One of the things I do in my day-a-week role at LSE is bring in guest lecturers from different aid and development organizations to add a whiff of real life to the student diet of theory and academia. One of the best is Owen Barder, who recently delivered a mesmerizing talk on cash transfers and the theory of change used by his organization, the Center for Global Development, which is one of the most effective think tanks around (although I don’t always share its politics….). Here’s the summary (and here are his powerpoint slides, if you want to nick them).
Owen chaired a recent high level panel on humanitarian cash transfers and presented its work in his talk. The traditional aid response is ‘people are hungry due to drought, flood, conflict etc → there isn’t enough food → we need to ship in loads of food’. Both arrows are wrong: Amartya Sen showed that the problem in famine is not lack of food, but lack of purchasing power among the affected populations – in nearly all of Ethiopia’s famines, the country has produced enough food to feed its people. The second arrow is wrong because giving people cash is usually a much more effective response than shipping food over from the US or wherever: the food often arrives too late, just when local farmers are recovering, and a flood of free food promptly destroys local markets. The evidence is now substantial:
- Cash transfers are 25-30% cheaper than in kind aid (so more food per dollar)
- When people are given in kind aid, they typically sell 30-50% of it to get the cash they need, at roughly 30% of the actual cost of the aid – a massive level of waste
- When you ask refugees, they invariably say cash is better than stuff (eg 80% of Syrian refugees in Lebanon)
Plus it’s good politics – cash stimulates the local economy, so local people are less resentful of the influx of refugees, and is more respectful – refugees don’t all want the same thing; cash respects their right to make decisions about their lives.
If you want a model for how the world can solve its most pressing problems in the 21st Century, it is the posse. As governance systems go, the Wild West approach of rounding up a few available hands and driving the bad guy out of town is certainly messy, but, if our favourite westerns are any guide, it could be highly effective. Political theorists who can see the potential dress it up in highfalutin’ language as "coalitions of the willing" and governance based on "flexible geometry", but we prefer to call it what it is: a posse. And this week, in New York, we are going to see plenty of evidence of why, increasingly, solving global problems is all about the art of the posse-able.