Thursday, July 29, 2010

The Democratization of Aid

Graphic from the World Bank's EVOKE game

This piece on Mari and the inspiration for GlobalGiving is great. It explains accurately and concisely the rationale Mari and I had when contemplating leaving the World Bank to start GlobalGiving.

The article explains, “But Kuraishi had spent years working to change the world with a top-down approach and saw its shortcomings as clearly as its strengths. The idea of top-down is that if you can effect change in governments and economies, then you’ll naturally reduce poverty and improve lives. And while that approach works, Kuraishi decided there was also room for a bottom-up approach—especially in countries with weak or corrupt governments. ”

Indeed, when we left, that was the idea–an alternative model that would grant access to funding and markets to people and communities that were otherwise left out, whether because their government was too corrupt or they weren’t established enough to acquire high-level grants with big institutions like the World Bank or USAID.

That was and is our vision. But, as the article documents, our vision is also expanding with our success.

Tara Swords writes in the article, “Eight years later, the organization has raised US$29 million for grassroots charity projects in more than 100 countries. Perhaps Kuraishi’s former World Bank colleagues should reconsider.”

I won’t lie. I smile every time I wrap my mind around the extent of our growth and success (2,800 projects now funded, in fact). And you might wonder what thoughts cross my mind when I read thoughts like “Perhaps Kuraishi’s former World Bank colleagues should reconsider.”

What runs through my mind is hope.

Because our success indicates that this model is working, and will continue to work.

But what makes me even more hopeful is that as I realize the effectiveness, potential, and power of our model–now tested for eight years–I’m increasingly aware of the possibility that GlobalGiving will not only serve as an add-on to traditional aid structures, but actually can serve as a model on which to base their work.

My hope is grounded in reality.

The World Bank’s Urgent Evoke project, for example, is a brilliant concept that puts development entrepreneurship into the hands of, well, anyone. And next month, they’ll be working with us to launch the funding component where the best, brightest ideas will have a shot at the GlobalGiving marketplace.
But the impetus and the seed money for this huge undertaking came from the World Bank.

This initiative is new, innovative, and smart. Not your standard World Bank funding fodder. I commend them for this type of open-access initiative.

I also admire their documentation of best practices and lessons learned, including what hasn’t worked. That’s brave and serves as powerful learning for the entire development community–exactly how it should work.

There are other hopeful signs out there of a shift in aid–that’s it’s moving, albeit slowly, to recognize that the true potential for change lies within the people and communities who are affected by the world’s problems, and not necessarily the people who write the most effective grant proposals.

So, when I hear others comment on our success, I’m hopeful. We no longer want to just be the guys who left the World Bank. We want to be part of a larger community of people dedicated to the democratization of the aid process. And it’s happening!

Traditional Evaluations are Not Scalable

It’s a standard trope of this blog to point out that there’s no panacea in global development. That’s true of impact evaluation, too. It’s a tool for identifying worthwhile development efforts, but it is not the only tool.  We can’t go back to assuming that good intentions lead to good results, but there must be room for judgment and experience in with the quantifiable data.
That is Alanna Shaihk guest blogging at AidWatch.   She describes two limitations to evaluation discussed by Steve Lawry of the Hauser Center at Harvard.  Excessive reliance on evaluation, Lawry says, stifles innovation and artificially constrains aid agencies to initiatives that can be easily measured with data.

I would add a third limitation.  Formal evaluations, including the gold standard of randomized controlled trials, are not scalable.  We simply do not have the time and resources to do centralized, in-depth evaluations of everything.  The only way forward is to establish a decentralized, implicit form of evaluation in which beneficiaries and other stakeholders can provide feedback about quality and relevance of aid projects.

This is how markets work.  The magazine Consumer Reports does a great job of evaluating products.  But it evaluates a miniscule proportion of all the products produced each year in the economy.  So who evaluates the other 99.9999% of products?  The consumer.  If the consumers buy a product, it keeps getting produced.  If not, it doesn't. Does this system work perfectly?  Of course not.  Does it work better than any alternative we have found?  By far.

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Wednesday, July 28, 2010

Where breakthroughs come from

Image via CrunchBase
Steve Jobs was asked years ago about how he planned to compete with the Wintel monopoly. He said, "I'm going to wait for the next big thing." He didn't say "I'm going to personally create the next big thing." Neither iTunes nor the iPod was his idea. The iTunes idea came from a small company calledSoundJam MP, and the genesis of the iPod was a design inside the head of Tony Fadell, a tech consultant who went to work for Apple. Steve Jobs's brilliance was in keeping his eyes open for the ideas, recognizing the moment, connecting the dots, and "creating" iTunes and iPod as a system that worked together, adding Jonathan Ive's designs, and marketing it all brilliantly. He wasn't sitting at his desk banging his head against the wall trying to force an idea out of the universe.
That is from a very nice (and personal) post about creativity by Dan Pallotta on the HBR blog.
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Friday, July 23, 2010

Transparency as opportunity

When it rains, it pours...

DfID announced in June that it is going to make its aid fully transparent to citizens in the UK and recipient countries. This was followed in July by the IATI meeting, where participants agreed to provide more responsive, detailed and transparent information about aid programs. And literally a few days,  later SIDA, Sweden’s official aid agency, committed itself to this transparency movement.

SIDA sees this not only as a defensive move (“today’s reality” of demands for accountability) but also as an opportunity: a major goal is to: “to promote fresh thinking and harness the knowledge that exists in different parts of society.”

