The Center on Democracy, Development, and the Rule of Law congratulates Otis Reid on being awarded the David M. Kennedy Honors Thesis Prize for his original and rigorous research on the impact of concentrated ownership on the value of publically traded firms on the Ghana Stock Exchange. Reid is a member of the 2012 CDDRL Undergraduate Senior Honors Program and wrote his thesis entitled, “Monitoring, Expropriating, and Interfering: Concentrated Ownership, Government Holdings, and Firm Value on the Ghana Stock Exchange,” under the consultation of Professor Avner Greif.

Four undergraduate Stanford students are awarded the Kennedy Prize each year for their outstanding honors theses in the humanities, social sciences, engineering and the applied sciences. Reid was also recognized with the Firestone Medal for Excellence in Undergraduate Research awarded to the top ten percent of honors theses in social science, science, and engineering. Reid will receive these awards in a medals ceremony on Saturday, June 16.

Reid's thesis combined field research and advanced econometric analysis to conclude that concentrated ownership by the government and private parties on the Ghana stock exchange has a negative impact on the value of firms in Ghana. These findings have important consequences for the regulation of newly established stock exchanges, and ultimately for Africa's economic development. Very little research has been conducted on this topic, and Reid's thesis makes a valuable contribution to this field of study with practical policy implications for developing economies. 

"Otis Reid has produced a highly original work of scholarship—worthy of publication in an academic journal—that has exhibited astute knowledge of the literature and the challenges of firm development on the ground, shrewd formulation of a research design, impressive technical ability, and yet wise and important policy conclusions as well," said CDDRL Director Larry Diamond. "It is very rare to find an undergraduate honors thesis that is able to combine all four of these things."

Reid, a public policy and economics major, held prominent leadership roles in student organizations on campus, namely Stanford in Government and the Stanford Association for International Development, as well as serving as a resident assistant at Crothers dormitory. In recognition of his commitment to public service and enriching student life through these leadership positions, he was honored with the The Lloyd W. Dinkelspiel Award for Distinctive Contributions to Undergraduate Education.

After graduation, Reid will travel through Southeast Asia for five weeks before starting a position at McKinsey & Company consulting group in Chicago where he will be working on a combination of business and social sector problems.

The CDDRL Undergraduate Senior Honors Program trains students from any academic department at Stanford to prepare them to write a policy-relevant research thesis with global impact on a subject touching on democracy, development, and the rule of law. Honors students participate in research methods workshops, attend honors college in Washington, D.C., connect to the CDDRL research community, and write their thesis in close consultation with a faculty advisor to graduate with a certificate of honors in democracy, development, and the rule of law. 

During the Liberation Technology Seminar on March 1, Joshua Blumenstock, a Ph.D. candidate at U.C. Berkeley’s School of Information, demonstrated the use of “big data” to explore the economic impact of mobile phone technologies in sub-Saharan Africa. Blumenstock focused on a project in Rwanda, which leverages an enormous database of phone calls, text messages, and mobile money transfers. Using this data, he studies the patterns of remittances through mobile phones and explores if this new mechanism can serve as an effective social insurance during economic shocks. He hopes that this new data will provide insight into socioeconomic behavior, and improve policy and welfare in developing economies.

He argued that mobile money has quickly gained prominence in areas with very little formal banking, and it is used to send phone credit, make purchases and withdraw cash. On average, 200 million dollars are sent a day in Kenya alone through this mechanism, indicating the huge potential for such transfers in developing economies.

His data indicates that money is sent in response to shocks, supporting the hypothesis that phone-based technologies can enable risk-sharing. Blumenstock uses in situ evidence to explore the motives for this pro-social behavior. He used phone data from 1.4 million individuals over a period of 4 years to investigate how much money is sent, why it is sent and who benefits. He found that mobile money transfers have a highly reciprocal component and that most transfers go to the elite. In light of this evidence, Blumenstock concluded that while phones have had a positive impact on the lives of some people in times of crisis, the benefits of mobile technologies may not be reaching those with the greatest need.

During the Feb. 16 Liberation Technology Seminar, five teams from Stanford University’s John S. Knight Journalism Fellowship program shared their ideas on using technology to push the boundaries of journalism. The first speaker,Girma Fantaye, is an Ethiopian journalist in exile. Ethiopia leads the world in the number of refugee reporters (79 fled the country between 2001 and 2011). Under the context where print journalism is unable to function independently, Fantaye is attempting to create an online journal that will provide critical coverage of the nation’s politics. He discussed the various challenges involved in such a project and why it has promise in repressive environments.

