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Technology, infrastructure, governance and anticorruption, human development, subjective wellbeing/happiness
Charles Kenny is a senior fellow and the director of technology and development at the Center for Global Development. His current work focuses on gender and development, the role of technology in development, governance and anticorruption and the post-2015 development agenda. He has published articles, chapters and books on issues including what we know about the causes of economic growth, the link between economic growth and broader development, the causes of improvements in global health, the link between economic growth and happiness, the end of the Malthusian trap, the role of communications technologies in development, the ‘digital divide,’ corruption, and progress towards the Millennium Development Goals. He is the author of the book "Getting Better: Why Global Development is Succeeding, and How We Can Improve the World Even More" and “The Upside of Down: Why the Rise of the Rest is Great for the West.” He has been a contributing editor at Foreign Policy magazine and a regular contributor to Business Week magazine. Kenny was previously at the World Bank, where his assignments included working with the VP for the Middle East and North Africa Region, coordinating work on governance and anticorruption in infrastructure and natural resources, and managing a number of investment and technical assistance projects covering telecommunications and the Internet.
While the misuse of antimicrobials in human health is a key factor accelerating the emergence of drug resistance, we should not overlook the role of agriculture. This paper makes the case for a global treaty to reduce antimicrobial use in livestock.
The scale of the turnout at the Women’s Marches across the world recently, along with President Trump’s early reinstatement of a ban on US funding for organizations that offer family planning services in foreign countries, seem to suggest an administration already at odds with an entire gender. On this week’s podcast, three CGD senior fellows weigh in on the evidence that engaging and empowering women—both at home and overseas—makes good sense, especially in an America-First strategy.
Corruption in aid has been a major topic of discussion in Washington in recent weeks. One of the questions reportedly from the Presidential transition team to the State Department was: “With so much corruption in Africa, how much of our funding is stolen?” During the nomination hearings for Rex Tillerson to be Secretary of State, Senator Rand Paul provided one answer: seventy percent of aid is “stolen off the top.”
The question is a fair one to ask. The bad news is that the short answer is “we don’t know.” The better news is that the slightly longer answer is “nowhere near 70 percent.” And the best news is that if we spent more time tracking the results of aid projects, we’d have a much better idea of where corruption was a problem and if our efforts to reduce it were working.
Statistics about corruption are hard to verify and open to considerable dispute. I've written before about a recent Supreme Court case where the justices strongly disagreed about what counts as 'corrupt,' for example. But also, for obvious reasons, people don’t tend to advertise the fact that they are involved in corruption. That all makes measurement hard. Nonetheless, three indicators of corruption might help answer how widespread the problem really is:
investigative cases of particular aid projects;
survey evidence about bribe payments; and
'expert perceptions' about the general state of corruption in a country.
What does each indicator suggest about the extent of corruption?
1. Investigative cases
The World Bank’s Sanctions Evaluation and Suspension Office keeps track of cases where World Bank investigations have uncovered evidence of fraud and corruption. An analysis of cases between 2007 and 2012 found sanctionable fraud or corruption in 157 contracts worth $245 million, of which less than a third of contracts showed evidence of sanctionable corruption. The World Bank’s lending volume is about $40 billion a year, so this suggests less than a third of contracts collectively worth about 0.1 percent of volumes over the period involved discovered and sanctionable corruption.
2. Survey evidence
Of course, that investigative cases only capture ‘discovered’ corruption is a huge issue. It is likely that the great majority of corruption isn’t uncovered by investigators. So what about asking firms that work on aid contracts?
Sadly, we don’t have survey evidence of corruption specifically involving businesses involved in aid contracting, but we do have surveys of corrupt payments by firms to government officials for government contracts in general from the World Bank. Enterprise surveys ask firm managers how much are the “gifts” expected in return for winning a government contract in their sector. In 22 countries, the average is more than 5 percent of the value of the contract. In 38 countries, the average is between 2 and 5 percent; in 52 countries the average is below 2 percent. You’d hope aid would be less affected by corruption than local spending given all of the oversight apparatus from investigators general to procurement experts involved, but in truth there is limited evidence they have a big impact, so maybe the numbers are about the same for aid-financed contracts. Given the $161 billion global aid business, an average of (say) five percent being lost to corruption adds up to around $8 billion—a real loss. But not the $113 billion that would be suggested by Senator Paul’s figure.
