Archive for the ‘ Media ’ Category

Democrats staying one step ahead of the blame

A Reuters/Ipsos poll late last week reiterated what has been true for the majority of the time that this fiscal cliff saga has rumbled on: that if the USA goes over the fiscal cliff, the Republicans will be blamed more than the Democrats.

It seems like this fact has conditioned a lot of the Democratic approach to negotiations, sitting back as Boehner fails to come up with a proposal that even his own party will sign up to, portraying the GOP as a party which is behind the times when it comes to progressive taxation, and a party which is ignoring the will of the majority following Obama’s re-election.

This is very much like the Democratic approach to the FY 1996 budget, where Clinton and Gingrich went head to head. Clinton was prepared to resist Republican demands, even if it meant shutting down federal government, and was unwilling to sacrifice popular federal programmes so long polls showed that Republicans would get the majority of the blame for any shutdown.

Tell Newt To Shut Up! is the definitive guide to those winter ’95 budget negotiations, and quotes a conversation between a senior Republican (perhaps Dick Armey – though don’t quote me on that) and Vice President Al Gore. The Republican tells the veep that his party are willing to shut down the government unless the Democrats agree to their proposed spending cuts.

“Our numbers show that if you do that, you guys lose,” Gore replied.*

That dynamic has been very much at play in 2012 too.

* At least approximately. It’s not online and I don’t have a copy of the damn book. Wanted to get the blog out before the deadline (it’s late enough as it is) but if anyone knows the exact quote or has the book (I think it’s p. 146) then let me know…

renewed intent

It seems that most of my posts of recent months have concerned my lack of posts, which is something I now aim to put right. After a fairly hectic (and blogless) summer, I’ve now got a job at Reuters, working on the markets desk in London, specialising in stocks in Europe and the UK. So alongside my pieces for Reuters I aim to keep the blog-only content ticking over, perhaps with a renewed markets focus but also with a continued eye on the politics of Europe, Africa and the United States. All strictly inline with Reuters policy and principles, of course…

A peacebuilding success? Cracks in Burundi’s fragile post-conflict settlement

News this week that a HRW report on political violence has been suppressed might come as a surprise to those in the international community who like to hail the Burundian experience as a success story when it comes to post-conflict situations.* However, to people who have studied the peacebuilding process, and to Burundians themselves, it is just one symptom of a broader picture which in reality is less optimistic.

Yesterday I saw Dr Devon Curtis deliver a talk about the situation in Burundi and the real nature of peacebuilding. While peacebuilding is often conceived of as a “neutral” activity, it is in fact by nature a political activity too.That doesn’t make it any less worthy, but if practitioners aren’t upfront about the values and priorities which infuse the frameworks they use in peacebuilding (be them centred around liberalism, stabilisation or even local ownership), then there will be problems in the future which will catch them unawares. As in the DRC, the process of peacebuilding has swung between an emphasis on the installation of Western notions of what it is to be a good liberal democracy on the one hand, and the stabilisation of the situation, so that values such as human rights are subordinated to the broader stability of politics in the region, on the other. Thus, the immediate post-1993 situation called for a stabilisation of a potentially explosive situation, whereas the Arusha process was infused with more liberal norms. I don’t think the two priorities are necessarily always so separable – what about the stabilisation ahead of DRC’s 2006 elections, elections that are at the heart of any liberal agenda? – but the dichotomy is nevertheless a helpful one. As Dr Curtis pointed out, both have order at the heart of them. With stabilisation, this is obvious, but even with the liberal approach, the DRC example is illuminating, as it doesn’t address the potential for the militarisation of politics. Overemphasis on the technicalities such as the formal completion of elections and the institutionalisation of power-sharing arrangements can miss the fact that returns to violence are still high in Burundi, and the liberal framework for peacebuilding doesn’t address this effectively. Instead, because elections are being held with regularity and the spectre of genocide has faded, the mission is wound down and declared a success; ignorant of the fact that dynamics of militarisation and control are still playing out in Burundian society today.

With a greater awareness of these issues, perhaps the international community would be more restrained in giving themselves a pat on the back for their great success in peacebuilding, and, by the same token, less surprised when it starts to unravel.

* The UNA-USA also seem to think that only 80,000 people died in Rwanda, so there’s another surprise in store for them there.

