Friday, December 10, 2010

New York City runs RCT, receives complaints that money doesn't grow on trees

Innovations for Poverty Action Blog

It has long been the standard practice in medical testing: Give drug treatment to one group while another, the control group, goes without.

Now, New York City is applying the same methodology to assess one of its programs to prevent homelessness. 

...

But some public officials and legal aid groups have denounced the study as unethical and cruel, and have called on the city to stop the study and to grant help to all the test subjects who had been denied assistance.

From the New York Times

It always amazes me when people think resources are unlimited. Why is "scarce resource" such a hard concept to understand? I don't mean that merely rhetorically. The point is so obvious to many (eg, folks affiliated with IPA and JPAL), but yet in public dialogue some argue as if there are no tough choices or tradeoffs. Who made them gabazillionaires?? Even Bill Gates and Warren Buffett have tough tradeoffs to make.

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Thursday, December 9, 2010

The Kenyan Mobile Money Ecosystem

White African

[This is a guest post by Ben Lyons of Kopo Kopo, and recently of FrontlineSMS:Credit, who I consider to be one of the leading experts on mobile money, banking and payments in Africa. You can follow Kopo Kopo on Facebook and Twitter.]

Mobile Phone with Money in Kenya

Kenya is by far the most exciting, innovative mobile money market on earth. Below is an overview of some of the major and upcoming players.

MAJOR PLAYERS

Safaricom M-Pesa
Launched in March 2007, Safaricom M-Pesa was the first mobile money system in Kenya. It is now the most successful mobile money deployment on earth, boasting use by 51% of the adult population. In addition to person-to-person transfers, you can use M-Pesa to remit funds from the UK to Kenya, pay bills, purchase goods, buy airtime, and, with the launch of M-Kesho, move funds to and from an interest-bearing account with Equity Bank. Fun fact: Safaricom M-Pesa has more agents in Kenya than Wells Fargo and Wachovia have ATMs in the United States.

Airtel Money
Formerly Zain Zap, Airtel Money is the second largest mobile money system in Kenya. Prior to its acquisition, Zain was focused on creating a "cashless society" whereby any number of needs could be met via mobile money. Zain was also committed to its notion of One World, the idea that a Zain customer in Country X should be able to call a Zain customer in Country Y a at local rate. One World was the source of much speculation with regard to international person-to-person mobile money transfer. It will be interesting to see if / how Airtel changes course, especially with regard to pricing.

Orange Money
Orange Money launched in late 2010 in association with Equity Bank. Instead of offering the same features as M-Pesa, Zap, or yuCash, Orange opted to create a de facto front-end for Equity Bank accounts, allowing it to exceed regular transaction and m-wallet balance thresholds.

Essar yuCash
Essar yuCash launched in December 2009 and is powered by Obopay. yuCash offers some standard features such as person-to-person transfer and balance inquiry as well as some unique features like requesting money, adding a short message to a payment, and inviting friends to join. yuCash is also unique insofar as it offers five different front-ends: WAP, SMS, Voice, USSD, and STK.

Equity Bank
Equity Bank is the largest microfinance institution in Kenya and is nothing short of a powerhouse. It has an extensive ATM network throughout Kenya and has integrated with M-Pesa (M-Kesho), Orange Money, and yuCash.

Musoni
Musoni is at the cutting edge of microfinance, enabling loan disbursal and repayment via Safaricom M-Pesa and Airtel Money. Musoni plans to conduct country studies in Rwanda, Tanzania, and Uganda in the coming years.

Paynet Group
Paynet is responsible for all Visa transactions in Kenya, interchange for 2,000+ ATMs, and PesaPoint. Due to their interaction with Visa, they are PCI DSS compliant, meaning that their system is both redundant and incredibly secure. Paynet aggregates and formats transaction data for several mobile money providers in East Africa.

UPCOMING PLAYERS

iPay
A product of Intrepid Data Systems, iPay enables merchants to accept online payment via Safaricom M-Pesa, Zain Zap, and Essar yuCash. Prominent users include PewaHewa, Fenesi, and Zetu.

PesaPal
PesaPal is a product of Verviant Consulting that, according to CEO Agosta Liko, aims to "make sense of the Kenyan payment landscape". PesaPal lets online merchants collect payments via M-Pesa, Zap, Google Checkout, and a range of common credit cards. Their latest product, e-Ticketing, allows event organizers to accept online payments for registration via mobile money.

M-Payer
A recent product of Zege Technolgies, M-Payer enables real-time mobile money transaction processing. The CEO of Zege Technologies, Kariuki, played an instrumental role in the M-Pesa / Equity Bank integration that resulted in M-Kesho.