3. Perceptions measures
The trouble with measures of bribe payments, however, is that they only capture one form of corruption, and one of its impacts. They don’t capture officials simply stealing funds on their own account. And if the bribe goes to cover up substandard work which means the aid-financed road falls apart or the aid-financed drugs don’t work, the impact of corruption is far bigger than the bribe payment made. Again, we don’t have a measure of this broader corruption specific to aid flows, but you can ask a bunch of people how corrupt they think a country is in general as one potential indicator. Using one such ‘expert perceptions’ measure, Bill Easterly at one point calculated that 76 percent of US foreign aid went to countries judged to be corrupt.
Sadly, as Easterly himself noted, "It is inherently impossible to calculate the number 'x percent of aid is stolen' from the numbers that I use on how much aid goes to corrupt countries." And that’s not to mention the considerable problems with regard to the accuracy—and even the meaning—of a single measure of how a small group of people feel about overall corruption levels in a country.
So, using available corruption measures we’re left with three answers to “how much of our funding is lost to corruption”: one almost-certain underestimate of “less than 0.1 percent,” one possible underestimate of one part of the problem of “a few percentage points,” and one arguable interpretation that doesn’t really help that “a lot of aid goes to corrupt countries.”
Measuring Lost Aid through Outcomes
Luckily there's another, better way to estimate how much aid is 'lost': look at outcomes. If the aid program manages to buy all of the things it is meant to buy and deliver them where they are meant to go at a reasonable price, the aid funds can’t have been lost to corruption. Of course, measuring missed outcomes would be an over-estimate of aid lost to corruption specifically—a lot of other things can mean aid fails to deliver from bad luck to incompetence.
But at least it might provide an upper-end figure.
One partial measure of outcomes is project ratings. Take the World Bank, where project outcomes are rated on a six-point scale from highly unsatisfactory to highly satisfactory. Assume all projects rated in the bottom three categories are ‘lost’ and that adds up to 461 out of 1,617 projects completed 2010-2015, or about 29 percent. Be a little more generous and assume only the bottom two categories are ‘lost’ and that drops to around nine percent.
Again, Sarah Dykstra, Justin Sandefur, Amanda Glassman, and I looked at evidence for waste in GAVI—an aid institution dedicated to expanding vaccination coverage in developing countries. While we found plenty of evidence that developing countries were spending less on vaccines themselves when GAVI gave them vaccines at no or low cost, we estimated actual waste (vaccines not leading to vaccination) at between 0.5 percent and 15 percent of vaccines delivered, depending on the vaccine.
Or following on through the causal chain from aid financing to outcomes, countries that were the focus of attention from the President’s Emergency Plan for AIDS Relief (PEPFAR) saw the annual change in the number of HIV-related deaths between 2004 and 2007 that was 10.5 percent lower than other African countries. If the money had been lost to corruption, we simply wouldn’t have seen these results.
All of the evidence we have—on corruption cases, bribes, and outcomes alike—suggests corruption is a problem for aid, but nowhere near as big a problem as suggested by Senator Paul. That said, we still don’t have enough evidence on results to come up with any conclusive overall numbers on ‘the percentage of aid that delivers the impact it was designed to.’ And we should. If the administration’s concerns over aid and corruption ended up improving the results focus of aid programs, that would be great news for many reasons—but not least because it would help reduce the real impact that corruption can have on development.
Women account for just 15 percent of all listed inventors behind nine million patent applications across 182 countries. This data comes from a fascinating new paper by Gema Lax Martinez, Julio Raffo, and Kaori Saito of the World Intellectual Property Organization, which looks at the gender of inventors, and it suggests a lot of countries and firms have a long way to go in reaping the innovative potential of women inventors.
Looking across the 100 firms worldwide that patent the most, the variation in women’s participation in innovation is considerable. For the worst-performing seven firms over the 2011-15 period, fewer than 1 in 10 patent applications included a woman inventor: Schaeffler Technologies; ZF Friedrichshafen; BMW; Audi; Continental Automotive; Denso Corporation; and Peugeot-Citroen. (See the interactive table at the bottom of the post for a full list of firms.)
For ZF Friedrichshaffen, for example, 62 out of the 909 patents it applied for between 2011-5 included a woman inventor. That counts as progress—the firm listed no women at all on its patent applications between 1995 and 1999. All of these firms are automobile manufacturers, though some also focus on other sectors including aerospace technology, railways, and electronics. Perhaps they don’t understand that single women buy more new cars than single men and in the vast majority of families, women take part in the buying decision.
