Sunday, January 24, 2021

Botswana's success and inclusive institutions: excerpts from 'Why Nations Fail'

I have written something before about, 'Why Nations Fail,’ an excellent book by Daron Acemoglu and James A. Robinson. This is another excerpt, this time they try apply their ideas to explain Botswana's success. The story of successful management of natural resources in Botswana is well-known, the question is why did it take place here, but not in, say, Sierra Leone, or Zimbabwe?

A few short excerpts below summarise their argument:

"Early stages of independence would play out very differently in Botswana, again largely because of the background created by Tswana historical institutions. In this, Botswana exhibited many parallels to England on the verge of the Glorious Revolution. England had achieved rapid political centralization under the Tudors and had the Magna Carta and the tradition of Parliament that could at least aspire to constrain monarchs and ensure some degree of pluralism. Botswana also had some amount of state centralization and relatively pluralistic tribal institutions that survived colonialism…..

..At independence the Tswana emerged with a history of institutions enshrining limited chieftaincy and some degree of accountability of chiefs to the people. The Tswana were of course not unique in Africa for having institutions like this, but they were unique in the extent to which these institutions survived the colonial period unscathed…..

.The first big diamond discovery was under Ngwato land, Seretse Khama’s traditional homeland. Before the discovery was announced, Khama instigated a change in the law so that all subsoil mineral rights were vested in the nation, not the tribe. This ensured that diamond wealth would not create great inequities in Botswana…..

...Another facet of political centralization was the effort to unify the country further, for example, with legislation ensuring that only Setswana and English were to be taught in school. Today Botswana looks like a homogenous country, without the ethnic and linguistic fragmentation associated with many other African nations. But this was an outcome of the policy to have only English and a single national language, Setswana, taught in schools to minimize conflict between different tribes and groups within society. The last census to ask questions about ethnicity was the one taken in 1946, which revealed considerable heterogeneity in Botswana.

.Botswana broke the mold because it was able to seize a critical juncture, postcolonial independence, and set up inclusive institutions. The Botswana Democratic Party and the traditional elites, including Khama himself, did not try to form a dictatorial regime or set up extractive institutions that might have enriched them at the expense of society. This was once again an outcome of the interplay between a critical juncture and existing institutions."

I have reproduced the chapter in full below. Its a fascinating book that I would recommend to anyone interested in understanding this question.

ON SEPTEMBER 6, 1895, the ocean liner Tantallon Castle docked at Plymouth on the southern coast of England. Three African chiefs, Khama of the Ngwato, Bathoen of the Ngwaketse, and Sebele of the Kwena, disembarked and took the 8:10 express train to Paddington Station, London. The three chiefs had come to Britain on a mission: to save their and five other Tswana states from Cecil Rhodes. The Ngwato, Ngwaketse, and Kwena were three of the eight Tswana states comprising what was then known as Bechuanaland, which would become Botswana after independence in 1966.

The tribes had been trading with Europeans for most of the nineteenth century. In the 1840s, the famous Scottish missionary David Livingstone had traveled extensively in Bechuanaland and converted King Sechele of the Kwena to Christianity. The first translation of the Bible into an African language was in Setswana, the language of the Tswana. In 1885 Britain had declared Bechuanaland a protectorate. The Tswana were content with the arrangement, as they thought this would bring them protection from further European invasions, particularly from the Boers, with whom they had been clashing since the Great Trek in 1835, a migration of thousands of Boers into the interior to escape from British colonialism. The British, on the other hand, wanted control of the area to block both further expansions by the Boers (this page–this page) and possible expansions by Germans, who had annexed the area of southwest Africa corresponding to today’s Namibia. The British did not think that a full-scale colonization was worthwhile. The high commissioner Rey summarized the attitudes of the British government in 1885 clearly: “We have no interest in the country to the north of the Molope [the Bechuanaland protectorate], except as a road to the interior; we might therefore confine ourselves for the present to preventing that part of the Protectorate being occupied by either filibusters or foreign powers doing as little in the way of administration or settlement as possible.”

But things changed for the Tswana in 1889 when Cecil Rhodes’s British South Africa Company started expanding north out of SouthAfrica, expropriating great swaths of land that would eventually become Northern and Southern Rhodesia, now Zambia and Zimbabwe. By 1895, the year of the three chiefs’ visit to London, Rhodes had his eye on territories to the southwest of Rhodesia, Bechuanaland. The chiefs knew that only disaster and exploitation lay ahead for territories if they fell under the control of Rhodes. Though it was impossible for them to defeat Rhodes militarily, they were determined to fight him any way they could. They decided to opt for the lesser of two evils: greater control by the British rather than annexation by Rhodes. With the help of the London Missionary Society, they traveled to London to try to persuade Queen Victoria and Joseph Chamberlain, then colonial secretary, to take greater control of Bechuanaland and protect it from Rhodes.

On September 11, 1895, they had their first meeting with Chamberlain. Sebele spoke first, then Bathoen, and finally Khama. Chamberlain declared that he would consider imposing British control to protect the tribes from Rhodes. In the meantime, the chiefs quickly embarked on a nationwide speaking tour to drum up popular support for their requests. They visited and spoke at Windsor and Reading, close to London; in Southampton on the south coast; and in Leicester and Birmingham, in Chamberlain’s political support base, the Midlands. They went north to industrial Yorkshire, to Sheffield, Leeds, Halifax, and Bradford; they also went west to Bristol and then up to Manchester and Liverpool.

Meanwhile, back in South Africa, Cecil Rhodes was making preparations for what would become the disastrous Jameson Raid, an armed assault on the Boer Republic of the Transvaal, despite Chamberlain’s strong objections. These events likely made Chamberlain much more sympathetic to the chiefs’ plight than he might have been otherwise. On November 6, they met with him again in London. The chiefs spoke through an interpreter:

Chamberlain: I will speak about the lands of the Chiefs, and about the railway, and about the law which is to be observed in the territory of the Chiefs … Now let us look at the map … We will take the land that we want for the railway, and no more.

