Charles Kenny

Why do people die in earthquakes ? the costs, benefits and institutions of disaster risk reduction in developing countries

Why do people die in earthquakes? is a working paper issued in January 2009. Every year, around 60,000 people die worldwide in natural disasters. The majority of the deaths are caused by building collapse in earthquakes, and the great majority occurs in the developing world. This is despite the fact that engineering solutions exist that can almost completely eliminate the risk of such deaths. Why is this? The engineering solutions are both expensive and technically demanding, so that the benefit-cost ratio of such solutions is often unfavorable compared with other interventions designed to save lives in developing countries. Nonetheless, a range of public disaster risk-reduction interventions (including construction activities) are highly cost effective. The fact that such interventions often remain unimplemented or ineffectively executed points to a role for issues of political economy. Building regulations in developing countries appear to have limited impact in many cases, perhaps because of limited capacity and the impact of corruption. Public construction is often of low quality - perhaps for similar reasons. This suggests approaches that emphasize simple and limited disaster risk regulation covering only the most at-risk structures and that (preferably) can be monitored by non-experts. It also suggests a range of transparency and oversight mechanisms for public construction projects.

Crisis? What Crisis?

Crisis? What Crisis? is an unpublished short paper. It asks if a sense of despair regarding the state of development worldwide can be justified, or if the record suggests grounds for greater optimism.

Is Africa a Failure?

Is Africa a Failure? is an unpublished short paper. The usual way to refer to the performance of African countries over the forty or so years since independence is as a ‘crisis,’ or even a ‘rot.’ In these versions of Africa’s recent history, there is but one thing to argue over –who is to blame. This does, however, raise the question, ‘at what has Africa failed?' The answer for parts of the continent is clear –but these cases do not make up the majority (or even a sizeable minority) of the region. In many important respects --not least health-- Africa’s post-colonial record remains one of considerable success.

A Note on the Ethical Implications of the Stern Review

A Note on the Ethical Implications of the Stern Review is an unpublished short paper.  The Stern Review adopts two interesting elements in its calculation of the costs and benefits of climate change mitigation.  First is a ‘global welfarist’ approach that values the utility of the World’s people (now and into the future) equally, and sets global utility maximization as the correct goal for policy.  Second is an assumption of a declining marginal utility to income.  Consistent application of the ‘global welfarist’ approach and the declining marginal utility of income together would demand an urgent process of global income redistribution.  Over the long term, this might see the richest ten percent of the World’s population facing an average redistributive tax rate in the region of 82 percent.  A version will be published in the Journal of Environment and Development.

What Is Effective Aid? How Would Donors Allocate it?

What Is Effective Aid? How Would Donors Allocate It? was issued as a World Bank Policy Research Working Paper in September, 2006.  There are significant weaknesses in some of the traditional justifications for assuming that aid will foster development. This paper looks at what the cross-country aid effectiveness literature and World Bank Operations Evaluation Department (OED) reviews have suggested about effective aid, first in terms of promoting income growth and then for promoting other goals. This review forms the basis for a discussion of recommendations to improve aid effectiveness and a discussion of effective aid allocation. Given the multiple potential objectives for aid, there is no one right answer. However, it appears that there are a number of reforms to aid practices and distribution that might help to deliver a more significant return to aid resources. We should provide aid where institutions are already strong, where they can be strengthened with the help of donor resources, or where they can be bypassed with limited damage to existing institutional capacity. The importance of institutions to aid outcomes, as well as the fungibility of aid flows, suggests that programmatic aid should be expanded in countries with strong institutions, while project aid should be supported based on its ability to transfer knowledge and test new practices and/or support global public good provision rather than (merely) as a tool of financial resource transfer. The importance of institutions also suggests that we should be cautious in our expectations regarding the results of increased aid flows.

The Trouble with the MDGs

The Trouble with the MDGs: Confronting Expectations of Aid and Development Success, co-authored with Todd Moss and Michael Clemens was published as a Center for Global Development Working Paper (No. 40) in May 2004.  The Millennium Development Goals (MDGs) are unlikely to be met by 2015, even if huge increases in development assistance materialize. The MDGs are a set of quantitative, time-bound targets for indicators such as poverty, education and mortality in developing countries adopted unanimously by the UN in 2000. However, the rates of progress required by many of the goals are at the edges of or beyond historical precedent. At the same time, there appear to be limits to the degree to which aid can contribute to development outcomes. Estimates of the ‘cost’ of reaching the MDGs are nevertheless frequently misinterpreted to mean that a certain quantity of aid—such as the oft-cited $50 billion—could cause the Goals to be met. Despite many benefits of the MDGs, there has been little discussion so far of potential costs of the specific form taken by these goals, especially the creation of unreasonable expectations about what is achievable in a short time frame and about the role of aid in the development process. Many countries making extraordinarily rapid progress on MDG indicators, due in large part to aid, will nonetheless not reach the MDGs. Unrealistic targets thus may turn successes into perceptions of failure, serving to undermine future constituencies for aid (in donors) and reform (in recipients). This would be unfortunate given the vital role of aid and reform in the development process and the need for long-term, sustained aid commitments. Though goal-setting can be useful, these particular goals might be better viewed not as practical targets but instead as valuable reminders of the stark contrast between the world we have and the world we want, and as a call to redouble our search for interventions to close the gap more rapidly.

A summary version in French was issued by Courrier de la Planete No. 76.  A summary version in English appeared in Sustainable Development Law and Policy VI, 1, 2005.  A brief on the paper was issued by the Center for Global Development in September, 2005.  The paper is forthcoming in World Development.

The Price of Oil

The Price of Oil: is it Low and is that Bad? co-authored with James Bond, was published in the International Journal of Global Energy Issues 17, 4, 2002.  The long-term price of oil should rest near its long run marginal cost (LRMC). Past price history and both demand and natural supply factors suggest that an oil price in the low teens is closer to the LRMC than the prices experienced over most of the last 25 years. For oil producing countries, this low price might not be as damaging as is often supposed - and might indeed encourage higher long-term growth. For oil consumers, low prices offer the opportunity to reform markets and reduce subsidies, with positive impacts on electricity rollout, development and the environment. For oil companies, low prices suggest the need to create new profit opportunities, but some of the more flexible and competitive players have already begun to show that this is possible.

Written when the price of oil was well below $20, the paper's prediction that oil prices would remain low looks a little weak...

Stock Markets in Africa

Stock Markets in Africa: Emerging Lions or White Elephants? co-authored with Todd Moss, was published in World Development, 26, 5 (1998). The number of stock markets in African countries has doubled over the last 7 years. Although these markets remain small and illiquid, they are growing rapidly, and will become an increasingly important part of many African economies. Using examples taken from experience in other developing regions and Africa’s recent past, this paper evaluates the common economic criticisms of stock markets and the political pitfalls involved in their operation. It concludes that the positive economic effects of bourses on African economies are far larger than any negative effects, and argues that the political costs can be mitigated while political benefits can also be gained. It finishes by suggesting reforms that can be put in place to reap more benefits and further reduce costs from stock markets on the continent.

It was reprinted in S. Mensah and D. Seck African Emerging Markets: Contemporary Issues Vol. 1 (Accra: African Capital Markets Forum).