For the 15 best-performing innovative companies, more than 50 percent of applications involved a woman inventor—and five firms topped 60 percent: Hoffman-La Roche; Novartis; Heinkel; L’Oreal; and LG Chem, Ltd. In contrast to the worst performers, these firms specialize in healthcare and chemicals: pharmaceuticals (Novartis), diagnostics (F. Hoffman-La Roche), cosmetics (L’Oreal), and home care products (Heinkel).
Martinez and colleagues suggest there are a number of patterns in the data that help explain why some patenting institutions do so much better than others when it comes to gender balance:
There is a considerable variation across countries: China and the Republic of Korea see 50 percent of patent applications involving women compared to 29 percent in the US and below 20 percent in Germany, Italy, and Japan.
This is a particular issue for business: 48 percent of patent applications from academic institutions involve at least one woman inventor compared to 28 percent for the private sector.
The industry sector matters (as suggested by best and worst performers): 57 percent of biotech patent applications include a woman inventor compared to 15 percent of civil engineering patents. In general, life sciences do better than engineering and IT.
And related to the factors above, the type of organization matters: research suggests women patent more in firms which are flatter and more flexible (biotech, life sciences) than hierarchical.
On current rates, we won’t achieve gender parity in inventors until around 2080. It would be in the interests of both innovative firms and the countries that house them were we to pick up the pace. Leveling the playing field for women innovators would be good for them, good for employers and good for productivity.
In our new policy note, we outline some suggestions for countries:
Make research grants conditional on recipient organizations instituting policies that work to level the playing field for women, or reward the institution of these policies, including through bonus payments.
Create a women’s top-up venture fund, providing additional finance for women-led firms attracting private venture capital.
Build upon and expand global networks convening women working in technology to encourage mentorship and information sharing.
Increase scholarship opportunities for women seeking to conduct research and contribute to developing technology.
Prioritize sectors with a particularly severe gender imbalance (e.g., automotive, energy).
Use the model of the Open Government Partnership to convene country leaders to make commitments towards greater gender equality in technology.
But beyond public policy, this is also a challenge for firms. They aren’t merely victims of their country and sector of activity. Take Apple, with only 25 percent of patent applications involving a woman inventor—it is based in the same country and sector as IBM, Intel, and Microsoft, and yet those firms have a 35 percent or better share. Perhaps the company’s poor performance is linked to its work environment? And improvement can be rapid: 10 of the top 100 innovative firms (BASF, IBM, Intel, Michelin, Qualcomm, Novartis, Henkel, and Hoffman LaRoche) increased their share of patents with at least one women inventor by more than 20 percentage points in a 16-year period. These 100 firms are some of the most creative businesses on the planet—surely they are up to the challenge of ensuring they aren’t unnecessarily leaving—or pushing—talent outside the doors.
Just as the evidence suggests that a more gender-inclusive political system may lead to better policies for women and girls and integrating women into corporate boards may mean reaching new consumers, there is a case to be made for increasing women’s presence in developing technology and innovation. Incorporating more women into technology sectors is likely to 1) increase productivity, 2) offers women a source of high-quality jobs, and 3) may have knock-on benefits for female consumers of technology, whose needs are more likely to be taken into account.
As we begin a new year, researchers at CGD are looking forward to sharing new findings and policy proposals through our newsletters, podcasts, and publications. But one of our primary ways of communicating our work is through the events we host. Unfortunately, since the launch of CGD’s gender and development research program, we’ve noticed something about who attends what events, and it looks like nearly half the audience we’d like present when we talk about gender equality is missing in action.
We analyzed participant data from 12 gender-related events and 12 randomly-selected (but similarly-sized) non-gender-related events hosted by CGD, and the evidence is very clear: men aren’t showing up for gender equality. At the 12 non-gender-related events, 47 percent of the participants were male. At gender-related events, only 13 percent of the audience was male. The non-gender event with the lowest proportion of men had higher male participation than the gender event with the highest proportion of men. See the tables below for comparison.
This isn’t a problem unique to CGD, of course. When Emma Watson launched the campaign “HeForShe” to enlist men in the struggle for gender equality, she noted that when Hillary Clinton declared that women’s rights were human rights in Beijing in 1995, only 30 percent of that audience was male. It’s a small sample, but from the data above, it doesn’t seem like there’s been much improvement (if any) in making gender meeting audiences more gender-balanced.
Why do we need men to show up to discussions about gender?
