Tue, 11 March 2014
My guest on the Wonkcast this week is Scott Morris, a senior associate here at CGD and former deputy assistant secretary at the US Treasury, where he oversaw US ties with the multilateral development banks.
Scott recently led a study group of CGD colleagues and outside experts that reviewed G20 efforts to increase financing for infrastructure in developing countries. The group produced a short note proposing five new deliverables for the G20 on infrastructure finance.
Mon, 10 March 2014
The House Energy and Commerce Subcommittee on Energy and Power held a hearing recently on electricity access in the 21st Century. Todd Moss offered an international perspective, framing energy poverty as a serious and pressing development challenge.
Direct download: Todd_Moss_Testimony_on_Energy_Access_in_the_21st_Century.mp3
Category:general -- posted at: 3:32 PM
Tue, 25 February 2014
What role can biometrics play in aiding development? My guest this week, senior fellow Alan Gelb, explains why new biometric identification technologies may be the key to radically expanding the social, political, and commercial opportunities for people in the developing world. Biometrics, he says, make it possible to fulfil for people everywhere the right to a unique, personal identity.
Alan explains that there are three principle ways in which people can identify themselves. The first can be something that you have, like a driver’s license or credit card. The second is something you know, like a PIN or a password; and the third is something that you are, like a finger print or iris scan. Biometric technology relies on this third method in order to uniquely authenticate individuals—and the costs are plummeting.
Although biometrics are often associated with law enforcement and security, especially in the post-9/11 world, two upcoming conferences, the Third Biometric Summit in Miami in March and the Connect ID conference in Washington, D.C. later that month also will include discussions of a booming new market: providing individual identities to hundreds of millions of people in developing countries.
Biometrics “most rapid growth is in developing countries,” Alan tells me. “Increasingly the applications are moving from security and law enforcement to a variety of development programs.”
While having proof of identity is something many westerners may take for granted, Alan explains that the lack of identification is a major impediment for poor people in the developing world.
“There are probably about 750 million children, people under the age of 16, who do not have birth certificates, who have never been officially registered,” he says. “Some of these will catch up later through national ID programs but others will not.”
Not having identification prevents people from getting licenses of various types, opening bank accounts, registering property, and even from receiving services from the government. At a time when many people are concerned about governments hacking personal data, reading emails, and listening to phone calls, such unwilled obscurity might appeal to some people as an argument against the use of biometric identification.
While Alan acknowledges that such privacy concerns are legitimate, he argues they are not sufficient reason to discourage the use of biometrics to the benefit the poorest.
“It's very hard to argue that people at the bottom of the pyramid, and they almost always are at the bottom of the pyramid, should not have an ID on the grounds that ID may be abused,” he says. “Despite all the screams about ID, the ones who don't have it, who should be the most privileged by this argument, since they have the greatest privacy, are also the poorest. They have privacy only in the sense that nobody cares about them. They don't participate.”
Given the opportunity to receive identification, people line up. Alan argues that “there's a very strong lesson coming out of the comparative experience, which is that people will come forward, people are not afraid of technology, provided they think that it has something to offer them.”
Tune into the Wonkcast to hear more, including a discussion of the technical challenges in providing biometric identification at birth. And read Alan’s blog post in which he discusses some of the new trends likely to be hot topics at the upcoming biometric conferences in Miami and Washington.
Wed, 19 February 2014
Peace is breaking out on Capitol Hill? Can it be true? My guests this week, Tom Hart, the US executive director of the ONE Campaign, and Todd Moss, chief operating officer and senior fellow at CGD, discuss why President Obama’s Power Africa initiative and the complementary Royce-Engel bill have the potential to not only be a great success for Congress and the Obama administration, but also to radically transform the quality of life for the millions of Africans living without access to power.
Two thirds of people in African do not have any kind of modern electricity. For example, the average Ethiopian only has 52 kilowatt hours per year. While Todd had long been aware of these numbers, he says that they suddenly took on greater meaning for him when he went to buy a new refrigerator.
