Author Archives: mideastanalyst

Is China helping African countries industrialize?

Noah Smith published a column on Bloomberg earlier this week about the importance of industrialization to Africa’s future. Smith argues that both international aid programs and policy interventions have been inadequate at transforming African economies and improving living standards on the continent.

The article focuses on the role that Chinese entrepreneurs and firms are playing in spurring industrialization. Smith reviews a new book by Irene Yuan Sun that highlights the phenomenon of Chinese entrepreneurs setting up factories in Africa.

It is refreshing to see a prominent journalist such as Smith draw attention to the issue of economic development in Africa. Smith is particularly good when he discusses the moral stakes of economic development in Africa (i.e. Why we should care).

However, Smith’s argument about why African industrialization is likely to continue is not very compelling.

For example, he writes,

Rising labor costs in China, and the threat of U.S. tariffs, are finally causing manufacturers to diversify their supply chains. Some of their factories will go to Vietnam and Bangladesh, two rising stars of the developing world. But those countries won’t be big enough to replace China, which means that if manufacturers really want to keep costs down, many will have to look to Africa.

While it is true that manufacturers are searching for other bases due to high labor costs in China, it is not clear that sub-Saharan African countries are attractive destinations for this investment. For example, this study by the Center for Global Development highlights high labor costs in sub-Saharan Africa as a threat to manufacturing competitiveness.

However, it is important to consider the mechanism(s) by which increasing Chinese investment in manufacturing could help accelerate the industrialization process and economic growth.

As this paper by Dani Rodrik, Xinshen Diao, and Margaret McMillan points out, unlike in Asia, growth in Africa has been driven by increased productivity in agriculture and the movement of workers from agriculture to non-agricultural sectors but not by increased productivity in non-agricultural (“modern”) sectors. The paper discusses why increased productivity in the modern sector is essential for sustained economic growth.

My takeaway is that if Chinese firms in sub-Saharan Africa continue to grow and increase productivity in the nonagricultural sector, that transformation could help sub-Saharan African countries achieve a growth trajectory similar to Asian countries.

This Week in International Education

Below are a few education and development pieces I found interesting this week.

  1. This CGD note by Lant Prichett discusses the all too common practice of using metrics which are not directly related to student learning/ability to assess progress in basic education. Prichett cites the example of data collected during the rollout of a large-scale government-led education initiative in India, the Sarva Siksha Abhiyan (SSA). Pritchett writes, “As part of this scheme an EMIS (Education Management Information System) program called DISE (District Information System for Education) was launched. This was called a “report card” on schools and contains, for each district of India (aggregated up to state level) a huge “dashboard” of data about schooling. In the current State Report Cards 2016-2017 there are, by my count, 977 distinct numbers reported. Not one of those numbers is any direct measure of student learning (and interestingly, a previously included measure of learning, pass percentages, was dropped from the “report card”).”
  2. World Bank researcher David Evans highlights the impressive body of education research co-authored by RTI International’s Director of Education for Africa, Ben Piper. Evans notes that Piper and his co-authors do not let the perfect (clean causal identification) serve as the enemy of the good (answering questions that policymakers care about in a reasonable timeframe)
  3. At Marginal Revolution, Tyler Cowen summarizes a new paper by economist Juan Sebastian Munoz which suggests that upwards of 50% of the gender gap in math achievement in Colombia is driven by lower-achieving males dropping out of school. It turns out the opportunity cost of staying in school is higher for this group.
  4. Uganda is reforming its school inspection program to focus more on student learning, teaching, and teacher attendance. The government worked with DFID and Ark Education Partnerships group to pilot the new approach. (Via Lee Crawfurd). Lee Crawfurd highlighted the importance of school inspections as a mechanism for improving accountability in this blog post.


High Returns to Schooling – Driven by Productivity or Screening?

The Economist summarizes a new World Bank literature review on the returns to education by Harry Patrinos and George Psacharopoulos. Patrinos and Psacharopoulos find that the returns to education are consistently high, an extra year of schooling yields an average annual private return of 8.8% across 139 countries. The paper shows that there are significant differences in returns across regions of the world, between high-income and lower-income countries, and for men vs. women.

The  researchers calculate the “social” (i.e. non-private) returns to education, an essential datapoint for those interested in the question of how much governments should invest in education.

Another key policy question that the authors address is the mechanism through which eduation impacts wages. Here is how Patrinos and Psacharopoulous frame the debate:

The earnings premium associated with the level of education suggests that productivity increases as people acquire additional qualifications. An alternative view is that earnings increase with education due to credential effects. This refers to the idea that higher levels of schooling are associated with higher earnings, not because they directly raise productivity, but because they certify that the worker is likely to be productive.

I was surprised to learn that the academic literature does not provide much support for the credential effects thesis; rather, positive labor market outcomes seem to be driven by increases in productivity.



This Week in International Education

Below are links to a few education-related pieces I read this week:

  1. Low Performance and High Satisfaction: The Information Paradox of Bad Schools This blog by Susannah Hares of Ark Education highlights  findings from the Varkey Foundation’s Parent Survey. The survey reveals that parents in countries that perform poorly in education (such as India, Kenya, and South Africa) are more satisfied with their children’s education than parents in high-performing countries such as Korea. The piece explores several potential explanations for this phenomenon and examines whether providing parents with performance information is an effective strategy for improving education outcomes.
  2. Facing Forward: Schooling for Learning in Africa – The World Bank’s new report assesses the current state of education in sub-Saharan Africa and suggests ways to improve both access and quality.
  3.  Are Our Children Learning? This Twaweza report summarizes the results of basic learning assessments conducted in three East African countries: Kenya, Uganda and Tanzania from 2011-2015. My main takeaway from the report is that all three countries have seen little to no improvement in basic learning outcomes over the last five years.