Lipuka
Powered by Cellulant, a company that serves 60M+ subscribers throughout Sub-Saharan Africa, Lipuka integrates bank and payment channels to enable music downloads, bill payments, and information services via WAP.

Moca
Formerly called ZungukaPay, Moca is a product of Symbiotic Media Corsortium. ZungukaPay enabled online merchants to accept payments via M-Pesa, Zap, yuCash, PayPal, Google Checkout, and a range of common credit / debit cards. ZungukaPay also had an open API for integration purposes. The new product, Moca, takes a different turn by enabling customers to buy 'Moca credits' via mobile money, which they then use to pay for goods and services on partner websites (e.g. KeleleMobile). Fun fact: selling non-refundable credits precludes Moca from being seen as an e-money issuer by the Central Bank of Kenya.

JamboPay
A product of Web Tribe Limited, JamboPay is an "Online Checkout & Micro-Payment Service" that enables merchants to accept online payments via M-Pesa, Zap, yuCash, and Visa credit/debit cards. JamboPay has a tariff structure similar to PayPal in the US: a commission per transaction + a flat fee for any transactions initiated over the JamboPay web platform.

MobiKash
MobiKash, a third party mobile money provider, is operated by MobiCom Africa Limited in partnership with Sybase 365 and Seal Systems. MobiKash leverages USSD to give Kenyans on any mobile network real-time access to accounts at participating banks, including Post Bank, National Bank of Kenya, and Trans National Bank. MobiKash uses the Sybase 365 Mobiliser Platform.

KrossPAY
Formerly PesaPot Holdings Limited, KrossPAY worked with PAYG Solutions to develop a hosted core banking and financial management platform for microfinance institutions, credit unions, and community benefit organizations. Some PAYG Solutions programmers were involved with the creation of M-Pesa, so there may be a mobile money integration in the works. KrossPAY also offers a "universal mobile money transfer and payment" service called CaribPay.

Jipange KuSave
Jipange KuSave is an initiative of Mobile Ventures Kenya Ltd., a subsidiary of Signal Point Partners. Launched as a pilot in 2010 in partnership with FSD Kenya and CGAP, Jipange KuSave aims to extend affordable micro-savings and micro-credit to the 'mwanachi' (Kiswahili for 'common man') via mobile phones.

Tangaza Limited
Managed by Mobile Pay Limited and a network of independent trustees, Tangaza enables both local and international money transfer as well as services like utility bill payment and remote airtime purchase. Tangaza is accessible via USSD and the internet and works across multiple mobile networks.

NOTABLE M-MONEY INTEGRATIONS

PewaHewa
PewaHewa is similar to the iTunes Store insofar as you can browse for musical artists, albums, genres, etc. and purchase songs via mobile money. PewaHewa is powered by iPay.

Kalahari
Often referred to as "the Amazon.com of Africa", Kalahari offers a wide range of online goods and services, which customers can pay for via Safaricom M-Pesa.

Kilimo Salama
Kilimo Salama, Kiswahili for "safe farming", is a crop insurance product offered by the Sygenta Foundation for Sustainable Agriculture. Kilimo Salama enables farmers to pay crop insurance premiums and receipts payouts via Safaricom M-Pesa.

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Ben Knapen kraakte het ‘succesvolle’ 3D beleid af in column NRC

Vice Versa - vakblad over ontwikkelingssamenwerking

Ben Knapen maakte in zijn column in NRC Handelsblad van 20 januari 2010 het 3D beleid van Defensie in Afghanistan met de grond gelijk. In zijn Kamerbrief stelde de staatssecretaris echter dat het succesvolle 3D beleid zal worden doorgezet. Ewout Irrgang (SP) wees Knapen op zijn 180 graden gedraaide visie tijdens het kamerdebat van afgelopen maandag.

Knapen schrijft in zijn Kamerbrief dat de 'succesvolle' 3D benadering (Development, Diplomacy and Defence) in het nieuwe ontwikkelingsbeleid zal worden doorgezet. De brief vermeldt: 'Om onze belangen veilig te stellen, is de opbouw en versterking van de rechtsorde in ontwikkelingslanden cruciaal. Nederland heeft, via een geïntegreerde en innovatieve benadering (denk aan de 3D-benadering in Afghanistan), in het verleden resultaten geboekt waarop kan worden voortgebouwd.'

Paul van den Berg gaf in ' De vijf meest opmerkelijke onbewezen aannames in de Kamerbrief" al aan dat nooit bewezen is dat het 3D programma echt werkt. En uit een scherpe observatie van Ewout Irrgang (SP) tijdens het Kamerdebat van afgelopen maandag blijkt dat ook Ben Knapen in het verleden helemaal niet overtuigd was van de werking van het 3D beleid.

Irrgang wees op een column die Ben Knapen op 20 januari dit jaar voor NRC Handelsblad schreef.