As I have said before, the devil is in the details, but it is encouraging to see SIDA commit itself to this.  How long will it take other agencies to get on board?
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Monday, July 19, 2010

If We Show Them, Will They Care?

Participants in this month’s International Aid Transparency Initiative (IATI) meeting in Paris agreed to provide more responsive, detailed and transparent information about aid programs.  Will it make a difference?

As Owen Barder, who attended the meeting, acknowledges, changing organizational infrastructure and culture will not be easy. However, transparency is important for development projects because their effectiveness *might* improve if each aid agency knows what the others are doing, recipient governments can see the whole picture, and public watchdogs can hold them all accountable.  

Why do I say *might*?

We are increasingly awash in information.  Information availability used to be the binding constraint. But now we are on the brink of information overload, and the constraint is increasingly usability and incentives rather than availability.

Over the fifteen years I spent in the official aid sector (primarily at the World Bank, but also at USAID and the Asian Development Bank), I worked on millions of dollars of initiatives designed to increase the availability of information about aid projects.  In Indonesia, we did a giant database of all the coconut, rubber, and palm oil projects being funded by the various aid agencies.  In Russia, the G-7 was so concerned about poor aid coordination and duplication that they ordered the Bank to create a database of everything that was happening.

What was the net result of these initiatives?  Nada.  No change in behavior.  In each case, we made a Herculean effort to get the data into the database and distributed, but to my knowledge no agency changed what it did or how it did it.  And in both cases, the database efforts collapsed after about six months - both from lack of use as well as lack of incentive for anyone to provide the data.  

While I don’t have hard and fast data, I would guess that about 80-90% of information initiatives fail to achieve their intended effects -i.e., fail to change behavior so that some underlying phenomenon is improved.  For these initiatives to work, they require a combination of factors - the right information, gathered from the right sources, displayed through the right user interface, to the right people, at the right time.  Will the participants at the IATA meeting get all these right?  Are the right incentives in place?  Stay tuned...
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Monday, July 12, 2010

Democratizing Development: Hayek, Easterly, and Roberts Edition

Easterly makes two points about the search for solutions or at least things that might help poor people live better lives. One is that solutions are often proposed in isolation and are unlikely to work in isolation. Second, any solution that is going to work is likely to come from the use of local knowledge or at least dispersed knowledge rather than some expert who proposes some solution from the outside without local knowledge. These are both Hayekian insights.
That is from a nice post by Russ Roberts on an entry by Bill Easterly titled "The answer is 42! Why Development is not about solutions, it’s about problem-solving systems."

Taken together, these two posts provide much of the theoretical underpinning of the approach we are pursuing at GlobalGiving, to wit:  There are no universal panaceas, only solutions that work in specific places at specific times.  We want to help lead the formation of a marketplace (in the broadest sense, not just our own online marketplace), that effectively intermediates demand (for solutions) and supply (of money, networks, and expertise).

In such a market, there are rich information flows that go far beyond simple transparency.  Such a market generates information about what local people want (not what experts think they should have), about what approaches can meet those demands, and about whether ongoing initiatives are working - and how they could be improved.  All voices - regular citizens as well as experts - are heard and considered. This market is iterative - needs and solutions change over time based on both learning and shifting conditions.

Such a market subsumes but goes beyond aid itself.  It is part of a larger system of democracy.  It is the Democratization of Development in the fullest sense.  We are far from achieving it, but we are making progress.  As I have written here and here, the question is whether the official aid sector is going to help lead the charge or is going to be left behind, slowly fading to irrelevance.
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Aid Transparency: First the UK, Now the US?

This guest post is by Felipe Cabezas, who recently joined GlobalGiving.

DFID, the UK’s aid agency, recently committed itself to an Aid Transparency Guarantee, which will allow donors and beneficiaries to view aid spending and will increase aid effectiveness via beneficiary feedback.

 Holbrooke with Pakistani Foreign Minister Shah Mehmood Qureshi
In a letter to Senator John Kerry, Ambassador Richard Holbrooke echoed DFID’s statement. In reference to USAID’s work in Pakistan, he wrote that “[John Kerry’s] suggestion of providing more information about our efforts on the Internet is a good one, and we plan on putting more information on the USAID and Embassy websites as our plans become more concrete.”

It is great that USAID’s Islamabad mission is signaling a greater commitment to aid transparency, and hopefully it will consider the Center for Global Development’s suggestions when updating its website.

But USAID should not stop at Pakistan. It should provide the public with greater insight into its activities worldwide, thereby making the entire organization – not just one part – transparent.

DFID has already introduced a new kind of official aid agency: one that broadcasts its work and uses beneficiary feedback to improve its programs. If USAID embraces this model, it will join DFID as a leader in this “new age” of official aid.

Which other official aid agencies will follow?
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Wednesday, July 07, 2010

Corporate and International Giving Hold Up in Tough Times

It is no secret that the tough economic times have taken a toll on Giving in the US. Total giving fell by a total of over 5% in inflation-adjusted terms over the past two years.

The biggest decline came from decreases in foundation giving (over 7%), which should make them feel ashamed, since they are supposed to be cushion rather than exacerbate the effects of tough social and economic conditions.  

By contrast, giving by corporations was down less than average (only 4%) over these two years.

Source: Giving USA 2010
What is particularly impressive is that giving to international causes actually ROSE 7% over the past two years.  This is due partly but not entirely to the Haiti crisis.  I hope it also reflects a larger trend of Americans engaging more in the world around us.