Khama: I say, that if Mr. Chamberlain will take the land himself, I will be content.

Chamberlain: Then tell him that I will make the railway myself by the eyes of one whom I will send and I will take only as much as I require, and will give compensation if what I take is of value.

Khama: I would like to know how [i.e., where] the railway will go.

Chamberlain: It shall go through his territory but shall be fenced in, and we will take no land.

Khama: I trust that you will do this work as for myself, and treat me fairly in this matter.

Chamberlain: I will guard your interests.

The next day, Edward Fairfield, at the Colonial Office, explained Chamberlain’s settlement in more detail:

Each of the three chiefs, Khama, Sebele and Bathoen, shall have a country within which they shall live as hitherto under the protection of the Queen. The Queen shall appoint an officer to reside with them. The chiefs will rule their own people much as at present.

Rhodes’s reaction to being outmaneuvered by the three African chiefs was predictable. He cabled to one of his employees, saying, “I do object to being beaten by three canting natives.”

The chiefs in fact had something valuable that they had protected from Rhodes and would subsequently protect from British indirect rule. By the nineteenth century, the Tswana states had developed a core set of political institutions. These involved both an unusual degree, by sub- Saharan African standards, of political centralization and collective decision-making procedures that can even be viewed as a nascent, primitive form of pluralism. Just as the Magna Carta enabled the participation of barons into the political decision-making process and put some restrictions on the actions of the English monarchs, the political institutions of the Tswana, in particular the kgotla, also encouraged political participation and constrained chiefs. The South African anthropologist Isaac Schapera describes how the kgotla worked as follows:

all matters of tribal policy are dealt with finally before a general assembly of the adult males in the chief’s kgotla (council place). Such meetings are very frequently held … among the topics discussed … are tribal disputes, quarrels between the chief and his relatives, the imposition of new levies, the undertaking of new public works, the promulgation of new decrees by the chief … it is not unknown for the tribal assembly to overrule the wishes of the chief. Since anyone may speak, these meetings enable him to ascertain the feelings of the people generally, and provide the latter with an opportunity of stating their grievances. If the occasion calls for it, he and his advisers may be taken severely to task, for the people are seldom afraid to speak openly and frankly.

Beyond the kgotla, the Tswana chieftaincy was not strictly hereditary but open to any man demonstrating significant talent and ability. Anthropologist John Comaroff studied in detail the political history of another of the Tswana states, the Rolong. He showed that though in appearance the Tswana had clear rules stipulating how the chieftancy was to be inherited, in practice these rules were interpreted to remove bad rulers and allow talented candidates to become chief. He showed that winning the chieftancy was a matter of achievement, but was then rationalized so that the successful competitor appeared to be the rightful heir. The Tswana captured this idea with a proverb, with a tinge of constitutional monarchy: kgosi ke kgosi ka morafe, “The king is king by the grace of the people.”

The Tswana chiefs continued in their attempts to maintain their independence from Britain and preserve their indigenous institutions after their trip to London. They conceded the construction of railways in Bechuanaland, but limited the intervention of the British in other aspects of economic and political life. They were not opposed to the construction of the railways, certainly not for the same reasons as the Austro-Hungarian and Russian monarchs blocked railways. They just realized that railways, like the rest of the policies of the British, would not bring development to Bechuanaland as long as it was under colonial control. The early experience of Quett Masire, president of independent Botswana from 1980 to 1998, explains why. Masire was an enterprising farmer in the 1950s; he developed new cultivation techniques for sorghum and found a potential customer in Vryburg Milling, a company located across the border in South Africa. He went to the railway station master at Lobatse in Bechuanaland and asked to rent two rail trucks to move his crop to Vryburg. The station master refused. Then he got a white friend to intervene. The station master reluctantly agreed, but quoted Masire four times the rate for whites. Masire gave up and concluded, “It was the practice of the whites, not just the laws prohibiting Africans from owning freehold land or holding trading licenses that kept blacks from developing enterprises in Bechuanaland.”

All in all, the chiefs, and the Tswana people, had been lucky. Perhaps against all odds, they succeeded in preventing Rhodes’s takeover. As Bechuanaland was still marginal for the British, the establishment of indirect rule there did not create the type of vicious circle playing out in Sierra Leone. They also avoided the kind of colonial expansion that went on in the interior of South Africa that would turn those lands into reservoirs of cheap labor for white miners or farmers. The early stages of the process of colonization are a critical juncture for most societies, a crucial period during which events that will have important long-term consequences for their economic and political development transpire. As we discussed in chapter 9, most societies in sub-Saharan Africa, just as those in South America and South Asia, witnessed the establishment or intensification of extractive institutions during colonization. The Tswana would instead avoid both intense indirect rule and the far worse fate that would have befallen them had Rhodes succeeded in annexing their lands. This was not just blind luck, however. It was once again a result of the interplay between the existing institutions, shaped by the institutional drift of the Tswana people, and the critical juncture brought about by colonialism. The three chiefs had made their own luck by taking the initiative and traveling to London, and they were able to do this because they had an unusual degree of authority, compared with other tribal leaders in sub- Saharan Africa, owing to the political centralization the Tswana tribes had achieved, and perhaps they also had an unusual degree of legitimacy, because of the modicum of pluralism embedded in their tribal institutions.

Another critical juncture at the end of the colonial period would be more central to the success of Botswana, enabling it to develop inclusive institutions. By the time Bechuanaland became independent in 1966 under the name Botswana, the lucky success of chiefs Sebele, Bathoen, and Khama was long in the past. In the intervening years, the British invested little in Bechuanaland. At independence, Botswana was one of the poorest countries in the world; it had a total of twelve kilometers of paved roads, twenty-two citizens who had graduated from university, and one hundred from secondary school. To top it all off, it was almost completely surrounded by the white regimes of South Africa, Namibia, and Rhodesia, all of which were hostile to independent African countries run by blacks. It would have been on few people’s list of countries most likely to succeed. Yet over the next forty-five years, Botswana would become one of the fastest-growing countries in the world. Today Botswana has the highest per capita income in sub-Saharan Africa, and is at the same level as successful Eastern European countries such as Estonia and Hungary, and the most successful Latin American nations, such as Costa Rica.

