Two tracks to tenure in higher education?

Although this is a blog about Latin American development (and inequalities in other parts of the world), I will pick on some of the discussions on college education from time to time.  This is not only the sectors where I work but one that I feel passionate about improving.

Adam Grant proposes a two track tenure system: one for great researchers who may not want to be in the classroom and one for great teachers.  Based on a key study, he also argues that the correlation between good teaching and good research is low.  I am all in favor of valuing teaching more in higher education, not only because I love it but also because it is an useful way to influence how the world is run in the future.  At the same time, I find this dichotomy a little simplistic at least at the post-graduate level where I have always taught: is it possible to teach MA and Phd students in social science without having done research?  Can you show passion for development or for Latin American countries without doing consistent fieldwork?

Maybe the first step should not be to create two tracks but to evaluate the full body of work of all academics when making tenure or promotion decisions and when evaluating their contribution to the world more generally.

Generational conflicts and the welfare state: are developing countries different?

Two policy briefs of Policy Network highlight the generational conflicts within welfare state reform in many European countries. With the crisis, most of the cuts have concentrated (once again) in young people: we have the example of scholarships or reductions in unemployment insurance payments.  Maccinnes and Spijker argue that population aging is not as problematic as it is normally argued because life expectancy has increased and people can work longer.  Bruno Palier argues that unskilled workers, women, children and other groups are now more at risk of poverty than the elderly.  All these authors call for a more future-oriented welfare state that pays more attention to education, skills, youth unemployment and even pre-school education.

This is extremely important in countries like Spain where youth unemployment is so high and, therefore, market incorporation so difficult to start with.  Yet how does it translate to Latin American countries? In many ways, a welfare state for the elderly should be less of a problem because the population is still younger. There should be more room to invest in education and skills without crowding out any other investment.  At the same thing, there is a paradox in these countries: relatively too much expenditure on pensions for some interest groups (think about Brazil) together with high poverty levels among the elderly.

What is the conclusion of all of this in developing countries?  First, securing universalism is sometimes about reducing the benefits of the upper middle class--a point Hunter and Sugiyama made a few years ago for the case of Brazil.  Second, we also need to promote non-contributory pensions which secure a minimum living standards not only for the poor but for large segments of the middle class as well.  This should be less expensive than in other countries.  Third, because unemployment insurance is harder to organize in a highly informal context, maybe the concentration should be on children at all ages from pre-school to primary and secondary education.  This would mean creating a welfare state that focuses in the two extreme of lives and on low income groups and the middle class simultaneously.

If only the reforms were even more radical...

The neoliberal belief that the failure of the Washington Consensus was caused by its insufficient application is alive and well.  In yesterday's NYT, Juan Carlos Hidalgo from the Cato Institute maintains that Costa Rica's problems are caused by excessive protection, incentives to selected sectors like tourism and a weak exchange rate. He concludes that "what Costa Rica needs are genuine market reforms that eliminate the government’s power to pick winners and losers."  At the same time, he repeats the unproven claim that Frente Amplio wants to replicate Chavez's policies.  

This is rather surprising: together with Mexico and Chile, Costa Rica has been an avid participant in free trade agreements.  Openness has radically transformed the agricultural sector and has reduced the opportunities to survive through subsistence agriculture for the domestic market.  Most of the manufacturing sector has suffered due to liberalization and not despite of it.  The tax system has not helped to raise enough taxes and any attempt to reform it and make it more efficient has failed because of political pressures (including those from the Libertarian party that is closest to Hidalgo's ideas). The problem of Costa Rica is that the current model has failed to support domestic producers and has built few linkages between the dynamic sectors (which receive incentives) and the rest.

At the same time, Hidalgo's criticism of the incentives some sectors like tourism have received should be taken seriously by proponents of industrial policy.  The fact is that many of us believe that it is important to develop new sectors and that attracting companies like Intel was probably a good thing.  Yet contrary to what Hidalgo says, the problem has been insufficient state intervention to promote linkages and to use the reduction of external bottlenecks created by higher exports to support other sectors.  This is something Eva Paus in her book on Ireland and Costa Rica and my paper in World Development showed.

Regarding the Frente Amplio, it is just better not to say anything.  The "politics of fear" should be clearly named for what they are: not only unhelpful but also undemocratic!