And conversations about gender affect men, too. When we talk about gender, we’re not just talking about women. We’re talking about the way socially constructed norms constrain the opportunities of women and men, girls and boys—albeit through different pathways. The consequences of gender inequality affect everyone—while the gains from achieving gender equality are clear. From increasing the labor force participation rate to fighting HIV/AIDS, there is plenty the gender and development field has done—and can continue to do—for both men and women. Even interventions that particularly target women, like ending sexual and gender-based violence, have to involve men and are proven to benefit men and women alike.
Despite institutions like the United Nations and the European Commission affirming their commitment to engage men and boys, the truth is that there simply aren’t enough men—at the very least in Washington—showing up to listen and engage when discussions focused on advancing gender equality are held. Our colleague Owen Barder rails against all-male panels. At meetings about gender we face the risk of all-female audiences.
If any men out there are still looking for a New Year’s resolution, what about committing to attend an event discussing one of the myriad development issues related to gender? You’ll be most welcome.
Last week, surrounded by policymakers, civil society representatives, and migrants themselves from all over the world, UN Women Deputy Executive Director Lakshmi Puri addressed the Global Forum on Migration and Development. Her remarks emphasized the importance of making migration both “a right and an opportunity” for women, specifically by incorporating a gender perspective into the proposed Global Compact for Safe, Orderly and Regular Migration. Puri’s message is well taken: women currently make up half of the international migrant population, but continue to face unique risks and obstacles in migrating due to their gender. In an attempt to mitigate at least some of these gender-specific barriers, we’ve put together a new proposal, which focuses on providing entry preference to female economic migrants from “gender-unequal” countries.
The triple loss of gender discrimination in migration
The benefits of migration to migrating women themselves, sending, and receiving countries are well-documented. But across the world, women face higher barriers to migration than do men: in accessing the education and work experience that can help qualify them for visas, or in finding the resources necessary to move. And in some countries, women need the permission of husbands or fathers to get a job, to travel, or to obtain a passport. This is a loss to those who want to migrate and a self-inflicted wound on the countries they come from. It is also a loss to destination countries, which are denied the drive and talent of the women who don’t arrive. Recipient countries can help rebalance this inequality with a triple-win policy that benefits migrants, sending countries and themselves alike.
The triple win of selective preferences
Women coming from gender-unequal countries have the cards stacked against them before they even get on the plane. Their ability to emigrate despite this disadvantage suggests a higher capacity relative to male migrants coming from these same contexts, or migrants coming from gender-equal countries who face fewer barriers. And that suggests they are likely to contribute relatively more to recipient countries as well as increase flows of financial and social remittances back to their origin countries. Comparatively gender-equal countries using a points system as part of their immigration decision-making processes could give additional points to women from gender-unequal countries migrating for economic reasons to help reap these relative gains.
Canada’s immigration system, for example, works on a point system that considers six factors: language, education, experience, age, arranged employment, and adaptability. The country could add a seventh factor under this proposal giving points to women migrants from countries that legally discriminate against women in terms of freedom to travel, as it might be. Within countries that do not use a points system (e.g., the United States), policymakers should find other ways to preference these women—potentially introducing a visa quota category for female principal visa-holders from gender-unequal countries under employment-based visas.
There is a lot of work to be done to ensure that women benefit equally with men from migration—the biggest force for development that we know. Implementing an entry preference system would be a first step to ensuring that all people seeking to migrate in search of better opportunities do so on a more level playing field—and reap the benefits for themselves, their families, and their countries (both home and host) in the process.
The Sustainable Development Goals are an ambitious set of targets for global development progress by 2030 that were agreed by the United Nations in 2015. A review of the literature on meeting "zero targets" suggests very high costs compared to available resources, but also that in many cases there remains a considerable gap between financing known technical solutions and achieving the outcomes called for in the SDGs. In some cases, we (even) lack the technical solutions required to achieve the zero targets, suggesting the need for research and development of new approaches.
Domestic violence — overwhelmingly against women — is by far the most common form of violence in the world. About 350 million women across the planet have suffered severe physical violence from their intimate partner according to the World Bank (PDF). In developing countries, more than one in three girls will be married before the age of 18, placing them at increased risk of abuse. Worldwide, 125 million women have been subject to genital mutilation. And sex-selective abortion is replacing neglect as the tool of choice among families across the globe who want boys not girls, with somewhere between 4 and 12 million sex-selective abortions performed in India alone over the past three decades.
These practices are so common because in all too many places they are considered normal and acceptable. Around one-quarter of women worldwide suggest that wife beating can be justified if she does something like arguing with her husband or burning dinner according to the World Bank report. Women who agree with any justification for wife beating are at a considerably higher risk of violence than those who do not. And in many countries, the police are loath to intervene in domestic violence cases. In India, 94 percent of police agree that a husband may rape his wife.
