PSD Blog - The World Bank Group

In search of PSD’s “holy grail”

The “holy grail” for those working in PSD is the scalable and sustainable business model that engages the poor while delivering social and developmental outcomes. Finding the PSD grail will potentially empower large numbers of poor men and women to find their own way out of poverty as well as generating, on a commercial basis, socially desirable goods and services. But there have been many false trails in the quest for the PSD grail. Among them are supply chain development initiatives that remain external to the economic lives of the poor, and heavily subsidized models that engage the poor but have limited prospects for wider replication, scaling or longer term sustainability.

Occasionally something comes along that captures our imagination and seems to offer a glimpse of the elusive grail. Mohammed Yunus' recent speech on social business at IFC was a widely reported example. Another similar but smaller event was more quietly inspirational. Harold Rosen, IFC’s former in-house serial entrepreneur and inspiration behind many of the IFC’s small and medium enterprise interventions, returned to IFC to discuss the performance of his Grassroots Business Fund (GBF), which was spun off from IFC in 2008.  

Random Hacks of Kindness is here!

As announced in a previous post, the Random Hacks of Kindness "hackathon" is officially under way today. Thank you to those of you who contributed ideas for issues to be tackled or helped spread the word in the developers' community.

The prospect of 200 programmers from Silicon Valley and around the world convening in San Francisco to work with international first responders and disaster risk management experts is mouth-watering. In the works are software solutions such as a system to submit found or missing people reports, a tool to determine the trustworthiness of crowdsourced data points, and a people-finder mobile-based upload, confirmation, comment, and inquiry system. These solutions will continue to be developed at subsequent events, and openly shared with the international community. So watch this space or the official Random Hacks of Kindness website for follow-up calls to action.

World Bank public data now available directly in Google

The World Bank and Google have taken their relationship to the next level! Starting today, seventeen of the World Bank's Development Indicators are now available via a nifty Google search.

Google's in-house blog explains:

With today's update, you can quickly access more data with a broad range of queries. Search should be intuitive, so we've done the work to think through queries where public data will be most relevant to you. To see the new data, try queries like [gdp of indonesia], [life expectancy brazil], [rwanda's population growth], [energy use of iceland], [co2 emissions of iceland] and [gdp growth rate argentina]. For example, if you search for [internet users in the united states], you will see the following chart at the top of the results page:

Clicking on the result will bring you to an interactive chart where you can compare the United States with other regions around the world. We've also added a new feature to enable you to embed these charts in your own website or blog by clicking on the "Link" button in the upper right-hand corner of the chart page. You have the option to either embed the chart with static data, or you can also set the chart to update dynamically when new data becomes available.

Got Behavioral Economics?

Despite economists’ frequent assumption that humans are rational economic agents, let’s admit it, we have limitations; we may be weak, altruistic, easily manipulated or scatter-brained among many other things. Thus, results based on, say field experiments relying on one-off interviews may tend to miss a lot of that important human behavior.

The Obstacle to Renewable Energy (hint: it isn't about costs)

Columbia University's Geoffrey Heal asks, "can renewable energy save the world?". The answer is dependent on infrastructure and technology, rather than cost:

Where does this leave us with renewables as a solution to the problem of climate change? We can replace some fossil fuel power with renewable power without a major cost increase, but we cannot hope to replace a major fraction of our fossil power with intermittent power sources such as wind and solar – unless we can develop storage technologies. Being able to store power and smooth the output of intermittent power sources would greatly enhance the attractions of renewable power.

The bottom line is that neither costs nor capital requirement will prevent us from decarbonising the electricity supply. The real obstacle to doing this largely with renewables is our current inability to store power, and as long as we cannot store power we will need to use non-renewable sources like nuclear and coal with carbon capture and storage.

Probably a good place to invest some stimulus money.

The day you’ll be able to stumble upon development funds

Quite literally…

Imagine walking around the streets of DC with your mobile phone in hand. You "point" to, say, a building or a bridge and an application on the phone allows you to detect whether the project is a beneficiary of some of the $787 billion allocated by the US Government American Recovery and Reinvestment Act. The amount of money spent for the building and the name of the beneficiary are also displayed. Public spending could not get more transparent – and tangible – than this. Science fiction? Not anymore, thanks to the augmented reality mash-up just released by the ever inspiring folks at Sunlightlabs (hat tip: David Osimo).

