Center for Global Development

Grants these days: Like asking your parents for a car

Topics: Health, Innovation
Countries: United States
OK, it may not be a free ride, but that might be just as well. Photo: <a href="http://www.flickr.com/photos/nightthree/321826517/in/photostream/">Justin Russell (Flickr)</a>
OK, it may not be a free ride, but that might be just as well. Photo: Justin Russell (Flickr)

Funding self-sustaining poverty solutions means attaching strings. We all know it's for the best—but man, sometimes those funders can drive you crazy.

On the Center for Global Development's health policy blog, Victoria Fan and Rachel Silverman fill a deeply underserved niche in the poverty alleviation industry: satire.

The pair attempts to explain the differences among the world's leading global health donor institutions by imagining what they'd tell you if they were your parents and your grant application were a request for an automobile. A few highlights:

PEPFAR: Ok, we’ll buy you a new car, but we’re going with you to the dealership and it must be American-made. At least one seat must be devoted to abstinence and the delay of sexual debut. Before you drive the car, you must promise not to support prostitution. Each quarter, you must report how many miles you’ve driven with how many passengers, with a target of 1000 passenger-miles per month. ...

WHO: Sorry, we haven’t had a car budget in ten years. But we DO have a new set of guidelines on best practices for safe car driving, and a box full of old carfax vehicle reports that you’re welcome to look at any time. …

Gates Foundation: Of course, darling, we gave your boarding school plenty of money to buy a car. And since we’re on the Board, we’ll make sure they buy the right car. And you can drive it any time you want…as long as one of us is in the passenger seat to make sure you’re going the right way.

Global Fund: We’ve reviewed your proposal for a Range Rover and according to Consumer Reports it is a technically capable car for city driving. Here is a $70,000 check for you to go and buy the Range Rover, as discussed in your proposal.

There's a serious point here, of course: Parents attach strings to their gifts not to be nasty, but because they care deeply about the long-term outcomes of their disbursements.

None of which changes the timeless truth that sometimes parents just don't understand.

What if the best way to measure wealth is ... health?

When people make money, health always seems to be one of their top priorities. Does that make it a good measure of prosperity itself? Photo: Photo: Jean-Pierre Dushime/Mercy Corps
When people make money, health always seems to be one of their top priorities. Does that make it a good measure of prosperity itself? Photo: Photo: Jean-Pierre Dushime/Mercy Corps

Health isn't just an optional side benefit of prosperity, one expert argues. It might be the ideal way to measure whether wealth creation is working.

As battle lines are drawn over the United States' World Bank nominee Jim Yong Kim, some are questioning whether a man who's criticized "the quest for growth in GDP and corporate profits" for failing to improve health outcomes can be truly committed to the Bank's traditional focus: economic prosperity.

"His qualifications are a bit narrow for the job," former International Monetary Fund director Arvind Subramanian told Bloomberg. "Someone who comes to the bank has to be much more than a health economist."

In a blog post Wednesday, Subramanian's colleague Amanda Glassman, director of global health policy at the Center for Global Development, struck back with a persausive case that health is central to the Bank's work—and to economic growth in general. My favorite point is her first:

Health and nutrition status are the ultimate measures of well-being. … Charles Kenny has argued that health outcomes like life expectancy and infant mortality rates are better indicators of long-term well-being than growth and income poverty. Further, there is much evidence that more years of life and health are valued more than other consumption; the trend in public and private health expenditure mainly goes in one direction – up."

As Glassman notes, the technical definition of a "luxury good" is that people prioritize it when they get richer. Health seems to fit that bill perfectly.

In that sense, a World Bank leader who uses health as a primary sign of poverty alleviation isn't rejecting economic growth. He's just finding a new way to measure it.

Why fingerprint scanners could be the perfect way to distribute oil wealth

The falling costs of electronic fingerprinting make it a promising tool for cash payments of wealth from extracted resources. Photo: <a href="http://www.flickr.com/photos/sidelong/2945717204/in/photostream/">Dave Bleasdale (flickr)</a>
The falling costs of electronic fingerprinting make it a promising tool for cash payments of wealth from extracted resources. Photo: Dave Bleasdale (flickr)

Spy movies turn voices into passports, retinas into passwords. And modern fingerprint readers might be on the verge of helping developing nations turn oil revenues into cash transfers.

That's what Alan Gelb and Caroline Decker argue in a compelling round of research published this summer by the Center for Global Development. When people enroll in a cash payment program, their fingerprints or irises are scanned electronically; these are then used for identification before each future cash withdrawal.

It's called biometrics, and Gelb and Decker say it's a great way to fight fraud:

Evidence suggests that even well designed transfer programs experience 10-20 percent leakage, if not higher…We estimate that in a typical cash transfer program, savings from biometrics can cover initial costs in only 15 months and save an additional $60 million after five years. This is in addition to providing an auditable trail of the entire program and facilitating more efficient payment mechanisms.

Gelb and Decker also persuasively argue that biometrics can be great for voting and banking records, too. But they're especially interesting as a way for resource-rich countries to divvy up the revenues from their natural wealth. The researchers estimate, for example, that Libya's pre-war oil exports added up to an annual windfall of $6,250 for each of 6.4 million citizens.

Find a way to put most of that cash in the hands of residents, perhaps by way of a national trust fund, and you'd have some very nice working capital for up to 6.4 million business ventures or school tuitions.

There are two reasons resource-extraction cash transfers are a particularly promising application for biometrics:

Ongoing payments: The 15-month payoff period for biometric systems makes them ideal for large-scale programs that maintain long-term relationships with cash recipients. Resource extraction is a years-long process.

Decentralized wealth: Resource-rich nations have been dogged by what Gelb and Decker call "governance problems associated with the concentration of large rents in the hands of the state." By creating an efficient channel to spread that wealth to individuals, biometrics could make make it harder for future autocrats to consolidate power.

Even James Bond might be impressed by that.


Stories We're Watching

Biofuels goals 'may lead to food shortages'

Science and Development Network - Mon, 05/21/2012 - 02:00
A study finds that some developing countries may face significant food security impacts by 2020 if their ambitious biofuels targets are met.

Land grabbers: Africa's hidden revolution

The Guardian's Poverty Matters - Sat, 05/19/2012 - 16:05
Vast swaths of Africa are being bought up by oligarchs, sheikhs and agribusiness corporations. But, as this extract from The Land Grabbers explains, centuries of history are being destroyed.

Sustainable development is the only way forward

The Guardian's Poverty Matters - Sun, 05/20/2012 - 23:00
Development co-operation needs to shift focus from poverty eradication to a broader, more inclusive framework.

The Real Story on Charcoal for African Cookstoves

Triple Pundit - Sun, 05/20/2012 - 13:11
You may have seen pictures of women in Africa cooking their daily meals on a small cookstove. These cooking implements look remarkably similar to the portable charcoal grills an American family might bring to the beach for an afternoon of grilling hot dogs and hamburgers.

Could Glass-Steagall Have Stopped JPMorgan Loss?

NPR - Sat, 05/19/2012 - 15:13
The banking giant's $2 billion loss has many lawmakers and economists wondering what happened to the 2010 financial overhaul, which was supposed to prevent risky hedging. Many are also looking back further — to a Depression-era law, repealed in 1999, that separated commercial and investment bank activities.

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