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Last week CGD published our working paper on the use of fingerprint and iris scans for cash transfers. As we continue to look into this topic, we are even more convinced of the potential this technology has for transfer systems, particularly those in resource-rich countries.
Cash transfers are increasingly being used by developing countries and development agencies to address a range of economic and social problems, including human investment and greater equality. But the option to directly distribute natural rent to citizens of resource-rich developing countries may also be especially relevant. Such an approach could encourage better resource management and head off the governance problems associated with the concentration of large rents in the hands of the state. Unfortunately, it is often difficult to establish efficient transfer programs in developing countries, many with a record of corruption and leakage. Evidence suggests that even well designed transfer programs experience 10-20 percent leakage, if not higher.
The wake-up call came as a bit of a shock. Ernesto Zedillo, the highly regarded former president of Mexico and director of the Yale Center for the Study of Globalization, was discussing the record of international institutions and the powerful countries that run them. On their response to unprecedented international cooperation and coordination challenges, he was in no mood to mince words.
Five years ago, probably the most positive you could be about global development was to argue that, despite a sluggish performance in reducing global income poverty connected to slow-changing institutions, broader quality of life in areas like education and health had improved everywhere. That’s pretty much the story I told in Getting Better. But since then, what we have learned about development progress suggests su