India’s response to open defaecation

A billion people in the world defaecate in the open, largely because they have no toilet.  Half of them are in India. The graph below comes from an atlas of the Sustainable Development Goals produced by the World Bank.

SDG6.2

The government of India hoped, five years ago, that it could end open defecation by 2019.  It is well behind that target, but claims that 72.3 million toilets have been constructed, out of a target of 110 million. Reports from India number such things in lakh, a unit of 100,000; 72.3 million is 723 lakh.  The position was slightly confused last month by the Prime Minister’s claim that the state of Bihar had constructed 8.5 lakh, that is 850,000, toilets in a week – it seems that the toilets have been constructed, but not so quickly.

The Economist is sceptical about the figures more generally; some of the toilets that were supposed to be constructed appear not to exist, the claims of one state to have ended the practice have been shown to be false, and besides some people continue to defaecate in the open even though they have a toilet.   In Bangladesh, improved sanitation has been linked to education about hygiene, to great effect.   Regardless, the government deserves some credit for the priority it has given  to issues that are intended to make people’s lives better – including housing, electricity, financial inclusion and sanitation.

 

Proxy means tests don’t work

A review of the effectiveness of proxy means tests by Brown, Ravallion and van de Walle finds that they are not an effective way of concentrating resources on the poor. The process is simply not accurate enough.

“Standard PMTs help filter out the non-poor, but exclude many poor people, thus diminishing the impact on poverty. … The prevailing methods are particularly deficient in reaching the poorest.  … The most widely-used form of PMT in practice does only slightly better on average than an untargeted universal basic income scheme, in which everyone gets the same transfer, whatever their characteristics. Even under seemingly ideal conditions, the “high-tech” solutions to the targeting problem with imperfect information do not do much better than age-old methods using state-contingent transfers or even simpler basic income schemes.”

Proxy means tests are being used because poor countries just don’t have the quality of information to make fuller assessments work.  As many critics of means testing have pointed out, richer countries don’t have the capacity to do it either.  People’s incomes fluctuate, boundary problems are intrinsic, people don’t understand what should be included and what should not be, and take-up is consistently poor.

There is however one large reservation to make about this study’s findings.  There have to be doubts as to whether any country, rich or poor, really has the capacity to produce the kind of information that detailed quantitative studies of this kind call for.  This study points to the difficulty that any test has in determining whether or not specific individuals are poor.  The standard they use to verify the connections, household consumption, is not absolute proof of poverty; it’s an indicator.  It’s probably more valid than some other indicators, but it isn’t perfect and it is just as difficult to collect as income.  I happen to agree with the paper’s conclusions about proxy means tests, because they happily coincide with my own judgment, but nothing can be supposed to be proved beyond doubt; the core information that the analysis is built on is not good enough, and it cannot be.

A consultation on the claimant count

The DWP has issued a consultation about changes to the claimant count.   Once upon a time, we used to have a count of the numbers of people who were unemployed.  That count was persistently too high, despite a long series of downward revisions.  In the 1980s the government started to use the ‘claimant count’ instead, focusing on benefit receipt and excluding many people who were looking for jobs but who weren’t claiming benefit.  The claimant count series goes back to 1971; it correlates with unemployment figures, but it is usually lower. Now, all too predictably, the claimant count has been rising.  It’s happened because the rules of JSA, ESA and Universal Credit demand that people are treated as looking for work.  The two options in the consultation are both intended to massage the figures so that things don’t look quite so bad.

There is another option, of course.  The ONS already keeps figures from the Labour Froce Survey, which counts unemployment in the terms of the international definition used by the ILO.  The series goes back to 1984, when the government dropped the old count of unemployment.  It has also stopped using the claimant count from its Labour Market Statistics, because it’s meaningless as an economic indicator.   Indicators are not particularly useful when the conditions they’re kept under change.  So why are we using the claimant count at all?

“No-one is illegal”

I came across this slogan for the first time earlier this week, in a café in Oświęcim, shortly after a visit to the extermination camp at Auschwitz.  It struck a chord, for more reasons than the obvious one. There’s something deeply disturbing about with any system that accuses people, not of offending, but of being an offence – making their very presence a matter for the criminal law.