Deepa Fernandes and Michelle Holmes presented Illumin.us, a project that aims to empower non-professional journalists to create compelling news stories for the media. Mobile technologies have enabled average citizens to gather powerful stories and democratize the process of choosing which stories get told. Today, anyone can create breaking news. While the tools for production are widely available, a lot of coverage is of poor quality due to the lack of journalistic training. To combat this, the Illumin.us team is creating a mobile “pocket coach” to help anyone who wants to tell a story. The app will contain the basic tools and tips for capturing news and will be available to the curators of news. It will encourage people to use their own mobile devices to report anything from breaking news to simple stories worth sharing.

Martyn Williams then discussed his project to protect sources in an online environment. A few decades ago, newspapers went to great lengths to keep the identities of their journalists secret. Today, TV stations rely heavily on user submitted content online that is vulnerable to government surveillance. Williams’ goal is to use cheap and open source technologies to ensure that those submitting to news organizations are safe and accredited.

Djordje Padejski and T. Christian Miller are working on a freedom of information platform that will enable investigative journalists to access government information legally from any country with The Freedom of Information Act (FOIA) type law. They argued that much of the information provided by Wiki leaks could be legally obtained through FOIA and other “Right to Know” laws, but there is no easy mechanism through which journalists can access public records internationally. Padejski and Miller’s project—the FOIA machine—would facilitate the usage of these under-utilized access laws. By automating the process, they hope to decrease bureaucracy, time and legal constraints. The FOIA machine will even target transnational issues by appealing to multiple governments’ records, revealing dissonance and promoting accuracy.

Emad Mekay from Egypt, discussed using technology to share government information from the U.S. with newspapers in the Middle East and North Africa. After covering the Arab Spring, he came to Stanford to work on projects to help the Arab media. Impressed by the openness of information in the U.S., Mekay came up with a plan to create an online news agency, using U.S. information technology and Freedom of Information laws to make Arab regimes more accountable and U.S. policy in the Middle East more transparent. The agency will act as a foreign correspondent for media outlets in the Middle East with a focus on getting news about the Middle East and North Africa region available in official sources in the U.S.

Philanthropist and software giant Bill Gates spoke to a Stanford audience last week about the importance of foreign aid and product innovation in the fight against chronic hunger, poverty and disease in the developing world.

His message goes hand-in-hand with the ongoing work of researchers at Stanford’s Freeman Spogli Institute for International Studies. Much of that work is supported by FSI’s Global Underdevelopment Action Fund, which provides seed grants to help faculty members design research experiments and conduct fieldwork in some of the world’s poorest places.

Four FSI senior fellows – Larry Diamond, Jeremy Weinstein, Paul Wise and Walter Falcon – respond to some of the points made by Gates and share insight into their own research and ideas about how to advance and secure the most fragile nations.

Without first improving people’s health, Gates says it’s harder to build good governance and reliable infrastructure in a developing country. Is that the best way to prioritize when thinking about foreign aid?

Larry Diamond: I have immense admiration for what Bill Gates is doing to reduce childhood and maternal fatality and improve the quality of life in poor countries.  He is literally saving millions of lives.  But in two respects (at least), it's misguided to think that public health should come "before" improvements in governance.  

First, there is no reason why we need to choose, or why the two types of interventions should be in conflict.  People need vaccines against endemic and preventable diseases – and they need institutional reforms to strengthen societal resistance to corruption, a sociopolitical disease that drains society of the energy and resources to fight poverty, ignorance, and disease.  

Second, good governance is a vital facilitator of improved public health.  When corruption is controlled, public resources are used efficiently and justly to build modern sanitation and transportation systems, and to train and operate modern health care systems.  With good, accountable governance, public health and life expectancy improve much more dramatically.  When corruption is endemic, life-saving vaccines, drugs, and treatments too often fall beyond the reach of poor people who cannot make under-the-table payments. 

Foreign aid has come under criticism for not being effective, and most countries have very small foreign aid budgets. How do you make the case that foreign aid is a worthy investment?

Jeremy M. Weinstein: While foreign aid may be a small part of most countries’ national budgets, global development assistance has increased markedly in the past 50 years. Between 2000 and 2010, global aid increased from $78 billion to nearly $130 billion – and the U.S. continues to be the world’s leading donor.

The challenge in the next decade will be to sustain high aid volumes given the economic challenges that now confront developed countries. I am confident that we can and will sustain these volumes for three reasons.

