Lessons in Aid Inefficiency

Part of what drew me to Liberia was my interest in understanding best practices in international aid.   It's no secret that aid is often inefficient at best and ultimately counterproductive at worst.  Unlike others, I do not believe that this unfortunate fact is a justification to throw the baby out with the bath water.  I believe that there is a role for assistance, and if my path takes me in that direction, I want to know how to do it well.  I knew some of the mistakes that these organizations make are not obvious, and I wanted to be sure that I'd have the view from the other side to guide my career in development.

The project I've been focusing around philanthropic support for leapfrogging Internet technology has provided a fascinating window into these dynamics.  Step one for me was to find out what everyone else was doing in this arena. What did I find?  UNDP is funding standalone Internet infrastructure (VSATs) for all country offices of a single ministry.  The University of Indiana is looking into building a fiber-based Local Area Network for the University of Liberia. The government owned operator wants to build a fiber ring in Monrovia.  UNDP set up its own connection to Cote d'Ivoire's undersea cable connection.  USAID is investigating a project for backbone and last mile infrastructure - and to their great credit is working closely with the government across the sector and pushing for coordination.  Multiple other entities have applied for permission to build landing stations.  The potential for inefficiency, not just on the part of the aid community, is glaring.  I wasn't about to add another philanthropist led initiative to that list.

These discussions quickly led me to the conclusion that what's needed first and foremost is an industrial policy to coordinate all of this activity.  What concerns me about many of these efforts is that many relate to shared infrastructure, natural monopolies, and I saw an opportunity to guide these investments in a way so as to be ideal for the sector.  I believe the Government of Liberia has an exciting opportunity to shape the creation of Liberia's Internet infrastructure in a way that is not just efficient but also best for competition and ultimately Liberian's development.  The time is now.  Three submarine cables are coming along the coast of West Africa that can be connected to, myriad entities are looking to make investments, donors are looking for opportunities, it’s on philanthropist’s radar.  All of these pieces moving forward without government coordination risks investment inefficiencies and reactive regulation.  

It wasn't the sexy answer, but I feel strongly that it's the right one: to hold on infrastructure support until the government answers these complex questions.  I've instead pushed to redirected philanthropic interest in technology towards mobile applications for public service delivery and building the capacity within Liberia to build, support, and maintain the technology.  Ultimately I firmly believe that solutions should come from within, and I’d like to see our foundations partners focus on building the capacity to do so.

I presented these recommendations to the ICT Focus Group, a team composed of representatives from ministers responsible for telecommunications and ICT policy in Liberia, the regulators, and the national operator.  They were well received, but what was most telling was the reaction to my sentiments about the infrastructure component.  The frustration with donors was significant, and though they were preaching to the choir, they wanted to make one message clear and they wanted it relayed: make sure than donors understand that when they set up small piecemeal projects it's not efficient and often isn't sustainable.  (I recognize there's a much longer discussion to be had here about donor objectives, etc. and I have a feeling this is particularly pertinent to infrastructure).

On my end, I was happy to get the policy need on the table and hear support for it among these key constituents.  It's unfortunately not my mandate to help answer those questions, but I'm going to keep banging on the table about the opportunity and need for it.  I worry that if the government doesn’t prioritize and address these issues, and the investments will be made sub-optimally.  Let's face it, Liberia has a long way to go and a lot of other pressing and urgent needs.  I worry I'm being idealistic.

Which brings me to my next question.  What is the best way to react if the first-best solution, plugging into a coordinated approach driven by the government isn't realistic?  What's the second-best approach?

Helena

I was the last member of the intern house to arrive to Liberia.  By then, the arrangements for our laundry, cooking, and cleaning had already been made.   Sepah, who lives a couple doors down, would do our laundry for $10 per person per month.  Helena, who lives clear across town, would do our cooking three nights a week for $15 per person per month (not including the food itself) and another $35 per person per month for cleaning the house twice a week.

I opted out of the food (have I not yet posted on my inability to stomach Liberian food?) but wasn’t thrilled about the high relative to price of the cleaning.  $15 to cook but $35 to clean?  $35 x 7 = $245 per month to clean twice a week.  It felt like way too much. Momar’s mom in Senegal pays $60-$80 per month for a girl to live there and cook and clean every day.  It seemed like we must have been overpaying Helena by a factor of at least three.

Generally speaking I just let these things slide, because at the end of the day another $10 to me is nothing compared to what it is to the receiver.  But Helena wasn’t even doing a good job cleaning (you can’t walk across the house without needing to clean your feet before getting into bed).  It was never clear that she even came.

