There is a nice list of global health wins this year from Karl Hofmann, President and CEO of PSI, the world’s largest social marketing firm. You can see his list on the Huffington Post. Highlights include exciting progress on a malaria vaccine, “Treatment as Prevention” for HIV, and progress on the rate of vaccination against pneumonia.
December 30, 2011
April 16, 2011
YAIA: Yet Another Index Acronym
I visited a link today from the Center for Global Development’s Amanda Glassman about a panel struck to discuss vaccine funding for the GAVI Alliance. Amanda’s presentation focused on which of the G-20 countries were paying their “fair share” toward funding GAVI given that herd immunity from vaccines is a global good. Her first attempt to quantify which countries were paying into GAVI appropriately was to compare the percentage of GAVI’s funding by country to that country’s contribution to global GDP. Using this analysis indicated that the UK was paying way more than their fair share, whereas the US was paying way less. Given the Jenny McCarthy debacle recently in the US regarding vaccinations as well as the protracted economic downturn, this may not be surprising. In her post, Amanda suggested that perhaps a more sophisticated analysis would be to create a GAVI funding index in analogy to CGD’s Commitment to Development Index. This led me to learn more about this index.
At first glance, this index suffers from the same downfall as other indices – that is, it’s an index, which necessitates decisions about scaling, standard deviation, weighting, etc. The full scoop on CGD’s answer to these questions is found here. Once the waves of index ennui washed over me and dissipated, I began to look at some of the salient features of this particular index. Interestingly, the index quantifies not just spending, but contributions to global development in other areas as well. I focused on technology contribution, since that is my main interest. Wanna guess who came out on top in terms of technology contributions to global development last year? Portugal! South Korea was 3rd, Japan was 4th, and the US was 13th. One of the reasons is because of changes made to the index since last year:
“The intellectual property rights (IPR) section of the technology component gained two new indicators: one on whether countries allow patent applications to be challenged before they are officially approved, which discourages companies for claiming ownership of ideas already in the public domain; and one on whether patent exceptions are provided for research purposes, increasing access to such innovations in developing countries.”[1]
This bumped Portugal way up above where it was last year. But even still, looking at the 2009 numbers yielded the top five technology contributors as: Spain, South Korea, Japan, France, and Canada, which contained some surprises for me. Funding for technology development counts in the index, as does virtually every component of intellectual property rights and protection law for that country. The US ranks low because of its rather draconian patent law. It will be interesting to track this index over time to see if some of the interesting IP developments in the US and Canada affect their rankings over time. In the meantime, I feel the need to make an index to rank all of the global health indices out there. Perhaps there’s a support group for that.
March 31, 2011
Mesofinance in the developed world
So, I was perusing Kiva.org the other day, as I frequently do, and lo and behold, there was a loan going to a person from the US. Kiva, as many readers of this blog will know, is a microfinance organization that purports to give small loans directly to individuals. The microfinance concept is a growing one in global health and international development, and Kiva is one of the major players partly because it allows you, the individual lender, to see a picture of the person you are loaning to (although the debate about Kiva rages on, see here). Most of the loans go to people in places that you might expect (sub-Saharan Africa, war-torn Afghanistan/Pakistan, parts of Central America, etc.) But the US? Surely the per capita income here is too high regardless of the circumstances to warrant microfinance. It seems like it just wouldn’t cover the costs. $250 USD goes a long way in Africa, but does not go a long way in the US. The loan to the American I saw was for $5,625. Thus this is more mesofinance than microfinance. This is especially true given that the average Kiva loan is currently $318 per borrower.
So, my initial reaction was that this was (a) silly, because it wouldn’t work, and (b) criminal, because it was diverting funds from people in places that really needed it. Has Kiva experienced mission creep? But then I began to think more critically about the issue, and decided to do some more digging. Was my assumption that the per capita income in the US was too large a valid one? After all, there are rich people and poor people everywhere, and the US certainly runs the gamut in terms of extreme poverty and extreme wealth. Kiva claims to check these loan requests carefully before putting them on the site, so there must have been a reason this loan made it.
The critical thing to realize here is that the per capita income for the entire country is the average (arithmetic mean) of all incomes from all earners. But, if you look at the variance, the story is very different. Figure 1 shows that while the top US earners have increased their incomes dramatically over the past 20 years, the lowest earners have barely made any progress at all.