In die column maakte Knapen de methode met de grond gelijk. Hij schreef: 'Het klinkt goed – 3 D – maar het is ook goochelen met argumenten. De ene achterban wordt over de streep getrokken met het opbouwargument, de andere met het NAVO-alliantie argument en een derde met het oorlog-tegen-terrorisme argument. Alsof dit allemaal past.' Volgens Knapen kan je het begrip 3D ook vertalen met de term hutspot: 'alles door elkaar en zeer seizoensgebonden.'

De benadering leidt vooral tot onduidelijkheid, schreef Knapen in zijn column. 'Bij elke aanslag heerst verwarring', stelde hij. 'Jagen we er een F-16 overheen of bieden we schoon drinkwater? In Duitsland sneuvelde onlangs nog een minister omdat een Duitse legereenheid verstrikt was geraakt in de vraag of er geholpen of geschoten moest worden. De keuze was verkeerd uitgevallen en vijftig Afghanen verloren het leven. Onschuldige burgers, zo bleek, en geen deeltijd-Talibaan.'

Irrgang verwees ook naar een andere column, die Knapen op 8 juli 2009 in dezelfde krant schreef. Daarin ging de voormalig NRC columnist in op de ontwikkeling van Afghanistan. Economische ontwikkeling was volgens hem niet mogelijk in een ' het prototype van de mislukte staat.' ' De academische wereld van ontwikkelingseconomen heeft de handen al vol om überhaupt te begrijpen waarom het ene ontwikkelingsland maar niet vooruitkomt terwijl in het andere land de motor van ontwikkeling op een gegeven moment, en meestal pas na lange tijd, aanslaat', schreef hij. Hoe zit het dan met die eerste D in het 3D beleid, vraagt Vice Versa zich af.

Waarom draaide de visie van Knapen 180 graden en staat hij, sinds hij staatssecretaris is ineens volledig achter de 3D benadering? Is de effectiviteit ervan nu ineens wel bewezen? Hoewel de Afghaanse onderzoeksorganisatie TLO een redelijk positief rapport schreef over de bereikte resultaten in Uruzgan tijdens de Nederlandse aanwezigheid, laat een door de Tweede Kamer aangevraagde evaluatie nog op zich wachten. Ben Knapen reageerde niet op de opmerking van Irrgang.

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Should Megabanks Be Broken Apart? (NYT Room For Debate)

The Baseline Scenario

By Simon Johnson.  This material was prepared as part of the New York Times' Room for Debate on "Should Mega-Banks Be Broken Apart"?  I strongly recommend the post by Anat Admati.

Writing in the Washington Post, in November 2009, Jamie Dimon, chief executive of JP Morgan Chase, argued:

"Creating the structures to allow for the orderly failure of a large financial institution starts with giving regulators the authority to facilitate failures when they occur. Under such a system, a failed bank's shareholders should lose their value; unsecured creditors should be at risk and, if necessary, wiped out. A regulator should be able to terminate management and boards and liquidate assets. Those who benefited from mismanaging risks or taking on inappropriate risk should feel the pain."

But the Dodd-Frank financial reform legislation does not create a "resolution mechanism" that can deal with cross-border megabanks; this point is admitted by all involved. And there is nothing in the G20 process or underway with any other international forum that would make a difference in this regard.

So when very big banks are on the brink of failure, the Obama administration and Congress will have to face this choice: either let this big bank go through bankruptcy, like Lehman Brothers, or provide it with a bailout — meaning complete protection for all creditors (but hope you can at least remove some management this time around).

Unfortunately, the Irish experience shows that the "let's do an unsavory bailout" will like not end well next time. Our megabanks are getting bigger — as we demonstrated in 13 Bankers and as Thomas Hoenig argued in the Times last week — not because of any kind of legitimate market process, but because they benefit from an unfair and non-transparent government subsidy. And these big banks have recklessly dangerous levels of debt relative to equity, as Anat Admati and her colleagues have pointed out.

Put simply, by allowing our biggest banks to become even bigger — and more leveraged — the government is taking on a large contingent fiscal liability. Whatever you think of current fiscal policy — and whatever the outcome of the current debate over taxes and spending in the U.S. — remember this: by all standard balance sheet measures, Ireland was running responsible fiscal policy over the past decade. But the implicit liabilities of the Irish state were ballooning out of control, in direct proportion to the size of the biggest Irish banks. Three banks failed and this has taken down the entire Irish economy.

There are no economies of scale or scope in banking over about $100 billion in assets. Bankers, like Jamie Dimon, make claims to the contrary — including in an interview published in the New York Times on Sunday. But they do not have a single piece of evidence that society gains from having megabanks at today's scale and with today's leverage.

