Sunday, August 31, 2014

Should life evaluations be anchored to the best and worst periods of our lives?

Survey data on life satisfaction is a reliable tool for measuring some aspects of well-being. There is evidence (including in some research reported on this blog) that survey measures of life satisfaction are closely related to perceptions of achievement, personal relationships, standard of living, links to community, health and future security. There is also evidence that when people are asked to evaluate their life satisfaction they tend to think about things such as their career, romantic life, family, standard of living and health (See: Maike Luhmann

However, as previously discussed on this blog (here, here and here) there is a problem in comparing life satisfaction ratings from surveys conducted at different times because reference norms do not remain static.  When we are asked to rate our satisfaction with life we do so relative to reference norms, such as by comparing the quality of our lives with those of people we know, or by comparing our current lives with ‘the best possible life’. That means that we are rating our lives against benchmarks that can change as a result of such things as technological advances. For example, if we perceive that people living the best possible life have access to useful communications devices, such as iPhones, we may rate our own lives less highly if we cannot afford such devices.

If we see our lives improving in line with our perceptions of the best possible life, it is hardly surprising if we give similar ratings to their lives in successive surveys. It should be obvious that it would be a mistake under those circumstances to interpret stable ratings as implying that there has been no improvement in the quality of our lives. Before claiming that people are on some kind of hedonic treadmill that requires them to run faster to stay in the same place, researchers should be sure that the measurement tools they are using are actually capable of measuring progress.

Similarly, when researchers see life satisfaction ratings return to previous levels after people suffer some misfortune, they should be sure that they are using appropriate measurement tools before they claim that this means that the people concerned have not experienced any lasting loss of well-being. It is commendable and often therapeutic to “look on the bright side of life”, but if life evaluations reflect frames of mind it may be problematic to interpret them as a judgement about overall well-being.

That point can be illustrated by reference to a South African study in which conventional life satisfaction and happiness ratings were compared with scores on the ACSA scale. (See: Valerie MøllerPeter TheunsIda Erstad and Jan Bernheim, ‘The Best and Worst Times of Life: Narratives and Assessments of subjective Well-Being by Anamnestic Comparative Self Assessment (ACSA) in the Eastern Cape, South Africa’, Soc Indic Res, 89(1) 2008.)

The ACSA approach to measuring well-being and changes in well-being was first suggested by Jan Bernheim about 30 years ago. Its distinctive feature is to ask survey respondents to rate their current well-being by comparison with their memory of the best and worst periods of their own lives, with the best period being given a rating of +5 and the worst period being given a rating of -5. The scale is left open so that subsequent scores higher than +5 or lower than -5 are possible if individuals consider that their lives have improved or deteriorated sufficiently.

The South African study involved 46 respondents, 20 of whom were patients in a TB hospital. In general, the three measures of subjective well-being were strongly correlated with each other, but there was weak correlation between life satisfaction and ACSA for the TB patients. Again, while there were no significant differences between the averages of conventional life satisfaction and happiness ratings of the TB patients and others included in the survey, on the ACSA scale the average ratings of the TB patients were about 30 per cent lower than for the others included in the survey.

The authors note that while they did not ask for life stories when they were obtaining ACSA scores, they observed that respondents tended to string the momentous events in their lives together, using anchor periods as reference points to shape a coherent narrative. Interviews lasted between half an hour and 45 minutes and respondents “generally had no difficulty with the task”.

A couple of years ago I wrote a post wondering why more use has not been made of ACSA. I am still wondering. It seems to me that it would be potentially useful to incorporate an ACSA question for a sub-sample of respondents whose well-being has been monitored over an extended period in longitudinal studies (such as GSOEP, HILDA and BHPS). The accounts of changes in well-being over time provided by those surveys would be more plausible if life evaluations were anchored to consistent reference points corresponding to the best and worst periods of the lives of respondents.

Sunday, August 24, 2014

What do we know about the aspirations of poor people in developing countries?

It seems obvious that if we want to help anyone to achieve their aspirations we should make an effort to find out what their aspirations are.  That is why I suggested in my last post that it would be a good idea to ask poor people about their priorities for economic development, rather than seeking to replace the Millennium Development Goals with another set of priorities generated by development experts and bureaucrats.

