Ideas to Action:

Independent research for global prosperity

CGD in the News

February 24, 2016

How Mark Zuckerberg Should Give Away $45 Billion (Huffington Post Highline)

From article:

The challenge with direct cash payments, says Owen Barder, the director of Europe for the Center for Global Development, is getting them to all of the people who need them. The places where this strategy has worked well already had functioning banking sectors and national identification systems in place before a disaster struck. In Pakistan, humanitarian agencies used government data to identify the areas with the worst damage, then checked IDs to make sure the debit cards got to the people living there.

Most poor countries, though, don't have these pipes laid down. Kenya's Hunger Safety Nets program, which gives cash to people at risk of starvation, took months to establish because payouts were distributed through local agents, whom people didn't trust, or ATMs, which people had never used before.

Barder describes a scenario where, 10 minutes after an earthquake hits Nepal, all the people within five miles of the epicenter get $500 on their cell phones. That's a great idea. But it is, he says, a lot harder than it sounds. After the 2005 tsunami, low-caste populations in India were almost entirely excluded from cash transfers because they weren't registered in the national welfare system. In Indonesia, cash transfers were distributed through community leaders who had to come to a central planning center, then travel back to their constituencies with an envelope full of cash. In at least one case, bandits were waiting for them on the bus.

The need for modernizing these systems is obvious. In 2009, India launched an ambitious—and largely unheralded—project to issue a 12-digit identification number to all 1.3 billion of its citizens. So far, it has spent around $880 million and registered 970 million people. The numbers are already being used to distribute unemployment checks and disaster relief. But as this effort moves to more remote populations, registering them gets harder. Some farmers have hands so worn the scanners can’t read their fingerprints.

Laying down the pipes to get cash transfers to the first 75 percent of a population, the people who have birth certificates and cell phones, is relatively easy. Getting to the last 25 percent, the people one charity could never reach, is technical, slow, expensive and absolutely critical—a perfect project for Zuckerberg.

These aren't, of course, the only ideas I heard for how Zuckerberg should give away his money. Charles Kenny of the Center for Global Development says Zuckerberg should invest in global public goods, things no single government wants to pay for but the world needs nonetheless—like a vaccine for malaria, or making renewables cheaper than fossil fuels.

Read full article here.

February 15, 2016

Shine A Light On The Gaps (Foreign Affairs)

From article:

Agriculture forms the backbone of African economies, accounting for 32 percent of gross domestic product (GDP). A majority of the continent’s farmers earn their living on small plots of less than two hectares, which represent 80 percent of all farms across sub-Saharan Africa. But these smallholder farmers are largely excluded from financial services and are therefore constrained from improving their wellbeing and transforming their farms into economically viable businesses. Although smallholder farmers face a number of challenges to raising productivity, bridging the financial access gap must be a priority.

There is much literature on expanding financial inclusion among the world’s poor. The issue has been a development priority since Group of Twenty (G20) leaders launched the Financial Inclusion Action Plan in 2010. But Africa’s smallholder farmers have received little attention, and women farmers—who make up half of the continent’s agricultural labor force—have received even less.

Being excluded from financial services has negative consequences for smallholder farmers. Access to credit can help raise farm productivity by expanding access to inputs as well as better storage, marketing, and processing. Access to savings instruments at harvest enables families to put money aside and helps smooth consumption at other times of the year. Access to payment platforms can offer a secure and efficient way to make transactions. And access to insurance products can protect against illness and weather-related shocks. In the absence of these formal mechanisms, smallholder households often rely on informal instruments. Although they are accessible and flexible, informal financial services can also be inefficient and costly in the short term, and they do not always offer the services needed to help transform subsistence farming into a profitable business.

Read full article here.

September 19, 2014

Why Apple's New Phones Won't Change the World but Nokia's Will (Bloomberg Businessweek)

From the article: 

One reason mobile phones have a considerably greater impact in poor countries is because other information-based services are so weak. Only about one-quarter of people in sub-Saharan Africa have an account at a financial institution—let alone a Visa or American Express card. Mobile payments have leapfrogged the rollout of plastic payment systems across the region. As many as 60 percent of Kenyans use their mobile phone for financial transactions, and almost three times as many people in the country use mobile banking than have a debit or credit card.

Read article here

July 7, 2014

Teach Literacy by Text Message. Really. (World Bank)

From the article:

Two years ago Aker et al added to [our knowledge of “what works” in adult education in low-income environments] with a study from Niger showing that a mobile phone-based component added to a standard adult literacy program improved math and literacy scores for participants, and those results persisted, at least in math. So simple mobile phones can make standard adult literacy programs better.

...

Mobile phones clearly aren’t the silver bullet to all of our development problems: We’ll probably be waiting a while for the iPhone app that physically vaccinates children. (Anyone?) Aker herself, one of the authors on this paper, has an interview from 2011 trying to separate the hope from the hype.

But they are at the center of some promising interventions: increasing adherence to rapid diagnostic tests among malaria patients or to antiretroviral therapy among HIV-positive individuals.  And in some cases, like this one, the cell phone program manages not just to complement what we think of as a crucial input, but actually to replace it.

Read the article here

July 1, 2013

Can Silicon Valley Save the World? (Foreign Policy)

Charles Kenny and Justin Sandefur write an FP cover story about the potential and pitfalls of technology for development.

From the article:

Not content with dominating IPOs on Wall Street, Silicon Valley entrepreneurs are taking their can-do, failure-conquering, technology-enabled tactics to the challenge of global poverty. And why not? If we can look up free Khan Academy math lectures using the cheap, kid-friendly computers handed out by the folks at One Laptop per Child, who needs to worry about the complexities of education reform? With a lamp lit up by an electricity-generating soccer ball in every hut, who needs coal-fired power stations and transmission lines? And if even people in refugee camps can make money transcribing outsourced first-world dental records, who needs manufacturing or the roads and port systems required to export physical goods? No wonder the trendiest subject these days for TED talks is cracking the code on digital-era do-gooding, with 100 recent talks and counting just on the subjects of Africa and development.

Read it here.