“I was in a store buying a new refrigerator and I noticed that my new fridge uses about 400 kilowatt-hours per year and I thought: this is crazy that my fridge would use more power than a person would.” Todd produced a chart that helped many people to better understand the extent of energy poverty in Africa.
Lack of modern energy in Africa touches every aspect of life from small entrepreneurs who are unable to grow their businesses to dramatic impacts on education and health.
“Not having electricity in Africa means kids can’t study after the sun goes down, so it impacts education, and something like 70-75% of schools don’t have electricity. It means moms cook on open fires inside their homes,” says Tom Hart. ONE has worked for years on the fight against AIDS, malaria, and other communicable diseases in Africa. Tom asserts that this has been crucially important work but adds: “More people die from the inhalation of toxic smoke fumes than from AIDS and malaria combined.”
Given these bleak figures, Tom and Todd say that they are encouraged by the Obama administration’s Power Africa initiative. They also agree, however, that complementary legislation, theElectrify Africa Act introduced by Congressmen Royce and Engel, includes adjustments that would set more ambitious targets and provide more efficient tools to meet them.
One such tweak involves modernizing policies governing the US Overseas Private Investment Corporation.
“They need multi-year authorization” and permission to retain a slice of their profits to increase staff levels and do more deals,” Todd explains. “They’re actually sitting on a lot of cash. They have paid profits back into the US treasury for thirty years, including about $250 million dollars last year. They’ve already got the capital and the systems in place for the investments. They just need the people to make that happen. I know that sounds very minor but that’s actually the main sticking point. “
Todd emphasizes that while limited staff is a significant obstacle to OPIC’s effectiveness in Africa, it is not the only obstacle. OPIC needs more flexibility to invest in fossil-fuel projects, including natural gas that Todd says are necessary to make rapid progress in bringing modern energy to Africa. The issue has become more pressing as several African countries are on the brink of oil and gas booms that will see them become energy exporters—even as their own populations lack for electricity.
“Given the current policies, OPIC would not be allowed to participate in natural gas power plants where Ghana would turn its own natural gas into electricity for its own people,” Todd explains. “We think that some flexibility for very poor countries—we’re not talking about letting OPIC invests in coal plants in Brazil—we’re talking about natural gas in poor African countries, they should be allowed a little extra flexibility,” he says.
I tell him that even a climate hawk like me finds such arguments persuasive. But what about Capitol Hill? Is this another good idea that will fall victim to a combative and stagnant Congress?
Tom is hopeful. “We have yet to have a bad meeting about [the Electrify Africa Act] on the Hill,” he says. “It has been introduced by leading Republicans and leading Democrats, and the House Foreign Affairs Committee, as well as the Africa subcommittees. It’s got 44 co-sponsors on both sides of the aisle. It’s quite tremendous when you see both Republicans and Democrats want to do something good and powerful, potentially transformative, that does not have a negative impact on the federal budget.”
Todd says he shares Tom’s optimism, viewing the Royce-Engel legislation as, “a very impressive and long-lasting legacy for the United States and for the Obama administration in sub-Saharan Africa which is after all, becoming increasingly important to us just at a time when we’re losing a lot of our influence in that region.”
Tune in to the full Wonkcast to hear from Tom what ONE volunteers will be doing over the next two weeks to help speed along this bipartisan, low-cost, and potentially transformative bill.
Mon, 10 February 2014
Development progress has traditionally been measured in terms of reductions in poverty and increases
in per capita GDP, that is, average income as calculated by dividing total income by the total population.
My guests on this week’s Global Prosperity Wonkcast, Nancy Birdsall and Christian Meyer,
argue that median income—the income at the middle of a country’s income distribution—is a better
measure. They join me to discuss their new working paper, The Median is the Message: A Good-Enough
Measure of Material Well-Being and Shared Development Progress. During the interview we discuss why
the median makes more sense (hint: something to do with inequality); why it hasn’t been used much
in the past (hint: data availability); and how it could be incorporated into the post-2015 development
I ask Nancy how she became interested in the median. “Almost 10 years ago, I did a paper where I
(initially) defined the middle class as the group around the median, and that’s how I discovered just how
low the median was. I realized that definition of the middle class didn’t make sense,” Nancy explains.