Meanwhile, Sepah arrived dutifully at our door every day, and spent hours washing our clothes by hand in the windows of sunshine or at least dryness between the downpours.  She was without doubt working significantly harder than Helena for significantly less.  Helena’s hourly wage must have been 8x Sepah’s.  It didn’t feel right.

Meanwhile, Helena asked for July’s pay in advance because she was moving into a new house and they needed the entire year’s rent at once (this is actually standard practice here… crazy!).  So one month working for us paid her rent for a year.

Two weeks ago we decided to let Helena go.  The going rate in Liberia is $60 a month, not $250.  We were getting ripped off, which might have been fine if we were happy with her work.  We decided we'd rather pay Sepah $60 to clean the house, who lived right next door and was always thre anyway. We called and called Helena for days to tell her but she never answered her phone.  Finally last week she arrived in the morning before we left and we broke the news.

In tears, Helena asked our guards to reason with us.  Personally I wasn’t very sympathetic.  When I told Achie how much we’d been paying her, he was shocked.  Helena got a sweet deal.  She got paid for two months of work the equivalent of 8 months of pay, and made enough to cover rent for two years. When I explained our reasoning, he agreed our decision was more than fair.

Helena returned to the house again this morning in tears.  Maybe she’d been counting on the extra money and already spent it.  Ultimately we decided to rehire her for $60 per month.

It’s a fine line.  While I’m comfortable paying a small “rich white person” tax, it’s not ok to rip me off egregiously.  I hear so many calls lately from the African development community to treat Africans with the respect and dignity they deserve.  Treat them as partners and not charity cases. 

They are right.  And following that logic, we were right to take a stand against Helena charging us 4x what she should have and not doing her job well.  Doing anything less would have been charity

My Depressing Visit with the University of Liberia

I frankly think capacity building needs to rise higher on the agenda of the development community as a whole.  The old proverb says it all “Give a man a fish he’ll eat for a day, teach a man to fish he’ll eat forever.”  All too often we’re so busy feeding people we don’t teach them how to feed themselves once we’re gone.

So it should come as no surprise that a key component of my recommendations for supporting technology in Liberia is capacity building. Not as sexy as blanketing the country with wireless broadband, but critical for creating an ecosystem around technology for the applications needed in Liberia to arise from within.

I visited the University of Liberia yesterday and met with Professor Robert Damalo, Director of Computer Information Systems to learn more about the existing programs and discuss what foundations could do.  That visit more of less ruined my day.

I’ve visited a few computer science programs in emerging markets, which are obviously not the same as developing countries, especially one like Liberia.   But somehow I expected to find more than nothing there.  There was nothing there.

I take that back.  There are about 30 computers that the student body of 20,000 uses.  They aren’t connected to the Internet, they’re almost exclusively used for Microsoft Office applications for homework assignments.  But really, if you had to share one computer with 667 others, would you ever bother trying to use it?

There is also a VSAT, a video conferencing unit, and a handful of thin client computers.  It’s all collecting dust.  An ICT department was opened in 2007 with the support of Socketworks and the goal of introducing IT and providing Internet access to the university (hence the VSAT).  The intention was so have the IFC pick up the bill for the Internet connection (a hefty $5000 per month thanks to satellite’s egregious rates).  The IFC came in, saw the Internet Cafes in town filled with students and interpreted it not as evidence of the demand for Internet, but rather the ability to pay for it.  No free Internet was needed at the school, they concluded, and refused to pay.  Not surprisingly the university can’t foot that bill.  Now Socketworks is trying to unload the assets to the University for $200,000. 

To my surprise and glee, one of the very forward looking and tech savvy ministers had long ago set up Google Apps accounts for the school.  He showed me the usage stats last week when we met: about 20 accounts, most of them never used.  No wonder, there’s no account creation process and no Internet access.  Now I get it.

They’d tried to get the faculty to start using the local network to get class information and materials online.  The problem is, the faculty has no idea how to use even the most basic technology to facilitate their teaching.

But that’s just the tip of the iceberg.  I wasn’t there to understand if the University as a whole had access to technology and the Internet.  I wanted to understand the computer-related programs and courses available.  I wanted to understand how far Liberia is from graduating students capable of building technology for their country.

About as far as it possibly could be is the answer, sadly.  There’s one intro to computer programming class, and it’s available only to math majors. Business students learn some IT via Microsoft Office programs.  That’s it. That’s all there is.

Professor Damalo has largely given up on establishing proper technology degree programs.  Instead he’s been pushing for a simple 3-month certificate program.  Since 2004.

