I think that basic economics, the way it is taught today, tends to give people reflexive pro-free market, anti-government positions — positions that arenot held by people with a deeper exposure to economic thinking. When your understanding of government finances is based on reading the newspaper, it’s somewhat eye-opening to come to college and learn that free markets lead to maximum societal welfare and taxes impose a deadweight loss on society — the pictures are so simple and compelling. That’s why a little bit of economics makes you more likely to be a Republican.

But when you learn more about principal-agent problems, information asymmetries, and so on, you learn that those simple pictures are simplistic to the point of being misleading. That’s why Joseph Stiglitz argues in Freefall that understanding economics is crucial to understanding why free markets often lead to suboptimal outcomes. The problem isn’t knowledge per se; it’s a little bit of knowledge.

The morals of this? If you want to be an economist make sure you stay and get a PhD in it.

From The Baseline Scenario.

The country realises that it is now a migration destination.

H/T Bunmi

1. Could aid squeeze help Africa? – Reuters Africa news blog

2. Tyler Cowen’s Berlin Notes – Marginal Revolution

3. Nuggets of Ethiopian industrial development – Chris Blattman

4. Nigerian king who beats up his wife gets deposed – NEXT

5. Open letter to Bono and Bob Geldof – Marieme Jamme

By Aljazeera

From NEXT:

The governor of Nigeria’s central bank, Sanusi Lamido Sanusi, has criticized the Federal Government’s continued spending on reducing fuel cost, renewing the call for the removal of a subsidy programme that has gulped trillions of naira but has failed to reach ordinary people as intended.

Mr. Sanusi was speaking on Monday at a meeting of the House of Representatives Ad Hoc Committee on Nigeria’s local and foreign loans. He said he supports a full stoppage of the “immoral” subsidy because its intent has been diverted from the target masses to a “cabal of elite.”

“This subsidy is going to a small group of people. The greater Nigerian people are not benefitting from it.’’ Mr. Sanusi said.

According to him, ‘‘the subsidy is creating a pool of funds for a cabal. These are the same people who borrow from banks and do not pay; the same people who are rigging elections.”

Mr. Sanusi is the latest in line of a number of government officials who have made it clear they would like to see the removal of the oil subsidy but the first such public declaration by a member of President Goodluck Jonathan’s administration.

The citizens, especially organised labour, are those who need convincing, not members of the House of Rep.

Image via Wikipedia

From The Economist:

For anyone who has ever felt a tinge of rose-tinted nostalgia for the traditional, Ayaan Hirsi Ali provides a bracing, and on the whole healthy, cold shower. Having experienced traditional society from the inside—in the form of a Muslim Somali family headed by a well-known politician who practised polygamy and left a deeply troubled and dysfunctional progeny—she has no time for sentimentality. As the world’s most famous ex-Muslim (who became a politician in the Netherlands, then a public intellectual in America), she tells people who have grown up in countries shaped by the Enlightenment and the scientific revolution that they don’t know how lucky they are.

(Mentions some of the shortcomings of the book later on)

From Pankaj Mishra:

“Nomad” is unlikely to earn Hirsi Ali many Muslim admirers. Neither will her recent support for the proposed French ban on face veils and the Swiss referendum outlawing minarets. In denouncing Islam unreservedly, she has claimed a precedent in Voltaire—though the eighteenth-century scourge of the Catholic Church might have been perplexed by her proposal that Muslims embrace the “Christianity of love and tolerance.” In another respect, however, the invocation of Voltaire is more apt than Hirsi Ali seems to realize. Voltaire despised the faith and identity of Europe’s religious minority: the Jews, who, he declared, “are, all of them, born with raging fanaticism in their hearts,” who had “surpassed all nations in impertinent fables, in bad conduct and in barbarism,” and who “deserve to be punished.” Voltaire’s denunciations remind us that the Enlightenment was a much more complex and multifaceted phenomenon than the dawn of reason and freedom that Hirsi Ali evokes. Many followed Voltaire in viewing the Jews as backward, an Oriental abscess in the heart of Europe. Hirsi Ali, recording her horror of ghettoized Muslim life in Whitechapel, seems unaware of the similarly contemptuous accounts of Jewish refugees who made the East End of London their home after fleeing the pogrom.

Here is NigeriansTalk’s Saratu’s commentary on the review.

The Kristof weighs in here:

To those of us who have lived and traveled widely in Africa and Asia, descriptions of Islam often seem true but incomplete. The repression of women, the persecution complexes, the lack of democracy, the volatility, the anti-Semitism, the difficulties modernizing, the disproportionate role in terrorism — those are all real. But if those were the only faces of Islam, it wouldn’t be one of the fastest-growing religions in the world today. There is also the warm hospitality toward guests, including Christians and Jews; charity for the poor; the aesthetic beauty of Koranic Arabic; the sense of democratic unity as rich and poor pray shoulder to shoulder in the mosque. Glib summaries don’t work any better for Islam than they do for Christianity or Judaism.

And:

It’s true that public discussion in some Muslim countries has taken on a strident tone, full of over-the-top exaggerations about the West. Educated Muslims should speak out more against such rhetoric.

In the same way, here in the West, we should try to have a conversation about Islam and its genuine problems — while speaking out against over-the-top exaggerations about the East. This memoir, while engaging and insightful in many places, exemplifies precisely the kind of rhetoric that is overheated and overstated.

Need a little more introduction to Ms Ayaan Hirsi Ali? See this. (Actually, you should check it out.)

19.7%, says the finance minister.

Via Naijablog

Interested in Actor-Network Theory? Check out the video.

From WSJ:

Foreign consumer-goods companies including Coca-Cola Co., Nestlé SA and Unilever PLC have been in Africa for decades without much competition from local players. Now, home-grown companies are expanding aggressively across the continent, eager to accommodate a growing middle-class among the billion-person population.

Examples?

Among the most prominent of these consumer upstarts: African retailers such as Nakumatt Holdings Ltd. of Kenya, the top supermarket chain in East Africa, MTN Group Ltd., Africa’s largest cellphone provider, and South African restaurant chain Spur Corp. Nakumatt has expanded into three neighboring countries while 348-restaurant chain Spur has opened in seven other African countries.

And:

Aiding Nakumatt and others’ cross-border expansion is an African gross domestic product expected to grow 4.3% this year from just under $1.5 trillion in 2009, according to the International Monetary Fund, a clip that trails only China and India among the world’s massive emerging markets. The growing investment and trade, from African companies in African countries, has helped cushion the continent from the shocks of the global economic crisis.

Commercial growth also is being fueled in part by the rise of young African banks that have opened branches across the continent, providing much-needed capital to local companies. Ecobank, from Togo, now has branches in 27 African countries and $9 billion in assets. In Nigeria, 10-year-old Guaranty Trust Bank PLC operates in five English-speaking West African countries.

I can think of others…. but I would presume that one gets the picture with these examples. The whole article, which is on the whole pretty upbeat, is here.