Measuring Trends in Government Corruption

 

CorruptionWorldBankGraph.jpg   Source of graph:  online version of the NYT article quoted and cited below.

 

(p. A6)  Africa, often stereotyped as a place of epic corruption and misrule, emerges in a World Bank report as a continent of great variety, with some countries — Tanzania, Liberia, Rwanda, Ghana and Niger — making notable progress over the past decade, and others — Zimbabwe, Ivory Coast and Eritrea — moving backward.

The report, released yesterday and based on the most comprehensive data on governance in more than 200 countries, found that not just poor countries struggled with corruption and flawed government.

. . .

The report, “Governance Matters, 2007: Worldwide Governance Indicators 1996-2006,” was written by Mr. Kaufmann and the World Bank researchers Aart Kraay and Massimo Mastruzzi. It was posted on the Internet at www.govindicators.org. Data came from an ideologically diverse array of groups that included Freedom House, Transparency International, the Heritage Foundation, Reporters Without Borders and the State Department.

“This is the best data source on governance now,” said Steven Radelet, a senior fellow at the Center for Global Development, a Washington research group. “It is of huge importance in development. Ten years ago, there was no data. Fifteen years ago, we didn’t talk about this stuff.”

. . .  

The report found that the gains and losses balanced out such that the average quality of governance worldwide over the past decade was little improved.

 

For the full story, see: 

CELIA W. DUGGER.  "World Bank Report on Governing Finds Level Playing Field."  The New York Times  (Weds., July 11, 2007):  A6. 

(Note:  ellipses added.)

 

Cuba’s Best Doctors Not Blind to Incentives Offered by “Communist” Government

 

   "Patients at the Ramón Pando Ferrer eye hospital in Havana."  Source of caption and photo:  online version of the NYT article quoted and cited below.

 

(p. A4)  Cuban doctors abroad receive much better pay than in Cuba, along with other benefits from the state, like the right to buy a car and get a relatively luxurious house when they return. As a result, many of the finest physicians have taken posts abroad.

The doctors and nurses left in Cuba are stretched thin and overworked, resulting in a decline in the quality of care for Cubans, some doctors and patients said.

 

For the full story, see:   

JAMES C. McKINLEY Jr.  "Havana Journal;  A Health System’s ‘Miracles’ Come With Hidden Costs."  The New York Times   (Tues., November 20, 2007):  A4. 

 

Sanctimonious Celebrities at “Live Earth” Concert “Eco-Extravaganza”

 

   Global-warming concert participants Garner, Madonna, Ludacris, and Gore.  Source of photos:  online version of the NYT article cited below.

 

(p. B1)  . . . , celebrity efforts to curb the greenhouse effect backlash into the glass-house effect: People who own Escalades, private jets and McMansions shouldn’t recycle bromides at people who fail to carpool to work. Carbon-offsetting, the newly fashionable practice of compensating for one’s own carbon emissions by paying into a fund to reduce them elsewhere, may be better than nothing, but to some it sounds too much (p. B5) like rich men paying others to take their place in the draft during the Civil War.

That credibility gap seemed to fuel much of the skepticism and sniping along the sidelines (British newspapers which gleefully counted Madonna’s many houses and cars, discouraged readers from following in her outsize carbon footprint) and drove Bob Geldof, founder of Live 8, to question this concert’s usefulness.

 

ALESSANDRA STANLEY. "The TV Watch Sounding the Global-Warming Alarm Without Upsetting the Fans."  The New York Times   (Mon., July 9, 2007):  B1 & B5. 

(Note:  ellipsis added.) 

 

Effective Foreign Aid

 

   "HOMELAND SECURITY.  Many women in Mexico, like Estela Palacio Calzada, with her granddaughter, rely on money sent back from the U.S. "  Source of caption and photo:  online version of the NYT article quoted and cited below.

 

Adam Smith argued in The Theory of Moral Sentiments, that altruism is more effective when it is directed toward those we know best–mainly our family, and immediate neighbors.

A policy implication may be that the most effective foreign aid is to have more open immigration policies, that then permit the migrants to send back funds to those in their home country who they know best.