How did Botswana break the mold? By quickly developing inclusive economic and political institutions after independence. Since then, it has been democratic, holds regular and competitive elections, and has never experienced civil war or military intervention. The government set up economic institutions enforcing property rights, ensuring macroeconomic stability, and encouraging the development of an inclusive market economy. But of course, the more challenging question is, how did Botswana manage to establish a stable democracy and pluralistic institutions, and choose inclusive economic institutions, while most other African countries did the opposite? To answer this, we have to understand how a critical juncture, this time the end of colonial rule, interacted with Botswana’s existing institutions.

In most of sub-Saharan Africa—for example, for Sierra Leone and Zimbabwe—independence was an opportunity missed, accompanied by the re-creation of the same type of extractive institutions that existed during the colonial period. Early stages of independence would play out very differently in Botswana, again largely because of the background created by Tswana historical institutions. In this, Botswana exhibited many parallels to England on the verge of the Glorious Revolution. England had achieved rapid political centralization under the Tudors and had the Magna Carta and the tradition of Parliament that could at least aspire to constrain monarchs and ensure some degree of pluralism. Botswana also had some amount of state centralization and relatively pluralistic tribal institutions that survived colonialism. England had a newly forming broad coalition, consisting of Atlantic traders, industrialists, and the commercially minded gentry, that was in favor of well-enforced property rights. Botswana had its coalition in favor of secure procedure rights, the Tswana chiefs, and elites who owned the major assets in the economy, cattle. Even though land was held communally, cattle was private property in the Tswana states, and the elites were similarly in favor of well-enforced property rights. All this of course is not denying the contingent path of history. Things would have turned out very differently in England if parliamentary leaders and the new monarch had attempted to use the Glorious Revolution to usurp power. Similarly, things could have turned out very differently in Botswana, especially if it hadn’t been so fortunate as to have leaders such as Seretse Khama, or Quett Masire, who decided to contest power in elections rather than subvert the electoral system, as many post independence leaders in sub-Saharan Africa did.

At independence the Tswana emerged with a history of institutions enshrining limited chieftaincy and some degree of accountability of chiefs to the people. The Tswana were of course not unique in Africa for having institutions like this, but they were unique in the extent to which these institutions survived the colonial period unscathed. British rule had been all but absent. Bechuanaland was administered from Mafeking, in South Africa, and it was only during the transition to independence in the 1960s that the plans for the capital of Gaborone were laid out. The capital and the new structures there were not meant to expunge the indigenous institutions, but to build on them; as Gaborone was constructed, new kgotlas were planned along with it.

Independence was also a relatively orderly affair. The drive for independence was led by the Botswana Democratic Party (BDP), founded in 1960 by Quett Masire and Seretse Khama. Khama was the grandson of King Khama III; his given name, Seretse, means “the clay that binds together.” It was to be an extraordinarily apt name. Khama was the hereditary chief of the Ngwato, and most of the Tswana chiefs and elites joined the Botswana Democratic Party. Botswana didn’t have a marketing board, because the British had been so uninterested in the colony. The BDP quickly set one up in 1967, the Botswana Meat Commission. But instead of expropriating the ranchers and cattle owners, the Meat Commission played a central role in developing the cattle economy; it put up fences to control foot-and-mouth disease and promoted exports, which would both contribute to economic development and increase the support for inclusive economic institutions.

Though the early growth in Botswana relied on meat exports, things changed dramatically when diamonds were discovered. The management of natural resources in Botswana also differed markedly from that in other African nations. During the colonial period, the Tswana chiefs had attempted to block prospecting for minerals in Bechuanaland because they knew that if Europeans discovered precious metals or stones, their autonomy would be over. The first big diamond discovery was under Ngwato land, Seretse Khama’s traditional homeland. Before the discovery was announced, Khama instigated a change in the law so that all subsoil mineral rights were vested in the nation, not the tribe. This ensured that diamond wealth would not create great inequities in Botswana. It also gave further impetus to the process of state centralization as diamond revenues could now be used for building a state bureaucracy and infrastructure and for investing in education. In Sierra Leone and many other sub-Saharan African nations, diamonds fueled conflict between different groups and helped to sustain civil wars, earning the label Blood Diamonds for the carnage brought about by the wars fought over their control. In Botswana, diamond revenues were managed for the good of the nation.

The change in subsoil mineral rights was not the only policy of state building that Seretse Khama’s government implemented. Ultimately, the Chieftaincy Act of 1965 passed by the legislative assembly prior to independence, and the Chieftaincy Amendment Act of 1970 would continue the process of political centralization, enshrining the power of the state and the elected president by removing from chiefs the right to allocate land and enabling the president to remove a chief from office if necessary. Another facet of political centralization was the effort to unify the country further, for example, with legislation ensuring that only Setswana and English were to be taught in school. Today Botswana looks like a homogenous country, without the ethnic and linguistic fragmentation associated with many other African nations. But this was an outcome of the policy to have only English and a single national language, Setswana, taught in schools to minimize conflict between different tribes and groups within society. The last census to ask questions about ethnicity was the one taken in 1946, which revealed considerable heterogeneity in Botswana. In the Ngwato reserve, for example, only 20 percent of the population identified themselves as pure Ngwato; though there were other Tswana tribes present, there were also many non-Tswana groups whose first language was not Setswana. This underlying heterogeneity has been modulated both by the policies of the postindependence government and by the relatively inclusive institutions of the Tswana tribes in the same way as heterogeneity in Britain, for example, between the English and the Welsh, has been modulated by the British state. The Botswanan state did the same. Since independence, the census in Botswana has never asked about ethnic heterogeneity, because in Botswana everyone is Tswana.

