Posts Tagged “development”
Ross • 31st Jan 2010 • Thinking • computers, computing, development, dharavi, economy, slums, technology, work
I am interested in the potential of boosting wages in slums by setting up IT centres so that locals can work via Mechanical Turk, and similar services. Although these jobs pay below UK minimum wage, it would be multiples of a typical slum-dweller’s income. It appears that this is not a new idea. Some firms have gone a stage further and distributed this work by mobile phone, broadening reach. However the benefit of a single location is that you don’t rely on the worker having a phone, and that you could combine work with education and IT literacy classes.
Ross • 8th Nov 2009 • Learning, Thinking • africa, aid, Dambisa Moyo, development, economics, international development, William Easterly
I have just finished this book, by Dambisa Moyo. It’s a very simple argument. So simple that the preface by Niall Ferguson means you can skip the majority of the book. After an hour, you’ll have the idea. As Niall points out, it’s slightly annoying that these arguments are taken more seriously when they come from Dambisa, an intelligent, attractive Ghanaian, rather than from older, whiter (but equally intelligent) critics of aid, such as Bill Easterly. But that’s not to the discredit of Ms Moyo or the arguments. Somebody needs to get the fact that aid is not the answer on the radar. Moyo does a good job as the ‘anti-Bono’.
Ross • 25th Oct 2009 • Living • africa, development, international development, kenya, kiva, loans, microfinance
Oh dear, it appears that Kiva has suffered another defaulting partner. This time, it’s Kenya’s Ebony Foundation that has stopped paying back loans – apparently using last year’s violence a a convenient reason to shirk its obligations. The organisation’s leaders are playing hide and seek. Unfortunately, this gives microfinance (and Kenya!) a bad name. I won’t be putting any more money into Kiva: this is not the first time a partner has failed to repay monies owed. This does not show Kiva’s due diligence in a good light. I would be much more understanding if it were loan recipients who were defaulting – but for a large partner to walk off with more than half a million dollars, well, as the saying goes, fool me once…
Ross • 29th Sep 2009 • Learning • africa, aid, development, international development
In what might qualify as a surrealistic moment, the Administrator of USAID asked a staffer to summarize the policy conclusions of the Vanity Fair analysis for U.S. foreign aid.
That’s from William Easterly’s working paper “Can the West save Africa?” A footnote to the passage reads:
I verified this by getting an actual copy of the memo
Ross • 19th Aug 2009 • Thinking • development, finance, international development, microfinance
…it is impossible to read this year’s text without coming to the conclusion that microfinance is at a crossroads, and that it might do the industry a power of good if it was able to call a “time-out” to reassess its role. In the popular press, microfinance is still very much the developmental flavour of the month – and even the most battle-hardened aid veteran has to acknowledge its appeal as an alternative to the conventional ‘top down’ model for wasting taxpayers’ money. But… microfinance currently faces serious challenges – challenges that have been exacerbated by the global crisis. Should microfinance institutions shift from their essential social role to a (perhaps) more sustainable profit-seeking model? Can they go on relying (as they have done) on subventions of one sort or another from Western investors? Should they develop into more or less full service financial institutions, and become part of the formal financial sector?
That’s from the CSFI’s Microfinance Banana Skins 2009, available as a free PDF. My answers would be yes, no, more, and yes, respectively.
Ross • 27th May 2009 • Learning, Thinking • development, policy, teenage pregnancy
One of the most illuminating insights from the study of economics is that of man as a rational maximiser of utility. Putting aside the valid quirks of organisational limitation and bounded rationality, inherent bias and behavioural economics, the idea that people do what they do because it works for them is very powerful. It’s also very democratic and empowering. People don’t do things you think of as bad or wrong because they are naive or foolish, they do it because, for them, it makes sense.
Treating people as rational means giving them credit to know what’s best for themselves, rather than adopting paternalist policies. If you want to change behaviour (itself a dubious objective requiring much caution) you have to do more than simply educate people. Education only changes behaviour when there was a lack of information before. If there was no dearth of information, education is just the annoying imposition of another viewpoint. It will have little impact except to waste money and annoy those being ‘educated’.
If you really want to change behaviour, give people credit for knowing their own minds, don’t tell them what to think, but change the incentives. This sometimes offers radically different policy solutions.
This theme has recurred a couple of times in the last week: once when examining UK government policy on teenage pregnancy (as part of my MPA studies) and once when reading an article about the book Portfolios of the Poor in The Economist. In the former case, I was struck that government policy both aims to make life better for teenage mothers – providing them with better facilities, better housing, better job and educational opportunities – while also trying to decrease the numbers of teenage mothers through education. Lisa Arai makes a good case that this doesn’t conform to a rational model, where teenage girls have children because that offers them a better life option. In the latter case, people living in poverty have been shown not to be financially naive spendthrifts, but highly sophisticated, rational consumption-smoothers. Applying rational models to these policy challenges produces very different solutions.
In what other areas would assuming rational behaviour make a huge policy difference?
Ross • 15th May 2009 • Thinking • africa, development, economics, resources
From BBC News:
Developing economies could better ride the current financial crisis with more effective maintenance of their natural resources, according to a new report.
The report, from Natural Resource Charter, is here. I haven’t read it, although I am sure it would be interesting. The article references Paul Collier, who pushes a fairly simple system for straight auctions of commodities. It’s worth noting that to some extent, this already happens with commodity extraction rights - so maybe it’s a call to do that better. (The journalists could do better with the headline too: ‘Africa urged to auction commodities’?) However, if they are pushing for African countries to auction raw diamonds, coal and whatever, then they’re recommending a highly statist approach in which governments own the extraction plant and companies. That would be a step backwards. More clever public contract managers (with performance bonuses) in government would be a better solution.
Ross • 13th May 2009 • Learning, Thinking • africa, development, energy, fuel
Making cooking briquettes from banana waste is a promising idea for development. I guess it works for plantain crops too. However, I don’t see why the focus should just be on Africa. Banana-fuel could be useful across Southern and South-Eastern Asia, Latin American and some Pacific islands too. There could even be a business in this. Labour and sawdust would be easy to come by, as would sunlight for drying the briquettes. The problem, I imagine, would be collecting the banana waste. Unlike sawdust, banana skins aren’t found in one place, but scattered throughout a million waste bins. The options for collecting this input look poor:
- Hiring scavengers may be one, basic, reclaimation option, but I think the cost may rule that out.
- You could offer an incentive for customers to return their banana skins, and pay by weight. In many ways, this is like outsourcing the scavenger option, and doesn’t remove the inefficiency.
- Grow your own bananas. Then you need some way to make money from the fruit. Drying and chipping may be the best option, or grinding into banana flour.
Option 3 makes me think that banana-chipping outfits probably already exist in some places. So perhaps there is a stock of banana skin waste…. a quick online search turns up Narosa Farms.
Ross • 20th Jul 2008 • Learning, Thinking • charity, development, finance, money
I have been a long-term lender on Kiva, an innovative microfinance portal that matches entrepreneurs and their projects in the developing world with charitable people (generally) in the more developed world. I like their model. In just over two years, I have funded almost 20 businesses across three continents. I have earnt no interest on these loans – but have seen it as a creative and sustainable means of charitable giving. The three great things about Kiva are that I choose who benefits from my money; that recipients have no incentive to request more funds than they need; and that I am constantly updated about the entrepreneur’s progress. I have never had any defaults. This last sentence may not hold true for much longer. (more…)
