Johan Fourie's blog

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Posts Tagged ‘science

How do we build a prosperous, decolonized South Africa?

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boys-plowing

I recently attended an academic conference at the University of the Free State on the topic ‘Decolonizing Africa’. Much of the debate was, understandably, about the past: about the lingering effects of the (Atlantic) slave trade, European colonization that included the imposition of largely artificial borders, and the post-colonial failures of independent Africa. But at the final keynote, delivered by Prof Alois Mlambo of the University of Pretoria, the discussion turned to the future. How do we build a prosperous, decolonized South Africa?

One unescapably emotive topic is land reform. The expropriation and dispossession of land in South Africa is the root, many agreed, of the severe levels of inequality that plague the region. But how to correct this past injustice was not so easy; in the audience, too, were several Zimbabwean scholars quite critical of that country’s land reform programme. Over lunch, one Zimbabwean student told me the tragic story of his grandfather, a former farm worker on a white farm turned successful tobacco farmer after land reform, only to lose his land because he was considered ‘too successful’ by the ruling ZANU-PF party. The farm is now dormant.

Getting land reform right is fraught with difficulty. Not everyone that suffered land expropriation wants to return to farming – by far the largest number of recipients of successful land claims in South Africa choose the cash instead of the land. (This is often ignored by politicians and commentators when simply taking the hectares transferred as measure of land reform success.)  And even when recipients choose to return to the land, they often struggle to support themselves because of the small size of land allocated, or a lack of capital investment, or a lack of technical or management skills. There are also political consequences: because land recipients, like those in Zimbabwe, often do not receive title deed to the land they are given, they become ensnared by the political party that gave them the land. Why do people still vote for ZANU-PF despite the state of the economy? Because they worry a vote for the opposition means that they might lose their land. Most worryingly, it is often the original farm workers who lose the most, like the Zimbabwean student’s grandfather.

This is not to say that some form of wealth redistribution is not imperative. But whereas land (and the minerals it contained) was clearly the most productive resource when it was expropriated in the nineteenth century (which is the reason it was expropriated), a valid question is whether it still is the most productive. Of course, people value land not only for its economic uses: there are a myriad of historic, cultural and religious reasons why the land of your ancestors are treasured. But as a redistributive policy aimed at creating a more equitable society, is land reform the best way to create prosperity for those who suffered historical injustice?

Think of the fastest growing companies globally: which of them still rely predominantly on land ownership? AirBnB is a great example: it is the world’s largest accommodation service, without owning any property! For AirBnB and the myriad other unicorns that have created incredible wealth for their founders and shareholders, it is not land or physical property that creates wealth, but science and technology. (Even farmers know this: that is why they are investing in science to improve their crops and in technology to mechanize production.)

In the twenty-first century, land is what you buy with your wealth, and not the reason for your wealth. A quip about Stellenbosch wine farmers summarize this well: How do you make R1 million farming in Stellenbosch? You spend R2 million.

Prof Mlambo remarked that India and China, both with a history of colonisation, is not growing at above 5% because they have redistributed land. They have prospered because they embraced science and technology. Consider this: in the 2015/2016 academic year, 328,547 Chinese students studied in the United States; only 1,813 South African students did. (If you account for population size, 7 times more Chinese than South Africans students study in the US.) Take South Korea, a country with roughly the same population size as South Africa: 61,007 South Koreans traveled to study in the US in 2015/2016, 33 times more than South Africa.

So how would a redistribution policy look that takes science and technology seriously? I don’t have the answers, but here are some suggestions. Most of us would agree that education is key, but the South African education system has not made much progress in the last decade and it is unlikely to do so in the next. Redistribution must start at the first year of life. Publicly funded but privately run nurseries will remove the gap between the rich and poor that has already emerged when kids arrive at school. For primary and secondary education, a voucher system that incentivize private schools for the poor is an option. At tertiary level, we need more and better-funded universities, notably in science and technology. (It would help to send more of our smartest students abroad to study at the frontiers of science – they will return with new ideas and networks to propel our industries forward.) Visas for and recruitment of skilled immigrants can boost research and entrepreneurship. Improve free wifi access and invest in renewable energies. The private sector, because that is where most innovation occur, can be incentivized through appropriate legislation to offer shares to workers – or to those living in communities where they operate. There are a myriad of innovative possibilities.

If Zimbabwe has taught us anything, it is that politics may triumph over economic logic. Land reform in Zimbabwe was not an economic strategy in as much as it was a strategy to keep the ruling party in power. It has had severe economic consequences, as anyone visiting Zimbabwe today can attest. The real radical economic transformations of our age – just in my lifetime, the Chinese has managed to reduce the share of people living in absolute poverty from 88% to less than 2% – have not come from redistributing an unproductive twenty-first century resource. It has instead been the result of investments in science and technology. Any attempt to redistribute with the purpose of building a more prosperous society should take this as the point of departure.

