Charles Landow focuses on Africa and Latin America in this week’s Missing Pieces. Enjoy!

• Cuba’s Evolution: An Economist special report examines Raúl Castro’s reforms in Cuba. It first reviews the decline of the country’s vaunted equality and social services since the Soviet Union’s collapse. One arresting illustration: in real terms, today’s average wage is only a quarter of 1989’s. Castro is trying to unleash growth by allowing a nascent private sector, though the report argues that reforms have a long way to go. Politically, “change can come only from the Communist Party itself” for now, since the opposition is small and divided. Possible futures include China-style reforms, a Putin-like strongman, or a party-led quasi-democracy. Or, someday, Cubans could take matters into their own hands. CFR’s Julia Sweig analyzes developments in Cuba and U.S.-Cuba relations in a recent interview. Read more »

Charles Landow features a range of developments in this edition of Missing Pieces. I look forward to your thoughts.

• Mexico’s Middle Class: A Washington Post piece chronicles the rise of a little-noticed Mexican phenomenon: the middle class, which is “fast becoming the majority” of Mexico’s 114 million people. The article credits NAFTA for booming investment, leading to a surge of jobs and increased consumption of homes, cars, and more. Fertility rates are down and educational attainment up. One potential implication for the United States: reduced immigration as more Mexicans find opportunities at home. CFR’s Shannon O’Neil discussed Mexico’s middle class in a video and blog post last year. Read more »

I just finished reading the much-hyped book, Behind the Beautiful Forevers, which well deserves the hype. It is an extraordinary look at life in Annawadi, a slum adjacent to Mumbai’s modern international airport. Author Katherine Boo spent three years in the slum (researching, interviewing, videotaping, recording) trying to understand “how ordinary low-income people—particularly women and children—were negotiating the age of global markets.” The question that drives her is: “What is the infrastructure of opportunity in this society?” It is a critical question for any society, and one that Boo has been exploring in various poor communities for the past twenty years as a staff writer for the New Yorker. The answer she paints for Annawadi makes me question my relatively bullish assessment of India’s growth prospects. The residents of Annawadi, many of whom earn a living by scavenging through garbage, are remarkably resilient, innovative, determined, and hard-working towards their goal of upward mobility. But they are also stymied at almost every turn by a corrupt system. Read more »

The World Bank recently released updated estimates of poverty around the world. Overall, the news is good, as reflected in headlines from the likes of The Economist (“A Fall to Cheer”) and a Financial Times blog (“Poverty Falling Everywhere”). Between 2005 and 2008 (the year of the update’s main estimates), the percentage of people living in extreme poverty—below $1.25 per day in purchasing power parity (PPP) terms—fell in all six developing regions, the first worldwide drop since 1981. Moreover, according to partial estimates for 2010, global poverty that year was half the level in 1990. This means that the first Millennium Development Goal, halving poverty between 1990 and 2015, has been reached with time to spare. (The MDGs were adopted in 2000, but the baseline for change was 1990.) Read more »

In this week’s Missing Pieces, Charles Landow ranges from Indonesia to Brazil and Colombia, with stops in Turkey and Russia. I hope you enjoy the selection.

• Incentivizing Aid: Indonesia’s Generasi program gives villages grants to improve health and education. To encourage strong results, part of each year’s grant is allocated based on villages’ performance on 12 indicators the previous year. A new paper from the National Bureau of Economic Research tests this incentive by randomly selecting some villages to receive the normal program and others to receive non-incentivized grants. The authors find that incentives improve performance on health indicators, with prenatal visits 5 percent higher and immunization rates 3 percent higher than in non-incentivized villages. The incentives do not boost educational performance. The paper suggests this is because incentives cause midwives but not teachers to work more hours; the former are often paid fee-for-service while the latter are not. Read more »

In this edition of Missing Pieces, Charles Landow highlights topics from financial services for the poor to Venezuela’s presidential race. I hope you enjoy the selection.

• Banking for the Poor: Quality matters as much as quantity in expanding financial services to the poor, suggests a paper from the National Bureau of Economic Research. Pascaline Dupas and co-authors first offered a random sample of rural Kenyans a savings account with no opening fees and simplified procedures. More than 60 percent opened an account, but only 28 percent made at least two deposits in the following year. Surveys suggested that many feared “embezzlement, unreliable services, and transaction fees.” Working with another group of Kenyans, the researchers offered vouchers that made it easier to receive loans. Six months later, only 3 percent had started to apply. According to surveys, recipients feared losing their collateral if they could not repay their loan. Clearly, financial services must be appealing and trustworthy—not simply available—if low-income people are to use them. Read more »

Charles Landow ranges from Mexico to the Maldives and from corruption to constitutions in this week’s Missing Pieces. Enjoy!

