Clowns in the DR Congo

Here's a lighthearted story in time for April Fools' Day. The event is real.

A team of clowns is bringing laughter to children in eastern DR Congo by performing in refugee camps, courtesy of the Spanish Clowns Without Borders organisation. The story is here.

Clowns get a bad press in horror films, but myself, I like them tonnes.

Intrinsic properties of a technology influencing its spread

I have been looking at factors that influence the spread of a technology. My emphasis has been different from most studies, in that it concentrates on intrinsic properties of the technology rather than external factors such as the intellectual property regime. The work is aimed at innovators wanting to ensure a wide diffusion of their individual technology, rather than at policymakers wanting to encourage broad technology diffusion. The intrinsic and external factors interact closely, so much of the reasoning overlaps.

The intrinsic factors are:
1. How much information is embedded, that is, being used by virtue of the content of a capital good rather than explicit knowledge of users
2. How much information is codified, i.e. available in a code of operation, and how much of the codified information is written
3. What the capital requirements are
4. What the performance is as expertise in use varies
5. What the size of the market is
6. Whether the produced good is used as an intermediate or final good
7. Who owns the technology
8. Where the technology is being developed or used

The list captures most of the themes in the literature.

US dollar devaluation?

Should the dollar be devalued by deliberate US Government policy? There have been recent discussions among economists and in the media about the benefits and problems associated with the dollar having a weaker role in the international economy. Here's a report coming out of Russian media today, for example.

Devaluation would probably not be a matter of deliberate exchange rate fixing by the US government, but rather taking measures to make the currency less valuable, such as inflating the domestic economy by expanding the money supply with national output growing more slowly. Then the currency would be less valuable against other currencies and US exporters would find that their prices are lower when denominated in foreign currencies.

Devaluation could also increase welfare if there is monopolistic competition in international product markets. Under monopolistic competition, the market structure and profit maximisation motivations of companies combine, and products which could be sold profitably are not produced. Slight one-sided changes in exchange rates correct for the deficit if the companies are reluctant to adjust their prices in the face of small changes caused externally.

Devaluation has a bad reputation from the 1930s, as repeated competitive devaluation across countries is asserted to have contributed to collapses in trade. Some economists have claimed on the other hand that the devaluations in fact had small effects on trade in reality. Still other economists have asserted that it is not the actual devaluation or trade falls that primarily lead to the problem, but rather the discouragement to investment which they represent that leads to greater economic damage.

Whatever the merits of devaluation, the US Government may not actually have to undertake any active policy to devalue the currency if the implicit or explicit debates continue, since the worries about potential devaluation may lead to a small flight from the dollar and a small devaluation, which may be optimal from the US Government viewpoint.

Well and pump deterioration in Africa

Here's a briefing paper from the IIED on water provision maintenance in rural Africa. It asserts that tens of thousands of water supply points have fallen into disrepair, wasting hundreds of millions of development dollars.

The paper was highlighted on the UN IRIN news service here. If ever proper management of development monies was a concern associated with a certain political viewpoint, it is a mainstream concern today.

Cote d'Ivorian heads leading UK financial services company

An Ivorian is reported here to be the first black person to head a FTSE 100 company.

In my (admittedly not vast) experience, it is not very unusual to find an African expat at senior levels in European financial services, whether in managerial or consultancy roles.

Keeping a perspective on the global recession

There has been much attention on the global economic recession from the media, government, and international agencies. The recession in developed countries is disruptive, but not an enormous catastrophe.

The IMF is predicting a decline of around 3.5 percent on average in the world's leading economies next year. The fall is large, and puts the economy back to where it was three years ago. If governments or banks are guilty of incompetence they have lost three years of potential growth for everyone. There will be disruption and some people will have greater difficulties than average.

A three percent downturn would put the developed economies back to where they were in 2006, or to put it another way, in the third richest year in human history. Even if the economy contracts 25 percent - ie, goes through a Great Depression - the developed economies would still be in their tenth richest year in history.

Here's a satire pointing out the difference between current and past downturns.

Warnings of resource demand crises

The UK Government's Chief Scientist is warning of sharply rising global demand for food, water, and energy at the same time as climate change continues. He speaks here.

I am glad that scientists are keeping climate change and resource declines on the public agenda. The long-run effects do not always produce immediate headlines, so they have to be kept in the news in other ways.