Topic: International Economics and Development

NOBODY Expects the Spanish Press Contrition!

Back in October, Spain’s parliament passed a horribly ill-advised law at the behest of the Spanish news publishing lobby, the AEDE. Struggling to adapt to the information age in one of Europe’s more troubled economies, the AEDE thought it had hit on a brilliant new revenue source: They got a provision inserted in a new intellectual property law that, starting in January, will force news aggregation sites to pay newspapers for the privilege of linking to their stories.

This never made much sense: News aggregators are a massive source of traffic (and therefore ad revenue) for news sites.  In effect, the law seeks to make it more difficult and costly for anyone to give those sites free advertising.  Indeed, it’s hard to see the point of posting stories online unless you expect people to link to them, and it’s simple enough to automatically prevent search engines from indexing your site’s content if, for some obscure reason, you don’t want people to have an easy means of discovering your content.  But never mind the logic; the law seemed like a foolproof way for ailing news companies to milk a few euros from big tech corporations flush with cash. What could go wrong?

You know how the story ends, right?  Everyone but the newspapers themselves seems to have seen it coming, since something similar had just played out in Germany: Google News, the largest of the aggregators, announced last week that they would be shutting down operations in Spain. Since the company didn’t even show ads on its news site, keeping it open under the new regulations would be an unsustainable, money-losing proposition.

The hilarious coda to the story: The AEDE, which previously complained that news aggregators were “stealing” their work by publishing headlines and tiny snippets of stories, is now begging Spanish regulators to stop Google News from closing. The site’s shuttering, the group complained without irony, “would undoubtedly have a negative impact on citizens and Spanish businesses.” Give them points for chutzpah if nothing else: They’re not even waiting for the blood to dry on the hatchet before bemoaning the loss of their golden eggs.

Early Childhood Summit Don’t Lie?

When I first heard about the White House Summit on Early Education being held today, I worried. “I sure hope this isn’t going to be a PR stunt to cheerlead for government pre-kindergarten programs,” I thought. Then I got the announcement: U.S. Secretary of Education Arne Duncan will be having a Twitter chat with pop sensation Shakira in conjunction with the summit! “Oh, I was just being silly,” I said to myself, relieved that this would be a sober, objective discussion about what we do – and do not – know about the effectiveness of pre-K programs.

Okay, that’s not actually what happened. In fairness to Shakira, she does appear to have a very serious interest in children’s well-being. Unfortunately, the White House does not appear to want to have an objective discussion of early childhood education.

Just look at this, from the official White House blog:

For every dollar we invest in early childhood education, we see a rate of return of $7 or more through a reduced need for spending on other services, such as remedial education, grade repetition, and special education, as well as increased productivity and earnings for these kids as adults.

Early education is one of the best investments our country can make. Participation in high-quality early learning programs—like Head Start, public and private pre-K, and childcare—provide children from all backgrounds with a strong start and a solid foundation for success in school.

Let me count the ways that this is deceptive, or just plain wrong, as largely documented in David Armor’s recent Policy Analysis The Evidence on Universal Preschool:

  • The 7-to-1 ROI figure – for which the White House cites no source – almost certainly comes from work done by James Heckman looking at the rate of return for the Perry Preschool program. It may well be accurate, but Perry was a microscopic, hyperintensive program from the 1960s that cannot be generalized to any modern, large-scale program.
  • If you look at the longitudinal, “gold-standard” research results for Head Start, you see that the modest advantages accrued early on essentially disappear by first grade…as if Head Start never happened. And federal studies released by the Obama administration are what report this.
  • It stretches credulity to call Head Start “high quality,” not just based on its results, but on its long history of waste and paralysis. Throughout the 2000s the federal Government Accountability Office and general media reported on huge waste and failure in the program.
  • Most evaluations of state-level pre-K programs do not randomly assign children to pre-K and compare outcomes with those not chosen, the “gold standard” mentioned above. Instead they often use “regression discontinuity design” which suffers from several shortcomings, arguably the biggest of which is that you can’t do longitudinal comparisons. In other words, you can’t detect the “fade out” that seems to plague early childhood education programs and render them essentially worthless. One large-scale state program that was evaluated using random-assignment – Tennessee’s – appears to be ineffective.
  • The White House says early childhood programs can help “children from all backgrounds.” Not only is that not true if benefits fade to nothing, but a federal, random-assignment evaluation of the Early Head Start program found that it had negative effects on the most at-risk children.