 

THE money flows in dribs and drabs, crossing borders $200 or $300 at a time. It buys cornmeal and rice and plaid private school skirts and keeps the landlord at bay. Globally, the tally is huge: migrants from poor countries send home about $300 billion a year. That is more than three times the global total in foreign aid, making “remittances” the main source of outside money flowing to the developing world.

Surveys show that 80 percent of the money or more is immediately spent, on food, clothing, housing, education or the occasional beer party or television set. Still, there are tens of billions available for savings or investment, in places where capital is scarce. While remittances have been shown to reduce household poverty, policymakers are looking to increase the effect on economic growth.

Some migrants, for instance, send home money to savings accounts at small bank-like microfinance institutions, which use the resulting capital pool to lend to local entrepreneurs.

 

For the full story, see:

JASON DePARLE. "Migrant Money Flow: A $300 Billion Current."  The New York Times, Week in Review Section  (Sun., November 18, 2007):  3.

 

   Source of map graphic:  online version of the NYT article quoted and cited above.

 

Von Hippel Promotes User-Driven Innovation

 

     "Eric von Hippel of M.I.T., left, and Dr. Nathaniel Sims, with hospital devices Dr. Sims has modified. Mr. von Hippel says users can improve on products."  Source of caption and photo:  online version of the NYT article cited below.

 

Some innovation is done by the devoted for free.  But in his books, and in the article excerpted below, I think von Hippel puts too little emphasis on the entrepreneur and the entrepreneur’s profit motive, as drivers of innovation. 

One example is the Moveable Type free program that underlies this, and many other blogs.  It is often described as one of the best blog platforms, but it is hard to use for a non-techie, kludgey, and very limited in some obvious ways.  For example, there apparently is no way that I can make comments to the most recent 10 entries visible on the main blog page.  And there is only limited backup capabilities.  And the spell-checker does not have "blog" in its dictionary, and asks me if I really meant to type "bog."

You can bet that if Moveable Type was produced for profit, they would have provided users these obvious capabilities.  And I would rather pay for a more capable program, rather than get a less capable program for free.

 

(p. 5) DR. NATHANIEL SIMS, an anesthesiologist at Massachusetts General Hospital, has figured out a few ways to help save patients’ lives. 

In doing so, he also represents a significant untapped vein of innovation for companies.

Dr. Sims has picked up more than 10 patents for medical devices over his career. He ginned up a way to more easily shuttle around the dozen or more monitors and drug-delivery devices attached to any cardiac patient after surgery, with a device known around the hospital as the “Nat Rack.”

. . .

What Dr. Sims did is called user-driven innovation by Eric von Hippel, a professor at the Massachusetts Institute of Technology’s Sloan School of Management. Mr. von Hippel is the leading advocate of the value of letting users of products modify them or improve them, because they may come up with changes that manufacturers never considered. He thinks that this could help companies develop products more quickly and inexpensively than with their internal design teams.

“It could drive manufacturers out of the design space,” Mr. von Hippel says.

It is a difficult idea for research and development departments to accept, but one of his studies found that 82 percent of new capabilities for scientific instruments like electron microscopes were developed by users.

. . .

One problem with the user-innovation model is that it can run into intellectual property rights protections.  . . .

. . .

. . . , Mr. von Hippel’s ideas are up against more conventional forms of user-aided design, such as sending anthropologists to study how people use products in their daily lives. Companies then translate their research into new designs.

Even some of Mr. von Hippel’s acolytes remain cautious. “A lot of this is still in the category of, ‘You could imagine this working out really well,’ ” says Saul T. Griffith, who as an M.I.T. engineering student was part of a group of kite-surfers who developed products for their sport that have since become commercialized. Mr. von Hippel wrote about Mr. Griffith in his 2005 book, “Democratizing Innovation.”

 

For the full story, see:

MICHAEL FITZGERALD.  "Prototype How to Improve It? Ask Those Who Use It."  The New York Times, Section 3  (Sun., March 25, 2007):  5.

(Note:  ellipses added.) 

