Wednesday, April 16, 2014

A thought about values as a professional planner.

Many years ago I left graduate school to participate in a health planning research project in South America. Before I left I had a chance to meet with a number of the faculty members and talk about the challenges I would be facing. One of them asked me how I would handle dealing with people with very different values about health in my new job.

I was pretty naive at the time. I still believe that there is a great deal of commonality in our values about health and illness. Those who differ from the norm seem to be aberrant. Only a small portion of the population commit suicide. People who seek pain are termed masochists. We came across people who sought out the death of their children, but seemed to do so in desperation facing extreme difficulties in raising them. The vast majority of people would rather be healthy than sick, would rather not face disabilities resulting from past illness, would rather live a long, healthy life than die early. Indeed, helping poor sick children even when they are strangers seems a widely shared value.

We did not discuss the larger question of how health planners deal with conflicts of interests. The tax payers who would rather not be taxed to pay for health services for the poor, the property owners who don't want health facilities located where they might reduce the value of their property, the health workers who want to work in pleasant locations rather than where they might be more needed, the vendors of drugs and equipment who want to maximize their sales and income rather even when doing so may not be the best use of money available for health services, and even the people who steal from health facilities all have objectives other than improving public health.

Of course, there remain issues. The World Health Organization has proposed "Disability Adjusted Life Years" (DALYs) as a good measure of health outcomes for a population, but that is a pretty rough indicator. The Pan American Health Organization long ago included a measure of "transcendence" in its planning methodology to reflect the fact that people (and electorates) are more concerned with some diseases than with others; polio was such a disease in the United States when we had a polio afflicted president and a March of Dimes to fight the disease. What rights to people have to health services, or to health? How does a health service system respond to the fact that health and sickness are often the result of factors outside of medical control?

In point of fact, working as a health planner at increasingly central levels I did find myself facing the second kind of value conflict -- personal benefits conflicting with public. However, it was generally a good approach to assume that I was focusing on improving the public health, reducing sickness and disability, extending life. I was lucky enough to find myself working with others who shared those values. Sometimes we were able to help advance those objectives.

As a health planner I was generally providing information to others who would make the decisions, and dealing with fairly limited issues. I was able to help people make a better decision as to where to build a city hospital, helped design a loan to build a rural health service (which succeeded in cutting child mortality in its service district in half in five years), and helped the World Bank and later the Carter Administration raise the importance of health in the foreign aid portfolio.

I suspect that other "sectoral planners" working in areas such as education, housing and transportation do well be keeping their eyes on the nominal objectives for their sector -- providing an effective service in a cost-efficient manner.

Of course, a harder problem comes for those at the top who are trying to balance many rights and many needs with a limited budget. and given relative freedom to innovate and move resources from one area to another, but forced to negotiate which many interests in developing final portfolios of legislation and programs.

Funding for Global Public Goods versus Development Assistance/Poverty Aleviation

Helmut Reisen, an economist I am learning to value greatly, has an interesting post on his blog today.

He asks why the World Bank and others seem so cocksure that extreme poverty can be ended by 2030. I take their promise to be fluff intended to con donors into continued or increased funding to fight poverty. I fear that extreme poverty will still be with us in 2030, and that a lot of poverty that the World Bank defines as not to be extreme is very serious indeed.

He notes that a lot of funding categorized as development assistance is actually funding for "global public goods". Much of that funding would go for prevention of climate change and other environmental deterioration. I would note that some of the efforts to fight communicable diseases (such as the eradication of polio) might also be included as a global public good -- the benefits of eliminating the polio in the last few countries in which it is currently found will be enjoyed worldwide.

There would seem to be no argument against the countries with the most money spending some of that money globally to "buy" global public goods. We regularly use progressive taxes to pay for public goods.

Reisen would seem to be concerned that such funding is being labeled "development assistance" when it is actually intended for another purpose. I see that point. Still, developing countries too will benefit from those global public goods, and in many cases their people are more vulnerable to the deterioration of those goods.

Of course, in some cases we can have our cake and eat it too. Thus, for example, investment in energy efficiency can be a cost effective investment even without including the external benefits of reduced greenhouse gas emissions. So too, the investment in hydropower rather than fossil fuel generation plants may produce lower cost electricity as well as prevent greenhouse gas emissions.

I am afraid that I believe that the world will not do the right thing and reduce greenhouse gas emissions as much as we could or should. Indeed, I believe we will see deforestation, desertification, loss of top soil, destruction of coastal zones, depletion of water resources, air and water pollution, and other environmental destruction that we could and should have prevented. Investments now to help poor people in poor countries to prepare to deal with this onslaught will help avert future poverty and thus be perhaps a legitimate form of development assistance.