Botswana achieved remarkable growth rates after independence because Seretse Khama, Quett Masire, and the Botswana Democratic Party led Botswana onto a path of inclusive economic and political institutions. When the diamonds came on stream in the 1970s, they did not lead to civil war, but provided a strong fiscal base for the government, which would use the revenues to invest in public services. There was much less incentive to challenge or overthrow the government and control the state. Inclusive political institutions bred political stability and supported inclusive economic institutions. In a pattern familiar from the virtuous circle described in chapter 11, inclusive economic institutions increased the viability and durability of inclusive political institutions.

Botswana broke the mold because it was able to seize a critical juncture, postcolonial independence, and set up inclusive institutions. The Botswana Democratic Party and the traditional elites, including Khama himself, did not try to form a dictatorial regime or set up extractive institutions that might have enriched them at the expense of society. This was once again an outcome of the interplay between a critical juncture and existing institutions. As we have seen, differently from almost anywhere else in sub-Saharan Africa, Botswana already had tribal institutions that had achieved some amount of centralized authority and contained important pluralistic features. Moreover, the country had economic elites who themselves had much to gain from secure property rights.

No less important, the contingent path of history worked in Botswana’s favor. It was particularly lucky because Seretse Khama and Quett Masire were not Siaka Stevens and Robert Mugabe. The former worked hard and honestly to build inclusive institutions on the foundations of the Tswanas’ tribal institutions. All this made it more likely that Botswana would succeed in taking a path toward inclusive institutions, whereas much of the rest of sub-Saharan Africa did not even try, or failed outright.  

Tuesday, December 22, 2020

Packing the Courts - excerpts from 'Why Nations Fail,’ by Daron Acemoglu and James A. Robinson

I am in the midst of reading Why Nations Fail, an excellent book on development which attempts to explain why some countries succeed while others do not. Their thesis is that institutions, what economists call the 'rules of the game' the ways in which society is organised make the difference between success and failure. It is a compelling argument but one difficult to summarise but this excerpt from the review in the Washington Post captures some of its essence: 

They are impatient with traditional social-science arguments for the persistence of poverty, which variously chalk it up to bad geographic luck, hobbling cultural patterns, or ignorant leaders and technocrats. Instead, “Why Nations Fail” focuses on the historical currents and critical junctures that mold modern polities: the processes of institutional drift that produce political and economic institutions that can be either inclusive — focused on power-sharing, productivity, education, technological advances and the well-being of the nation as a whole; or extractive — bent on grabbing wealth and resources away from one part of society to benefit another.....

When Congo finally won its independence in 1960, it was a feeble, decentralized state burdened with a predatory political class and exploitative economic institutions — too weak to deliver basic services but just strong enough to keep Mobutu and his cronies on top; too poor to provide for its citizenry but just wealthy enough to give elites something to fight over.

Acemoglu and Robinson argue that when you combine rotten regimes, exploitative elites and self-serving institutions with frail, decentralized states, you have something close to a prescription for poverty, conflict and even outright failure. “Nations fail,” the authors write, “when they have extractive economic institutions, supported by extractive political institutions that impede and even block economic growth.”

But even as vicious cycles such as Congo’s can churn out poverty, virtuous cycles can help bend the long arc of history toward growth and prosperity. Contrast the conflict and misery in Congo with Botswana — which, when it won its independence in 1966, had just 22 university graduates, seven miles of paved roads and glowering white-supremacist regimes on most of its borders. But Botswana today has “the highest per capita income in sub-Saharan Africa” — around the level of such success stories as Hungary and Costa Rica.

How did Botswana pull it off? “By quickly developing inclusive economic and political institutions after independence,” the authors write. Botswana holds regular elections, has never had a civil war and enforces property rights. It benefited, the authors argue, from modest centralization of the state and a tradition of limiting the power of tribal chiefs that had survived colonial rule. When diamonds were discovered, a far-sighted law ensured that the newfound riches were shared for the national good, not elite gain. At the critical juncture of independence, wise Botswanan leaders such as its first president, Seretse Khama, and his Botswana Democratic Party chose democracy over dictatorship and the public interest over private greed.

A critical ingredient are independent courts, that check the power of rulers and help uphold institutions such the rule of law and property rights. Rulers, even well-meaning ones, sometimes find independent courts an obstacle. The books cites different examples of attempts to pack courts that had different outcomes: in the US the attempt was thwarted resulting in a virtuous cycle while in Argentina it succeeded and spawned a vicious cycle. This section reminded me of some recent events so I have reproduced it in full. It's a bit long but I think it's worth a read.  

Packing the court

Franklin D. Roosevelt, the Democratic Party candidate and cousin of Teddy Roosevelt, was elected president in 1932 in the midst of the Great Depression. He came to power with a popular mandate to implement an ambitious set of policies for combating the Great Depression. At the time of his inauguration in early 1933, one-quarter of the labor force was unemployed, with many thrown into poverty. Industrial production had fallen by over half since the Depression hit in 1929, and investment had collapsed. The policies Roosevelt proposed to counteract this situation were collectively known as the New Deal. Roosevelt had won a solid victory, with 57 percent of the popular vote, and the Democratic Party had majorities in both the Congress and Senate, enough to pass New Deal legislation. However, some of the legislation raised constitutional issues and ended up in the Supreme Court, where Roosevelt’s electoral mandate cut much less ice.

One of the key pillars of the New Deal was the National Industrial Recovery Act. Title I focused on industrial recovery. President Roosevelt and his team believed that restraining industrial competition, giving workers greater rights to form trade unions, and regulating working standards were crucial to the recovery effort. Title II established the Public Works Administration, whose infrastructure projects include such landmarks as the Thirtieth Street railroad station in Philadelphia, the Triborough Bridge, the Grand Coulee Dam, and the Overseas Highway connecting Key West, Florida, with the mainland. President Roosevelt signed the bill into law on June 16, 1933, and the National Industrial Recovery Act was put into operation. However, it immediately faced challenges in the courts. On May 27, 1935, the Supreme Court unanimously ruled that Title I of the act was unconstitutional. Their verdict noted solemnly, “Extraordinary conditions may call for extraordinary remedies. But … extraordinary conditions do not create or enlarge constitutional power.”