An obvious way to proceed would be to conduct surveys to ask people to select priorities from among the 17 goals proposed by the Open Working Group on Sustainable Development Goals. However, I am not sure that list is an adequate reflection of what we know about the aspirations of poor people in developing countries.

MoP2CoverbigThe book, Moving Out of Poverty, by Deepa Narayan, Lant Pritchett and Soumya Kapoor (published in 2009) is a good place to start to get some understanding of the aspirations of poor people in developing countries. The study collected information from 60,000 people in over 500 communities in 15 countries. The authors used a range of different data collection methods including focus group discussions, household interviews and interviews of individuals to obtain their life stories. They were aware that some of the methods they used to collect data may be subject to bias, but the methods chosen had the virtue of allowing poor people (and people who had escaped from poverty) to speak for themselves.

One of the major findings of the study was that poor people see poverty as an experience that can be escaped by individual effort, self-reliance and initiative, rather than an identity or fate resulting from personal characteristics (such as illiteracy). The evidence seems to support that view. There is a lot of movement into and out of poverty and there are typically more similarities than differences between households in poverty and those which have escaped poverty.

The views of the poor people covered by the study often reflect what the authors describe as “the hunger for freedom”. The concept of freedom that people have in mind encompasses individual liberty, but it is broader than that. It seems to be summed up in a discussion by women in Chinxe, Mexico, who said: “Freedom means having opportunities”. 

The authors present evidence that the freedoms and opportunities that poor people value are much the same as those valued by other humans: the freedom to speak their minds; the freedom to choose how to live their lives according to their beliefs and desires; freedom to live with dignity and respect (e.g. having enough money for daily expenses and not being beaten); freedom from fear and oppression (including the right to protest and vote); freedom of movement (including, for women, freedom from customary restrictions); and freedom from restrictions hampering the ability of people to find work, control their money, establish and conduct businesses, to own property and goods, and to sell their property whenever and to whomever they choose.

The authors suggest three principles that should guide future approaches to poverty reduction:
  •  All actions should seek to expand the scope for people in poverty to utilize their agency (i.e. their ability to help themselves) in both the public and private spheres.
  • Actions should seek to transform markets so that poor people can access and participate in them fairly.
  • Well-functioning local democracies can help poor people move out of poverty.

Unfortunately, the Open Working Group on Sustainable Development Goals does not seem to consider any of these principles to be sufficiently important to be reflected in future development goals.

Sunday, August 17, 2014

Why not ask poor people their priorities for an agenda to succeed the Millennium Development Goals?

A few years ago a senior official of the Australian government aid agency asked me my view of the Millennium Development Goals (MDGs).  My response was that I had not thought much about them. I am not proud of that. As a person who claims to have a strong interest in human flourishing I should have shown more interest in the MDGs, even if only to be able to articulate why I didn’t think their existence made a significant contribution to reducing world poverty.

If I did not have a strong interest in issues relating to human flourishing, there is a good chance that I would not even have been aware of the existence of the MDGs. World Values Survey data (for 2005-2009) shows that only 12 percent of Australians had actually heard of the MDGs. The relevant percentages varied widely among the 43 countries included in the surveys - from 64 percent in Ethiopia to 5 percent in the United States.

If asked about the MDGs now I would say that providing poor people with better opportunities should be the most important goal. That is mainly about opportunities to earn income. Poverty has some multidimensional aspects that are not adequately reflected in conventional measures of income. For example, it is important to recognize that people with disabilities can have greater needs than others with similar incomes and that income measures do not normally take account of such things as availability of safe drinking water. But when people have opportunities to earn income they are in a better position to help family members and to contribute to provision of public goods.

 Nevertheless, I would still struggle to list all the MDGs. The problem is that there are 8 to remember – including four goals relating to health issues. One of the goals that sticks in my mind is “Develop a Global Partnership for Development”, which seems to be mainly about flying bureaucrats to international conferences.

The most important thing to know about the MDGs is that good progress has been made to achieving many of them. The proportion of people living in extreme poverty has halved since 1990. Unfortunately, that still leaves about 700 million people in the world who are living on less than US $1.25 a day.