First, a strong core of leading voices in both parties recognizes that promoting development serves our national interest. In this interconnected world, our security and prosperity depend in important ways on the security and prosperity of those who live beyond our borders.

Second, providing assistance is a reflection of our values – it is these humanitarian motives that drove the unprecedented U.S. commitment to fighting HIV/AIDS during the Bush Administration.

Perhaps most importantly, especially in tight budget times, development agencies are learning a great deal about what works in foreign assistance, and are putting taxpayers’ dollars to better use to reduce poverty, fight disease, increase productivity, and strengthen governance – with increasing evidence to show for it.

Some of the most dire situations in the developing world are found in conflict zones. How can philanthropists and nongovernmental organizations best work in places with unstable governments and public health crises? Is there a role for larger groups like the Gates Foundation to play in war-torn areas?

Paul H. Wise: As a pediatrician, the central challenge is this: The majority of preventable child deaths in Sub-Saharan Africa and in much of the world occur in areas of political instability and poor governance. 

This means that if we are to make real progress in improving child health we must be able to enhance the provision of critical, highly efficacious health interventions in areas that are characterized by complex political environments – often where corruption, civil conflict, and poor public management are the rule. 

Currently, most of the major global health funders tend to avoid working in such areas, as they would rather invest their efforts and resources in supportive, well-functioning locations.  This is understandable. However, given where the preventable deaths are occurring, it is not acceptable. 

Our efforts are directed at creating new strategies capable of bringing essential services to unstable regions of the world.  This will require new collaborations between health professionals, global security experts, political scientists, and management specialists in order to craft integrated child health strategies that respect both the technical requirements of critical health services and the political and management innovations that will ensure that these life-saving interventions reach all children in need.

Gates says innovation is essential to improving agricultural production for small farmers in the poorest places. What is the most-needed invention or idea that needs to be put into place to fight global hunger?

Walter P. Falcon: No single innovation will end hunger, but widespread use of cell phone technology could help.

Most poor agricultural communities receive few benefits from agricultural extension services, many of which were decimated during earlier periods of structural reform. But small farmers often have cell phones or live in villages where phones are present.

My priority innovation is for a  $10 smart phone, to be complemented with a series of very specific applications designed for transferring knowledge about new agricultural technologies to particular regions.  Using the wiki-like potential of these applications, it would also be possible for farmers from different villages to teach each other, share critical local knowledge, and also interact with crop and livestock specialists.

Language and visual qualities of the applications would be key, and literacy problems would be constraining.  But the potential payoff seems enormous.

On March 22, a military coup abruptly ended two decades of uninterrupted democracy in Mali, the well-reputed West African country and key counter-terrorism partner of the United States. The coup leader Army Captain Amadou Sanogo and his mutinous troops suspended the 1992 democratic constitution, took over the presidential palace, the state television and several institutions, arrested members of the government, and promised a more efficient fight against Tuareg rebels. Interruption of the Malian democracy by a belligerent military faction is a serious threat to stability, peace, and human rights given the domestic context.

Since the coup, the conflict with the Tuareg rebels has continued to worsen. The two main Tuareg groups — the National Movement for the Liberation of Azawad (MNLA) and Islamist Ansar Dine — have gained ground and seized new territories in the north of the country, pushing for sharia law. If a domestic solution is not found quickly, African regional organizations and the international community should act in concert with Malian democratic defenders - either diplomatically or coercively  - to restore democracy and peace, and stop rebel progression before it is too lateAfrican regional organizations and the international community should act in concert with Malian democratic defenders — either diplomatically or coercively — to restore democracy and peace, and stop rebel progression before it is too late.

The Coup in Mali: Who is Behind it and Why?

Plotters deposed the widely respected and democratically elected President Amadou Toumani Touré, a little over a month before the scheduled presidential election on April 29. Coup leader Captain Sanogo justified the unconstitutional seizure of power under the guise of national security, accusing President Touré of inefficiently fighting the decades-old Tuareg rebellion, and not providing enough resources to the army.

However, given the electoral timing, reasons advanced by Captain Sanogo to justify the coup are illogical. President Touré was not a candidate in the 2012 presidential election, and had just over a month left in his second and last term in office. As a visionary leader, he respected the unique Malian societal and political culture, improved governance, and put the country on a path to sustainable economic growth. Therefore, it is not surprising that Freedom House has continued over the past two decades to classify Mali as a democratic regime — whether electoral or liberal — despite several challenges such as; weak public institutions and central government, poverty, aid dependency, the Tuareg separatist rebellion, and labor or social unrests. The coup leader’s argument is further weakened because the democratic Malian government was offering public space to potentially unsatisfied military personnel to negotiate within the constitutional framework, along with the option to openly discuss issues of concern with presidential candidates.

