by Jules Evans | Oct 7, 2011 | Cooperation and coherence, Global system, Influence and networks
Yesterday, I went to the British Academy to hear Richard Easterlin, the father of happiness economics, present his latest thinking, together with Andrew Oswald of Warwick University. Sir Gus O’Donnell, head of the civil service, was also there – and made an interesting interjection.
Easterlin asked the provocative question: does higher income raise happiness in poorer countries? His answer was ‘no, as far as the evidence goes’. He showed graph after graph of transition economies where the income has been rising sharply over the last decade, while the happiness levels remained flat. He focused on China, a country “where the rate of economic growth has been completely unprecedented, at almost 10% a year for the last decade. If any country would show an improvement in happiness, it would be China.” But it doesn’t. Another flat line. The only countries which showed noticeable drops and rises in happiness levels, as far as I could tell, where post-Communist countries, whose happiness levels showed a clear (and understandable) drop after the collapse of communism, and then a steady rise after that, only to flatten out again.
This famous flattening of average happiness levels despite rises in income has been called the Easterlin Paradox, and is perhaps the single most influential graph for happiness economics. It is used, over and over again, as evidence that governments should not be focusing on raising income, but instead on raising happiness.
I asked Easterlin: do any policies have any clear impact on national happiness levels? Perhaps the happiness flatlines we see in country after country is evidence not that we’re pursuing the wrong policies, but simply that our daily happiness levels are not very sensitive to major policy changes. Think about all the different political, economic and cultural changes over the last 50 years in the UK, and yet our happiness levels remain flat. Why is that? I suggest it’s because the measurement technique – asking people to rate their happiness between one and ten – simply isn’t good enough to pick up changes in quality of life over time. We adapt to our situation, and except in moments of extreme crisis, we always say ‘oh, about a seven’.
What do happiness economists expect? Do they think that, if governments pursue the right policies, the public will go from a seven, to an eight, until eventually, after say 30 years, we will all be shouting ‘Ten!’ before ascending in rapture unto heaven? Of course, given such a bounded numerical scale, people are going to say ‘about a seven’, even if their lives have actually got better or worse over time. We forget the bad times, and we also forget the good times. Our daily well-being is probably protected by our forgetfulness and our ability to adapt.
Happiness economists try to get around this by using country comparisons. ‘Look’, said both Oswald and Easterlin, ‘how Scandinavian countries are typically happier than Anglo-Saxon countries. This is because they spend more on health, education and unemployment benefits. If we did the same, we’d be happier.’ I’m paraphrasing, but that’s basically what they both argued. Now I’m personally all for higher education and health spending. But that sort of cross-country comparison completely ignores cultural differences.
To be convinced, I’d like to see examples within a particular country where particular policies have led to a clear rise or fall in national happiness levels. Do such examples exist, I asked. “Yes”, Easterlin replied. “There are clear links between employment and happiness levels in countries. Unemployment in the US has dropped markedly in the last three years, and happiness levels in 2010 were at their lowest for many years.”
At that point, the head of the civil service, Sir Gus O’Donnell, who was listening attentively in the audience, joined the debate. He said: “One of the things we’re trying to figure out is the adaptation effects. There’s a new paper out by Angus Deaton, which looks at the effect of the recession of US happiness levels, and it shows that happiness levels are already back to their pre-crisis levels, despite unemployment still being much higher than it was. There’s even evidence that people adapt quite quickly to traumas like losing an arm. So what does that mean for public policy?” (more…)
by Andy Sumner | Oct 7, 2011 | Conflict and security, Cooperation and coherence, Economics and development, Global system
Sesame Street is addressing head on the issues of 50m Americans living with hunger (see Alex post here on the staggering data in the Economist recently) by introducing a new character.
Lily, who doesn’t know where her next meal is coming from debuts on Sunday… Sounds political for a kids show?
Or perhaps a face saving reaction to the parody of the OccupyWallStreet protests (see also map of spreading protests here) that developed on twitter’s OccupySesameStreet – see comment by Mother Jones here).
Lily is sponsored by Wal-Mart Stores Inc.
by Andy Sumner | Oct 5, 2011 | Conflict and security, Cooperation and coherence, Economics and development, Global system
The ‘traditional’ foreign aid donors (aka the OECD DAC) released it’s latest report (here) and stats on aid (here) this week. This is of course amid different debates each side of the Atlantic (the UK’s 40% increase in aid amid major public spending cuts and the US aid cuts that the NY times reported on here with infographic here).
So, what does this week’s report and new data say on who spends what on aid?
A very quick ‘3 take-ways’ run down:
First, who get’s most OECD DAC aid?
