Menus Subscribe Search

Follow us


Helping World’s Poor? There’s An App for That

• March 04, 2011 • 3:35 PM

Technology, such as the humble cell phone, may knock down some of the impediments that tarnish the name of foreign aid.

A growing number of foreign aid organizations have been coming around to the novel idea that the well-off could best help the world’s poor simply by giving them money. Don’t build roads or fund public health campaigns or proffer job skills — just give people cash. The idea has been floated, among other places, in the aptly titled book Just Give Money to the Poor, which Miller-McCune reviewed last summer.

As far as how to go about doing that, though, a parallel seismic shift in the reality on the ground in the world’s poorest countries could enable aid organizations to scale up the idea — to game-changing effect.

“We should be very, very excited about the fact that the majority of the people we care about that we’re trying to reach now have a mobile phone — we can think fundamentally differently about how we reach them,” said Priya Jaisinghani, a senior adviser to the United States Agency for International Development. “What we’re seeing is that with this simple device, you can think about banking without the bank, you can think about education without the school, you can even think about health care services without the public health system.”

That cell phone could facilitate cash transfers directly from donor organizations to the world’s poor, bypassing corrupt bureaucrats who skim off shockingly large sums and replacing armored-car cash distribution points that are costly and inefficient to run.

Jaisinghani was speaking at a New America Foundation event ambitiously mulling the question, “Can Technology Save Foreign Aid?” Apparently, there is an app for that.

Jamie Zimmerman, the director of New America’s Global Assets Project, and Henry Jackelen, a United Nations Development Programme official, unveiled a paper outlining exactly what such a cell-phone-assisted cash transfer program would look like.

Zimmerman says the development world is poised for such a system thanks to the momentum of three converging trends. Smaller-scale “conditional cash transfer” programs — which require, for example, female heads of household to immunize their children or enroll them in school as a condition of receiving money — have been proving successful in Africa and Latin America. The microfinance field has shifted from an exclusive focus on giving the poor credit to helping them build savings. And technology has advanced to the point where legions of the world’s poorest, who may be able to afford little else, now own a cell phone.

“You put these things together, and I think you have a really powerful recipe for massively providing the poor with opportunities to save and build their assets,” Zimmerman said. “You have three trends, and from there, you can get at solving what’s a very old problem, and that’s the problem of the inefficiency and ineffectiveness of [official development assistance].”

Foreign aid is a notoriously inefficient beast, but some of the figures Zimmerman and Jackelen cite are still shocking. The amount of Western aid that actually makes it to the impoverished individual household level is estimated to be as low as 10 percent in some countries. A corruption audit of the Global Fund to Fights AIDS recently discovered that 67 percent of funds in Mauritania — and 36 percent in Mali and 30 percent in Djibouti — were misspent or unaccounted for.
[class name="dont_print_this"]

Idea Lobby

THE IDEA LOBBY
Miller-McCune's Washington correspondent Emily Badger follows the ideas informing, explaining and influencing government, from the local think tank circuit to academic research that shapes D.C. policy from afar.

[/class]
Donor governments and organizations, meanwhile, have long measured the impact of aid in money spent not outcomes achieved. Electronic cash transfers, however, would eliminate both the price of corruption and many of the transaction costs of getting paper money to the poor, stretching aid dollars much further at a time when few governments are interesting in giving more. One domestic Brazilian aid program, for instance, cut its administrative costs from nearly 15 percent to less than 3 percent of money dispersed by switching to an electronic transfer system.

The primary beauty of cell phones — Zimmerman and Jackelen cite projections that 1.7 billion people in the world will have one by 2012 — is that they allow the poor to receive money without a bank account. Aid could be transferred through a credit that’s recognized — alongside a biometric ID — at retail locations or post offices. Such systems are in place in poor countries where 140 million people are already receiving cash transfers from their own governments. Of that population, just a quarter receives that money into a full-fledged bank account.

The idea still has technical challenges and some geopolitical ones, too. It’s hard to imagine Hamid Karzai, for instance, allowing foreign aid organizations to wire money straight to his citizens without going through the Afghan government first.

“We’re not arguing that this should replace all other forms of aid or that this is any sort of panacea to poverty reduction,” Zimmerman said. “What we’re arguing is that there’s an increasing acknowledgement that aid in its current form has a lot of problems and that we need to think creatively about new ways to actually reach the poorest of the poor.”

The proposal equally requires a real shift in thinking on the part of donor organizations accustomed to treating the poor as if they need help figuring out how to spend their money.

“Could we trust a model where we’re not having aid go through these highly regulated programs where it’s a bunch of contractors coming in, giving the service, building the school, but we actually let go, and we say ‘have the money, you do it’?” Jaisinghani asked. “It’s quite revolutionary to think about letting go — just give them the money.”

 

“Like” Miller-McCune on Facebook.

Follow Miller-McCune on Twitter.

Add Miller-McCune.com news to your site.

Subscribe to Miller-McCune

Emily Badger
Emily Badger is a freelance writer living in the Washington, D.C. area who has contributed to The New York Times, International Herald Tribune and The Christian Science Monitor. She previously covered college sports for the Orlando Sentinel and lived and reported in France.

More From Emily Badger

A weekly roundup of the best of Pacific Standard and PSmag.com, delivered straight to your inbox.