Much of that progress toward achieving the MDGs has to do with increases in economic freedom in China and India, and would have occurred if the MDGs did not exist.  Nevertheless, the monitoring and reporting process associated with the MDGs has served a useful function.

Meanwhile, a sub-committee of the Global Partnership for Frequent Flying – sometimes referred to as the UN General Assembly's Open Working Group on Sustainable Development Goals - has held meetings where it:
 reaffirmed the commitment to fully implement all the principles of the Rio Declaration on Environment and Development, including, inter alia, the principle of common but differentiated responsibilities, as set out in principle 7 thereof”.   
 “It also reaffirmed the commitment to fully implement the Rio Declaration, Agenda 21, the Programme for the Further Implementation of Agenda 21, the Plan of Implementation of the World Summit on Sustainable Development (Johannesburg Plan of Implementation) and the Johannesburg Declaration on Sustainable Development, the Programme of Action for the Sustainable Development of Small Island Developing States (Barbados Programme of Action) and the Mauritius Strategy for the Further Implementation of the Programme of Action for the Sustainable Development of Small Island Developing States. It also reaffirmed the commitment to the full implementation of the Programme of Action for the Least Developed Countries for the Decade 2011–2020 (Istanbul Programme of Action), the Almaty Programme of Action: Addressing the Special Needs of Landlocked Developing Countries within a New Global Framework for Transit Transport Cooperation for Landlocked and Transit Developing Countries, the political declaration on Africa’s development needs and the New Partnership for Africa’s Development. It reaffirmed the commitments in the outcomes of all the major United Nations conferences and summits in the economic, social and environmental fields, including the United Nations Millennium Declaration, the 2005 World Summit Outcome, the Monterrey Consensus of the International Conference on Financing for Development, the Doha Declaration on Financing for Development, the outcome document of the High-level Plenary Meeting of the General Assembly on the Millennium Development Goals, the Programme of Action of the International Conference on Population and Development, the key actions for the further implementation of the Programme of Action of the International Conference on Population and Development and the Beijing Declaration and Platform for Action, and the outcome documents of their review conferences. The Outcome document of the September 2013 special event to follow up efforts made towards achieving the Millennium Development Goals reaffirmed, inter alia, the determination to craft a strong post-2015 development agenda. The commitment to migration and development was reaffirmed in the Declaration of the High-Level Dialogue on International Migration and Development”.

I hope no-one tried to read all that. The reasons I included that passage should be obvious, so I will resist the temptation to try to explain.

Actually, as well as reaffirming their commitment to fully implement the outcome of their previous frequent flying activities, the Open Working Group on Sustainable Development Goals managed to suggest 17 sustainable development goals to succeed the Millennial Development Goals.

I don’t object to any of the goals specified. If anything I would like to add to the list. For example, I would like to see a specific reference to ending slavery and intergenerational debt bondage. As more people emerge from poverty there is also a case for greater recognition of the importance of reducing vulnerabilities and building resilience (but without the welfare state ideology being advocated by UNDP - see my last post for comment).

However, if 8 goals is too many for me to remember, there is not much hope that I will be able to remember 17. Following the recommendations of Bjorn Lomborg’s Copenhagen Consensus group, Matt Ridley has suggested 5 goals:
1. reduce malnutrition;
2. tackle malaria and tuberculosis; 
3. boost preprimary education;
4. provide universal access to sexual and reproductive health;  and
5. expand free trade.

Those seem to me to be worthy goals, but my views are no more relevant than those of the bureaucrats, diplomats and development experts who attend UN conferences. 

In using any top-down approach to determine the development agenda, bureaucrats and development experts are telling the world’s poor what their priorities should be in order to live happier lives. That is highly impertinent in my view.

As I see it, the best way to determine the development agenda would be by using surveys to ask the world’s poor about their priorities. Those priorities might not meet the approval of all members of the global partnership of frequent flyers, because they may differ for people living in different circumstances in different parts of the world. If that is what emerges, then so be it.

The over-arching goal should be to ensure more widespread opportunities for individuals to live happy lives, rather than to produce a uniform development agenda that conforms to the ideals of bureaucrats and development experts.

