Economic growth in the Cote d'Ivoire

The Guardian reports on the economic boom in the Cote d'Ivoire:

Construction sites loom at every twist and turn of the super six-lane highways that weave around the Ébrié lagoon in the heart of Abidjan. Roads are being widened. New apartment blocks and shopping malls are joining 1970s skyscrapers on the skyline. And the final touches on a shiny new high-rise tower signal the African Development Bank's return after more than a decade.

Two years after the post-election conflict, when more than 3,000 people were killed, Ivory Coast's economy is bouncing back. With the country relieved of nearly $8bn (£5bn) in debt after reaching completion point of the heavily indebted poor countries initiative, investors are returning and GDP climbed to 9.8% last year.

"The recovery has been very impressive," said Marcelo Giugale, the World Bank's head of economic policy and poverty reduction in Africa, on a recent visit. "Not just economically speaking, but institutionally."

The economy is expected to grow another 8% in 2013, and the fiscal deficit will shrink from 4.7% to 3.2%.  The IMF also reports that the government is attempting to reform the cocoa sector, increase the supply of energy and create commercial courts that strengthen the business environment.

The initial Guardian article also details some of the problems with reconciliation, but I'm saving that for a separate post.

The purchaser-provider split

Interesting article from the Economist on "post ideological" Sweden's increasing use of private companies to provide public services:

Sweden has gone further than any other European country in embracing the purchaser-provider split—that is, in using government money to buy public services from whichever providers, public or private, offer the best combination of price and quality. Private firms provide 20% of public hospital care in Sweden and 30% of public primary care. Both the public and private sectors are obsessed with lean management; they realise that a high-cost country such as Sweden must make the best use of its resources.

Saint Goran's hospital is one of the glories of the Swedish welfare state. It is also a laboratory for applying business principles to the public sector. The hospital is run by a private company, Capio, which in turn is run by a consortium of private-equity funds, including Nordic Capital and Apax Partners. The doctors and nurses are Capio employees, answerable to a boss and a board. Doctors talk enthusiastically about “the Toyota model of production” and “harnessing innovation” to cut costs.

St Goran’s is the medical equivalent of a budget airline. There are four to six patients to a room. The decor is institutional. Everything is done to “maximise throughput”. The aim is to give taxpayers value for money. Hospitals should not be in the hotel business, the argument goes. St Goran’s has reduced waiting times by increasing throughput. It has also reduced each patient’s likelihood of picking up an infection. However, scrimping on hotel services means that it has to invest in preparing patients for admission and providing support after they are released.

St Goran’s also acts as a hare for Capio, one of Europe’s largest health-care companies, with 11,000 employees across the continent and 2.9m visits from patients in 2012. Sweden is Capio’s biggest market, accounting for 48.2% of its sales (France comes second with 37.6%). The firm performs 10% of all Swedish cataract operations, and much more besides. Capio thinks it can make huge savings in other countries by transferring the lessons it has learned in Sweden. The average length of a hospital stay in Sweden is 4.5 days, compared with 5.2 days in France and 7.5 days in Germany. Sweden has 2.8 hospital beds per 1,000 citizens. France has 6.6; Germany, 8.2. Yet Swedes live slightly longer.

These public-private partnerships show the importance of context and culture in policymaking.  This seems to work well in Sweden, but it works because they have terrific levels of social capital and trust.  I would be more reluctant to recommend such an arrangement in a country with poor social capital.

Defining the problem -- benchmarking and health system performance goals

Roberts et al. discuss the importance of "defining the problem," an issue that takes on particular relevance in light of the recent Oregon Medicaid debate:

The most overlooked, yet one of the most important steps in health-sector reform is defining the problem.  Heath-care systems give rise to hundreds of statistics on their performance.  But which are an appropriate focus for public attention?

The group that succeeds in having its problem definition accepted as the basis for discussion about reform will have a great effect on the solutions pursued and the policies adopted.  

This is basic Public Policy 101 stuff, but a good reminder.  Roberts and Co. also lay out their three main performance goals for health reform: 1) health status; 2) satisfaction (that the health system produces among its citizens); and 3) financial risk protection.  I would argue that 3) is a more worthy goal than 2), but I could be persuaded otherwise.

Within "problem definition" Roberts also discusses the usefulness of "benchmarking," a concept that I like:

In health sector reform, benchmarking means looking at countries similar to one's own in income and spending levels, whose health system performance is particularly effective.  Thus, reformers in Thailand might wonder why Sri Lanka has longer life expectancy while spending less on health care, and use that fact to focus their own problem definition.  Similarly, Latin American countries could look at health statistics from Cuba or Costa Rica for setting their own objectives.   