More on inequality

A new policy brief from Oxfam provides striking numbers on the extent of inequality at the top in the global economy and in a few countries like the US. Much of all the data we use is questionable, but it is still clear that we are moving to a world of super-rich and everyone else.  Here some the information they provide:

·         "Almost half of the world’s wealth is now owned by just one percent of the population.

·         The wealth of the one percent richest people in the world amounts to $110 trillion. That’s 65 times the total wealth of the bottom half of the world’s population.

·         The bottom half of the world’s population owns the same as the richest 85 people in the world.

·         Seven out of ten people live in countries where economic inequality has increased in the last 30 years.

·         The richest one percent increased their share of income in 24 out of 26 countries for which we have data between 1980 and 2012.

·         In the US, the wealthiest one percent captured 95 percent of post-financial crisis growth since 2009, while the bottom 90 percent became poorer."

The real question, however, is whether any of this will truly feed into the political agenda and where.  Nothing significant is likely to happen in much of Latin America... or in Spain for that matter.

Central America: growing violence and persistent economic problems

The AECID (the Spanish cooperation agency) organized last week an interesting conference in Antigua (Guatemala) on the changes in Central America in the last 25 years and the challenges for the future.  The conference highlighted many of the improvements but also challenges discussed in the Handbook of Central American Governance we recently published.  Four are particularly important:

a. The growing costs of violence, which is now almost an epidemic in Central America. Carlos Dada, director of the great daily El Faro, gave an insightful talk on the failures of recent policies to prevent crime. He highlighted the costs of inequality and the lack of young people´s opportunities in the labour market.  He also explained why "mano dura" proposals tend to be so popular: they at least respond to poor people´s anxieties when they lose a member of their families or are victims of crime.

b. The difficulties that the region has to transform its economic model.  Several participants still hope that regional integration can help to promote economic growth and trigger a process of economic transformation.  Will this really be the case? Can small and medium firms (the main source of employment in the region) build links with regional partners?

c. The weakness of the state. Talking about new social policies or industrial policy (and, fortunately, there was a lot of talk about both) is useless unless we are able to improve the quality and autonomy of the bureaucracy and make the state stronger and more responsive in all countries.

d. The central role of the elite.  As I discussed with my friend and colleague Salvador Martí i Puig, we need to know much more about the elites: who they are now? How they operate? What are their everyday practices? And how the old and new elites interact with each other?

New LAC Working Papers in Political Economy

I am happy to announce that the Latin American Centre at the University of Oxford is launching a new working papers series in political economy.  Supported by CAF-Development Bank of Latin America, the working papers aim to publish high quality research on political economy and economic issues that deal with the region.  This will include the annual working paper from the CAF Visiting Fellow.  You can find the new webpage here.

I am particularly happy because the first paper we publish has been written by Jorge Katz, formerly at ECLAC and now at the University of Chile.  Jorge is not only one of the best specialists on innovation in Latin America, but also a great teacher and colleague.  In this paper, he elaborates a great critical account of growth theories with examples from the region.

Five reasons why Latin America is important for debates on development

Paul Collier has famously argued that development debates should focus on the "bottom billion"--the poorest countries in the world--and should ignore regions like Latin America. The region is too rich, too modern and, for others, too unimportant from a geopolitical perspective.

 This kind of approach--which is becoming increasingly dominant in the UK--does not make much sense. There are many reasons why the region offers important lessons and illuminate many debates in development studies. Here you have five (a catchy number!):

 1. For at least a century, Latin America has been one of the most (if not the most) unequal region in the world, but many Latin American countries (led by Brazil) are now reducing inequality faster than ever.

2. Many Latin American countries have relatively well-functioning states capable of implementing industrial and social policies... but without the autonomy and capacity to do so effectively. 

3. Their shift in economic policies across history has probably been more radical than in any other region: from an export-led liberal model to import substitution to neoliberalism (see Rosemary Thorp's full book in the web for a great illustration) and to the current rich debates on post-neoliberalism and the left today.

4. Latin America has benefited from some of the best economic thinkers in the developing world (including Raul Prebisch) and some of the most dynamic international organizations.

 5. Latin America is probably the region with most ecological wealth and diversity in the planet and with more creative debates about the conflicts between development, the environment and human rights. What (many) other reasons am I missing?