Figure 1. US income distribution, 1947-2010. Source: US Bureau of Labor Statistics
While all the lines on the graph have positive slope (explaining the rise in the mean per capita income), someone in the bottom 5% of earners will be having a progressively harder time surviving as time goes on. As another comparison, if we look at the rise in per capita income for the bottom 20% of earners compared to the rise in cost of living measured using the consumer price index, we see more clearly the suffering that is increasingly taking place. The annual wage for someone in the bottom 20% of earners has increased 41% (in 2007 dollars) compared to a 1000% increase in the CPI over that same period (Figure 2).
Figure 2. US Consumer Price Index (CPI), 1947-2010. Source: US Bureau of Labor Statistics
So, now I think very differently about this loan. My home country is not immune from extreme poverty and Kiva is right to raise money for loans to the people in the US. One concern I have is that people will give differently to fund loans in the US (or Canada, or elsewhere in the developed world) compared to developing countries. I must say, I don’t see evidence of that yet, but this is also the first loan I’ve seen going to someone in the US, so perhaps time will tell.
October 18, 2010
Maple syrup?
I was not surprised to hear of Canada’s failure to secure a seat on the UN Security Council last week, but I was surprised to hear that they lost the vote to Portugal. Poor, bankrupt Portugal. I think the act that sealed the deal, though, was the attempt by the Canadian delegates to “sweeten the deal” by giving certain member countries a gift of maple syrup in a last-ditch attempt to sway their votes. Maple syrup? For a seat on the UN Security Council? If the member countries weren’t already convinced that Canada didn’t care about the UN, this was a clarion call to that effect. Canada has been absent from all-important decisions of late on the world stage, and this is but one more indication that her Majesty’s colony is slipping from its moral high ground. The G20 convention was a madhouse and way too expensive, we have shifted development funding from Africa to Latin America, and our stance on the finer points of MDG5 at the G8 was embarrassing. I guess at least we are still signatories on the Land Mine treaty . For now. Maybe we should give the US some maple syrup to convince them to sign it.
September 17, 2010
Global un-health
“Walk softly but carry a big stick” – Theodore Roosevelt
“Peace cannot be achieved through violence, it can only be attained through understanding.” – Ralph Waldo Emerson
So, I was following a Tweet and associated article the other day, and a couple of sentences caught my eye. The first was:
“Earlier this year in Yemen, the WFP was forced to cut food rations in half for 250,000 internally displaced people because it could not raise $24m for its programme there (even as the Pentagon approved a $150m aid package for the Yemeni military to fight terrorism).”
And the second, at the end of the story:
“Unless the international community comes up with new methods of financing emergency humanitarian relief, we can expect an ever-widening gap between the scale of disasters and our ability to fulfill basic human needs in times of crisis.”
This got me thinking about the relationship between military spending and development aid. While I do not claim to be a political scientist, nor is that the focus of this blog, I was curious to compare at least the magnitudes mentioned in the story to what is really going on in appropriations. My first stop (because I’m lazy) was Wikipedia, where I found this misleading graphic:
Figure 1. Military spending of all countries in the world as a percentage of their GDP.
As a percentage of GDP?! This makes the US and other major military spenders look like the middle of the pack! This highlights a basic concept in analytical science that I spend a lot of time dealing with, namely the difference between relative and absolute quantitation. The above map normalizes the amount spent to the economic size of the country, but does nothing to compare the actual numbers of weapons that countries can buy. What if we represent it as the actual total spent (an absolute measure)? Luckily Wikipedia also provides raw military expenditures for 2009 for all the countries, and here’s what the graphic looks like once I modified it:
Figure 2. Total military spending by country for 2009. $1B = $1 billion USD.
Ah-ha. Now we see the violence inherent in the system. So, how much is this when compared to development aid spending by country? This is a relative measure that makes sense to me, because it takes into account the size of the economy implicitly. Development aid numbers come from the OECD for 2008 as well as other sources. Below I present the ratio of military spending to development spending on the same colour map as before:
Figure 3. Ratio of actual military spending for 2009 to overseas development aid (ODA) by country.
