Wednesday, 2 July 2014

Infrastructure aid

The Campaign for Boring Development makes the case that development does not always make for exciting stories. In their words, It doesn't photograph well.

They have 5 principles in their manifesto,
  1. Development Does Not Photograph Well
  2. “Making the Lives of the Poor Better” is not the same thing as ”Fighting Poverty”
  3. Sustainable, but not sustained
  4. Development Bloat is the Imperialism of the 21st Century
  5. Why Income?
Item 2 is interesting in that they distinguish Humanitarian Aid and Development Aid. The former makes the life of the poor easier but does not grow their wealth (significantly), the latter leads to increased wealth. It seems that some aid is sold as development aid but is in fact humanitarian aid. They give the example of microfinance.
In Banerjee’s analysis, the problem is that the familiar narrative about the bottom billion as entrepreneurial but capital-starved just isn’t borne out by the evidence. Framing the poor as “natural entrepreneurs” obscures the much more mundane reality that, for the most part, very poor people in very poor countries use very small loans very much in the same way middle class people in rich countries use bank loans: to finance big ticket items that massively improve their lives but cost multiples of their monthly income.

If you earn the median U.S. worker’s income, you can’t shell out $20,000 in cash for a nice car next month. That’s six months’ income! It might take you 5 or 6 years to save up that much cash. But that doesn’t mean you have to walk to work every day for the next six years while you save up to buy a car. You get a loan and pay for it while you’re driving it it. Does that loan increase your income and transform your life chances? No. Does it massively improve your quality of life? You betcha.

If you’re in the bottom billion, you can’t shell out $200 in cash to finally fix the damn roof that’s been leaking on you for the last two years. That’s like six months’ income! It might take you 5 or 6 years to save up that much cash. But that doesn’t mean that you have to keep getting rained on for six years while you save up for your roof. You get a loan and pay for it while you’re using it. Does that loan increase your income and transform your life chances? No. Does it massively improve your quality of life? You betcha.
Source
They are not critical of helping the poor in their poverty, but they wish to distinguish this from lifting them out of poverty. Now any endeavour may have aspects of both, but development probably needs to be predominant for it to be called Development Aid.

The main reason to link to this story is that I find the topics they discuss anything but boring. Developing infrastructure such as water supply and roading is very important; possibly under-appreciated (at least roading), and
Road building is hard, dusty, unglamorous work. It photographs horribly. I mean, seriously, try hitting up donors with that image. It just doesn’t work.

Road Building, in other words, is the original Boring Development agenda: the
stuff development agencies used to do back in a halcyon age back before the bloat agenda hobbled pragmatic interventions proven to work.

While donors dither, African governments – who need little reminding how important roads are to development – are taking the lead. Africa is on a road-building frenzy to expand its existing, woefully inadequate primary road network tenfold by 2040.
New Zealand needs more roads and it is a high-income developed country; how much more does Africa.

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