“We called it the ‘middle income group’ because it really wasn’t middle class by Western standards.”
In later works, Nancy identified (as opposed to “defining”) the middle class as those who have the
equivalent of at least $10 per day per capita. Last year, in a paper on Latin America authored with
Christian and Nora Lustig, she identified a group she calls the “strugglers” – people with
daily incomes between $4 and $10 who are well above the international poverty line but still vulnerable
to falling back into poverty.
This research, she says caused her to realize that although there are millions of people who’ve escaped
extreme poverty, half of the population of the developing world is still at $3 per day or less (about the
median for all people in developing countries today), and $3 per day is still very poor.
Christian explains that unlike per capita income, median income reflects differing levels of inequality.
If there are a few very rich people and many poor people, average income will be much higher than
the median income. If, on the other hand, income distribution is relatively less unequal, the difference
between the mean and the median will be smaller.
“The median provides a distribution-aware measure,” Christian explains. “Unlike the average, it’s aware
of the underlying distribution of wealth in a country, and using such a measure provides a simple sense
of income inequality.”
Nancy illustrates this with a comparison of Cameroon and China. Both have median daily consumption
expenditure of about $3.25 per capita,” Nancy says, even though China is far richer measured in terms
of average per capita GDP -- about 3.5 times richer than Cameroon. Right away, you know that income
inequality is higher in China, and that is in fact the case, with higher incomes in the coastal cities and
much lower incomes in the rural interior.
Inequality hasn’t only been rising in China. I note that Figure 11 from their paper (please insert the first
chart from 11) shows the growing divergence in the US between average income and median income
since the 1980s. I suggest that as the two measures have diverged, interest in the median as a measure
of social wellbeing seem to have grown.
Nancy confirms that rising inequality is part of what is driving this interest. Another factor, she says, is
increased data availability. “What’s changed over the last 10 years is the increase in household survey
data in developing countries,”Nancy notes. “Now we have increasing access to the entire distribution of
household consumption expenditures or income, which makes estimating the median possible.”
We also discuss the World Bank’s new sShared Pprosperity indicator Index,” which tracks the income
growth of the bottom 40 percent of the population, and why the median is likely to be a better overall
measure of development progress (listen to the Wonkcast for more on this!).
I end by asking Nancy how she would propose incorporating median income into the post-2015
development framework. She proposes that each country should set its own target for an increase in the
median income between now and 2030. “Because it’s a distribution-aware measure, it allows countries
to set goals without facing the kind of pushback around thinking of inequality as an outcome, when
everyone wants to focus on equality of opportunity,” she says.
Mon, 27 January 2014
What should the US and Europe do about the relative decline of their global influence? My guest this week, CGD senior fellow Charles Kenny, has a surprising answer in his new book, The Upside of Down: Why the Rise of the Rest Is Good for the West. His take? Embrace it.
“The opportunities of a wealthier world will also be far easier to grasp if the West stops trying to reverse the inevitable flow of its relative decline and moves to channel it instead,” he says.
“Rather than focusing on retaining or regaining top nation status on anachronistic measures of influence like aggregate output, policymakers should maximize America’s and Europe’s benefits from a richer, healthier, more educated, and safer world.”
Charles is an inveterate optimist whose previous book was titled Getting Better: Why Global Development Is Succeeding--And How We Can Improve the World Even More. In theUpside of Down he addresses fears that the rapid rise of the developing world will diminish not only the influence of the US and Europe but also the quality of life.
To the contrary, he argues, life can get better even as national status as measured in aggregate GDP is eclipsed by rapid growth in China, India, Brazil and elsewhere. Charles background—his mother is American, his father British—leads him to see a wider lesson in the UK experience.
“The US will lose some global influence, as China’s GPD overtakes it, maybe as India’s GDP overtakes it; but Britain has much less global influence today than it had at the height of the British Empire and it’s also just a much nicer place to live.”