I suspect the vast majority of people behind expanding preschool are well intentioned, and I encourage them to leverage as much private and philanthropic funding as they can to explore different approaches to pre-K and see what might work. But a splashy event intended to proclaim something is true for which we just don’t have good evidence doesn’t help anyone.

Let’s not mislead taxpayers…or kids.

‘Justice’ à la Venezuelan

This week a Venezuelan judge indicted opposition leader María Corina Machado on flimsy charges of conspiracy to kill President Nicolás Maduro. If found guilty, she could spend up to 16 years in prison. Can she expect a fair trial from the Venezuelan judiciary?

Not at all, according to the findings of an investigation led by three Venezuelan lawyers and published in a new book, El TSJ al Servicio de la Revolución (“The Supreme Court at the Service of the Revolution”). According to their research, since 2005 Venezuela’s justice system has issued 45,474 sentences, but not once has it ruled against the government.

Machado’s fate thus depends entirely on the whims of Maduro and his entourage. The precedent of Leopoldo López, another opposition leader who has been jailed since February on charges of arson and conspiracy, does not bode well for Machado. 

An Innovative Way to Title Property in Poor Countries

Over the past couple of decades, a consensus has emerged among development practitioners and over a broad ideological spectrum about the need to legally recognize and protect the property rights of the world’s poor. Yet land tenure and the holding of other forms of property of billions of poor people remains informal.

As Peter Schaefer and Clay Schaefer explain in a Cato study released yesterday, one reason there has been little progress in titling or registering the property of the poor is that powerful interests in developing countries block reform. And in countries that have particularly predatory governments, there may be little actual demand to title property. Why would you publically register your property if the result will be confiscatory taxation, political persecution, or the need to pay bribes to avoid complying with prohibitively expensive regulations?

The authors propose a novel, bottom-up approach to registering property that gets around those problems: using a simple, hand-held GPS device, individuals in poor communities can inexpensively map their property claims in an informal community registry that is publically accessible on the internet. In the vast majority of cases, there is already a consensus about what informal property belongs to whom, so disputes on boundary issues that might arise are typically not significant and are readily solved. This community mapping approach is already partly being employed in parts of Africa and India. Because such registration is voluntary, it would only take place where people actually demand it; and because it is informal, it need not rely on unreliable government bureaucracies to make it happen.

Were communities to create “live” documents of their registries on the internet, as the authors propose, they would increase tenure security by providing useful information to investors, neighbors, multinational corporations and even governments. As Peter and Clay Schaefer note, “When a community achieves a critical mass of registered users, it will be very difficult for their governments to ignore the claims that have been recorded.” That approach will also make it more politically feasible for poor people to negotiate with the authorities and gain formal title to their property.

Remembering Georgia’s Freedom Fighter

Sometimes a person’s genuine significance can be assessed only after their passing. That seems to be the case of Kakha Bendukidze, Georgian entrepreneur, reformer, and philanthropist, who died unexpectedly early last month. While he was very well-known among libertarians in Eastern Europe and the former USSR, the reactions of some of the world’s leading media outlets suggest that his influence extended far beyond narrow ideological lines, making him one of the most important voices on public policy in the region.