Is there an argument that donor nations can provide more money for poverty reduction and global public goods by deliberately mislabeling some of the global public goods funds as development assistance? In the USA, the climate deniers might have more sympathy for international expenditures labeled "development assistance" than for those labeled "climate change prevention and amelioration".

As an aside, it seems to me that "poverty alleviation" is one aspect of "development assistance", but only one aspect. Social and economic development would seem to me to be best seen as "a tide that lifts all boats". Thus I see development as involving capital accumulation, which seems always to result in the rich getting richer, the middle class getting "better off", with relatively little of the capital being accumulated by the poor. I also see general development of poor countries involving their increased competitiveness in global markets, and increased competition from the recipients (current or former) of foreign aid has not been popular with U.S. producers.

Let me end by quoting an especially useful part of the posting:
Assessing vulnerability which is independent of present policy is needed both to identify the most vulnerable poor countries and to design criteria for the allocation of international resources. Two kinds of vulnerability and the corresponding indices can be considered:
  • Structural economic vulnerability (as measured by the UN Economic Vulnerability Index, EVI), the UN index thought to replace the non-transparent performance index CPIA. EVI is a composite consisting of 50% ´exposure´ (size, location, agricultural share) and 50% shock intensity (both natural and trade)[1].
  • Physical Vulnerability to Climate Change Index (PVCCI), an indicator developed by Patrick Guillaumont (2013)[2] at the Fondation pour les Études et Recherches sur le Développement International (FERDI). PVCCI consists of 50% ´risks related to progressive shocks´ (flooding due to sea level rise; increasing aridity) and 50& ´risks related to the intensification of recurrent shocks´ (rainfall; temperature)[3].
1. A detailed presentation of EVI can be found in Patrick Guillaumont (2011), The concept of structural economic vulnerability and its relevance for the identification of the Least Developed Countries and other purposes (Nature, measurement, and evolution), UN-DESA, CDP Background Paper No. 12, ST/ESA/2011/CDP/12 ,September.
2. Patrick Guillaumont (2013), “Measuring Structural Vulnerability to Allocate Development Assistance and Adaptation Resources”, FERDI Working Paper No. 68, Ferdi: Clermont-Ferrand, March.
3. For detail, see P. Guillaumont and C. Simonet (2011), “Designing an Index of Structural Vulnerability to Climate Change”, FERDI Working Paper I.08, March.

Tuesday, April 15, 2014

I admire Neil deGrasse Tyson. Given his day job, he is almost certainly a respected astronomer. He is clearly a fine popularizer of science, communicator of scientific knowledge to the general public. I am not sure I trust his judgment on "soaring spiritual" experiences.

On the other hand, it represents a great intellectual achievement. It ranks with the idea that the modern landscape is the result of natural processes that raised mountains and then washed them away, created seas and then dried them up, Another idea of similar importance is that efficient markets can find prices that reconcile supply and demand for goods (as it were) naturally, without the intervention of a central planner. I put it in the same class with the idea that the larger a statistical sample, the more closely its average value will approximate the mean of the distribution from which it was drawn; a similar idea is that the children of individuals who differ greatly from the mean in some way will tend to be closer to the mean than their parents. Homeostasis is another idea from science, suggesting that order may be maintained by natural processes -- an idea that is linked to modern engineering control theory.

Before the Enlightenment and the Scientific Revolution, people assumed that all order was achieved by some intelligence imposing that order. We now understand that in some circumstances order can arise and/or be maintained without planning. That teleonomic processes are possible as well as teleological ones.

Monday, April 14, 2014

Saturday, April 12, 2014

A Graph That Speaks for Itself!

Source: Gallup World Leadership Project

The United States, as the world's most powerful country, is probably never going to be popular with everyone. Under the Obama administration, no more than a quarter of respondents from this poll taken in 150 countries have disapproved of U.S. leadership, compared with more than one-third of respondents in the last year of George Bush's presidency. Last year 46% of respondents approved of U.S. leadership, while 24% disapproved -- both better grades than received by the Bush administration.

MSNBC's Rachel Maddow Show noted:
A few weeks ago, as part of a larger condemnation of Obama presidency, Mitt Romney insisted the last five years have been awful for the United States’ stature around the world. “It is hard to name even a single country that has more respect and admiration for America today than when President Obama took office,” the failed candidate said, adding, “Our esteem around the world has fallen.”

