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  • Author: Nelson H.W. Wawire
  • Publication Date: 01-2020
  • Content Type: Research Paper
  • Institution: Center for Global Development
  • Abstract: This study addresses constraints to enhanced revenue mobilization and spending quality in Kenya. The structure and growth of Kenya’s economy and spending quality have a bearing on its taxable capacity. Constraints to enhancement of revenue mobilization and spending quality include the existence of a large informal sector; inadequate information on property ownership; perceived corruption; inefficient use of public resources; political interference; volatile election cycles; abuse of tax incentives; uneven transfer pricing; illicit financial flows; and untaxed online businesses, coupled with poor administrative capacity and tax policy design. Policy implications on revenue performance are (1) the National Treasury and Kenya Revenue Authority (KRA) should focus on property taxes and capital gains taxes to expand the tax base; (2) development partners are needed to direct technical assistance to the informal sector, to aid with transfer pricing, to monitor illicit financial flows, and to properly tax online businesses; (3) greater use of technology is needed to increase efficiency; (4) intervention by the Geospatial Information System is needed to link data on land and property ownership with tax information in the existing database; (5) a pay-for-results model needs to be deployed; (6) need to reduce tax expenditures; and policy reforms to be initiated in the agricultural sector. The policy implications on expenditure are (1) the need for efficient utilization of tax revenues; (2) the need for implementation of digital technologies; (3) the need to revisit an integrated financial management information system (IFMIS) configuration; (4) the need to adhere to long-term planning; and (5) adoption of the GFS 2014 reporting standard. Overall, an independent entity needs to be established that will set budget ceilings, monitor budget implementation, and carry out audits.
  • Topic: Governance, Revenue Management, Public Spending, Mobilization
  • Political Geography: Kenya, Africa
  • Author: Birahim Bouna Niang, Ahmadoi Aly Mbaye
  • Publication Date: 01-2020
  • Content Type: Commentary and Analysis
  • Institution: Center for Global Development
  • Abstract: Senegal’s recent economic performance is impressive. For the first time, Senegal has achieved a GDP growth rate of more than 6 percent for three consecutive years (2015–2017), and per capita GDP has increased at an annual average of 4.1 percent. In parallel, progress in fiscal revenues has been recorded, with the ratio of average revenues to GDP increasing by 5.7 percentage points between 2000-2002 and 2014-2017, placing Senegal above the regional average of 15 percent. Notwithstanding, the performance of the Senegalese tax system is limited by the country’s narrow tax base, largely attributable to a sizable informal sector. Despite accounting for more than half of GDP, Senegal’s informal sector makes up less than 3 percent of total tax collection. Revenue collection is also limited by the fast-growing array of exemptions, and by tax expenditures. These special dispensations mainly went to multinationals with local branches in Senegal. Tax expenditure more than doubled between 2010 and 2014, from18.4 percent of tax revenues and 3.4 percent of GDP to 40 percent of tax revenues and 7.8 percent of GDP. According to some estimates, the cumulative costs are close to 18 percent of annual GDP. Other factors deterring effective domestic resource mobilization include poor governance and the limited technical capacity of the tax administration, failures of the information system, and weak system transparency. Expenditures are often ineffective, particularly in the education and health sectors. Improving the state of public finances requires reforms to strengthen technical and institutional capacities and to adapt the management framework in view of Senegal’s entry into the hydrocarbon era. This might include setting up a public finance monitoring committee, adopting new budgetary rules consistent with those set by the West African Economic and Monetary Union, building relevant tax administration capacities. On the expenditure front, actions are needed to improve the targeting of support programs for vulnerable groups, and to implement capacity-building programs for government officials in charge of project evaluation, including in the Planning Directorate and in technical ministries. Lastly, a systematic ex ante and ex post evaluation of public investments is needed.