Sunday, August 10, 2014

Could the adoption of welfare states reduce vulnerabilities and build resilience in developing countries?

2014 HDR CoverI was delighted when I first noticed that Human Development Report 2014 has looked at the question of how poor people in developing countries can be made less vulnerable and more resilient in the face of natural disasters, commodity price instability and other threats to their well-being. In turning its attention to vulnerability and resilience the United Nations Development Programme (UNDP) has recognized the progress that has occurred in reducing world poverty in recent decades.

However, I am appalled that the UNDP has adopted an approach that is likely to lead to lead to greater welfare dependency and increased government debt in developing countries, and inevitably make the poor people in those countries more vulnerable to extreme poverty when fiscal restraint has to be re-imposed. There is something very peculiar about the idea that people can become more resilient by being made dependent upon unsustainable government largesse. The UNDP seems to have an obsessive desire to encourage developing countries to adopt the most expensive kind of welfare system imaginable.

At this point you probably think that I must be exaggerating. If so, you are wrong! The report does not argue for provision of a targeted safety net to assist those most in need of help at time they most need that assistance. In fact, it rejects that approach explicitly in favour of universal provision of basic social services such as education and health care. The authors argue:
“Universal coverage of basic social services is not only imperative – it is also possible at an early stage of development. And recent evidence shows that it can be achieved in less than a decade” (p 85).

The authors recite the view that when social benefits are targeted, “the middle class and elites are less willing to fund them through taxes”.  They obviously see little merit in public policy transparency. They also over-estimate their ability to pull the wool over the eyes of middle and upper-income voters. Such voters have not been backward in shifting the burden of funding universal welfare back to low income earners via taxes on wages or goods and services (as in Scandinavian countries) or in shifting it forward to future generations through increases in public debt (as in many other high-income countries).

When the authors discuss policies to promote full employment they show some recognition that a somewhat different approach might be appropriate in developing countries. They recognize a need for policies to address the vulnerabilities of people engaged in traditional agricultural activities and informal sectors. For example, they mention the role of micro-credit schemes, improved small-scale technologies and support for farmer cooperatives.

I was hoping to see some innovative thinking about food security in the report, but I didn’t find any. The issue is mentioned in the discussion of agricultural trade liberalization, where it is in the “too hard” basket. There is recognition that “spikes in the prices of food and other commodities are adding to hunger and starvation for the poor and vulnerable”, without consideration of how this could be avoided. There is recognition that farmers in developing countries often have to compete with subsidized agricultural products from developed countries, again without providing any suggestions about how this could be avoided. And there is this peculiar recommendation: “Agricultural liberalization needs to be selective in targeting goods mainly exported by developing countries to avoid increasing prices of food staples of developing countries”. So much for free trade, or even fair trade!

Actually, apart from that example of absurdity, I found the section on trade in Chapter 5 of the report to be one of the more sensible parts of the report.

While I am in a positive frame of mind I should also mention that the report has some informative diagrams showing progress in reducing world poverty. For example, Figure 2.6 (page 41) shows that for most countries the poorest 40 percent of the population have enjoyed more rapid consumption than the population as a whole over the period 2005-10. However, when the authors wrote about that Figure, what they emphasized was that consumption for those at the poorest end of the distribution has been slower than for the population as a whole in some countries where inequality has been high or rising. The three countries they cite as examples are Malaysia, China and Uganda. That seems to me to be grossly unfair to China and Uganda; in those countries, growth in consumption at the poorest end of the distribution has been much the same as for the population as a whole.

It was almost inevitable that the UNDP would produce a disappointing report about how to reduce vulnerabilities and build resilience in developing countries. People who work for international agencies are always subject to the temptation to see themselves as architects of human development. It would be overly optimistic to expect anyone writing a report for the UNDP to show an understanding the bottom-up processes through which economic development has tended to lead to growth of emancipative values and progressively greater efforts to protect vulnerable people from misfortunes.

The authors of the report seem to have hopes that the approach they advocate will influence international debate about the post 2015 development agenda, which is to follow the Millennium Development Goals. In my view their report should be ignored. The approach the authors advocate is a recipe for a return to more widespread poverty and misery throughout the world.

