Wednesday, September 28, 2011

Unintended consequences of food aid

Chris Blattman

Give cash or food?

Both types of transfers increase the demand for normal goods, but only in-kind transfers also increase supply. Hence, in-kind transfers should lead to lower prices than cash transfers, which helps consumers at the expense of local producers.

We test and confirm this prediction using a program in Mexico that randomly assigned villages to receive boxes of food (trucked into the village), equivalently-valued cash transfers, or no transfers. The pecuniary benefit to consumers of in-kind transfers, relative to cash transfers, equals 11% of the direct transfer.

A new paper. Not surprising, but never quite proven. Or quantified.

 

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Changing nature of aid

Global development news, comment and analysis | guardian.co.uk

In the future we are likely to see a shift in development co-operation, which could be a welcome change for development policy

The distribution of poor people in the world has changed. The increase in the national income in populous countries such as China, India and Brazil means that the majority of the world's poor people now live in middle-income countries.

International development policy is still coming to terms with what that means. Particularly with whether or not we still need to bother with providing aid to countries like India. The argument is that if these countries have a large enough economy to graduate from the low-income development category and sustain nuclear programmes, then they do not need development assistance from countries like the UK, which face their own deficit issues. It would appear aid is a growing irrelevance in these countries.

To paraphrase Ravi Kanbur of Cornell University, we must recognise that gross national income per capita, which is how we classify countries as developed or otherwise, is an indicator of how likely it is that a country's citizens will be poor. No more than this. It does not indicate the political will or the capability of the government to address poverty. It does not mean there are no sustained and substantial pockets of poverty, a situation barely imaginable for most developed countries.

Consequently, regardless of gross national income measures, our moral obligation to fight poverty may remain. It may be that donor governments can feel encouraged by the fact that there are probably now more national partners to help in the fight against poverty, thanks to the expanding economy.

Imagine there has been sufficient growth in these national economies – as uneven as it may be – for them no longer to need money from elsewhere to meet the needs of their citizens. Let us also assume that even if there is no political will to address the problem, there will be enough interest from the private and charitable sector to support such funding. This leads us to wonder about the added value of international development support. The challenge then is to move beyond thinking of development support as merely funding.

Many of us understand from history that reducing poverty takes more than money, and we have more than 50 years of international donor experience to prove this.

For instance, the Indian government may not be able to afford to feed all the malnourished children in the country and maintain its celebrated level of growth. But it recognises that it might be able to make a strategic investment that could build the assets of deprived households, or increase the capacity of public health infrastructure sustainably. In such a scenario, the critical question is "What is that strategic investment?", not "Where is the money coming from?"

This kind of expert facilitation is the real engine of development; the funding that occupies so much of our debate is only the fuel. For instance, last year Martin Greeley used the UN's thematic papers on the progress of the millennium development goals to identify six priorities to accelerate achievement of the targets. None of these priorities was about funding – they concerned country-led partnerships, accountability, gender sensitivity, inclusive delivery, and planning for resilience. Let us be clear: money matters, but what matters more is what you do with it. Development is a knowledge enterprise.

In these emergent middle-income countries, there are of course new philanthropists who want to contribute to progressive change. However, philanthropists need help to understand what has worked in the past, because building a successful industry is not the same as delivering development outcomes. They need to understand who they can partner with; they need to understand better the detail of how international development works. They need help to assess progress; for instance, educating a generation can take a generation, and progress indicators would be both helpful and responsible. In fact, they may need assistance in working out their position in national and international systems for accountability.

We should be clear, though, that this is not about business as usual for development practitioners. They will be pressed to extend the rhetoric and skills of partnership. They will also need to forge a new language, one that is more accessible to the interests and experience of a group beyond their traditional aid partners and funders.

The Rockefeller Foundation is funding an initiative with a number of partners to establish a framework for the future of philanthropy and development. The consultations at the heart of the initiative are designed to allow the philanthropic sector to cultivate a closer partnership with development organisations. This reflects a shift in development co-operation and hints at what could be a welcome response in development policy.

The rise of the new economies does not mean the end of development. In fact, it could be that this is what it was meant to be like all along.

• Nick Perkins is head of communication at the Institute of Development Studies


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Zimbabwe introduces cash transfer scheme

Global development news, comment and analysis | guardian.co.uk

Education assistance and child protection and cash transfers at core of national action plan for orphans and vulnerable children

Zimbabwe has launched a $75m plan to protect orphans and vulnerable children over the next three years.

