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Biometrics, foreign aid, Africa, economics of resource-rich countries, growth and development, transition economies
Alan Gelb is a senior fellow at the Center for Global Development. His recent research includes aid and development outcomes, the transition from planned to market economies, the development applications of biometric ID technology, and the special development challenges of resource-rich countries.
He was previously director of development policy at the World Bank and chief economist for the bank’s Africa region and staff director for the 1996 World Development Report “From Plan to Market.”
The new World Bank Group Strategy posted this week for discussion by the Development Committee, the ministerial-level forum that oversees the World Bank and the IMF, provides a solid analytical foundation for what has so far been a messy and disjointed re-organization effort. The release of the paper coincided with a speech by bank president Jim Kim that covered much of the same ground, but the strategy paper digs deeper. For those of us who believe that the World Bank has a crucial role to play in addressing the problems of the 21st Century, there is much to applaud.
In response to our August 5 blog criticizing the World Bank’s current reorganization plans, a few readers wrote to ask us if we could come up with a better idea. This is a daunting challenge. We’ve heard that the Bank has spent millions over more than a year to generate more than 40 ideas about how to tweak the Bank’s organization and has intensively discussed three overarching ideas, for none of which we have actually seen a background paper – or even a PowerPoint. So with brains unfettered by facts, uncluttered by concept papers, bereft of briefings and emboldened by ignorance, here goes…
In the wake of Zimbabwe’s disputed reelection of Robert Mugabe, it is alleged that dead voters accounted for one-third of the voter rolls, that 63 constituencies had more registered voters than actual inhabitants even though 2 million potential voters under 30 went unregistered. The elections have left many asking if biometrics are the future of voting.
What exactly is privacy? As Bob Gellman points out in his new CGD paper, the concept changes from place to place. Scandinavian countries have strict privacy laws, but tax returns are public; the United States has no broad privacy laws, but tax returns are shield from public scrutiny. In some European countries, nude sunbathing is common; in some Muslim countries, women typically appear in public wearing garments that cover the body from head to feet. That’s all to say that privacy—and efforts to protect it—depend on context.
The World Bank is reorganizing. Bloomberg reports that president Jim Yong Kim has written staff about a shake-up at the bank’s highest levels in preparation for implementing an as-yet-to-be-announced new institutional strategy. Such can be unsettling for bank employees, some of whom will find their jobs on the line and others who may get new bosses. Is there any reason for the rest of the world to care?
Africa’s industrial progress has been disappointing. Part of the reason is that labor costs are higher than one might expect, given GDP per capita. Alan Gelb, Christian Meyer, and Vijaya Ramachandran distill the policy lessons.
Biometric identification is spreading rapidly across the developing world, where it is helping to close the “identification gap” that separates poor countries from rich ones. India’s Unique Identification (UID) project offers important lessons for other countries.
Senior Fellow Allan Gelb and Policy Analyst Julia Clark write a piece for The Guardian on how identifying people based on physical traits could benefit aid work, but caution over issues of privacy and fraud.
The following article orignally appeared in The Guardian.
Citizens of rich countries take official identification for granted. But many in poor countries lack robust IDs, or indeed any documentation at all. This "identity gap" has been an obstacle to inclusive development in many countries. But increasingly, governments and donors have turned to digital fingerprints, iris scans, and other biometrics to provide inclusive, secure and accurate identification for their citizens, from national IDs, to elections and social welfare payments. In a recent Center for Global Development working paper , we surveyed 160 cases where biometric identification had been used for such programmes in over 70 developing countries — cases which cover over 1 billion people!
Unlike paper-based systems, biometrics can reliably ensure uniqueness (have you already registered to vote?), authenticate transactions (are you the owner of this debit card?), and help create an auditable trail (did you already receive payment this month?).
Thus, as mobile technology has done for communication, biometric identification may allow developing countries to leapfrog past traditional paper-based identity systems.
But despite this potential, the technology is no guarantee of success. Concerns remain regarding privacy (though biometrics can improve anonymity when used in place of personal information like name, gender or address), cost and implementation. To date, there has been little empirical work on the effectiveness of biometrics for developmental purposes. Companies with proprietary technology have been reluctant to provide performance data. India's open standards may change this; its performance reports provide a benchmark for accuracy and inclusion that can be used by other countries. India's Unique ID programme now covers some 240 million people, and has contributed to the rapidly falling costs of the new technology. But many programmes are still in the early stages, and only a few of the 160 cases have had impact studies so far.
Still, it is possible to distil a number of important lessons and pitfalls from the information that is publicly available for existing biometrics programmes. In our paper, we identify important successes, risks and failures, and discuss the important role that donors — who already fund a majority of the surveyed cases — can play in identification strategies.
Examples of successes:
Biometrics has helped to promote development in certain cases, particularly with regards to increasing efficiency, improving service delivery and accountability, and allowing poorer countries to build sophisticated identification systems in a relatively short period of time. Biometrics can also facilitate inclusion for marginalised groups; a robust identifier can replace the need for extensive documentation (which the poor often lack) in many cases.