  • Topic: Labor Issues, Economic Growth, Services, Mobilization, Domestic Work
  • Political Geography: Africa, Senegal
  • Author: Kimberly Ann Elliott
  • Publication Date: 01-2020
  • Content Type: Policy Brief
  • Institution: Center for Global Development
  • Abstract: The United Kingdom will confirm its departure from the European Union on 31st January 2020. As part of its independent trade policy, the government has committed to improve access to UK mar- kets for the poorest countries. This note sets out three ways it can do so: expanding duty-free market access while avoiding piecemeal trade agreements that undermine Africa’s own trade integration ef- forts; using an alternative framework for those trade agreements it does negotiate with developing countries; and supporting a “back-to-basics” multilateral negotiation at the World Trade Organiza- tion that could help to rebuild confidence in that institution and thus protect the interests of small and vulnerable countries. After a brief review of the background and context, it sets out specific pro- posals in each of these areas.
  • Topic: Development, International Cooperation, International Trade and Finance, European Union, Brexit
  • Political Geography: Africa, United Kingdom, Europe
  • Author: Maryam Akmal, Lant Pritchett
  • Publication Date: 02-2019
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: The Sustainable Development Goals (SDGs) for education include the goal that “all youth...achieve literacy and numeracy” (Target 4.6). Achieving some absolute standard of learning for all children is a key element of global equity in education. Using the Annual Status of Education Report (ASER) data from India and Pakistan, and Uwezo data from Kenya, Tanzania, and Uganda that test all children of given ages, whether in school or not, on simple measures of learning in math, reading (local language), and English, we quantify the role of achieving equality between the richest 20% and the poorest 40% in terms of grade attainment and learning achievement toward accomplishing the global equity goal of universal numeracy and literacy for all children. First, excluding Kenya, equalizing grade attainment between children from rich and poor households would only close between 8% (India) and 25% (Pakistan) of the gap to universal numeracy, and between 8% (Uganda) and 28% (Pakistan) of the gap to universal literacy. Second, children from the poorest 40% of households tend to have lower performance in literacy and numeracy at each grade. If such children had the learning profiles of children from rich households, we would close between 16% (Pakistan and Uganda) and 34% (India) of the gap to universal numeracy, and between 13% (Uganda) and 44% (India) of the gap to universal literacy. This shows that the “hidden exclusion” (WDR, 2018) of lower learning at the same grade levels—a gap that emerges in the earliest grades—is a substantial and often larger part of the equity gap compared to the more widely documented gaps in enrollment and grade attainment. Third, even with complete equality in grade attainment and learning achievement, children from poor households would be far from the equity goal of universal numeracy and literacy, as even children from the richest 20% of households are far from universal mastery of basic reading and math by ages 12-13. Achieving universal literacy and numeracy to accomplish even a minimal standard of global absolute equity will require more than just closing the rich-poor learning gap, it will take progress in learning for all.
