I just recently finished reading James Surowiecki's The Wisdom of Crowds, and I've been thinking a lot about how prediction markets could be mainstreamed into the work of development institutions. Sure, the Iowa Electronic Markets are great at predicting the outcome of elections, and Hewlett Packard can get a much better forecast of future sales, but how can the World Bank or USAID use these tools to make themselves more effective?
At least one part of the World Bank Group is already experimenting with this technology. CGAP, an independent research center housed in the Bank and focused on microfinance, is trying to use prediction markets to assess the future of mobile banking. My colleague Jim Rosenberg over at CGAP explains:
CGAP and DFID are trying to figure out what mobile banking might look like in the year 2020. [We are] consulting industry with a prediction market around key driving questions on “How can government and private sector most affect the uptake and usage of branchless banking among the unserved majority by 2020?”
The market is open to anyone - through Aug 10. Get a login by writing to technology@cgap.org.
This is a great example of how prediction markets can be harnessed to gather market intelligence that could be very useful for folks on the ground. But I see many other kinds of questions that could be asked:
- Will we reach the Millennium Development Goals? (Or, perhaps a little more precisely, how far off will we be in reaching the MDGs, perhaps segmented by country/region/etc.)
- How successful will lending operations like Development Policy Loans be at reaching their stated goals?
- Predicting the unpredictable - e.g. will there be a crisis (or crises) of some kind in the next year? In which sector will the crisis occur in? (This last one may be a bit tricky to properly specify to produce a clear "winner" in the market, but it's probably worth trying.)
These questions are just the tip of the iceberg - do you have any other ideas?
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