I asked Professor Damalo what he thought foundations could do to help. Train people to fix computers, he said.  Train our staff to use computers. Train IT teachers.  He hadn’t even mentioned a computer science program, so I pressed him on it.

“Let’s just start with a certificate program,” he said.

He then got a call and I followed him to another office.  He’d been called in to fix a computer that had a virus.  This is what Professor Damalo does with most his time.

Did I mention that as I walked through campus past inexplicable piles of chairs and desks, classes were held under a pavilion outside because there weren’t enough functioning classrooms?

It’s clear that Liberia is not investing enough in higher education.  I think it’s a mistake.  I’ve met enough smart, ambitious, and enthusiastic young people to know that the ability to take advantage of it is there.   Who, if not them, will lift Liberia?  It’s such a cliché thing to say but here you really mean it when you say to a smart educated young person: “You are the future of this country.”

I returned to my desk thinking I should keep three words permanently above my computer screen: “don’t give up.”

What's Really Different About Liberia

Before I landed here, I posted a bit about what I’d heard about Liberia: how incredibly poor it is, how people live, how little economic activity there is. Now that I’ve been on the ground for three weeks now (time flies!) I can say that much of that was just plain misleading.

The fact of the matter is people living in poverty, people living off a dollar or two a day, people without running water, without proper waste treatment facilities, without electricity, in homes that could blow over in a bad storm – I’ve seen it before. It hit me first when I went to Mumbai with Google back in 2006 (see the posting here!). A drive by its enormous slums, the sight of millions of people (literally) sleeping on the streets, the children begging at every turn, and you’ve looked dire poverty in the eye firsthand. That same poverty is in abundance here, but in India it’s literally orders of magnitude larger in terms of absolute numbers.

What makes Liberia different isn’t the poor, it’s the lack of much of a middle and upper class above it. In so many other developing countries there’s enough wealth and expertise above the poor to establish businesses, to pay taxes to fund public services and investments, to justify the existence of nice hotels, restaurants, and to create enough demand for foreign companies to export their goods and services.

Here there’s a very thin veil of it, almost nonexistent. Any Liberian with the money or means or skills to leave did, and few of them have come back. Those who remained weren’t building businesses and skills; they were surviving. They weren’t sitting in school or university; they were fleeing their homes. As a result there is an enormous lack of capacity to do the work required to move this country forward, let alone support a tax base for redistribution and government programs or create demand for expensive imported goods.

It’s this lack of in between that makes Liberia’s struggle forward so challenging. The problems we are targeting in most other developing economies are premature here in Liberia. It’s not that we need capital for entrepreneurs to flourish, it’s that we need to provide training to create the entrepreneurial skills in the first place. It’s not that we need to figure out how to fix the incentive problem in health and education, it’s that we have to train doctors and teachers in the first place. The list goes on and on.

Building capacity from next to nothing doesn’t happen overnight. It’s not something that happens in one incredibly capable President’s term either. Building this fundamental capacity in Liberia will probably take an entire generation. But hopefully, if this country can avoid slipping back into conflict, it will happen.

The process, as slow as it is, is definitely on.

I Just Want A Happy Life!

I’m not sure where to even begin with this one. I wanted my roommate Javi to write a guest post to do the story justice (because its his), but he refuses to write in English (he’s Spanish) so I’ll do my best to recount it.

Javi has been taking incredible pictures in Liberia (check them out here: http://www.facebook.com/album.php?aid=278304&id=858825494&l=e7a5e0e541 He’s quite brazen and takes the camera everywhere: to the markets, the street corners, the soccer fields, the neighborhood high school, and then just the other night, he scored a press pass to the big soccer game.

His camera has been the key that has opened the door deeper into Liberian society than I could ever hope to explore. With it he has been able to engage in conversations with people whose stories make it clear how far this country has to go to repair the damages of the war. Tragically, I can’t help but wonder if a whole generation will find itself unable to recover from the scars of the past.

One night last week at the soccer game, two young men approached Javi. Visibly intoxicated, they told him they were former child soldiers. They recounted doing cocaine, heroine, and marijuana at the age of seven -- and then going out and killing people. They showed him the scars on their arms from the needles.

They asked for a picture, and then looked at a young man in the distance, who shook his head sternly. He was their commander. Javi was taken aback at not just the fact that they still had a commander, but even moreso that these kids, who had killed so many people, were clearly terrified of him.

“This guy must be totally insanse,” Javi thought.

The young man walked over, leaned in uncomfortably close to Javi’s face and said, “I’m monitoring you.”

