In analyzing the Canadian housing debate, it is useful to distinguish between two time periods: 2000–15 and post-2015.

2000–15: Chrétien, Martin and Harper

Figure 1 illustrates, post-2000, the annual increase in Canada’s population and annual number of housing units completed (all types). Between 2000 and 2015, the ratio of the two was fairly stable, somewhat less than two additions to Canada’s population (most but not all due to immigration) relative to each completed housing unit. Overall, during the Chrétien, Martin and Harper governments, aggregate supply of new housing was adequate. Few people were talking about inadequate housing supply.

Admittedly, there were other housing problems. A price spike took place in 2006–07, when the annual price increase reached 10 per cent (see figure 2). There was not much debate about the cause of the spike: the real estate speculative bubble in the U.S. housing market spilled over into Canada. In 2008, the bubble “popped” and a minor price decline followed in 2009. Post-2008, Canadians prided themselves on the rarity of bankruptcies in Canada as a result of better-regulated Canadian banks.

By contrast, in the United States there was legitimate fear of a worldwide freeze of financial markets as in 1929. The U.S. Treasury bailed out bankrupt large financial institutions, at great cost to American taxpayers. However, explosion of the housing bubble wreaked serious financial damage not only on major financial institutions but also on many middle-class Americans, who had invested in one or more houses on the basis of the conventional wisdom that housing prices always increase, never decline. As a result, much of middle-class America accepted the Tea Party interpretation of events: when house prices collapse, elites get bailed out; ordinary people go bankrupt. The political outcome was the victory of Tea Party Republicans in the 2010 congressional election.

In the early 2010s, the Canadian discussion of house prices was more or less limited to Toronto and Vancouver. These two cities have large immigrant diasporas and are the destination of 40 per cent of new immigrants. Much of the housing debate in these two cities turned on the hard-to-measure effect of wealthy offshore investors buying Canadian housing units as a safeguard for their wealth and a potential source of capital gain. British Columbia and Ontario brought in provincial legislation that attempted to limit foreign investment in housing – for example, taxes on “empty homes.” The two provinces realized modest reductions in house prices.

2016–present: Trudeau

A feature of Justin Trudeau’s government has been to champion multiculturalism and project a doubling of permanent immigration by the mid-2020s. It also encouraged the provinces to expand visa-based immigration. By 2019, the Statistics Canada estimate of the ratio of annual population increase to housing completions had nearly doubled from the 2000–15 ratio.

Given the second price spike in 2021–22, many housing policy analysts looked seriously at the combination of higher permanent resident numbers and visa-based de facto immigration. The articles in Inroads by Anne-Michèle Meggs and Pierre Fortin have made a significant contribution to the debate. The majority of visa-based immigrants have no intention of returning to their home countries; they hope to become Canadian citizens. For the years since 2020, Statistics Canada has been obliged to revise upward its estimates of total population – in 2021 and 2022, the revised estimates of annual population increase have exceeded one million.

It is hardly surprising that when we increase population by a million people annually – as opposed to 330,000, the pre-2015 average – we experience a second house price spike. The drop in house prices in 2023 has been due to a dramatic increase in interest rates.

In its summer 2023 retreat in Prince Edward Island, the Trudeau cabinet finally took note of the unexpected consequence of its post-2015 immigration policy. No doubt, the ministers studied the polls, which display a major change in public opinion. Between the Nanos immigration poll in March and the more recent poll in September 2023, opinion has changed: “accept more immigrants” declined from 15 to 8 per cent; “accept about the same” declined from 46 to 34 per cent; and “accept fewer” increased from 34 to 53 per cent.

As Trudeau repeats often, “Canada is a country of immigrants.” True, but one of the responsibilities of a sovereign country is to reach a compromise that acknowledges the negative as well as the positive implications of large immigration. Because of the Liberals’ under-the-table immigration policy, until recently there has been negligible public discussion of the implications for the housing market of tripling the pre-2015 population increase.

Belatedly, the provinces and Ottawa have now implicitly acknowledged that recent immigration numbers are a major cause of the spike in house prices and rents. To reduce immigration numbers, however, poses political problems for both Ottawa and the provinces. Ottawa has perhaps decided to reduce the number of postsecondary study visas. The federal immigration minister has, for example, acknowledged that 40 per cent of Indian students seeking study visas have fake reference letters. The prospect of universities and colleges receiving fewer foreign students, who pay up to four times the fees of domestic students, imposes sizable financial costs on provincial budgets.

A second problem to tackle is the impact of high rents in exacerbating homeless numbers. Ottawa and the provinces are increasing subsidies to encourage construction of more low- and middle-income rental units. To have a substantial impact, this strategy will require some combination of higher deficits and higher taxes.

At the time of writing (October 2023), no major political party at the provincial or federal level has argued openly for a lower immigration number (permanent residents plus visa-based arrivals).

Image: Kwaku Griffin via Pexels.

Earlier this year, I attended a Comparative and International Education Society conference in a five-star hotel in downtown Washington, D.C. For me, this was a new cosmopolitan community. The CIES brings together academics and practitioners engaged in education for developing countries. The largest contingent was USAID staff. Among bilateral donors, the United States plays the prominent role in financing pilot projects and thereby “nudging” host countries to pursue sensible education goals, such as learning outcomes, that host governments are often reluctant to pursue. The U.K.’s smaller equivalent does the same.

Some of the attendees were education professors; some were education PhD students hoping to be hired by an NGO; some were representatives of private firms that manage donor-financed projects. The firms were either competing for new projects with “development partners” (i.e., countries with weak public education systems) or reporting on the projects they were implementing in faraway countries. The conference lasted ten days.

It was not all earnest discussion. Seasoned NGO managers came to Washington to catch up with one another’s activities. I attended as lead author of a book assessing primary education in South Asia.¹ Shahidul Islam, one of my co-authors, persuaded the society to host a launch for the book (Manzoor Ahmed, emeritus director of Bangladesh’s major education institute, is the third co-author). Shahidul, who spent two decades directing U.S. and U.K. education projects throughout South Asia, was comfortable in this community. He recruited Baela Raza, a senior Pakistani activist, to chair the launch. Baela is refreshingly blunt in discussing the state of education in her country. She emphasized Pakistan’s depressing “learning poverty” statistic – only 23 per cent of Pakistani children aged 10–14 are able to read at a Grade 2 level. (More on learning poverty below.)

Among the plenary conference presenters was Mme Sidibé Dedeou Ousmane, at the time Mali’s Education Minister. She enjoys an exceptional professional reputation for dedication to education. The chair of her session wanted the panel to discuss diversity, equity and inclusion. She was not much interested in such woke goals. In impeccable Parisian French, the minister discussed the problems she faced, the most traumatic being the effects of the loss to jihadis of the northern half of her country. Jihadis have shut down all schools in territory they control – for boys as well as girls. At present, there is no schooling for 600,000 school-age children in central and northern Mali. The contrast between Mme Ousmane’s school system and a five-star Washington hotel is stark.

Mali is one of six African countries that have experienced coups d’état since 2020 (Niger, Burkina Faso, Chad, Gabon and Guinea are the others). In some countries there have been more than one. In addition, there are simmering civil wars in Ethiopia, Angola, Nigeria, the Central African Republic, Cameroon, the Democratic Republic of Congo (DRC) Sudan and Mozambique. For reasons not discussed in the local media, Mme Ousmane subsequently lost her portfolio.

The World Bank divides developing countries into three groups based on per capita annual income: low (below $1,135), lower-middle ($1,136–$4,465), and upper-middle ($4,466–$13,645). There is a strong case that universal, reasonable-quality basic education, usually defined as primary plus some secondary schooling, is essential for low-income countries to escape “low” or “lower-middle” income status. Universal basic education is not sufficient for a country to prosper, but for many reasons it is a necessity.

There are exceptions. If governing elites capture sufficient resource rents and spend efficiently on basic services, countries with large petroleum and mineral resources can provide decent basic services to all citizens. Several African states (including Nigeria, Niger and the DRC) have large potential public resource revenues, but most don’t provide decent services. Most dissipate the potential through dismal national governance.

Dismal governance is at the heart of Africa’s “darkness” (apologies to Joseph Conrad). By almost any criterion, the quality of governance in high-income countries is better than in any African country. However, that is not a fair comparison. Britain became the world’s first industrial country more than 200 years ago because its governance, dismal by 21st-century high-income country expectations, was slightly more accommodating of industrial initiatives than that of other European countries. From David Hume and Adam Smith in the 18th to Charles Dickens and Karl Marx in the 19th century, numerous writers damned British governance with as much passion as some current African intellectuals acknowledge their domestic failures.²

Many, perhaps most, 21st-century African intellectuals are convinced that European colonialism is the major source of present “darkness.” However, debating the extent to which this is true gets us nowhere in addressing the question that Lenin made famous: “What is to be done?” To answer that question, we must first face the facts.

Africa is the continent with the lowest per capita incomes and the highest fertility rates. At present, its population is 1.4 billion and the average total fertility rate is 4.6. The World Bank estimates that 87 per cent of the next generation of teenagers is illiterate, and hence the majority will likely be doomed to informal low-wage employment, and early marriage for girls. The UN population projection is a doubling to 2.8 billion by 2050.³

Combined with probable further desertification in the Sahel, deforestation, higher temperatures and drought, a doubling of the continent’s population is a profoundly pessimistic prospect. The UN qualifies its projection: if African countries achieve better basic education, the continent’s “human capital” will rise, which will enable better-paying jobs in industrial and service sectors; more women will work; marriage will be delayed; the fertility rate will decline. Based on present trends, this optimistic scenario is doubtful. To realize it requires significantly better governance.

China offers one model. An authoritarian post-1950 government enabled China to impose a one-child policy for two generations. Whatever Mao’s sins, by the time Deng Xiaoping assumed power in late 1970s, Chinese public schools had created an adult industrial work force of both men and women able to read and do basic arithmetic. Other – less authoritarian – examples in the post–World War II era are Malaysia, Thailand and Sri Lanka. The probability of an equivalent development in Africa, hopefully in a more benign way than in China, is negligible.

The next section examines three basic socioeconomic measures: basic education, total fertility rate and poverty rate.

Education, fertility and poverty

The debate among economists is more or less over as to the importance of universal literacy and numeracy, the bottom rung of the “human capital” ladder. If quality primary education is limited to private schools for those able to pay, the bottom rung is effectively broken and the majority remain poor. In 2019, the World Bank introduced the concept of “learning poverty” (LP), a crude measure of basic reading ability comparable across all developing countries.⁴ The World Bank has published LP rates for regions and for 78 individual countries. The estimate for African children aged 10–14 able to read at Grade 2 level is 13 per cent.

As an example, consider Côte d’Ivoire. Over the decade prior to the COVID pandemic, the average rate of a cohort of children in Côte d’Ivoire surviving in school to the final primary grade (Grade 5) was 75 per cent; 25 per cent dropped out. The country’s LP rate is 83 per cent, consisting of the 25 per cent who are not in school plus, among the remaining 75 per cent who are in school, 77 per cent who cannot read Grade 2 stories.

Not surprisingly, median LP rates in Africa decline from 90 per cent among low-income countries to 71 per cent in the lower-middle income group and 46 per cent in the upper-middle group. There is ambiguity as to what is cause and what is effect. Is realization of decent basic education a major cause of higher future per capita income? Or does parental interest in decent education for their children arise only in countries that, for reasons other than education, have achieved higher per capita incomes?

In the long run, causation runs both ways. In one generation, the evidence for the first interpretation – that basic education comes first – is strong.⁵ Reliance on private schools enables some countries to achieve “lower-middle” income status without reasonable quality government schools. Such is the case in South Asia, where half the population is below the poverty threshold in table 1.

Another robust conclusion among developing countries is the positive impact of girls’ education, which increases family incomes and reduces the number of unwanted (at least by mothers) children. Campaigns for family planning have some impact; female literacy is a more powerful incentive to limit early marriage and reduce family size. The prospect of higher earnings than can be obtained in traditional activities is a powerful incentive to educate girls and postpone marriage. In general, educated girls exercise more authority in domestic family matters, which in turn reduces fertility rates. Median total fertility rates in Africa decline from 4.6 among the low-income to 3.9 among the lower-middle and 2.8 in the upper-middle group – which is nonetheless above the stable fertility rate of 2.1.

Unfortunately, sub-Saharan Africa has been unable to copy the post–World War II progress in southeast and east Asia. In some countries (such as Kenya), the key problem is tribal conflict. In countries with large Muslim populations, leaders of fundamentalist Islamic movements, many of which are brutally violent, argue that modernization is an insult to the Qur’an. Closing schools, in particular blocking education for girls, is a high priority, as can be seen in Mali’s loss of the northern half of the country. In western Africa, jihadi movements have conquered much of the northern rural regions of countries from Nigeria to Mauritania.

Governments can reduce poverty by direct cash transfers. Among the old without family support, cash transfers make sense. Also, governments can reduce poverty by subsidizing certain commodities, such as farm fertilizer or basic staples. However, provided governments have a long-term perspective, investment in quality basic education is the best means of reducing poverty.

Governance

Governance is an ambiguous concept. Francis Fukuyama has a (blessedly) short definition: “a government’s ability to make and enforce rules, and to deliver services, regardless of whether that government is democratic or not.”⁶ The only way to measure governance among countries is through public surveys. Probably the most sophisticated of the many such surveys is the World Bank’s Worldwide Governance Indicators (WGI).⁷ Annually, the WGI define national governance on six dimensions in about 200 countries. The scores among African countries in three of six dimensions are listed in table 2. Rankings are in the form of percentiles⁸:

  • Voice and Accountability: perceptions of the extent to which a country’s citizens are able to participate in selecting their government, as well as freedom of expression, freedom of association and a free media.
  • Political Stability and Absence of Violence/Terrorism: perceptions of the likelihood of political instability and/or politically motivated violence, including terrorism.
  • Government Effectiveness: perceptions of the quality of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation and the credibility of the government’s commitment to such policies.

