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41. An Analysis of the Binding Constraints on Digital Financial Inclusion in India Using a Decision Tree Methodology

Author:
Nandini Harihareswara and Howard Miller
Publication Date:
04-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The past decade has seen significant innovation and growth in the volume and value of digital payments in India. However, we find that the associated gains have been heavily concentrated in favor of wealthier and urban customers and have had less impact on lower income and rural populations. While some customers now have a far greater selection of quick, cheap, and convenient digital payments methods, as much as 65 percent of the population remains effectively excluded. Using a decision tree framework, we test a range of factors on the supply and demand sides that could be binding constraints on further digital finance penetration. We find that an unlevel playing field in favor of the (primarily state-owned) banking sector results in a lack of effective competition that could be inhibiting greater innovation and outreach in favor of lower-income and marginalized people. This unlevel playing field is potentially a function of institutional weakness combined with the nexus of control of the government and the banking sector, which is reinforced by the position of the National Payments Corporation of India. This control may also be viewed by the government as necessary to protect economic stability in a very dynamic market. To the extent that institutional deficiencies are the root cause of regulatory barriers to the entry of new providers and the scope of digital financial services offered, they are a binding constraint on advancing digital financial inclusion. Under this market structure, the outreach and inherent business models of digital payments and transfers do not provide sufficient perceived benefits to attract large segments of the population. Further, a lack of trust in providers combines with the perception of low benefits to generate an additional binding constraint, preventing the market from reaching a critical mass at which the bulk of the population would have the means and the incentives to use the system. Therefore, the market remains at an equilibrium below its potential.
Topic:
Development, Governance, Finance, and Digitalization
Political Geography:
India and Asia

42. How Do Development Agencies Support Climate Action?

Author:
Rachael Calleja
Publication Date:
03-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
This paper explores how development agencies are integrating climate action into development portfolios in response to calls to scale-up climate engagements in alignment with both the Sustainable Development Goals and the Paris Agreement. Using data compiled on all 30 members of the Organisation for Economic Co-operation and Development’s Development Assistance Committee (OECD-DAC), this paper maps and analyzes trends in both the scale and usage of official development assistance allocated to support climate activities and the tools and approaches used to integrate climate across development activities. This paper shows that while climate has become a key priority for development agencies, there remains scope for deepening integration by improving monitoring and reporting of climate and development results, integrating climate considerations across the life cycle of projects, and searching for complementarities across agencies.
Topic:
Climate Change, Development, Environment, and Green Transition
Political Geography:
Global Focus

43. A Post-Brexit Trade Policy for Development and a More Integrated Africa

Author:
Kimberly Ann Elliott
Publication Date:
01-2020
Content Type:
Policy Brief
Institution:
Center for Global Development
Abstract:
The United Kingdom will confirm its departure from the European Union on 31st January 2020. As part of its independent trade policy, the government has committed to improve access to UK mar- kets for the poorest countries. This note sets out three ways it can do so: expanding duty-free market access while avoiding piecemeal trade agreements that undermine Africa’s own trade integration ef- forts; using an alternative framework for those trade agreements it does negotiate with developing countries; and supporting a “back-to-basics” multilateral negotiation at the World Trade Organiza- tion that could help to rebuild confidence in that institution and thus protect the interests of small and vulnerable countries. After a brief review of the background and context, it sets out specific pro- posals in each of these areas.
Topic:
Development, International Cooperation, International Trade and Finance, European Union, and Brexit
Political Geography:
Africa, United Kingdom, and Europe

44. From Principles to Practice: Strengthening Accountability for Gender Equality in International Development

Author:
Megan O'Donnell
Publication Date:
01-2020
Content Type:
Policy Brief
Institution:
Center for Global Development
Abstract:
Existing accountability mechanisms focused on global gender equality are largely retrospective in nature. Where mechanisms do probe at governments’ commitments to future progress, they often lack accompanying incentive structures (“carrots and sticks”) to encourage ambition. Countries re- port their progress implementing the Convention on the Elimination of All Forms of Discrimination against Women and the Beijing Platform for Action, participate in annual Commission on the Status of Women sessions, and touch on gender equality as part of voluntary national review reporting for the Sustainable Development Goals. Although these processes, among others, provide an opportu- nity for country reflection and for civil society engagement, they do not mandate that governments establish and adhere to forward-looking, specific commitments detailing how they aim to promote gender equality. The absence of future commitments makes it difficult for civil society actors to hold governments to account according to well-defined metrics. At the same time, governments and women’s rights advo- cates worldwide are increasingly discussing and adopting “feminist foreign policies” and “gender-re- sponsive budgeting.” There is a need to clearly define with robust and transparent metrics what these terms mean and how to hold countries who claim to be “feminist” and “gender-responsive” account- able for ambitious progress, while also encouraging other countries to increasingly prioritize gender equality.
Topic:
Development, Gender Issues, Inequality, Feminism, and Equality
Political Geography:
Global Focus

