This report considers the potential of ID, mobiles, and payments to improve the capacity of governments to deliver more effective, inclusive, and accountable programs.
Identifying and Verifying Customers: When are KYC Requirements Likely to Become Constraints on Financial Inclusion?
Onerous KYC documentation requirements are widely recognized as a potential constraint to full financial inclusion. However, it is sometimes difficult to judge the extent to which this constraint is a serious or binding one, relative to others. The paper considers this question, distinguishing between different types of documentation and different financial market segments according to their KYC requirements.
India has emerged as a leader in building on its biometric digital ID to reform service and program delivery. It moved quickly to consolidate the rollout of Aadhaar, and then to embed the unique Aadhaar number into program databases. A range of applications, including digital signature and payments, was then constructed on top of the Aadhaar foundation (the India Stack). Together with partners, the Center for Global Development is analyzing the effects of Aadhaar-based reforms. The three programs we discuss below highlight achievements as well as challenges that need to be overcome for greater efficiency and inclusion.
Like a number of other countries, even in 2017, Malawi lacked a functioning national registry or identification system. This essay describes how a comprehensive multipurpose national ID system was implemented in 180 days, with the assistance of UNDP and other development partners.
Digital Governance in Developing Countries: Beneficiary Experience and Perceptions of System Reform in Rajasthan, India - Working Paper 489
India is at the forefront of the use of digital technology to transform the way in which citizens interact with states. This paper provides a picture of the perceived impact of digitization reforms in Rajasthan, based on a survey of beneficiaries of several benefit programs. We find that, on balance, the reforms appear to have improved perceptions of service delivery despite some difficulties during the digitization process and the possibility that there could have been some degree of exclusion.
Even while policy solutions to address de-risking are being implemented, new technologies have emerged to address de-risking by increasing the efficiency and effectiveness of AML/CFT compliance by financial institutions.
Recent advances in the scope and sophistication of identification systems could have far-reaching consequences for development. While there is no one-size-fits-all approach, there are common features that ID systems should share if they are to support development.
Identification Revolution: Can Digital ID Be Harnessed for Development? offers a balanced perspective, covering both the benefits and the risks of the identification revolution, and pinpointing opportunities to mitigate those risks.
Fuel Subsidy Reform in Developing Countries: Direct Benefit Transfer of LPG Cooking Gas Subsidy in India
India’s reform of household subsidies for the purchase of LPG cooking gas stands out for a several reasons. The paper provides a detailed picture of the reform through its various stages, including how the process was conceptualized, coordinated, and implemented. It analyzes how such a reform must be able to adapt to concerns as they arise and to new information, how digital technology was used and how it is possible to use a voluntary self-targeting “nudge” to defuse potential resistance to income-based targeting.
What a New Survey of Aadhaar Users Can Tell Us About Digital Reforms: Initial Insights from Rajasthan
India’s Aadhaar biometric identification scheme has registered over 1.1 billion people, including almost all adults in the country and over 15 percent of the global population. Of course, initiatives of this scale cannot escape controversy. What the debate has so far lacked, however, is data. We set out to help fill that gap with a survey focused on a digital governance initiative in the state of Rajasthan.
Elections have emerged as a leading area for the application of biometric technology in developing countries, despite its high costs and uncertainty over its effectiveness. This paper finds that a reduction in the probability of post-election violence by only a few percentage points could offset the cost of the technology. However, this is possible only in particular situations.
There is growing recognition of the importance of identification for sustainable development. Its role is recognized formally in target 16.9 of the Sustainable Development Goals, which calls for providing “legal identity for all, including through birth registration” by 2030. Identification is also an enabler of many other development targets, from social protection (delivering support) to financial inclusion (opening bank or mobile accounts and establishing a credit record) to women's empowerment.Having a recognized identity is crucial for achieving several development outcomes.
The post-2015 development agenda is being shaped as we speak. The role of identification and its importance to development outcomes places it within the new Sustainable Development Goals (SDG) agenda — specifically as one of the proposed SDG targets (#16.9), but also as a key enabler of the efficacy of many other SDG targets. Although there is no one model for providing legal identity, this SDG would urge states to ensure that all have free or low-cost access to widely accepted, robust identity credentials.
Indonesia’s rate of birth registration is imprecisely measured but is low, especially among the poorer, rural, population. At the same time, the country has developed a system of population registration with wide, if not universal, coverage. In addition, under current regulations that link legal recognition of paternity to the existence of a legal marriage, many children can only receive a birth certificate with the name of the mother. Such a credential is widely seen as less than desirable, creating a situation where children are discriminated against on the basis of the marital status of their parents.
Pakistan is a leader in the application of identification systems and technology to a range of development issues. The National Database and Registration Authority (NADRA) of Pakistan has become a central player in a number of program areas and has been internationally recognized for its expertise, including winning many awards for excellence.
Universal legal identity through birth registration has consistently remained as a potential target for the post-2015 agenda through several rounds of negotiation. However, as it has been put forth, it conflates legal identity and birth registration. This policy note clarifies the differences between legal identity and birth registration and offers measurable, achievable target language for each component to ensure that this important issue remains in the post-2015 development agenda in an impactful way.
Privacy and Biometric ID Systems: An Approach Using Fair Information Practices for Developing Countries
Biometric identification systems that are in place or under consideration in many countries present significant privacy consequences principally relating to information privacy or data protection. This paper discusses personal privacy in the context of the adoption of biometric identification systems.
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.