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odds and ends for development assistance

In what will be my final post (for more, see: the failure of supply-side (aid) economics, no wal-marts in malawi, the great quality of life convergence) based on selections from Charles Kenny’s draft of “The Success of Development,”  below are some of my favorite nuggets and takeaways from his work:

Sachs‘ Millennium Project produced a report Investing in Development, based on such ideas. New York University Economist Bill Easterly was outraged on reading Sachs‘ report and demanded that we―discard the Planners‘ patronizing confidence that the Planners know how to solve other peoples‘ problems better than the people themselves do. He contrasted the planning approach to that of a ‘searcher‘ who ―admits he doesn‘t know the answers in advance… believes that poverty is a complicated tangle of political, social, historical, institutional, and technological factors and ―only hopes to find answers to individual problems by trial and error experimentation.

If rich countries increased the size of their labor forces by only three percent through reduced restrictions on migrant labor, Lant Pritchett estimates that this would add $300 billion to the welfare of citizens of poor countries –roughly four times the magnitude of foreign aid flows.

Average copyright and patent protection periods in developing countries have increased from between four to seven years prior to the last round of World Trade Organization agreements to a minimum of twenty years. This has an estimated cost to developing countries, purely in terms of licensing payments, of $20 billion per year. And US bilateral trade agreements are adding 20 years to copyright terms above World Trade Organization rules, while weakening the rights of countries to override this artificial monopoly in cases of national emergency.

Between 2000-2002 there were an estimated 1,300 donor-financed projects in Tanzania, 1,000 donor meetings a year and 2,400 reports due a quarter.This is a problem that is getting worse, with the number of projects launched by donors worldwide rising from around 10,000 in the 1995-7 period to nearly 28,000 in 2003.

One potential model to achieve greater impact with lower capacity costs is through a national equivalent of the payment for service delivery model that we have seen working well within countries at the provider level. Nancy Birdsall of the Center for Global Development has championed such a model. It would involve paying governments a fixed sum for evidence of progress against pre-agreed, easily measured targets. Examples might include a payment for each additional student who completed primary or secondary education taking a set of standard tests, or each additional child vaccinated against a series of major diseases. Donors would not interfere in the ‘how‘ of service provision with extended missions and armies of consultants, nor demand particular procurement practices or financial audits. They would pay purely on evidence of results based on independent surveys.

A comparatively traditional approach to technology-focused development assistance might be modeled on the Consultative Group on International Agricultural Research, an effort founded in the aftermath of India‘s Green Revolution. This sought to replicate the dramatically increased crop yields achieved in the subcontinent throughout the developing World. The Consultative Group supports fifteen centers dedicated to research into sustainable increases in agricultural output. It has played an important role in ensuring that the World as a whole has escaped the Malthusian trap. Perhaps a similar model might be adopted for research (including high-quality evaluation) into appropriate technologies and approaches that could significantly reduce child mortality, for example. The research center model may also be appropriate for developing communications approaches that show a robust, reliable and replicable impact on the speed of knowledge transfer at the community level –perhaps using community radio, advertising or other methods of social marketing.

A second approach would be to use financial incentives to encourage private research. One model promoted by Britain‘s Department for International Development is the advanced purchase commitment.  … That in turn suggesting the barrier to rollout of a suitable vaccine for developing countries is a matter of incentive and applied research, not knowledge or missing basic research. The $1.5 billion commitment made by donors is guaranteed to be used to purchase a vaccine which meets minimum effectiveness criteria under a given price ceiling, providing an incentive to pharmaceutical companies to undertake vaccine development.

Another approach is that of using prizes to provide an incentive to research. Prizes played a role in the development of accurate time pieces required to measure longitude at sea, and provided the incentive for Charles Lindbergh to fly across the Atlantic non-stop. More recently the model has been exploited by the X-Prize Foundation, which offered $10 million to the first company to launch a passenger vehicle 100 kilometers into space twice in the same week. The Foundation is already working to develop a prize based around the creation of a cheap and effective diagnostic tool for tuberculosis, and is considering a range of prizes in education. Given the centrality of technology and ideas to development progress, and the range of approaches which have shown some promise at the local and global level in extending knowledge and innovation, it may be that there is a role for a new or existing multilateral development organization to expand support in this area.

Such a ‘global innovation bank‘ would foster research into new technologies and approaches to tackle development challenges as well as methods to speed the adoption of such technologies. It could use a combination of traditional research funding methods, advance purchase commitments and prizes to provide this support. A ‘global innovation bank‘ would face a considerable risk of funding white elephant technologies. The history of aid projects is littered with efforts which foist inappropriate technologies on unwilling recipients, with negligible or even negative impacts. One recent example is the rapid rollout of donor-funded Internet centers in rural areas of developing countries where the demand for Internet access ranges from zero to not much. That limited demand hasn’t stopped a continued proliferation of donor-sponsored Internet kiosks sprouting up around the developing world. Nor has a survey by the United Nations Development Program that could find no examples of donor-funded telecentres that were fully sustainable. And nor, sadly, has the fact that there still isn’t a rigorous analysis of the impact of Internet kiosks and their benefit-cost ratio in a developing country setting. Such kiosks join a line of poorly thought through and under-evaluated technological fixes which have been particularly rife in the history of rural development … That technological fixes can be as risky or counter-productive as the policy silver bullets discussed in Chapter Three suggests that any global innovation bank should have as a core mission rigorous and independent selection and evaluation procedures.

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Filed under: Economic Policy, General Welfare, World,

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