Goldenballs, the prisoner’s dilemma and how Ibrahim could have won it all

This clip of an extraordinary game of Goldenballs has been doing the rounds recently, and as I’ve been brushing up on my micro, I thought I’d do a little guide to how it worked.

The idea of the game Goldenballs is based on the Prisoner’s Dilemma in game theory. In this dilemma, two prisoners are arrested and questioned by police. They have two options, Silence or Betrayal. If they both choose Silence, they both are let free. If one chooses Silence and the other chooses Betrayal, then the Betrayer gets a new life in Monte Carlo, while the Silent one is locked up for ten years. If they both attempt to grass up the other, then they both get 5 years in jail.

Let’s put some numbers on to this. If we have person x and person y, then the payoffs are

<Silence, Silence> <5, 5>

<Silence, Betrayal> <-10, 10>

<Betrayal, Silence> <10, -10>

<Betrayal, Betrayal> <-5, -5>

The idea of the game is that there is an equilibrium at <Betrayal, Betrayal>, even though both players would be better of at <Silence, Silence>. This is because, if you think the other person will remain silent, your payoff is maximised by betrayal (5 < 10) and if you think the other person will betray you, your payoff is maximised by betrayal too (-10 < -5). Therefore betrayal is a dominant strategy for both parties (This is the most basic problem in game theory, so although I haven’t used any grids etc a quick google can put you straight if you’re still confused).

The problem is you have no way of co-ordinating your decision in this one-shot game. Goldenballs introduces a co-ordinative aspect, by giving the participants a chance to discuss their decision. And normally it takes the form “We should co-operate”. “Yeah we should.” “Cool let’s co-operate then” then a question of how honest the people are.

But, as Mr Right (the player’s in this game I’m going to call Mr Right and Mr Left, I’ve decided) has worked out, such an attitude to negotiation doesn’t solve the game. The dominant strategy to betray remains, and the Nash Equilibrium of <betrayal, betrayal> does too; regardless of the good vibes you’ve been getting from your partner through out the game. The incentive is still there to steal.

BUT… this is not the same game as outlined above. The payoffs are:

<Split, Split> <6,800, 6,800>

<Split, Steal> <0, 13,800>

<Steal, Split> <13,800, 0>

<Steal, Steal> <0, 0>

If you think the other person is going to Split, there is a clear incentive to Steal. But if you think they are going to Steal, then you are faced with the payoffs of 0 or 0. They are equivalent. Thus, Steal is only a weakly dominant strategy.

Rather than engage in the fantasy that co-operation was possible if Mr L thought R was going to Split (faced with such a proposition, L would always steal), Mr R sets his stall out: I’m going to steal. This infuriates L – he can’t do anything with that. Whatever he does, he’ll get nothing.

But Mr R offers him a chance of the winnings. Although this isn’t taken very seriously by Mr L, it is (quite literally) better than nothing. His payoff from Splitting if Mr Right steals is now 6,800p, where p is the probability that R keeps his promise. p could be infinitesimally small, but as long as it isn’t zero, it’s better than the alternative.

This is presumably the realisation that L has when he sighs “okay, I’m going to go with you.” He splits, so does Mr R, and co-operation in a one shot game has been achieved.

Is this the only solution to the game? Quite simply, no. Mr R constructed a payoff matrix whereby L had nothing to lose by splitting, but the uncertainty in whether or not Mr R will keep his promise is only uncertain to Mr L. Mr R knows exactly what he’ll do. Let’s call “altruistic” Mr R “Nick”, and evil Mr R “Mick”. If Mr R is Nick, then he may as well play Split too, as p = 1, so his payoff from Stealing is 13,600-6,800 = 6,800, so Split and Steal are equivalent. We could even model a negligible benefit ε of being an internet hit and people knowing how nice you are, so his payoff from splitting is slightly higher. But Mick would do no such thing, and would steal the money and then not share. Then he has to play steal, and once he had, even though on the show we wouldn’t know if he would keep his word, we can assume he won’t, as if he was going to cough up he may as well as split. So for what happened to be a proper solution to the game, we have to make assumptions about the nature of Mr R, and his utility gain from (essentially) being nice (perhaps the size of ε).