The good news is that the percentage of women who believe that wife beating is acceptable has been falling. In Burkina Faso, the proportion who felt husbands could beat wives for arguing with them fell from around one-half to less than one-third between 2003 and 2010. And laws are increasingly reflecting the new norm of unacceptability. Three countries worldwide had legislation against domestic violence in 1989, today the number is 76. Each additional year that a country has domestic violence legislation in place is associated with a reduced prevalence of about 2 percent, according to the World Bank.
Figure: Percent of women who consider a husband justified in hitting his wife
What More Can Developed Countries Do to Help Reduce the Global Toll of Violence against Women?
The most important thing that rich countries can do is tackle the considerable domestic violence that still infests them at home. In a month when a Baltimore Ravens football player was (finally) dropped from the team for knocking out his fiancée and Wesleyan College banned students from the Beta Theta Pi Fraternity that had become known as a “rape factory” on campus, it is clear the United States cannot pretend to stand above the fray. It should join the global struggle against gender violence in a spirit of partnership rather than leadership.
Nonetheless, there is a large role for aid and migration tools to play in highlighting the issue and reducing the level of violence — in the United States and other wealthy countries alike.
Support nudges at the local level:
Conditional cash transfer (CCT) programs have gained attention in recent years as a way to address poverty and encourage certain behaviors. In these programs, governments and donor agencies provide individuals or families with cash in return for fulfilling certain conditions, such as enrollment, health facility visits, or vaccination. New research shows that these incentives can be directed toward women and girls to help them overcome barriers by creating space to make better choices for their health and well-being.
In India, child marriage is illegal but the practice remains stubbornly common, with just under half of all girls married before their 18th birthday. The Indian state of Haryana introduced a CCT program in 1994 to delay girls’ marriage and change how families view their daughters. The government provided a savings bond to infant girls that would be redeemable for 25,000 rupees (about $550) when each girl turned 18, on the condition that she was still unmarried. The International Center for Research on Women evaluated the program in 2012 just before the first cohort of participants turned 18 and found that girls who participated in the scheme were significantly more likely to still be in school at the time of evaluation than girls who had not participated (76 percent versus 64 percent). Even though the girls had not received the cash benefit at this point, the program had influenced families’ investment in their daughters’ education. While we won’t know whether the cash transfer has affected early marriage rates until the next survey round is completed later this year, research has shown that the longer a girl stays in school, the more likely she is to delay marriage and pregnancy.
The Haryana CCT program targeted delayed marriage as an outcome, but cash transfers can also be used remove economic barriers which prevent girls from accessing education in the first place. Completing secondary education is correlated with a one-third reduction in risk of domestic violence, not least because it delays marriage. Modest, monthly transfers to families conditioned on girls’ enrollment in school in Bangladesh extended years of enrollment by approximately two years and led to an increase in age of marriage by about the same amount. Another program in Malawi targeting girls’ education and HIV status had an average annual disbursement of $100 per family during the school year, with $30 going directly to the girls themselves. Program participants were three to four times more likely to be in school at the end of the year than non-participants and had an HIV prevalence that was 60 percent lower than the control group.
Many CCT programs targeting education or health outcomes have been conducted nationwide, such as Bolsa Família in Brazil. Such programs could be designed with an added focus on adolescent girls. For example, a similar program targeting girls’ education could be scaled up to cover the population of girls aged 15 to 19 in a country like Rwanda, approximately 600,000 girls, at the disbursement cost of $60 million. Donors could support such programs.
Support community interventions:
Gender inequality is closely linked to domestic violence and serves to both reveal and reinforce the norms that support violence against women. The CCT programs mentioned target domestic violence on the individual level through intermediate outcomes, but interventions which challenge norms supporting violence have also been widely used at the community level. The SASA! study in Uganda is one of the first evaluations of community interventions addressing intimate partner violence. SASA! mobilized activists to analyze power dynamics at the root of domestic violence within their communities and to motivate people within their social network to address power inequalities through media outreach, informal activities and local activism. The results are very encouraging: women in treatment communities were 52 percent less likely to experience physical intimate partner violence in the past year compared with those in the control communities, and both men and women in communities receiving the intervention reported lower social acceptance of domestic violence than their counterparts in the control group.
