A Three Legged Stool or Four Legged Table for Development?

Malita Chikhosi is part of a group of 10 women who received 200 hundred chickens from Self Help Africa in Malawi. | Photo by Trocaire | Flickr CC license.

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  Women in Kenya a flock of chickens through a self-help group, formed by Ugunja Community Resource Centre.  Photo: Hailey Bartholomew / TEAR Australia

Chris Blattman, a public policy professor at the University of Chicago has a provocative essay at Vox calling on Bill Gates to step up and run the trials to test whether providing the poor in underdeveloped countries with livestock, chickens in particular, is a better investment than a simple transfer of cash.

Last year you said, “There’s no investment that has a return percentage anything like being able to breed chickens.” Looking at the research, I’m skeptical of that assertion. You were speaking at a press event with Heifer International. They run programs much like the ones in the Science study I just mentioned. Maybe Heifer convinced you they get better returns. But a different study says that one of Heifer’s programs cost $3,000 per household.

I’m sure Heifer is trying to do better in future (and can). But nonprofits are going to have to do a lot more to demonstrate the benefits of their projects and drive down costs before I’m convinced that there’s no investment like a chicken.

I’ve been familiar with this debate for some time and I generally think the evidence so far shows that cash transfers are a better use of resources than lots of in kind types of aid. But Blattman tosses off in a single sentence and then moves from an issue that I think is “under-theorized”:

I propose we give impoverished Africans cash, and to let Heifer offer chickens and services for sale.

This hints at an interesting problem – how then to provide essential services or capital that may be necessary to bootstrap an economy.

Heifer International HQ | Photo by Diane Herr | Flickr Creative Commons license

That is, what if there are no goats to be purchased? What if there is no cell network or broadband? No trained agronomist to provide training or consulting services that can be purchased?

Are there industries and services that are essential to a developing economy that don’t spontaneously or organically spring into being through the emergent properties of markets – or at least not on a reasonable timeline – even if you prime the pump with cash transfers?

ACRE is a company that grew out of an NGO effort to provide crop insurance in Kenya, Rwanda, and Tanzania.

Can we rejigger the donor/NGO mentality so completely that they are both willing to just do cash transfers AND fund NGOs that sell their services? Microloans are one area where that has been the model, but the evidence that they are effective is not encouraging. In the agriculture space, one company that grew out an NGO is providing crop and livestock insurance to farmers in Kenya, Rwanda, and Tanzania.

I don’t think the proponents of cash transfers would deny that there are somethings that need to be donated in kind – vaccines, birth control, education, mosquito control* would be at the top of the list. Then there is infrastructure – roads, rail, airports; water and power systems. Is it sufficient to make a stool with cash transfers as a third leg? Or do we need a table with some fourth leg of NGOs selling bootstrap training, services and capital? I don’t know the answer to that, but as far as I know, there hasn’t been much discussion to even conceptualize how crucial in kind services can be transitioned to fee for service in a development setting.

*Even mosquito control gets problematic in that cheap insect repellent coated nets often get repurposed for things the beneficiaries find more useful, at least in the short term.

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