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Biometrics, foreign aid, Africa, economics of resource-rich countries, growth and development, transition economies
Alan Gelb is a senior fellow and director of studies 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 post-2015 development agenda is being shaped as we speak. The United Nations has recently released a report that synthesizes the full range of inputs received from various stakeholders. These inputs, including ones from the World Bank Group, are a substantive contribution to the intergovernmental negotiations in the lead up to the September 2015 Summit that will officially launch the new Sustainable Development Goals (SDGs) agenda.
Originally published in October 2013 and updated January 2015
Food security has arisen again on the development agenda. High and volatile food prices took a toll in 2007–08, and in many low-income countries agricultural yields have risen little, if at all, in the last decade. Moreover, food production in these poor countries is especially vulnerable to climate change. Meeting this demand is a global challenge. The Food and Agriculture Organization of the United Nations (FAO) is expected to lead the way in meeting this challenge and, with the arrival in 2012 of the first new director-general in 18 years, it has an opening to restructure itself to do so.
Countries have traditionally invested their sovereign wealth in securities of major markets able to provide dependable returns and macroeconomic stability, but some are now investing more sovereign wealth domestically because of diminished returns in major markets and new investment opportunities at home.
India's inability to deliver public services remains its Achilles’ heel. Without a solution to this critical weakness, India's aspiration to be a global economic power will remain unrealized. Why is this problem so particularly acute in India? Is it political interference and corruption, poorly designed programs, weak administration, and over-centralization, or is it a much deeper cultural problem of aversion to collective action?
What does the empirical evidence tell us? What are the examples of successful experiments within India of effective service delivery and what lessons can be drawn from these? What can India learn from other countries? Ajay Chhibber will draw on these questions to explore directions for change so that India can deliver.
These recent developments in identification, combined with rising mobile phone ownership, broadening Internet access, and innovative payment delivery mechanisms, can be harnessed to transform the way states implement poverty-reduction programs and improve the lives of their citizens. Digital payments promise faster, more transparent, and lower-cost delivery for existing cash-based government transfers, and can also transform the way governments deliver subsidies. In a new background paper, Dan Radcliffe reviews the evidence on the gains from digital payments and pinpoints four ways in which they can improve development outcomes.
The International Development Association (IDA) is the World Bank’s arm that provides highly concessional loans and grants to the world’s poorest countries. IDA is one of the largest sources of assistance for these countries – of which, half are located in Sub-Saharan Africa. And, it is the single largest source of donor funding for basic social services in the poorest countries. In FY10, the largest IDA recipients included India, Vietnam, Tanzania, Ethiopia, Nigeria, Bangladesh, Kenya, and Uganda.
According to the Center’s Quality of Official Development Assistance (QuODA) assessment, IDA is the only multilateral aid agency that scores in the top ten across all four sub-indices (maximizing efficiency, fostering institutions, reducing burden, and transparency and accountability).
The majority of IDA’s funding comes from contributions by roughly 45 donor governments. Every three years, these governments gather to replenish IDA’s coffers. The so-called replenishment negotiations provide an opportunity for shareholders and stakeholders to influence IDA’s institutional and programmatic objectives. The largest pledges to previous replenishment (IDA-15) were made by the United Kingdom, the United States, Japan, Germany, France, Canada, Italy and Spain. Additional funds come from the World Bank’s net income and from borrower countries' repayments of earlier IDA loans (i.e., “reflows”).
In mid-December 2010, donor governments will meet in Brussels to conclude the IDA-16 Replenishment agreement. This will be the last full IDA replenishment until the Millennium Development Goals (MDGs) deadline in 2015. The IDA-16 agreement largely will focus on several key themes, including: fragile states, gender, crises response, and climate change. World Bank management has proposed an overall IDA-16 financial envelope of $47 billion – of which, donor governments would provide roughly $33 billion. This would essentially entail flat donor contributions in real terms compared to the previous IDA-15 replenishment. However, it would mean a roughly 15 percent increase overall due to usage of the World Bank’s internal resources (i.e., IDA credit reflows, IBRD net income transfers, etc).
The Center has produced several proposals and analytical papers dealing with IDA’s operations. These include:
Leveraging World Bank Resources for the Poorest: IDA Blended Financing Facility Proposal. Research Fellow Ben Leo proposes a new World Bank financing model for creditworthy emerging economies, such as India and Vietnam. By doing so, IDA could free up to $7.5 billion worth of additional assistance for the world’s poorest, most vulnerable countries.
How Can Donors Create Incentives for Results and Flexibility for Fragile States? A Proposal for IDA. Senior Fellow Alan Gelb offers a concrete proposal for how IDA can: (i) rebalance incentives to increase attention on delivering results and to the frameworks for monitoring and evaluating them; and (ii) supplement performance-based allocations to fragile states through a performance fund to enable well-performing projects to be scaled up.
Inside the World Bank's Black Box Allocation System: How Well Does IDA Allocate Resources to the Neediest and Most Vulnerable Countries? In this paper, Research Fellow Ben Leo explores just how well IDA’s existing performance-based allocation system addresses the unique needs in the world’s most vulnerable countries.
The World Bank's Work in the Poorest Countries: Five Recommendations for a New IDA. This CGD report argues that donor governments should focus on five key actions: (i) affirming IDA's centrality in the international aid system; (ii) allowing IDA to concentrate on its core competencies; (iii) stop holding IDA hostage to broader geo-political battles; (iv) pushing IDA to find the right incentives for dealing with fragile states; and (v) sharpening the incentives for performance.
Why do so many businesses choose to remain informal? Vijaya Ramachandran and co-authors discover that the answer is more nuanced than often believed. In East Africa, for instance, the difference in productivity between formal and informal firms is often indistinguishable, while in Southern Africa productivity it is more differentiated. Policies to encourage formalization and increase productivity are likely to be more successful in East Africa, whereas an emphasis on job training and vocational skills might be more appropriate in Southern Africa.
Effective identification is increasingly seen as a crucial step towards the achievement of several other development goals. In fact, developing countries have been implementing new ID programs at a breakneck speed. To provide a relatively comprehensive picture of these rapidly changing trends, fast-evolving systems, and mushrooming applications is no easy feat, but we have tried to assemble a rough overview of those ID- and development-related topics that struck us as most relevant in the form of a Preliminary Discussion Paper.
This paper offers a proposal to improve performance-based allocation systems of International Development Association (IDA) donors and others to better address the needs of fragile states and better link development allocations with performance.
Poor regulation is a key obstacle to financial inclusion. An enabling regulatory environment is critical for creating incentives for businesses to offer innovative financial services to the poor, and for underserved customers to take up formal financial services.