The most salient dimensions of the WGI governance dimensions in terms of association with literacy (measured by learning poverty) are perceptions of political stability and government effectiveness. The role of democracy is much less prominent in responses.⁹

Occasionally, coups d’état in Africa have brought about effective governance. Two examples are the Tigray revolt in Ethiopia against the Marxist generals who ran the country before 1992, and Paul Kagame’s Tutsi-based victory in Rwanda over a Hutu-dominated government that in 1994 promoted genocide of the Tutsi.

Income inequality

Among OECD countries, high income inequality is often a background factor conducive to left- and right-wing populist demagogues upsetting the apple cart.10 The two most prominent in this century have been Donald Trump and Boris Johnson.

A simple measure of national income inequality is the ratio of the share of income among the top 10 per cent of the population to that of the bottom 10 per cent. Among high-income OECD members, Scandinavian countries display the lowest ratio; Canada is roughly in the middle (with a ratio of 8.4); the U.S. and U.K. demonstrate high inequality. The ratio among low- and lower-middle-income African countries is about 12:1. The median ratio (27.7) among African upper-middle-income countries is three times that in Canada (see table 3).

If high income inequality in OECD countries is a factor contributing to the success of populist demagogues, presumably high income inequality is a relevant factor in explaining political instability in Africa. The “top 10 per cent” in African countries are typically urban and well educated. In francophone countries, the urban elites historically relied on the French army as guarantor. No longer. Several of these countries (including Mali) have turned to Russian mercenaries as guarantor of urban security.

Disillusionment and the desire to leave

Among many Africans there is profound disillusionment with the quality of governance in postcolonial nation-states. The illiterate, largely rural, majority are drawn to populist authoritarian ideologues – Salafist Muslims or tribal leaders. Among the minority with education and skills, a desire to emigrate, either legally with a visa or illegally via traffickers, is common. The desperation that leads many Africans to want to leave is captured in these excerpts from an article based on informal interviews by journalists in five countries. The article was published in the Guardian in October and was a copublication with the nonprofit platform ZAM, which works with a network of African journalists.11

Nigeria: ZAM reporter Theophilus Abbah stops and questions builders, plumbers and doctors in the capital, Abuja. Nine out of 10 say they want to “japa”, the Nigerian term for exiting the country at the “slightest opportunity”. They cite poor governance, the dismal state of health, education and other public services, a massive wealth gap, corruption and the oppression of media and civil society organisations.

Cameroon: A funeral is being held for Bryan Achou (name changed), whose body was pulled from the Mediterranean and returned to his family less than a year ago. Friends and relatives commiserate about his fate. “He’s a child from my neighbourhood. In less than two weeks, we lost two children: one was in the ocean between Turkey and Greece, the other was in Tunisia,” says one woman. “Really, before 2035, this country will have been emptied of its citizens,” another mourner says.

This is a reference to the government’s new development paper Cameroon vision 2035, an outline of plans by the president, the 90-year-old autocrat Paul Biya, to turn his ailing, conflict-ridden country around. Judging by the resignation in the reactions to the remark, no one here believes it will succeed. There have been so many plans since Biya came to power in 1982.

Uganda: At Entebbe airport in Kampala, a human rights worker waiting for a flight sees a line of veiled young women seated in the departure area. They look Ugandan. An immigration officer tells him the group is travelling to Saudi Arabia and other Gulf states to take up jobs as domestic workers. The activist is perturbed. Many reports say that this domestic worker route often ends up with young women trapped in modern slavery conditions, where they suffer long working hours, beatings, rape and even murder. How have these Ugandans missed the numerous radio and news reports?

Kenya: Patricia Wanja Kimani, who experienced months of abuse as a domestic worker in the Gulf, says: “It’s like telling a child not to put its hand in the fire; it will still put a hand in the fire.” Kimani has written a book about her experiences and now works for an NGO that aims to warn Kenyan women off leaving. Her colleague Faith Murunga, who works at an NGO with a similar mission, says that Kenya’s young people, 67% of whom are unemployed, have few alternatives. As in Uganda, a wealthy elite does little to tangibly improve the lot of the majority. “We try to engage with the government. We do what we can,” says Murunga.

Zimbabwe: 95% of teachers would emigrate given the opportunity, according to a 2022 survey. The reason, says Obert Masaraure, president of the Amalgamated Rural Teachers’ Union of Zimbabwe, which conducted the survey, is that teachers earn too little to take care of their families “even without food or school fees”. Speaking to ZAM reporter Brezh Malaba, Masaraure says he regards a colleague who made it to Saudi as “so lucky”. Zimbabwe boasts some of the world’s richest gold and diamond reserves, as well as lithium and other minerals. But the proceeds don’t reach state coffers; many reports have exposed how income is appropriated by individuals in the ruling Zanu-PF party.

Continue reading “Mme Ousmane’s School System and the Prospects for Africa”

Ashoka Mody, India is Broken: A People Betrayed, Independence to Today. Palo Alto, CA: Stanford University Press, 2023. 528 pages. Deepti Kapoor, Age of Vice. New York: Riverhead Books, 2023. 548 pages. Ram Gopal Varma (director), Sarkar 3 (film).

Ashoka Mody is an economist, currently a faculty member at Princeton University. He has written a history of India’s politics and economic development over 75 years, from independence in 1947 to the management of COVID in 2020–22. Given his career – he spent over a decade at the World Bank, followed by nearly two decades as a senior official at the International Monetary Fund (IMF) – the reader might expect his book to employ the cautious style of international agencies such as the IMF. Admittedly, Mody discusses exchange rate policies, tax policies, income distribution, poverty rates and such. Neither the Bank nor the IMF would ever publish this book. Mody’s goal is to damn the priorities of Indian politicians, from Jawaharlal Nehru to Narendra Modi. Numerous academic colleagues (Indian, American and British) have reviewed the manuscript and provided implicit support for Mody’s prosecution.

Some academics, graduate students and motivated general readers will read Mody’s book. Its audience will probably be small. Those not willing to read a lengthy academic book can get a feel of Indian politics via “realist” authors and movie directors – such as Salman Rushdie’s Midnight’s Children, Aravind Adiga’s The White Tiger, the film Slumdog Millionaire (based on Vikas Swarup’s Q & A) and Ram Gopal Varma’s “Godfather” Sarkar films. Deepti Kapoor’s Age of Vice is a new novel with themes that overlap with Mody’s: unacceptably large income inequality; unacceptable corruption in government and business, much of it in construction and real estate; elite capture of state-level governments; and blurring of the distinction between corrupt politicians and corrupt businessmen. Her novel may not be as complex as Salman Rushdie’s, but it is a good read.

Mody’s two accusations

Mody’s first accusation is that, from the beginning, Nehru and most – albeit not all – Congress leaders failed to prioritize provision of universal quality services such as primary health care and, above all, basic education. Nehru was enamoured of large-scale infrastructure and industrial projects such as steel mills. He described himself as a socialist, but he avoided the complex administrative details required to establish school systems able to provide universal literacy and numeracy.

The second is that, after Nehru, no prime minister has given priority to containing corruption. Indira Gandhi abandoned her father’s discomfort with corruption. She described it as a “global phenomenon,” making no distinction between Scandinavia and India. Over the following decades, Mody argues, corruption expanded and has become deeply embedded in the conventions of India’s public services. The potential for democratic accountability to rectify matters has more or less disappeared.

By prioritizing Hindu nationalism (Hindutva) and dismissing Mahatma Gandhi’s insistence on religious tolerance, Narendra Modi has eliminated the possibility of a major political party campaigning successfully on a platform reversing the political rot dating back to Indira Gandhi. Among many items of evidence, Mody notes the rise in the share of members of parliament (Lok Sabha) with pending criminal cases: from 24 per cent in 2004 (Congress government led by Manmohan Singh) to more than 40 per cent in 2019 (BJP government led by Modi).

Mody’s conclusion, echoing Kapoor: India is broken.

Basic education failure in South Asia and the Sri Lanka exception

Mody devotes a chapter to Rabindranath Tagore. Tagore is known as a poet and novelist, but he was also a passionate advocate of universal public education: “In my view the imposing tower of misery which today rests on the heart of India has its sole foundation in the absence of education. Caste divisions, religious conflicts, aversion to work, precarious economic conditions – all centre on this single factor.”1 Tagore travelled widely; he examined public school systems in many countries. As mentor to Nehru, he (unsuccessfully) recommended that an independent India pursue the education strategies of countries such as the Soviet Union, Japan and Sri Lanka.

Akin to Canada in the mid-19th century, by the 1930s governments in the provinces of the British raj controlled domestic policy. Unlike the rest of the subcontinent, the leading politicians in Colombo prioritized universal basic education in the decades prior to Sri Lanka’s gaining sovereignty in 1948. The education minister, C.W.W. Kannangara, played a powerful role in cabinet debates over priorities. He and Tagore offered mutual support on the importance of education. By the time Kannangara retired from politics in 1947, Sri Lanka had an adult literacy rate of about 65 per cent, four times the rate elsewhere in the subcontinent. Tagore died in 1941. Had he lived past 1947, he would have been deeply disappointed.

Mody thanks his 96-year-old father for providing help on the early chapters dealing with the politics of Nehru’s reign. Presumably, this passage reflects both his and his father’s conclusion:

The government persisted in dedicating insufficient funds to primary education and spending those scarce education funds on higher education. Thus, India acquired a lopsided education system that did not serve the people and created the incentives among students for acquiring degree certificates rather than acquiring education. Corruption infiltrated the administration, especially, of colleges and universities.

Convincing evidence exists to confirm the conclusion of Mody and his father that, since 1947, India has continued to suffer a “lopsided education system.” Tagore’s “imposing tower” of illiteracy has shrunk over the last 75 years, but the majority of Indian children remain illiterate. The first five-year plan (1951–56) promised that all children aged 6–11 would achieve, within a decade, at least universal primary education and hence basic literacy and numeracy. Six decades later, in 2009, the Congress government enacted the Right to Education Act, which specified universal education to age 14. At the central and state levels, governments spent money on better school facilities but made no progress on reducing corruption in hiring and posting of teachers, decentralizing administration and increasing teacher supervision. Overall, student outcomes have not improved.

The only credible assessment of primary education outcomes across rural India is very large in-home surveys organized every two years by Pratham, a large NGO. The two key results of these surveys are the ability of Grade 5 students (the final primary grade in South Asia) to read a short story at a Grade 2 level and successfully divide a three-digit by a one-digit number. In the 2018 survey, the most recent pre-COVID, on average 50 per cent of more than 500,000 children surveyed could read the story; 28 per cent could do the division. Admittedly, the variance across Indian states is large.2

A new piece of evidence is the World Bank’s learning poverty statistic, a heroic attempt to compare basic literacy rates across countries in the cohort of children expected to be in upper-level primary grades. In India, the 2022 learning poverty rate (proportion of children between the ages of 10 and 14 who can’t read a Grade 2 story) is 56 per cent. That is, only 44 per cent of children in that age range can read at a Grade 2 level. The comparable rate in Bangladesh is 42 per cent able to read, in Pakistan 25 per cent. By contrast, 85 per cent of Sri Lankan children can read, at least at the Grade 2 level.

Failure to control corruption

The World Bank defines corruption as “the extent to which public power is exercised for private gain, including both petty and grand forms of corruption, as well as ‘capture of the state’ by elites and private interests.”3 Those engaged in corruption have an incentive not to divulge their illegal activity. Hence, measuring corruption is open to much debate. One respected measure of corruption at the national level is Transparency International’s annual Corruption Perception Index. In 2022, of 147 countries ranked top to bottom, India ranked 85th. Incidentally, the corruption in other South Asian countries is worse. Bangladesh ranked 147th, Pakistan ranked 140th, Nepal ranked 104th and Sri Lanka ranked 101st.4

Here is Mody’s abstract to Chapter 22 (“Modi Breaks India’s Fractured Democracy”):

A democracy works for the people when it provides public goods that help everyone enhance their own well-being. By that test, Indian democracy definitively betrayed its people. When Narendra Modi became prime minister , Indians suffered from poor quality education and health services, cities were chaotic, the judicial system worked only for some, and rampant environmental pollution was depleting the inheritance of India’s children. The centrality of construction as a growth driver was contributing to corruption and the injection of criminals in politics; this was true for even progressive states such as Tamil Nadu. With Modi’s ascent, an intolerant Hindutva became an added impediment to democracy. Modi’s initiatives to provide more toilets and gas stoves helped but made no dent in the broader lack of public goods. The 2019 election brought election spending, legislators facing criminal charges, and Hindutva to a new crescendo, sending Indian democracy into possibly irreversible decline.

Mody provides a critique of Indian business elites, politicians (in all major parties) and the judiciary. At time of writing (February 2023), it appears that Gautam Adani, head of a conglomerate with headquarters in Gujarat (Modi’s home state), has manipulated financial accounts. The result is a halving of Adani’s known corporate share values, previously $200 billion USD. The Economist’s summary of recent events is consistent with Mody’s:

The Modi years have in many ways eroded India’s checks and balances. His government has steadily undermined the independence of the courts and the police. The media are mostly too cowed to investigate the mighty as they once did. Few Indian newspapers would have touched a story about Mr Adani had an American firm not asked the tough questions first. Mr Adani himself recently bought NDTV, a news channel that was once critical of the government but is now supine.5

South Asia’s “realists”

Kapoor’s novel is partially an autobiography. Neda, a central character in the novel, is an investigative journalist for a Delhi newspaper. Kapoor was a journalist while in her 20s. She admits to participating in the dissolute lifestyle of Delhi’s young and rich. The second central character, Sunny Wadia, is the dilettante son of the powerful though thoroughly corrupt and brutal patriarch of the Wadia construction firm. The third is Ajay, son of an impoverished single mother whose husband has been killed by a neighbouring farmer. Ajay’s mother sells him to a trafficker of child servants and prostitutes. Ajay ultimately becomes Sunny’s personal assistant.

At times in the novel, Kapoor assumes the role of journalist and describes the tactics whereby the Wadia firm displaces slum dwellers in Delhi and buys up land titles of farmers with small holdings in the city’s outskirts. There is a corrupt beneficial link between the Wadia corporation and the chief minister of Uttar Pradesh. I don’t want to spoil the climax. Reviewers in the New York Times and the Guardian refer to Mario Puzo’s Godfather as a precedent.6 Both novels are based on the complex codependence of organized criminals and senior politicians. There are other literary precedents to note.

