Sunday, January 3, 2010

Paul Romer, Town Planning, and Eating Gays in the Land of the Deep-Fried Taco

Sorry guys, the first post of this didn't contain the links.


Dear Friends & Colleagues,

Two weeks ago, I went to see The Brothers Bloom in a Mexican Cinema. In Mexico, most Western films are released in both subtitled and dubbed formats; people with thick-rimmed glasses and skivvies overly attend the subtitled sessions, and those with pick-up trucks choose the dubbed sessions. For me, the only memorable part of the film [two and a half stars], was when one brother Bloom said to another brother Bloom "I don't want to impugn an entire country, but Mexico is a terrible place". All the political science students in their berets giggled, nervous, and offended, but unwilling to not get the joke. They knew that fifteen thousand people have been murdered here since President Calderón stupidly declared war on the drug cartels, but are also tired of being the butt of supposedly affectionate jokes in the west. Being proud of being Mexican is difficult.

Mexican national pride, from what I can reckon, is based on cuisine, custom, and saying "bugger off" to the Spanish, one hundred and ninety-nine years ago. In 1810, a charismatic priest called Miguel Hidalgo y Costilla, irritated by the authorities in Madrid ordering private vineyards destroyed, including his (they would threaten the Crown Monopoly), raised an army and took the silver-mining town of Guanajuato. His attempt at gaining Mexican independence was immediately unsuccessful---the Spanish shot him in Chihuahua, then cut off his head and put it on a spike in front of the grain warehouse in Guanajuato (for a decade, to let the message sink in). Eleven year later, though, Hidalgo's "bugger off" resonated with a greater proportion of those in power, and Spain ceded control.

After seeing the film, Susana and I visited Guanajuato, staying in a hotel metres from where Hidalgo's head was. The town itself is unlike the rest of Mexico; it seems to have `got it together'. It is a tourist town in the purest sense. Throngs clog its cobblestone streetlets for the permanent carnival atmosphere, take tours of the dungeons, castles, and silver mines, or drink tequila in the lane-way bars. It is a lucky town, with something to sell: picture the Warrumbungles, minus the trees, with all the seventeenth century pomp of a pious European city, glued together with the walkways, parks, and restaurants of Sydney's The Rocks, in permanently mild weather. The physical beauty, however, is not the sole reason to go to Guanajuato. For Mexicans, visiting the town is an escape from their dirty, industrial Mexico, where pedestrians give way to cars that give way to trucks. In Guanajuato, pedestrians have de facto right of way; cars get around in their underground cobblestone tunnels, and there are no trucks. Guanajuato exists in a different kind of normal.

Normal, unsurprisingly, is a fairly important concept in development economics. As pointed out by Daron Acemoğlu, an important development economist, Mexico´s normal is comparatively dismal:

"On one side of the border fence, in [Nogales,]Santa Cruz County, Arizona, the median household income is $30,000. A few feet away[, in Nogales, Sonora], it's $10,000. On one side, most of the teenagers are in public high school, and the majority of the adults are high school graduates. On the other side, few of the residents have gone to high school, let alone college."

Economists call the different versions of normal that exist on either side of the fence bordering Arizona and Sonora institutions. Institutions are not schools, or hospitals (unless they are), but the shared common accepted rules between a group of people. Kissing hello is one institution. My lentil burgers are another. Today I saw a fantastic example of a proud Mexican institution: a bus had been pulled up by a motorcycle police-man, for running a red light. Underemployment in Mexico is around the quarter of willing workers, and the driver---knowing that he could be easily replaced---"fixed" the policeman right there, five metres from Susana and I.

It has been a source of constant fascination for me how the physical layout of a city can influence these institutions, and how they become re-enforcing. Guadalajara, for example, is a big city--about the size of Sydney--and has about the same quality of roads and transport as Sydney would if no maintenance work was carried out for 5 years or so. The size, coupled with the presence of plenty of heavy industry and cheap petrol, means the pick-up truck (American style, not the more efficient Japanese type), is omnipresent. In many industries, owning a pickup-truck can be the deciding factor in one's employability. These factors further result in traffic problems, road damage, and a potential enormous "friction" when Mexico eventually faces a real oil constraint.