A rather strange top 10 rather unevenly linked to poverty or income levels:
Turkey, Pal, Afghanistan, Ethiopia, Serbia, Morocco, Sudan, DRC, Ukraine, Egypt…
What kind of countries get aid most?
55% goes to low income countries; 45% to middle-income countries.
Finally, which countries are aid dependent?
Surprisingly, not as many as you’d think if one takes 5% or 10% of GNI (gross national income) in ODA (overseas dev assistance) for medium and high aid dependency.
What to make of all this? How closely are poverty and aid linked?
The world’s poor live in 3 places:
1. Half of world’s poor are in China and India – these countries (arguably) have sufficient resources and in fact are both foreign aid donors themeselves – aid to China and India is probably in the shared endeavour of global public goods, possibly concessional loans.
2. A quarter of poor live in other lower middle income countries (MICs) – again plenty of domestic resources here so no real need for lots of aid but many of these are also fragile states or have governance issues – Pakistan and Nigeria – that no one knows quite how to intervene (see some thoughts here).
3. And a quarter of worlds poor are low income countries (LICs) who unequivocally need aid but most LICs will be lower MICs in next decade so what happens to aid after that?
This all leaves aid in need of an overhaul I think (see aid 2.0 post here).
Maybe aid needs a rethink with objectives related to insuring against new global risks – climate adaptation, financial instability for example or tried and tested poverty interventions such as conditional cash transfers direct to the poor?
Happy to hear views below…
by Richard Gowan | Oct 5, 2011 | Africa, Conflict and security, Cooperation and coherence, East Asia and Pacific, Europe and Central Asia, Global system, Middle East and North Africa, North America
It turns out that my last post on the Security Council and Syria was wrong.
Exceptionally wrong, in fact.
Rather than acquiesce to a resolution condemning the Syrian government for repressing its people, China and Russia used their vetoes. And rather than support the EU-drafted resolution (as had seemed increasingly likely) Brazil, India and South Africa abstained.
This is a big set-back for the EU and the Americans, who were firmly behind the European initiative. It’s a big win for Russia, which would have been embarrassed if China had even abstained. And it’s a grim moment for Brasilia, Delhi and Pretoria, who have missed the chance to carve out a distinctive position in the Council on Syria, and opted to avoid a confrontation. This was a moment the “IBSA” countries could have seized to show why they deserved more respect at the UN. They missed it.
More analysis tomorrow. For now, congratulations to Gabon and Nigeria for voting for the resolution, refuting the claim that all developing countries are anti-interventionist.
by Richard Gowan | Oct 4, 2011 | Conflict and security, Cooperation and coherence, East Asia and Pacific, Global system, Latin America and the Caribbean, Middle East and North Africa, South Asia
It now looks like the Security Council will vote on a (still too weak) resolution demanding the end of the Syrian crackdown today or tomorrow. Russia is still bad-mouthing the proposal, drafted by the Council’s European members, but other powers are lining up to back it. Brazil – previously numbered among opponents of a resolution along with China, India and South Africa – looks like it’s on board:
In a joint statement issued the same day European nations were to seek a vote on a UN Security Council resolution condemning Syria’s crackdown on protests, EU leaders and visiting Brazilian President Dilma Roussef said the two sides “expressed grave concern” at the current situation in Syria.
“They agreed on the need to continue urging the Syrian authorities to put an end to the violence and to initiate a peaceful transition to democracy.”
The well-informed David Bosco predicts that India and South Africa will also vote for the resolution, although the Indians were fighting a rearguard action against it last week. He thinks that China and, in the end, Russia will abstain. Meanwhile, Turkey is giving the resolution full support from outside the Council:
Turkish Prime Minister Recep Tayyip Erdogan voiced support for the proposed UN resolution and said he would soon announce sanctions on the neighbouring country.
“The draft resolution before the council today is in the nature of sending a warning. We hope there will a positive outcome of this vote and that there will then be further discussions about whatever further steps need to be taken,” Erdogan told a news conference during a visit to South Africa.
The political picture could change again before the vote, and it can’t be repeated too often that the EU’s resolution has been watered down a lot , with a threat of sanctions reduced to near-invisibility. But I think that this episode underlines the point Franziska Brantner and I made in our recent update on human rights and the UN for ECFR: many non-Western powers, especially rising powers like Brazil, want to distance themselves from Russia’s obstructionism in UN debates. Even China is ready to step away from the Russians, as it did over Côte d’Ivoire. As we noted in our paper, and I repeated here last week, this opens up the EU’s options for coalition-building in New York. It looks like the EU is finally finding ways to use those options…
