Business, Peace and Sustainable Development journal

Image

For those interested in the intersection between the private sector and peacebuilding, I recommend checking out the inaugural issue of the new journal, Business, Peace and Sustainable Development. Among other articles, you will find Talia Haggerty‘s summary of, and thoughts on, the Institute for Economics and Peace conference on “Peace Economics, Peace Metrics and the Role of Business,” held at the Kogod School at American University last April. You will also find a stunningly thought-provoking personal introduction to myself, by myself.

Greenleaf Publishing has also arranged for free access to the inaugural issue, with detail pasted below.

BPSD: Issue 1

 Username: bpsdtrialaccount

Password: bpsdtrialaccount

Leave a comment

Filed under Uncategorized

Opening Remarks: Leadership for Peace and Prosperity

Image

This past weekend, I was asked to make the opening remarks for the second day of the Conference on Leadership for Peace & Prosperity, co-sponsored by the Center for Peace and Commerce and Ahlers Center for International Business at the University of San Diego, and the Institute for Economics and Peace. A few folks have asked me for a hard copy, so I thought I’d put this online.

_______________________________________

Opening Remarks

Conference on Leadership for Peace and Prosperity

Saturday, 5 October 2013

Topher L. McDougal

Introduction

Hello and thank you for joining us on this second day of conference presentations on Leadership for Peace and Prosperity.  My name is Topher McDougal; I am an economist and an Assistant Professor of Economic Development and Peacebuilding here at the Kroc School of Peace Studies. I am also a member of USD’s Center for Peace and Commerce, a joint-venture between the Schools of Business Administration and Peace Studies.

A couple of years ago, Johan Galtung, often credited as the founder or godfather of Peace Studies, visited the Kroc School of Peace Studies. Our faculty met with him and I was introduced as “the economist.” We had a pleasant talk and, when the meeting drew to a close, Galtung drew me aside with these words: “You know the best part of being an economist, Topher?” A few possible answers sprang to mind, but I said no, I had no idea. Galtung answered his own question: “You can always become an ex-economist!” And the twinkle in his eye playfully hinted that I had just wasted the last 12 or so years of my life.

And while as a rule one should avoid analyzing humor, I think that comment was funny because economists are routinely seen by many (including, apparently, the godfather of Peace Studies) as patently antithetical to peace and indeed maybe even to basic humanity more generally. I was chatting with Professor Brauer the other day about a Cost-Benefit Analysis of a mega-dam in India that indicated a huge net benefit to society partly because the 250,000 subsistence-level indigenous people it was to displace were not part of the market economy, and therefore represented no opportunity cost to construction. Indeed, the dam itself was used as a way of getting them to finally engage in the market economy and make themselves “useful.” And in the aftermath of a Great Recession unpredicted and largely unmitigated by most economists, it’s easy to see the reputation as being well-earned.  But I hope that the perception is starting to change, and this is one of the events and the places that is contributing to that change.

We had a very full day of interesting conversations and presentations yesterday. Today promises to be of an equally high calibre, though, for better or for worse, it will be shorter. Like yesterday afternoon, there will be some difficult decisions for conference attendees as they struggle with which of the concurrent sessions to attend. I don’t know if we are streaming these sessions live online today, but if so, you may wish to attend, say, session 3a in person while simultaneously watching session 3b on your iPhone or iPad or iPad mini. This is all just part of a brave, new, slightly offensive, multitasking future.

Overview

Ten or 12 years ago, Tony Addison talked encouragingly about how businesses in conflict zones were switching from a mentality of “working in” conflict to one of “working around” conflict. That is, they were no longer just blithely unaware of conflict dynamics in the societies in which they sourced materials and labor or found their customer base.  They were increasingly trying to follow the Hippocratic oath and “first do no harm.” But Addison also hoped for a day when businesses would move to “work on” conflict—that is, deliberately engage parties to those conflicts within and around their own operations to \ channel, transform, and resolve them. Many recent efforts—and most recently this conference and the inauguration of the journal of Business, Peace, & Sustainable Development—seem to have ushered in that age of working on conflict.