Our biggest banks are already subject to a partial size cap. According to the Riegle-Neal Act of 1994, no one bank can have more than 10 percent of total retail deposits in the United States. Unfortunately, the growth of wholesale financing and the global spread of these banks essentially made a mockery of this sensible macroprudential regulation.

We should update and apply the Riegle-Neal Act, exactly as proposed by Senators Sherrod Brown and Ted Kaufman in spring 2010.

If you would like to reproduce this entire post, please contact the New York Times.


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What’s the most effective development intervention we know?

Chris Blattman

Picking kiwis?

From David McKenzie at the World Bank finance blog, the per capita income gain from 6 kinds of interventions:

The paper is here. Quibble with the numbers as much as you like, these are massive differences.

After learning that Intel's co-founder was a refugee resettled in the US by IRC, I have begun to wonder: if 0.005% of refugees and immigrants transform the US economy, is the annual gain from immigration to current citizens of the US equally large?

See also Ryan Pevnick on the ethics of immigration policy.

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Tuesday, December 7, 2010

Does Capitalism Need Social Business?

Financial Access Initiative Blog

What do Jack the Ripper, the shortage of affordable housing, and cataracts have in common? They are all problems that can and have been addressed by social finance. Jonathan Morduch recently shared his wisdom on the subject during the Chief Economist Talk series at the World Bank. You can watch a video of his talk and download the presentation here.

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Met vriendelijke groet,
Best regards,
Henk J.Th. van Stokkom.
(mailed from my mobile)

RCTs: The hot new idea from 350 BC

Innovations for Poverty Action Blog

A lot of the papers in say experimental social psychology published today could have been written a thousand years ago so psychology is behind its time. More generally, random clinical trials are way behind their time.  An alternative history in which Aristotle or one of his students extolled the virtue of randomization and testing does not seem impossible and yet it would have changed the world.

Alex Tabarrok on Ideas Behind Their Time.

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Best regards,
Henk J.Th. van Stokkom.
(mailed from my mobile)

Evaluating the Millennium Development Villages

Innovations for Poverty Action Blog

Gabriel Demombynes and Michael Clemens published a paper recently lamenting the lack of a rigorous (randomized) evaluation of the Millennium Development Villages Project.

Whilst we can't [yet?] give you that, we can give you something pretty similar.

IPA is working with a nonprofit The Hunger Project to evaluate their "EpiCenter" strategy – building community centers in villages to provide a holistic set of services in a sustainable manner.

The key features of the Millenium Villages Project model are:

  • Evidence-based interventions covering multiple sectors,
  • Participatory community decision-making,
  • Environmental sustainability,
  • Scale-up and focus on the Millenium Development Goals.

 

The key features of The Hunger Project model are: 

  • Evidence-based interventions covering multiple sectors,
  • Participatory community decision-making,
  • Environmental sustainability,
  • Scale-up and focus on the Millenium Development Goals.

 

Yes, those 2 lists are identical.

There are differences between the projects, but they are similar enough to demonstrate that randomized evaluation can work for this kind of project.

Rigorous evaluation has a growing profile, but it is still sufficiently rare in the aid world that those organizations that are brave enough to submit their activities to proper impact evaluation deserve our recognition and admiration.

The Hunger Project - we salute you!

The project is still underway, but watch this space for the eventual results! For more on their project see here, and for more on the Millennium Villages controversy, see here.

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Met vriendelijke groet,
Best regards,
Henk J.Th. van Stokkom.
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A Different Kind of Philanthropy

SSIR Opinion & Analysis

What if foundations mostly gave unrestricted funding instead of dictating how grantees could spend their grants? What if foundations kept supporting grantees who performed instead of ending funding because the "grant cycle" had ended? What if foundations ditched the whole system of soliciting grant proposals and focused on proactively searching for great grantees? What if foundations expected grant reports to mostly consist of information the nonprofit was collecting anyway rather than specialized requests that sap the grantees resources?

It seems like a pipe dream. A wish list of a harried executive director.

But this sort of foundation exists. And it is thriving.

Located on the second story of a nondescript building in the Russian Hill neighborhood of San Francisco is the Mulago Foundation. Run by a staff of three, the Mulago Foundation may very well be a case study of an emergent model of how to run a foundation.

From the Mulago website:

"Unrestricted funding is the most useful for the organization and the most leveraged for the donor. If we don't think they know how to use the money better than we do, we shouldn't give them any."

They provide continued funding for increasing returns. "We don't abandon a good thing. If we continue to see real impact and clear progress toward scale, we stay in the game."

"We don't take proposals. Proposals are a hassle for all concerned and rarely give us the information we need. We use an extensive network to feed us organizations that meet our very specific criteria. Us finding them rather than them asking us makes for a healthier relationship that is more productive and more fun."

