Although this year had welcome news about poverty rates falling across the globe, almost two and a half billion people still get by on less than $2 a day. Innovative solutions for tackling global poverty are needed as much as ever. Here are five development innovations to watch in 2013:
1) Cash Transfers
Cash transfers are among the most effective ways to reduce poverty in a sustainable fashion. There is growing evidence that beneficiaries of the transfers continue to experience increased consumption long after the transfer has occurred. More than thirty governments around the world have implemented conditional cash transfer programs tied to such positive behaviors as improving children’s healthcare and education. Now, some organizations are bringing the cash transfer model to philanthropy. Earlier this year, I wrote about GiveDirectly, a nonprofit that distributes money to poor families in Kenya primarily through mobile phones. Families can use the money however they choose, and GiveDirectly tracks their decisions. So far, the data support the premise that poor people know best how to spend what little money they get to improve their lives. Generally, recipients made high return investments, such as replacing a thatched roof with a long-lasting metal one. GiveDirectly has a low overhead cost (only about 7 percent in fees and administration), and if the organization proves its model of cash transfers to be effective and scalable, it could upend traditional philanthropy.
The philosophy behind Information and Communication Technologies for Governance (ICT4Gov) is that increased civic participation leads to better governance, and the rapid spread of new technologies, in particular mobile phones, is a great enabler of civic participation. For instance, if citizens can provide feedback to government about service delivery, and even rate the quality of specific programs, then government will have more information to prioritize services and should be more accountable to citizens. Increasingly ubiquitous cell phones make that whole interactive process possible, even in places with little infrastructure. A primary focus of the World Bank Institute’s ICT4Gov initiative has been participatory budgeting—a process that allows citizens to vote on how a certain percentage of a government’s budget will be put to use. One such project is in South Kivu in the Democratic Republic of the Congo, a country known more for conflict than innovative governance. Participatory budgeting has given South Kivu communities the chance to voice their development needs, and the government has responded. Apparently, tax collection rates in South Kivu have gone up as people have come to believe that their government can actually deliver valuable services—perhaps part of the solution to increasing tax collection in developing countries, where tax collection rates are notably low. Watch for more on participatory governance in 2013.