 

von Hippel has two main books in which he defends his user-driven innovation ideas:

von Hippel, Eric. The Sources of Innovation. New York:  Oxford University Press, 1988.

von Hippel, Eric. Democratizing Innovation. Cambridge, MA:  MIT Press, 2005.

 

Evidence that Bush’s Iraq Surge is Working

 

  "LOVE PREVAILS. A bride and groom, surrounded by friends and a band, dressed for their wedding photos last week in Baghdad."  Source of caption and photo:  online version of the NYT article quoted and cited below. 

 

(p. A1)  BAGHDAD, Nov. 19 — Five months ago, Suhaila al-Aasan lived in an oxygen tank factory with her husband and two sons, convinced that they would never go back to their apartment in Dora, a middle-class neighborhood in southern Baghdad.

Today she is home again, cooking by a sunlit window, sleeping beneath her favorite wedding picture. And yet, she and her family are remarkably alone. The half-dozen other apartments in her building echo with emptiness and, on most days, Iraqi soldiers are the only neighbors she sees.

“I feel happy,” she said, standing in her bedroom, between a flowered bedspread and a bullet hole in the wall. “But my happiness is not complete. We need more people to come back. We need more people to feel safe.”

Mrs. Aasan, 45, a Shiite librarian with an easy laugh, is living at the far end of Baghdad’s tentative recovery. She is one of many Iraqis who in recent weeks have begun to test where they can go and what they can do when fear no longer controls their every move.

The security improvements in most neighborhoods are real. Days now pass without a car bomb, after a high of 44 in the city in February. The number of bodies appearing on Baghdad’s streets has plummeted to about 5 a day, from as many as 35 eight months ago, and suicide bombings across Iraq fell to 16 in October, half the number of last summer and down sharply from a recent peak of 59 in March, the American military says.

As a result, for the first time in nearly two years, people are moving with freedom around much of this city. In more than 50 interviews across Baghdad, it became clear that while there were still no-go zones, more Iraqis now drive between Sunni and Shiite areas for work, shopping or school, a few even after dark. In the most stable neighborhoods of Baghdad, some secular women are also dressing as they wish. Wedding bands are playing in public again, and at a handful of once shuttered liquor stores customers now line up outside in a collective rebuke to religious vigilantes from the Shiite Mahdi Army.

Iraqis are clearly surprised and relieved to see (p. A8) commerce and movement finally increase, five months after an extra 30,000 American troops arrived in the country.

 

For the full story, see: 

DAMIEN CAVE and ALISSA J. RUBIN.  "As Security Improves, Baghdad Starts to Exhale."  The New York Times   (Tues., November 20, 2007):  A1 & A8.

(Note:  the slightly different online title was "Baghdad’s Weary Start to Exhale as Security Improves.")

 

 

"COMMERCE RETURNS. A Baghdad market, shut by violence, recently reopened."  Source of caption and photo:  online version of the NYT article quoted and cited above. 

 

Let the Evidence Decide if the Mapinguary is Myth or Real

 

   A statue of the mapinguary in Rio Branco, Brazil.  Source of the photo:  online version of the NYT article quoted and cited below. 

 

RIO BRANCO, Brazil — Perhaps it is nothing more than a legend, as skeptics say. Or maybe it is real, as those who claim to have seen it avow. But the mere mention of the mapinguary, the giant slothlike monster of the Amazon, is enough to send shivers down the spines of almost all who dwell in the world’s largest rain forest.

The folklore here is full of tales of encounters with the creature, and nearly every Indian tribe in the Amazon, including those that have had no contact with one another, have a word for the mapinguary (pronounced ma-ping-wahr-EE). The name is usually translated as “the roaring animal” or “the fetid beast.”

. . .  

The giant ground sloth, Megatherium, was once one of the largest mammals to walk the earth, bigger than a modern elephant. Fossil evidence is abundant and widespread, found as far south as Chile and as far north as Florida. But the trail stops cold thousands of years ago.