"The last thing we want is to waste the time and energy of those who are trying to save the world… We gather the specific information that we need. The due diligence documents we require are things that organizations should already have on hand, including a business or strategic plan, financials, organization chart, top-five donor list, and board attendance."

This isn't suppose to be the way foundations work.

We tend to assume that outstanding, cutting edge foundations will be big. It is true that very successful nonprofit and for-profit organizations do tend to be big. But actually this is only true of very successful organizations that actual provide goods and service. Hyper successful organizations that invest in other organizations are far more frequently quite small.

Consider Warren Buffet.
From the Wall Street Journal:

"[Buffett] makes swift investment decisions, steers clear of meetings and advisers, eschews set procedures and doesn't require frequent reports from managers… He seldom holds meetings. "There isn't much going on here," he says of his office on a typical day… [His company] headquarters is staffed by just 17 employees… Berkshire headquarters, occupies a single floor of a nondescript office building…

Mr. Buffett believes that managers of [his] companies ought to be left to run their businesses without interference from him, and without having to hew to any unifying corporate strategies or goals. "We delegate to the point of abdication," Mr. Buffett says…Mr. Buffett tells the chiefs of his business units not to produce any special reports for him…He keeps no calculator on his desk, preferring to do most calculations in his head. "I deplore false precision in math," he says, explaining that he does not need exact numbers for most investment decisions… Mr. Buffett tends to stick to investments for the long haul, even when the going gets bumpy… "If you don't make mistakes, you can't make decisions," Mr. Buffett says."

How is this possible? It is because Mr. Buffett understands that his job is to invest in other companies, not try to run them. He doesn't have to figure out what should be done, he just needs to figure out who is good at figuring out what should be done and investing in them.

But today, the definition of effective philanthropy has become "strategic philanthropy" where the foundation is expected to devise ways to solve problems and select grant recipients who can best carry out the approach the foundation thinks will work best.

There is another way. The Mulago Foundation is practicing a form of philanthropy that is desperately needed. It is a fundamental departure from the conventional wisdom of what good philanthropy is suppose to be about. But I think it is very likely that an approach that prioritizes picking great nonprofit organizations and backing them is likely to be a lot more effective.

And gosh darn it, it looks like a lot more fun.


Advertisement Sean Stannard-Stockton is CEO of Tactical Philanthropy Advisors, a philanthropy advisory firm that serves individual and family philanthropists. Sean is the author of the Tactical Philanthropy blog and writes a monthly column for the Chronicle of Philanthropy. He is a member of the World Economic Forum's Council on Philanthropy & Social Investing and has been quoted or referenced in The New York Times, Wall Street Journal, Washington Post, Financial Times and many other media outlets.

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A Different Kind of Philanthropy

SSIR Opinion & Analysis

What if foundations mostly gave unrestricted funding instead of dictating how grantees could spend their grants? What if foundations kept supporting grantees who performed instead of ending funding because the "grant cycle" had ended? What if foundations ditched the whole system of soliciting grant proposals and focused on proactively searching for great grantees? What if foundations expected grant reports to mostly consist of information the nonprofit was collecting anyway rather than specialized requests that sap the grantees resources?

It seems like a pipe dream. A wish list of a harried executive director.

But this sort of foundation exists. And it is thriving.

Located on the second story of a nondescript building in the Russian Hill neighborhood of San Francisco is the Mulago Foundation. Run by a staff of three, the Mulago Foundation may very well be a case study of an emergent model of how to run a foundation.

From the Mulago website:

"Unrestricted funding is the most useful for the organization and the most leveraged for the donor. If we don't think they know how to use the money better than we do, we shouldn't give them any."

They provide continued funding for increasing returns. "We don't abandon a good thing. If we continue to see real impact and clear progress toward scale, we stay in the game."

"We don't take proposals. Proposals are a hassle for all concerned and rarely give us the information we need. We use an extensive network to feed us organizations that meet our very specific criteria. Us finding them rather than them asking us makes for a healthier relationship that is more productive and more fun."

"The last thing we want is to waste the time and energy of those who are trying to save the world… We gather the specific information that we need. The due diligence documents we require are things that organizations should already have on hand, including a business or strategic plan, financials, organization chart, top-five donor list, and board attendance."

This isn't suppose to be the way foundations work.

We tend to assume that outstanding, cutting edge foundations will be big. It is true that very successful nonprofit and for-profit organizations do tend to be big. But actually this is only true of very successful organizations that actual provide goods and service. Hyper successful organizations that invest in other organizations are far more frequently quite small.