Kakha was a close intellectual ally of Cato and did more than his fair share to promote free-market ideas in countries of the former USSR. In the early 2000s, he pressed for the adoption of a flat tax in Russia. Earlier than others, he understood Vladimir Putin’s true motives, sold his Russian businesses and moved to his native Georgia. It was there that he spearheaded, as Minister for Economy, the ambitious program of fighting corruption and liberalizing the economy, which led to extraordinarily high growth rates for Georgia’s economy. In 2007 alone, the economy expanded by 12.3 percent. After leaving public office, Kakha helped establish the Free University of Tbilisi, a private university offering Western-style undergraduate and graduate education, and the Knowledge Fund, a charity providing funding for teaching and research, including scholarships for Georgian students from poorer backgrounds.

Impressive as this account is, few would have guessed that his passing would prompt a wave of tributes and appreciations coming from sometimes unexpected places. On Foreign Policy’s Democracy Lab, Anna Nemtsova called Kakha one of Georgia’s “most progressive reformers and corruption fighters.” The New York Times published a lengthy obituary, which highlighted Kakha’s involvement with the new leadership of Ukraine. The Independent, in turn, called Kakha a “businessman and statesman who fell foul of Vladimir Putin but rescued Georgia’s post-Soviet economy.”

Finally, the New Yorker magazine offers a carefully written appreciation, offering a lot of details on Kakha’s life and activities in Ukraine prior to his untimely death, as well as the directness with which he communicated his ideas:

Even though he was unsure whether Ukrainians would accept the changes that he wanted to carry out, he agreed to work with [Ukrainian President] Poroshenko, friends say, because he saw Ukraine as the frontline of the battle for liberal reforms in the former Soviet states. With the same tough love that he had inflicted on Georgians, Bendukidze urged Ukrainians to stop blaming others for their problems. “You have broken every world record in idiocy,” he told an audience at the Kyiv School of Economics, in July. “You keep electing populists, people who promise you more. This means you are electing the worst.” He advocated cutting government spending, reducing retirement benefits for public servants, and radically deregulating the economy. Ukraine, he said, in one of his last interviews, had too many ministries and agencies. “Who needs them when the government’s sole function these days is to take money from the International Monetary Fund and pass it on in payment for Russian gas?” he asked.

A Tyranny of Silence: One Journalist’s Battle Against Modern-Day Restrictions on Free Speech

In their effort to provide the public with information about controversial yet important world events, journalists face constant intimidation. Whether it takes an extreme form—such as beheading or death threats—or a less violent one—like government censorship or enforced political correctness—it nonetheless constricts their ability to convey truthful information about key issues.

No one knows this better than Flemming Rose.

In 2006,  the Danish newspaper Jyllands-Posten published 12 cartoons of the prophet Muhammad, stoking the fires of a worldwide debate about what limits—if any—should constrain freedom of speech in the 21st century.

Rose, then the paper’s culture editor, defended the decision to print the drawings, quickly becoming the target of death threats and more, all of which he recounts in his new book, published by the Cato Institute.

In The Tyranny of Silence: How One Cartoon Ignited a Global Debate on the Future of Free Speech, Rose provides a personal account of an event that has shaped the global debate about what it means to be a citizen in a democracy and how to coexist in a world that is increasingly multicultural, multireligious, and multiethnic. Rose writes about the people and experiences that have influenced his understanding of the crisis—including meetings with dissidents from the former Soviet Union and ex-Muslims living in Europe—and takes a hard look at the slippery slope of attempts to limit free speech.

Rose’s message clearly resonates with lovers of liberty around the world. A special one-on-one conversation between Rose and Jonathan Rauch of the Brookings Institution, hosted at the Cato Institute in mid-November, saw over 100 in-person attendees with another 53 people tuning in online.

That impressive showing, however, was far outpaced by the mass response to Cato’s very first Reddit AMA, featuring Rose, which has been viewed well over 200,000 times since it was first published on November 13th, and continues to draw thousands of Reddit viewers every hour, almost two weeks later.