It’s About More Than Aid
Aid has an important role to play, but the United State should bolster its use of other tools. Alongside highlighting the issue of violence through diplomacy, the United States could do more by using refugee status as a signal of concern over the status of violence, as an official response in countries, and as a tool to reduce suffering. In a landmark ruling in August 2014, the Board of Immigration Appeals, an agency of the Department of Justice, concluded that married women in Guatemala who cannot escape their spouses were part of a social group potentially deserving of refugee status because of the risk of violence they face and the limited likelihood of government protection. We hope that ruling will open the door to more victims of violence who have been ignored or further abused by legal systems in their home countries.
Over the next two years, we will flesh out the role that conditional cash transfers and other “nudges” can play in reducing gender violence and in achieving other goals of women’s empowerment. We will also look at the role that “naming and shaming” approaches can play, including granting refugee status to victims from countries where serious domestic violence is systematically and institutionally ignored by law enforcement. We welcome your thoughts and reactions to those ideas.
Last week, Gavi, the Vaccine Alliance, completed a $7.5 billion replenishment to fund its work on immunization in the world’s poorest countries between now and 2020. Gavi’s next step is to ensure that the money is used as effectively as possible to save lives and improve health.
Today, we’re launching a working paper and policy brief that we hope will be a helpful input to that discussion. We find that many of the vaccines provided by Gavi went to people who would have been vaccinated anyway, leading to little increase in overall vaccination rates — especially for the cheapest vaccines, and particularly in middle-income countries. Paradoxically, this is partially good news. Our results imply that if it's possible to save lives with a vaccine that costs a few cents, most middle-income countries will do it with or without aid. But that doesn't mean there's no place for aid. First, the poorest countries in the world still struggle to roll out basic vaccines. Second, for newer vaccines that countries have not widely adopted on their own, we find signs of a positive impact of Gavi aid on vaccination rates.
A natural experiment at a global level
Measuring the impact of Gavi is difficult. Alas, Gavi did not conduct a global RCT, randomly selecting program countries to receive aid. But they did something almost as useful from an analyst’s point of view: Gavi focused on countries whose initial gross national income (GNI) was below a strict threshold, originally set at $1,000 per capita. That means Gavi countries were poorer and had lower initial vaccination levels than non-Gavi countries. But the strict cut-off allows us to compare countries on either side of the threshold that should be fairly similar, and check for a jump in outcomes at $1,000.
As shown in the graph below, Gavi’s abrupt eligibility cut-off was fairly well enforced: the probability a given country received aid from Gavi in a given year jumped from about 20 percent if they had a per capita GNI just above $1,000 to over 80 percent if they were below the line. Lower-middle-income countries (i.e., countries in the vicinity of the cut-off, which is where our analysis is relevant) received roughly one-quarter of Gavi’s programmatic funding, while low-income countries, those further away from the threshold, received the remaining three-quarters.
So aid levels clearly jumped at the arbitrary $1,000 income threshold. Did outcomes jump as well, signaling a positive impact of Gavi aid? In short: for cheap vaccines they didn’t; for more expensive vaccines, results are more promising.
The results suggest that the impact of Gavi support depends on the vaccines it is buying. Approximately 40 percent of Gavi’s programmatic funding has been used to buy pentavalent vaccines — a combination shot covering diphtheria, pertussis, and tetanus (DPT) alongside Haemophilus influenza type B (Hib) and hepatitis B (hep B). In 2000, DPT coverage in threshold countries was already high, and the cost of the vaccine was low. Hib and hep B were more expensive, but prices for hep B fell fast and many non-eligible countries adopted the vaccine as part of their schedule. Today, DPT is available for $0.17 a dose, and hepatitis B for $0.19 a dose. Gavi’s provision of pentavalent vaccines effectively crowded out domestic spending on DPT and hep B.
But many countries above the threshold for Gavi support did not roll out Hib vaccinations, suggesting that element of the Gavi-purchased pentavalent vaccine was providing additional immunizations that would not have happened absent Gavi support. Similarly, Gavi purchases of the rotavirus vaccine (at $5 a dose), increased coverage among eligible countries as compared to ineligible countries.
The graph below shows hep B vaccination rates for countries on either side of the Gavi eligibility cut-off. While aid deliveries jump sharply at the eligibility line, there’s no sign of a similar jump in vaccinations — suggesting limited or no impact for countries near the threshold.
The picture looks more compelling for Hib. Though still far from conclusive, there’s a statistically significant jump up in Hib coverage as you cross the threshold into Gavi eligibility.