Consider Warren Buffet.
From the Wall Street Journal:

"[Buffett] makes swift investment decisions, steers clear of meetings and advisers, eschews set procedures and doesn't require frequent reports from managers… He seldom holds meetings. "There isn't much going on here," he says of his office on a typical day… [His company] headquarters is staffed by just 17 employees… Berkshire headquarters, occupies a single floor of a nondescript office building…

Mr. Buffett believes that managers of [his] companies ought to be left to run their businesses without interference from him, and without having to hew to any unifying corporate strategies or goals. "We delegate to the point of abdication," Mr. Buffett says…Mr. Buffett tells the chiefs of his business units not to produce any special reports for him…He keeps no calculator on his desk, preferring to do most calculations in his head. "I deplore false precision in math," he says, explaining that he does not need exact numbers for most investment decisions… Mr. Buffett tends to stick to investments for the long haul, even when the going gets bumpy… "If you don't make mistakes, you can't make decisions," Mr. Buffett says."

How is this possible? It is because Mr. Buffett understands that his job is to invest in other companies, not try to run them. He doesn't have to figure out what should be done, he just needs to figure out who is good at figuring out what should be done and investing in them.

But today, the definition of effective philanthropy has become "strategic philanthropy" where the foundation is expected to devise ways to solve problems and select grant recipients who can best carry out the approach the foundation thinks will work best.

There is another way. The Mulago Foundation is practicing a form of philanthropy that is desperately needed. It is a fundamental departure from the conventional wisdom of what good philanthropy is suppose to be about. But I think it is very likely that an approach that prioritizes picking great nonprofit organizations and backing them is likely to be a lot more effective.

And gosh darn it, it looks like a lot more fun.


Advertisement Sean Stannard-Stockton is CEO of Tactical Philanthropy Advisors, a philanthropy advisory firm that serves individual and family philanthropists. Sean is the author of the Tactical Philanthropy blog and writes a monthly column for the Chronicle of Philanthropy. He is a member of the World Economic Forum's Council on Philanthropy & Social Investing and has been quoted or referenced in The New York Times, Wall Street Journal, Washington Post, Financial Times and many other media outlets.

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Met vriendelijke groet,
Best regards,
Henk J.Th. van Stokkom.
(mailed from my mobile)

De snelle gedaanteverwisseling

Vice Versa - vakblad over ontwikkelingssamenwerking

Bij Jack van Ham, scheidend topman van ICCO, ging 'het licht uit' toen hij CDA-kamerlid Henk Jan Ormel afgelopen week bij het televisieprogramma Moraalridders het economisch gerichte ontwikkelingsbeleid van staatssecretaris Ben Knapen hoorde verdedigen. Ook ergert hij zich aan de berichtgeving van dagblad Trouw en Vice Versa over het nieuwe ontwikkelingsbeleid. 'Beide bladen lijken een U bocht te maken die ik even niet volg.'

Door Jack van Ham

Het is nog niet zo heel lang geleden dat ik Vice Versa en het dagblad Trouw beschouwde als positief kritische volgers van het internationaal zo geprezen Nederlandse ontwikkelingsbeleid. De laatste vrijdagborrel en het redactionele commentaar van de hoofdredactie van Trouw van afgelopen woensdag 1 december hebben mij enigszins versteld doen staan. Met koppen als 'Bezuinigingen bieden juist kansen voor het particuliere kanaal' en 'Knapen lijkt goede keuzes te maken bij ontwikkelingssamenwerking' lijken beide bladen een U bocht te maken die ik even niet volg.

Hoe de kansen voor het particuliere kanaal zullen toenemen is op te maken uit het financiële staatje dat door Lau Schulpen op vrijdag j.l. is geplaatst op de Vice Versa site. Met een totale bezuiniging op het particuliere kanaal van meer dan 30% en voor sommige organisaties een budgetkorting van bijna 50% per jaar, kun je in ieder geval vaststellen dat de uitdagingen voor dit kanaal buitenproportioneel groot zijn. Er zullen weinig organisaties of bedrijven zijn die bij een teruggang van 50% van hun middelen in een periode van nauwelijks 4 maanden opgewekt zullen denken dat 'hun kansen' substantieel zijn toegenomen.

Raadsel

Waarom ontwikkelingsorganisaties dat wel zouden moeten doen is mij vooralsnog een raadsel. De komende maanden/jaren zal de focus van die organisaties vooral gericht moeten zijn om een dergelijke desastreuze financiële  teruggang met fatsoen, en het voorkomen van enorme kapitaalsvernietiging voor de organisaties die zij tot op heden en met instemming van de subsidiërende overheid steunen, door te vertalen. De impliciet beschreven gedachte dat zij hierdoor 'de nieuwe kansen zullen grijpen en ingrijpend zullen vernieuwen' is niet minder dan een gotspe.