Rose’s AMA, entitled “I am a journalist and free speech advocate who has received hundreds of death threats since 2006. AMA,” quickly broke into the top ten discussions on the iAMA forum that week. As questions continues pouring in, Rose sat down for a second full hour session the day after the original session was scheduled.

You should definitely read the AMA yourself, but here are some highlights:

Enjoyed the discussion? You can read the whole thing here. And, of course, don’t forget to buy the book to read all of Rose’s harrowing tale.

Russia Should Bury Lenin’s Body and the Rest of Communism

MOSCOW—Red Square remains one of the globe’s most iconic locales. Next to the Kremlin wall is a small, squat, pyramidal building:  Vladimir Ilyich Ulyanov Lenin’s mausoleum.

Lenin is preserved within, dressed in a black suit, his face is grim and his right fist is clenched, as if he was ready to smite the capitalists who now dominate even his own nation’s economy.  He is one of history’s most consequential individuals. Without him there likely would have been no Bolshevik Revolution, Joseph Stalin, Cold War, and Berlin Wall.

Of course, without Lenin there still would have been a Bolshevik movement. But it would have lacked his intellect, tactical skills, and, most important, determination. So feared was he by his enemies that he became Germany’s secret weapon against Russia, sent back to Russia to spread the bacillus of radical revolution.

Lenin pushed the Bolsheviks toward power as the authority of the moderate Provisional Government, which had ousted the Czar, bled away. Lenin was no humanitarian whose dream was perverted by his successors. He insisted on solitary Bolshevik rule, brooked no dissent even within the party, established the Cheka secret police, and employed terror against opponents.

Lenin was left helpless by three strokes.  He died on January 21, 1924, just 53 years old. His body lay in state for four days, during which nearly a million people passed by.

Within a week of his passing the idea of preserving his body was broached. The mausoleum started as wood and turned into the current granite and marble structure in 1929.

Communist imagery, including Lenin’s mummy, came under attack with the dissolution of the Soviet Union. Moscow’s anti-communist mayor backed burying the corpse and restoring Red Square to its pre-revolutionary state. Boris Yeltsin, the first president of non-Communist Russia, also proposed to bury Lenin. But Yeltsin’s health faltered and political strength weakened.

In 2001 Yeltsin’s successor, Vladimir Putin, expressed fear that burial would suggest the Russian people had lived under “false values” all those years. He concluded in 2011 that the decision would be made when the time was right.

Yet the same year Vladimir Medinsky, then a leading member of Putin’s United Russia Party, proposed burying the corpse next to Lenin’s mother in St. Petersburg and turning the mausoleum into a museum. In 2012 Putin appointed Medinsky Minister of Culture, suggesting support for removing Lenin’s body. However, Putin failed to act and since has ignored the issue.

While Russia cannot escape its history, it should stop glorifying the country’s turn down one of humanity’s great deadends. Although an unjust despotism, Imperial Russia could have been transformed into some form of constitutional rule.

But by entering World War I the Czarist autocracy sacrificed that opportunity. The Provisional Government, led by liberal constitutionalists and democratic socialists, put the previous regime’s commitment to war before the Russian people’s interests.

Unfortunately, the victorious Bolsheviks suppressed free markets, stole private property, crushed political dissent, murdered political opponents, imposed materialist ethics, and exalted ruthless dictatorship. The result was a sustained assault on the history, traditions, ethics, and very essence of the Russian people. Although Russians finally were able to turn back from this deadly detour, the same old authoritarianism has been born again, repackaged to make it more palatable to Russians today.

As I point out on Forbes online, “Burying Vladimir Lenin would be a powerful symbolic gesture to close an era. That still might not help the West understand what Vladimir Putin is, but it would emphatically show what he is not. And that would be no small feat at a time of dangerously rising tensions between Russia and the West.”

Someday Russians will be free. Liberation will come only through the Russian people’s own efforts, however, not from the West. Only they can make their own future. The day liberty arrives will be the real Russian Revolution.