Beyond the problem of prepositions, this sub-field, if it is one—this intersection of Peace Studies, Economics, Business, Environmental Science, Law, Political Science, Conflict Analysis & Resolution—is under-empiricized (as David Stephens seemed to hint at yesterday with his comment on the “worm’s eye view,” which I loved), but it’s also under-theorized.  Being a relatively new intersection, many of our concepts, definitions, and basic causal assumptions are still quite mutable, multifarious, and not necessarily shared across the boundaries of the participating disciplines. We at the Kroc School of Peace Studies have been wrestling continuously with how to produce “Scholar-Practitioners”—students capable of retooling their theories by doing, and retooling their doing by theorizing.  For that reason, I have been very happy to see the mix of such thoughtful industry leaders and social entrepreneurs, and such problem-solving academics at this conference.

My own sub-field of Development Economics has witnessed a kind of crumbling of big ideas in recent years.  No longer do we subscribe to large theories of “Big Push,” “Dependency,” “Convergence,” “World Systems.” Rather, we increasingly look for solutions to development problems on a case-by-case basis, and thus the use of randomized control trials has become commonplace.

In Peace Studies (which has a bad reputation, especially in the States, for being “soft” and “kumbayah-ish”) we need to use rigorous methods to test our ideas. At the same time, though, it’s critical that we continue to “think big.” And so I was delighted to see papers in the upcoming sessions that do just that, tackling issues from the meaning of a ‘restorative economy’ to the relationship between violence and state-building.

Institutions for Peace

Most, if not all, of the papers in today’s sessions deal with what economists call “institutions.” As Douglas North would define them, these are human-devised constraints on human behavior. This definition differs, of course, from that found in the common vernacular, where “institutions” usually denotes “organizations,” be they for profit, non-profit, or governmental. In the economic definition, institutions may take the form of corporate incentive systems, land and property rights, trade and contract practices, transitional justice practices, disciplinary codes of conduct, and business norms. And these systems may themselves find some corporeal manifestation in organizations ranging from corporations to rebel groups to multilateral bodies. As a kind of subscriber myself to the New Institutionalist School of Economics, it may be unsurprising that I believe that the form, scale and, context of institutions largely determine whether a conflict can be channeled constructively or veer into violence.

One observation that I have continually found interesting (and which you may or may not) is that these two definitions of institution—one a tangible “thing,” the other a kind of shaping of our own collective energies—are maybe in in fact not so different from one another after all. Einstein’s theory of relativity is famous for, among other things, equating mass (tangible things) with energy (forces). The Newtonian system was shown to be overly Manichean, and that energy was essentially “invested” in certain more durable forms that we call matter. And the smaller the matter particle, the more wave-like, the more energy-like, it became. Likewise, the economy can be thought of as flows of human (and nonhuman) energies that we invest in the formation and re-formation of institutions and organizations. Oliver Williamson has described a hierarchy of institutions ranging from markets and market actors, to contracts, to private property systems, to constitutions, that get progressively slower in their rapidity of change—markets shift instantaneously, while constitutions are amended perhaps only every few decades. And maybe the faster those institutions change—or maybe the weaker institutions are—the more they behave like raw energy.

This kind of conceptualization may shed some light on a long-running debate we have in Peace Studies as to whether Peace is a function of structures (matter, organizations) or dynamics (energy).

On the one hand, Johan Galtung is famous for his double distinction between direct and structural violence on the one hand, and negative and positive peace on the other. He thereby paved the way for modern forward-looking organizations like our own conference co-sponsor, the Institute for Economics and Peace, to publish reports on the “Structures of Peace,” and the “Pillars of Peace”—structures that must be in place in order to build inclusive societies that allow people to flourish and make meaningful choices about their lives.

On the other hand, the economist Kenneth Boulding had a view of peace as a dynamic process. To his mind, each society, each context, each scale, presented unique and ever-mutating challenges and opportunities. You could not just apply the same “structures” or “pillars” and expect the same results in different historical or societal contexts.

The “structures of peace” approach treats the prerequisites of peace as matter, the second, dynamic approach treats them more as energy. In an Einsteinian way, perhaps both have their merits.