The key to adjusting gracefully to relative decline lies in what might be called good global citizenship: pursuing policies that are fair to people in the developing world and ultimately better for people in the wealthy countries, too.
Many of Charles’s examples concern US policies, though he notes that the same approach applies to Europe as well.
Too often, he says, narrow, short term interests predominate, while a broader, longer-term perspective would support policies that are good for Americans and for everybody else, especially in a world where the US is no longer No. 1. Among the topics we cover: US migration policy, intellectual property rights, and tobacco exports.
In the second half of the Wonkcast we move onto a discussion of climate change. Charles is quick to acknowledge that there are legitimate fears that the “rise of the rest” that he celebrates throughout his new book “may toast the planet.”
But here, too, he sees reasons for hope: developing countries, he says, are moving more rapidly than the West to address climate change.
“The largest producer and consumer of solar in the world is China,” Charles notes. “The percentage of people willing to give up money to help the environment is twice that of the US. There is reason to believe that developing countries are taking this stuff more seriously than we do now.”
We end with a discussion of the role of money in politics in the US—a key element in my view in the predominance of the short-term, narrow thinking that too often drives US policies at home and towards the rest of the world. Charles manages to persuade me that this, too, is not entirely hopeless. Our conversation is just the thing you want to listen to if you are feeling discouraged about the state of the world.
Mon, 13 January 2014
Are pay-for-performance aid programs such as Cash on Delivery Aidmore vulnerable to corruption than traditional input-focused programs? My guests this week, senior fellows William Savedoff and Charles Kenny, argue in a new new working paper and brief that the opposite is true.
Mon, 6 January 2014
As the fourth anniversary of the massive, January 12, 2010, earthquake in Haiti approached, I
invited CGD senior fellows Vijaya Ramachandran and Michael Clemens, experts respectively
on disaster relief and labor mobility, to join me on the Wonkcast to discuss the role of outsiders
in trying to assist Haiti’s recovery. The record is not reassuring on either count. But it does offer
valuable lessons for future efforts in Haiti and for attempts elsewhere to help poor countries
struck by disasters.
Vijaya’s research on Haiti found that in the aftermath of the quake there was an outpouring of
international support, with some $6 billion in public and private contributions from the United
States alone. Vijaya explains that such a large sum, if distributed directly to citizens, would have
doubled the income of the average Haitian for a year. But reconstruction has been painfully slow
and there has been little sign of improved living conditions. What happened to all that money?
“Nobody knows,” Vijaya says. “There is so little tracking of what happened to these funds.
We know from the available data that money was disbursed to organizations in the US and
elsewhere--nongovernmental organizations, for-profit organizations, some public organizations,
including various agencies that were implementing programs in Haiti--but after that the trail goes
Much of the relief and reconstruction money initially passed through USAID, the leading US
development agency. USAID reports on disbursements to its primary contractors but these firms
and NGOs typically then subcontract to others. And while the primary contractors are required
to collect data on their subcontractors’ activities, they are not required to disclose it. Usually they
don’t--and neither does USAID.
“The information is likely somewhere in USAID’s system, but it’s not being aggregated or
released in any understandable way to the public,” Vijaya says.
This way of doing business is increasingly at odds with a global push for greater transparency,
including in foreign assistance. The International Aid Transparency Initiative (IATI) has created
an online toolset that makes it easy for aid donors, NGOs and for-profit contractors to disclose
their activities on a common platform in a consistent digital format.
Vijaya explains: “IATI basically creates a very simple accounting format where different
organizations can report what they’re doing. And this format is standardized, so we can
compare what one organization, say Save the Children, is doing in comparison to Oxfam … and
these organizations themselves can see what the other players are doing.” Subcontractors can
use the system just as easily--and likely would if USAID encouraged them to do so, Vijaya adds.
“There’s no reason why this data cannot be uploaded quickly and easily,” she says.