“When you travel in the Amazon, you are constantly hearing about this animal, especially when you are in contact with indigenous peoples,” said Peter Toledo, an expert on sloths at the Goeldi Institute. “But convincing scientific proof, in the form of even vestiges of bones, blood or excrement, is always lacking.”

Glenn Shepard Jr., an American ethnobiologist and anthropologist based in Manaus, said he was among the skeptics until 1997, when he was doing research about local wildlife among the Machiguenga people of the far western Amazon, in Peru. Tribal members all mentioned a fearsome slothlike creature that inhabited a hilly, forested area in their territory.

Dr. Shepard said “the clincher that really blew me away” came when a member of the tribe remarked matter of factly that he had also seen a mapinguary at the natural history museum in Lima. Dr. Shepard checked; the museum has a diorama with a model of the giant prehistoric ground sloth.

“At the very least, what we have here is an ancient remembrance of a giant sloth, like those found in Chile recently, that humans have come into contact with,” he said. “Let me put it this way: Just because we know that mermaids and sirens are myths doesn’t mean that manatees don’t exist.”

Even so, the mystery of the mapinguary is likely to continue, as is the search.

“There’s still an awful lot of room out there for a large sloth to be roaming around,” Dr. Shepard said.

 

For the full story, see: 

LARRY ROHTER.  "A Huge Amazon Monster Is Only a Myth. Or Is It?"  The New York Times, Section 1  (Sun., July 8, 2007):  3. 

(Note:  ellipsis added.)

 

Some scientists believe that the mapinguary may be based on actual sightings of a real creature related to the Megarium, two of whom are depicted above.  Source of the photo:  online version of the NYT article cited above. 

RioBrancoAmazonMap.jpg   Source of the map:  online version of the NYT article cited above. 

 

Communist China’s “Greatest Folly”: Renewable Energy Dam

 

  "Liu Jun leaving his home in Miaohe, China, near the Three Gorges Dam.  All of the village’s residents are being relocated."  Source of caption:  p. A1 of print version of the NYT article quoted and cited below.  Source of photo:  online version of the NYT article quoted and cited below. 

 

(p. A1)  JIANMIN VILLAGE, China — Last year, Chinese officials celebrated the completion of the Three Gorges Dam by releasing a list of 10 world records. As in: The Three Gorges is the world’s biggest dam, biggest power plant and biggest consumer of dirt, stone, concrete and steel. Ever. Even the project’s official tally of 1.13 million displaced people made the list as record No. 10.

Today, the Communist Party is hoping the dam does not become China’s biggest folly. In recent weeks, Chinese officials have admitted that the dam was spawning environmental problems like water pollution and landslides that could become severe. Equally startling, officials want to begin a new relocation program that would be bigger than the first.

The rising controversy makes it easy to overlook what could have been listed as world record No. 11: The Three Gorges Dam is the world’s biggest man-made producer of electricity from renewable energy.

. . .

(p. A12)  The Communist Party leaders who broke ground on the Three Gorges project in 1994 had promised that China could build the world’s biggest dam, manage the world’s biggest human resettlement and also protect the environment.

. . .

(p. A13)  In the isolated mountain villages above the reservoir, farmers have heard nothing about a new resettlement plan. For many farmers, the immediate concern is the land beneath their feet. Landslides are striking different hillsides as the rising water places more pressure on the shoreline, local officials say.  . . .

. . .

Around daybreak on June 22, Lu Youbing awoke to the screams of her brother-in-law and the sickening sensation of the earth collapsing. Her mountain farmhouse in Jianmin Village buckled as a landslide swept it downhill. In all, 20 homes were demolished. Five months later, Ms. Lu is living in a tent, fending off rats and wondering where her family can go.

“We have nothing left,” she said. “Not a single thing.”

Winter is approaching, and she is trying to block out cold air — and rats — by pinning down the tent flaps with rocks. Villagers have been told that more landslides are possible. Ms. Lu lives with her second husband and their two children. They are too poor to buy an apartment in the city or to build a new home on higher ground. Local officials gave them the tent. Villagers have donated clothes.

The tents are pitched on the only available flat land — a terrace with a monument celebrating efforts by local officials to improve the environment.

