In Box

An Unfair Deal

Fair trade is overrated.

If paying an extra buck or two for the "fair-trade" option at your local coffee shop makes you feel more virtuous about your place in the global economy, you're not alone. Ethical beans are big business: In 2010, the United States imported 108 million pounds of fair-trade-certified coffee -- purchased directly from small producers, who have to abide by agreed-upon standards including shorter hours and no child labor. That total represents 1,385 times more of the stuff than came into the U.S. in 1998. But does fair trade actually do anything to help the people who grow coffee escape poverty?

In Nicaragua -- a country that earns nearly a quarter of its export income from coffee -- many family farms participate in "organic" and "fair-trade" certification systems, under which they submit to inspections of their labor standards and environmental practices in exchange for higher prices for their beans. Unfortunately, according to results recently published by economists Tina Beuchelt and Manfred Zeller in Ecological Economics, higher prices only go so far. The certified beans bring in more money, but once you take into account increased production costs, such as bringing the maintenance of farms up to code and shorter labor hours, the final profit is no higher, and in many cases is actually lower: Some Nicaraguan fair-trade farmers were taking home as much as $55 less per harvest than their noncertified competitors. Worse, while 60.9 percent of the "unfair" coffee-producing households observed were below Nicaragua's official poverty line, 68.6 percent of the fair-trade farmers were. The results were even starker for organic farmers, with 71.3 percent below the poverty line.

So is fair trade a myth? Not necessarily, says Beuchelt, who has found much more promising results in Colombia, another top coffee producer. The difference between the two countries is that the Colombian farmers have much better access to roads, technology, and other infrastructure than their Nicaraguan counterparts, making it much easier and cheaper to comply with fair-trade rules. "There's still a need for government intervention," Beuchelt says. "Certification can't solve the basic development problems these countries have."

And nor, it seems, can paying for the more expensive latte at Starbucks. 

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In Box

Divide and Conquer

For Barack Obama, maybe getting nothing passed in Congress isn't so bad after all.

Since the new, Republican-dominated Congress was sworn in at the beginning of 2011, U.S. President Barack Obama has seen his domestic agenda stalled, his foreign-aid budget slashed, his signature victory -- last year's health-care bill -- threatened with repeal, and his government brought to the verge of a shutdown. But maybe he should look on the bright side.

Historically, American presidents have been much more popular during times of divided government. Over the last half-century, voters have been about 17 percent more likely to approve of the commander in chief's performance when Congress is controlled by the opposing party, according to a 2002 study in the Journal of Politics. Political scientists typically attributed this to the fact that voters tend to be more likely to assign blame than praise: When the president is less powerful, there's less reason to criticize him.

But what does this mean on foreign affairs, where the president has more power to act independently of Congress and thus should, by all rights, be the one to blame when things go wrong? In fact, as political scientists Brian Newman and Kevin Lammert of Pepperdine University found in a recent paper published in Presidential Studies Quarterly, the effect is slightly more pronounced when it comes to foreign policy: Voters are 18 percent more likely to approve of the president's handling of world affairs during a period of divided government. It's possible that voters are simply unaware of the president's greater control over foreign policy. The authors also suggest that during times of international crisis -- after the 9/11 attacks or during the first Gulf War, for instance -- the president and Congress tend to work more closely together, something voters usually support.

A few days after the killing of Osama bin Laden, Obama was benefiting from this effect: Fifty-one percent of Americans approved of his foreign policy, according to a May 5 Quinnipiac poll, compared with 41 percent at the end of March. If the numbers drop again, he'll only have himself to blame.

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