  • Topic: Development, Education, Sustainable Development Goals, Language
  • Political Geography: Pakistan, Kenya, Africa, Middle East, India, Asia, Tanzania
  • Author: Bright Simons
  • Publication Date: 03-2019
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Just before the yuletide of 2018, I arrived in my native Ghana after one of my long spells away. I flipped out my phone, opened Uber, and tried to flag a ride from inside the shiny new terminal of Accra’s international airport. After a couple of false starts I gave up, walked out, and headed for the taxi stand. In the many days that followed, this ritual repeated itself with remarkable regularity. Sometimes I got the Uber, but on as many occasions, I couldn’t. The reasons for the frequent failure ranged from curious to bizarre. The “partner-drivers” would accept the request. Then they would begin to go around in circles. Sometimes they would start heading in the opposite direction. On a few occasions they would call and announce that they were “far away,” even though their registered location was visible to me on the app and their estimated time of arrival had factored into my decision to wait. It would take me a whole week to figure out that the problem wasn’t always that many Ghanaian Uber drivers couldn’t use GPS all that well, or that they were displeased with fares. There were other issues that I’d left out of my calculation, such as my payment preference, which was set to “bank card” instead of “cash.” The drivers want cash because it allows them to unofficially “borrow” from Uber and remit Uber’s money when it suits their cashflow. Though Uber offers two tiers of service, the difference in quality appeared negligible. Even on the upper tier, it was a constant struggle to find an Uber whose air conditioner hadn’t “just stopped working earlier today.” As something of a globetrotter used to seamless Uber services in European and American cities, I found the costs of onboarding onto Uber as my main means of mobility in Accra onerous. Why is a powerful corporation like Uber, reportedly valued by shrewd investment bankers at $120 billion, with $24 billion in capital raised, unable to maintain even a relative semblance of quality in its product in Ghana? And in other African cities I have visited? It may seem bleedingly obvious why heavily digitalised Facebook, Twitter, Microsoft, and Google manage to deliver fairly uniform standards of product quality regardless of where their customers are based, whilst Uber, because of its greater “embeddedness in local ecosystems” and lower digitalisation of its value chain, fails. But in that seemingly redundant observation enfolds many explanations for why the innovation-based leapfrogging narrative in frontier markets, especially in Africa, unravels at close quarters.
  • Topic: Development, Science and Technology, Governance, Digital Economy, Emerging Technology
  • Political Geography: Africa
  • Author: Alex Ezeh, Jessie Lu
  • Publication Date: 07-2019
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: In order to achieve sustainable development outcomes in sub-Saharan Africa (SSA), African institutions must be the leading experts on and primary providers of research solutions to local problems. Despite years of investment in capacity building, SSA lags behind every other region in terms of research outputs and government investments, and new models for building institutional capacity are needed. Through interviews with African institutional leaders and development partners working in SSA, this study finds that funding inefficiencies lead to key challenges within institutions’ governance and management structures, financial systems, talent management processes, leadership and institutional vision capacities, and peer support networks, all of which obstruct the ability of African institutions to become impactful and sustainable drivers of development outcomes in the region. We present for consideration three possible innovative models that can facilitate the emergence of strong Africa-based, Africa-led institutions: a multi-stakeholder funding platform, an integrator organization model, and a scale model.
  • Topic: Development, Research, Sustainability, Socioeconomics
  • Political Geography: Africa, Sub-Saharan Africa
  • Author: Alan Gelb, Anit Mukherjee
  • Publication Date: 07-2019
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Reforming inefficient and inequitable energy subsidies continues to be an important priority for policymakers as does instituting “green taxes” to reduce carbon emissions. Simply increasing energy prices will have adverse impact on poorer consumers, who may spend substantial budget shares on energy and energy-intensive products even though the rich typically appropriate more of the price subsidy. Equitable pricing reforms therefore need to be accompanied by programs to transfer compensation: depending on the situation, this can be targeted or universal. Successful reforms require measures to raise awareness-of the subsidies and the problems they cause, effective dissemination of the reform to the population, and rapid feedback loops to facilitate mid-course corrections. Digital technology, including for unique identification and payments, as well as general communications, can help build government capacity to undertake such reforms and respond to changes in fuel markets. The paper outlines the use of digital technology, drawing on four country cases. The technology is only a mechanism; it does not, in itself, create the political drive and constituency to push reform forward. However, it can be employed in a number of ways to increase the prospects for successful and sustainable reform.