Kapoor has obviously been inspired, in terms of plot, by Adiga’s White Tiger, a brilliant satire and winner of the 2008 Booker prize. Adiga’s equivalent of Ajay is Balram, a very smart, very ruthless peasant from Bihar. He rises in status to become the driver for Mr. Ashok, owner of a coal mine. To get the permit for a new mine, Mr. Ashok must pay a very large bribe to the relevant cabinet minister in Delhi. As he drives his employer to the minister’s apartment, he slits Mr. Ashok’s throat and disappears with the duffel bag stuffed with cash. This provides Balram with the necessary financing to become a successful entrepreneur in Bangalore. The novel is written as a series of letters to the prime minister of China who is about to visit Bangalore and witness India’s high-tech developments there. Balram wants the Chinese guest to learn about the actual manner of conducting business in India, not the Potemkin village version prepared by political elites.

Much as Balzac, Dickens, Dostoyevsky and Gogol described the indefensible extremes of wealth, poverty and corruption in 19th-century Europe, Kapoor and Adiga are two of many realist novelists who describe the contemporary shape of Indian society. To these two can be added their Pakistani equivalents, Mohsin Hamid and Mohammed Hanif.

A link from Dickens to contemporary South Asian writers is Slumdog Millionaire, a film loosely based on Vikas Swarup’s novel Q & A that won the 2009 Oscar as best film of the year. The actors were all Indian; the director, Danny Boyle, was British. The equivalent of Fagin in Oliver Twist could be the thugs who recruit street children on a Mumbai garbage dump, blind them and set them up as productive beggars. The Mumbai Oliver and a young girl escape the clutches of Mumbai’s Fagins. He becomes a chawallah (tea seller), working for a television company that runs a popular quiz show; she becomes a prostitute. By good luck, Oliver finds a benefactor; by good luck, the chawallah becomes a quiz contestant and wins a million rupees. He elopes with the girl, who is liberated from a brothel. The ending is a Bollywood song and dance.

Ram Gopal Varma has, in the manner of Francis Ford Coppola, directed several “Godfather” Bollywood movies. He freely acknowledges his inspiration from Coppola and Puzo.7 His most recent Sarkar was released in 2017. Varma is here testing the limit of free expression in Modi’s India. Sarkar is a Mumbai don, the equivalent of Brando’s aging mafia don. The film introduces corrupt businessmen, corrupt politicians and corrupt police, as well as the role of vigilante justice. In Godfather II, the opening scene is an old man appealing to the don to revenge the rape of his daughter by beating up the rapist. In a similar scene in Sarkar, Sarkar’s lieutenants murder the rapist as he steps out of an expensive car parked at the entrance to a five-star hotel. As Al Pacino succeeds the old don, Sarkar’s “good son” agonizes over his family obligations. Ultimately, he sacrifices a peaceful domestic life in America with his fiancée and, instead, continues Sarkar’s tradition of vigilante justice.

The defence

Mody’s book is the prosecutor’s case against Indian elites. However, there is a defence case to be made. The defence is in the bullet points, with the prosecutor’s response in italics:

  • The share of the population living below the “low” income country poverty threshold of $2.15 USD per person per day8 has dramatically declined since 1947. It is now only 10 per cent. The World Bank classifies India as “lower-middle” income with a recommended poverty threshold of $3.65 USD per person per day. With this somewhat higher threshold, 45 per cent of Indians are poor.
  • India has had an impressive rate of per capita GDP increases since the turn of the century. The average annual increase from 2000 to 2019, the last year prior to COVID, was over 5 per cent, not as high as China but well above the increase among nearly all other “lower-middle” income countries. Despite embedded corruption and grossly inadequate public services, India illustrates that a country can achieve impressive growth rates. There is a ceiling to per capita GDP of “low middle” income countries with lamentable social services and high corruption. All “upper middle” income countries, such as China and Malaysia, deliver tolerably good education and health services.
  • Over the last 50 years, Indian life expectancy at birth has risen from about 50 to 70. The life expectancies at birth for both Sri Lanka and China are higher.
  • If we compare India 75 years after independence to, say, Britain 75 years after the publication of Adam Smith’s Wealth of Nations, we should discuss the Great Exhibition of 1851. It was an overly self-satisfied celebration of the British economy. It took another century before Clement Atlee, Labour Prime Minister following World War II, created adequate universal social services in the U.K. This is a legitimate argument against the British, but in post-1947 India everyone expected better than Britain in 1851.
  • Mody elaborates on the role of corruption in destroying the environment of the subcontinent. For example, the air in India’s megacities is undeniably dangerous to human health, but probably no worse than the air in London as described by Dickens in Bleak House (published in 1853). Given rising temperatures and sea levels, we cannot wait for a century before Indian elites assume social responsibilities.

These are five credible qualifications but, were I the judge, I would still endorse Mody, the prosecutor.

Continue reading “India’s Corruption Through Three Lenses”

Stefan Dercon, Gambling on Development: Why Some Countries Win and Others Lose. London: Hurst & Company, 2022. 360 pages.

Born in Belgium, Stefan Dercon now lives in the U.K. and is a professor at Oxford University. He is a worthy addition to the list of academics, mostly economists, trying to understand why some countries escape the World Bank’s “low income” category and reach at least “lower-middle income” status; why some stall at “lower middle” and others graduate to “upper middle.”¹

Table 1 lists the countries Dercon discusses at length. I have added Canada to drive home the fact that Dercon’s book concerns those in the first three categories – countries with per capita GDP far below that of high-income countries. Despite its phenomenal manufacturing prowess over the last half century, China’s current per capita GDP is only one third of Canada’s; India’s is one seventh. Dercon devoted his early career to Ethiopia which, until its post-2020 civil war, had a growth rate second only to China’s among the countries in table 1. However, after a quarter century of rapid growth, Ethiopia’s per capita GDP in 2019 was only 5 per cent of Canada’s.

I quote from Dercon’s preface:

A decade or so ago, I came to a realisation. I needed to radically rethink how development comes about. By then, I had one foot in academia – as an Oxford professor – and one in government – … as chief economist and the most senior technocrat in the UK’s Department for International Development. My moment of truth came not long after I first flew into Beijing … I never saw in China the extreme deprivation I had seen in Burkina Faso, Ethiopia, or India … In the 1980s China was the country with the largest number of people living in such deprivation … By the time I was travelling around China, more than half a billion Chinese had risen from those depths.

Dercon’s epiphany came while travelling across China. At the time of Mao’s death in 1976, per capita incomes in China and India were similar. By 2019, China’s per capita income was two and a half times India’s. Whatever criticisms might be made of World Bank estimates, there is no denying, Dercon insists, that China has lifted 500 million people, the equivalent of half Africa’s population, out of “extreme deprivation.” When Deng Xiaoping assumed power, he had no Soviet-style five-year plans to implement. What underlies the phenomenal development success of post-1978 China, Dercon concludes, is a pragmatic agreement among Communist Party elites to pursue economic growth.

Dercon’s epiphany is the importance of elite agency: “The political and economic elites have much more agency than is usually allowed by the historical approach to institutions.” (I discuss the institutionalists in the accompanying box.) Among “low income” countries, Dercon is not much interested in democracy and honest elections, constitutions with ringing statements on human rights, the ideal of politically neutral courts and politicians subject to rule by law, or efficient implementation of taxes. On all these dimensions, successful developing countries vary widely in the scope accorded to government or courts. What the successful countries share is “a development bargain … an underlying commitment to growth and development among members of the country’s elite.”

Dercon defines a successful “development bargain” as having three shared components:

  • A durable political and economic deal: Development requires long-term horizons among the elites, which implies that they agree not to undertake violent intra-elite conflict.
  • A sensible state: The scope of the state differs widely among successfully developing countries. It may tolerate corruption and criminality in some sectors, provided it manages other important sectors well. What the state does take on, it performs “sensibly.” If, for example, the elites decide the state should provide primary and secondary schools for all, it does so with attention to school learning outcomes. In South Asia, the Sri Lankan government has – despite the corrupt incompetence of the Rajapaksas over the last 15 years – managed good public schools, reflected in the fact that the illiteracy rate among children aged 10 to 14 is 15 per cent, compared to the 58 per cent average in South Asia as a whole.
  • The ability to acknowledge errors and correct course: Dercon acknowledges that Bangladesh displays corrupt “volatile rent-seeking politics,” but the state does ultimately correct major obstacles to economic development. Bangladesh is the world’s second largest garment exporter. For decades, Bangladeshi governments tolerated massive violation of health and safety regulations in garment factories. For example, a political insider blatantly flouted all regulations and constructed a large building housing seven garment factories on a swamp. In 2013 the building collapsed: 1,100 workers died and more than 2,000 suffered injuries. The owner was captured and shot as he fled to India. Over the next five years, the government markedly improved safety regulations.

Dercon’s definition of the three components is admittedly fuzzy and omits some important factors that determine per capita GDP growth rate – education in particular. More on this later.

Yes, minister

About the time he visited China, Dercon found himself with a new minister in his department. She told the press, “I didn’t come into politics to distribute money to people in the Third World.” He provided her with a large pile of books, written mostly by economists, on economic development – whether she wanted them or not. Among the authors are four winners of the Nobel economics award. He insisted that she spend an afternoon in a tutorial discussing the authors’ conflicting analyses. Implicitly, he does the same for readers of his book (see Box).

Ideally, Dercon should have tutored his minister for more than one afternoon and offered his conclusion on the numerous debates among the development economists. However, his tutoring was cut short. In an interview, the Prime Minister (David Cameron at the time) said that Daron Acemoglu and James A. Robinson’s Why Nations Fail was his favourite book on development. So be it. Dercon decided his duty as a senior civil servant was to design policy consistent with the Prime Minister’s view of the world. This was not particularly difficult. Dercon, like Acemoglu and Robinson, is among the institutionalists, with the qualification that he thinks governing elites have more “agency” than most institutionalists acknowledge.

Dercon’s zoo

To say Dercon has travelled widely is a serious understatement. Very few academics, journalists or diplomats have visited as many countries. He describes meetings as a journalist with politicians and senior economic advisers in Kinshasa and conversations with peasants in rural Ethiopia. When I was in Bangladesh this past summer as a guest of BRAC, the country’s largest NGO, my hosts discussed Dercon’s visit in 2020, just before the COVID pandemic. As a policy analyst, he discusses in detail various successful programs pursued by Meles Zenawi, leader of the Tigrayan coalition that, in 1991, toppled Ethiopia’s Marxist dictator. Meles was not a democrat; he led a meritocratic government in the tradition of Deng Xiaoping in China and Lee Kuan Yew in Singapore. Dercon has a high regard for Meles, who died in 2012. (As noted above, Ethiopia ranks second only to China in per capita GDP growth among the countries in table 1.)

Dercon is, obviously, an economist. He alludes to other goals, but his principal criterion in evaluating countries is growth rate of per capita GDP. He began his academic career teaching in Addis Ababa and participated enthusiastically in early initiatives of Meles’s government. The optimism of youth has mellowed with age:

With the end of the Ethiopian civil war (in 1991), it was hoped that peace would launch a new period of change and progress across the country and on the continent as a whole … I did not see the genocide coming (in Rwanda). I was not alone. For many of us, it dashed our hopes that peace and open politics would bring rapid prosperity to the continent … Political systems seemed to change, but in too many places the change only ensured that everything stayed the same. Improvements in people’s lives were barely evident in the data we researchers collected and analysed, even though we looked hard for them.

Four economically successful countries in east and southeast Asia – South Korea, Taiwan, Hong Kong and Singapore – are often labelled as the Asian tigers (Hong Kong is no longer a country, but would very much like to be independent of mainland China). To leaven his discussion of economic progress – or lack of progress – among the countries he discusses, Dercon creates an imaginary zoo. China, the world-changing outlier, is a dragon; India is a peacock, very showy with promises but short on fulfilling them. Indonesia is a tiger cub, which may or may not mature into a full-fledged Asian tiger. He reaches the same conclusion with respect to Bangladesh.

Many African countries are compared to hippos in a lake. The visitor sees the eyes above water, but the political action is below the surface, hence invisible. As hippo examples, he discusses Sierra Leone and Malawi. He is more hopeful for Kenya, Uganda and Ghana, which may achieve economic takeoff. He has no faith in either Nigeria or the Democratic Republic of Congo escaping low-income status. Their governing elites engage in continuous zero-sum games that benefit themselves – but no one else.

The worst Ethiopian catastrophe of the 20th century was not the Italian invasion or Haile Selassie’s “traditional military and aristocratic” government; it was the economic incompetence of the Marxist regime that ran the country from 1976 to 1991. It did little to limit the 1984–85 famine, estimated to have killed up to a million people. After 1991, Tigrayans dominated the Ethiopian government for a quarter century. By 2018, resentment of their political and military dominance came to the fore. In 2018, a non-Tigrayan became prime minister. Subsequently, Tigray attempted to secede, and the ensuing civil war has shattered Ethiopia’s “development bargain.”² Biafra’s attempted secession from Nigeria half a century ago is an ominous precedent.³

Dercon labels several countries as hyenas. The secession of South Sudan from Sudan has yielded negligible benefits for citizens of both countries: “The South Sudanese state and its leaders could have been lions, but they chose to be clans of hyenas fighting over the scraps.” Other hyenas are Afghanistan, Nepal, Lebanon and Somalia. At various times over the last half century, these countries have experienced anarchic violence. At present, Lebanon, Afghanistan and Nepal are nominally at peace. But even in Somaliland, the most stable region in Somalia, no one places much faith in ever realizing a successful development bargain.