45. International Development Cooperation After Brexit

Author:
Mikaela Gavas
Publication Date:
01-2019
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Mikaela Gavas submitted written evidence to the United Kingdom's House of Lords EU External Affairs Sub-Committee on January 31, 2019. In her evidence Gavas answered questions about the future of UK-EU development cooperation after Brexit.
Topic:
Development, Regional Cooperation, European Union, and Brexit
Political Geography:
United Kingdom and Europe

46. Learning Equity Requires More than Equality: Learning Goals and Achievement Gaps between the Rich and the Poor in Five Developing Countries

Author:
Maryam Akmal and Lant Pritchett
Publication Date:
02-2019
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The Sustainable Development Goals (SDGs) for education include the goal that “all youth...achieve literacy and numeracy” (Target 4.6). Achieving some absolute standard of learning for all children is a key element of global equity in education. Using the Annual Status of Education Report (ASER) data from India and Pakistan, and Uwezo data from Kenya, Tanzania, and Uganda that test all children of given ages, whether in school or not, on simple measures of learning in math, reading (local language), and English, we quantify the role of achieving equality between the richest 20% and the poorest 40% in terms of grade attainment and learning achievement toward accomplishing the global equity goal of universal numeracy and literacy for all children. First, excluding Kenya, equalizing grade attainment between children from rich and poor households would only close between 8% (India) and 25% (Pakistan) of the gap to universal numeracy, and between 8% (Uganda) and 28% (Pakistan) of the gap to universal literacy. Second, children from the poorest 40% of households tend to have lower performance in literacy and numeracy at each grade. If such children had the learning profiles of children from rich households, we would close between 16% (Pakistan and Uganda) and 34% (India) of the gap to universal numeracy, and between 13% (Uganda) and 44% (India) of the gap to universal literacy. This shows that the “hidden exclusion” (WDR, 2018) of lower learning at the same grade levels—a gap that emerges in the earliest grades—is a substantial and often larger part of the equity gap compared to the more widely documented gaps in enrollment and grade attainment. Third, even with complete equality in grade attainment and learning achievement, children from poor households would be far from the equity goal of universal numeracy and literacy, as even children from the richest 20% of households are far from universal mastery of basic reading and math by ages 12-13. Achieving universal literacy and numeracy to accomplish even a minimal standard of global absolute equity will require more than just closing the rich-poor learning gap, it will take progress in learning for all.
Topic:
Development, Education, Sustainable Development Goals, and Language
Political Geography:
Pakistan, Kenya, Africa, Middle East, India, Asia, and Tanzania

47. A Short-Sighted Vision for Global Britain

Author:
Owen Barder, Hannah Timmis, and Arthur Baker
Publication Date:
03-2019
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
here has been a resurgence in calls to reconsider the cross-party consensus in the UK on foreign aid and development. The main political parties are all committed to spending 0.7 percent of gross national income on aid, to using the internationally agreed definition of aid, and to maintaining a separate government department to administer the majority of this aid, led by a Cabinet Minister. In their recent report, Global Britain: A Twenty-first Century Vision, Bob Seely MP and James Rogers lay challenge to these long-established pillars of UK development policy. In this note, we consider some of the questions they raise and suggest alternative answers.
Topic:
Development, Government, Foreign Aid, and Bureaucracy
Political Geography:
Britain and Europe

