Category: Public Policy

A key barrier to economic growth in the developing world is reliable access to the global information network: the Internet. A UN-sponsored study, “Information Economy Report 2005″ by the United Nations Conference on Trade and Development, (PDF) shows that one of the features of the digital divide between the developing and the developed world has to do with the cost of high-bandwidth Internet access. The report says “that the smaller, low-income Internet markets in developing countries, particularly in Africa, have been unable to attract sufficient investment in infrastructure, which – combined with lack of competition – results in bandwidth cost that can be up to 100 times higher than in developed countries.”

We’re not dealing here with simply the lack of hardware and software, as the UN’s One Laptop Per Child (OLPC) program might lead you to believe. Incidentally, the solution proposed by OLPC to the problem of the cost of Internet connectivity is to create mini-networks of OLPC users: “What about connectivity? Aren’t telecommunications services expensive in the developing world? When these machines pop out of the box, they will make a mesh network of their own, peer-to-peer. This is something initially developed at MIT and the Media Lab. We are also exploring ways to connect them to the backbone of the Internet at very low cost.”

It’s precisely this problem of connecting to the “backbone of the Internet at very low cost” that is the major issue. The problem has to do with the strength of developing world economies in general, infrastructure issues in particular, and a host of other related complexities. This is not a simple lack of materials. You need a robust and healthy economy to support the kinds of investments and development costs associated with these kinds of infrastructure concerns.

For some irony on the situation of the developing world moving into the digital age, check out the “back-to-paper movement” in the developed world.

HT: International Civic Engagement

Blog author: jballor
Wednesday, November 30, 2005
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The first lesson of Politics 101: When in trouble, look to your base. That’s what House Speaker Dennis J. Hastert is apparently doing, in his recent push to make sure the lighted tree put up in December on the U.S. Capitol be returned to its name of the last decade, the “Capitol Christmas Tree.” Its name had been the stunningly interesting and descriptive “Holiday Tree.”

You can expect any court cases involved over so-called “Christmas” trees to find the primarily secular and cultural signification of the “Christmas tree,” and likely validating their use by civil authorities. But in the meantime, the conservative religious base in the Republican party has another public symbol to rally around.

But in the case of the Capitol tree, I have to wonder if this is a kind of political posturing in part aimed at diverting attention from the behavor of federal lawmakers. This is the “trouble” I was referring to: burgeoning corruption, especially bribery, scandals within the Beltline.

Republicans have held control of both chambers of our bicameral legislature for a decade now, having taken over both the House and the Senate in 1995. Of course, the most recent charges have focused on the leadership of the majority party, but Democratic party leaders are not immune.

In any case, its quite clear how far the Republican agenda has come from the initial days of their majority standing, with the Newt Gingrich-led Contract with America, that pledged to “end the cycle of scandal and disgrace.” Beyond the shift from a Congress that shut down the government over a balanced budget to one that has overseen explosion of federal spending and deficits, we’ve seen a move to politics as usual, quid pro quo, evidence that “power tends to corrupt, and absolute power corrupts absolutely.”

It’s likely, too, that Speaker Hastert’s attention to the “Holiday Tree” is similarly politics as usual.

A good story on Moses Maimonides in this weekend’s Washington Post, “The Doctor Is Still In: Medieval Rabbi-Healer Maimonides Linked Body, Soul.”

A key contention is that Jewish doctors like Maimonides “associated healing with basic religious duty.” The main source for the article is author Sherwin Nuland, whose most recent book is on Maimonides. While Nuland caricatures Christians in opposition to Jewish religious interest in healing, the perspective is a valuable one.

The article does note that beyond Nuland’s interest in Maimonides as a doctor, “the bulk of his writing dealt not with the body and its ills but with the soul and the religious laws that govern humankind’s existence.”

On that note, I’ll pass along an observation from Keith Ward’s book Religion & Revelation, regarding the interpretation of apparently difficult passages in the Old Testament, in which God orders murder or genocide: “Commentators like Maimonides argue that since God is creator of all, he has the right to decree the destruction of anyone.” I think the account of the flood would be highly problematic if you didn’t take such a view. Amen, Maimonides!

A consensus has developed among activists on the left that Wal-Mart is bad for America, and particularly bad for the poor, not only in America (where wages are supposedly driven down) but also abroad (where suppliers allegedly abuse and exploit their workers). Check out this litany of social harms alleged to be caused by Wal-Mart. The organization that compiled that list – Wal-Mart Watch – even has a “faith resource guide” that pastors can use to whip up anti-Wal-Mart sentiment within their flocks.

Unfortunately, this appears to be yet another case of well-meaning activists pursuing a goal that will actually hurt those it is intended to help. Monday’s Washington Post notes that Wal-Mart is actually a progressive force in society:

EVIL! Or not.