Where the analogy breaks down, though, is when we speak about “Peacebuilding.” Because unlike Physics, the field of Peace Studies is one with strong normative foundations.  We want not just to study how things operate, but to change them for what we believe and conceive to be the better.  Moreover, our conceptions of “peace” change over time. But in any case, we want to produce peace, not just understand why violence occurs.

And here, I think in closing, is where leadership comes to play an important role in Peace and Prosperity. As Jaime Alonso Gomez suggested in his anecdote of yesterday, leaders decide when and how much human energy gets converted into the flesh and blood of an organization. They decide how much they care about the passion, about the character and values, about the judgment, about the knowledge and skills of the people they hire. They choose to invest—or not—in conflict-resolution mechanisms, in collaborative frameworks, in participatory governance structures, in impact evaluation practices. They choose to invest—or not—in peace.

I hope you get to enjoy the city of San Diego later today or perhaps tomorrow.  And in the meantime, good luck choosing the sessions you will attend: I for one am stumped.

Leave a comment

Filed under Uncategorized

Stability and the Economy

For those who enjoy reading Greek symbols as much as American Standard English, here’s my latest article in Stability.

Leave a comment

August 20, 2013 · 5:09 pm

Free Lunches

Image

A recent NYT article described an up-and-coming model for development: cash transfers with no strings attached. Cash transfers are, of course, an old idea in development, and their main attraction is that, from an economic perspective, they increase “allocative efficiency” of donations–in plain speak, the people who know their own needs and preferences best are allowed to choose where scarce resources will go.  So what could go wrong?

Well, a lot. A friend offered me a rupee for my thoughts on this, and that’s about all they’re worth, but here are a few considerations.  When comparing the efficiency of these sorts of cash-transfer programs to standard subsidies, I would imagine that they come off very well. In fact, in some ways, this isn’t so different from remittances, except that it’s arguably more “just” in that the individuals targeted will typically not have the benefit of magnanimous relations in the diaspora.  However, I also suspect that (a) *how* it’s done is just as important as *if* it’s done, and (b) it’s not the panacea that proponents suggest. One can imagine scenarios, e.g., in which giving money to individuals (as opposed, e.g., to giving money to local participatory gov’ts that would then decide collectively how to spend it) would alleviate (healthy) public pressure on local gov’t to provide public goods and infrastructure.

On point (a), I’m not talking primarily about the mechanism of the transfer itself. Cell phones are probably the best way to do it, as their coverage in most countries is now expansive and the costs of access to the network are low-ish and falling. Rather, there are a whole host of issues that arise with transfers of wealth from outside an economy, and questions that need to be asked.  For example, (1) who receives the gifts? The percentage of a given village receiving them may bear on collective feelings of envy–a single downtrodden recipient might be thought of as an exeption, while a larger number might become a “class” that is thought of differently by their neighbors. Also, (2): how much do they receive? Someone gaining a LOT of money may suddenly find themselves resented and even targeted for attack. In fact, one might imagine a scenario in which a local mafia formed in response to such transfers, essentially targeted the recipients one by one and confiscating or taxing their gains. (3) Are the criteria for distribution made apparent to the entire community, or does it really seem like manna from the (quixotic and unknowable) gods? If the criteria are unknown, then the system may seem fundamentally unfair–potentially fueling a desire for vigilante redistributive justice. (4) Do the community elders approve of the intervention? If not, recipients may find themselves at odds with the social structure of their community. (5) Are they one-time transfers to people, or regular income subsidies? If the latter, how is it determined that someone no longer needs help? Moreover, if success gets them booted off the list, doesn’t that provide a perverse incentive not to put their money into productive investments? (6) Is the quantity of money injected into the local economy enough to cause inflation, either in terms of goods, services, or real estate? If so, will there be negative costs to the program borne by those who are poor but not quite poor enough to qualify for the cash transfers?