“We don’t know about winter,” she said. “This is the only option we have. What else can we do?”

 

For the full story, see:

JIM YARDLEY.  "At China’s Dams, Problems Rise With Water."   The New York Times  (Mon., November 19, 2007):  A1, A12-A13. 

(Note:  ellipses added.)

(Note:  online the title of the article is "Chinese Dam Projects Criticized for Their Human Costs.")

 

   "The Three Gorges Dam is projected as an anchor in a string of hydropower “mega-bases” planned for the middle and upper reaches of the Yangtze River."  Source of caption and photo:  online version of the NYT article quoted and cited above.

 

Accepting an 80% Pay Cut for a Chance to Defy Death

 

   David Sinclair (left) and Christoph Westphal (right).  Source of photo:  online version of the NYT article cited below.

 

Humans are often risk-averse, but are also often willing to accept greater risk, in the pursuit of a really important goal. 

 

SIRTRIS PHARMACEUTICALS wants to sell you the elixir of youth. Yet the company’s founders are neither cranks nor quacks, but include a well-regarded Harvard scientist and a serial entrepreneur. 

Imagine a pill, derived from a compound found in something as benign as red wine, that treated the most feared and debilitating diseases of aging: illnesses like diabetes, neurodegenerative conditions like Alzheimer’s and Parkinson’s, and many forms of cancer. Imagine, furthermore, that this pill had no injurious side effects. Imagine, finally, that the pill’s only side effect conferred what human beings have always wanted: an increase in life span. That’s what Sirtris wants to create.

. . .

Mr. Sinclair, who at the relatively youthful age of 37 is already renowned for his investigations into how we grow old, discovered in 2003 that a molecular compound called resveratrol, found in red wine and other plant products, extends the life span of mice by as much as 24 percent and the life span of other animals, such as flies and fish, by as much as 59 percent.

Dr. Westphal, a self-described “geek” who relaxes by reading papers in academic journals like Nature and Science, was stunned by Mr. Sinclair’s discovery, and visited him in his lab to discuss the implications for drug development. The two soon decided to start a company.

“I figured if there’s going to be one chance that I’d take an 80 percent pay cut to be the C.E.O. of a company rather than general partner in a venture firm, then this was it,” Dr. Westphal, 39, told me when I visited Sirtris’s offices in Cambridge, Mass. “If we’re right on this one, everyone’s going to want to take these drugs and they’re going to treat many of the major diseases of Western society.”

. . .

“Nobody knows why we age,” Mr. Sinclair explained to me. “We’re working on genes that increase fitness and defenses against diseases. The body mounts those defenses when it’s under adversity. Caloric restriction is one of those triggers and the molecules we’re developing are also one of those triggers.”

Dr. Westphal and Mr. Sinclair stress that they are not working to “cure” aging, a condition that, so far at least, is common to all humanity and that most physicians do not consider a disease. “Curing aging is not an endpoint the federal drug agency would recognize,” Dr. Westphal says dryly. Instead, both men say, they are working to ameliorate the diseases of aging.

While Mr. Sinclair has bragged that resveratrol is as “close to a miraculous molecule as you get,” much uncertainty surrounds his research and the commercialization of his discovery faces many challenges.

. . .

Sirtris hopes to have its first drugs in commercial production by 2012 or 2013. While that may seem far off, it’s wonderfully fast for the biopharmaceutical industry, where development is onerously slow, difficult and uncertain.

This speed of research and development owes much to Dr. Westphal’s energy and Mr. Sinclair’s ambition.

“For as long as I can remember, I’ve wanted to develop drugs that combat diseases of aging,” Mr. Sinclair says. “As soon as I realized I was mortal, I started to worry. I set a goal to see if we could make drugs that would target the diseases of aging in my lifetime. I didn’t know it would be possible at all — and I didn’t know it would happen so quickly.”

 

For the full story, see: 

JASON PONTIN.  "SLIPSTREAM; An Age-Defying Quest (Red Wine Included)."  The New York Times, Section 3  (Sun., July 8, 2007):  3.