The words and the logo are the badge of a movement, “No One is Illegal”,  described on Wikipedia as a “loosely connected international network”.  The  groups describing themselves in these terms take subtly different positions – “a world without borders” (Sweden), an end to immigration controls (UK) , or “freedom to move, freedom to return, freedom to stay” (Canada).   (These are not the same thing: the first of these is about status and citizenship, the second about movement, the third about membership.)  It is probably fair to say that the movement represents some extreme viewpoints; but sometimes, thinking about the extremes can help to clarify issues that matter for those of us who live in the murky, muddy middle.  The challenge that No One is Illegal puts before us is this:  can immigration controls be justified?

The basic arguments for free movement are these:

  • Individualism – that every individual should have a choice of where they live, and opportunities to improve their lives through their own actions
  • Freedom – people are free to move, and no-one has the right to deny them a chance of a decent life
  • Free markets – the efficient operation of labour markets depends on the movement, not just of goods and services, but of people.
  • Humanitarianism. Migrants are not fleeing war, famine and disease lightly. People have a duty to each other, including a duty to strangers.
  • Arguments about consequences.  The effect of denying people access to legitimate means of movement has been disastrous – a human rights catastrophy that has costs the lives of tens of thousands of people.   People use boats or walk because they cannot fly or drive.   They use dangerous, illegitimate routes because the safe, legitimate routes have been closed to them.

No One is Illegal starts from the premise that everyone has a right to be where they are.  If immigration controls are to be justified, there have to be some considerations to set against that presumption.   The key arguments for control are these:

  • Communitarianism.  People in different places have connections, networks, shared values and culture that have to be respected.  Migrants are not excluded, but have to be integrated; free movement is not compatible with this.
  • Citizenship.  Citizenship can be understood, for this purpose, as membership of a social and political community; membership depends on status, mutual obligations and relationships with the wider community, not just on physical presence.
  • Pragmatism.  Migrants can be admitted when they are useful for a nation, and excluded when they are not.
  • The argument about capacity.  If people are going to be absorbed into any new society, there have to be the services, facilities and infrastructure to support them.  This, like the communitarian argument, does not mean that migration is excluded; it means that it needs to be controlled.

(There are also lots of bad arguments for restricting migration, including racism, ethnocentricy, and the defence of privilege.  I am not going to look at them here, except to note that they have been made.)

All of the the arguments for free movement are good ones, and some are very strong; but I am not convinced that they trump  all the arguments for some controls.  Even if people should be able to move much more freely, some thought has to be given about integration and management – housing, education, medical care, language and so on.  The countries which are most welcoming to migrants are the countries which do just that.

That brings me back to the slogan, “No-one is illegal”.  What, if that was more generally accepted, would that mean? Taken to the extreme, it could be taken to imply a free-for-all, or or an unregulated labour market, or unrestricted laissez-faire.  However, the position does not need to be taken so far (and I doubt that the supporters of the principle, many of whom think of themselves as ‘anti-capitalist’, mean to say that). In general terms, it implies only:

  • that being present in a country is primarily a question of fact, not a legal status;
  • that countries which intend to regulate migration need to accept that migrants have rights, too; and
  • that it should not be a criminal offence simply to be present in a country.

The arguments considered here would mean that migration can still be controlled by regulating and managing permissions to reside, and taking steps to integrate migrants.  For the UK, it seems to me to follow that :

  • The UK has a responsibility to manage the integration of migrants, to ensure appropriate facilities and access to services;
  • The onus of showing that a person does or not not have permission rests with the authorities, not the individual;
  • While some permission to reside may be explicit, permission to reside is  also implicit in a range of actions that governments may take, including levying personal taxation,  licensing actions (e.g. issuing a driving licence), regularising employment (National Insurance numbers) or recording the presence of the person (births, marriages or divorce).    It follows that any of these could be considered to be proof of residence.
  • The rule which has applied since 1971 – that being present without permission is in itself a criminal offence – is wrong in principle, and should be discontinued.

I should add one further issue, which is not implicit in the slogan: the principle of natural justice, which is that no person should be deprived of his or her liberty without due process and a hearing.  That should be true for everyone that the state comes into contact with, regardless of nationality, status or permissions.

Shamefully, the Home Office is harassing British citizens

This note was posted on Twitter by David Lammy MP.  Lammy writes:

I am disgusted and appalled by the case I have just received. My constituent arrived from Jamaica in 1964 aged 6. He has shown me his letter from the Home Office telling him that he will be deported despite having a National Insurance card from 1974 & NHS documentation from 1964.