But pick-up trucks are not a bad institution per se, and nor are sprawling cities necessarily riddled with corruption and "isolated communities". There is something else going on.

If I were to have to pick a single metric for development, it would be the level of maintanance of the space between a road and houses. Certainly, poor footpaths do not cause a poor society; in contrast, they are the weather-bell of development. In general, people look after their houses. It has ceased to surprise me that in supposed "slums" one can find well-maintained dwellings with more mod-cons than I had in my Brunswick share-house. Similarly, in some of the poorest parts of the world, I have travelled on beautiful, smooth roads (I admit, fairly infrequently).

People take care of their houses because they stand to directly benefit from it: economists say their time spent housekeeping is consuming a "private good", in that others cannot freely consume it. Roads (public goods) are a different story. In general, good roads only happen in places where those who stand to benefit from the roads have some power or economic importance (ie. farming districts, or infamous smooth-highways-to-the-
governer's-house examples). Footpaths, though, are a necessity only for the marginalised (the blind, the crippled, and the old), and it is no surprise their existence, let alone quality, is the marque of a society that has got it together.

More geekily: the existence of high quality footpaths indicates that people implicitly care about the existence of footpaths (a public good) almost as much as their own houses, and do this either by taking care of the footpaths themselves, or paying a tax in order to have an administrator do it for them. This general idea--that development occurs due to institutions equating perceived private returns with public returns--is fairly central to the work of Douglass North, who won the Bank of Sweden (Nobel) Prize for economics in 1993, and who all economics students should be forced to read.

Footpaths are, of course, fairly insignificant in the scheme of things, but they are a good allegory for public good-provision in general. The people of Guanajuato (and their clean streets, which are, incidentally, primarily cleaned by the residents, not council) left me with something to think about: they care for their footpaths because the rest of Mexico would judge them harshly were their streets filled with litter (the norm in Mexico). Why is there not the same degree of shame attached to Mexico's other ills: drug crime and corruption? If Landscape Architects and Urban Planners have the capacity to engineer our emotions to accept ownership of land that is not ours, and treat it as so, is it not the task of economists and other policy-makers to figure ways to attach popular sentiment (and more importantly, action) to behaviour in the public good?

An interesting thinker on the topic of Cities and Institutions is Stanford Professor Paul Romer, whose Charter Cities idea has been quite a hit this year. The general concept is this: poor countries' governments have proven to be fairly bad administrators, for whatever reason; similarly colonialists didn't do a really flash job managing the same countries either, and so re-colonising countries is not a palatable option. However, cities are a fairly proven method of improving livelyhoods, and most cities in rich countries are run well. It follows that if rich countries were to establish cities and allow people from poor countries to populate them (accepting the rules and institutions of the city), everyone would benefit. The best example of this sort of thing, historically, is Hong Kong, which was administrated by the UK until 1997, and is one of the most prosperous cities on the planet. Here are a list of candidates proposed by Romer.

On balance, I think the idea is a fantastic one, though not without some flaws, which I'll write on another time. My biggest criticism is, so far, the lack of detail of what a charter city would look like. I would not say that contemporary suburban design inspires "ownership" of a city in the way the nooks, hills, and churches of Guanajuato do. Urban design can, simply, make the job of instilling good institutions easier.

To get a better idea of the so-called "International Best Practice" in urban design, I plan to go this year to the Shanghai Expo 2010. I will likely go in July, if the Treasury wants to give me some time off. If you're interested in joining me, shoot me an email.


Jim said...

You may have spent a day or so in Guanajuato. I have lived there full time since 1996. The streets are kept clean by municipal workers. Residents may tend their stoops but they alsod toss out the mop water into the streets. Usually the good looking, well painted homes sans graffiti are a result of municpal action as at least once per year but often twice city paint brigades touch things up - well not on my street as I'm off the tourist pathway but I do buy my own paint. Calderone's 'stupid' war against the drug cartels - well, everyone is entiled to his own opinion. What wasn't addressed at all in the US presidential election campaign was that the problem is US consumption of drugs smuggled through Mexico. Kill the market/solve the problem. At least the majority of the 15,000 killed so far have been the bad guys.

written from Chiang Mai

javage said...