The results suggest that Gavi’s model of providing aid “in kind” (vaccines rather than cash) does not make it immune from the phenomenon of fungibility, where aid crowds out a recipient’s own spending. In this case, Gavi support for cheap vaccines in threshold countries displaced vaccine spending that governments would likely have made regardless. And the governments used the savings elsewhere. For vaccines that would not have been purchased absent Gavi support, fungibility was much less of an issue since there was no existing spending to displace.
It is important to note that these findings apply to countries near the threshold of Gavi eligibility. Across Gavi-eligible countries as a whole, hepatitis B coverage increased from 17 percent in 2000 to 80 percent in 2013 while Haemophilus influenza coverage increased from 4 percent to 77 percent. This very rapid adoption is consistent with a story that Gavi facilitated rollout of coverage through the provision of a combination vaccine covering those diseases as well as diphtheria, pertussis, and tetanus, especially in the poorest countries.
Vaccines save lives, and we find some evidence Gavi has significantly increased vaccine rollout. But our research suggests Gavi might have had an even bigger impact if it had steered resources away from buying cheap vaccines and associated expenditure in threshold countries. The good news is that Gavi has already started making reforms in this direction, introducing phased cofinancing at the threshold. We hope our paper will help in the design of the next round of adjustments.
This paper attempts a first-cut listing of global public goods and international spillover activities, as well as providing some data on their global distribution alongside basic correlational analysis. Few if any goods are “pure” global public goods and there is a spectrum of the extent of spillovers. Some global public goods are not well measured. The listing is far from exhaustive, nor is it based on rigorous selection criteria. But it does suggest considerable diversity in trends, levels and sources of public good and spillover activities.
It is widely agreed that the middle class is vital to progress because of its many virtues, but defining middle class in any meaningful way is difficult. And survey evidence suggests the middle class is not culturally unique, particularly socially progressive, or entrepreneurial.
When you read what economists have to say about development, it is easy to be disheartened about the prospects for poor countries. One big reason is that slow changing institutional factors are seen as key to development prospects. I’ve just published a CGD book that’s a little more optimistic: Results Not Receipts: Counting the Right Things in Aid and Corruption.
Most of the book is about what donor agencies like DFID and the World Bank should do about corruption in aid projects, but Results Not Receipts also discusses the role of corruption and weak governance in determining development outcomes more broadly—the subject of the sample chapter. And in that chapter, I’m more optimistic about progress both through improved institutions and despite weak institutions than some of my peers.
The dominant view amongst development economists is that historical forces and slow-changing government institutions have significantly determined development outcomes. In their blockbuster paper “The Colonial Origins of Comparative Development,” published in 2001, Daron Acemoglu and Simon Johnson from MIT and James Robinson from the University of Chicago traced through a causal chain, noting a strong relationship between mortality rates faced by soldiers, bishops, and sailors in colonies and the type of legal and political institutions they created—and between those early institutions and institutions today. Since then, economists from around the world have linked historical differences from soil type, through the extent of the slave trade to ancient knowledge of the wheel all through norms, culture, and institutional forms to modern economic outcomes.
And development economists have compiled measures of institutional quality that directly suggest institutions are slow to improve. CGD’s Lant Pritchett and colleagues studied the Worldwide Governance Indicators (initially complied by researchers at the World Bank). They suggest it would take over 600 years for Haiti to reach Singapore’s quality of government effectiveness as measured by those indicators, even with a generous interpretation of its previous rate of progress.
The abiding relationship between comparative development success today and historical measures of development cannot be denied. Nonetheless, for all the importance of history to comparative development, there’s a lot more to progress than the past. Around 5.1 billion people worldwide live in countries where we know average incomes have more than doubled since 1960. Nearly 2.2 billion people are in countries where average incomes have more than quintupled over the past 50 years. In Africa, eight economies in the region ended the last decade twice the size they’d started it. And as a whole, the developing world significantly outperformed rich countries in weathering the storm of the global financial crisis. It isn’t just income; other measures of the quality of life including health are rapidly improving worldwide—about two million children born this year will live to their fifth birthday who would have died were mortality rates unchanged from 10 years ago.
That progress is possible because countries at a given level of settler mortality or other measures of historical development are seeing better outcomes over time. And that suggests one of two things: either institutions can change faster than some measures suggest, or development isn’t just about slow-changing institutions. It is probably a bit of both. On the side of institutional change, Acemoglu, Johnson, and Robinson certainly didn’t support the notion that such change was always and everywhere achingly slow—they pointed to case of Japan during the 1870s and 1880s as well as South Korea during the 1960s as showing that rapid institutional change could underpin considerable growth. That should give hope to corruption fighters in developing countries who are doing brave and important work improving local institutions.