The issue is not going away. Vijaya and I recall how after Typhoon Haiyan devastated the
central Philippines last November a blog post that she wrote with Owen Barder urging the
United States and other donors to be transparent about their assistance received thousands
of Facebook likes from Filipinos in the Philippines and overseas. The Philippine government
launched its own Foreign Aid Transparency Hub (FAiTH) and is looking to the United States and
other donors to support this effort by disclosing more detailed data on their own activities in the
Of course, aid can only do so much. Michael Clemens argues that the benefits of increased
labor mobility potentially dwarf aid, in Haiti, the Philippines, and elsewhere.
After a short break I turn to Michael to discuss the potential for increased labor mobility to raise
incomes and reinforce recovery in Haiti. It’s an issue on which he has been actively involved, as
one of the world’s top researchers on such questions and as a policy entrepreneur, pushing for
Haitians to receive the same opportunities that many other poor developing countries have to
send temporary workers to the United States.
Increased labor mobility for Haiti “could help enormously,” Michael says. “Something like 10
percent of Haitians live outside Haiti, and about a quarter of the economy in Haiti is sustained by
people sending money home, so really a huge feature of the economic landscape.”
The United States did slightly modify migration rules for Haitians after the quake: those already
in the country were temporarily protected from deportation. But Michael discovered that Haiti
was not included on the list of countries eligible for temporary work permits known as H2 visas,
which allow people to work in seasonal agriculture and service industries, such as tourism.
Under Michael’s leadership, CGD pushed for Haiti to be included.
“We recommended to the Department of Homeland Security that they undo that ban and allow
Haitians to access these visas,” Michael explains. They did that, but since then, nobody has
taken the next step of building a program that would allow Haiti to really use this program for
The next step Michael refers to would be the creation of a guest-worker program, similar to
successful programs in New Zealand and Canada, that help to ensure mutual benefits through
activities such as pre-departure training, collaboration and information sharing, and selection
of workers. In the absence of a broader national program, Michael suggests a US-Haitian
partnership that could effectively and cheaply help Haiti recover and grow its economy.
Such a partnership, he says, should include Haiti's labor ministry; an international organization to provide technical assistance, showing Haiti
how other countries manage such programs; and private sector recruiters to recruit, train, and monitor the workers.
Michael estimates that such
a program, which could unleash hundreds of millions of dollars in remittances from Haitians
working in the United States, could be set up and run for less than a million dollars. That’s less
than a tenth of one percent of foreign assistance provided to Haiti since the quake.
We end the discussion concluding that there are two “stroke of the pen” changes that could
make a world of difference to Haiti, even four years after the quake. 1) USAID Administrator Raj
Shah should announce that primary contractors are strongly encouraged to begin using IATI to
disclose data on subcontractor activities and 2) a philanthropist involved in trying to help Haiti
should step forward to sponsor the creation of US-Haitian labor mobility partnership.
Mon, 2 December 2013
My guest on this week’s Global Prosperity Wonkcast is CGD senior fellow and director of the Rethinking US Development Policy program Ben Leo, here to discuss his new CGD working paper, Is Anyone Listening? in which he examines how well US foreign assistance aligns with the priorities of people in recipient countries. Answer: not so much or, as Ben puts it more diplomatically: “the alignment is modest at best.”
“It depends on the country, it depends on the region, but there are some major African and Latin American countries where very little of US assistance focuses on what people care most about,” Ben says. Like I said, not so much.
“This project has been kicking around in my mind for quite a while,” Ben explains. It began with discussions about the appropriate post-2015 development goals to follow on the Millennium Development Goals.
“I’d be asked, ‘what do you think the next MDGs should be?’ And I’d always say, ‘it doesn’t matter what I think. Ask ordinary people what they care most about and let’s have that be the working basis for the new goals.’”
“And whenever I’d say that people would respond, ‘well, they’re going to say health and education.’”
Ben thought this might not be the case. Using public attitude survey data from Afrobarometer and Latinobarometer he analyzed what people identify as their top priorities by country and region. Surprise: overwhelmingly the top concerns of people in both Africa and Latin America are jobs and the economy, along with infrastructure in Africa and crime in Latin America. US assistance, meanwhile, goes mostly for health and education, issues that rarely score as top priorities.