Caffeine and public health

It may not be a huge one nor a very well studied one, but it looks like there is a public health issue here somewhere: 

"The number of American emergency hospital visits involving energy drinks doubled between 2007 and 2011 to more than 20,000." 

Not saying that I support a particular ban or regulation, but I do think there may be a problem here somewhere down the road.  

What is and isn't worth paying for in public health

Bill Gates on which public health interventions are most worthwhile in developing countries:

BG: The way that this is talked about is, what’s a year of life worth? They call it a disability-adjusted life year (DALY). When you’re running a poor country health-care system, you can’t treat a year of life as being worth more than, say, $200, $300 or else you’ll bankrupt your health system immediately. So, with very few exceptions, you do nothing for cancer. If you get cancer, you’re going to die. And so none of the stuff that’s going on in the U.S. about $300,000 a year chemotherapy drugs is relevant.

Even simple things don’t pass the test. We’re on the verge of saying that Africa should do blood pressure medicine because it’s become generic and so cheap and that’s such a common issue in terms of heart attack death, the so-called polypill is so cheap that it’s one of the few non-infectious disease things that meets the dollars per DALY threshold to actually go into a poor healthcare system and say this is worth it given the extremely finite not only financial resources, but personnel resources, that you have.     

But here’s the good news for these countries. If you spend the less than 2 percent of what the rich countries spend, but you spend it on vaccinations and antibiotics, you get over half of all that healthcare does to extend life. So you spend 2 percent and you get 50 percent. If you spend another 80 percent you’re at over 90 percent.

Immigration in the Cote d'Ivoire

Interestingly, immigration seems to be at the heart of the Cote d'Ivoire's recent conflicts.  The story is, in some ways, similar to that of the U.K. in recent years, where years of open immigration contributed to economic growth and cultural enrichment, but also to a deep-seated resentment of immigrants when the economy turned bad.

After independence, the Cote d'Ivoire maintained an open, business-friendly economy, and allowed in many immigrants from its poorer neighboring countries who were happy to participate in the "Ivorian miracle."  The Ivorian miracle, according to Lonely Planet, "was foremost an agricultural one," and immigrant laborers played a large role in allowing the economy to thrive.  But when global commodity prices crashed in the '80s and '90s, the economy stagnated.  And, as so often happens, the stagnant economy caused many citizens to focus their frustrations on the wave of recent immigrants.

This eventually led to the civil war.  The government spent the '90s passing jingoistic laws debating the concept of Ivorian ethnicity.  Christian Bouquet describes how universities and government began to "reflect on the definition of a new identity concept with a view towards 'scientifically' establishing the criteria of Ivorian citizenship."  Politics descended into ethnic factionalism, which lead to a coup and almost a decade of "crisis" and frequent small bouts of violence.

Stories like these make the U.S.'s centuries long open immigration policies all the more remarkable.  Although the U.S. story is obviously a unique one in that the government's pro-immigration policies were made much, much easier by the thousands of miles of "available" and "unoccupied" land on its western frontier.

The recent experience of the Cote d'Ivoire, the U.K. and Scandinavian seems much more common.  Are there any other examples of countries that have opened their borders to immigrants and not seen a spike in hostility towards immigrants?  Canada seems like a decent candidate in this regard.

Health care markets v. public health care

Marc Roberts et al. on why health care markets fail:

Moreover even where there are markets, they are often imperfectly competitive, and physicians can determine much in the way of patient behavior.  Given these departures from the competitive ideal, it is not surprising that microeconomic theory has offered few explanations for macro-level health outcomes or for the rate of growth of national health expenditures.  

But also why government health care fails:

Poorly run government bureaucracies and inefficient state-owned companies have proliferated, in part because of their political advantages.  Using the public sector to provide patronage rather than service, employment rather than output, allows government to build up a political base.  Workers are identifiable, easy to organize, and often grateful to political leaders for their employment.  Customers, on the other hand, are harder to identify and organize and are likely to have less at stake.  These factors often lead to an overstaffed, poorly managed, high-cost public sector, with unhelpful staff, crumbling facilities, and poor service.  

So where do they come down on the issue?  They fudge:

Because (the privatization movement) is so widespread, we want to let readers know our view of such matters.  Whether new arrangements will perform better than current practice is a complex empirical question.  As we argue throughout this book, in predicting outcomes, the devil is often in the details--especially when it comes to how organizations are managed and governed.  In our view, the applicability of the market model to health care varies with specific circumstances: Is a given market large enough to support a reasonable number of efficient, independent competitors?  Do customers know enough, or can they be given enough information, to choose intelligently?  Will the savings that result from the competitive pressures be greater than the resources used up through higher transaction costs?  In our view, health reforms should answer such questions before deciding on policy.