• Mexico’s Potential Presidenta: Josefina Vázquez Mota became Mexico’s first female major-party presidential nominee with her victory in the National Action Party (PAN) primary last weekend. She has served as secretary of public education, secretary of social development, and head of the PAN contingent in Mexico’s lower house. CFR’s Shannon O’Neil writes on ForeignAffairs.com that Vázquez Mota’s gender will make her the candidate of change, even though the PAN has held the presidency for twelve years. She starts out behind Enrique Peña Nieto, former governor of the state of Mexico. But he has proved prone to cringe-worthy gaffes, including a December remark that opened him to charges of sexism.
• Africa’s Progress: Dambisa Moyo, the Zambian-born author known for her stinging critique of foreign assistance in 2009’s Dead Aid, argued last week in the Financial Times that Africa is thriving by following the solid capitalist practices “that the rest of the world forgot.” Attractive investment opportunities, auspicious demographics, and strong efforts to fight corruption and bolster the rule of law have the continent poised for growth, Moyo writes. One promising initiative on corruption comes from Kenya, where citizens are recounting their experiences with bribery on a new website called ipaidabribe, inspired by a similar site in India. Individual names are blocked, but the aggregation of reports about the most corrupt agencies could be a powerful tool for cleaner public services. A Washington Post piece last week profiled the site and its founder, and a recent article in Kenya’s The Star reviewed many interesting tales.
• Moscow and the Maldives: Two former presidents published op-eds last Wednesday. The first is deposed president Mohamed Nasheed of the Maldives. He writes in the New York Times that his resignation last week was in fact a coup with important lessons for other nascent Muslim-majority democracies. The other is Prime Minister Vladimir Putin of Russia. He seeks in the Washington Post to recast himself as a corruption-busting democrat who deserves a return to the presidency. Both articles are worth reading.
• India’s Problematic Police: The Wall Street Journal examines India’s “fake encounters,” or murders disguised as self-defense shootings by the police. The practice dates from the 1990s, when teams of officers competed to take out Mumbai’s notorious gangsters. Sometimes, according to the Journal, they just wanted to bag criminals; other times they took money to help corrupt parties settle their scores. Though India’s government is trying to clean up its police, some citizens apparently approve of the extra-judicial killings as a useful “shortcut” around the country’s dysfunctional courts.
• Constitutional Inspiration: As Egypt, Libya, and Tunisia try to craft new constitutions for a more democratic era, a New York Times article suggests that the U.S. constitution’s global influence is slipping. The piece cites a forthcoming study showing that other democratic constitutions are becoming less and less similar to America’s. The U.S. constitution guarantees some rights not highly valued today, while omitting others now considered crucial, the Times reports. Of course, who writes a new constitution and how the process unfolds determine what ends up in the text. Scholars such as Jennifer Widner and Tom Ginsburg and others have explored these issues.

Charles Landow reviews writings on the foreign aid debate, global economic growth, democracy in Asia, and state capitalism in this week’s Missing Pieces. Enjoy!

• Assessing Aid Efforts: Is foreign aid a success or a waste? The debate is long-running. A recent report from Oxfam and Save the Children evaluates international assistance to combat last year’s Horn of Africa famine. It faults donors and relief providers (including those NGOs themselves) for delays in mounting a full response, despite warnings of failing rains starting in 2010. It is a positive example of humanitarian actors holding themselves and others accountable and suggesting ways to improve. Meanwhile, Bill Gates offers a full-throated defense of foreign aid in an International Herald Tribune op-ed this week and his recent Gates Foundation annual letter. He notes that child mortality and extreme poverty in the world have fallen by more than half in the last fifty years, gains he credits “in large part to aid-funded programs to buy vaccines and boost farmers’ productivity.” As he concludes in his letter, “The relatively small amount of money invested in development has changed the future prospects of billions of people—and it can do the same for billions more if we make the choice to continue investing in innovation.” For more on the foreign assistance debate, see video interviews by Isobel Coleman with Don Steinberg, deputy administrator of USAID, and Daniel Yohannes, CEO of the Millennium Challenge Corporation. Read more »

Charles Landow covers China, India, South Africa, Brazil, and the European Parliament in this week’s Missing Pieces. Enjoy the selection and let us know your thoughts.

• Wobbling Growth in China…: Robert Samuelson of the Washington Post this week considers the prospect of a major slowdown in China. Ingredients include a potential housing bubble, weak demand for Chinese exports abroad, and rising government debt. A “soft landing,” or modest reduction in GDP growth, is still seen as likely, but a Nomura report cited by Samuelson sees a one-in-three chance of a steeper drop. A recent op-ed by CFR president Richard Haass reviews China’s daunting economic to-do list. The current Foreign Affairs also features a debate over the prospects for China’s continued rise. Read more »