But Mr L didn’t play in a totally rational manner either. Because rationality means that one can, essentially, work out everything that I’ve just written above before the game is played. And even though L didn’t know who he was playing, evil Mick or nice Nick, he would have been rational to steal in either case. Mr R’s promise is not credible, not just because once he’s one the jackpot no-one can make him share it (a classic intertemporal problem, which I won’t go into here…) but because, as outlined above, an altruistic Mr R (Nick) would just play Split. At which point… Mr L has an incentive to Steal the whole jackpot! So in fact, even though Nick created a payoff matrix for Ibrahim (aka Mr L) where he only had something to gain by Splitting, had Ibrahim thought through the motivations of what Nick was saying, he would have found it rational to cheat. Perhaps Ibrahim didn’t have enough time to think it through, and Goldenballs’ time limit saved Nick and his altruism.

But perhaps Ibrahim is just as irrational as Nick. As they both had a chance to win it all, and neither took it. In a one-shot game, there can be no future punishment, no way of enforcing agreement. So ultimately, although Nick’s strategy seemed to create new payoffs for Ibrahim, its success rested on trust and a belief in non-rational altruism all the same.

An inglorious triumvirate

I’ve had some interesting feedback to my last blog post, some of which took it more seriously than intended but all of which is well taken (not least as I’d be hypocritical to defend lazy blogging with appeal to humour given my unforgiving post of the same day). The central point of the post is the use of discourse: when the economy is recovering, it is due to the government’s genius, when it is tanking, it is due to all manner of implausible, irrelevant  and highfalutin excuses. And that point still stands.

The claim that the panic was purposively induced was meant more ironically, which is just as well because, as has been pointed out to me, the figures don’t add up. ONS statistics of Q4 GDP at market prices have £380,517,000 = 0.1% of quarterly GDP, meaning that to add +0.3% (assuming 0% growth without the fuel crisis) would require >£1.1bn extra spending. If we assume 30 million cars on the roads, they’d all have needed fill up at the government recommended amount of half a tank (30 litres) at 140p per litre, and it not had had a negative impact on other consumption. In one sense this is possible, as the nature of panic buying isn’t that everyone followed the government’s “reasonable” advice, but that those who did top up bought much more than half a tank, even if it wasn’t all the 30 million. But then wrangling like this is tenuous, as how many would had to have bought petrol anyway, how many people at petrol stations across the country who were interviewed by the BBC exclaimed their frustration at the panic buying while claiming (very plausibly) that they needed it? Analogously you can argue that the supposed growth of last quarter was illusory because the the proportion of money that is spent on food… clearly that is absurd. My point was that the government’s reasoning is likewise tenuous, and had growth been below par they probably would have cited Lent and a drop in demand for sugar as the reason, even though it’s never been relevant any other year, and people buy Easter eggs preemptively…

Whatever, you get the picture. Given the difficulty of working out the effect of the petrol crisis on growth, the idea that it was pre-planned conspiracy is far-fetched to say the least. Irony is hard to convey on a blog, and while I don’t apologise for that, I did want the figures and will happily admit that they don’t back up the hypothesis of coalition led conspiracy. But part of me thinks: if only they did! Because as explanations of accounting for the government’s motivation during the the petrol crisis, we have that it was:

a) a conspiratorial account for inflating growth figures,

b) a possible “Thatcher moment”, spoiling for a fight with trade unions

c) due to massive amounts of governmental incompetence.

The friend who alerted me to the figures cited b), I’d just as happily believe c). Inflating growth figures, while underhand, could instrumentally benefit the country, restoring market confidence and perhaps creating a positive cycle of growth. While we have a classic case of credit-taking by the political class, good things could come of it, and frankly, it seems the lesser of three evils when explaining the government’s action. Which might be, in term, why on examination it’s the least plausible. After all, of all the feedback I had from the blog, no-one said that I was being unfair on the government per se; merely that I had misidentified their motivations, and the exact nature of their dastardliness/incompetence. Which doesn’t exactly cover them in glory.

Tanker Politics and Technical Recessions

As is repeated to the point of banality, a week is a long time in politics. Last week, the OECD said that Britain would fall back into a technical recession. This week, the BCC said it will avoid one. What’s changed in the interim? Well, the exogenous consumption shock of a manufactured crisis that hugely increased demand for an expensive product during the last few days of Q1, that’s what.