Recent Posts

October 24 • 4:00 PM

We Need to Normalize Drug Use in Our Society

After the disastrous misconceptions of the 20th century, we’re returning to the idea that drugs are an ordinary part of life experience and no more cause addiction than do other behaviors. This is rational and welcome.


October 24 • 2:00 PM

A Letter to the Next Attorney General: Fix Presidential Pardons

More than two years ago, a series showed that white applicants were far more likely to receive clemency than comparable applicants who were black. Since then, the government has spent hundreds of thousands of dollars on a study, but the pardons system remains unchanged.


October 24 • 12:00 PM

What Makes You So Smart, Middle School Math Teacher?

Noah Davis talks to Vern Williams about what makes middle school—yes, middle school—so great.


October 24 • 10:00 AM

Why DNA Is One of Humanity’s Greatest Inventions

How we’ve co-opted our genetic material to change our world.


October 24 • 8:00 AM

What Do Clowns Think of Clowns?

Three major players weigh in on the current state of the clown.


October 24 • 7:13 AM

There Is No Surge in Illegal Immigration

The overall rate of illegal immigration has actually decreased significantly in the last 10 years. The time is ripe for immigration reform.


October 24 • 6:15 AM

Politicians Really Aren’t Better Decision Makers

Politicians took part in a classic choice experiment but failed to do better than the rest of us.


October 24 • 5:00 AM

Why We Gossip: It’s Really All About Ourselves

New research from the Netherlands finds stories we hear about others help us determine how we’re doing.


October 24 • 2:00 AM

Congratulations, Your City Is Dying!

Don’t take population numbers at face value.


October 23 • 4:00 PM

Of Course Marijuana Addiction Exists

The polarized legalization debate leads to exaggerated claims and denials about pot’s potential harms. The truth lies somewhere in between.


October 23 • 2:00 PM

American Companies Are Getting Way Too Cozy With the National Security Agency

Newly released documents describe “contractual relationships” between the NSA and U.S. companies, as well as undercover operatives.


October 23 • 12:00 PM

The Man Who’s Quantifying New York City

Noah Davis talks to the proprietor of I Quant NY. His methodology: a little something called “addition.”


October 23 • 11:02 AM

Earliest High-Altitude Settlements Found in Peru

Discovery suggests humans adapted to high altitude faster than previously thought.


October 23 • 10:00 AM

The Psychology of Bribery and Corruption

An FBI agent offered up confidential information about a political operative’s enemy in exchange for cash—and they both got caught. What were they thinking?


October 23 • 8:00 AM

Ebola News Gives Me a Guilty Thrill. Am I Crazy?

What it means to feel a little excited about the prospect of a horrific event.


October 23 • 7:04 AM

Why Don’t Men Read Romance Novels?

A lot of men just don’t read fiction, and if they do, structural misogyny drives them away from the genre.


October 23 • 6:00 AM

Why Do Americans Pray?

It depends on how you ask.


October 23 • 4:00 AM

Musicians Are Better Multitaskers

New research from Canada finds trained musicians more efficiently switch from one mental task to another.


October 22 • 4:00 PM

The Last Thing the Women’s Movement Needs Is a Heroic Male Takeover

Is the United Nations’ #HeForShe campaign helping feminism?


October 22 • 2:00 PM

Turning Public Education Into Private Profits

Baker Mitchell is a politically connected North Carolina businessman who celebrates the power of the free market. Every year, millions of public education dollars flow through Mitchell’s chain of four non-profit charter schools to for-profit companies he controls.


October 22 • 12:00 PM

Will the End of a Tax Loophole Kill Off Irish Business and Force Google and Apple to Pay Up?

U.S. technology giants have constructed international offices in Dublin in order to take advantage of favorable tax policies that are now changing. But Ireland might have enough other draws to keep them there even when costs climb.


October 22 • 10:00 AM

Veterans in the Ivory Tower

Why there aren’t enough veterans at America’s top schools—and what some people are trying to do to change that.


October 22 • 8:00 AM

Our Language Prejudices Don’t Make No Sense

We should embrace the fact that there’s no single recipe for English. Making fun of people for replacing “ask” with “aks,” or for frequently using double negatives just makes you look like the unsophisticated one.


October 22 • 7:04 AM

My Politicians Are Better Looking Than Yours

A new study finds we judge the cover by the book—or at least the party.


October 22 • 6:00 AM

How We Form Our Routines

Whether it’s a morning cup of coffee or a glass of warm milk before bed, we all have our habitual processions. The way they become engrained, though, varies from person to person.


Follow us


Politicians Really Aren’t Better Decision Makers

Politicians took part in a classic choice experiment but failed to do better than the rest of us.

Earliest High-Altitude Settlements Found in Peru

Discovery suggests humans adapted to high altitude faster than previously thought.

My Politicians Are Better Looking Than Yours

A new study finds we judge the cover by the book—or at least the party.

That Cigarette Would Make a Great Water Filter

Clean out the ashtray, add some aluminum oxide, and you've (almost) got yourself a low-cost way to remove arsenic from drinking water.

Love and Hate in Israel and Palestine

Psychologists find that parties to a conflict think they're motivated by love while their enemies are motivated by hate.

The Big One

One company, Amazon, controls 67 percent of the e-book market in the United States—down from 90 percent five years ago. September/October 2014 new-big-one-5

Copyright © 2014 by Pacific Standard and The Miller-McCune Center for Research, Media, and Public Policy. All Rights Reserved.