Before the Court’s ruling came in, Roosevelt had moved to the next step of his agenda and had signed the Social Security Act, which introduced the modern welfare state into the United States: pensions at retirement, unemployment benefits, aid to families with dependent children, and some public health care and disability benefits. He also signed the National Labor Relations Act, which further strengthened the rights of workers to organize unions, engage in collective bargaining, and conduct strikes against their employers. These measures also faced challenges in the Supreme Court. As these were making their way through the judiciary, Roosevelt was reelected in 1936 with a strong mandate, receiving 61 percent of the popular vote. 

With his popularity at record highs, Roosevelt had no intention of letting the Supreme Court derail more of his policy agenda. He laid out his plans in one of his regular Fireside Chats, which was broadcast live on the radio on March 9, 1937.

 He started by pointing out that in his first term, much-needed policies had only cleared the Supreme Court by a whisker. He went on

I am reminded of that evening in March, four years ago, when I made my first radio report to you. We were then in the midst of the great banking crisis. Soon after, with the authority of the Congress, we asked the nation to turn over all of its privately held gold, dollar for dollar, to the government of the United States. Today’s recovery proves how right that policy was. But when, almost two years later, it came before the Supreme Court its constitutionality was upheld only by a five-to-four vote. The change of one vote would have thrown all the affairs of this great nation back into hopeless chaos. In effect, four justices ruled that the right under a private contract to exact a pound of flesh was more sacred than the main objectives of the Constitution to establish an enduring nation.

Obviously, this should not be risked again. Roosevelt continued:

Last Thursday I described the American form of government as a three-horse team provided by the Constitution to the American people so that their field might be plowed. The three horses are, of course, the three branches of government—the Congress, the executive, and the courts. Two of the horses, the Congress and the executive, are pulling in unison today; the third is not.

Roosevelt then pointed out that the U.S. Constitution had not actually endowed the Supreme Court with the right to challenge the constitutionality of legislation, but that it had assumed this role in 1803. At the time, Justice Bushrod Washington had stipulated that the Supreme Court should “presume in favor of [a law’s] validity until its violation of the Constitution is proved beyond all reasonable doubt.”

Roosevelt then charged

In the last four years the sound rule of giving statutes the benefit of all reasonable doubt has been cast aside. The Court has been acting not as a judicial body, but as a policymaking body.

Roosevelt claimed that he had an electoral mandate to change this situation and that “after consideration of what reform to propose the only method which was clearly constitutional … was to infuse new blood into all our courts.” He also argued that the Supreme Court judges were overworked, and the load was just too much for the older justices—who happened to be the ones striking down his legislation. He then proposed that all judges should face compulsory retirement at the age of seventy and that he should be allowed to appoint up to six new justices. This plan, which Roosevelt presented as the Judiciary Reorganization Bill, would have sufficed to remove the justices who had been appointed earlier by more conservative administrations and who had most strenuously opposed the New Deal.

Though Roosevelt skillfully tried to win popular support for the measure, opinion polls suggested that only about 40 percent of the population was in favor of the plan. Louis Brandeis was now a Supreme Court justice. Though Brandeis sympathized with much of Roosevelt’s legislation, he spoke against the president’s attempts to erode the power of the Supreme Court and his allegations that the justices were overworked. Roosevelt’s Democratic Party had large majorities in both houses of Congress. But the House of Representatives more or less refused to deal with Roosevelt’s bill. Roosevelt then tried the Senate. The bill was sent to the Senate Judiciary Committee, which then held highly contentious meetings, soliciting various opinions on the bill. They ultimately sent it back to the Senate floor with a negative report, arguing that the bill was a “needless, futile and utterly dangerous abandonment of constitutional principle … without precedent or justification.” The Senate voted 70 to 20 to send it back to committee to be rewritten. All the “court packing” elements were stripped away. Roosevelt would be unable to remove the constraints placed on his power by the Supreme Court. Even though Roosevelt’s powers remained constrained, there were compromises, and the Social Security and the National Labor Relations Acts were both ruled constitutional by the Court.

More important than the fate of these two acts was the general lesson from this episode. Inclusive political institutions not only check major deviations from inclusive economic institutions, but they also resist attempts to undermine their own continuation. [emphasis added] It was in the immediate interests of the Democratic Congress and Senate to pack the court and ensure that all New Deal legislation survived. But in the same way that British political elites in the early eighteenth century understood that suspending the rule of law would endanger the gains they had wrested from the monarchy, congressmen and senators understood that if the president could undermine the independence of the judiciary, then this would undermine the balance of power in the system that protected them from the president and ensured the continuity of pluralistic political institutions.

Perhaps Roosevelt would have decided next that obtaining legislative majorities took too much compromise and time and that he would instead rule by decree, totally undermining pluralism and the U.S. political system. Congress certainly would not have approved this, but then Roosevelt could have appealed to the nation, asserting that Congress was impeding the necessary measures to fight the Depression. He could have used the police to close Congress. Sound farfetched? This is exactly what happened in Peru and Venezuela in the 1990s. Presidents Fujimori and Chávez appealed to their popular mandate to close uncooperative congresses and subsequently rewrote their constitutions to massively strengthen the powers of the president. The fear of this slippery slope by those sharing power under pluralistic political institutions is exactly what stopped Walpole from fixing British courts in the 1720s, and it is what stopped the U.S. Congress from backing Roosevelt’s court-packing plan. Roosevelt had encountered the power of virtuous circles.

But this logic does not always play out, particularly in societies that may have some inclusive features but that are broadly extractive. We have already seen these dynamics in Rome and Venice. Another illustration comes from comparing Roosevelt’s failed attempt to pack the Court with similar efforts in Argentina, where crucially the same struggles took place in the context of predominantly extractive economic and political institutions.