• In Nigeria, introducing biometrics into the federal pension system eliminated nearly 40% of the beneficiary roll. This not only increases efficiency and accountability, but has the potential to improve services (assuming the funds saved are redirected to other services).
• Bolivia was able to expand its voter roll to large section of the population previously absent from the political process.
• South Africa has been using biometric identification and electronic transfers and ATMs to distribute pensions and social grants for over 20 years.
• In Pakistan, an efficient national identification agency (NADRA) ensured transparent management of disaster relief funds by ensuring that only those affected by the 2010 floods received reconstruction payments through Visa cards.
Risks and challenges:
In certain cases, projects have failed to deliver due to problems with logistics, incentives and sustainability. In other countries, multiple agencies or donors control inefficient, incompatible systems that can't be integrated or scaled up. People who cannot provide biometrics (eg, those with damaged or missing fingers) may find it difficult to register, and others may be excluded if identification exercises define citizenship in an exclusionary way. Finally, ongoing concerns about privacy remain — though many cases indicate these are less than often assumed — particularly in countries with weak legal safeguards.
• Voter registration, for example, is a high-stakes activity that must often be done quickly. Though biometrics may seem ideal for providing clean electoral rolls, the hurried timeline can complicate procurement (as recently seen in Kenya) and compromise quality.
• A number of countries have a multitude of IDs, which overlap and cause confusion and waste. In 2006, Nigeria established a committee on harmonisation of national identity cards to address this issue. The committee identified 12 ongoing ID projects at the federal level, eight of which included biometrics.
• While completing a national identification project to include the undocumented in social protection programmes, the Dominican Republic simultaneously implemented laws that effectively stripped many individuals of Haitian descent of de facto, if not de jure, citizenship. This may be a concern in other countries with migratory populations.
Role of donors:
Donors have played a critical role in the rollout of identity programmes and technology, supporting at least half of the surveyed projects. Though critical, this support is often given without long-term strategies for identity management, resulting in fragmented or duplicate IDs. Beyond continuing to play an important demand-side role in the provision of identification, donors can also help set technology standards and bring together disparate parties and agencies to avoid fragmentation and create economies of scope and scale. Because biometrics make it easy to verify the number of unique enrollments, donors may also consider using output-based financing for identification.
Ultimately, there is no perfect system or approach to identification. What works in one country may not work in others, and what works in one local project may not work on a larger scale. Some countries (and regions ) have favoured a supply-driven approach, focusing on providing "foundational" identification (like civil registries and national IDs ) that can be used for many purposes. Others have strengthened identification for a particular service (like elections or social transfers) in response to demand. Like the US social security number, these "functional" IDs may later be expanded for other purposes. Both pathways offer advantages and disadvantages — but in both, incentives and capacity will dictate success or failure.
• For a fuller discussion of these cases, lessons and issues, see our paper .
Read it here.
The “identity gap” is large, but it’s closing. Over the past 10 years, developing countries from Afghanistan to Zambia—and the donors that support them—have begun to focus on identity systems. Some have sought to create or extend national identification to cover large populations that previously could not exercise basic rights or access services due to a lack of official documentation. Others have reformed government and NGO programs by creating robust identification to improve quality, increase accessibility and eliminate fraud.
The U.S. financial reform bill passed by the Senate today and now headed to President Obama for his signature will have far reaching impact on poor people in the developing world if it succeeds in reducing the severity of future financial crises. But even if it fails in this regard, a provision requiring oil, gas and mining companies registered with the Securities and Exchange Commission (SEC) to publicly disclose their tax and revenue payments to governments around the world could be a big boost for increased transparency in countries afflicted with what has come to be called “the resource curse.”
This week, I will be travelling to Beijing, China, with my CGD colleagues, Alan Gelb and Christian Meyer, to attend an authors’ workshop for the Oxford Handbook of Africa and Economics, at the National School of Development at Peking University. Alan, Christian, and I will discuss our new paper “Development as Diffusion: Manufacturing Productivity and Africa’s Missing Middle.”
Anyone doubting the speed of innovation in biometric ID should attend a conference on Identification. A major conference, Connect:ID, is taking place March 17-20 in Washington shortly after the 2014 Winter Biometrics Summit, March 3 – 6 in Miami. I recently participated in the ASPCA’s 10th Government Forum on Electronic Identity in Cambodia, as well as the 2012 Biometrics Consortium Conference in Tampa. These meetings always have a heavy commercial presence, both speakers from industry and presentations of new technology and shiny new products. They also include academics and government representatives, as clients and also as speakers, sharing experience and approaches to common identity-related issues.
For the policymaker looking to improve services and the delivery of benefits, or for the financial institution trying to expand its customer base, the gap between technical solutions and the situation of the average technology user represents fertile ground for the many new opportunities that the digital economy provides.