Paul Kagame of Rwanda is similar to Meles inasmuch as they both saved their countries from hyena status and introduced economic and social policies far more efficient than those of their neighbours. Like Meles, Kagame is a meritocratic dictator (Rwanda’s per capita GDP growth in table 1 is close to that of Ethiopia). Had Dercon published his book before COVID, he would probably have labelled post-1991 Ethiopia as an African lion (lions being the symbol of the Ethiopian empire). He would have done the same for post-1994 Rwanda. Now, faced with ethnic conflict in Ethiopia erupting into civil war, he adds a question mark to both. It is to be hoped that ethnic tensions in Rwanda and eastern provinces of the Democratic Republic of Congo won’t reignite the civil war of 1994.

Education matters

Many academics in developing countries are content to blame European imperialism for their countries’ poverty. The argument rings true, for example, when discussing the problems posed by arbitrary national borders, which oblige multiple ethnic communities to accept rule by other ethnic elites. However, we cannot rewrite history. Dercon argues that blaming the colonizers is intellectually lazy: it minimizes the responsibility of governing elites to undertake “development gambles.”

I am sympathetic to his argument, with one major exception. His discussion of basic education as an element in a development bargain is superficial. Whatever the errors of Chinese policy in Mao’s reign, by the time Deng Xiaoping adopted “sensible” policies and persuaded his politburo colleagues not to “cancel” one another, the majority of Chinese adults could read at a basic level and do basic arithmetic; hence, they could migrate to cities and become productive industrial workers. By the early 1990s, according to UNESCO’s (excessively) modest criteria, nearly 80 per cent of Chinese could read, whereas less than 50 per cent of Indians could do so. This literacy gap is a relevant factor in any explanation for why India’s per capita GDP is currently only 40 per cent of China’s – and countries in sub-Saharan Africa rank much lower relative to China.

In 2021, the World Bank launched a “learning poverty” statistic to estimate the national share of children aged 10 to 14 who cannot read short Grade 2–level stories comparable across countries (see table 1). In the specified age range, children are expected to be in an upper primary grade. A country’s learning poverty rate is the sum of (a) children in this age cohort who have dropped out or never enrolled in a school and are assumed not to be literate and (b) children who are in school but unable to read a simple story.⁴

In South Asia, for example, the proportion no longer in school is about 15 per cent; the proportion of students in school but unable to read is 50 per cent. In a random sample of 100 South Asian children aged 10–14, about 15 cannot read having dropped out or never enrolled; half of the 85 in school cannot read simple stories. The average learning poverty rate in South Asia is 58 per cent unable to read; in China the equivalent share of children aged 10–14 is only 18 per cent. In sub-Saharan Africa it is 87 per cent. In Dercon’s “home” country, Ethiopia, he discusses in detail Meles’s sensible macroeconomic and agriculture policy. He doesn’t discuss Ethiopian schools. In Ethiopia, the learning poverty rate is 90 per cent, slightly worse than the sub-Saharan average.

Table 1 illustrates national poverty rates based on the World Bank’s suggested poverty threshold for lower-middle-income countries (US$3.65 per person per day). For a family of four living at the poverty threshold, annual income is equivalent to US$5,330. There is very high correlation between high 2019 per capita GDP and low poverty rate. There is also very high correlation between high 2019 per capita GDP and low learning poverty rate. The implications are that more prosperous countries achieve lower poverty rates, and that producing literate children contributes to high per capita GDP. Disentangling the role of education from other relevant factors in explaining per capita GDP is an interesting statistical exercise. Here it suffices to say that education matters.

Finally, there is very high correlation between a low learning poverty rate and a low poverty rate. The implication is that, independent of per capita GDP, literacy contributes to low poverty rates. Relative to illiterate women, for example, women able to read are more likely to earn income for their families, and usually exercise more authority on issues such as limiting the number of children. In addition to Dercon’s zoo, I grade table 1 countries in terms of achieving a low poverty rate. The “A” grade countries are Sri Lanka, China and Indonesia (poverty rate 14–22 per cent). The countries deserving a “B” grade are Nepal, Pakistan, India, Ghana and Bangladesh (40–52 per cent). The “C” grade countries are Kenya, Nigeria, Sierra Leone and Ethiopia (60–65 per cent); “D” grade countries are Uganda, Tanzania, Zambia and Rwanda (72–78 per cent). The unambiguous failures are Democratic Republic of Congo, Malawi and Somalia (88–90 per cent).

Dercon’s Reading List for his Minister

Jeffrey Sachs, an economist at Columbia University, wrote The End of Poverty: How We Can Make It Happen in Our Lifetime (Penguin, 2005). He emphasized two factors to explain the persistence of poverty in “low income” countries. First, most such countries are prone to a high incidence of debilitating tropical diseases, which reduces productivity. Sachs was the chief economist associated with the Millennium Development Goals (MDGs), the ambitious United Nations campaign between 2000 and 2015 to achieve eight social policy goals. One MDG set a target for reduced under-five mortality, another for reduced maternal mortality. Second, per capita GDP in these countries is so low that it is unrealistic to expect them to save and invest in needed infrastructure and quality social services. His basic advice: high-income countries should give lots of aid.

Paul Collier, an Oxford colleague of Dercon’s and former World Bank economist in Africa, wrote The Bottom Billion: Why the Poorest Countries are Failing, and What Can be Done about It (Oxford University Press, 2007). The book contains detailed advice to donor agencies when they are faced with corrupt host governments. The problem of corruption is particularly acute, Collier contends, in countries (such as Nigeria and the Democratic Republic of Congo) that have large resource rents from oil and minerals. The magnitude of such rents is an irresistible incentive for host-country politicians to concentrate on zero-sum conflicts that maximize income for those allied with the governing party – and provide only rudimentary services to the majority.

William Easterly, a “rogue” World Bank economist, wrote The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good (Penguin, 2006). His critique goes further than Collier’s. If countries had democratic elections, property rights and the rule of law, and the governing elites let markets function, economic growth would take place. He cites Thailand and Japan as fortunate never-colonized countries that, before World War II, realized significant development without aid. Donors complain about corrupt governments, but in practice they subsidize bad behaviour. Hence, in most circumstances, aid has done more harm than good: it is a prop for corrupt governments and hampers the emergence of “sensible” governments.

Dambisa Moyo, author of Dead Aid: Why Aid is Not Working and How There is a Better Way for Africa (Farrar, Straus and Giroux, 2009), is a Zambian economist. She more or less agrees with Easterly, and emphasizes the potential advantage for host governments of pursuing international capital investments.

Joseph Stiglitz, Nobel economics prize recipient and yet another senior World Bank economist, wrote Globalization and its Discontents (W.W. Norton, 2002). He emphasizes the monopoly power of multinational firms. They capture far too large a share of revenue arising from their investments in developing countries. Decisions of international organizations such as the World Trade Organization, the World Bank and the International Monetary Fund function in a manner unduly favourable to multinational firms. Stiglitz wants major reform in all three. Nonetheless, he favours developing countries engaging in international trade. Why? Despite unequal income distribution, workers in tradable sectors benefit because they typically earn more than they could in traditional sectors (such as agriculture) and, over time, local entrepreneurs may replace multinational firms.

Ha-Joon Chang, a Korean professor at Cambridge University in the U.K., is the author of Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism (Bloomsbury, 2007). He fundamentally disagrees with Stiglitz. Chang wants developing countries to do as South Korea did: protect the domestic market until host countries mature and are able to compete effectively with multinational firms.

Abhijit Banerjee and Esther Duflo shared a Nobel economics prize for their many carefully implemented randomized control trials. The technique requires two samples identical in all relevant respects except that the treatment sample receives a policy intervention while the control sample does not. If allocation to the treatment sample is random, the only explanation for a significant difference in sample outcomes must be the treatment. Such trials have demonstrated many potentially productive policy interventions. Banerjee and Duflo jointly wrote Poor Economics (Penguin, 2011). The problem with randomized control trials is external validity: will the result obtain outside the confines of the trial? Critics of their work, such as Douglass North and the team of Daron Acemoglu and James A. Robinson, insist that randomized control trials ignore underlying institutional obstacles that prevent adoption of productivity-enhancing interventions.

This brings us to the institutionalists. Douglass North earned the Nobel economics award in 1990 for his critique of market “fundamentalists” (such as Easterly) and his rehabilitation of institutional analysis among economists. The first sentence of Institutions, Institutional Change and Economic Performance (Cambridge University Press, 1990) is as good a definition of institutions as any: “Institutions are the rules of the game in a society or, more formally, are the humanly devised (formal and informal) constraints that shape human interaction.” Acemoglu and Robinson are disciples of North. Their book Why Nations Fail: The Origins of Power, Prosperity, and Poverty (Random House, 2012) begins with a discussion of Nogales, a city straddling the U.S.-Mexico border. In the Mexican half, average income is one third that in Arizona. The fundamental explanation of this 3:1 ratio, they argue, is differences in U.S. versus Mexican institutions.

Continue reading “Why Some Countries Are Poor and Others Are Not”

Wole Soyinka, Chronicles from the Land of the Happiest People on Earth. New York: Pantheon, 2021. 464 pages.

For many years, I have known of Wole Soyinka, Nigeria’s most prominent literary figure, as a prolific writer of plays and poetry, plus a few novels. I knew that he had won the Nobel Prize for literature (long ago, in 1986). At age 87, he has published a new novel, a devastating satire on the failings of his homeland. I admit that Chronicles from the Land of the Happiest People on Earth is the first major work of Soyinka that I have read.

In his review in the Guardian (see accompanying article), Ben Okri, a Nigerian writer who fled his home country in the 1970s under death threats, characterizes Chronicles as “a vivid and wild romp through a political landscape riddled with corruption and opportunism and a spiritual landscape riddled with fraudulence and, even more disquietingly, state-sanctioned murder. This is a novel written at the end of an artist’s tether.” The key difference between Soyinka and many African writers is his insistence that, whatever the sins of colonialism, postcolonial African elites enjoy “agency” and writers should hold them accountable for the outcomes in the countries they govern.

With more than 200 million people, Nigeria has the largest population of any African country – nearly double that of the second, Ethiopia. Currently, both are enmeshed in civil war: the Tigray attempt to secede from Addis Ababa and the Boko Haram attempt to install a violent version of Salafist Islam across northern Nigeria and elsewhere in the Sahel. Like many African countries, Nigeria’s boundaries reflect colonial administration, not ethnic or tribal communities. Nigeria’s three major ethnic groups are the Muslim Hausa in the north, the Yoruba in the southwest and the Igbo in the southeast. Post-independence, citizens of Nigeria would probably have been, if not the happiest people in the world, at least happier had they been citizens of three sovereign countries, enabling each of the three major communities to construct a society compatible with its ethnic heritage. Probably, but not certainly – there is no certainty in such speculation.

The one event in Nigeria known by at least some Canadians (mostly those of my generation, the generation that came of age in the 1960s) is the fate of the Igbo-dominated breakaway republic of Biafra, which lasted from May 1967 to January 1970. It ended after the Yoruba- and Hausa-dominated army imposed a brutal blockade that resulted in mass starvation, with Biafran deaths estimated at approximately one million. It was a cause célèbre at the time: many contemporary rock stars sided with Biafra, and John Lennon returned his MBE (Member of the Order of the British Empire) because the U.K. supplied arms to the central government and thereby contributed to Biafra’s collapse.

The Igbo were not innocent lambs led to slaughter. Shortly after independence, political violence erupted, and Igbo elites participated in some of the politically inspired assassinations over the decade. In early 1967, leaders of the army and regional political leaders met in Aburi, Ghana, in an eleventh-hour attempt to avoid civil war. The core of the Aburi Accord was transformation of the country into a decentralized federation with significant powers accorded to each of three regions. All representatives at Aburi signed the accord, but General Yakubu Gowon, head of the national government, never allowed it to be proclaimed.

Soyinka’s roots are with the Yoruba. His family descended from the royal family of Isara, one of several Yoruba dynasties. His father was an Anglican pastor and school headmaster, his mother an ardent Christian feminist. In the years leading to Biafra’s secession, Soyinka held a comfortable position as Chair of Drama at the University of Ibadan, Nigeria’s first university to grant degrees. In a quixotic attempt to avoid the looming civil war, Soyinka secretly met with Colonel Ojukwu, military governor in the Igbo southeast. When his unofficial intervention became known, Soyinka was arrested and kept in solitary for nearly two years. Another quixotic attempt to hold politicians accountable came three decades later, in the 1990s. Soyinka publicly condemned Sani Abacha, the general then running the national government. Soyinka was obliged to flee Nigeria, which he did on his motorcycle. Abacha arranged a trial in absentia, which resulted in Soyinka’s being condemned to execution.

The Igbos lost their independence, but they have won the historical interpretation of events. Long after the civil war, in 2006, Chimamanda Adichie, an Igbo, published an award-winning novel, Half of a Yellow Sun (the title refers to Biafra’s flag).¹ The novel is the equivalent of Tolstoy’s treatment of Napoleon’s invasion of Russia. Another Igbo writer, Chinua Achebe, served as a Biafran cabinet minister during the war and 40 years later published his memoir, There was a Country.²  The following is an excerpt from the memoir – the parallel with the Russian invasion of Ukraine in February 2022 is obvious:

Said Baroness Asquith in the British House of Lords, “Thanks to the miracle of television we see history happening before our eyes. We see no Igbo propaganda; we see the facts.” Following the blockade imposed by the Nigerian government, “Biafra” became synonymous with the tear-tugging imagery of starving babies with blown-out bellies, skulls with no subcutaneous fat harboring pale, sunken eyes in sockets that betrayed their suffering. Someone speaking in London in the House of Commons or the House of Lords would talk about history’s happening all around them, but for those of us on the ground in Biafra, where this tragedy continued to unfold, we used a different language … the language and memory of death and despair, suffering and bitterness. The agony was everywhere. The economic blockade put in place by Nigeria’s federal government resulted in shortages of every imaginable necessity, from food and clean water to blankets and medicines. The rations had gone from one meal a day to one meal every other day—to nothing at all. Widespread starvation and disease of every kind soon set in. The suffering of the children was the most heart-wrenching.