For the right, this is a common line of attack. Tea Party favorite Ben Carson recently argued, “Russians seem to be gaining prestige and influence throughout the world as we are losing ours.” Former Vice President Dick Cheney said on “Face the Nation” a month ago that America’s willingness to keep our commitments has been “in doubt for some time now” around the globe “because of the policies of the Obama administration.”
I see two possibilities.

  • Republicans don't understand how the United States is regarded abroad, or
  • Republicans don't tell the public the truth about the improvement Obama has made in our image abroad.
 Of course some may be badly informed, some may be speaking 'politician speak", and some may have another explanation.

Two on taxes from today's FB input. Just to make you feel bad before the 15th!

Robert Reich posted something interesting on Facebook. The post included the pie chart above, and a text, from which I quote:
(C)onsider that four of the largest tax expenditures in the tax code – the preferential rate on capital gains, the home mortgage interest deduction, the deduction for property taxes, and employer-provided health care -- overwhelmingly benefit the richest 1 percent, who receive nearly a third of these benefits. Middle and low-income households get less than 5 percent of them. Last year, people making more than $1 million saved $96,000 on their taxes because of them. The poorest fifth of income earners saved less than $5. 
Capping these tax breaks at what the typical family saves from them would generate several hundred billion dollars a year -- which could be used for education, infrastructure, and reducing the public debt. Why won’t Republicans accept this? Why aren’t Democrats pushing for it?
I have long thought that there should be a cap on many kinds of deductions. Why is it good public policy to encourage people to take on huge debts to buy mansions? While I think it makes sense to consider the current value of past investments while calculating capital gains, I don't see why it is good public policy to provide incentives for taking profits from investments after a year or two.

A Washington Post article was shared on Facebook today, dealing with a new plan by which the federal government will "reclaim" old debts by impounding income tax refunds.
Across the nation, hundreds of thousands of taxpayers who are expecting refunds this month are instead getting letters.........informing them that because of a debt they never knew about — often a debt incurred by their parents — the government has confiscated their check. 
The Treasury Department has intercepted $1.9 billion in tax refunds already this year — $75 million of that on debts delinquent for more than 10 years, said Jeffrey Schramek, assistant commissioner of the department’s debt management service. The aggressive effort to collect old debts started three years ago — the result of a single sentence tucked into the farm bill lifting the 10-year statute of limitations on old debts to Uncle Sam.
In theory, the government should be able to prove that such a debt existed, and that the person from whom they collected the debt was indeed liable for it. The government position seems to be "possession is nine-tenths of the law" and we have the money. Apparently money is being collected in payment of debts that the government can not document. It is being collected from children of the persons who are claimed to have incurred the debts, without proof that the children in fact benefited from the funds. The feds are impounding the tax returns without prior notification. In one case described in the article, more was impounded than was owed by the tax payer's parent.

Taxes are due by Tuesday, April 15th. Enjoy the weekend! 

How the economy changed over the past 60 years!

From Thinking On The Margin (a blog):
In the 60 years after World War II, the United States built the world's greatest middle class economy, then unbuilt it. And if you want a single snapshot that captures the broad sweep of that transformation, you could do much worse than this graph from a new Pew report, which tracks how average family incomes have changed at each rung of the economic ladder from 1950 through 2010.    
Note that a few percentage points change in income for the top 5 percent is a lot more money than a few percentage points for the bottom fifth. It was, of course, in 1980s and 1990s that the rich got much richer. The 70s were the years of the oil shocks and inflation. The crash at the end of the first decade of this century saw incomes go down for all groups, but the stock market recovery of the last few years has made the rich richer.

Thanks to nephew Mike for pointing me to this blog post.

New Data on Foreign Aid.

From The Economist:
Last year developing countries received $134.8 billion in aid, the highest ever, according to the OECD’s Development Assistance Committee (DAC)........The United Arab Emirates increased aid fourfold, chiefly to help Egypt. It gave the most as a share of its income. America gives less than 0.2% of its GNI
France, Germany and the United Kingdom, with a total population among if 210 million them gave  $43.4 billion while the USA with a population of 313 million gave $31.5 billion. The GDP per capita of the USA is 53,101; those of Germany, the UK and France are respectively 40,007, 37,307 and 35,784 (all in international dollars).

Thus the USA, while richer than our European allies, gives much less than they do to alleviate poverty in Africa, Asia and Latin America. The excuse often given is that we spend much more on the military than do the European countries. I think it is that the Congress will not give more because of the views of the more isolationist members, and because the voters don't know how uncharitable the country actually is.