48. Why “Leapfrogging” in Frontier Markets Isn’t Working

Author:
Bright Simons
Publication Date:
03-2019
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Just before the yuletide of 2018, I arrived in my native Ghana after one of my long spells away. I flipped out my phone, opened Uber, and tried to flag a ride from inside the shiny new terminal of Accra’s international airport. After a couple of false starts I gave up, walked out, and headed for the taxi stand. In the many days that followed, this ritual repeated itself with remarkable regularity. Sometimes I got the Uber, but on as many occasions, I couldn’t. The reasons for the frequent failure ranged from curious to bizarre. The “partner-drivers” would accept the request. Then they would begin to go around in circles. Sometimes they would start heading in the opposite direction. On a few occasions they would call and announce that they were “far away,” even though their registered location was visible to me on the app and their estimated time of arrival had factored into my decision to wait. It would take me a whole week to figure out that the problem wasn’t always that many Ghanaian Uber drivers couldn’t use GPS all that well, or that they were displeased with fares. There were other issues that I’d left out of my calculation, such as my payment preference, which was set to “bank card” instead of “cash.” The drivers want cash because it allows them to unofficially “borrow” from Uber and remit Uber’s money when it suits their cashflow. Though Uber offers two tiers of service, the difference in quality appeared negligible. Even on the upper tier, it was a constant struggle to find an Uber whose air conditioner hadn’t “just stopped working earlier today.” As something of a globetrotter used to seamless Uber services in European and American cities, I found the costs of onboarding onto Uber as my main means of mobility in Accra onerous. Why is a powerful corporation like Uber, reportedly valued by shrewd investment bankers at $120 billion, with $24 billion in capital raised, unable to maintain even a relative semblance of quality in its product in Ghana? And in other African cities I have visited? It may seem bleedingly obvious why heavily digitalised Facebook, Twitter, Microsoft, and Google manage to deliver fairly uniform standards of product quality regardless of where their customers are based, whilst Uber, because of its greater “embeddedness in local ecosystems” and lower digitalisation of its value chain, fails. But in that seemingly redundant observation enfolds many explanations for why the innovation-based leapfrogging narrative in frontier markets, especially in Africa, unravels at close quarters.
Topic:
Development, Science and Technology, Governance, Digital Economy, and Emerging Technology
Political Geography:
Africa

49. Making Basel III Work for Emerging Markets and Developing Economies

Author:
Thorsten Beck and Liliana Rojas-Suarez
Publication Date:
04-2019
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
A sound financial regulatory framework is critical for minimizing the risk imposed by financial system fra­gility. In the world’s emerging markets and developing economies (EMDEs), such regulation is also essential to support economic development and poverty reduc­tion. Meanwhile, it is increasingly recognized that global financial stability is a global public good: recent decades have seen the development of new inter­national financial regulatory standards, to serve as benchmarks for gauging regulation across countries, facilitate cooperation among financial supervisors from different countries, and create a level playing field for financial institutions wherever they operate. For the worldwide banking industry, the international regulatory standards promulgated by the Basel Com­mittee on Banking Supervision (BCBS) stand out for their wide-ranging scope and detail. Even though the latest Basel recommendations, adopted in late 2017 and known as Basel III, are, like their predecessors, calibrated primarily for advanced countries, many EMDEs are in the process of adopting and adapting them, and many others are considering it. They do so because they see it as in their long-term interest, but at the same time the new standards pose for them new risks and challenges. This report assesses the implica­tions of Basel III for EMDEs and provides recommen­dations for both international and local policymakers to make Basel III work for these economies.
Topic:
Development, Economics, Emerging Markets, and Markets
Political Geography:
Global Focus

50. Downsizing Defense in Development: Unpacking DOD’s Development Assistance

Author:
Sarah Rose
Publication Date:
05-2019
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The US Department of Defense (DOD) is not a development agency, but it does manage millions of dollars of development assistance. In the early 2000s, DOD took on a significantly expanded development role, prompting a number of concerns and creating a lingering perception of intensive US military involvement in development activities. In fact, lessons learned from this era drove a reconceptualization of the Pentagon’s role in development. Today, the military controls only a tiny portion of US development funds, most of which go toward health (mainly PEPFAR) and disaster relief activities. This paper provides a brief landscape analysis of DOD’s recent development aid-funded efforts, breaking down its engagement into six key thematic areas. It concludes with five considerations related to DOD’s role in development assistance: (1) DOD has comparative advantages that make it an important actor in US development policy; (2) civilian-military coordination is hard but critical for development policy coherence; (3) adequate resourcing of civilian agencies is critical for effective civilian-military division of labor; (4) increasing the flexibility of civilian agencies’ staffing, programming, and funding could complement the military’s rapid response capabilities; and (5) incomplete transparency and limited focus on results reduces accountability around DOD’s aid investments.
Topic:
Defense Policy, Development, Military Strategy, Bureaucracy, and Civil-Military Relations
Political Geography:
United States and North America