The 1853 constitution of Argentina created a Supreme Court with duties similar to those of the U.S. Supreme Court. An 1887 decision allowed the Argentine court to assume the same role as that of the U.S. Supreme Court in deciding whether specific laws were constitutional. In theory, the Supreme Court could have developed as one of the important elements of inclusive political institutions in Argentina, but the rest of the political and economic system remained highly extractive, and there was neither empowerment of broad segments of society nor pluralism in Argentina. As in the United States, the constitutional role of the Supreme Court would also be challenged in Argentina. In 1946 Juan Domingo Perón was democratically elected president of Argentina. Perón was a former colonel and had first come to national prominence after a military coup in 1943, which had appointed him minister of labor. In this post, he built a political coalition with trade unions and the labor movement, which would be crucial for his presidential bid.

Shortly after Perón’s victory, his supporters in the Chamber of Deputies proposed the impeachment of four of the five members of the Court. The charges leveled against the Court were several. One involved unconstitutionally accepting the legality of two military regimes in 1930 and 1943—rather ironic, since Perón had played a key role in the latter coup. The other focused on legislation that the court had struck down, just as its U.S. counterpart had done. In particular, just prior to Perón’s election as president, the Court had issued a decision ruling that Perón’s new national labor relations board was unconstitutional. Just as Roosevelt heavily criticized the Supreme Court in his 1936 reelection campaign, Perón did the same in his 1946 campaign. Nine months after initiating the impeachment process, the Chamber of Deputies impeached three of the judges, the fourth having already resigned. The Senate approved the motion. Perón then appointed four new justices. The undermining of the Court clearly had the effect of freeing Perón from political constraints. He could now exercise unchecked power, in much the same way the military regimes in Argentina did before and after his presidency. His newly appointed judges, for example, ruled as constitutional the conviction of Ricardo Balbín, the leader of the main opposition party to Perón, the Radical Party, for disrespecting Perón.

Perón could effectively rule as a dictator.

Since Perón successfully packed the Court, it has become the norm in Argentina for any new president to handpick his own Supreme Court justices. So a political institution that might have exercised some constraints on the power of the executive is gone. Perón’s regime was removed from power by another coup in 1955, and was followed by a long sequence of transitions between military and civilian rule. Both new military and civilian regimes picked their own justices. But picking Supreme Court justices in Argentina was not an activity confined to transitions between military and civilian rule. In 1990 Argentina finally experienced a transition between democratically elected governments— one democratic government followed by another. Yet, by this time democratic governments did not behave much differently from military ones when it came to the Supreme Court. The incoming president was Carlos Saúl Menem of the Perónist Party. The sitting Supreme Court had been appointed after the transition to democracy in 1983 by the Radical Party president Raúl Alfonsín. Since this was a democratic transition, there should have been no reason for Menem to appoint his own court. But in the run-up to the election, Menem had already shown his colors. He continually, though not successfully, tried to encourage (or even intimidate) members of the court to resign. He famously offered Justice Carlos Fayt an ambassadorship. But he was rebuked, and Fayt responded by sending him a copy of his book Law and Ethics, with the note “Beware I wrote this” inscribed. Undeterred, within three months of taking office, Menem sent a law to the Chamber of Deputies proposing to expand the Court from five to nine members. One argument was the same Roosevelt used in 1937: the court was overworked. The law quickly passed the Senate and Chamber, and this allowed Menem to name four new judges. He had his majority.

Menem’s victory against the Supreme Court set in motion the type of slippery-slope dynamics we mentioned earlier. His next step was to rewrite the constitution to remove the term limit so he could run for president again. After being reelected, Menem moved to rewrite the constitution again, but was stopped not by Argentina political institutions but by factions within his own Perónist Party, who fought back against his personal domination.

Since independence, Argentina has suffered from most of the institutional problems that have plagued Latin America. It has been trapped in a vicious, not a virtuous, circle. As a consequence, positive developments, such as first steps toward the creation of an independent Supreme Court, never gained a foothold. With pluralism, no group wants or dares to overthrow the power of another, for fear that its own power will be subsequently challenged. At the same time, the broad distribution of power makes such an overthrow difficult. A Supreme Court can have power if it receives significant support from broad segments of society willing to push back attempts to vitiate the Court’s independence. That has been the case in the United States, but not Argentina. Legislators there were happy to undermine the Court even if they anticipated that this could jeopardize their own position. One reason is that with extractive institutions there is much to gain from overthrowing the Supreme Court, and the potential benefits are worth the risks.

Sunday, November 15, 2020

Successful contact tracing and the purpose of lockdowns

Sri Lanka's has experienced a spike in Covid-19 detections since early October and the authorities have responded with a series of localised curfews, shutting down parts of the country, mostly in the Western province. While the centre of the city is now open some suburbs (eg Dematagoda, Borella) have been under curfew for about three weeks while parts of the Western province (eg Negombo) have been under curfew for a month, if not longer.

A lockdown suppresses the disease for a while and slows its spread. While it does not eliminate the disease it buys time while measures to increase public health care capacity (procuring emergency hospital space, breathing ventilators, medical protective equipment, and testing kits) are put in place. It also allows contact tracing to take place.  

"if you can find infected cases, isolate and treat them, and trace the close contacts who they might have infected, and isolate them too, then you can keep much of the infection out of the general population."

This of course is most effective when the caseload is low, if the number of cases is high then the number of contacts to trace multiples which means many more contact tracers have to be employed and much more tests need to be done. Sri Lanka's strategy has been largely about tracing and isolating contacts which has been done with the assistance of the military intelligence and other service units.  