Thanks for the clarification, Jim.

Guanajuato is a pretty town. I can see the attraction of living there. It is also interesting that one needs not go very far to the North to find that neither council nor residents tend to their stoops, and there are no footpaths.

Your comment on municipal action against graffiti is interesting. Obviously, the municipal government realises that tourists won't see Guanajuato as an escape if there are as many "Juan, te amo"s scribbled on the walls as in their home towns. But do you buy your paint for the same reason? And why do you buy your paint, but the millions in León and Guadalajara don't?

Calderon's war against drugs is stupid. It's done nothing to reduce the flow of drugs, or crime, and has resulted in 15,000 murders. Yes, most of the dead have been "bad guys", but I'm of the mindset that bad guys deserve justice, not death.

Jim said...

Paint1 - Have you read John Grisham's "A Painted House"?
Paint2 - My property sits back from the road - its sort of a isc. triangular shape with the sharp pointy end facing the world. I do it [paint] for aesthetic reasons and pick my colors from a chart of sand colors that I picked up in CapeTown years back. The paint is mixed by eye by a lady at the paint store who has no artistic experience she just works there and that was her job. Said she made a lot of mistakes at first.
Paint3 - I do 'touch up' my 'zone' which is the entry alley to my place and the 25m of the street leading in. When graffiti hits I let it sit for a day and then it’s gone. The neighbors notice and they have taken action on some of their zones*. I think one reason you see so much elsewhere is that most of Mexico is built without a facade - its just wall to the outside – the houses face inward and they live looking inward to their courtyards. Once when remodeling a house in the rear of the property I decided to move a poorly placed window from one wall to another. The other wall was at the property line so we knocked a fairly small hole trough it and then busted the rest of the wall inward. The neighbor came by a few days later to let me know that there was a law** preventing one having a window overlooking someone's property - again this gets back to the looking inward thing. We worked things out with me accepting I couldn't object to his trees maturing and blocking the view.

Justice, oh sweet justice. These bad guys aren't innocents [or innocent]. They knew what they were signing up for. And well letting justice prevail-- sure, why not? They can certainly afford it. Try Michael Connelly's "The Lincoln Lawyer” for how the justice system in the States is worked. Try Misha Glenny's "McMafia" to see how the globalization of organized crime works.

* I do have one long exposed wall. As a defense I have planted bougainvilleas on the other side. Now several years later they have grown and cascade over the wall. My alternate plan was to paint religious murals and if they got graffed I’d let a higher power taken action.
** this is true and goes back to Spain

javage said...

Thanks again Jim.

Your point about façades and graffiti re-enforces my initial point--that urban design can foster institutions/individual behaviours which are in the public interest. Thanks again for your comment.

As you're a more experienced (non?)Mexican than I, you are probably a better judge of whether Guanajuato has `got it together' better than the rest of Mexico in other (non-aesthetic) areas--especially crime, graft, and drugs? If so, for what reasons do you think?

On the drug war, I agree about the bad-ness of the bad-guys. There's no doubting that people who sign up to the cartels are aware that with riches come a significantly shortened expected lifespan.

What I don't agree about is whether military action against the cartels is much better than doing nothing. There is a good article, linked in the blog above, by Jorge Castañeda, on this. Given his credentials, I take his points fairly seriously.

From my reading on insurgencies (which the Mexican issue is not, precisely), I can´t recall an asymmetric war that has been won with direct force alone. Can you?

The problem is that, even if the costs of doing business for a cartel are raised by government forces, those costs are minimal compared to the profits of cartel activities. You are right when you say ¨kill the market, kill the problem¨, but unfortunately, Mexico has very little say over US drug policy.

I´m currently writing a review on David Kilcullen´s `The Accidental Guerilla´, which should be up within the next week or two. It´s on this topic.

javage said...

Thanks Charles for the link: Jim--here´s a more fleshed out essay by Castañeda in Foreign Policy.