(Note:  ellipses added.)

 

FDA Hurts Consumers with New Burdens on Small Firms Making Proven Drugs

 

  "Larry Blansett, chief executive of the Blansett Pharmacal Company, sells a wide range of what he calls legacy drugs."  Source of caption and photo:  online version of the NYT article cited below.

 

(p. C1)  In the 1970s, Larry Blansett was producing a wide array of prescription cough syrups, antihistamine tablets and pain killers at the company he co-founded, UAD Laboratories. But the Food and Drug Administration was not keeping a close watch.

Mr. Blansett continues to sell the same range of products at his latest venture, the Blansett Pharmacal Company, which employs about 90 people in North Little Rock, Ark. “We grew gradually at first, but are now a national company,” he said.

Now, however, the F.D.A. has begun to crack down on the thousands of drugs that have never had to go through the agency’s stringent approval process, many of them made by small companies like Blansett Pharmacal. And those companies are crying foul.

. . .

Perry Cole, executive director of the Branded Pharmaceutical Association, . . .  said these drugs — the makers call them legacy drugs and define them as (p. C5) drugs that have been prescribed for at least 25 years and have gained a history for safety and efficacy — were far safer than many prescription drugs of recent vintage, like Viagra, which he said had been associated with hundreds of premature deaths.

. . .

The agency began its campaign against the makers of unapproved drugs in June 2006, and immediately began ordering companies that made products that it deemed potentially hazardous to file new drug applications or take them off the market.

In December, for example, it told firms to stop making unapproved products containing quinine, which has been used since the 1600s to treat malaria. The one company that made an approved quinine product, Qualaquin, was the Mutual Pharmaceutical Company of Philadelphia, and the F.D.A’s action, in effect, granted Mutual a temporary monopoly.

 

For the full story, see:

BRENT BOWERS. "Small Business; A Headache for Small Drug Makers."  The New York Times (Thurs., October 18, 2007): C1 & C5.

(Note:  ellipses added.)

 

77,000 Die from Lack of Tort Reform

 

   Source of report cover image:  http://www.pacificresearch.org/pub/sab/entrep/2007/Jackpot_Justice/index.html

  

(p. A18)  How does the legal system extract such an astounding amount from our economy? We applied the rent-seeking theory of transfers from economic science to pick up where past studies — including the highly regarded Tillinghast-Towers Perrin study — leave off. We began by examining the static costs of litigation — including annual damage awards, plaintiff attorneys’ fees, defense costs, administrative costs and deadweight costs from torts such as product liability cases, medical malpractice litigation and class action lawsuits. The annual static costs, $328 billion per year, are well in excess of previous Tillinghast estimates.

But $328 billion is only the beginning. After all, litigation doesn’t just transfer wealth, it also changes behavior, and often in economically unproductive ways. Any true estimate of the costs of America’s tort system must also include these dynamic costs of litigation — the impact on research and development spending, the costs of defensive medicine and the related rise in health-care spending and reduced access to health care, and the loss of output from deaths due to excess liability.

. . .

Based on data from previous studies, we determined that more than 77,000 people would have been alive today and contributing to the workforce, but are not because of a failure to enact comprehensive tort reforms in the states. The cost of foregone output from these lost workers is more than $7 billion each year.

What we’re left with, then, are annual dynamic costs of $537 billion resulting from our litigation system. Add that to the static costs of $328 billion and you arrive at the total of over $865 billion per year.

 

For the full commentary, see: 

LAWRENCE J. MCQUILLAN and HOVANNES ABRAMYA.  "The Tort Tax."  The Wall Street Journal (Tues., March 27, 2007):  A18.

(Note:  ellipsis added.)

 

McQuillan, Abryamyan, along with Anthony P. Archie, have co-authored a report entitled Jackpot Justice: The True Cost of America’s Tort System that elaborates on many of the issues sketched in the commentary excerpted above.   You can download a free PDF copy at:  http://www.pacificresearch.org/pub/sab/entrep/2007/Jackpot_Justice/Jackpot_Justice.pdf