Achebe’s most famous novel is his first, published a decade prior to Biafran secession. Things Fall Apart is the iconic novel about cultural disruption arising from Europeans’ intrusion on Africa’s tribal societies. In English-language schools and universities throughout Africa, it is on all relevant reading lists. Achebe’s novel has been linked to Soyinka’s famous play, Death and the King’s Horseman, written in the 1970s. The play is inspired by an actual event: a colonial official prevented the suicide of the horseman of a recently deceased tribal chief. According to Yoruba tradition, once dead, the horseman guides the chief to his life after death. Like Achebe’s novel, the play deals with incompatibility of Western and traditional cultures. Soyinka wrote an introduction in which he insisted that the play was an indictment as much of traditional African culture that sanctioned suicide as of imperial hubris. The play is set during World War II, when modern “civilized” countries were engaged in an all-consuming war. In 2009, the Guardian interviewed Soyinka on a London performance of the play:

I find it necessary to caution the would-be producer of this play against a sadly familiar reductionist tendency … At the time , the tendency – in the theatre, the cinema and the novel – was to present everything that dealt with things outside western culture as being understandable only as a “clash of cultures”. This covered everything, and it encouraged analytical laziness.³

Soyinka is not a guerrilla opponent of a corrupt national government. He is among the elite of west Africa. His best historical precedent is perhaps Voltaire. On occasion, Voltaire avoided prison by fleeing abroad (to Switzerland); at other times, European royal circles feted him. Though a critic of the “ancien régime,” Voltaire did not share the revolutionary ideas of contemporaries such as Rousseau. Soyinka has refused to identify with Marxist colleagues who blame all on French and British colonialism. His critique: Third World Marxism is reductive and ignores the complex realities of postcolonial societies. Soyinka has taken his distance from Léopold Sédar Senghor’s ideas of négritude, which he views as a romantic attempt to paint precolonial African society as ideal.⁴ A recent documentary film has used asynchronous film clips of Senghor and Soyinka elaborating on their respective literary and political ideas.⁵

When I searched for a Canadian review of Soyinka’s Chronicles in a national newspaper, all I found was this squib in the Globe and Mail:

Half a century after his last novel, the playwright and Nobel-winner returns to the form with aplomb in a bustling satirical tale about contemporary Nigeria, one of whose most memorable characters is Kighare Menka, a surgeon who runs a lucrative side business selling the amputated limbs and organs of suicide-bombing victims.

The squib is a testament to parochialism among Globe journalists. Not only is the brevity an insult to Soyinka; the squib’s author lost the plot. Probably, he or she never read the novel. Far from running the “lucrative side business,” Menka plays the role of Voltaire’s Candide, the naive moralist horrified by the lucrative elite-managed secret society that sells amputated limbs. The source of body parts is Boko Haram’s tactics and application of shari’a in northern Nigeria. (Spoiler alert: at the head of the society are the Machiavellian Nigerian prime minister and a prominent religious leader in the tradition of Sinclair Lewis’s Elmer Gantry.)

Chronicles has parallels with Dostoyevsky’s finale, The Brothers Karamazov. In both novels, a whodunit mystery is a central plot device enabling the exhaustive discussion of a wide range of human behaviours and beliefs among closely entwined characters who enter into multiple conversations. Not until the final chapter in each novel does the reader discover who murdered a central character. The Brothers Karamazov was Dostoyevsky’s last major piece of writing; given his age, Chronicles may well be Soyinka’s. I hope not.

A Novel Written at the End of an Artist’s Tether
by Ben Okri

Ben Okri is a Nigerian poet and novelist, forced to flee his country in the 1970s. He won the Booker prize with his novel The Famished Road. Reprinted by permission from the Guardian, September 27, 2021.

Soyinka’s new novel tells the multidimensional story of a secret society dealing in human parts for sacrificial uses, whose members encompass the highest political and religious figures in the land. It details how the conspiracy and cover-up of this quasi-organisation affect not only the life of the nation but, more specifically, the lives of four friends. This is essentially a whistleblower’s book. It is a novel that explodes criminal racketeering of a most sinister and deadly kind that is operating in an African nation uncomfortably like Nigeria. It is a vivid and wild romp through a political landscape riddled with corruption and opportunism and a spiritual landscape riddled with fraudulence and, even more disquietingly, state-sanctioned murder. This is a novel written at the end of an artist’s tether. It has gone beyond satire. It is a vast danse macabre. It is the work of an artist who finally has found the time and the space to unleash a tale about all that is rotten in the state of Nigeria. No one else can write such a book and get away with it and still live and function in the very belly of the horrors revealed. But then no other writer has Soyinka’s unique positioning in the political and cultural life of his nation.

Chronicles from the Land of the Happiest People on Earth opens with the sentence: “Papa Davina … preferred to craft his own words of wisdom. Such, for instance, was his famous ‘perspective is all.’” This alerts us from the beginning that we need aesthetic distance to make sense of the twists and turns, the baroque engineering, the curious structure and the paradoxically exuberant tone of this strange novel.

Papa Davina is the religious guru, whose all-purpose spiritual ministry, Ekumenica, is an elaborate front for practices so sordid and monstrous that even when one learns what they are the mind still refuses to grasp them. He is in cahoots with the head of state, the wily and pragmatic Sir Goddie, and it seems that this racket, this secret society, encompasses the entire power structure of the land. Is this a metaphor for the extreme nature of corruption and lies that strangles the life out of that potentially great nation or is it a case where the metaphor is in fact the thing itself? If the latter, then the writer is dealing with one of the most existential problems in fiction, which is how a writer deals with the unspeakable in a medium in which things must be spoken of and a story told. How do you tell a story of the unspeakable?

Soyinka is one of Africa’s most representative writers. A poet, playwright, essayist, memoirist, activist and novelist, he was jailed in the 60s for his outspoken condemnation of the Nigerian civil war and was the first African recipient of the Nobel prize for literature in 1986. He has been one of the most caustic critics of dictatorships and bad governance in Nigeria.ᵃ This novel is the fruit of all that experience. It is his first in 48 years and only his third. His debut, The Interpreters, was the story of a generation of friends, each one representing one of the gods or goddesses of the Yoruba pantheon. It opens with the sentence: “Metal on concrete jars my drink lobes.” His second, Season of Anomy, was his fictional and poetic response to the Nigerian civil war. In the intervening years he has written more than 20 plays, poems, autobiographies, polemics and various forms of literary hand grenades. Apparently it took the forced solitude of lockdown to compel him to finally write the novel he has carried in him for some time.

It is a portrait of how a generation betrays and is betrayed by the prevailing ethos of moral entropy At the heart of Chronicles … is the tale of a quartet of friends who form themselves into a fraternity called the Gong of Four and how they maintain their integrity and are drawn into the maelstrom of political life that surrounds them. In a microcosmic sense it is a portrait of how a generation betrays and is betrayed by the prevailing ethos of moral entropy.

One thing to be clear about from the outset is that with certain writers of highly individualised voices, highly cultivated ways of seeing, there is nothing you can do about their styles. It is an inescapable fruit of how they see the world. Like Henry James,ᵇ like Conrad, like Nabokov,ᶜ there is no choice but to get used to the style, to saturate yourself in it. But once you nestle into that tone, something wonderful happens and a rollercoaster ride of enormous vitality is the result.

It is a high-wire performance sustained for more than 400 pages and it makes for uncomfortable and despairing reading, but always elevated with a robust sense of humour and the true satirist’s unwillingness to take the pretensions of power seriously, even when it is murderous in effect.

There are many things to remark upon in this Vesuvius of a novel, not least its brutal excoriation of a nation in moral free fall. The wonder is how Soyinka managed to formulate a tale that can carry the weight of all that chaos. With asides that are polemics, facilitated with a style that is over-ripe, its flaws are plentiful, its storytelling wayward, but the incandescence of its achievement makes these quibbles inconsequential.

If you want to know what kind of novel can be written by someone who has survived as a sort of insider in a difficult land but who has kept their creative conscience and their powers of invention alive then Chronicles… answers that question. It is Soyinka’s greatest novel, his revenge against the insanities of the nation’s ruling class and one of the most shocking chronicles of an African nation in the 21st century. It ought to be widely read.

Continue reading “Nigeria’s Voltaire, or Maybe Dostoyevsky”

Mario Polèse, Le miracle québécois : récit d’un voyageur d’ici et d’ailleurs. Montreal: Boréal, 2021. 336 pages.

His parents were Viennese. His mother was a Jew. Not surprisingly, they fled after the Anschluss in 1938. Mario Polèse was born in Holland, in 1943. His parents subsequently emigrated to the United States, where Mario obtained his PhD in urban studies from the University of Pennsylvania. He came to Montreal as a young academic – and decided to integrate into francophone Quebec. His first language is German, his second Dutch, his third English. French, his fourth language, is now, in the jargon of the Canadian census, his “language most used at home.”

Le miracle québécois is, in a sense, a lengthy “love letter” to Quebec francophones who, against the odds, have survived as a nation over two and a half centuries.¹ Polèse is diplomatic: he does not enter into partisan jibes at individual politicians, nor is he hostile to English-speaking Canadians. He apologizes for not addressing the problems faced by francophone Canadians outside Quebec, in particular Acadians, in his book. Nor, he acknowledges, does his book address the problems facing the Indigenous population, inside and outside Quebec.

Polèse begins with a 1960 quote from a prominent French academic:

A powerful sentiment underlying all ideas among French Canadians is their sense of inferiority in the province their ancestors created. The inferiority is real: the levers of command, in finance, industry, large firms, are all in the hands of English-speaking strangers.²

His opening paragraph summarizes the “miracle”:

The miracle is first the history of cohabitation of two peoples on the same territory and in the same city, two peoples separated originally by religion and language. It is the history of eliminating the social gulf between two peoples, the elimination of a historical relation of domination. It is, finally, the history of a cultural revolution, of a people who literally metamorphose – who transform their institutions, change social norms and change the definition of their nation.³

The Quiet Revolution

Polèse divides Quebec’s Quiet Revolution into two phases. The first was expansion of the Quebec government in the early 1960s, triggered by the équipe du tonnerre of Premier Jean Lesage. René Levesque, a member of the équipe, championed nationalization of the Quebec electric power system. Eric Kierans, a close friend of Lévesque’s, played an important role in maintaining the financial credibility of Quebec’s government.⁴ The single most important accomplishment of the first phase was creation of a modern state-run education system, from primary school to a network of new francophone universities – plus the innovation of cegeps – general and vocational colleges – as an accessible introduction for those wanting to pursue postsecondary studies. Before 1964, publicly funded Catholic and Protestant schools operated autonomously, with little state involvement.

The second phase was the necessary promotion of French and limitation of access to English-language public schools. Bill 101, adopted in 1977, was needed to ensure that Quebec’s future would belong to well-educated francophones – and not to well-educated immigrants integrating into the anglophone community.

As an aside, Polèse mentions the prominent bust of Camille Laurin, the articulate champion of Bill 101 in the first Parti Québécois government, in front of Office Québécois de la Langue Française headquarters in Montreal. Laurin’s accomplishment is not without critics. Some argue that Bill 101 has not adequately limited access to public English-language education and that French linguistic hegemony in Montreal remains in doubt; some argue that linguistic protection unnecessarily accelerated Montreal’s loss of status as a finance and head office city and increased its unemployment rate. Polèse interprets the second argument as the unavoidable cost of survival of French as the dominant lingua franca in the province.

At one level, Polèse’s book is a discussion of the Quiet Revolution’s success in closing many of the socioeconomic gaps present in 1960. In point form, here are key statistics he cites, along with a few others I’ve added:

Education
  • Average years of education among nonagricultural ethnic groups in Quebec, 1961: German 10.2 years, British 9.6, Jewish 9.5, French 7.0, Italian 5.5.
  • The Program for International Student Assessment (PISA) is the most credible comparative assessment of secondary school systems in 80 middle- and high-income countries. Canada fared well in the most recent PISA round, conducted in 2018. Disaggregated by province, Quebec’s 2018 comprehensive PISA score was significantly better than the nine other provinces in mathematics (Quebec 532, rest of Canada 507) and close to the national average in reading (Quebec 519, Canada 520) and science (Quebec 522, Canada 518).
Income
  • Average annual male earnings in Quebec, by ethnicity, 1961: British $4,940, Jewish $4,851, German $4,254, French $3,185, Italian $2,938.
  • In 1961, learning French was of minor value to anglophones, while learning English was of substantial value to francophones. Francophone-anglophone earnings premium in Quebec by French-English bilingualism, 1961: anglophone, bilingual $6,049, unilingual $5,929; francophone, bilingual $4,523, unilingual $3,107.
  • Quebec’s family income has risen from 70 per cent of Ontario’s in 1960 to above 90 per cent of Ontario’s in 2015.
Integration of immigrants into French as opposed to English
  • In the quarter century from the end of World War II to 1970, the share of immigrants’ children enrolled in English-medium schools rose from 50 to 90 per cent.
  • In 1976, 20 per cent of students with neither French nor English as mother tongue attended French-medium schools. By 2015, this figure had risen to 90 per cent.
  • In 1971, the share of Quebecers using French as home language was about 80 per cent. In the 1970s, projections indicated that the share of Quebecers speaking French at home would consistently decline, especially in Montreal. This has not happened. However, on the basis of census data from 2001 to 2016, Charles Castonguay concludes that French as the major home language declined from 83.1 to 80.6 per cent.⁵
Income inequality
  • Since 1990 income distribution, as measured by the Gini coefficient, has consistently been somewhat more equal in Quebec than in Ontario and in Canada overall.
Québécois pragmatism

Let me turn to Polèse as amateur political scientist and historian.

As the son of parents forced to flee a cosmopolitan city in a small country – with a large neighbour intent on establishing an empire based on German cultural superiority and antisemitism – Polèse emphasizes the rarity of successful countries containing multiple national communities. Perhaps the Slovak initiation of a separatist initiative, culminating in the 1993 “velvet divorce” in Czechoslovakia, is a European equivalent of peaceful resolution of Quebec’s secessionist movement. No one would describe interethnic relations in Ulster or Belgium as “velvet” or “quiet.” In France, third-generation Maghrebi immigrants are less integrated into French society than first-generation ones. Terrorism by Muslims in France over the previous decade, combined with large-scale Maghrebi immigration, elevated immigration as the dominant theme of the 2022 French presidential election.