Die nieuwe kansen moeten zij volgens de staatssecretaris vooral halen uit een bredere steun en groter draagvlak van het Nederlandse volk. Hij kan zich dan met de vrijgekomen middelen bezighouden met via het Nederlandse bedrijfsleven 'investeren in ontwikkelingslanden en gedeeld eigenbelang.' De focus ligt hierbij dan op economische ontwikkeling.

Kanttekeningen

Graag een paar kanttekeningen bij deze keuzes:

1. Het draagvlak en de vrijwillige bijdrage van het Nederlandse volk aan ontwikkelingssamenwerking is al ongekend hoog. Waar de Nederlandse overheid ongeveer 400 miljoen bijdraagt aan de particuliere organisaties, doet het Nederlandse volk dat jaarlijks via campagnes, lidmaatschappen  en loterijen, met een bedrag dat 4/5/ keer zo hoog is. Naast de ontwikkelingssector vindt de overheid dat nu ook de cultuursector de vrijwillige bijdrage markt op zou moeten. Tegelijk verhoogt zij belastingen, verhoogt zij bijdragen aan zorg, kinderopvang etc. Veel van dat geld gaat in het bijstaan van noodlijdende banken, financiële instellingen en pensioenfondsen die daarenboven hun uitkeringen stap voor stap zullen verlagen omdat de mensen zelf meer moeten gaan 'bijsparen.' Volgens Knapen moet ontwikkelingssamenwerking geen charitas zijn, de weg die hij volgt suggereert minstens anders.

2. Voor de bijdragen die de particuliere organisaties nog wel krijgen hebben zij het afgelopen jaar een loodzware en ondoorzichtige wegingprocedure (tendering) moeten doorlopen die als gevolg van de recente en indringende bezuinigingsmaatregelen overboord kan en nog nauwelijks waarde heeft. De bijdrage aan het bedrijfsleven wordt met een pennenstreek verhoogd met 100 miljoen (tendering?). Bijdragen die het bedrijfsleven moet verleiden om zich duurzamer en eerlijker te gaan gedragen in ontwikkelingslanden. De vraag is wie hen dit in het verleden verboden heeft dat te doen.  Bedrijven als Philips en Unilever, samen al goed voor een omzet die vele malen hoger is dan het totale Nederlandse ontwikkelingsbudget, zouden zich met deze bijdrage moeten laten aanmoedigen. Het de vraag wie met deze verschuiving gediend is en of er enige duiding of controleerbaar bewijs is dat deze aanpak zal werken ten gunste van ontwikkelingslanden.

3. (Grote) ontwikkelingsorganisaties hebben  het afgelopen decennium hun inspanning verlegd van hoofdzakelijk sociale activiteiten naar duurzame economische ontwikkeling (wat aanvankelijk verboden was om met medefinancieringsmiddelen te doen). Van een aantal van die organisaties is het mij bekend dat zij bijna 50% van hun middelen ( totaal meer dan 100 miljoen jaarlijks), inzetten op Duurzame en Rechtvaardige economische ontwikkeling. Zij richten zich daarbij (samen met een groot aantal bedrijven) op midden en kleinbedrijf en vooral op lokale ontwikkeling en eerlijke handel. Voedselzekerheid is daarbij een speerpunt. En ja, de rest van hun middelen gaan vooral in mensenrechten, gezondheidszorg en scholing. Economische ontwikkeling is zonder deze 'sociale elementen' nu eenmaal onmogelijk. Twintig miljoen per jaar erbij  bij het IDH en 100 miljoen korten op de economische programma's die via ontwikkelingsorganisaties lopen (overigens vaak ook in samenwerking met IDH dat de grote netwerken van de ontwikkelingsorganisaties hiervoor ook nodig heeft) levert per saldo weinig op. Sterker nog, het vermindert de samenwerking tussen ontwikkelingswerk en bedrijfsleven.

Toen ik deze week een woordvoerder van het CDA bij 'Moraalridders het economisch gerichte ontwikkelingsbeleid hoorde verdedigingen ging bij mij echt het licht uit. Zijn antwoord op de vraag wat voor voordeel dit beleid nu zou opleveren was: 'Als het Nederlandse bedrijfsleven meer gaat verdienen aan ontwikkelingssamenwerking, ontvangt de overheid meer belasting en kunnen we weer omhoog met het hulpbudget.'