The money will come from the Zimbabwean government and donors, including the UK, the European Commission and the UN children's agency, Unicef. Some $45m of the money for a child protection fund has been raised from donors, leaving a $30m shortfall that will need to be covered before full national coverage can be ensured.

The scheme is part of a national action plan for orphans and vulnerable children that involves education assistance, child protection and cash transfers to the poorest families. Cash transfers have been tried with some success in Brazil, Mexico and South Africa. Zimbabwe is the latest country to adopt this approach. The four-year plan, officially launched on Tuesday, aims to reach more than 80,000 households.With the support of NGOs, at least 25,000 children are expected to benefit from access to child protection services. Child-headed households, grandparent-headed households, households with large numbers of dependents, and those with chronically ill or disabled people will receive cash transfers of up to $25 each month for food and healthcare.

"Protecting children from poverty, harm and abuse begins with reducing their vulnerabilities; cash transfers are one of the critical components that will contribute to the realisation of children's rights," said Dr Peter Salama, a Unicef representative. "This shows the inclusive government's strong commitment to addressing equity and reaching the most vulnerable."

Zimbabwe is led by a unity government after disputed elections in 2008, which left more than 200 people dead. Robert Mugabe remains president after decades in power, while his arch rival Morgan Tsvangirai, a victim of rights abuses under the Mugabe regime, is prime minister.

Badly hit by HIV, Zimbabwe has more than 1 million orphans, only 527,000 of whom currently have access to external support, according to Unicef. Traditional family and community structures to support orphans have been under considerable financial strain, given the poor state of the economy in recent years. As a result, more children face difficulties in receiving healthcare, education and other basic amenities.

"This unprecedented social protection mechanism shows how, as the government of Zimbabwe, we continue to devise meaningful and innovative ways to increase support to orphans and vulnerable children," said Joice Mujuru, the vice-president. "Through this innovation we are reinforcing and strengthening the traditional role of families and communities in promoting and protecting the wellbeing of children."

Jayati Ghosh, professor of economics at Jawaharlal Nehru university, New Delhi, who has objected to cash transfer programmes that seek to substitute cash for essential public spending, welcomed the fact that cash transfers in the Zimbabwe plan would be complemented by access to basic social services including health and education.

"I am all for cash transfers and similar redistributive mechanisms as long as they are in addition to - and not substitutes for - the effective public delivery of essential goods and services," she said. "The successes in Brazil, Mexico and South Africa have been associated with increased social spending by the government to ensure access to more comprehensive and better quality health and education that is publicly provided."


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To Spend Out, or Not To Spend Out? What Every Foundation Should Ask Itself

SSIR Opinion & Analysis

To spend out, or not to spend out, that is the question for foundations. Or, at least, that should be the question. While we at the Institute for Philanthropy are not advocates of one answer or the other, we believe it s beneficial for foundations to have this debate.

Currently, there are very few foundations in the US and the UK that choose to spend down their endowments within a fixed time frame, as opposed to maintaining them in perpetuity. In the US, it is of course mandatory for foundations to pay out 5 percent of their endowments each year, and in the UK there has been much advocacy—so far resisted by the nation's lawmakers—for the introduction of a similar requirement.

What this implies is that, in both jurisdictions, there is a keen sense that there should be an onus on foundations to make grants—that there should be an impetus towards social change. Indeed, there are times when the rapid and strategic deployment of private capital is the best way to address a pressing social problem. As Gara LaMarche, president and CEO of The Atlantic Philanthropies (which plans to spend down by 2016) has observed: "You can make a more concentrated effort with substantial wealth to (address) problems if you're not hoarding your resources." For our part, we consider that, when deciding whether to spend out, foundation staff should ask themselves three questions:

1. Is the way the organization uses its resources truly aligned with the pursuit of its philanthropic mission?

Buzz Schmidt, the founder of Guidestar International, has argued that not enough donors are objectively asking themselves whether a perpetual corpus is the most effective means of achieving its aims. He has warned against philanthropists falling back on tried and tested models that sometimes lack innovation, and has instead called for an informed discussion on foundation structures that allows exploration and innovation to take place.

2. Should the foundation make a shift to a higher impact grantmaking strategy?

3. Would spending out, or increasing payout, make it easier for the foundation to make that shift?

In the UK, the Joseph Rowntree Charitable Trust considered that it would spend out their endowment if there were an imminent threat of nuclear conflict. Its view was that the gravity of such a situation would call for highly responsive funding. In a less extreme scenario, the Gates Foundation increased its payout commitment two years ago to 7 percent, in recognition of the particular urgency of their work. This move was particularly timely, in that it coincided with the economic downturn—a time when many NGOs were feeling the financial pinch like never before. 

