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Category Archives: Trade

What don’t make sense in trade don’t make sense in aid

Common sense principles in international trade are surprisingly useful for aid as well. Here’s a list of overall principles that help explain some of the most discussed aid dos and don’ts on this and other blogs.

1) Don’t trade low value items with huge transport costs. No exporter or importer in their right mind would ship bulky low-value items large distances, which is why things like construction materials are often locally-sourced. Aid examples: Nobody

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Of mangos and plastic crates

Sometimes the things that keep people in poverty seem so small and so insignificant, and the remedies seem so simple, that it’s hard for people from rich countries to understand why they remain impoverished.

Jelen, a Haitian farmer living on about $2 a day, can’t get enough water to her mango trees, even though there is a river just beside her property. She needs a simple canal dug from the river to irrigate her…

Also posted in Aid policies and approaches, Disaster relief | Tagged , | 15 Comments

Oops, did I just prove “Confessions of a hit man” conspiracy?

Ray Fisman in Slate takes my paper with Daniel Berger, Nathan Nunn, and Shanker Satyanath on Commercial Imperialism as partial confirmation of John Perkins’ allegation of a global conspiracy to take down poor nations for the benefit of rich corporations. This is fun, so let’s run with it.

Of course there’s a eeny weeny difference between conspiracy theories and social science that just says, yes, CIA interventions could have been helpful to US corporations…

Also posted in Academic research | Tagged , , | 10 Comments

Commercial Imperialism? Political Influence and Trade During the Cold War

We exploit the recent declassification of CIA documents and examine whether there is evidence of US power being used to influence countries’ decisions regarding international trade. We measure US influence using a newly constructed annual panel of CIA interventions aimed at installing and supporting leaders during the Cold War. Our presumption is that the US had greater influence over foreign leaders that were installed and backed by the CIA. We show that following CIA interventions

Also posted in Academic research | Tagged , | 4 Comments

Rwanda’s coffee success story

A walking tour through some of the trendiest coffee shops in the NYU vicinity reveals a common element: creatively packaged, expensive Rwandan coffee for sale.

Given our long-standing interest in 1) good coffee and 2) the potential of entrepreneurship for development, this phenomenon clearly merited investigation. The work of Karol Boudreaux, who has been following the Rwandan coffee sector for several years, helps to sketch the outlines of a partially donor-funded development success story…

Also posted in Big ideas, Entrepreneurship, History | Tagged , , | 18 Comments

Worst in Aid: The Grand Prize

Hillary Clinton recently declared: “We are working to elevate development and integrate it more closely with defense and diplomacy in the field…The three Ds must be mutually reinforcing.”

Clinton says that the 3D approach will elevate development to the level of diplomacy and defense. Unfortunately, it could instead lower development further to an instrument employed to achieve military or political priorities. Clinton foresaw these objections: “There is a concern that integrating development means diluting it or politicizing…

Also posted in Democracy and freedom, Military aid | Tagged , , , , | 34 Comments

Chronicle of a death foretold

When the article Madagascar: Textile Industry Unravels came across our desks yesterday, we were saddened but not surprised. That’s because people on the ground have been predicting this outcome (and Aid Watch has been stubbornly blogging about it over and over). Multiple critics have protested ever since the US government, hoping to force President Andry Rajoelina’s questionable government to hold elections, first threatened to remove preferential trading rights for…

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Madagascar textile workers ask President Obama to keep their jobs for Christmas, but nobody is listening

Here’s an excerpt from an ad that appeared in the print edition of Politico today, paid for by the owners of apparel factories in Madagascar and one of their American investor partners. We have blogged about this seemingly obscure issue already many more times than you, our patient readers, may have wanted, but we see this as one of those rare, clear opportunities for the US to do good by first…

Also posted in Aid policies and approaches | Tagged , , | 14 Comments

USTR Replies to Our Campaign to Save Madagascar Jobs

After sending an email to Constance Hamilton, Deputy Assistant U.S. Trade Representative for Africa, we received the following email in response:

Thank you, Mr. Easterly, for your email. We of course, want to have as
many sub-Saharan African countries as possible be eligible for AGOA
benefits. We are working with all the countries, including Madagascar
– to encourage their governments to abide by the AGOA eligibility
criteria, particularly rule…

Also posted in Aid policies and approaches, Democracy and freedom | Tagged , , | 5 Comments

Hopeless cause of the week: save Madagascar!

Aid Watch has a stubborn attachment to excellent but possibly hopeless causes…

Madagascar, a country we first blogged about in June and then again in August, may be down to its last few days as regards AGOA, the US preference program that underpins about 50 percent of the country’s $500 million textile industry.  Because of the change of government that took place in Madagascar in March, the US has been steadily threatening…

Also posted in In the news | Tagged , | 4 Comments