Wal-Mart’s critics allege that the retailer is bad for poor Americans. This claim is backward: As Jason Furman of New York University puts it, Wal-Mart is “a progressive success story.” Furman advised John “Benedict Arnold” Kerry in the 2004 campaign and has never received any payment from Wal-Mart; he is no corporate apologist. But he points out that Wal-Mart’s discounting on food alone boosts the welfare of American shoppers by at least $50 billion a year. The savings are possibly five times that much if you count all of Wal-Mart’s products.

These gains are especially important to poor and moderate-income families. The average Wal-Mart customer earns $35,000 a year, compared with $50,000 at Target and $74,000 at Costco. Moreover, Wal-Mart’s “every day low prices” make the biggest difference to the poor, since they spend a higher proportion of income on food and other basics. As a force for poverty relief, Wal-Mart’s $200 billion-plus assistance to consumers may rival many federal programs. Those programs are better targeted at the needy, but they are dramatically smaller. Food stamps were worth $33 billion in 2005, and the earned-income tax credit was worth $40 billion.

Set against these savings for consumers, Wal-Mart’s alleged suppression of wages appears trivial. Arindrajit Dube of the University of California at Berkeley, a leading Wal-Mart critic, has calculated that the firm has caused a $4.7 billion annual loss of wages for workers in the retail sector. This number is disputed: Wal-Mart’s pay and benefits can be made to look good or bad depending on which other firms you compare them to. When Wal-Mart opened a store in Glendale, Ariz., last year, it received 8,000 applications for 525 jobs, suggesting that not everyone believes the pay and benefits are unattractive.

The whole article is quite illuminating. The moral of the story? Make sure that your good intentions are connected to sound economics.

Via Q and O

What, exactly, was the point of the recent Summit of the Americas in Argentina? President Bush’s participation there seemed to accomplish little more than to excite street mobs and vandals. And then there was Venezuelan President Hugo Chavez, doing his best Fidel impersonation as he led opposition to a U.S.-backed free trade agreement. Alejandro Chafuen, president of the Atlas Economic Research Foundation, uses the occasion of the summit to succinctly catalog the ills that plague Latin America. “With few exceptions,” Chafuen writes in the Washington Times, “Latin Americans have reverted to feel-good nationalistic populism, while rejecting free-market growth strategies: They can feel good while doing poorly.”

The heart of the problem is weak protection of property rights and, in some places, an almost complete disregard for the rule of law. The results are incredibly destructive. As Chafuen puts it:

Despite Latin American economic growth rates averaging more than 5 percent in 2004 and similar growth anticipated this year, “capital flows” are negative, meaning more money leaves than enters the region. This is not due to foreign debt but a continued lack of confidence among long-term investors. Not surprisingly, as Latin America expert Andres Oppenheimer has noted, “only 1 percent of the world’s investment in research and development currently goes to Latin America.”

This “feel-good, nationalistic populism” is also winning converts in the United States. Democrat Congressman William Delahunt of Massachusetts has acted as a go-between to bring discounted heating oil from Venezuela to his constituents, thereby giving Chavez an opportunity to tweak the Bush administration. Another deal is in the works through a congressman in the Bronx. Delahunt describes Chavez’s move as a “humanitarian gesture” and evinces little concern that he may be working at cross purposes with the State Department’s policy toward Venezuela. Delahunt said he works for his constituents, not Condoleezza Rice.

In a piece in the Providence Journal, Colombian journalist and Harvard fellow Maria Cristina Caballero, cheers the rise of Chavez.

Chavez, the socialist strongman, has emerged as a more ferocious — and popular — opponent to Bush than apparently any American Democrat. While Bush pushes policies to import oil and export democracy, Chavez exports subsidized oil to his friends, which include Cuba and China as well as the poor people of Massachusetts and the Bronx, and — he says — spreads the wealth.

Fortunately for Chavez’s friends in Masschusetts and the Bronx, they are not living under the “strongman’s” rule of law. They would find that his discounted heating oil and free medical clinics staffed by Cuban doctors comes at a very high price.

Blog author: jballor
Monday, November 28, 2005
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Hans Mahncke, an International Law and Trade scholar at Hong Kong’s Lion Rock Institute, takes to task recalcitrant NGOs in a recent TCS article. The essential sticking point is the inability to reform the WTO:

The WTO is plagued by two major faults. On the one hand, its rules have grown too complex, feature too many loopholes and allow for too much discretion on the part of those who actually understand them. On the other hand, if countries with greater negotiating clout cannot find a way to wiggle their way out of WTO commitments within the framework of multilateral rules, they simply circumvent these by entering into bilateral arrangements. Hence, assuming that NGOs are focused on a return to multilateralism, they ought to start investing their time and energy to lobby for fewer rules, rather than more.