  • Topic: Climate Change, Energy Policy, Environment, Science and Technology, Reform, Digitalization
  • Political Geography: Africa, Middle East, India, Latin America
  • Author: Michael Clemens, Helen Dempster, Kate Gough
  • Publication Date: 07-2019
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: The world is experiencing significant demographic shifts. By 2100, Europe’s working-age population will have declined, and sub-Saharan Africa’s working-age population will have greatly increased. Many of these new labor market entrants will seek opportunities in Europe, plugging skill gaps and contributing to economies in their countries of destination. Germany is one country piloting and implementing projects that can help alleviate such demographic pressures and maximize the potential mutual benefits of legal labor migration. We discuss these projects, and highlight differences in their potential impact on development in the country of origin. We recommend that European governments build on, adapt, and pilot-test one of Germany’s approaches, also known as the Global Skill Partnership model: training potential migrants in their countries of origin before migration, along with non-migrants. Ideally, governments should pursue such pilot-tests with those countries that exhibit rising future migration pressure to Europe, particularly in sub-Saharan Africa. Neither the conclusion nor the results of this analysis reflect the opinion of the Federal Ministry of Economic Cooperation and Development (BMZ) or Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ).
  • Topic: Migration, Labor Issues, Immigration, Border Control
  • Political Geography: Africa, Europe, Germany, Sub-Saharan Africa
  • Author: Njuguna Ndung'u
  • Publication Date: 08-2019
  • Content Type: Research Paper
  • Institution: Center for Global Development
  • Abstract: Following the launch of M-Pesa in 2007, Kenya has emerged as a global leader in the development of mobile money and in increasing rates of financial inclusion. This paper shows how M-Pesa’s success has led to a series of endogenous innovations that have shaped Kenya’s digital space, placing it ahead of other developing economies in the region in the deployment and use of digital technology. It also explains how the mobile financial services revolution enabled the government to implement its e-governance strategy to better provide a range of services and opportunities to beneficiaries of public programs, business, taxpayers and investors, as well as dynamizing the private sector. At the same time, even as it contributes to strengthening state capacity, the digital revolution makes new demands on the state, and the paper outlines several important challenges that Kenya will need to address in order to further consolidate its success. These include improving connectivity across the country, ensuring a fully interoperable mobile payments platform and implementing measures to strengthen consumer protection. Another important focus for the future is to transition to a fully digital identification (e-ID) system. The thrust of the paper is to provide inspiration and guidance for other countries to use Kenya’s achievements as an example.
  • Topic: Science and Technology, Governance, Leadership, Innovation, Digital Policy, Digitalization
  • Political Geography: Kenya, Africa
  • Author: Anita Kappeli
  • Publication Date: 09-2019
  • Content Type: Special Report
  • Institution: Center for Global Development
  • Abstract: The arrival of a new leadership team in Brussels provides an opportunity for Europe to reinvigorate its role as a global development power and to build a true partnership with its continental neighbour, Africa. These tasks have never been more urgent. With only 10 years to go, the world is far from achieving the Sustainable Development Goals (SDGs) by 2030. A confluence of well-documented global trends, including accelerating climate change, declining multilateralism, and the erosion of democratic norms, is only increasing the challenge.
  • Topic: Development, Diplomacy, International Cooperation, European Union, Sustainability, African Union
  • Political Geography: Africa, Europe
  • Author: Barbara Bruns, Maryam Akmal, Nancy Birdsall
  • Publication Date: 09-2019
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Most countries in sub-Saharan Africa have not implemented testing of children’s learning that can be benchmarked regionally or globally. In contrast, in the last two decades, almost all countries in Latin America have participated in regionally and globally benchmarked testing initiatives. Our analysis of the political economy of cross-national learning measurement in Latin America suggests that policymakers perceive the risks of exposing their education system’s performance by joining cross-national assessments, but they also value the quality of the data generated, the strengthening of domestic technical capacity, and the political benefits in using comparative results to argue for reforms or to advertise progress. We document that in Ecuador and Peru cross-national tests played an important role in both stimulating and justifying reforms that have produced major improvements in learning. In sub-Saharan Africa, no cross-national test has been implemented as consistently or widely as the Latin American regional test. The context in Africa makes regional cooperation on cross-national testing more daunting—countries are poorer and more linguistically diverse than in Latin America, raising the relative costs of developing and administering cross-national tests. The experience of Latin America suggests that a coordinated and efficient application of resources in implementing cross-national tests in Africa, on the part of countries and with support of the international community, could help build countries’ national capacity, strengthen focus on learning, support better research, and help diffuse reforms that raise learning.
