Annual AfDB and ADF meeting, and a compact online African database

The African Development Bank and African Development Fund annual Board of Governors meeting is taking place yesterday and today. There are already dozens of press releases, reports, interviews, and speeches on the AfDB website here. With luck, there will be a condensed final report produced for general consumption.

There's a new website just launched to complement the release of the 2009 African Economic Outlook report. It has a convenient page of economic and related demographic data here.

New medicines cost tonnes, take ages, and there are hardly any of them

I was reading through the literature on technology and came across some papers on research and development of new medicines. I had a general idea that they were expensive, but the papers here and here present data that has new medicines produced in the United States costing almost a billion dollars each, taking over a decade, and numbering only a few dozen per year.

Many anti-malarial medicines are chemically similar to quinine, and it is feasible that new medicines could be found by changing chemical structures by relatively small amounts. In this case, it would be easy to produce new medicines based on old ones. If such small modifications account for many of the new medicines, then the number of genuinely new medicine pathways is tiny. Some new medicines are derived from plants, so the rate of finding new laboratory-derived pathways seems tiny.

Applications for MA Economic and Governmental Reform at the University of Westminster

Here's a reminder about applying and getting funded for the Master's course in Economic and Governmental Reform at the University of Westminster here in London, starting in October. I teach the economics modules on the course. African applicants are most welcome and have good performance records.

Our students have come from government, private sector, and NGO backgrounds, and after the course have moved on to senior positions in Africa, Europe, and beyond. Living in London itself offers many attractions and opportunities, of course.

Information on the course and obtaining funding is on its website (here). The course, like most in the UK, is expensive (GBP10,000), so students usually have applied for scholarships first. Course requirements are listed on its website, although there is some flexibility. Unavoidable ones are:

1. Reasonable English (or things won't make sense)
2. A first degree with some relevance to the topic, or a degree and relevant work experience
3. Willingness to work hard (or things will not be enjoyable)

Good luck with application.

Is the patent information enough for technology diffusion?

I have posted links to developed country patent offices in recent posts. The motivation is that African entrepreneurs and inventors can build on the inventions in developed countries. My last post pointed out one limitation of doing so, namely that there may be adaption costs if the technology is not well suited for Africa. Another set of costs arises not from adaption, but just adoption, so that even if the technology was ideal for Africa's circumstances there would still be expenses to learning and using it.

A technology's tacitness can raise adoption expenses. It means that the information used in the technology is not written down. A stricter definition is that the information could not possibly be written down. In the first definition could fall difficulties such as an incomplete patent specification; in the second definition lies problems such as the practical inability in a reasonable time period to fully specify all the operational requirements of a system. Imagine a machine construction guide - it may never state that a power supply is required, rather being taken for granted, but if someone has never built a machine before they might wonder why their machine doesn't work despite being perfectly built according to the patent.

A second problem belonging to the "can't be written down" tacitness is that even if someone knows exactly a design they may not be able to implement it well without extensive practice. An example might be in language learning; knowing the words and grammar is great, but it can still take forever just to say the most basic sentences. Technological fitness through repetition as well as design information is required to implement the design.

Problems like the ones described tend to reduce with experience: an inventor can fill in the holes in a patent specification; they know what the designer was thinking; they are already well practised in related technologies. The importance of experience explains why research and development even in developing countries can be important in promoting growth. The idea is not to produce technologies specific for the most advanced countries, but rather to understand foreign technologies and get them to work as well as possible locally.

Japanese patent website, and African sites

The Japanese patent website can be found here. After the PAJ link is clicked, people can search for Japanese designs in whatever object interests them. I have been highlighting waterproof construction designs because of an emerging market in the Great Lakes region, and listed links to US and EU designs for waterproof tents in recent posts.

I looked at the Kenyan patent office website, the South African patent office website, and a pan-African body (here). None appeared to put designs online free of charge (I didn't look really thoroughly so may be mistaken), although it might be possible to get them for a fee from the South African website.

What might be helpful for economic development is free public online information for pan-African patents. If countries are concerned that public information combined with weak property rights would be a discouragement to innovation in their countries, then they could restrict the patents to those which are expired or aging (say three years old or more) or those where the patent holder is willing to allow public disclosure (which would admittedly probably be less commercially valuable).

Easy access to African specific patents could allow local innovators to build on knowledge which is specific to African circumstances. Inventions from developed countries may require considerable reengineering to work in African circumstances (for example, waterproof designs for a North European summer may not be robust enough in a tropical storm). There is also a demonstration effect - if a design has been shown to work in an African country, then entrepreneurs may be more willing to risk investment in it than if it had only worked on the other side of the world. Inventors working even with highly generic products in highly similar developed countries often build on local innovation more than foreign innovation, and choose to adapt foreign technology further for local circumstances. A pan-African database would mean that not every entrepreneur has to incur the same possibly elavated costs of adaptation from developed to local contexts.

Comparing the growth effects of openness

Openness (equal to a country's imports plus exports, all divided by GDP) is often included in growth regressions. Other determinant variables may describe internal features of the economy, such as the saving rate, education, institutional quality, and political stability. Sometimes the determinant variables may include foreign direct investment and other measures of external exposure, but by no means always.

External exposure brings some disadvantages and some advantages for a country. The advantages include more optimal allocation of global short-term resources (but usually only short-term, not long-term, as a country may get stuck in producing cash crops, for example, rather than industrialising), and international technology transfers. By technology transfer, I mean use in production of information about methods or input combinations, where the information has been taken from abroad. Estimates on the growth importance of transfer vary, from quite important to really important (explaining over half of growth in some countries).

Openness is only one possible way of getting technology from overseas. Foreign direct investment, licensing, joint ventures, student and teacher movement, expatriate return, seminars and the internet are all possible sources of information about it, and may be more effective. Moreover, studies indicate that imports may be more effective for transferring technology than exports, and capital goods imports may be better than consumer goods imports. So having openness as the measure of external exposure will capture the (perhaps dominant form of) external influence on growth only partially and with considerable error.

The other variables in the regressions will pick up the effect of international exposure if they are correlated with the exposure, and correlation will often occur if people and companies in the economy try to maximise their income at all, since people are likely to adapt to encourage transfer if they think it is advantageous. So the effect of, for example, education or institutional form will be overestimated. Misspecification or incomplete specification increases the chance of interpretational error in estimations where internal factors seem to matter much more than external relations. On theoretical grounds, we may question this outcome, as it does not seem believable that so many countries are suddenly getting their internal arrangements far better than almost every other country in history, as measured by their economic growth.

Hunger map

I came across an interactive map on the UN Food and Agricultural Organization website, here. It shows global rates of hunger by country since 1970. In 1970, countries in Northern Africa were hungriest. Today, countries in Southern Africa are hungriest. The highest rates of hunger are correlated with wars.