Posts

Redistribution the only way to stop the downward spiral – Business Day 21.01.2015

Business Day 21.01.2015This week on Business Day, South Africa’s leading business newspaper, GovInn director Lorenzo Fioramonti -drawing conclusions on Piketty’s research – discusses why redistribution is the only way to tackle inequalities in South Africa and worldwide: will the WEF listen?

“One does not need a doctorate in economics to recognise that SA is one of the most unequal societies in the world. We see it every day, when we drive through our cities and across the country, when we go shopping or take our kids to school.

While inequality is a fact of life (we are different people, with different capacities, interests and aspirations), it becomes a social malaise if it exceeds certain levels. And each society should democratically decide which degrees of inequality are acceptable.”

“Such a level of inequality also reinforces violence, frustration and crime.

In SA and elsewhere, economic growth has been employed as a magic wand to avoid a serious debate on inequality. The belief that the economy can grow infinitely and at a sustained pace has been comforting to the ruling elites, as this means the pie will continue expanding without the need to redistribute its shares.

Indeed, allowing the rich to become richer has been often presented as a precondition for the economy to excel for the benefit of all.

Nowhere has this been as evident as in the justification of the stellar salaries of top managers of private and public corporations.

The reality, however, is that this “trickle-down” vision of economic development is largely a dogma, as Piketty has now confirmed with his data.
Moreover, he finds no correlation between the pay cheques of “super managers” and the performance of the companies they lead.
In his view, the only thing that explains these skyrocketing salaries is the fact that managers can easily influence the scale of their remuneration, often with the support of complacent boards of directors, while common workers cannot.

Read full article on Business Day

Rethinking development seminar: Chinese Agricultural Investment in Africa

Rethinking Development Seminar Series

Chinese Agricultural Investment in Africa: Actors, Modalities and Assessment
27 January 2015

SPEAKER: Lu Jiang, London School of Economics and Political Science

Rethinking development Seminar 27 January 2015Against the backdrop of the high-profile “reencounter and reunion” of China and Africa since the new millennium, agriculture has been one of the most important cooperation fields between the two sides.
Different from its earlier, mostly aid-featured engagement with African agriculture in the 20th century, the Chinese government began to actively encourage and support Chinese companies to invest in the agricultural sector on the continent. The speaker will look back on the past decade’s practice of Chinese agricultural investment on the ground, examine the different actors and modalities involved in this process, and give an initial assessment as to the results and implications of the Chinese state-led agricultural investment policy in Africa in the new era.
Lu Jiang is a PhD candidate in International Relations at the London School of Economics and Political Science (LSE). She got her master’s and bachelor’s degrees from Fudan University in Shanghai, China. Her research interests revolve around China’s foreign policy and particularly Chinese foreign relations with Africa. Her master thesis was about China’s oil engagement in Sudan. She is now working on Chinese agricultural aid and investment in Africa with a special focus on the case of Mozambique.

Date: 27 January, 2015
Time: 12.30-13.30
Venue: Room L1-64 in the Graduate Centre, Hatfield Campus
RSVP and enquiries: thinah.moyo@up.ac.za

Download the invitation in pdf

“Creating a More Egalitarian Society”: introduction to the LEDDA partnership

“Creating a More Egalitarian Society”, by John Boik:  an introduction to the LEDDA framework and the LEDDA Partnership.

Houston, 7.12.14

GovInn joins RISC

RISC logo
We are glad to announce that our Centre has joined RISC, the Consortium for Comparative Research on Regional Integration and Social Cohesion.

Founded in 2007, RISC gathers socially conscious research centres from all over the world. Through the creation of a cross-regional and interdisciplinary network RISC promotes the comparative examination of the human and environmental impacts of various aspects of regional integration across geographic areas and time periods. What sets RISC apart is its commitment to conduct research that could support social action projects in local communities.
GovInn researchers welcome the opportunity to contribute to a better understanding of the global political and economic challenges from the privileged observation point of Southern Africa.

Learn more about GovInn research projects
Learn more about RISC

World needs a new Bretton Woods with Africa in the lead – Business Day 27.11.2014

This week on Business Day, South Africa’s leading business newspaper, GovInn director Lorenzo Fioramonti reflects on the need to redefine the economic system and the very definition of economic progress.

“After the 2007-08 global economic collapse, we have not yet seen one major reform. Both bail-outs and quantitative easing (a cryptic term to hide the fact that governments have resorted to the old-fashioned, Zimbabwe-esque remedy of printing money out of thin air) have done exactly the opposite: they have condoned business-as-usual practices, providing an incentive for the financial sector to continue speculating.”

Our leaders make public appeals for more growth, but fail to specify what “type” of growth they want. While in the postwar period the world could have been satisfied with economic growth at all costs — most countries had been destroyed by the conflict and the future was simply about rebuilding — the new century has brought some critical reality checks. The planet is in pain, unbridled economic growth has increased inequalities in many countries and environmental damage has become a concern not only for tree-huggers, but for anybody interested in social and economic stability.

Read the full article on Business Day. 

Presentations from “Beyond GDP in Africa: Innovative ideas for a regional dashboard”

On 28-29 October 2014, GovInn, in partnership with the Sustainability Institute,  hosted a workshop that brought together academics and practitioners from statistical offices from Sub-Saharan Africa to identify practical solutions to measure well being and prosperity and move beyond numerical indicators such as GDP.

The title of the workshop was ‘Beyond-GDP in Africa: Innovative Ideas for a Regional Dashboard.’ Its goal was to take stock of the various criticisms raised against the gross domestic product (GDP) as a measure of economic progress and to propose a way forward for African countries.