Mon, 25 November 2013
News from Warsaw on the just-concluded 19th round of global climate talks suggests that there has been little progress towards a binding agreement on either cutting emissions or paying the rising costs of climate change. Nonetheless, even without a global agreement requiring them to cut emissions from power plants, which account for about a third of the problem, 130 countries have set renewable energy targets. Some of these targets are quite ambitious.
Ambitious renewable targets are great but sun and wind are only available in particular places and fluctuate depending on by time of day, weather, and season. As the share of renewables in a power grid increases, this intermittency problem gets worse: you may have extra power when you don’t need it and not enough power when demand is high. Overcoming intermittency usually requires additional back-up capacity—such as natural gas plants that can be fired up at short notice—raising total costs.
In this week’s Wonkcast I discuss this problem with CGD visiting senior associate Kevin Ummel and explore with him his ingenious, data-intensive solution. Kevin’s plan for making large-scale wind and solar power a reality begins with a simple insight: by taking into account spatiotemporal characteristics of wind and solar—where and when the wind blows and the sun shines—and matching this information against the where the power is needed, the location of the grid, and daily and seasonal fluctuations in demand, it is possible to build renewable power facilities in places that will minimize intermittency, thus reducing costs.
While the concept is simple, execution of such planning is hugely data intensive and devilishly complex. Kevin is well-suited for this task, having among other things overseen the development and roll out of CGD’s Carbon Monitoring for Action (CARMA) website, the world’s only comprehensive source of information on the location, ownership, and emissions of the 60,000 power plants around the world the 20,000 entities that own them.
To demonstrate the his spatiotemporal approach, Kevin applied these techniques to South Africa, which has committed to an ambitious renewables target: wind and solar power to provide 20% of generating capacity by 2030. His paper, Planning for Large Scale Wind and Solar Power in South Africa: Identifying Cost Effective Deployment Strategies Using Spatiotemporal Modeling, shows why such planning is critical and, for those with the data and modeling skills, a handbook on how to proceed. For the less technical among us, including people like me and presumably many policymakers and government planners, his CGD brief provides an overview of the process and a concise seven-point plan on how to proceed, starting with step one:
Determine wind and solar resource levels and identify geographic areas suitable for potential project or transmission siting. The latter should consider technological, economic, environmental, and sociopolitical constraints through consultation with stakeholders.
Sounds easy, right? Kevin understands that this is easier said than done, and that it requires massive computing power. Fortunately, such power is now low-cost and widely available.
“We have lots of experience planning power systems with no renewables in them,” Kevin explains.
“I like to use the analogy of a Rubik's cube. Solving a traditional Rubik’s cube is like planning a conventional power system with fossil fuels and no renewables. Now, imagine I took that Rubik’s cube and modified 2-3 % of the squares so that they changed every few seconds, and then asked you to solve the cube so that you had solid colors on every side to achieve a maximum percentage of solid colors for a certain period of time. That's like planning a power system that has a low level of wind and solar power penetration. Now, imagine that I took the same Rubik’s cube and instead of just 2-3% of the squares changing colors, imagine 40-50% of the squares. Trying to arrange that in a way that maximizes the probability of having solid colors on all sides at any one time is like planning a high penetration wind and solar power system: very complex.
Complexity notwithstanding, Kevin thinks it entirely possible, given the large potential benefits, that countries will invest in initial spatial and temporal modeling to get an idea of which renewable energy technology makes sense, given their energy needs and geography.
“I'd like to see investors like the World Bank, governments, and energy ministries approach the power system planning problem the way a financially savvy person approaches retirement planning,” he says.
“The future is uncertain. We don't know what's going to happen with costs of technologies, but we should try to develop deployment strategies and transmission plans that leave open as many low-cost possibilities as we can, so that as we learn more we have the ability to go down those paths that make the most sense.”
I invite you to listen in on my conversation with Kevin. After the interview ended, I kept the recorder running in a post-interview chat that offered some surprising insights. With Kevin’s kind permission, we have added that as a bonus audio clip at the end of the Wonkcast.