This map indicates who is spending big on the military but not on development. If you compare those countries on the first map that spend a larger portion of their GDP on the military to the same countries on the bottom map, you can see that many of those same countries aren’t equivalently big spenders on development. Certain countries that have high ratios are still mid-level developing countries according to their GDP per capita. Excluding those, we get to the next level, those countries that lie at ratios between 15 and 35. I think these countries should implement a budget resolution to achieve a certain ratio between military (“defense”) spending and development aid. I say 10 would be a good starting point, considering that most “developed” countries are down around ratios between 1 and 6. That means the United States would have to put out roughly $66 billion in development aid annually. Imagine what good might come from that! The other option would be to cut military spending. Not historically a very popular choice in the US, but good would flow from that as well. I see increased spending on development aid as a basic national security measure. The more global health and the less poverty there is in the world, the less war there will be.
August 8, 2010
The Giving Pledge – a good idea?
When I first read about the Giving Pledge last week, it seemed like a good idea. I mean, billionaires giving away their money? What’s not to like? But the more I read about it and think about it, the more shallow it appears. For one thing, many of the people on the current list are already huge donors to philanthropic causes. Names like Gates, Broad, Rockefeller, and Ellison are widely associated with university buildings, nonprofit foundations, and large research centres. The idea that they are making a new commitment to giving away money rings a bit hollow – they have been doing this for a long time. Second of all, the Pledge is not binding in any way – their FAQ says “The pledge is a moral commitment to give, not a legal contract.” Not that it has to be – see point #1 above (they are already donating huge sums). The difference for some may be the level of donation. The Pledge stipulates a majority (50% or more) of each donor’s wealth should be given before or after his or her death. This is a good thing, to be sure, but it is not clear to me that the donations need be to organizations that necessarily help the world. I can see large sums of money going to PAFs or global health funding with well-worn stipulations for support, for example. As someone interested in improving global health, I wonder how much of the money will go to well-established and well-run charities that actually make a difference. The Giving Pledge strikes me more as a public relations move to try and get more ordinary people to give, under the assumption that they will be motivated by billionaires giving. Perhaps. Or, the opposite might be true. If billionaires are already giving away billions, why do these philanthropies need my $100? I can see this backfiring in a most dangerous, bad cash-flow kind of way. Charities waiting around for sudden influxes of money might be waiting a long time. It turns charitable giving into a kind of lottery, with winner-takes-all stakes. Stay tuned…
June 28, 2010
Macro vs. Micro: The Craigslist Experiment
I saw Dr. Paul Polak speak at UBC today. His message, straight from his book Out of Poverty, is that free market solutions not only can work in the developing world, but in fact they must work. His training as a psychiatrist translates into his understanding that the way people think is common the world over. His first non-profit, IDE, introduced millions of treadle pumps, drip irrigation systems, and other simple technologies to countries like Bangladesh, India, and various places in Africa at a cost of $25. This cost covers the installation by a trained technician, the cost of the pump, and overhead (profit) for every step of the supply chain. One of the most interesting points of his talk for me was that simply giving away pumps (or anything else) won’t work. The reason is because in order for people to value something, it must have an assigned value they can evaluate their opinions against. You can demonstrate this with a simple experiment on Craigslist, something my wife and I saw the last time we moved. It goes like this:
1. Pick a crappy piece of furniture, or something else you won’t mind parting with. Post an ad for it on Craigslist. Assign it a value of $0 (free) and include a picture of the item. See how many inquires you get for the item.
2. Now modify the post and assign the item a value (say, $5) without changing its description. See how the number of inquiries changes (it should jump up).
3. Now, change the item’s description to include something that makes the item stand out, even if it doesn’t. Descriptors like “funky”, “unique”, “artistic”, etc. work well. You should see a concomitant rise in the numbers of inquiries.
Same object, different valuation. The corollary to this is that people judge their own value by what they can afford. This was reflected in one of the other points Dr. Polak made, that charity (international aid) does not help social justice. Allowing people to buy what they can afford and providing products in their price range helps social justice and equality. This also jumped out at me in one of the books I am reading now, Dead Aid by Dambisa Moyo. Her thought (p. 58 in my version):
In most functioning and healthy economies, the middle class pays taxes in return for government accountability. Foreign aid short-circuits this link. Because the government’s financial dependence on its citizens has been reduced, it owes its people nothing.
So, take home message: simple solutions that scale and can be sold at a profit is a critical piece of enabling people in developing countries to advance their own welfare. International aid, on the other hand, may in fact be detrimental to this process. Do you have an idea for a widget that 100 million people need and can buy for $10? Email me!