  • Topic: Education, Political Economy, Children, Social Services
  • Political Geography: Africa, South America, Latin America, North America, Sub-Saharan Africa
  • Author: Heather A. Knauer, Patricia Kariger, Pamela Jakiela, Owen Ozier, Lia C.H. Fernald
  • Publication Date: 10-2019
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: In many low- and middle-income countries, young children learn a mother tongue or indigenous language at home before entering the formal education system where they will need to understand and speak a country’s official language(s). Thus, assessments of children before school age, conducted in a nation’s official language, may not fully reflect a child’s development, underscoring the importance of test translation and adaptation. To examine differences in vocabulary development by language of assessment, we adapted and validated instruments to measure developmental outcomes, including expressive and receptive vocabulary. We assessed 505 2-to-6- year-old children in rural communities in Western Kenya with comparable vocabulary tests in three languages: Luo (the local language or mother tongue), Swahili, and English (official languages) at two time points, 5–6 weeks apart, between September 2015 and October 2016. Younger children responded to the expressive vocabulary measure exclusively in Luo (44–59% of 2-to-4-year-olds) much more frequently than did older children (20–21% of 5-to-6-year-olds). Baseline receptive vocabulary scores in Luo (β = 0.26, SE = 0.05, p < 0.001) and Swahili (β = 0.10, SE = 0.05, p = 0.032) were strongly associated with receptive vocabulary in English at follow-up, even after controlling for English vocabulary at baseline. Parental Luo literacy at baseline (β = 0.11, SE = 0.05, p = 0.045) was associated with child English vocabulary at follow-up, while parental English literacy at baseline was not. Our findings suggest that multilingual testing is essential to understanding the developmental environment and cognitive growth of multilingual children.
  • Topic: Development, Children, Linguistics, Language
  • Political Geography: Kenya, Africa
  • Author: Scott Morris, Erin Collinson, Alysha Gardner
  • Publication Date: 10-2019
  • Content Type: Policy Brief
  • Institution: Center for Global Development
  • Abstract: The African Development Bank (AfDB), the Asian Development Bank (ADB), and the International Fund for Agricultural Development (IFAD) are among the international financial institutions seeking pledges from donor countries as part of upcoming replenishment cycles in 2019 and 2020. The United States is a leading donor to these funds and has played a crucial role in shaping the institutions’ agendas throughout their histories.
  • Topic: Agriculture, Development, Finance, Banks, Institutions, Banking
  • Political Geography: Africa, Asia
  • Author: Mikaela Gavas
  • Publication Date: 10-2019
  • Content Type: Policy Brief
  • Institution: Center for Global Development
  • Abstract: Despite their potential to achieve high development impact, projects in the poorest and most fragile countries, most in sub-Saharan Africa, are chronically underfinanced by Euro- pean development finance institutions and private investors owing to real or perceived low risk-adjusted returns. The External Investment Plan and its risk-mitigation tools, if struc- tured right, have the potential to mobilise investment where the need is greatest. To make this happen, the new European Commission should n clarify the strategic objectives of external investment and steer it towards leveraging high-risk capital for underserved markets; n explicitly focus assistance on the poorest countries through clear project selection criteria; n provide demand-driven technical assistance and oper- ationalise policy dialogue to improve the business envi- ronment; and n federate the development finance institutions focusing on steering policy, encouraging best practice, and har- monising procedures and results amongst the develop- ment finance institutions and multilateral development banks.
  • Topic: Diplomacy, International Cooperation, European Union, Investment
  • Political Geography: Africa, Europe, Sub-Saharan Africa
  • Author: Hannah Timmis, Ian Mitchell
  • Publication Date: 10-2019
  • Content Type: Policy Brief
  • Institution: Center for Global Development
  • Abstract: As the rest of the developing world has reaped the benefits of rapid globalisation, Africa has remained marginalised in international trade. The new European Commission has an opportunity to accelerate export-led growth on the continent by introducing a bolder, more coherent policy on trade, agriculture, and aid.