 

The Market for Aid 2.0: Collaborative markets

A couple of years ago, former PSD blogger Tim Harford and co-author Michael Klein argued for more market-like mechanisms in the aid industry in The Market for Aid. A new working paper by Owen Barder (Beyond Planning: Markets & Networks for Better Aid) picks up where Tim and Michael left off. Owen argues that aid agencies are stuck between a rock (donor countries) and a hard place (recipients and recipient country governments), in which the interests of donors and recipients don't fully align. Better planning alone won't make this problem go away. 

Owen offers up an alternative, something he calls a collaborative market. The concept draws on some of the ideas in The Market for Aid, but goes a step further:

A considered combination of market mechanisms, networked collaboration, and collective regulation would be more likely to lead to significant improvements [in the aid system]. A “collaborative market” for aid might include unbundling funding from aid management to create more explicit markets; better information gathered from the intended beneficiaries of aid; decentralized decision-making; a sharp increase in transparency and accountability of donor agencies; the publication of more information about results; pricing externalities; and new regulatory arrangements to make markets work.

World Bank gets its own data visualizer

Perhaps taking a page from Hans Rosling's extremely popular presentation of development data at the 2006 TED Talks, the World Bank now has its own publicly accessible tool for data visualisation. This first version of the tool contains 49 indicators for 209 countries taken from the World Development Indicators.

Just to get a taste of how the tool works, I looked at the number of internet users per 100 people (Y-axis) compared to GNI per capita (X-axis) and got the chart below. Each of the colored blobs represents a country, and the size of the blob represents total population. On casual observation, it looks like a lot of countries that are more wired than their income levels would predict are in eastern Europe.

For those who really want to get crazy, the tool also allows you to "play" the statistics over time. If you want to learn more about how not to bore your audience to death during your next Powerpoint presentation, check out this video tutorial. (Highly recommended for all development professionals.)

A Chinese Marshall Plan?

Geoff Dyer explores the idea of using China's massive foreign exchange reserves to form an investment vehicle for emerging markets. He has assembled a series of proposals from leading Chinese thinkers, including some from within the government.

For example:

• Hu Xiaolian, deputy governor of the central bank, has proposed the idea of a "supra-sovereign wealth investment fund" which would invest in developing countries so that "these countries (can) serve as new engines in global recovery and growth."
• World Bank Chief Economist Justin Lin thinks that "Chinese companies should step up investment in Africa and south-east Asia, including outsourcing some low-end manufacturing, to boost consumer demand."
• And finally, Xu Shanda, former head of China's federal tax bureau, has "called for the creation of a ($500bn) Chinese 'Marshall Plan' to lend money to Africa, Asia and Latin America to boost living standards in those regions and create demand for Chinese products to replace struggling US and European customers."

I find myself in agreement with Dyer's take on the idea:

If China can channel even a modest portion of its vast liquidity to the developing world in a responsible way that boosts demand without creating new, suffocating debt burden, it will be pushing on a door that is already opening.

Financial crisis lab rats

This year's Nobel prize for economics went to Oliver Williamson and Einor Ostrom - both known for grounding their work in the real world. The committee perhaps wisely shunned researchers in finance or macroeconomics who are still coming to terms with the financial crisis and global recession. No such shyness from the judges for the Ig Nobel Prizes - committed to showcasing improbable research that makes you laugh and think. They found a way to reward those who have tested financial market models through all too real experience, giving their economics prize to the management and auditors of four Icelandic banks for demonstrating that "tiny banks can be rapidly transformed into huge banks, and vice versa - and for demonstrating that similar things can be done to an entire national economy."

The Ig® Nobel Prizes - now in their 19th year - make for entertaining reading. Where else can you see 3 true Nobel Laureates, including Paul Krugman, wearing brassieres that convert to face masks? Yet they provoke discussion about the purpose of research and the value of unpredictable, unintended results. Could we champion an award to highlight improbable research and projects in the World Bank Group? I welcome nominations.