Vaker heb ik betoogd en aangevoerd dat ontwikkelingssamenwerking zijn oude paradigma's voorbij is. Niet langer dienen ontwikkelingslanden als hulpobjecten te worden gezien, niet langer moeten wij denken dat rijkdom zich met eerlijke verdeling wel over de wereld zal verspreiden. Ook en met name de elite en middenklasse in ontwikkelingslanden zullen meer aan de collectieve ontwikkeling dienen bij te dragen. Nieuwe vormen zijn daarvoor nuttig en nodig. Maar blind markmechanisme en economische ontwikkeling en de voorsprong die wij daarop hebben, als dominant alternatief willen zien is niet anders dan het dienen van exclusief eigenbelang. Bovendien, verandering van een beleid waarvoor bestuur en politiek in hoge mate medeverantwoordelijk waren kan niet onder het mom van 'nieuwe kansen' en cold turkey bezuiniging worden afgewend op organisaties die zich tot op heden betrouwbaar, vernieuwend en coöperatief hebben gedragen. Kapitaalvernietiging en een rem op vernieuwing zijn eerder het gevolg. Ook de bestaande organisaties en hun partners hebben er recht op door politiek en bestuur fatsoenlijk te worden behandeld en niet te worden afgeserveerd.

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Met vriendelijke groet,
Best regards,
Henk J.Th. van Stokkom.
(mailed from my mobile)

Development is Uneven, Get Over It

Aid Watch

This a 20 minute extemporaneous talk at UNICEF headquarters in New York on the topic of "Inclusive Growth". After the talk, there is a question, comment, and response session with the audience.  The full video is an hour, if you are really a masochist. (Try this link if the video player above doesn't work.)

To summarize the talk: success is intrinsically uneven, so development and growth is intrinsically uneven, not "inclusive". (See the earlier post about the fractal stubborness of uneven geographic wealth.) In this talk, I also mention how remarkably uneven success shows up in just about every field of endeavor. One way this shows up is in a "power law": there is such a strong negative relationship between the frequency of success and the scale of success that we have to use a logarithmic scale (i.e. a scale where every unit increase means multiplying by 10)  for both to be able to fit the extremes onto the graph, like the one below:

There is no evidence that large-scale redistribution programs can succeed without killing off growth, but targeting things like health and education to the poor has worked and could work even more. Lastly, the best thing of all you can do for "inclusive growth" is asserting the individual human rights of all, including women, gays, and religious, racial, and ethnic minorities. For more detail to fill out these ideas, please watch the video.

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Met vriendelijke groet,
Best regards,
Henk J.Th. van Stokkom.
(mailed from my mobile)

Sunday, December 5, 2010

Planners vs. Searchers in 1958

Aid Watch

At the 9th meeting of Hayek's Mont Pelerin Society (MPS) in 1958, members discussed two papers by P.T. Bauer on economic development and foreign aid. Over at the Foundation for Economic Education's excellent From the Archives blog, Nicholas Snow recently posted the account of that discussion from the first issue of the Mont Pelerin Quarterly. The entire issue is available for download (NB: as a 20 MB PDF) here.

Bauer's discussants included Hayek's mentor Ludwig von Mises and the (according to Bill) perennially under-appreciated Herbert Frankel. Given the number of my favorites there or represented, reading these comments is a bit like watching the 1927 Yankees in action (or for our nerdier readers, the Justice League of America).

Nick singles out a great quote from Mises's comments, and here is another that captures well the bias that still exists against skeptics and critics in debates over foreign aid:

People will call us negative because we do not consider the plight of the so-called underdeveloped countries as a problem to be solved by the governments. The governments want to solve it by spending the taxpayers' money for the execution of some spurious plans, of plans that are badly designed and, as a rule, even more poorly put into effect. The popularity of this mode of speech is reflected in the way in which the words plan and planning are employed today. Planning, as our contemporaries use the term, means always planning by the government. The plans of the individuals do not count; they are just no planning. (p. 19)

Herbert Frankel also offers a gem of an insight well ahead of the development literature of his time. He says of Bauer's on-the-ground work:

The lesson that flows from it is that it does pay to go to these remote areas and find out what the problem is, instead of assuming that one knows the problem before one begins. Until recent years, people have simply assumed in many of these territories in Africa, that there were no real, positive signs of enterprise among the indigenous population, which was supposed to be so uninstructed or inert that it was not able to fend for itself, experiment for itself, or improve itself. It was not realised that a reason why there was this apparent lack of initiative in the population was that there were serious customary or legal obstacles to the exercise of ordinary enterprise, even on a small scale. (p. 16)

Here we have not only the recognition that local conditions matter, but that institutions–the rules of the economic game–matter crucially for explaining cross-country income differences.

The whole document is worth reading. It provides a fascinating retrospective on how the development economics of its day looked from a classical liberal perspective. Certainly the development planners of their day failed; otherwise more recent efforts would never have come to be. Did the MPS members put their finger on why those plans failed? If they did, how many of the same errors guide development research and policy today?

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What the average American thinks we spend on foreign aid

Chris Blattman

27% of the federal budget

vs what they think we ought to be spending (=13%)

and what we're actually spending (=0.6%)

[source]


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