  • Topic: Development, Diplomacy, International Cooperation, European Union, Economic Development , Economic Transformation
  • Political Geography: Africa, Europe
  • Author: Charles Kenny
  • Publication Date: 10-2019
  • Content Type: Policy Brief
  • Institution: Center for Global Development
  • Abstract: Now that computers are capable of taking the jobs that require brain as well as brawn, it may appear there is little left for humans to do. There are many scary forecasts of the capacity of automation and AI to replace a lot of workers very fast. Self-driving vehicles may wipe out opportunities for taxi driv- ers and truckers, for example. Brynjolfsson, Rock, and Syverson note there are 3.5 million people em- ployed driving vehicles in the US. If automation reduced that to 1.5 million, that alone would increase total US labor productivity by 1.7 percent,1 but it would also leave two million drivers looking for work. In 2013, Oxford economists Carl Frey and Michael Osborne made waves by predicting that 47 percent of US employment was automatable over the next two decades, with a higher estimate for developing countries.2 Erin Winick of Technology Review subsequently produced a summary table of job losses and gains estimations on automation.3 Some of the worldwide figures are in Table 1. There are clearly two sides to the ledger, but some of the predicted job loss numbers at the global level are considerable. The forecasts suggest bad news for Africa in particular, given concentration in types of low-skill jobs that might be easy to automate, rising working age populations, and already far too few good jobs to occupy the existing population. Arntz et al. suggest the share of workers at high risk of automation is 40 percent amongst those with a lower secondary education and above 50 percent for those with primary or less education.4 Advanced manufacturing and AI applications including automated call centers might even reverse the trend towards manufacturing and low-skilled services moving to developing countries. That would imperil a recent run of global income convergence. And there have been cases of impact al- ready: Foxconn replacing 30 percent of its workforce when it introduced robots, and 1,000 lost jobs in Vietnam when Adidas shuttered a factory and moved production to “speed factories” in Germany and the US. If this is the beginning of a trend, it would be harmful to African development prospects.
  • Topic: Development, Science and Technology, Artificial Intelligence, Automation, Emerging Technology
  • Political Geography: Africa
  • Author: Michael Clemens, Helen Dempster, Kate Gough
  • Publication Date: 10-2019
  • Content Type: Policy Brief
  • Institution: Center for Global Development
  • Abstract: As Europe’s working-age population continues to decline, sub-Saharan Africa’s is rapidly increasing. Many of these new labour market entrants will seek opportunities in Europe, plugging skill gaps and contributing to economies in their countries of destination. To make the most of these movements, the new European Commission should create and promote new kinds of legal labour migration pathways with more tangible benefits to countries of origin and destination; pilot and scale Global Skill Partnership projects between Europe and sub-Saharan Africa and within Africa; and be a positive voice for migration within Europe, promoting the benefits from migration and ensuring they are understood.
  • Topic: Migration, Labor Issues, Legal Theory , Borders, Labor Market
  • Political Geography: Africa, Europe
  • Author: Souleymane Soumahoro
  • Publication Date: 05-2017
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: In this paper, I examine the effects of power sharing on vulnerability to adverse shocks in a multiethnic setting. Combining a unique dataset on the allocation of ministerial posts across ethnicities with the spatial distribution of Ebola, I provide evidence that ethnic representation mitigated the transmission of Ebola in Guinea and Sierra Leone. The findings suggest that one percentage point increase in proportional cabinet shares reduced Ebola transmission by five percent, as reflected in the total number of confirmed cases. I also provide suggestive evidence that this relationship goes beyond a simple correlation and operates through public resource capture and trust in political institutions.
  • Topic: World Health Organization, Health Care Policy
  • Political Geography: Africa