Making aid RANDy

By Simon Scott, Counsellor, OECD Statistics Directorate

rand
Entrance to the RAND headquarters in Santa Monica in 1968 (photo courtesy of the RAND Corporation)

It was the go-to think tank for the US Department of Defense during the Cold War. It was where Nathan Leites deciphered The Operational Code of the Politburo and Paul Baran conceived the “hot potato routing” system that would lead to the Internet.

But the RAND Corporation, spun off from an Air Force project with the Douglas Aircraft company to do Research ANd Development on intercontinental warfare, was active across the whole field of international relations. And at the height of East-West tensions during the 1962 Cuban missile crisis, DoD contract number ARPA/SD-79 had it investigating … a better way to measure foreign aid.

Up until that time, all official flows from rich to poor countries had been summed up indiscriminately, whether they were grants or loans, and whether or not they targeted development. John Pincus of RAND came up with a new idea – get rid of the non-developmental aspects and “reformulate the definition of aid [so that] all forms of aid are reduced to their value as grant or subsidy.”

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Implementing industrialisation strategies in Africa

By Dirk Willem te Velde, Director of Supporting Economic Transformation Programme and Head of International Economic Development Group, ODI


Explore this topic further with the upcoming launch of the
2017 African Economic Outlook: Entrepreneurship and Industrialisation in Africa.
Stay tuned for details


Industrialisation-Africa

A cursory look at national and pan-Africa policy statements suggests that many African countries have a strong desire to industrialise. They have a point: manufacturing creates jobs, diffuses technology and makes the economy more resilient. Unfortunately, much analysis points to a reduction recently in the share of manufacturing as a percent of GDP on the continent, although significant progress is being made in selected countries. Real manufacturing value added has grown around 7% annually or more over 2005-2015 in Tanzania, Rwanda or Ethiopia. And few realise that real manufacturing production and exports of manufacturing doubled in sub-Saharan Africa in the decade to 2015.1

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Green Industrialisation and Entrepreneurship in Africa

By Milan Brahmbhatt, Senior Fellow, New Climate Economy (NCE) and World Resources Institute1


Explore this topic further with the upcoming launch of the
2017 African Economic Outlook: Entrepreneurship and Industrialisation in Africa.
Stay tuned for details


Solar salesman in Gulu Uganda Photo credit James Anderson
Solar salesman in Gulu, Uganda. Photo credit: James Anderson

Policy makers across Africa have embraced industrialisation and economic transformation as keys to accelerate inclusive growth. They also increasingly see the need for economic transformation to deliver green growth – growth that does not endanger Africa’s natural environment in ways that reduce the welfare of present and future generations. Economic transformation and green growth depend on doing new things: making risky investments in new, unfamiliar sectors or products or adopting new, unfamiliar methods, processes, technologies, inputs or business models. All this depends crucially on the activity of entrepreneurs, who drive change through their innovation and risk-taking. Fostering entrepreneurship, including green entrepreneurship, is thus a key policy aim for African countries.

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Business incubation needs a re-think

By Allon Raiz, Chief Executive Officer, Raizcorp


Explore this topic further with the upcoming launch of the
2017 African Economic Outlook: Entrepreneurship and Industrialisation in Africa.
Stay tuned for details


Ellon-RaizA little more than 12 years ago I read an article about 981 “entrepreneurs” who had been through a brief new venture creation programme. According to the journalist’s investigation, not one of these would-be entrepreneurs who had been in that programme was in existence a year later. The journalist lamented that despite the obvious evidence that these high volume, low quality programmes were ineffectual, they were nevertheless prolific, wasting hundreds of millions of dollars every year.

Twelve years ago, incubation as a way to promote entrepreneurship was only beginning to appear in any significant manner in the developing world. Unfortunately, in my opinion, the incubation industry inherited a few philosophical approaches from the training industry that have plagued the industry ever since.
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Little changes for women entrepreneurs in Africa unless mindsets and policies change

By Mike Herrington, Executive Director, GEM Global


Explore this topic further with the upcoming launch of the
2017 African Economic Outlook: Entrepreneurship and Industrialisation in Africa.
Stay tuned for details.


women-africa
Women selling eggs in Kigali, Rwanda

In the last decade, most countries in Africa underwent radical transformation, increased their GDP per capita and moved towards globalisation. Just look at Botswana where GDP per capita increased from USD 7 136 in 2013 to USD 7 505 in 2014, or Cameroon that saw an increase from USD 1 271 to USD 1 405, or Nigeria that experienced a jump from USD 1 692 to USD 3298 during the same period.1 

 However, to move closer to achieving the Sustainable Development Goals by 2030, the continent needs to change the mindset of people and pursue policies to boost the development of small, medium and micro-sized enterprises (SMMEs) to help reduce poverty and unemployment, particularly in sub-Saharan Africa.
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Wanted: mechanism for additionality

By Paddy Carter, Research Fellow, Overseas Development Institute

development-financeAdditionality is the thorn in the side of Development Finance Institutions (DFIs). It means: making an investment happen that would not have otherwise. Of course, everybody in development wants to make things happen that would not otherwise, and the possibility that aid substitutes for domestic efforts is a concern in other contexts. But additionality torments DFIs because of the constant suspicion that they crowd out private financiers by investing in products that would have been viable without public support.

DFIs are regularly called upon to provide rigorous evidence that their investments are additional. Rigorous quantitative evidence, in the eyes of academics, requires some credible method of estimating the counterfactual (what would have happened otherwise). And that requires something like a randomised control trial or a natural experiment or a valid instrumental variable. Yet, none of these is feasible in the world of DFIs. And without that, we are unable to distinguish correlation from causation.
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Does your neighbour know about the Sustainable Development Goals?

By Felix Zimmermann, Coordinator, OECD Development Communication Network

Final-bubble-central
Words OECD governments use
to describe the SDGs online.
Source: OECD DevCom 2017

I don’t really know my neighbour. What I do know is that she can get pretty grumpy when my kids are too noisy. I also know that she uses the recycle bins. But what does she think about sustainable development? I wouldn’t have a clue. That needs to change.

An urgent task: mobilising citizens into action for the SDGs

To have any hope of achieving the Sustainable Development Goals (SDGs) by 2030, we need all citizens to change their behaviours, no matter where in the world they live. SDG priorities may differ from country to country, but we need citizens in all countries to call upon governments, companies – and neighbours – to act.

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