Whenever the performance of the economy has been below par, there’s always been an excuse. The royal wedding.  Cold weather. Warm weather. But now we have a mightily impressive growth rate of 0.3%, it’s not the result of chaos and panic induced by the government, but rather is “encouraging”, and proof of business “confidence”. Much like the reaction to the budget was meant to be. How dim do they think we are? “Oh, GlaxoSmithKline read the budget and overnight decided to create a thousand jobs! What a good budget that must be. And when George Osborne gets asked questions about things like the 50% tax rate, he can legitimately cite GSK (despite its lack of relevance) and I will be satisfied.” (See 1.20-2.10ish).

You have to hand it to the government, it’s all fairly ingenious. Want a good way to boost consumption without giving anyone a job or more income to fund it? We’ve just been shown a masterclass. And it’s not even as if  all the petrol will go to waste! We just all bought it a few days early, and can keep it in those trusty jerrycans in the interim.

Kony 2012: the Ugandan Prime Minister’s response

I was fascinated to watch Ugandan PM Amama Mbabazi’s response to the Kony 2012 campaign last night, and how he seems to share the critiques of many Ugandan observers, such as Mamdani, and non-Ugandans. This is not necessarily obvious, given that the Ugandan government stands to gain from the achievement of Kony 2012’s goals. If you remember my first blog that talked about the LRA,  it was addressing an article by John Pilger in the New Statesman who dismissed the American national interest (which justified the intervention) as “usually mean[ing] buying a corrupt and thuggish regime that has something Washington wants”. And my first piece on Kony 2012, the Think Africa Press piece by James Schneider and Zoe Flood have all noted the self-interest that is served by Ugandan forces being given a remit to pursue Kony.

Which raises the question: why doesn’t the Ugandan Prime Minister welcome Kony 2012’s simplifying message with open arms, if it seems clearly in his government’s interests to do so?

A few points here. The reality on the ground cannot be ignored; be it Zoe Flood’s taxi driver or a Professor at Makerere University, Uganda’s civil society seems to have responded unanimously, taking exception to the video. And rightly so. It could be that the Ugandan government’s response has been derived from this backlash, and deviation from the public discourse within the country (for example, if the government welcomed the video wholeheartedly) might be seen as so politically motivated as to be absurd.

Secondly, the actions of the UPDF are not necessarily the direct fault of the central government. By this I mean, when Flood’s taxi driver says that “they haven’t arrested him because he makes them too much money”, it’s unclear who he means by “they”, and many of the UPDF’s abuses appear to be more the result of moral hazard rather than centralised policy. I wrote in my earlier post about Kisangani, and Gerard Prunier pointed out (in Africa’s World War) that mineral exploitation in Kisangani was not centrally controlled through the government, as it was by Rwanda. Moreover, when Schneider refers to “military commercialism,” he talks of Uganda’s senior officials in the army, not of the government per se. This isn’t a defence of the government, as clearly they should be responsible for their troops if they’re out of control as much as if they were just following orders. But it provides a dualism through which the government can keep a distance from the actions of the army, and again, might be jeopardised if the government supported the film too much.

Thirdly, throughout the film it is clear that Mbabazi is playing down the role of the military for a reason. He wants to encourage tourism and investment, and stress that Uganda is a safe country which has been at peace for five years. These things are all true, but this only makes sense if the gains to peace are higher than the gains to aid given to support the capture of Kony. This suggests that Flood’s taxi driver only takes us so far: while there may be marginal benefits to pursuing a war out of a Collier style “greed” scenario, the growth produced by investment and peace seem to outweigh this. It may be that both can be pursued, with the army being given a carte blanche to galavant around Central Africa to find Kony, while publically the government emphasises gains to peace inside Uganda.

Finally, it might just be that the Pilger story isn’t plausible. Why wouldn’t the Ugandan PM like a film which supported US aid for his “corrupt” government that is otherwise powerless to stop a warlord? Well, why would he? Perhaps it’s not all a big conspiracy theory, but rather the honest reaction of a man in government who is just as much bemused by the simplification of his country’s problems and history as his compatriots are. At this point, here’s a helpful reminder of some of my previous thoughts on African conspiracy theories.

I think the extreme version of the last point might be a bit naïve, but, as ever, comments are welcomed.