The hidden reason for poverty the world needs to address now

Collective compassion has meant an overall decrease in global poverty since the 1980s, says civil rights lawyer Gary Haugen. Yet for all the world's aid money, there's a pervasive hidden problem keeping poverty alive. Haugen reveals the dark underlying cause we must recognize and act on now.

A third way to think about aid

The debate over foreign aid often pits those who mistrust "charity" against those who mistrust reliance on the markets. Jacqueline Novogratz proposes a middle way she calls patient capital, with promising examples of entrepreneurial innovation driving social change.

When Does Aid Foreign Work?

The policy debate around whether foreign aid—now $138.5 billion a year—works has been polarized between the “Oh yes it does” camp and those who respond “Oh no it doesn’t.”  Claims that aid is responsible for impressive improvements in human development over the past couple of decades are clearly not credible. Yet, equally difficult to sustain are claims that aid has been entirely useless. It’s more useful to ask when aid works, not whether.

Scholarly studies have been doing just that for at least a decade.  Andy Summer of Center for Global Development and Jonathan Glennie (director of policy and research at Save the Children) thought to take a look and review the state of thinking on aid effectiveness. Specifically, they looked at the cross-country, peer-reviewed, econometric studies that focus on assessing if or under what conditions aid is effective in achieving its stated outcomes, particularly those related to economic growth or social development. The resulting CGD Policy Paper is here.

The paper focuses on aid effectiveness. It considers peer-reviewed, cross-country, econometric studies, published over the last decade in order to propose areas with policy implications related to the conditions under which aid is more likely to be effective.  

They discuss the nature of evidence on aid and why assessing its impact is so difficult. They attempt to make some global-level generalizations, with caveats, on when aid is most likely to work, as opposed to just whether aid works or not. 

KEY FINDINGS

First, aid levels: aid is more likely to work in the correct dosage but is ineffective if too high or too low.

Second, domestic political institutions: aid is more likely to work if the institutions are in place—for example, political stability and not too much decentralization.

Third, the aid composition: aid is likely to be more effective in certain sectors and aid objectives and time horizons matter a lot.

Fourth, aid predictability and concentration: aid is likely to be more effective if it is not volatile and fragmented.

And finally, two big unknown areas where there is little convergence in the evidence:

The first is that aid supports growth when the recipient country is implementing certain macroeconomic policies generally described as ‘good’ or orthodox policies. 

Second is that there is no consensus that grants are better than loans (or vice versa) for aid effectiveness. 

Read the paper for conclusions...

Human decision making and development policy

The World Bank has just released a new world development report 2015 entitled Mind, Society and Behavior.  The focus is on behavioral economics.  As an Economist commentary points out (link), these insights apply with great force to the poor—both the poor in rich countries and the more numerous inhabitants of developing ones. Behavioral economics therefore has profound implications for development. 

The new “World Development Report”, the flagship publication of the World Bank, considers them.

As the report shows, the poor are more likely than other people to make bad economic decisions. This is not because they are irrational or foolish but because so much is stacked against them. They are more likely to lack the basic information needed to make good choices, such as which fertilizer to use or when to apply it. They are more likely to live in societies which hold mistaken or harmful views, such as that girls should not go to school.

The full report may be downloaded here.

Cutting-edge Practices that Measure Results

A Forbes Summit meeting focuses on how technology and advanced metrics are changing philanthropy as fundamentally as baseball and Wall Street.  They call this Moneyball Philanthropy.  This panel focuses on education.

What are the cutting-edge practices that measure results and increase efficacy?


 
Researchers from Columbia University and the Robin Hood Foundation, an anti-poverty group, are trying to get a more nuanced picture of what it means to be poor and struggling. They're following 2,300 New York City families over two years, asking detailed questions about their finances, their hardships and their responses.  Listen to the short NPR story below:
 

THE iCOW APP

Su Kahumbu is an agriculturist and social entrepreneur who created iCow, an app that spreads seeds of information via text to farmers seeking bountiful and sustainable harvests.

See more Africa innovations linked here.



Problem: Small-scale dairy farmers often living in remote areas don't have access to valuable information about latest prices of milk or cattle, and they may not keep accurate records of important details such as their cows' gestation periods or their livestock's lineage – often resulting in inbreeding and disease.

Method: Created by Kenyan farmer Su Kahumbu, iCow is an app that works on the type of basic mobile phones farmers own. Each animal is registered with the service, which then sends SMS reminders to the farmer about milking schedules, immunisation dates and tips about nutrition and breeding or information about local vets or artificial insemination providers. 

Rwanda poised to become the performance improvement hub in Central Africa

Rwanda is on the move. It’s one of the only countries expected to meet the Millennium Development Goals by 2015, and is already a leader on the continent in the areas of health care and economic growth. The successes are remarkable, but in order to be sustainable over the long term, Rwanda’s local institutions have to be healthy and high-performing.

To help Rwanda achieve the sustainability it desires, the USAID-funded Human and Institutional Capacity Development project supports the country's government institutions and civil society organizations using the internationally recognized Performance Improvement (PI) approaches to demonstrably improve performance. The approaches include rigorous assessments of organizational needs and developing solutions to help organizations create a strategic vision, strengthen communications and internal systems, and better prepare for and adapt to challenges and changing circumstances.