If all contacts are traced and properly isolated then the spread can be slowed or even perhaps stopped completely but this requires specialised skills

"Case investigation and contact tracing is a specialized skill. To be done effectively, it requires people with the training, supervision, and access to social and medical support for patients and contacts. Requisite knowledge and skills for case investigators and contact tracers include, but are not limited to:

  • An understanding of patient confidentiality, including the ability to conduct interviews without violating confidentiality (e.g., to those who might overhear their conversations)
  • Understanding of the medical terms and principles of exposure, infection, infectious period, potentially infectious interactions, symptoms of disease, pre-symptomatic and asymptomatic infection
  • Excellent and sensitive interpersonal, cultural sensitivity, and interviewing skills such that they can build and maintain trust with patients and contacts
  • Basic skills of crisis counseling, and the ability to confidently refer patients and contacts for further care if needed
  • Resourcefulness in locating patients and contacts who may be difficult to reach or reluctant to engage in conversation
  • Understanding of when to refer individuals or situations to medical, social, or supervisory resources
  • Cultural competency appropriate to the local community"

Public trust is essential for contact tracing to work. People need to volunteer information so that potential cases can be tested and their contacts traced. If people are fearful then they are less likely to visit hospitals or volunteer information. There are a number of reasons why I believe this is low.

First, the worry uppermost in people's mind is that they will be shipped off to harsh quarantine centres with little in the way of facilities. The authorities have supposedly said that people can now isolate at home instead of being sent to a centre but given the lack of consistency in policy how many will believe this?

Second, the sensationalist approach by the media that portrayed this like a cricket match; daily scores of  infections and deaths accompanied by gleeful comparisons with other countries to show that we were 'winning the match'. The public bought into this and seem quite obsessed with the whole issue. 

Third, this approach leads to an 'us' v 'them', mentality, the disease is the enemy and the campaign as a war. This meant that victims became the enemy and were stigmatised. The guide emphasises how patient confidentiality needs to be maintained:

"to protect patient privacy, contacts are only informed that they may have been exposed to a patient with the infection. They are not told the identity of the patient who may have exposed them."

It is the medical professionals who should do the contacting, not the potential patient. In Sri Lanka the authorities paste posters on people's houses warning the public of potential infection which creates stigma while the public helpfully circulates lists of potential contacts leaked from various sources or concocted from somewhere.

Given this environment how many will seek treatment in a hospital for a cough or a sniffle? How many will voluntarily provide information on all their contacts? They may delay treatment until acute symptoms set in.

Undoubtedly the military intelligence are well experienced in extracting information from people but can they get all the information needed? 

The authorities are cremating the bodies of victims but Muslims say this practice is against their religious beliefs. Will this dissuade them from seeking treatment or divulging information? 

For successful contact tracing what percentage of the contacts need to be successfully identified and isolated? I don't have an answer but it is a complex task.

"Another consideration is whether the system identifies most – if not all – contacts an infected person has had during their infectious period. People may not recall (or choose not to reveal) their contacts. It is also not straightforward working out who has had significant contact. The current definition assumes “significant” to mean close proximity (less than 2 metres) and prolonged contact (more than 15 minutes). These are arbitrary thresholds.

Contact tracing is also laborious and time consuming. A study of contact tracers in Sheffield reported that each interview with an infected person to identify their contacts took around 80 minutes. The average number of significant contacts identified for each person infected with COVID-19 – around 30 contacts per case – was also high. Consequently, the workload involved is significant."

The logistics of this become well-nigh impossible if the caseload is large. In sum, even with extensive curfews, the process of contact tracing may fail to identify sufficient numbers of potential victims which means the curfew can only provide a temporary suppression in transmission.

There will be increases in the number of cases following the easing of curfew but the response should be calibrated within the framework of containment, not resorting to repeated curfews. Norman Loayza of the World Bank  warns that:

“Worse than a lockdown is a series of repeated and uncertain lockdowns. The risk of second and third waves of infection is large in populations with low immunity. The prospect of repeated and uncertain lockdowns can devastate the economy and worsen human suffering beyond comprehension.”




Wednesday, October 21, 2020

The recent increase in COVID cases needs a pragmatic response

Sri Lanka’s most recent outbreaks of Covid are spreading panic. The authorities have reacted with limited curfews and heavy handed isolation; rounding up suspected contacts and bundling them away into inhospitable quarantine camps. Activists have complained of a militarised approach to a public health problem. Similar stories were reported from China. Are the authorities are simply following a Chinese model?

There is also a lot of ire directed towards Brandix, where the first new cases were detected.

Lets try and put the issues in perspective.

People seem to have panicked because they believed the country to be free of the disease. It’s ‘sudden’ reappearance seems to have caused a shock. Were we really free of the disease? I think this was largely a case of wishful thinking. This is not a problem that will simply disappear, however hard we may wish otherwise.

Dr Ranan Eliya of the Institute of Health Policy said as much in March this year and in April warned of community spread.

He also touched the core of the current issue when he said “A competent public health response cannot blame people for its failure – it only indicates the policy itself was badly designed. Blaming the public is an admission of failure.”

What we see now is victims of the disease being blamed for spreading it and being treated as enemies, to be rounded up and imprisoned to keep the public safe.

This approach (even ignoring all the other associated problems) can only work if the disease was eradicated in the first place. Prof. S.B. Agampodi, Professor of Community Medicine, at the Rajarata University also raised the problem of community spread in an interview this week.

All indicators are that community transmission has been around in the country for some time and it would be very difficult to pinpoint whether the infection started in the Minuwnagoda factory of Brandix Apparel Limited or outside,”

he explains that when looking at the numbers, there simply cannot be 1,000 positives within the factory in two weeks”.

A response based on short-term knee jerk reactions is not good enough. It’s good politics to ‘show’ quick results but not good policy. This adhocracy is unfortunately only too familiar to observers of economic policy.

The worry is that the government imposes another wide-ranging curfew.

I have wondered before whether lockdowns are an appropriate containment measure for the pandemic in poorer countries. A recent paper (that has not been peer reviewed) also posits that they are not.