And the same institutions might produce better outcomes when new technologies allow for cheaper, simpler solutions. Think of vaccines and antibiotics allowing for health outcomes that previously could only be achieved by complex water and sewer systems alongside rigorously enforced public health measures. Or look at the mobile phone that so simplified telecommunications provision that over five billion people worldwide gained phone access in the space of around two decades.
The facts that institutions can rapidly improve whatever our imperfect measures suggest and that there is more to development outcomes than the quality of a country’s governance means that it isn’t naïve to be optimistic about the prospects of poor countries. And the progress we have seen in reducing poverty and increasing incomes worldwide over the past two decades implies it might be the pessimists who are being unrealistic.
I hope you’ll join me tomorrow to celebrate the release of Results Not Receipts: Counting the Right Things in Aid and Development. You can RSVP to attend the event here or watch the webcast online.
Unusually for the UN, there is just one goal for the Third International Conference on Financing for Development that opens in Addis Ababa, Ethiopia, next week. Admittedly it is a big ask. Member states must outline how the world will deliver on the incredibly ambitious development agenda outlined in the draft Sustainable Development Goals: 169 UN targets for progress by 2030 that include wiping out extreme poverty and malnutrition, ending avoidable child mortality, providing universal infrastructure access and a good deal else besides. And one thing is clear: the answer has to involve a lot more than aid. That requires a shift in how the world thinks about development and in how we pay for it.
Podcast with Charles Kenny
Amanda Glassman and Casey Dunning make the case for domestic resource mobilization and data as Addis deliverables.
Things were somewhat different back in 2002, when the first international conference on financing took place in Monterrey, Mexico. Coming soon after the agreement of the Millennium Development Goals, that conference discussed debt relief, trade, private finance and domestic resource mobilization (AKA developing countries raising taxes) as tools of development finance. But the highlight of the conference was new aid commitments from industrialized countries including the US announcement of the Millennium Challenge Corporation. In the period 2000–2005, aid flows from industrialized countries increased by over 50 percent, with Monterrey an important spur. That aid surely played some part in the considerable development progress we’ve seen over the past fifteen years, perhaps especially in progress towards the health and education MDGs.
But the SDG agenda is much broader than the MDGs. Rough estimates suggest a multi-trillion dollar price tag (to say nothing of the necessity for policy reform). Compare aid flows — currently around $161 billion dollars. That doesn’t mean aid is irrelevant — it will remain vital to delivering on global public goods, and in helping some of the world’s most disadvantaged gain access to nutrition, infrastructure, health and education services. Still, even were aid flows to rise dramatically, alone they couldn’t deliver on an ambitious global development agenda. The truth is that development is no longer mostly about aid. It hasn’t been for many years.
So what we need to do now is focus on the other, non-aid sources of development finance that were discussed at Monterrey. And they are huge. Remittances to developing countries from migrants living overseas are worth more than twice aid flows: around $341 billion. Foreign direct investment and equity investment alongside private lending to developing countries is worth $928 billion each year (more than five time aid). Domestic private investment in the developing world — building factories and houses, filling offices with equipment — amounts to $3.7 trillion a year (more than ten times aid). And domestic government revenues from taxes and royalties are worth over $5.5 trillion — sixteen times the value of aid flows. CGD colleagues will be hosting a side event at the UN Conference in Addis showcasing these more and different sources of development finance. If you want to see how these numbers compare to aid have a look at this new infographic we made.
If you want to finance a transformative development agenda, it is pretty clear where the conversation should turn. Given Addis is about international cooperation, the conference should focus on what the global community can do to maximize government revenues, private investment and remittances. That means an agenda to help foster economic growth in poor countries as the best tool to increase domestic revenues and investment. And it means progress in opening up markets to exports from the world’s poorest countries, helping companies invest in developing markets and cooperation to make sure those companies pay a fair tax bill, and opening up jobs to migrants who can send remittances home. In a world of climate change it also means ensuring climate-friendly development policy at home and abroad. The draft Addis outcome document already has some language on these topics, but it would be great to see it considerably strengthened.
In short, a transformative development agenda requires a broad commitment to development-friendly policies that, for industrialized countries in particular, goes far beyond aid. The kind of policies measured by the Center for Global Development’s Commitment to Development Index. Owen Barder, who is in charge of the CDI, will be presenting it in Addis during the conference. Watching CDI scores over the next few years would be a good way to monitor if the rhetoric rich countries deliver in Ethiopia is matched by reality in terms of policy reform. Here’s hoping.