Monday, August 4, 2014

How can good health care be affordable in developing countries?

When you consider that there are people in high-income countries who are struggling to afford good health care, it might appear obvious that it can only be afforded by wealthy people, or by people who have access to the bank accounts of wealthy people (including wealthy taxpayers). That perception is not entirely wrong – access to the most advanced medical technologies is often costly. Research, equipment embodying high technology and extensive staff training have to be paid for one way or another.

Pharmacy on a Bicycle: Innovative Solutions to Global Health and PovertyHowever, it is surprising how good, and how affordable, the health care available to ordinary people in developing countries could be with appropriate technology and incentives. The book, Pharmacy on a Bicycle, by Eric Bing and Marc Epstein, provides many examples of good health care being provided at low cost in low-income countries.

The authors are well qualified to write on this topic. Eric Bing is a physician with an MBA, who works on global health challenges at the George W Bush Institute. Marc Epstein is a business school professor, who has a special interest in commercializing technology in developing countries. The authors acknowledge assistance of several other people including their editor, Troy Camplin.

The book is written around the acronym: IMPACTS.
I” stands for innovation and entrepreneurship. In some instances products have been designed specifically for use in developing countries. For example, to detect heart abnormalities General Electric designed a low cost ECG. The product was developed for use in India but is now marketed globally.
M” stands for maximizing efficiency and effectiveness.  An example provided is the Aravind Eye Center in India which uses a production line process to undertake a large number of surgeries per day. This reduces cost, but it also improves surgeons’ skills and enhances the quality of care they can provide.
P” stands for partner coordination. This is not always about government regulation. For example, VisionSpring, a non-profit organisation, has developed partnerships with schools and businesses to provide inexpensive spectacles to students and workers.
A” stands for accountability. As might be expected, the authors emphasize the need to set clear goals and targets, and to monitor and evaluate performance to support effective decision-making. This is easier said than done, particularly in the public sectors of low-income countries, but the authors manage to find examples to illustrate how accountability systems have improved performance.
C” stands for creating demand. The benefits of services are not always obvious to potential users. One method of creating demand discussed by the authors is the use of vouchers which enable consumers to obtain access to services at reduced cost. They can also create competition among providers and create incentives for them to give low-cost, quality care. Several examples are provided of successful use of vouchers, but the one that appealed most to my imagination was an experiment in Uganda where expectant mothers were given vouchers to take motorcycle taxis to attend a clinic for prenatal care, delivery and postnatal care.
T” stands for task shifting.  This involves shifting tasks from doctors to nurses and from nurses to community providers or patients. Task shifting reduces bottlenecks and reduces cost.  For example, nurses have been trained to conduct screening in a program for prevention of cervical cancer in Zambia. Photographs were taken as part of the procedure and reviewed on a weekly basis by doctors and nurses. Over time, nurses became nearly as accurate in their diagnoses as doctors.
S” stands for scaling. How can innovations that have proved successful for small groups of people be scaled up to reach more people? The authors claim:  “By focusing heavily on the fundamentals of program, process and passion, organisations operating in even the most challenging of conditions can achieve scale while maintaining outstanding quality”. The contribution the authors have provided on the scaling question seems to me to be a good example of the well-meaning, but ineffectual, approach that management experts tend to adopt when they are confronted with economic problems.

Readers might have gathered by now that I think the discussion of the scaling issue is the weak point of this book. In scaling up successful pilot programs to reach large numbers of people the prime consideration has to be to ensure that organisations (firms) have appropriate incentives to deliver high quality goods at low cost. It would be useful for more consideration to be given to the question of whether market incentives, such as those that drive high quality service delivery around the world in franchise operations such as McDonalds’ fast food restaurants, could apply to a greater extent to delivery of medical services in developing countries. An irrational aversion to the idea of McDonaldizing health seems to prevent governments from allowing health markets to function effectively in the interests of patients.

My overall impression of this book is favourable, despite the reservations just expressed. The authors have done an admirable job in demonstrating that there is potential for a lot more people in the world to have access to high quality, affordable health care.