On point (b), there are at least two associated dangers: one political and one economic.  On the political side, it seems that cash transfers have the potential, as indeed NGO interventions do, to erode the social contract between the individual and government.  Faith in democratic systems more generally might be undermined as people turn to privatized solutions to their problems.  On the economic side, there are real positive economic spillover impacts associated with public investment that are less likely to be realized when it’s individuals choosing to make the investment decisions. The ability to buy antibiotics, for instance, may weaken the pressure to build a decent community water system capable of filtering waterborne microorganisms. (Fearon, Humphreys, and Weinstein had an experiment in Liberia on community-driven reconstruction that estimating the impact of CDR projects on social cohesion, democratic political attitudes, and material well-being using, in part, the willingness of funds recipients to invest at the individual versus the community level.) And poor infrastructure is one of the major constraints on the expansion of small businesses in the developing world. In fact, one of my favorite organizations, Rebuild Africa, rebuilds community infrastructure–schools, bridges, community centers (in addition to private houses)–in northern Liberia using only local labor and materials, and largely eschewing external injections of funds for exactly these reasons.

All that said, these unconditional cash transfers are probably, used sparingly and judiciously, a great way of averting worst-case scenarios for the worst-off.

Leave a comment

Filed under Uncategorized

The Trayvon-Newtown Connection

I doggedly repeat my assessment from the post-Newtown tragedy: While a pervasive culture (gun culture in the Newtown case; racism in this one) surely plays a  major role in determining the outcome, it is NOT the definitive one.  For me, the Trayvon Martin trial is less about juror bias, and more about crazy laws – laws eviscerating gun control that have been passed DESPITE very, very low numbers of Americans who have EVER been for weakening gun control.  Florida’s “stand your ground” law was passed in 2005, when around 9% of Americans believed in laxer gun laws, against an overwhelming 55% who believed in tighter ones (http://www.gallup.com/poll/1645/guns.aspx).  So while I will not deny that racism is still highly pervasive in almost all aspects of American life, what’s more at the heart of both of these cases is the fact that firearms corporations, through lobbying groups, are able to shape the laws that encourage the privatization of justice… and privatized justice will necessarily take on all the ugliness and bias of those whom it serves.

Leave a comment

Filed under Uncategorized

On the Denial of U.S.-Mexico Firearms Trade (with Rob Muggah)

http://cdn2-b.examiner.com/sites/default/files/styles/image_content_width/hash/c9/31/1343756771_1615_No%20Guns%20in%20Mexico.jpg?itok=3is3uj3C

Online gun enthusiast message boards elaborate two recurring themes related to U.S.-Mexico firearms traffic. First is a palpable disdain for Mexican requests to curb weapons flows into the country, such as the studiously ignored formal request from the Mexican Congress on 9 January to create a border states gun registry. Responses to such requests range from the sardonic (“How about Mexico creates a registry of its citizens and tells us who isn’t at home?”) to the churlish (“F*** Mexico”) to the indignant (“How dare they infringe my God-given rights!”) to the genocidal (“Let them all kill each other”).

Second is a suggestion that Mexico’s government, unable to staunch the rising tide of cartel violence, will shortly collapse. After all, as many as 120,000 homicides have taken place in Mexico since the beginning of then-President Felipe Calderón’s drug war in 2006, with the proportion committed by firearm rising from 20 to 50 per cent over the last 15 years. Having a failed state just south of the border will, some argue, require Americans to defend themselves by force of arms. (Yet at 15 guns per 100 people, Mexico’s guns are still about six times less prevalent than in the United States.)

Some gun advocates seem to acknowledge the contradiction between blaming Mexico for the coming anarchy, and brazen indifference to firearms traffic enabling cartels to operate in the first place. These deny that the traffic is noteworthy.  The NRA and Fox News both attacked the estimate that 90% of traceable guns seized in Mexico came from the United States, claiming that the subset of traceable guns is bound to be skewed toward U.S. provenance – though the 17% number they substituted ridiculously assumed that no untraced guns were US-sold.  The Right asserts that guns shouldn’t flow north to south because Central America is “awash” in cheap guns from civil wars of the ’80s and ’90s.  This is not wrong because the U.S. was the single largest supplier of arms to Central American counter-revolutions (which it was).  It’s wrong because it’s a highly stylized argument that confuses the Republican view of what they want to happen with empirical observation.