Read and download the presentations given at the workshop: 

Why it’s time to leave GDP behind, by Robert Costanza

The GCRO BAROMETER 2014, by Darlington Mushongera

MEASURING DECENT WORK INDICATORS AND WORK STATISTICS, by Coffi Agossou

Environmental Economic Accounting Water Resource Accounting for South Africa, by Robert Parry

Gross National Happiness (GNH) in Bhutan, by Lise Pretorius

Why reversing Africa’s Resource Curse requires calculating natural capital accounts and ecological debt, by Patrick Bond

Update on the UN System of Environmental-Economic Accounting, by Mandy Driver

Developing a Diagnostic Tool and Policy Instrument for the Realisation of Decent Work, by Edward Webster

Beyond GDP: Towards a composite well-being index The case of the Green Economy Index , by Anton Nahman

Beyond GDP in Africa: Day 1 summary

Click here to download the workshop official statement 

Names and democracy in Southern Africa: the tale of two presidents

GovInn Researcher Chris Nshimbi compares the democratization processes of Zambia and Malawi on his latest post for the Nordic Africa Institut of Uppsala, Sweden.

“A few days after celebrating 50 years of independence in October, Zambia relived a sad history: the death of a second incumbent president to die in office in the space of six years.

Zambia is once again appearing as a beacon of peace in a violent and conflict ridden continent. However, the proof shall be in the transition with elections to be held 90 days after the president’s demise.

There are interesting comparisons to be made with neighbouring Malawi—the story less told about the successes of the evolving democratization in southern Africa.

Southern Africa needs committed politicians and senior bureaucrats that transcend personal interests to apply the principles of democracy and seek the firm establishment of state institutions.”

Read the full article on the Nordic Africa Development Policy Forum

Lorenzo Fioramonti presents his latest book in Heidelberg

Lorenzo Fioramonti presents his new book in Heidelberg, Germany

Numbers dominate global politics and, as a result, our everyday lives. Credit ratings steer financial markets and can make or break the future of entire nations. GDP drives our economies. Stock market indices flood our media and national debates. Statistical calculations define how we deal with climate change, poverty and sustainability. But what is behind these numbers?
GovInn director Lorenzo Fioramonti presented his new book at the German American Institute in Heidelberg, Germany on 14 October 2014.

In How Numbers Rule the World, Lorenzo Fioramonti reveals the hidden agendas underpinning the use of statistics and those who control them. Most worryingly, he shows how numbers have been used as a means to reinforce the grip of markets on our social and political life, curtailing public participation and rational debate.Lorenzo Fioramonti presents his latest book in Heidelberg

Lorenzo Fioramonti presents his latest book in Heidelberg

Lorenzo Fioramonti presents his latest book in Heidelberg

“Competing with Capitalism to Maximize Well-Being” LEDDA framework on Thruth Out

What would you do to reinvent capitalism, to make it less destructive and more focused on what people really need?
It’s not that the benefits of capitalism are undesirable – jumbo jets and smart phones are sheer wonders – it’s that the collateral damage is growing untenable. Democracy and the commons are being sold off to the highest bidders.

GovInn Director Lorenzo Fioramonti and John Boik, creator of the Principled Societies Project present on TruthOut the Local Economic Direct Democracy (LEDDA) framework.

A LEDDA, Local Economic Direct Democracy Association
, is a membership-based, community benefit association open to residents, businesses, schools, nonprofits, local governments, public services, and others that choose to participate. The LEDDA framework is the local economic system – comprised of software, policies, standards, and procedures – that a new LEDDA implements. Once live, the membership can alter the local framework as desired.

In effect, the framework offers a secondary level of organization on top of an existing local economy.

Each LEDDA governs its own local framework through an online process of direct democracy, and all LEDDAs are networked together within a global association, which is also governed through online direct democracy. Thus the focus is both local and global.

The LEDDA framework integrates and builds on numerous initiatives already existing in cities and regions around the world, including buy local, local currency, open source, crowdfunding, socially responsible business, open data, smart cities, and participatory democracy. It contains its own monetary system, which issues a local electronic currency, called the token. And it has its own financial system, called the Crowd-Based Financial System (CBFS), which resembles crowdfunding and participatory budgeting. The framework is sophisticated, and there are many more elements.

The LEDDA framework is synonymous with LEDDA economic direct democracy, an economic system that offers all participants roughly equal and direct opportunity to influence their local economy. The framework infuses a local economy with democracy, in part by using money as a voting tool and by increasing and equalizing family incomes.

A computer simulation model has been published that illustrates the process. Inflation-adjusted mean family income more than doubles during the twenty-eight-year simulation period. As incomes rise, they become more equal. By the end of the simulation, every member family receives a pre-tax, take-home income equivalent to about $107,000, just above the 90th percentile of baseline income. Even very wealthy families would see a small direct gain.

By the end of the simulation, the LEDDA, located in an averaged-size US county, channels the equivalent of more than $2 billion dollars annually toward local businesses, schools, public services, and nonprofit organizations. Tax revenues for the county markedly rise. With such abundant resources, and democratic control over funding decisions, a community could remake its economy into one that best suits its needs.

The LEDDA framework is still theoretical, and the partnership is just forming. Over time, we hope to provide answers to the host of questions that such an approach naturally raises. In this, we invite your participation.

Imagine a democracy-infused economic system that maximizes well-being. The long-run social and environmental returns might be valued in the trillions, thousands of times greater than the costs of development and pilot trials. Isn’t it worth the effort?

Read the full article on TruthOut

How Moving Beyond GDP may Help Fight Poverty in Africa

In this policy brief for CROP (Comparative Research Programme on Poverty) GovInn director Lorenzo Fioramonti explains how alternative indicators are likely to highlight the important contribution of social cohesion and natural welfare to economic development, thus helping to eradicate poverty in the continent.

Click here to read the CROP Poverty Briefs in full