African country that won its independence from Portugal 40 years ago revolve around the country's president, José Eduardo Dos Santos, who has been president for the last 35 years, including through 22 years of a 27 year civil war that started immediately after the country won its independence from Portugal. Dos Santos banned demonstrations in the center of Luanda in 2011, and has ratcheted up that ban since. Earlier this year, the president passed a new law requiring religious denominations to have at least 100,000 members in three of 18 regions, banning at least nine church groups in April in police/military actions that could have killed up to 1,000 civilians and ended with the arrest of the leader of one apocalyptic church that says the world will end at the end of the year and that its followers should disengage from politics. While half the Angolan population lives on under $2 a day, the government has rebuilt a lucrative relationship with Portugal. Business Day Live in South Africa reports: [Links in Portugal are tight] in Angola, where the elite maintain especially close ties with Lisbon. For Portugal, Angola became a sure escape from the economic crisis, which gave the southern European country a dumping ground for goods, businesses and the unemployed. But the relationship is a two-way street, with Angola's wealthy — especially President Jose Eduardo dos Santos's daughter, Isabel — investing millions in Portugal in what critics have dubbed a "reverse colonisation". "What is the most dramatic consequence of Angola's massive investment in Portugal?" asked Marcolino Moco, a former Angolan prime minister. "Turning a country listed among the most advanced democracies of Europe, into a subordinate of an African absolutist kingdom." There may be reverse colonization going on, but there's also colonization. Dos Santos recently returned from China, where he got a commitment from the government for more support. Media reports indicated Dos Santos was seeking a two-year moratorium on loan repayments, but the Angolan government denied that, saying instead it had secured improved terms on the loans. China's president, Xi Jinping, said the country would help Angola "overcome [financial] difficulties" and the "reduction in government revenue" caused by a drop in oil prices for the second largest producer of oil in Africa. For the third year in a row, Luanda was named the world's most expensive city, beating out New York and London, by the Mercer Annual Cost of Living Survey. The Dos Santos government regularly clears poor people out of the city in a "war against chaotic urbanization". A hotel room in Luanda can go for $400 and lunch can cost $75.[...]

WATCH: Is Giving Directly to the Poor a Good Idea?

Sat, 02 May 2015 10:30:00 -0400

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"Is Giving Money Directly to the Poor a Good Idea?"

About 8 minutes. Produced by Amanda Winkler and Anthony L. Fisher. Camera by Jim Epstein and Brett Crudgington.

Original release date was April 27, 2015 and the original writeup is below.

"No one person has the same goal or aspiration," says Paul Niehaus, President and Co-founder of GiveDirectly, "And what you get when you give people money and let them use it is this real rich human experience where everyone does something a bit different."
GiveDirectly is changing the way people think about charity. The non-profit was founded in 2008 and is designed to help people living in extreme poverty through cash transfers via mobile phones. The recipients use their mobile phones to receive the money, which they are allowed to spend as they wish. This philosophy varies greatly from traditional third party charities which largely decide how a recipient should spend the money. 
"Something important happened in development around 2000, which is we decided to scientific experimental testing," explains Niehaus. "When you start doing science, when you put two things head-to-head and ask 'what's the impact?' there are surprises. Cash transfer, which is literally just giving money to poor people, has turned out to be one of those really big positive surprises."

Should We Give Money Directly to the Poor?

Mon, 27 Apr 2015 14:25:00 -0400

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Most of the time giving money to the poor means going through a traditional, third party organization. Not anymore. Paul Niehaus, President and Co-founder of GiveDirectly, sat down with Reason TV to discuss why giving money directly to the poor and bypassing traditional charities yields positive results. 

Is Giving Money Directly to the Poor a Good Idea?

Mon, 27 Apr 2015 14:00:00 -0400

"No one person has the same goal or aspiration," says Paul Niehaus, President and Co-founder of GiveDirectly, "And what you get when you give people money and let them use it is this real rich human experience where everyone does something a bit different."

GiveDirectly is changing the way people think about charity. The non-profit was founded in 2008 and is designed to help people living in extreme poverty through cash transfers via mobile phones. The recipients use their mobile phones to receive the money, which they are allowed to spend as they wish. This philosophy varies greatly from traditional third party charities which largely decide how a recipient should spend the money.

"Something important happened in development around 2000, which is we decided to scientific experimental testing," explains Niehaus. "When you start doing science, when you put two things head-to-head and ask 'what's the impact?' there are surprises. Cash transfer, which is literally just giving money to poor people, has turned out to be one of those really big positive surprises."

About 8 minutes.

Produced by Amanda Winkler and Anthony L. Fisher. Camera by Jim Epstein and Brett Crudgington.

Scroll down for downloadable versions and subscribe to Reason TV's YouTube Channel to receive automatic notifications when new material goes live.