Stricter labor laws means more computer use

The Private Sector Development blog at the World Bank has a cool post on the effect of labor laws on computer use. Social scientists have theorized that the stricter the regulations on hiring and firing workers, the more companies turn to computers and technology.

Turns out that conventional wisdom is correct, a World Bank study shows:

Amin (2009) tests this hypothesis on 1,948 retail stores in India using data from Enterprise Surveys, a regular World Bank survey on firm performance, firm characteristics and the business climate....The study finds that the percentage of retail stores that use computers rises by 6.2 percentage points as we move from the state with the least to the median level of rigid labor laws. This is a large effect given than only 19% of the stores in the sample use computers.

The PSD blog cautions against reading too much into the results, though: 

That is, to properly understand the computers/productivity relationship one needs to distinguish between the motive of saving labor because of labor regulations and the motive of enhancing efficiency through computer usage. To what extent these effects hold remains to be empirically ascertained - an important task given that the use of computers and other modern devices is fast spreading across the globe.

But there's a nice synergy there. And I wonder whether the same scientists have studied the corollary between India as an outsourcing hub and an IT giant. 


I nominate Nigeria to the Axis of Upheaval


There's a lot of competition for top crises these days -- what with Somali pirates going overboard, Pakistan and Afghansitan looking increasingly perilous, Mexico's chaos scarily peering over the border... 

But I vote for adding Nigeria to that very pressing list of concerns.

A new report released today, puts last year's death toll from unrest in the oil-producing Niger Delta region at 1,000. The almost-guerrilla war dragged the economy down by $20.7 billion in lost oil revenue, with little sign of abating in 2009. With oil prices already lower, government revenues are falling. More worrisome -- the rebels in that region who earn most of their cash from oil bunkering will be short on dough, inspiring more of the kidnappings-for-ransom that already breached the 300 mark in 2008. NGO workers on the ground tell me that things will really heat up if the prices (or the oil production levels) drop much lower.

To add another twist, the main rebel group in the region, the Movement for the Emancipation of the Niger Delta (MEND), today e-mailed a statement rejecting an amnesty offer that members of the ruling party allegedly proposed. In classic form, the rejection is colorful: 

The Movement for the Emancipation of the Niger Delta rejects this evil agenda by the [ruling party] PDP and its cohorts and vow never to sell our birth right [to Nigeria's oil] for a bowl of porridge."

The deal itself was even more interesting: the government would provide fighter amnesty, prisoner release, and huge payouts to MEND in exchange for a rebel promise to help rig the coming elections in favor of the ruling party. That offer may well be an exaggeration on the part of the rebel spokesman. Then again, given Nigeria's rather wretched election history... it might not.

Why should this mess end up in the top echelon of global worries? Don't forget: Nigeria is the third largest oil supplier to the United States. And when regional powerhouses go down in flames, it can't bode well for any of the unlucky neighbors -- many of whom are recovering from their own bouts of conflict. 

Did I mention that the country's president might be dying? With that, you have it -- my Axis of Upheaval nomination: Nigeria.