Whether or not foundations choose to spend out, this internal debate reminds them of their uniquely independent position. They are capable of taking risks that some other funders, especially those that distribute public funds, cannot consider. So then, to spend out, or not to spend out? At the Institute, we encourage foundations to ask themselves this tough question from time to time so that they retain that vitality of approach that is necessary for effective giving. 


image Salvatore LaSpada is the chief executive of Institute for Philanthropy, where he directs The Philanthropy Workshop. Founded at the Rockefeller Foundation, The Philanthropy Workshop is a strategic philanthropy training and networking program for ultra- and high-net worth individuals, and new foundation trustees. Previously, he was a philanthropic advisor to the Rockefeller family at Rockefeller Financial Services.

 

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Infographic: Kenya Mobile Subscribers, Penetration & Internet

White African

The research team at the iHub put together some stats on mobile numbers in Kenya. A special nod to Leo Mutuku for gathering it all from so many sources, and to Patrick Munyi for creating this cool visualization of it. Check out the iHub blog post to read the rest.

an infographic on mobile subscribers, penetration and internet in Kenya

Look for more infographics on the other East African countries soon.

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Tuesday, September 27, 2011

"Beware the Wrong Lessons from Poverty and Income Data"

Economist's View

Jeff Madrick:

Beware the Wrong Lessons from Poverty and Income Data, by Jeff Madrick: ...The poverty data released by the Census Bureau last week may well be the straw that broke the camel's back — the camel being those deliberately blind people who can't seem to acknowledge that most Americans are doing poorly. Average Americans should not be the ones who have to shoulder the burden of balancing the budget, even if it needed balancing soon.
The poverty rate is now as high as it was during the war on poverty of the 1960s — about 15 percent. The Census also revealed that median household income went nowhere under George W. Bush and is now down to its lowest level since 1997, essentially before the Clinton boom.
Even more deplorable, the young in America have been hit hardest. Economists at Northeastern University have been showing for years how low wages are for those in their twenties, if they can find a job at all. Now they calculate that 37 percent of young families with children live in poverty — more than one in three. It was one in five when Bush came to office.
But the reason I am writing this is ... that the elderly have taken a far smaller hit than the rest. Is this going to be the new argument for reducing Social Security and Medicare benefits?
The truth is much the opposite: These findings are an argument for a stronger safety net. The reason the elderly are not doing as poorly is precisely because of Social Security, Medicare, and Medicaid. ...
So let's not use these data to claim justification for cutting back social programs for the elderly. They show that the safety net is doing what it is supposed to do, which is to protect people from the ravages of a damaged economy. What we should be doing is expanding the safety net and getting the economy to start producing good old-fashioned American-style wage gains again. Can we afford new social programs for the young? Of course we can. We are among the lowest taxed of rich nations. ...

The argument that the elderly don't need Social Security is like arguing the bars on the windows are not needed because nobody's ever broken in.

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Run your own race

Seth's Blog

The rear view mirror is one of the most effective motivational tools ever created.

There's no doubt that many people speed up in the face of competition. We ask, "how'd the rest of the class do?" We listen for someone breathing down our necks. And we discover that competition sometimes brings out our best.

There's a downside, though. Years ago, during my last long-distance swim (across Long Island Sound... cold water, jellyfish, the whole nine yards), the competitiveness was pretty thick. On the boat to the starting line, there were hundreds of swimmers, stretching, bragging, prancing and working themselves up. By the time we hit the water, everyone was swimming someone else's race. The start was an explosion of ego and adrenaline. Twenty minutes later, half the field was exhausted, with three hours left to go.

If you're going to count on the competition to bring out your best work, you've surrendered control over your most important asset. Real achievement comes from racing ahead when no one else sees a path--and holding back when the rush isn't going where you want to go.

If you're dependent on competition then you're counting on the quality of those that show up to determine how well you'll do. Worse, you've signed up for a career of faux death matches as the only way to do your best work.

Self motivation is and always will be the most important form of motivation. Driving with your eyes on the rear view mirror is exhausting. It's easier than ever to measure your performance against others, but if it's not helping you with your mission, stop.