One of the aims of a lockdown is to buy time - to allow the capacity of the health care system to be expanded. The problem in poor countries is that the healthcare systems may already be overstretched which means that there is little likelihood of being able to reduce the caseload to a level that is within the capacity of the healthcare system. (ie an already overloaded system cannot cope even with a reduced caseload).

"The healthcare systems in poor countries have few hospital beds and ventilators per capita, and are predicted to be unable to absorb a rapid influx of COVID-19 patients. This means, however, that flattening the curve of the disease to fall within the capacity of the healthcare system may not be feasible, no matter the extent of the lockdown or mitigation efforts employed."

Sri Lanka seems to face this issue, there are only around 500 ICU beds. A recent gift of 200 ventilators from the US has expanded this but capacity seems low. Not much attention seems to have gone into its expansion either.

A lockdown does slow the spread of the disease but the consequence is that the resultant reduction in economic activity results in income losses. Richer countries try to compensate for this with increased welfare payments. Poorer countries with weak social protection schemes are unable to do this, so a greater part of the population suffers.

"Many more workers in poor countries are self-employed or in the informal sector and depend on daily wages to feed their families. In the absence of strong social protection and insurance, the cost imposed by social (and economic) distancing may be large in terms of immediate deprivation and hunger. As a result compliance rates with lock-down orders or social distancing guidelines may be lower in countries with weaker enforcement capacity."

The Labour Force Survey for 2019 (p37) estimates that around 57% of Sri Lanka’s workforce is informal. How did these people survive the curfew? There is no published data but I believe some development agencies did a few surveys and it would be good to have some data to go on.

The few informal conversations that I had with people, I was told that they survived by borrowing money together with what limited handouts they received. The question is, if they are to be subjected to another curfew, will it push them into deeper debt? Could this lead them into a poverty trap? A long term cycle of poverty? The longer the lockdown, the greater the likelihood of debt accumulating. Considering that we already endured eleven weeks of curfew there is a real danger of this. Could another extended curfew condemn a large section of the population to permanent poverty? Policymakers must not ignore this question and in the event a curfew is contemplated adequate relief needs to be provided.

With relief, the government faces two problemsthe first that there is no proper mechanism to deliver relief. Samurdhi, highly politicised and poorly targeted, is thought is thought to reach only half the intended beneficiaries. There is a need to build a proper social registry, something the Yahapalanya regime started with World Bank assistance but which is probably yet incomplete. It may not include the whole of the informal sector either. Completing this should be a priority.

The other, perennial problem is the lack of funds – large budget deficits and already elavated debt, both problems made much worse by tax giveaways last year. The solution would be to look to aid, concessionary finance (where available) or resort to money printing, in that order.

In weighing costs and benefits I have been trying to think of this in terms of mortality rates and the costs of livelihood disruption, which is similar to the approach by Barnett-Howell and Mobarak-(but they use a proper model for this, of which more later).

If we look at the mortality rates, the highest in a country not in a war zone seems to be Mexico (10.2%) followed by Italy (9.1%), Ecudor (8.1%). Taking the worst case, assuming the entirety of the population is infected then 10% will die. A prolonged lockdown may save the 10% but it will disrupt the lives of the 100%. Of those disrupted, the 43% in the formal sector will suffer less.

Assuming people in the formal sector keep their jobs (not all will) they will probably be paid some part of their salary (as far as I know only the bank staff and government servants received full pay, others were paid reduced amounts) so they are better placed to survive.

The 57% in the informal sector will suffer more, many may have no income. So to save 10% at least 57% must suffer. If it is a temporary suffering and does not result in permanent increases in poverty perhaps this can be justified. There needs to be a proper assessment of these trade-offs.

It may be an idea to turn to the methodology used by the authors of the paper I mentioned previously. Perhaps either they or someone else could run the models that they used with local data?

To determine the relative value of suppression strategies in rich versus poor countries, we embed estimates of the country-specific costs of mortality developed by Viscusi and Masterman (2017) into the influential epidemiological model developed by the the Imperial College London COVID19 Response Team that predicts mortality from the spread of the virus (Ferguson et al., 2020; Walker et al., 2020)

One reason for the higher mortality rates in rich countries is the higher proportion of elderly (an average of 17.4%) than in poor countries (average 3%). The elderly are more vulnerable so deaths in countries with an ageing population are likely to be much higher than in a country with a younger population, other things being equal.

Thus in poorer countries with younger populations deaths are likely to be less, other factors being equal. Lockdowns therefore will save proportionately less lives in poorer countries.

Sri Lanka stands in-between, it has an ageing society although not as elderly as some of the richer countries.The population over 60 was 12.4% in 2016, which is closer to the older countries than to the younger ones. (For comparison, the elderly account for 22.8% of the population of Italy, 18.3% in the UK and 16% in the US).

The ageing argument therefore not as important a factor in Sri Lanka but for reasons of climate, lifestyle or greater immunity - the BCG vaccine being a possible (but not proven) cause, the death rate does not seem to be very high. Again we don’t have good data, the official statistics being impaired by limited testing but we don't appear to be experiencing a very visible massive increase in deaths.

How should we think about policy for Sri Lanka?

For a start policymakers should have been be gathering data on the costs of the curfew, how livelihoods were affected to assess the costs associated with the exercise. They should also be looking to simple, measures that reduce risks without unduly disrupting livelihoods, the paper suggests some measures:

1. Masks and home-made face coverings are comparatively cheap. A universal mask wearing requirement when workers leave their homes is likely feasible for almost all countries to implement.

2. Targeted social isolation of the elderly and other at-risk groups, while permitting productive individuals with lower risk profiles to continue working. Given the prevalence of multi-generational households, this would likely require us to rely on families to make decisions to protect vulnerable members within each household.

3. Improving access to clean water, hand-washing and sanitation, and other policies to decrease the viral load.

4. Widespread social infl uence and information campaigns to encourage behaviors that slow the spread of disease, but do not undermine economic livelihoods. This could include restrictions on the size of religious and social congregations, or programs to encourage community and religious leaders to endorse safer behaviors and communicate them clearly.