There’s no doubt arms flow from the U.S. to Mexico.  Econometric studies (1, 2) have shown unequivocally that the U.S. Assault Weapons Ban reduced homicide rates across the border in Mexico.  Moreover, there’s a price gradient reported within Mexico: the farther from the U.S. border you are, the more an AK-47 costs.  Most obviously, in 2009 alone, U.S. and Mexican authorities seized roughly 37,000 U.S.-sold firearms.  But what proportion of the total traffic does this represent? Due to the intentional lack of information on gun sales in the U.S., no one seems to know. Our team at University of San Diego’s Trans-Border Institute and Brazil’s Igarapé Institute sought to estimate this volume econometrically in a recent study. We employed data from the Bureau for Alcohol, Tobacco, Firearms and Explosives (ATF) to create a demand curve, predicting the number of Federal Firearms Licenses to retail (FFLs) as a function of distance from the border.

We estimate that around 2.2% of U.S.-sold guns go south of the border – a proportion that has steadily risen since the early 1990s. This implies an annual value of roughly $127 million, and an annual volume of 252,000 firearms.  It also implies that U.S. and Mexican authorities are seizing just 15% of the total traffic. Stunningly, some 47% of U.S. gun shops depend economically on demand from the U.S.-Mexico trade. They are, wittingly or no, merchants of death.

The U.S. can no longer ask Mexico and other Latin American countries to pay the price for its lax gun regulations. And while recent bills outlawing firearms trafficking and “straw purchasing” are a step in the right direction, we need to get smarter.  Background checks should be able not just to verify a clean record, but to look for straw purchaser profiles. ATF should be allowed to keep disaggregated data on FFLs to alert them to dubious transactions. Cash sales of firearms should be prohibited in border states. And the ATF should assist Mexican authorities not just with the adoption of their e-Trace tool for arms tracing (long-delayed, ostensibly due to the process of translating it into Spanish), but also building their own registry of seized weapons.

Rights come with responsibilities. U.S. gun owners and the NRA would gain some badly needed credibility if they acknowledged that simple fact.

2 Comments

Filed under Uncategorized

On the reaction to the Newtown, CT shootings

I’m increasingly disturbed by how quickly the liberal intelligentsia seems to be adopting the now-faddish, counter-current claims that “it’s not about gun control, it’s about <the culture of gun worship> <the media’s focus on the perpetrator instead of the victims> <the lack of investment in public health, and mental public health in particular>, etc, etc.”

Yes, America has a deeply ingrained cultural obsession with the gun that is bound up in national mythologies and the construction of national identities.  The fact that the democratic process itself does not seem to quell the American fear of tyranny should be the basis of a national dialog; it is almost certainly behind not only the 2nd amendment fervor, but also our collective reluctance to ratify the most reasonable and inoffensive international treaties (like the one on disabilities that was modeled on our own ADA, and which just failed to pass the House). But Mexico, Guatemala, and Honduras don’t share our national mythologies, and their societies suffer from the fallout of lax gun laws in the US to a much greater extent than ours does.

Yes, the media steeps us in the details of the perpetrators’ lives and hypothetical motives, mindsets, and psychological torments, turning a ‘nobody’ into a posthumous ‘somebody.’ And yes, the persistent cuts to public health budgets have predictably disastrous results for those with mental illness.  But the magnitude of the negative spillover associated with an overly-deluded, underserved mentally ill population is not set in stone.  Not every poor deranged soul need end 20+ other lives in his tortured death throes.

My fear is that these sorts of “deeper-than-thou” arguments will ultimately sap the gun control effort when it just might have a tiny but tangible shot of getting something done for the first time since the assault rifle ban of 1994.  My misgiving is not due to a conviction that these factors don’t have a place in the discussion, but to the observation that those advocating for them actively sideline the tangible policy option of gun control in favor of amorphous ‘societal conversations’ that, at best, will take a long time to produce cultural change and, at worst, will serve only dissipate the momentum behind reasonable reform.

Leave a comment

Filed under Uncategorized