Building Sustainable Performance Improvement Through a Community of Practice

The project seeks to institutionalize PI approaches within Rwanda’s government and private sector, and has established a community of practice for professional Rwandan consultants seeking to incorporate the tools and processes into their work. Beginning in 2013, the project provided intensive training to 60 consultants through a series of targeted workshops. It also provides coaching and mentorship, and offers paid internships to qualified local consultants to use their new skills and help the project conduct performance analysis.

“The HICD project represents one of USAID’s core priorities, which is to support public institutions to operate in an effective and inclusive fashion, and that civil society is equipped to advocate effectively on behalf of individuals and communities in Rwanda” said Emily Krunic, Democracy and Governance Office Director at USAID/Rwanda. “This training and certification of local organizations will make sure Rwanda has the skills to strengthen its own organizations into the future.”

Rwanda Poised to Become the Largest CPT Resource in Africa

In the first quarter of this year, the project launched a preparatory course for Certified Performance Technologist (CPT) certification under its Human and Institutional Capacity Building (HICD) project. The workshops offered Rwandan consultants and organizations the opportunity to become officially licensed in the field of organizational capacity building through the International Society for Performance Improvement (ISPI).  Recently completed over the course of 8 weeks, the trainings introduced participants to the 10 Certified Performance Technologist standards, including a focus on results, taking a systematic view, adding value, and building productive partnerships with clients and stakeholders. The HICD project provided course fees.  Currently a number of the participants are completing the ISPI application. If qualified, they will earn CPT certification. 

This initiative is a collaborative effort with representatives from the National Capacity Building Secretariat (NCBS), local government officials, as well as private sector leaders, and more than 55 high-level Rwandan consultant members of the HICD project’s Community of Practice.  The vision is that Rwanda will soon become the most highly CPT-certified country on the continent, and thus a regional resource.

"We’re very excited to be partnering with NCBS on this activity. The HICD approach to performance improvement is closely aligned with Rwanda’s drive to achieve measurable performance improvements, and NCBS is the right institution to bring the approach to the private and public sector” said John Palmucci, Chief of Party of the HICD project.

Currently, there are very few African professionals certified by ISPI. With three Rwandans already certified through the HICD project, Rwanda is among the continent’s leaders. This training aims to put several more on the path to certification – ultimately making Rwanda the most highly CPT certified country in Africa. 

The project, through these and other training, aims to create a ‘Community of Practice’ in the field of organizational capacity building, creating a critical mass of local professionals available and certified to guide organizational development in both the public and private sectors. Once certified, the participants will join a community of more than 700 experts across the globe in performance improvement, and will be resources not only for Rwanda, but also for the continent.

Rebecca Ruzibuka, a member of the community of practice, was one of the first consultants to join the trainings and earned an internship to assist three civil society organizations. Throughout the training, project staff mentored her on the CPT application and, in October 2013, she became the second Rwandan CPT. Since then, the approach has gained momentum in Rwanda. As proof, Ruzibuka was recently named the 2013 Female Consultant of the Year by the Rwanda Organization of Professional Consultants (ROPC).

Ruzibuka has gone on to assist other community of practice and ROPC members with their CPT applications, and to share her experiences.  "I enjoy being an ambassador for HPT and performance improvement in Rwanda," says Ruzibuka. “I was lucky to be one of the early adopters of this approach, and I feel responsible to share it to help Rwanda develop and grow, and to improve the professionalism of the consulting industry here. I also appreciate that my use of HPT approaches contributed to my being selected as [female] Consultant of the Year."

“At this point, Rwanda has more CPT-trained people than any other country in Africa,” said John Palmucci, who oversees the HICD/R project in Kigali. “We want to make Rwanda a resource center so consultants can travel to other countries to support regional development”.

ISPI Rwanda Chapter Launched

On May 29th, USAID/Rwanda HICD, along with the Rwandan Organization for Management Consultants, sponsored a kick-off event for the emergence of an ISPI Rwanda Chapter.  Over 100 people attended the meeting as potential members, and 10 senior Rwandan business leaders and consultants volunteered as a temporary steering committee to manage the formation of the chapter with the goal to have board elections within 6 months.  Energy and interest is high.

Klaus Wittkuhn, ISPI President-elect, visited Kigali to represent ISPI President Mary Ellen Kassotakis and the Board for the ceremony and reception.   “I think that especially in a country like Rwanda, performance improvement really forms a pillar of development for the country,” Wittkuhn said.  Improving work performance, he explained, solves an institution’s productivity problem in a low-cost, efficient way that can lead to concrete gains in work output and citizen satisfaction.

“Performance improvement has already made great strides in Rwanda”, said Steven Kelly, a past board member of ISPI and the senior HICD expert supporting the HICD/R efforts.  He cited the Ministry of Agriculture as an example, where a team is currently improving work performance within the policy area and financial management system.  “We identified critical areas of institutional deficiency, and have implemented a comprehensive package of interventions addressing information flows, knowledge enhancements, incentives, procedural processes and job aids ” he explained.

Palmucci said Rwanda has the unique potential to be an example to other African countries who want to implement similar programs. 

The chairman of Rwanda’s Organisation for Professional Management Consultants, Vianney Makuza, agrees, saying the start of the ISPI chapter is the first step in making Rwanda a regional center.

In his enthusiastic welcome speech, Makuza stated  “ As religious people in Rwanda we follow the 10 commandments to guide our life.  And now, going forward, we use the ten ISPI standards to direct our professional efforts”.