The exceptionalism of (usually) respectful relations between Québécois and the rest of Canada is worth emphasizing. Many cases can be cited in which interethnic conflicts over the last half century have escalated beyond tension to civil war.

Immediately following collapse of the Soviet Union, Yugoslavia erupted in civil war. Africa and the Middle East contain multiple festering ethnic and religious conflicts motivated by communities that perceive themselves as exploited. The Igbo in southeastern Nigeria harbour bitter memories from the Biafran genocide 50 years ago (see my review of Wole Soyinka’s novel elsewhere in this issue). Rural Muslim nomads and villagers throughout the west African Sahel resent more prosperous urban elites, in countries from Mauritania to Nigeria.

The Tutsi, victims of the Hutu-inspired genocide in the 1990s, now control Rwanda via an astute dictator who has been in power for nearly three decades. Since the death of Emperor Haile Selassie in 1975, Ethiopia has known a Marxist military dictator, a war culminating in Eritrean separation, Tigray dominance for a quarter century and currently a second civil war pitting Tigray against the central government in Addis Adaba. With the exception of Somaliland, Somalia has degenerated into an anarchic dystopia. One could name many other such conflicts – from Mozambique to Sudan, Iraq, Syria and Lebanon.

In 1759, Wolfe defeated Montcalm on the Plains of Abraham. Had Polèse read Gary Caldwell’s 2001 review article in Inroads, he might have discussed the crucial role of Sir Guy Carleton, an Anglo-Irish Protestant who was governor of Quebec between 1768 and 1778. Carleton was in London in 1774 and his advice prevailed in drafting the Quebec Act: the Catholic Church preserved its status.⁶ The major argument of Carleton and his allies was that London needed to avoid a repeat of the “imbroglio” of Protestant rule imposed on Catholic Ireland. Support for the Quebec Act was far from universal. A century earlier, James II had attempted a Catholic restoration and the Whigs agreed with the American revolutionaries that a law legitimizing “papist intolerance” should not be enacted. Passage of the act depended on royalist members of Parliament opposed to liberal Whig sentiment.

Polèse discusses the response of the Continental Congress, for which the Quebec Act was one more reason to reject British rule. Benjamin Franklin, a sophisticated diplomat fluent in French, headed the delegation that visited Quebec in 1775, with the intent of gaining Québécois support for the forthcoming revolution. Carleton praised the sophistication of the Catholic bishops who led resistance to Franklin’s proposal. The Quebec Act was, for them, a “bird in the hand” relative to Franklin’s promise of “two in the bush.”

Similarly, in 1812, American elites considered the war with Britain an opportune moment to eliminate all British presence in North America. In correspondence in 1812, Thomas Jefferson wrote, “The acquisition of Canada this year, as far as the neighborhood of Quebec, will be a mere matter of marching; & will give us experience for the attack of Halifax the next, & the final expulsion of England from the American continent.” Again, the Catholic bishops made a pragmatic decision. They sided with the Loyalists in Upper Canada in opposition to the Americans.

Lord Durham was a Whig. He had no animus toward Québécois but assumed they were constrained by papist intolerance of modernity. His report in response to the Patriote rebellion of 1837 recommended unification of Lower and Upper Canada, which would dilute the influence of the Catholic bishops and prove beneficial for both Loyalists and Québécois. Polèse poses the question, “In the 19th century, could Quebec indulge the luxury of a liberal Quebec, laïc in the French anticlerical tradition? My blunt response is ‘no.’” However noble the Patriote revolt, Polèse is relieved that it failed. Had it succeeded, the Americans would inevitably have subjugated Lower Canada – and probably Upper Canada. Once again, Québécois pragmatism prevailed.

And again in 1867. The bishops supported the British North America Act, which replaced Durham’s union with a federation. Confederation restored a provincial government dominated by Québécois, a government with substantial – if constrained – powers. Polèse does not discuss a relevant detail: pre-1949, the ultimate court of appeal on constitutional matters was the Judicial Committee of the Privy Council in London. Much to the distaste of John A. Macdonald, in several important cases the Judicial Committee strengthened interpretation of provincial powers under section 92.

The consistent theme of Quebec history from 1759 to 1960 is that the Catholic Church was the sole powerful institution committed to the national survival of the Québécois. Neither the British nor the Americans could be trusted, but the British proved more willing to accept Quebec autonomy than the Americans would have been, had Quebec chosen American allies.

Polèse admits that, over the 200-year period, Quebec women paid a price for loyalty to the church. The local priests advocated “la revanche des berceaux” – good Catholics should have large families to maintain Quebec’s population relative to English-speaking Canadians. At the turn of the 20th century, the total fertility rate in Quebec was an average of 4 children born per woman. By 1960 it had fallen to 3, but it was still well above the Canadian average. The political revolution in Quebec in the 1960s was accompanied by dramatic changes in cultural expectations. Quebecers abandoned the church en masse; by 1970 the fertility rate was 2, and it is now below 1.5.

Polèse supported the Oui in two referendums, but, in retrospect he is not bitter over the fact that Quebec remains a unit within a federal state as opposed to a sovereign country. Québécois pragmatically appreciate their accomplishments since 1960 and acknowledge the advantages of an alliance with the rest of Canada. Belonging to a country of 40 million, as opposed to one of nine million, probably provides Québécois with a better chance of national survival than would a rancorous separation. Polèse concludes with a caveat:

Does the undeniable success of Bill 101 as an instrument of integration mean that the battle for French hegemony in Quebec has been won? No. It will never be won definitively … English, the language with which French is competing, is not just any language. It has become the dominant world language in commerce and science, as well as being the majority language in Canada and North America. Any Québécois with the slightest ambition to undertake international professional activity must learn the language of Shakespeare … To refer to my country of birth, any self-respecting Dutch person speaks English and does so well.⁷

The caveat is timely. This spring, the Quebec government enacted Bill 96, legislation intended to limit the share of places in English-language cegeps accessible to those whose education has been in French and to strengthen requirements for use of French in large firms. Predictably, the anglophone community in Quebec and editorialists at the Globe and Mail and National Post oppose the bill. Perhaps details of the bill should be amended, perhaps not. Canada is a successful federation that the majority of Québécois support – provided that the rest of Canada accepts jurisdiction of the Quebec National Assembly over language policy and resists the temptation to create a fuss based on Charter language rights promoted by Pierre Trudeau.⁸

If there is a major omission by Polèse, it is absence of discussion of these language rights. In its enthusiasm to invoke the Charter, the Supreme Court expanded French-English rights in a commercial context in its 1988 Ford decision. That decision generated militant Québécois opposition to Quebec’s federal status and catalyzed the dynamic leading to the second secession referendum in 1995.⁹

Le miracle québécois is an excellent summary of Canadian history as understood by the majority of Québécois. It is a book that non-francophone Canadians should read. Hopefully, there will be an English translation.

Continue reading “Love Letter to Quebec”

Image: Oleksandr Pidvalnyi, via Pexels.

There are various ways of measuring well-being at a national level. One potential candidate is per capita GDP; another is life expectancy, or disability-adjusted life years (DALYs).¹ Each of these indices has flaws, and calculating each requires a complex statistical apparatus. So why not cut the Gordian knot as to what goal we should pursue by simply asking people how happy they are? This is the core rationale for assessing happiness.

Furthermore, relative to economic and health status indices, gathering evidence on people’s happiness is a simple exercise. The principal source of the happiness scores in the UN’s World Happiness Report (WHR) is the Gallup World Poll,² which “asks respondents to evaluate their current life as a whole using the mental image of a ladder, with the best possible life for them as a 10 and worst possible as a 0. Each respondent provides a numerical response on this scale, referred to as the Cantril ladder.”³

Having gathered the life evaluation data, happiness researchers seek to explain national scores. One approach discussed in the World Happiness Report is a relatively simple tactic: a statistical exercise that regresses national life evaluations on six variables.⁴ The six variables don’t explain all the difference in national happiness scores, but they do explain most of it.

The first two variables are objective measures of economic prosperity (per capita GDP) and health status (healthy life expectancy); the remaining four are responses to subjective questions. Because the per capita GDP variable is in logarithmic form, the contribution of an additional $100 to national happiness, while remaining positive, declines as GDP levels rise.⁵ Also, implicit in the healthy life variable is that a good public health system improves happiness by lengthening life expectancy. Both of these variables are statistically highly significant. Combined, these two account for about half the explained national happiness score.

One of the subjective variables is perception of corruption, in government (“Is corruption widespread throughout the government in this country or not?”) and in business (“Is corruption widespread within businesses in this country or not?”). The perception of corruption variable is highly significant. This variable explains a good deal of the happiness of most high-ranking countries, while in most low-ranking countries it explains little. In other words, most high-ranking countries have succeeded in suppressing corruption; most low-ranking countries have not.

Another subjective variable is freedom to make life choices (“Are you satisfied or dissatisfied with your freedom to choose what you do with your life?”). This question is open to many interpretations. It can be interpreted as a measure of free speech and basic civil liberties. It can be a measure of freedom from religious constraints (on women in particular). It might be interpreted as a measure of access to adequate income required to escape the constraints of poverty.

The two remaining subjective questions are measures of social cohesion (“If you were in trouble, do you have relatives or friends you can count on to help you whenever you need them, or not?” and “Have you donated money to a charity in the past month?”).

The top 20 countries, ranked in terms of national happiness score, are all members of the Organisation for Economic Co-operation and Development (OECD) – sometimes mocked as “the rich countries’ club.” The difference between the happiness score of the top-ranked country, Finland (7.8), and that of the 20th, France (6.7), is not great. All 20 achieve reasonably high per capita GDP, reasonably long life expectancy, reasonable control of corruption and reasonably free speech and basic civil rights.

An alternative approach to explaining happiness rankings starts with realization that four of the six variables (per capita GDP, healthy life expectancy, control of corruption, freedom to make life choices) measure what most people expect of their national government. With the exception of countries with very large per capita mineral resources, such as the petromonarchies, no country can realize a high per capita GDP without nearly all young adults completing secondary school and the majority completing some form of postsecondary certification. No country can expect long life expectancy without a reasonably good primary and secondary health care system, and public health measures such as vaccination and sanitation. No country with high corruption, or with an arbitrary police and justice system, achieves high-income status.

There is a high correlation between rankings of national happiness and indices of national governance quality. One of the most frequently used governance indices is the World Bank’s Worldwide Governance Indicators (WGI)⁶. These indicators estimate annually the rank of 200 countries along six dimensions: (1) voice and accountability (free speech and honest elections), (2) political stability and absence of violence/terrorism, (3) government effectiveness in delivering services such as health and education, (4) quality of government regulations, (5) rule of law, and (6) control of corruption.

Whether we measure Finland’s relative ranking among countries in terms of the Cantril ladder or in terms of the WGI 2020 ranking does not make much difference. Finland is above the 99th percentile on five of six WGI dimensions. You can guess the exception: it ranks at the 82nd percentile in terms of political stability, as a result of its neighbour to the east.

In conclusion, happiness and governance indices are more or less measuring the same thing. Between the two, my preference is for the governance indicators. They imply that, for an “unhappy” country to become “happy,” there is no quick solution. Success requires the hard-to-implement reforms that increase national scores on the six dimensions of the WGI. This is not easy.

Based on the evidence provided by the great mid-19th-century novelists who described “unhappiness” and “bad governance” – Dickens and Dostoyevsky come to mind – national happiness scores on the Cantril ladder would probably have been less dispersed in the 19th century than they are in 2022. Life chances for most people living in Britain and Russia were probably not much different in the middle of the 19th century. In 2022, however, the U.K. ranks 16th in the World Happiness Report; Russia ranks 80th.

Continue reading “Happiness by the Numbers”

John Richards’s review of Paul Collier, Exodus: How Migration is Changing our World (New York: Oxford University Press, 2013) appeared in Inroads 35 (Summer/Fall 2014).

Paul Collier’s Exodus, which I reviewed in Inroads in 2014, is an economist’s assessment of the pros and cons of large-scale immigration. He began the book with a précis of his family history. Prior to World War I, his grandfather, Karl Hellenschmidt, migrated from an impoverished German village to Bradford, at the time a prosperous city in northern England. Come the war, a “gutter rag” newspaper labelled Hellenschmidt a traitor and a mob ransacked his shop. Paul’s grandfather was interned; his grandmother sank into terminal depression. His father, age 12, left school to run the shop. A quarter-century later, the threat of European war reemerged and Paul’s father decided to change his name and his identity and become English.

Given this family history, the reader might reasonably expect a vigorous denunciation of host-country nationalism and a defence of immigrants’ rights. That is not Collier’s conclusion. A strong national identity, he argues, is a necessary – although obviously not sufficient – condition for a society to have a successful set of social programs. Without a reasonably strong national identity, he argues, the rich will not agree to pay high taxes to fund programs that disproportionately benefit the poor. While the host country has an obligation to suppress violent anti-immigrant activities, immigrants have an obligation to integrate and accept core features of the host country’s national culture – such as expectations of group reciprocity on social programs. More on reciprocity below.

In 2014, I agreed with Collier’s conclusion. Immigration is a mixed blessing. As I wrote at the time,

Immigrants clearly benefit from immigration. The benefits to members of the host society are ambiguous and often unevenly distributed. Those left behind in the country of origin may benefit from emigration via several routes, starting with remittances … However, if the state of governance (in the home country) is very low, emigration of the most capable may well be at a level that serves to entrench dysfunction. Collier cites Haiti: most decently educated Haitians are living in New York and Montreal (I should have added Paris). Were they living in Port-au-Prince, they would be less prosperous but their political weight would improve prospects for decent governance.

In 2021, I essentially agree with what I wrote in 2014. Were I writing the review now, I would elaborate on the role of immigration to Canada in explaining the disruptive increase in housing prices over the last decade, particularly in Toronto and Vancouver. There are multiple causes for housing price increases, but among them is the high concentration of new immigrants, nearly half of whom opt for one of those two cities.