The Coup is Reinvigorating Fear of a Repressive Military Regime 

The coup is reinvigorating fear of the resurgence of repressive rule that reigned for decades after successive military coups. Such repressive rule must be prevented. In 1968, Lieutenant Moussa Traoré ousted the civilian government, eight years after Mali gained its independence from France. Because he was resistant to democratic changes, Traoré was ousted in 1991 by Amadou Toumani Touré in the face of widespread civil unrest and demands for greater political rights and democratic reforms.

In 1991, the Transitional Committee for the Salvation of the People (CTSP) was formed by various groups representing civil society and under the supervision of Amadou Toumani Touré. The Committee organized successful political liberalization, which included; a national conference, a constitutional referendum, a founding election won by President Alpha Oumar Konaré (1992-2002), and consequently a democratic transition in 1992. Many hope that twenty years of democratic developments are not eradicated by this coup. Captain Sanogo still has the window of opportunity to respect the Malian values and people, and end his rule, as requested by the people.

The Devastating Consequences of the Coup in Mali and Africa

The coup has significant implications on the political developments in Mali, West Africa and the African continent. It weakens the already fragile democratic institutions, and calls into question the solidity of the unique political culture, visionary leadership, and the subordination of the military to the executive that were considered by many as the foundation of Malian democracy.The coup weakens the already fragile democratic institutions, and calls into question the solidity of the unique political culture, visionary leadership, and the subordination of the military to the executive that were considered by many as the foundation of Malian democracy. In addition, it worsened the situation in the north of the country, with rebel militias controlling more towns than before the coup. The coup has consequently increased the risk of disproportionate use of force, potentially leading to more violent and deadly conflicts threatening minority groups in Mali, with negative consequences for the entire West African region.

 The coup also gives reasons — not necessarily valid — to citizens and pessimistic observers to despair about the prospect of democracy in West Africa. The spirit of democracy has recently been challenged in countries such as Cote d’Ivoire, Senegal, Mauritania, Guinea and Guinea-Bissau. If most plotters manage to stay in power, Africa may face a resurgence of military coup plots, reviving the violent nightmare of the two last decades of the twentieth century.

 Malian and International Reactions to the Coup

Malian domestic leadership and the international community have all taken serious steps towards returning the country to civilian rule and restoring the democratic system. Malian political and civil society leaders have clearly shown deep opposition to the rupture of the constitutional order, and they have requested return to the rule of law. They are peacefully demonstrating to avoid violence and to preserve national unity. On March 28, the ousted President Touré called for a consensual solution and told French Radio station RFI "what is important is democracy, institutions, and Mali." In the same vein, the international community has strongly condemned the coup, applied some diplomatic sanctions, and requested a return to an elected civilian government.

The U.N. Secretary General has called for immediate restoration of constitutional rule, and the U.N. Security Council echoed a similar sentiment by calling for "the restoration of constitutional order and the holding of elections as previously scheduled." The Economic Community of West African States (ECOWAS) reiterated its policy of “zero tolerance” for unconstitutional seizures of power, organized high-level meetings with heads of state to persuade the junta to step-down, readied its stand-by forces, and placed an economic embargo on Mali.

The African Union immediately suspended the membership of Mali until constitutional rule is restored, and the U.S. paused military aid to Mali and urged rebels to end fighting. France has suspended its official cooperation with Mali, but maintained humanitarian aid and is pushing the U.N. Security Council to explore avenues to support ECOWAS in their efforts to restore order. Canada, the African Development Bank, the European Union, and the World Bank have all suspended their aid. These diplomatic actions, especially from ECOWAS, have pressured the junta to announce (formally but not yet effectively) the restoration of the 1992 constitution on April 1, a few days after unconstitutionally promulgating a new one. Further actions should be made in a timely manner to pressure the junta to step-down, to ensure that power is transferred back to civilian rule and constitutional order restored.

Restoring democracy and peace in Mali — diplomatically or coercively — is imperative. It will send a strong warning to those who try to undermine democratic efforts that unconstitutional appropriation of power and threats to peace and security will not be tolerated. Citizens will also be shown that they are supported in their battle for democracy and peace.