Monday, March 31, 2008

More new technology..

Talking of new technology: there was a cool project in 2005 by a Dutch company to bring internet access to Tokelau, a remote group of Pacific Islands, where the only access is a 37 hours boat ride from Apia, Samoa:









A Dutch company installed the internet access on the island, funding it initially with aid money from NZ. They give the royalty fees for domain registration to the Tokelau government, for example by encouraging Fortune500 companies to register their "dot.tk" domains. (Although, you can easily get a free website through the .tk registry, which is why this pops up often). In return, the internet access is provided free on the islands in internet cafes, allowing the people of Tokelau to connect with the outside world.

Some of the atolls even have their own websites: check out Nukunonu and Fakaofo (and the beautiful beaches...)

Combining new technology (the internet) with old (phone booths)

My friend's sister is the "Rose Shulman" mentioned in this article, who helped set up kiosks in rural India where people can push a button and ask questions of an operator, who searches on the Internet for answers.

Two money quotes:

"
Both villages are some distance from Delhi, where their college students once had to travel to receive their exam results; now, they all come to the Question Box. The farmers of Ethida and Phoolpur have found information to help improve their rice-growing, while other residents have sought financial services and advice. One wants to use it as an English-teaching booth, around which six to eight students will gather for an oral lesson with a remote teacher."

"What Question Box users are asking:

How many zeroes are there in 90,000?

What's the square root of 25?

I've come 10th in my class for the past two years. What have I done wrong?

What's the price of pumpkin in Ghaziabad?

Who killed Mahatma Gandhi?

What's the price of milk in Dehli?

What's the score of the India v Australia cricket match?

Lorna is related to which sport?"

Sunday, March 30, 2008

Foreign Aid and Bribery at the UN

Melanie, great post! Your point about the political implications of bilateral aid immediately brought to mind this paper showing that countries are more likely to get bilateral aid when they are serving on the UN security council:

How Much Is a Seat on the Security Council Worth? Foreign Aid and Bribery at the United Nations

Saturday, March 29, 2008

Topic for tomorrow: Population Policy and Development

Hey all,
   the plan tomorrow is to talk about population policy and development. 

We can start out from two policy briefs from RAND, one on population dynamics and economic growth and another on family planning policies. A good background here is Malthus' Essay on the Principle of Population and the demographic transition. If we have time we could talk about China's one child policy, health and food aid, etc. 

Additional readings for later: Becker, Glaeser and Murphy, "Population and Economic Growth" and Birdsall, Kelley and Sinding, "Population Matters: Demographic Change, Economic Growth, and Poverty in the Developing World" (book). 

Friday, March 28, 2008

Bilateral vs Multilateral aid - buying political influence as well as buying development?

We were talking last week about aid effectiveness. I think a key distinction to make is between multilateral aid - aid delivered through organizations such as the World Bank, Asian Development Bank etc., and bilateral aid - aid delivered country-to-country. Bilateral aid is a contract between two countries, hence has the potential to be used by the donor in a favorable way - whether to support domestic production by tying the aid to the purchase of goods and services from the donor country, or perhaps by gaining political support from the recipient country. Multilateral aid, on the other hand, is less able to aid individual strategic relationships, as the aid is given on behalf of many member countries.

Here is a link to an op-ed article discussing some possible side effects of countries such as China giving large sources of foreign aid, effectively outbidding multilateral aid agencies at their own game. The article gives the example of a World Bank project in Nigeria, where the WB had identified significant corruption, and so money to develop the railway was coming attached to stringent anti-corruption measures. However, nearing completion of the negotiations the Chinese offered a much larger no-strings attached package, outstaging the WB offer. So, Nigeria gets more money to built railways, but without addressing corruption, just how effective will this money be? And what may be expected in return of Nigeria on the world political stage?

Other more explicit examples of bilateral aid being used for political influence include the admission by the head of Japan's Fishery Agency that Japanese foreign aid was used to influence countries to help overturn commercial bans on whaling, but further that this is a legitimate use of a political tool such as aid:
Japanese means is simply diplomatic communication and ODAs... So, in order to get appreciation over Japan's position, of course you know that is natural that we must resort on those two major tools , so I think there is nothing wrong.
And, of course, bilateral aid can be 'tied' to the purchase of goods and services from the donor country, so while is not providing political benefit is providing direct economic benefit. However, this may not be the most effective use of these resources in terms of development - perhaps purchasing from the recipient country and aiding local industry and employment would be more effective. Again, this benefit to the donor country is lost if the aid is delivered through multilateral channels.

I think that it is idealistic to assume that countries are acting entirely entirely benevolently with international aid - like any political act, I think there is a degree of "we'll scratch your back if you'll scratch ours". However, while such aid may be effective in achieving political goals, it may be less effective in achieving development goals. Aid delivered through multilateral aid agencies such as the WB, ADB, may be one way around this problem. However, such aid may also be less palatable domestically precisely for this reason - by distributing through a multilateral agency the country is giving up the political influence aid can yield.

(NB: I just tried to find breakdown of aid into multilateral/bilateral by country but had no luck finding aggregated tables- does anyone have # for this? I did find this PhD student who is currently writing on aid effectiveness, especially this multilateral vs bilateral difference - we can check back after August to see if it's complete and discuss then).