Collier reworked and expanded the arguments in Exodus in his 2018 book The Future of Capitalism.¹ This book is his attempt to summarize conclusions from a long career as a World Bank economist in Africa and as a senior professor at Oxford University. As in Exodus, he slips fragments of his family history into this book. The reader learns about his cousin: “Aged fourteen, my cousin and I were in tandem: born on the same day, the children of uneducated parents. (We) had won places in grammar schools (academically oriented government schools). Her life was derailed by the early death of her father; shorn of that authority figure, she became a teenage mother, with its attendant failings and humiliations.” A dramatic contrast with his own education and career.

Reciprocal obligations and the welfare state

Collier chose his title to honour Anthony Crosland, a prominent Labour Party MP and public intellectual in the quarter-century following World War II. In 1956, Crosland published The Future of Socialism, in which he made a sharp distinction between social democracy, a set of policies intended to equalize opportunity, and Marxist-inspired strategies that seek to contain corporate power via nationalization of major firms. Both Crosland and Collier conclude that the evidence of the last two centuries is unambiguous: strategies that accommodate private corporations and markets are the only institutional basis through which the majority in a country can escape poverty – whether it be the 19th-century U.K. or 21st-century China. While capitalism is the necessary basis for economic productivity, left to itself capitalism does not assure high-quality basic services for all – and on occasion, as occurred in 1929 and 2008, it derails.

Collier and Crosland emphasize that the realization of social democratic goals in the mid-20th century owes much to the distress arising from the Great Depression of the 1930s and the sacrifices of World War II. Ultimate victory over fascism and mass unemployment bequeathed to the U.K. and U.S. a strong national identity among their citizens. Collier’s summary:

Social democracy worked from 1945 until the 1970s because it lived off a huge, invisible and unquantifiable asset that had been accumulated during the Second World War: a shared identity forged through a supreme and successful national effort. As that asset eroded, the power wielded by the paternalistic state became increasingly resented.

An element of this asset was agreement (more or less) among the majority, including the rich, to pay much higher taxes to fund massively expanded postwar social programs – the most important being universal health insurance and good-quality kindergarten-to-college education. Collier makes passing reference to parallel developments in continental Europe, but he primarily discusses the New Deal in the United States and the postwar Labour government in the U.K. Funding social programs required that government capture about 40 per cent of GDP via taxes, at least twice the share captured in the 1920s. The Democrats created better education programs in the United States than did Labour in the U.K. (for example, the GI Bill catalyzed U.S. expansion of college education); Labour created better health care programs (the single-payer National Health Service providing universal medical, hospital and pharmaceutical insurance).

The Magna Carta of the U.K. welfare state is the Beveridge Report, tabled in Parliament in 1942. William Beveridge was an economist who devoted his career to social policy reform in the U.K. (Leonard Marsh participated in research under Beveridge. He subsequently emigrated to Canada and authored a Canadian equivalent, submitted to Ottawa’s Parliament in 1943.) Beveridge perceived the welfare state as a set of reciprocal obligations among citizens. His report contains many passages on the obligation of the rich to pay highly progressive income taxes and the obligation of the working classes not to abuse health insurance, unemployment insurance and other social insurance programs.²

As have others, Collier describes the post-1980 lowering of global trade barriers, rise of manufacturing capacity in East Asia and technological change favouring jobs that require education over those that require manual skills. With some justification, Margaret Thatcher and Ronald Reagan succeeded in portraying centre-left governments and unions of the 1970s as “special interest groups” hampering economic development. When they came to power in the 1980s, major U.K. and U.S. coastal cities thrived; however, many cities dependent on traditional sectors fell into prolonged decline (shipbuilding along the Clyde, car manufacturing in Detroit). Income inequality has risen throughout high-income countries, more prominently in the U.S. and U.K. than in most others. In statistical explanations of family income distribution, a variable that looms large is parents with a college degree relative to those without. Geographic distribution of college graduates correlates closely with prospering and declining regions. In terms of group identity, Collier follows David Goodhart’s characterization of well-educated “Anywheres,” who increasingly identify with cosmopolitan international communities and who are abandoning their earlier identification with domestic “Somewheres.” ³

Communalism

Cataloguing the factors that have worsened income distribution in high-income countries is hardly novel. The “big” idea that Collier pursues in this book is communalism: for better or worse, he insists, the human being is essentially a communal animal. Most of us identity with members of our extended family – albeit to varying degrees. Prior to settled agriculture 10,000 years ago, identity did not extend much beyond small villages. Among the changes brought on by industrialization, most of us now identify, at least to some extent, with our nation. Since the 19th century, we have extended our sense of identity from city to region to the country of which we are citizens. Collier makes references throughout to loyalties among working-class families in industrial cities (such as Bradford) in northern England.
Our portfolio of identities may extend beyond the nation-state but, as the travails of the European Union repeatedly reveal, most citizens of nation-states are loath to cede ultimate political authority to supranational bodies. Our identity with communities beyond our own country does exist – for example, in the form of foreign aid in times of natural or human-made crises – but this identity is weak relative to that accorded to citizens within our country. Depending what programs one counts, Canadian governments spend about 25 per cent of GDP on social programs for Canadians, and about 0.3 per cent on official foreign aid. Admittedly, new immigrants over the first and second generations usually maintain an identity with their country of origin far greater than most.

Collier relies heavily on Jonathan Haidt, champion of “moral foundations” theory.⁴ According to Haidt, human communities construct their moral conventions intuitively, with scant attention to complex implications and intellectual consistency. Dominant moral conventions are based on six fundamental values: loyalty to members of the community however defined; a sense of fairness among community members; extent of individual liberty; behavioural norms that define sanctity of community members; care or empathy for suffering among others; various concepts of equality. Different communities accord varying salience to each of these values. Haidt’s six intuitive human values are open to much debate. Here is how Collier interprets them.

Having staked out his belief that humans are fundamentally communal in both Exodus and The Future of Capitalism, Collier vigorously condemns academic economists for constructing elaborate models that envisage the economy as a series of market exchanges among individuals, each possessing a set of preferences and maximizing their utility (personal well-being) subject to their income and market prices. The idea is not wrong if the goal is maximizing national GDP. Deng Xiaoping understood the insights of The Wealth of Nations. Among his first accomplishments was to allow farmers, as opposed to government bureaucrats, to decide what crops to grow. Allowing farmers to choose crops yielding maximum expected income resulted in a doubling of wheat production from 1978 to 1985. By the end of the 1980s, Chinese production of grains and tubers was three times that of India.

Collier acknowledges that, post-1980, free trade “neoliberal” economic policies have increased world average per capita income and have modestly reduced worldwide income inequality – thanks to hundreds of millions of peasants in China and India moving to town and earning higher incomes in manufacturing jobs. But, he argues, this has been at the cost of increasingly polarized societies within high-income countries. Individual income maximization overemphasizes individual liberty and underemphasizes values of fairness.

Also, Collier has little good to say about Rawls. Rawls insists that we should make moral decisions as if each of us is behind a “veil of ignorance” as to our own future placement in the social hierarchy. Rawlsians will assent to a proposed policy that increases the sum of utility among those in a country if it offers benefits to those with the lowest utility. This reasoning, Collier argues, overemphasizes equality. It invites formation of minority identity groups defining new judicial rights. In reaction, populist demagogues (mostly conservative) and anticapitalist ideologues (mostly neo-Marxist) emerge in defence of the majority. Pragmatic policies of compromise may well become impossible.

Pragmatism, a nebulous philosophical trend that arose in late-19th-century America, rejects the search for philosophical and scientific certainty.⁵ It is associated with John Dewey and other liberal reformers of the first half of the 20th century, who argued for incremental progress and rejected ideological certainty. To give the flavour of Collier’s conclusions, I quote at some length a polemical passage:
In its origin (pragmatism) is communitarian, seeing the task of morality as doing our best to fit our actions to the values of our community and the specifics of the context … it rejects ideology, no one value is overarching, absolute and timeless. In real communities, the relative importance of values evolves; pragmatism asks “What, here and now, is more likely to work?”

In contrast, ideologies each lay claim to supremacy, derived from reason, over those who disagree with them. The custodians of the supreme ideology are a vanguard of the cognoscenti. Religious fundamentalists invoke a unique divine being as the ultimate authority; Marxists invoke the dictatorship of the “proletariat” guided by a hierarchy. Utilitarians invoke the sum of individual utilities and Rawlsians invoke “justice,” as defined by themselves. Just as pragmatism stands in contrast to ideology, it also stands in opposition to populism.
Collier acknowledges that “pragmatism has its dangers. The freedom to deduce moral actions situation-by-situation has to be bounded by our inherent limitations … Worse, we are tempted to fit reasons to our values. Worst, our judgements are no better than our knowledge.” At this point, an example helps us understand Collier’s over-the-top critique of utilitarian and Rawlsian moral theory.

Given Collier’s extensive work on African development, he not surprisingly has much to say about ethical responses among high-income countries to the increase over the last three decades in refugees from Africa and the Middle East – not to mention Afghanistan. The proximate cause of rising refugee numbers has been civil wars in, for example, Algeria, Ethiopia, Mali, Mozambique, Niger, Nigeria, Côte d’Ivoire, Chad, Iraq, Syria and Yemen. A second proximate explanation is religion: in all these cases, conflicting interpretations of Islam are implicated. In some cases, all participants are Muslim, one side moderate and the other committed to various Salafist perspectives. In Syria and Iraq, the conflict has pitted Sunni against Shi’a – exacerbated by unsuccessful U.S. and NATO interventions. In Algeria and West Africa, conflict has erupted between educated urban elites whose incomes have risen dramatically in the half-century since independence and a rural population whose incomes have not risen. In rural areas, Salafist imams define morality and jihadist extremists attack schools as institutions leading to apostasy.

Rawlsian moral policy, combined with economists’ emphasis on global utilitarianism and the responsibility of care for those faced with war and natural disasters, implies large-scale immigration of refugees as the appropriate response to civil wars. Not surprisingly, Collier disagrees: we have plenty of evidence, he argues, that large-scale immigration of refugees with values profoundly different from those of the potential high-income host country is a catalyst for populist anti-immigrant demagoguery (Donald Trump in the U.S., Nigel Farage in the U.K., Marine Le Pen and gilets jaunes in France, Viktor Orbán in Hungary, Matteo Salvini in Italy).

The clash between the “moral foundations” of immigrants from developing countries and citizens of high-income countries readily leads to a breakdown of pragmatic policy. As I write in mid-October, U.K. leaders are mourning the assassination by the son of a Muslim immigrant of a highly respected MP as he met with constituents. The recently elected Labour leader, Keir Starmer, spends most of his energy attempting to shift the public view of Labour from Jeremy Corbyn’s neo-Marxist tiers mondisme to some version of social democracy.

Among European countries, France has been the most dramatically afflicted by a Huntington-style clash of civilization between well-educated citoyens de souche and Muslim immigrants who have been in France for three generations at most. To some extent, the French have themselves to blame. Their social policies are overly generous and contain few reciprocal obligations (such as transfers conditional on employment) designed to accelerate integration.

In 2015, jihadists assassinated the editors of Charlie Hebdo, a high-profile satirical weekly. In 2020, a radicalized Chechen immigrant assassinated Samuel Paty, a secondary school teacher who, in conducting the required curriculum lecture about laïcité and free speech, displayed caricatures of Muhammad. Between these two high-profile events, Islamist jihadis killed some 250 people in targeted attacks throughout the country.

Emmanuel Macron is a pragmatist, but the chattering classes in Paris are not currently talking about pragmatic policy innovations to hasten integration. They are discussing the rising public profile of Éric Zemmour, an articulate Jewish journalist born in France to Algerian immigrant parents. Zemmour is convinced that the key policy innovation needed to preserve French secular values is a halt to Muslim immigration and deportation of those found guilty of serious crimes. Zemmour may, or may not, enter the 2022 presidential election. His latest poll result (mid-October) is 17 per cent, second only to Macron at 24 per cent for the first round of the election.

If not large-scale immigration, what? Collier does not discuss a Canadian point system designed to keep out those with low education levels and unable to speak English or French. His response turns around a responsibility of high-income host countries to finance employment opportunities in countries abutting the source of conflict. A good idea, but international support for such major interventions is, at present, marginal.

Anywheres versus Somewheres in developing countries

Collier’s thesis is that social democracy tamed capitalism and afforded a “good life” to the great majority of residents in high-income countries. It took two centuries after Adam Smith for countries in Europe and North America to abandon revolution and 19th-century Manchester liberalism. If the post-1980 lowering of global trade barriers, rise of manufacturing capacity in East Asia and technological change have polarized income and political identities in high-income countries, should we not expect a somewhat similar dynamic in developing countries? This is a question that Collier does not pose.

In the mid-20th century, a national identity on behalf of sovereignty accorded legitimacy to the first generation of postcolonial elites. It is an understatement to note that the governing elites of most newly sovereign countries emerging from European empires did not pursue social democratic goals consistent with Collier’s expectations. They did not prioritize good-quality health clinics and hospitals, good-quality primary and secondary education or adequate employment opportunities beyond the major cities. Many countries (e.g. India and Pakistan) copied the Soviet obsession with centralized investment in heavy industry; many collapsed into deeply corrupt dynastic regimes (e.g. Uganda under Museveni, Iraq under Saddam, Syria under the Assad family, Libya under Gaddafi, Algeria under geriatric FLN leaders, Zimbabwe under Mugabe, Pakistan – intermittently – under the Bhuttos).

With many national differences, the post-1980 factors that have fractured national identities in high-income countries have done the same in low-income countries. Over the decades, urban elites in the rapidly growing megacities of developing countries have identified with the lifestyles of high-income countries. Many young adults living in villages have migrated to urban slums in hope of gaining access to higher-income employment. Some succeed in gaining a formal-sector job, either in the public sector or in a labour-intensive sector such as construction or garment manufacturing; most remain in the informal sector earning not much more than they would have if they had stayed in their village.

Admittedly, per capita GDP has risen in the developing world post-1980, even in the poorest regions, sub-Saharan Africa and South Asia. But averages tell us nothing about income inequality, which is very high. Over half the South Asian population lives below the World Bank’s lower-middle-income threshold of US$3.20 per person per day.