I cannot say, in all honesty, that I have never seen anything like this, but I did hope never to see it in the UK.  Over the last 18 months or so, I have been reading, in short bursts, a fairly detailed account of the life of Jews in Vichy France – it’s hard to take, and I’ve still not finished the book.  Most of my father’s family escaped from France, because my grandfather was English, but others, like his cousin and aunt, didn’t; they’d thought they were French. For those who stayed, the little restrictions added up piece by piece.  At first people couldn’t go out at certain hours, then they couldn’t work or earn.  People who conformed to the rules, reporting to the authorities as requested,  realised too late what was happening.

Governments may find it convenient to blame this policy on mistakes or insensitivity, but it’s much worse than that.  This policy breaches the most basic principles of natural justice:: it offers a sentence before a verdict, and a verdict before a hearing.  It threatens people with bodily force, and we have to presume that the threat has been carried out.  It denies UK citizens the rights of their citizenship.  As David Lammy has said, the people who came to Britain before 1971 don’t need to be granted UK citizenship – they were UK citizens before they arrived.

There’s more.  The Home Office has ignored the evidence it was offered.  It has responded aggressively to enquiries from legitimate citizens and residents (including EU nationals).  It has denied people access work, health care and employment.  It has created a situation where the only most sensible thing for a citizen to do may be to hide.   And it all results from the deliberate decisions and actions of those in power.

I’ve seen some bad administration in Britain in my time, and some shameful decisions. This may be the worst.

Experiments with Basic Income were never going to settle the arguments

Many advocates of Basic Income will be disappointed at the decision in Finland to discontinue the experiments.  The decision seems to have far more to do with a change in the political climate than with any concern about how Basic Income operates; but moral judgments about rewards or disincentives are not the sort of issue that can be resolved with a proof of concept.

The experiments were always likely to be inconclusive. There are things that tests can show – for example, whether there are issues in the mechanisms of payment – and things they can’t, such as the impact of basic income over a person’s life cycle.  If anyone imagined that two years of Basic Income would resolve arguments about work incentives, they haven’t been paying attention.  In the first place, Basic Income is designed to be neutral as to whether or not people work; in the second place, previous income experiments have generally shown incentive effects to be feeble (and the economists who are convinced there have to be such effects have had to work hard to isolate them).  There’s a more substantial problem.  We know, from the introduction of pensions after 1908, that pensions have materially changed the way that older people engage in the labour market; but we also know that the effects took seventy or eighty years fully to materialise.  What that demonstrates, in economic terms, is that not that labour supply is something that responds directly to economic stimuli, but rather that, over time that the curves are liable to shift, reflecting changing patterns of behaviour, norms, expectations and the economic context.   (Two world wars and a health service might have had something to do with it, too.)   A two year programme can’t possibly replicate or predict such effects.

I’ve not seen any evidence to  support the view that Basic Income materially changes work incentives; while there is reason to think that some people will take the opportunity to disengage from work, there will be others who will be encouraged into casual work or self-employment.   The principal concerns I have about BI are quite different – related to the distributive implications and the relationship to existing benefits.  Those issues won’t clearly be addressed by experiments, either.

How selective benefits affect people who are not being targeted

A technical study for the World Bank challenges one of the central arguments for ‘targeting’ the poorest – as well as posing a major challenge to conventional economic theory.  The report is snappily titled General equilibrium effects of targeted cash transfers: nutrition impacts on non-beneficiary children.   The first effect of cash benefits to selected poor people was substantially to improve the extent to which their children were able to get protein rich foods.  There were marked improvements in nutrition, particularly on stunting – the effect that malnutrition has over time, in limiting children’s growth.

However, the policy also had a side-effect: the relative price of that kind of food increased. That, in turn, had a further effect: it reduced the access of other children, children in families who were not getting benefits, to protein-rich foods.  The effect was clearest in poorer villages where more people were getting benefits.  “We find that weight-for-age is significantly lower and the likelihood of being underweight significantly higher in program villages that have high rates of saturation. Average height-for-age is also lower and stunting rates higher …”

There are two major implications.  The first is about targeting.  One of the key problems with selectivity has always been that a line has to be drawn somewhere: the effect is that people a little above the line are not necessarily being treated fairly relative to those who are just below it.  The way to avoid this is to make the benefits universal – which is what has been happening with basic health care and universal primary education.