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Sunday, September 25, 2011

Three Famines: Starvation and Politics by Thomas Keneally – review

Global development news, comment and analysis | guardian.co.uk

The shocking truth about the most avoidable of disasters

Witnessing famine comes as a visceral shock – the slow and silent evisceration of society, family and the human body itself. The Russian sociologist Pitrim Sorokin, survivor of the famine of the early 1920s in his home country, wrote in Man and Society in Calamity (1946) of starvation reducing man to "a naked animal upon the naked earth".

His experience was of a communist famine, in which professors starved alongside peasants. More common is famine that singles out the poor. The economist and philosopher Amartya Sen, who lived through the 1943 Bengal famine as a young member of a prominent family that fed the destitute, opened his seminal book Poverty and Famines (1981) with the observation that famine is the phenomenon of some people not having enough food to eat, not of there not being enough food to eat.

Thomas Keneally, the Australian novelist, writes vividly about the depths to which human beings descend during famines. His examples are Ireland, Bengal and Ethiopia, and there are similarities among the three. Keneally draws on scholarship and archives, and also witnessed at first hand the civil war and famine in Ethiopia and Eritrea in the 1980s, when he travelled with the rebels and saw the destruction inflicted by the then military ruler of Ethiopia, Mengistu Haile Mariam, who persistently sought to starve the civilian population of the rebel-held areas into submission.

The book is both reportage of starvation and analysis of how famine is made. The "politics" in his subtitle points to the fact that drought, blight and pestilence may be unavoidable but famine is a manmade phenomenon. This may be an elementary point, but it needs to be made time and again.

One of Keneally's most intriguing passages is his description of Charles Trevelyan, assistant secretary to the treasury in Whitehall in the 1840s. The Irish revile Trevelyan as the instigator of cruelly minimal relief efforts during the famine. An evangelical Christian, virtuous in his personal life, he was convinced that certain events were inevitable and of divine intent, though he admitted that it was "hard upon the poor people that they should be deprived of knowing that they are suffering from an affliction of God's providence". Trevelyan didn't visit Ireland during the famine but derived his policies from John Stuart Mill's laissez-faire principles of political economy and Thomas Malthus's view that famine was a necessary corrective to overpopulation.

Keneally writes: "The religiously devout Trevelyan considered murder a great wrong. It is sobering, then, to think that the deployment of convinced, virtuous intent … and an intense belief in a providential deity, could be almost as destructive as the malignity of a dictator such as Mengistu Haile Mariam."

In the case of Bengal, Winston Churchill shoulders much responsibility. As the Japanese were poised to invade India in 1942, he ordered the destruction of much of the Bengal fishing fleet and the stockpiling of food for the army, and was notably indifferent to the need for relief. The famine caused the largest loss of life on the British side during the second world war.

Independent India has not suffered great famines, and Sen has speculated that the real force for eliminating famine is the development of liberal democracy. Keneally is sympathetic, noting the suppression of democratic aspirations in all his three cases. Today's famine in Somalia can certainly be attributed to the collapse of government and the absence of democracy.

Students of famine necessarily focus their attention on the bad news story, where starvation recurs. It is easy to overlook the 100-year trend, which is the elimination of famine from western Europe and its near complete banishment from Asia. Of the twenty 20 biggest famines of the 20th century, in terms of loss of life, just one (Ethiopia 1983-85) occurred in Africa. The other 19 were Asian and east European. The worst was China in 1958-61, the most recent that killed more than a million was North Korea in the 1990s.

Two huge factors in reducing killer famines are Asian economic growth and improvements in public service technology and infrastructure. Better transport for food and primary health care have minimised the biggest killers during famines, which were epidemic diseases. However, famines still persist in an era of globalisation. Most now occur in Africa, kill far fewer people, and are often associated with intractable civil wars.

Keneally makes passing mention of famines in Russia, China, North Korea and contemporary Ethiopia, accusing the Ethiopian prime minister Meles Zenawi of being as much to blame as his predecessor. Notwithstanding the ugliness of Ethiopia's military operations against Somali opposition groups, surely Keneally is making an error here. Extreme poverty in Ethiopia is not the product of Stalinist policy but of the globalisation trap.

With its existing economic infrastructure and human capital, Ethiopia, like most African countries, simply cannot compete in a global market, but has been told by international economic orthodoxy to pursue policies aimed at doing exactly this. Although the heyday of doctrinaire structural adjustment and downsizing of the state has passed, western nations still preach the fundamentals of a single path to development, through integration into the global market. Is not the ghost of Trevelyan stalking Africa?

Alex de Waal is the author of Famine Crimes.


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