Now at that point it would have been game over for me. I would have gotten my a** out of there as quickly as I possibly could. But not Javi (does this mean Javi is insanse?). Javi put his camera away and walked back over to the guy and started talking to him. Not only had he been a commander in the war, but he had also served in Charles Taylor’s Anti-Terrorism Unit (essentially his personal army, long story there).

“Do you know what the ATU was?” he demanded to know.

“Yes, I do.” Javi said…

He showed him his scars: bullet holes in his legs, huge cuts on his arms, and of course scars from the needles. He was only 23 years old. That means that he was only 17 when the war ended six years ago. He couldn’t go back to his village. They know who he is, what he has done. They are terrified of him. He is branded a killer.

But the most disturbing part of it was the one thing he repeatedly said, in an angry, exasperated voice: “That life if over. I just want a happy life!”

“They didn’t just steal his childhood,” Javi said to us later that night as he told the story. “They stole his life!”

Mob Justice: Is it Just?

I missed a raging ethical debate during the drive this morning, thanks to whatever I ate in the past couple days that I shouldn’t have, which has kept me home for the day.  Our driver told my housemates that his community caught a thief last night.  And then they cut off one of his hands.

This isn’t the first I’ve heard of something like this happening in Liberia. Another friend was at a graduation party recently when people started yelling “Thief! Thief!,” which was immediately met by everyone running out, chasing down the culprit, and beating him.  The Liberian people are justifiably sick and tired of having not just their livelihood but also indeed their lives stolen from them.

There are signs around Monrovia urging against mob justice, but it’s not as if there is much of an alternative, at least not yet.  The police force in Liberia is nearly nonexistent, so there is little formal deterrent to crime.  Mob justice is an informal institution that has arisen due to the lack of formal institutions in Liberia.

Clearly it is a problem if crime becomes rampant due to the lack of consequence (and I understand this actually happening, which is particularly concerning given the numbers of ex-combatants), but is it okay for communities to be cutting off someone’s hand if they are caught stealing?  Should angry mobs be determining and carrying out criminal punishment?

I've only put a morning's worth of thought on this, and haven't had a chance to vet my thinking with anyone yet, but here goes. There is a practical and a theoretical way of thinking about this question.

Practically speaking, without the informal institution you risk the establishment of criminal norms and networks, but with it, you are risking the establishment of tensions within communities and norms accepting brutality. 

I’m inclined to argue that the government should take a stand against mob justice, despite the fact that it is playing a critical role the government does not yet have the capacity to.  Down the line when the capacity does exist, I think it will be easier to take on criminal networks than to remove the societal tensions and shift the unhealthy norms that will inevitably arise from current behavior. 

In reality of course, a government without the capacity to stop theft doesn’t have the capacity to stop mob justice either.  It will still play a valuable role deterring theft.  But I don’t think the Liberian government can afford to indirectly condone such violence by not taking a stand against it.

Though, that’s my thinking on a practical answer.  What’s the theoretical one?  Is mob justice just?  What does justice mean in a country lacking formal institutions?  Or is there some definition of justice that is universal?

When Credit Isn't the Constraint? Just a hunch...

One of my responsibilities for the summer is to write a report on several commitments made at the Clinton Global Initiative last year. There are three, one of which is the creation of a $30M fund to support small and medium enterprises (SMEs) by offering entrepreneurs loans to start their businesses. Recognizing the capacity constraints that run alongside credit constraints in a place like Liberia, the Liberia Enterprise Development Fund (LEDF) also provides training and other support for its clients.

In the two years since inception, LEDF has not made many loans, and many of those it has made are not performing. The impression I got when first talking to people here in the government is that they just fell short of their commitment due to mismanagement. After a few more conversations, I’m not so sure that’s the case.

There were clearly management issues, and big ones. But my hunch is that even if LEDF had been executed well, it still would have fallen short of expectations. I think this actually might be a classic case of targeting the wrong constraint. For all my raising issues about the idea of a binding constraint, I think I’ve encountered a real world illustration of what happens when you target the wrong problem.

Surely credit is an issue. But it’s not the only one, and the LEDF’s experience may be evidence it is not the biggest one. I suspect the bigger problem is actually that there are few people with the entrepreneurial ability and skill set to formulate and execute a business plan. They recognized this by pairing the loans the training and other support, but I have a feeling whatever was offered fell far short of what would have been needed to fill the gap between current capacity and successful new businesses.

We’ll see if my intuition is right. Thanks Harvard for giving me the tools to have it in the first place.