*An edited version of this first appeared in Finweek magazine of 29 June 2017.

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More math and science, please

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Princeton University professor Leonard Wantchekon was the keynote at the African Economic History Workshop in Wageningen, the Netherlands

Princeton University professor Leonard Wantchekon was the keynote at the African Economic History Workshop in Wageningen, the Netherlands (31 October 2015)

I had the good fortune last week of meeting Leonard Wantchekon, Professor of Economics at Princeton University. His is an incredible story: student protester in Benin, sent to prison, tortured, escaped, fled to Canada, shifted from math to economics, and moved up the ranks to be professor at an Ivy League university.

But apart from these gripping experiences, he noted how important the study of mathematics was in his life, and still is for many students in Benin, a country ranked 167th poorest out of 187 countries in the world. That is why six of the top ten mathematicians in Africa are from Benin (his fact), and why he has opened the African School of Economics in the country.

This got me thinking about a topic I’ve written on before: what do the best and brightest South African high school matriculants choose to study? Of course, their choice is influenced by a multitude of factors. Parents have certain expectations, friends weight in, teachers have their say and there are often financial realities at play. They see adverts for different occupations in newspapers and online, they watch series which portray romanticized images of certain careers, and they dream about working with people, or with animals, or ‘not-in-an-office’. (If I had a Rand for every time a student told me that they just don’t want to work in an office… and these are Commerce students. Buddy, you’ll plead for an office after you’ve spent a few years in a cubicle!)

But a new paper by Biniam Bedasso of ERSA suggests that there are other factors, too, which shape our behaviour. Your science teacher is one. The most significant determinant of choosing a major at the University of Cape Town, according to Bedasso, is the number of science courses an applicant took in high school. The more science courses you take, the more likely you are to choose high-earning degrees like Engineering. Not all schools, however, are equally endowed with good science teachers, which means that inequalities at school translate into inequalities at university: black students who are more likely to go to schools with no science teachers are more likely to end up choosing degrees in the Arts and Humanities, for example.

Peer pressure is another factor that influences degree choice. Using enrollment at UCT between 2010 and 2013, Bedasso finds that if your friends choose a Humanities degree, you are 10% more likely than someone with your exact same characteristics that live elsewhere to also choose a Humanities degree. In his words:

Neighbourhood effects shape the choice of individuals through the influence of near-peer role models. Correcting for possible clustering of unobserved preferences along postcodes, a one standard deviation increase in the ratio of near-peers who were admitted to a certain faculty during the last three years is shown to increase the probability of choosing the same faculty by around 10 percent.

He also finds, interestingly, that politics matter. Black South African matriculants are more likely to choose Commerce or Arts degrees, instead of Engineering or Science, if they live in a neighbourhood that is governed by the ANC. It’s difficult to think why this would be: perhaps this confirms the old adage that it is not what you know but who you know. In economics-speak: social capital trumps human capital.

As we would expect, the quality of high school attended also matters. Says Bedasso: “High-achieving applicants who come from less competitive high schools tend to choose high-return majors than similar students from more competitive high schools.” So, if you’re from a poor school but do very well, you are more likely to study Math and Science than if you do equally well in a good school.

Surprisingly, whites weigh expected earnings more heavily in their choice of degree: “White applicants are more responsive to differentials in aptitude-adjusted expected earnings than black applicants.” In other words, whites are more likely to switch to a degree where they can earn a higher salary.

Bedasso thinks these results have profound implications for South Africa:

The gravitation of the children of the political elites towards less technical majors may deprive the political class of sufficient interest in productive activities. This, in turn, is likely to leave the elites with little incentives to respect property rights in the future. Hence, policy measures that will improve the availability of science education at high school level or account for the effect of near-peer role models in college admissions may go a long way in terms of shaping the path of economic development.

I think this is stretching the results, and would be more optimistic. Successful businesses require more than just breakthrough innovations; many of our top accountants and business students end up running technology companies because they know that running a business is not an algorithm to be programmed for success. As a new wave of young, successful black South African entrepreneurs strut their stuff in the business world and the barriers to entrepreneurial and managerial success appear less daunting, the attractiveness of a political career (and academic) will seem less appealing. This young generation, I would argue, is unlikely to cede property rights.

That being said, the need to promote math and science at schools remains imperative. We need more scientists, mathematicians, engineers, and computer programmers to remain competitive in the knowledge economy. We should start by appointing more and better math and science teachers, as Bedasso’s evidence suggests. It would also help if parents support their children to choose these (tougher) subjects. And if friends encourage each other.

I don’t know how to incentivize this change in behaviour. What I do know is that math and science can open doors that, if they remain locked, bar entry to a better life. Just ask a former prisoner from Benin.

Written by Johan Fourie

November 5, 2015 at 08:26