These observations are not new. They have motivated international bodies such as the World Bank and various UN agencies to “nudge” the governments of developing countries into adoption of social democracy. The highest-profile initiatives have been the UN’s 2000–2015 Millennium Development Goals (MDG) campaign followed by the 2016–30 Sustainable Development Goals (SDG) campaign. These campaigns have realized some success, but public sector corruption and underfunding remain pervasive and most SDG goals are unlikely to be met.

In South Asia, the urban elites have long since abandoned public education and health services. Among the near-poor (those with some discretionary income), an increasing share have abandoned government schools and health clinics in favour of low-fee private schools and mediocre private health care.

European and North American countries took two centuries before they decided that “tamed capitalism” was the best of many imperfect options. I wish the SDG campaign well in attempting to make the transition in 15 years.

Continue reading “If Not Immigration, Then What?”

Image: Francis Mckee, CC BY 2.0, via Wikimedia Commons. Edited by Inroads.

On the one hand, liberal greens will tell you that the world is ending – but that we must not use nuclear power, an abundant source of clean energy, to stave it off. On the other hand, conservative greens will tell you that the world is ending, but that we can’t burden people with a carbon tax or a gasoline tax to slow global warming.

On a third hand, suburban greens will tell you that the world is ending, but that they don’t want any windmills, solar farms or high-speed rail lines in their backyards.

On a fourth hand, most of today’s leaders will tell you that the world is ending, so at Glasgow they’ve all decided to go out on a limb and commit their successors’ successor to deliver emissions-free electricity by 2030, 2040 or 2050 – any date that doesn’t require them to ask their citizens to do anything painful today.

This is not serious – not when you’re talking about reversing all the ways that we have destabilized Earth’s systems, from ice caps and ocean currents to coral reefs and tropical forests to the density of carbon dioxide in the atmosphere. This is pretend.

Serious was how we responded to Covid-19, when it really did feel like the world economy was ending: We fought back with the only tools we have that are as big and powerful as Mother Nature – Father Profit and New Tech.

— New York Times columnist Tom Friedman¹

Friedman succinctly makes an argument with which I strongly agree. With exceptions, the political leaders speaking at the Glasgow UN Conference of the Parties (COP26) were not “serious.” Perhaps the most ominous evidence of a lack of seriousness is paragraph 36 of the Glasgow Climate Pact:

36. (The Conference of the Parties) Calls upon Parties to accelerate the development, deployment and dissemination of technologies, and the adoption of policies, to transition towards low-emission energy systems, including by rapidly scaling up the deployment of clean power generation and energy efficiency measures, including accelerating efforts towards the phase-out phase-down of unabated coal power and inefficient fossil fuel subsidies, recognizing the need for support towards a just transition.²

Optimists note that this is the first mention in a COP statement of eliminating use of coal to generate electricity; realists note that, at the last minute, India and China amended the text by substituting “phase-down” for “phase-out.”

Whatever the interpretation, paragraph 36 is not “serious” in Friedman’s terms. His implicit definition of serious is that politicians invest their political capital in launching programs that (1) are undertaken now, as opposed to being scheduled to ramp up over time or come into effect in future decades, and (2) have the potential to make a major impact in lowering greenhouse gas (GHG) emissions. Where should we start?

The Intergovernmental Panel on Climate Change (IPCC) is a UN organization responsible for assembling climate change scientific studies. In a 2018 report targeting policymakers, it put forward four pathways that would probably hold the increase in average world temperature to 1.5 degrees Celsius relative to preindustrial estimates (see Box 1).

Box 1

IPCC pathways to limit future temperature rise to 1.5 degrees Celsiusa

Pathway 1

The first scenario requires that innovations can simultaneously reduce energy demand and increase living standards, especially in the global South. A downsized energy system enables rapid decarbonization of energy supply. Afforestation is the only carbon dioxide removal option considered. There is no need for either fossil fuels with carbon capture and storage or bioenergy.

Pathway 2

This scenario requires faith in international cooperation with a broad focus on sustainability including energy intensity, human development, economic convergence, shifts toward sustainable and healthy consumption patterns (e.g., substitution of plant-based protein for red meat), low-carbon technology innovation and well-managed land systems. It requires some limited societal acceptability for carbon capture and storage, and bioenergy.

Pathway 3

This scenario implies that social as well as technological development follows historical patterns. In other words, final energy demand continues to grow. Central to this pathway is that we support universal acceptance of nuclear power. The scenario projects a fivefold increase in use of nuclear, a ninefold increase in nonbiomass renewables and a sevenfold increase in carbon capture and storage plus bioenergy. (At present, adding carbon capture from fossil fuel power generation roughly doubles the cost per kilowatt-hour).

Pathway 4

A resource- and energy-intensive scenario in which economic growth and globalization lead to widespread adoption of greenhouse gas–intensive lifestyles, including high demand for transportation fuels and livestock products. Emissions reductions are mainly achieved through technological means. We need faith in new technology removing carbon dioxide from the atmosphere, faith in carbon capture and storage and faith in bioenergy fuels.

a Summary of pathways defined in Intergovernmental Panel on Climate Change, Summary for Policymakers of IPCC Special Report on Global Warming of 1.5℃ Approved by Governments (Geneva, Switzerland: Author, 2018), p. 14.

Each of these pathways requires policies that, at present, are highly unpopular in high-income countries or depends on technological innovation that may or may not materialize. Pathway 1 requires reduced world energy demand, a massive increase in forest cover and emphasis on increased living standards in the global South. Pathway 2 requires high levels of international cooperation, lower energy intensity and a major shift in diets from meat to plant-based protein. Pathway 3 assumes extrapolation of historical trends in energy use. Central to this pathway is a massive increase in the share of energy derived from nuclear power as well as an increase in nonbiomass renewables and in carbon capture and storage. The fourth requires optimistic trends in technology for CO2 removal from the atmosphere and faith in carbon capture and storage.

The value of the pathways is to illustrate what “serious” means. My choice is Pathway 3. The case for it is that the majority in all countries – developing or high-income – will never agree to “phase out” or even “phase down” fossil fuel energy without a reasonable substitute. Pathway 1 requires Brazil, Indonesia, countries in tropical Africa and Russia, among others, to halt illegal logging and find ways to expand forest cover. It also requires that the global North reduce energy demand and leave room for the global South to increase its energy demand and the contingent GHG emissions. All good ideas, but they require Scandinavian quality of governance. Pathway 2 requires that the world abandon meat, especially red meat. Good luck in persuading the majority across the world to become vegetarians, or perhaps eat chicken along with vegetables, fruit and pulses. (No fish! Substituting fish for meat accentuates the pressure on world fish stocks.) The IPCC is dubious about realization of the technological innovations required by Pathway 4.

As with the other pathways, Pathway 3 poses obstacles. Relative to 2010, it assumes a doubling of nuclear power capacity by 2030 and a fivefold increase by 2050. What about disposal of spent fuel? What about more Fukushimas? What about the history of cost overruns on ex ante construction cost estimates? An obscure white paper answers these questions adequately. The good news about this pathway is the consensus among engineers that (relatively) small modular reactors (SMRs) are much safer than large earlier designs. Furthermore, engineers expect that use of standardized modular components will enable lower construction costs per megawatt capacity than earlier designs for much larger reactors.

In 2018, a committee composed of a half dozen Canadian power companies as voting members and Natural Resources Canada as a nonvoting member published a white paper on the potential to construct multiple SMRs.³ While the white paper addresses the technical questions, it does not address the major problem: public opinion in most high-income countries, including Canada, is opposed to expansion of nuclear power. One recent Canadian survey found overwhelming support for substituting renewable and “clean” energy for fossil fuel–based energy, but only 21 per cent were prepared to endorse nuclear as a clean energy option.⁴

Despite public attitudes, nuclear is making a comeback among some of the world’s “deep thinkers.” The well-respected Union of Concerned Scientists (UCS) publishes carefully researched reports on numerous U.S. policy issues. In 2018, UCS published a monograph advocating expanded investment in U.S. nuclear power capacity.⁵ In its November 13 issue, The Economist published an editorial and two articles on the potential of nuclear power in reducing greenhouse gases associated with power generation. All three are positive. Bill Gates has decided to put serious money behind his pronuclear advocacy and is investing half the cost of a $4 billion modular nuclear reactor to replace a coal-fired plant in a Wyoming coal town. (The U.S. government is paying the other half.) Gates is partnering with Warren Buffett on other nuclear projects.⁶

And in Canada? The white paper mentioned above and a more recent “action plan” are not on the Natural Resources Canada website.⁷ Nominal action plan supporters include six provinces and territories (Alberta, Saskatchewan, Ontario, PEI, New Brunswick, Yukon – but not British Columbia or Quebec), major provincial power companies in supportive provinces, a few universities (not including my university, Simon Fraser), several Indigenous organizations and municipalities, civil society groups, industry associations, heavy industry (e.g., Suncor), engineering firms and would-be SMR vendors (e.g., CANDU). You are forgiven if you have not heard of this “action plan.” It is probably the least visible climate change policy initiative developed in Ottawa.

Neither Natural Resources Minister Jonathan Wilkinson nor Environment Minister Steven Guilbeault is likely to ask my opinion on how to activate the SMR “action plan” – and change public opinion. However, I would be delighted to forgo my consulting fees if one or both want advice. Here are a few strategic arguments:

  • Wind and solar power are valuable renewable nonfossil energy sources, but solar does not generate power at night and wind must blow. Hydro and nuclear are the two Canadian sources of significant “dispatchable” power available at all times. Unfortunately, there remain few unexploited sites for large-scale hydro dams.
  • While Canada gets most of its power from non–fossil fuel sources, it still gets nearly a fifth from coal, natural gas and petroleum. Over this decade, Canada could eliminate nearly all fossil fuel–generated electricity by building 100 SMRs.⁸ An investment by Ottawa of, say, $50 billion over the next decade might be considered “serious.” Construction jobs for SMRs could be a suitable substitute for many jobs linked to fossil fuel power generation (see table 1).
  • The estimated levelized cost per megawatt-hour of electricity generated by SMRs is probably similar to that for natural gas or hydro. There are many SMR designs on the drawing board, and no consensus on optimal design. Hence, there is considerable uncertainty about the range of unit costs of energy generated by SMRs. By making a commitment to build multiple SMRs in Canada, we can contribute to developing optimum designs (see figure 1).
  • Canada was a leader in the mid-20th century in nuclear power technology, and could become a leader again. Since Canada generates 15 per cent of its power from nuclear plants, it has considerable engineering capacity in nuclear power generation.
  • A commitment to invest in nuclear power would, in time, probably generate an export potential. If Canada was prepared to invest heavily in multiple SMRs – some based on Canadian designs, some on designs from elsewhere – and thereby eliminate domestic fossil fuel power generation, we would within a decade build a comparative advantage over other countries in constructing and managing SMRs. If SMRs become widespread, Canada would be in an ideal position to export its expertise.
  • Canada could designate aid to SMR construction in developing countries as a major priority for our foreign aid budget. Eliminating the 18 per cent of Canadian electricity currently based on fossil fuels should be an initial goal. Most developing countries rely on fossil fuel–based power, and lack of adequate power capacity is a major impediment to their economic development. (“Load shedding” refers to the frequent shutdown over many hours of regions of a country because system demand exceeds capacity. It is one of the most widely understood English words among the poor in the global South.)

Pursuing serious climate change policy inevitably exposes a country to potentially losing out in some future unpredictable collective coordination game. I have sketched the potential of Canada promoting the IPCC’s Pathway 3. I acknowledge the risk. Others may prefer to sketch out one of the other IPCC pathways – or invent an altogether new pathway. Whatever the option, if serious, it will entail significant financial and political investments now, with uncertain future benefits.

For more from our Inroads 50 feature on climate change, click to read A Carbon Tax that Pays the Cost of Climate Change, by Marvin Shaffer and John Richards.

Continue reading “Getting Serious About Climate Change”

Photo via United Nations Development Programme.

On occasion, my interest in South Asia comes to the fore and I prevail on my Inroads colleagues to publish relevant articles, some written by me, some by others. In Summer/Fall 2018 we published Why is South Asia Poor?, a précis of a chapter in a book that I and two Bangladeshi colleagues have written. The book surveys the lamentable state of primary education in most of South Asia – and the difficulty of reform (it will be published by University of Toronto Press this fall). In Summer/Fall 2020, we published Something is Rotten in the State of India: An Election in Delhi, a Ghost in Denmark and a School in Bangladesh. The motivation for that article was the concerted, but fortunately unsuccessful, campaign by Prime Minister Narendra Modi’s political party to dislodge the reform government in Delhi in a bitterly fought state election. We continue the tradition here with Sumbal Naveed’s article on the decline in reading habits among young Pakistanis. Her evidence comes from a USAID-supported survey.

Click to read Why Young Pakistanis Don’t Read by Sumbal Naveed, and our accompanying photo essay, In School, But Are They Learning?

It is hard to exaggerate the importance of literacy in understanding why some countries are rich and others poor. Figure 1 illustrates literacy trends over three decades, by gender, in South Asia’s three populous countries: India, Pakistan and Bangladesh. The data are estimates by the United Nations Educational, Scientific and Cultural Organization (UNESCO). Obviously, there was progress in the intervening decades. However, literacy is a complex concept; the UNESCO threshold defining literacy is low (e.g., ability to read short articles in a newspaper) and literacy is self-reported in many of the national surveys on which UNESCO relies. Also obvious is persistence of a gender gap in literacy – even among young adults in school in the 1990s and this century.

Naveed refers in her article to the Annual Status of Education Report (ASER), a large-scale early-grade assessment conducted in India and Pakistan. In India the sample size is about 500,000, in Pakistan about 80,000. ASER’s literacy threshold is the ability to read a short story (about 200 words) in the Grade 2 curriculum in the dominant regional language. In Pakistan, the three languages are Urdu, Sindhi and Pashto. In the most recent (2018) survey in India, 27 per cent of Grade 3 students could read the story, in Pakistan 17 per cent. By Grade 5, in both countries about half could read the Grade 2–level story.