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Archive for September, 2009

May 20, 2010 Update

For some very interesting and pragmatic research approaches, see the work of Esther Duflo at the MIT Poverty Lab.

TED Talk: Social Experiments to Fight Poverty (Feb 2010)

MIT Poverty Lab Research Page

Her argument, which I wholeheartedly agree with and have been asking social science colleagues for a while:

Instead of applying theories on a broad scale, let us first use the same approach that is used in clinical trials (aka scientific method).

  1. Start with a hypothesis.
  2. Conduct experiments with a control group
  3. Document the results
  4. Analyze the data with particular emphasis on unexpected findings
  5. Guide yourself by the rule of thumb, a valid theory is both descriptive AND predictive (in other words, it does not just explain what is going on, it must also allow you to forecast/predict what will happen if you have the same inputs/variables).  This is an area where I personally believe the social science research to date has been sorely lacking.  Theories are highly descriptive but few, if any, are predictive.

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I originally wrote this post on September 12, 2009.  On April 28, 2010 Charlie Rose interviewed African entrepreneur & billionaire/Celtel founder  Dr. Mohammed Ibrahim (aka Mo Ibrahim) and I was delighted to hear him express views that are similar to what I posted.

Specifically:

  1. The need to distinguish between development aid and humanitarian aid (the latter being always necessary).
  2. Yes Africans need to be self-sufficient.  However, the need for African governance to improve does not mean that development aid to governments should stop.  More importantly, many of the same banks (e.g. Goldman Sachs) that are willing to make highly risky investments are not willing to take risks in Africa.  Capital is a necessary form of aid to any business endeavor.  Generic statements such as “Dead Aid” or “all aid to Africa should stop” are not helpful in creating the types of changes that need to occur in Africa.
  3. While assistance from the Chinese and others is always welcome, the Chinese must stop using their funds (public or private) to support corrupt or despotic regimes (Moyo has recommended that Africans turn to China for aid).

You can view the delightful interview here http://www.charlierose.com/view/interview/10985 (well worth watching as Dr. Ibrahim recounts how he achieved his business success in Africa).

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This topic has been at the forefront of debate for quite some time.  Many have asked for my opinions on Dambisa Moyo and her book Dead Aid.  I have not read the book but I have listened to interviews such as these: http://www.youtube.com/watch?v=pXWIUg30Cpk&feature=channel

Overall, my summary opinion would be that, economists are theoretical and not experienced in hands-on implementation plus have a tendency to speak of their theories as if they were gospel.  Taken in this light, there is nothing new or surprising about what Moyo is saying: Governments in African countries (and other developing nations) tend to have high levels of corruption and, if aid is given through a mechanism that is highly corrupt, it does not do much to benefit the target recipients.  This has been said over and over again.  George Soros (also an economist by training although this one is a billionaire) launched his Open Society Institute http://www.soros.org/ because he realized that the corruption problems he witnessed in Eastern Europe were the same problems which exist in other parts of the world.   Let me also state that there is nothing wrong with theory.  We need theories to organize our thoughts and to create frameworks which enable dialogue and the exchange of ideas which eventually leads to solutions.  However, theories must not be promoted as solutions; they are abstract and theoretical.  It takes data, implementation experience, monitoring and evaluation to create effective solutions.

On a personal level, I have very vehement sentiments when I hear blame being placed on external entities (in this case donors providing aid and the celebrities who use their status to create awareness about problems).

First, I have to disclose a bias, I am a huge Bono fan!  He has always used is rock star status to talk about issues we would prefer to ignore (in the context of Africa, before debt relief and aid, it was Apartheid).  Celebrities are trend setters.  This is a well established fact and the top celebrities get paid millions upon millions to endorse products because of this fact.  Given a choice between a celebrity getting paid millions to tell me which lipstick to buy or which shoe to wear versus a celebrity who forgoes millions in income to use his or her status to create awareness about a social problem, I vote for the latter any day, any time, any where.  As for focusing on negative issues versus positive issues, problems are negative issues.  If you want to talk about a problem, you will be speaking about negative things.  The responsibility for positive stereotypes does not lie with celebrities, it lies with Africans.  It is up to Africans to talk about what is good or what positive steps are being taken to address the problem the celebrity is creating awareness about.