This makes the point beautifully: the more complex and regulatory trade agreements are, the more likely they are to not be free. As Mahncke asks, “Ultimately, if someone, anywhere, wants to buy someone else’s goods or services at a mutually agreeable price, why should government, or NGOs, interfere with such an arrangement?” Good question.

Blog author: jspalink
Thursday, November 24, 2005
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Acton is starting a new ad campaign which aims to raise awareness of effective ways to overcome poverty and world hunger. We encourage everyone to view our ads and to consider them seriously as they join the rest of the developed world in extending a hand to those in need.

If you’re interested in promoting real solutions to poverty, join our partnership of religious leaders. Visit our website to access valuable educational materials and connect with other sound economic thinkers. Together, we can turn goodwill into effective action.

Blog author: jspalink
Wednesday, November 23, 2005
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The system that administers special education in the United States is one that “parents find unresponsive, and schools find expensive,” writes Jennifer Morse, Acton Senior Fellow in Economics. She takes a look at the implications of a recent Supreme Court ruling and comes up with a solution that involves the dreaded V-word: Vouchers.

Read the full commentary here.

Alan Anderson of the Sydney Morning Herald notes that Ronald Reagan’s joke about the Government’s view of the economy has become United Nations policy toward the internet. The Belmont Club blog notes that placing control of the Web into the hands of UN regulators will have far reaching negative consequences:

The United Nations: Working hard to create a less free and less useful internet!

One of the reasons the Internet has been so successful is that it has so far escaped the restraints of Filipino judges, Tunisian government officials and United Nations bureaucrats. Addresses which are published onto the root servers can be resolved and their content displayed, subject to the restrictions of their publishers. The United States, by refusing to regulate the Internet, has occupied the position of an information central banker maintaining the coin of the realm. If lower court Filipino judges and assorted bureaucrats get their way, the pathways of the Internet will be subject to bureaucratic gatekeeping, conducted in the name of “governance”. But the proper word would be debasement.

The moment the free flow of packets over the Internet is no longer substantially guaranteed, it will cease to be trusted. Companies which are building businesses worth billions over the Internet protocols would stop if they knew a relative of the Tunisian President had to be placated for commerce to continue. Applications such email, instant messaging, searches, e-commerce, online banking, virtual medicine — to name a few — would be at the mercy of bureaucratic caprice, not just in the United States, but in every swamp and backwater imaginable. In the end, governing the Internet, especially in the United Nations sense, might be indistinguishable from destroying it. But one can see how that would appeal to those who yearn for bad, bad old days.

Blog author: abradley
Wednesday, November 23, 2005
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The newest phase in the fight for digital/intellectual property rights involves the recent Digital Rights Management software from Sony. Apparently, Sony’s “protected” audio CDs have been installing a “rootkit” onto your computer, and opening up your computer to yet more malicious software on the Internet (as if it isn’t bad enough already without a Sony rootkit). There are a couple of things I want to say about this – first, a short description of exactly what the problem is; and secondly, a look at the ethical/moral implications of this situation. (All you Computer Science professors out there: this is a very good case study if you are teaching a class on Software Ethics.)

So, what exactly happened? Sony, along with many other music companies, has been brainstorming up ways to prevent people from copying audio CDs. This is mostly a reaction to the Napster phenomenon from the turn of the millennium, but also to continued audio piracy. Sony’s solution to the problem has been the sale of protected CDs that put software on a device that identifies the CD as legitimate and allows playback. The software that Sony CDs have been installing onto computers around the world is flawed and has opened up countless computers to new trojans and other malicious software. Sony has since released patches that “remove” the flawed code, although the updated software seems to be equally flawed.

What are the ethical implications? First, and foremost, Sony has been installing software on computers without the informed consent or knowledge of its general user base. While this is bad enough, Sony has been installing a “rootkit” onto your computer – a program that has administrative access to everything on your computer, and hides certain files. Even granting Sony the benefit of the doubt, this is simply poor decision-making and poor programming. To make matters worse, they’ve used allegedly plagiarized code. Sony, as a leader among their competition, should be excelling in all of these areas using honest, open, and transparent means. A company such as Sony should be at the forefront of developing software and/or hardware that is easy to use, SAFE, and effective, not software that is deceptive and dangerous.

One more thing to say before I’m done venting… In response to RIAA president Cary Sherman’s following statement at a recent press conference:

“The problem with the SonyBMG situation is that the technology they used contained a security vulnerability of which they were unaware. They have apologized for their mistake, ceased manufacture of CDs with that technology, and pulled CDs with that technology from store shelves. Seems very responsible to me. How many times that software applications created the same problem? Lots. I wonder whether they’ve taken as aggressive steps as SonyBMG has when those vulnerabilities were discovered, or did they just post a patch on the Internet?”

People generally know that software that they install may contain bugs, and there is a user end license agreement that specifies the terms of those situations. An audio CD that you want to listen to is not equatable to general software installation.