This report considers the potential of ID, mobiles, and payments to improve the capacity of governments to deliver more effective, inclusive, and accountable programs.
Financial inclusion is a fundamental pillar of development. But Mexico poses a conundrum. In many respects it has been successful at growing its economy and integrating with global markets. Yet among its peers in Latin America, Mexico is the worst-performing at financial inclusion relative to its income; at 36.9%, its rate of inclusion only surpasses three other countries regionally—all with much lower per capita incomes.
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.
Improving the quality, impact, and efficiency of public services is one of the most critical challenges of public policy. There are multiple ways of addressing these challenges, but a common theme is the need to put citizens at the center of governance and service delivery, through empowerment, transparency, accountability, and participation.
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.
Fuel Subsidy Reform and Green Taxes: Can Digital Technologies Improve State Capacity and Effectiveness?
Reforming inefficient and inequitable energy subsidies continues to be an important priority for policymakers as does instituting “green taxes” to reduce carbon emissions. The paper outlines how the use of digital technology can help accomplishing those reforms, drawing on four country cases. The technology is only a mechanism; it does not, in itself, create the political drive and constituency to push reform forward.
The state of Andhra Pradesh is recognized as a leader in using technology to improve the delivery of public services, programs and subsidies. This paper reports on research to better understand the functioning and effectiveness of its reforms to strengthen state capacity by digitalizing service delivery.
The ability of digital payments to deliver better outcomes for governments, businesses, and individuals—including driving financial inclusion—has been one of the success stories of the digital age.
Bangladesh, a country of 165 million people bordering India and Myanmar, is undergoing a rapid economic and social transformation. Bangladesh is also witnessing a digital revolution.
Earlier this year we undertook a field study of Krishna district of Andhra Pradesh (AP), together with collaborators from Microsave, to understand the experience and perceptions around digital governance reforms. Our three surveys—of households, ration shop owners, and bank correspondents—find widespread support for digital governance reforms, including the use of Aadhaar authentication to receive food rations through the public distribution system (PDS) and social pensions through the panchayat, as well as for digital land records. However, we also find some areas for improvement.
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.
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.
Can Africa Be a Manufacturing Destination? Labor Costs in Comparative Perspective - Working Paper 466
Our central question is whether African countries can break into global manufacturing in a substantial way. Our results suggest that for any given level of GDP, labor is more costly for firms that are located in Sub-Saharan Africa. However, we also find that there are a few countries in Africa that, on a labor cost basis, may be potential candidates for manufacturing—Ethiopia in particular stands out.
This work analyzes fresh data made available by updated, more comprehensive Enterprise Surveys of formal firms of various sizes and, importantly, of informal firms. It concentrates on five countries (the DRC, Ghana, Kenya, Myanmar, and Rwanda) to provide more fine-grained insights into differences in characteristics and productivity levels between formal and informal firms or different sizes in different developing countries.
Attention presidential transition teams: the Rethinking US Development Policy team at the Center for Global Development strongly urges you to include these three big ideas in your first year budget submission to Congress and pursue these three smart reforms during your first year.