The second implication is about one of the received principles of economic theory, ‘Pareto optimality’.  Most economic analyses about of suppose that welfare is increased if at least one person is made better off, and no-one is worse off.  I’ve argued in previous work (for example, my book Reclaiming individualism) that this cannot happen, because prices are relative to resources.  This  study demonstrates the effect very clearly.

Blaming the people who get left out

In Factfulness, Hans Rosling comments about the way that we underestimate the improvements in poor countries, and complain that their peoples are pathologically incapable of improving their situation, despite the evidence that they are doing just that. Here in Poland, I’ve been told several times, as I’ve gone to local agencies, that the reason why people are poor is that they come from poor, inadequate families.

When Keith Joseph set up the research on transmitted deprivation in the UK, the situation was admittedly complex;  the structures of the UK economy were long-established and it may well have seem that social services had been working with similar problems for a very long time.  But the research showed a very different picture.  In the first place, poverty was not continuous – people’s circumstances had probably changed within their own lifetimes.  Most people had a different experience from the previous generation: the determining factors were the economy, education, and – often forgotten -the impact of partnering.  People who were raised as poor might be disadvantaged, but most of them did not stay poor.  After the first generation, most people were already in different circumstances from their parents; there were continuities only for a minority. By the time we got to the third or fourth generation, any apparent continuities had disappeared.  When the researchers looked for families which had been consistently deprived over four generations, they couldn’t find any.

Poland has changed rather more rapidly than the UK.  Two generations ago, in the Communist era, the main experience of poverty was for people in work; then came liberalisation, and the casualties of reform; and now things are changing again.  In Lodz, where I’m working, the economy has been growing, and unemployment has more than halved in the course of the last six years.  Very few people have a life similar to their grandparents’.

Now, it’s not impossible to argue that, in the scramble for improvement, the race is to the swift – that the people who get left behind, in any generation, are the least engaged, the least competent or least worthy.   To accept that, we’d need to accept both that the system does make such a selection, and that it should.  We need to question the assumption that if people are still poor when things are improving, it must be their fault.

The Scotsman comes around to the idea of a universal benefit

I made a case, last December, for the removal of fees for burials and cremations. The Scotsman has just offered an editorial accepting that argument in relation to children, at least.

The majority of Scotland’s councils have scrapped burial fees for children. … Unfortunately, nine of Scotland’s 32 local authorities continue to charge bereaved parents fees of up to £800 for burials. We are not always convinced by arguments for universality. … But surely there is no debate to be had about the abolition of burial fees for children?

It’s pleasing that they’ve gone that far. I do wonder, however, that we don’t extend the argument a little further. Funerals are almost always a difficult experience, the expense of a funeral is (after a house and car) one of the largest that most people will ever have to incur, the present system for helping people in difficulties is riddled with anomalies, and there is no risk or incentive arguments that would mean it was not appropriate to offer people some help with costs. “We Scots”, the Scotsman argues, “have a good conceit of ourselves as a compassionate, humane lot.” So why stop at children?

Easterly argues that the Washington Consensus worked: post hoc, propter hoc?

Development economist Bill Easterly  has posted a new paper arguing that the “Washington Consensus” and structural adjustment might have worked after all.  These were the basis for the liberal market policies forced on developing countries by the IMF and the World Bank in the 80s and 90s.   The argument is that although most of the measures failed to show any consistent benefits at the time, subsequent improvements in development might not have happened without it.

There are three core problems with that position.  The first problem is evidential: showing that something happens over a long period of time does not show that a policy near the beginning is what started it.  If structural adjustment really did work, there should be evidence of it starting to work at the time, and evidence that countries which did it more faithfully had better results.  There really isn’t.  Second, the ‘policy outcomes’ Easterley uses as a test – currency value, inflation rates, trade shares and so on – are not necessarily the outcomes of policy at all; they are indicators that economies have avoided some of the problems that impede growth.  Third, over that length of time, there have been lots of other influences.  The massive improvements in recent years might just be attributable to poverty reduction strategies, the growth of democracy, improved governance, basic health care, the internet and the cellphone, the advancement of education, cash transfers, women’s rights and many other things.  The more influence we attribute to any of those – and I’d argue that they all matter – the less we attribute to structural adjustment.