The issue of responsibility leads me to my second bias.  As a self-titled Responsibility & Empowerment Catalyst, I will always put the blame on personal responsibility first (perhaps it is Catholic upbringing and too many mea culpa confessions).  In my opinion, if aid is to blame for Africa’s problems, what are Africans responsible for?  Take the genocide in Rwanda as an example. Yes, external monies were funneled to various groups to purchase weapons etc.  However, was anyone involved REQUIRED to kill another human being?  Especially in the instance when people committed violence against members of their own family for being of the wrong tribe, how was this required?  If someone were to come up to you today and say, here is a gun, kill your first cousin whom you’ve known and played with since childhood because he or she is different, would you do it?  When things like this happen it really is not about tribe or socio-economic status or race it is about senseless hate.  Aid did not cause the genocide in Rwanda, Rwandans caused the genocide in Rwanda!  The same applies in the Congo, in Liberia, in Sudan, in Kosovo,……  If we truly want to have a proper debate about responsibility, we MUST first talk about individual accountability and responsibility.  We cannot create discourse which allows individuals to play the role of victim by blaming their actions on “I can’t help myself, someone else made me do this.”  Nothing I have heard thus far from Moyo even begins to touch on this issue.

At a practical and professional level, I need to preface my remarks with the three rules of thumb I was given during my undergraduate training in Political Science and a fourth which I learned on the job as a Public Policy analyst working in city government:

  1. Never complain about a problem unless you already have a solution that can be implemented.
  2. The devil is in the details.
  3. Follow the money.
  4. In God we trust, all others bring data.

I also must disclose that my professional bias is in favor of practitioners and not theoreticians.  Two examples of practitioners who have PROVEN track records in implementing globally replicable solutions that get people above the $1/day poverty line are Paul Polak www.paulpolak.com (use of appropriate technology) and Muhammad Yunus http://www.muhammadyunus.org/ (most recognized micro-finance model).

I must add that there are African versions of both.  I will focus on Kenya.  When it comes to appropriate technology there is Kickstart which has been successfully developing appropriate technology equipment for the rural poor since 1991.  On the micro-lending side Kenya has a strong Association of Microfinance Institutions which have been quite successful.  Two examples are Jamii Bora which is now schooling JP Morgan, and, Small & Micro Enterprise Programme SMEP (no website) which has been operating for close to 20 years and have seen street vendors who were given a loan of $200 15 years ago and now have a networth of $6million.

Would development aid dollars to such organizations be a waste of money???  The danger of focusing only on the failures is that it leaves little if any room to examine what has been successful.

Now to put the four golden rules in the context of the two examples raised by Moyo in the above video link.  In order to make things easier to read I have created a table and converted it to PDF format:

Cecilia_Wandiga_Reactions_to_Moyo

If after reading this you are feeling the onset of a migraine, you have just had your first Implementation 101 lesson.  We haven’t even touched upon getting the necessary players to the table, managing personalities, finding resources, etc.

Are the issues I raise insurmountable?  Absolutely not!  Solutions already exist all over this wonderful planet of ours.  However, there is a HUGE difference between selling books by issuing opinionated statements and actually creating effective and workable solutions.  I always welcome controversial dialogue.  It sparks debate, debate leads to the exchange of ideas, the exchange of ideas eventually (more often than not, as in 10 to 20 years) leads to solutions.

What we must all remain clear about is the difference between theoretical debate and actual implementation.  During theoretical debate we announce that the Devil is in the room and explain why this is a problem.  During implementation we have to shake his hand, dance with him, eat with him, listen to him, AND work with him.

Does Dead Aid appear to be equally as exciting of an idea now?

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