• India’s Cash Transfers: The new year brought a new development program in India with revolutionary potential. Under the scheme, Voice of America reports, “245,000 people across 20 districts… are getting pension and scholarship money transferred directly into their bank accounts, instead of having to wait to receive it from post offices or bank officials.” The aim is to eliminate skimming. And the current effort could be just a start. The real test would be using cash transfers to replace India’s massive distribution of subsidized food and fuel. Some analysts enthusiastically support doing so. Others, including Nobel laureate Amartya Sen, caution that food rations tend to benefit families—especially girls—while cash might not. Scaling up cash transfers also requires giving bank accounts and reliable identification to hundreds of millions of Indians, which is no easy task. Read more »

Although this year had welcome news about poverty rates falling across the globe, almost two and a half billion people still get by on less than $2 a day. Innovative solutions for tackling global poverty are needed as much as ever. Here are five development innovations to watch in 2013: Read more »

As he did last year, Charles Landow draws highlights from a range of democracy and development indexes for this year-end edition of Missing Pieces. The UN Human Development Index and the Economist Intelligence Unit’s Index of Democracy are not included this time because they were not published in 2012. Enjoy the reading and the holiday season.

• Freedom in the World: In Freedom House’s 2012 report, 26 countries showed “declines” in their level of political freedom while only 12 made “gains.” As the report says, “this marks the sixth consecutive year in which countries with declines outnumbered those with improvements.” The Middle East saw the biggest strides but also serious regression. Eurasia declined, and the report sees “danger signs for new democracies,” including South Africa and Turkey. Asia, though, experienced a moderate rise in freedom. Overall, there are 87 “free” countries and 60 “partly free” countries, both equal to last year. Forty-eight countries are “not free,” an increase of 1 because of South Sudan’s independence. Niger, Thailand, and Tunisia joined the ranks of electoral democracies. Nicaragua dropped off. Read more »

• Microfinance and Profits: Are for-profit microfinance institutions (MFIs) good for the poor? The question has sparked intense debate in recent years. An article in World Development weighs in by examining the relationship between MFIs’ “profit orientation” and the interest rates they charge. It finds that MFIs with strong for-profit characteristics (such as formal for-profit status and board members with banking expertise) charge higher rates. Moreover, these MFIs have “significantly higher” costs, including operating expenses and losses from bad loans. There is thus “absolutely no evidence” that a for-profit stance brings greater efficiency. Why, then, do MFIs operate as for-profit entities? The author posits that their owners are not greedy, but instead that “MFIs that project a more business-like orientation” can better attract capital to grow. Read more »

Women-owned businesses represent 32 to 39 percent of all private businesses worldwide, but reportedly receive less than one percent of procurement from both corporations and governments. (I say reportedly, because these numbers are very hard to verify. Still, even if the statistic is off by a factor of ten, women-owned businesses are still hugely underrepresented.) Read more »

Well, at least President Morsi knows when to retreat. Last week, basking in the glow of having helped broker a cease-fire in Gaza, Morsi issued a decree that in essence gave Egypt’s president power over the judiciary. But in the face of growing street protests, he now appears to be backpedaling away from that brazen push for broad new powers. Read more »

• The World in 2060: Currently the United States produces 23 percent of global GDP against 17 percent for China and 7 percent for India. By 2060, says an OECD report, these shares will be flipped: China will account for 28 percent, India 18 percent, and the United States only 16 percent. Likewise, while China and India today combine for less than half the G7’s GDP, in 2060 their economies will total more than 1.5 times the G7’s. With this growth, GDP per capita in China and India stands to increase by more than seven times, the OECD says. But strikingly, this will not erase “significant gaps in living standards between advanced and emerging economies.” According to an Economist analysis of the OECD’s figures, GDP per capita in China will be just 59 percent of the U.S. level in 2060. For India the figure will be 27 percent, for Brazil about 40, and for Mexico about 50. Read more »

As 2015 approaches, debate among global development scholars and practitioners is turning to what should succeed the Millennium Development Goals (MDGs), a topic explored on CFR’s Development Channel earlier this fall. Among the contributions to the debate so far is a thoughtful report recently released by Canada’s Centre for International Governance Innovation and the Korea Development Institute. Several members of the team behind this effort visited the Council on Foreign Relations this week, where they discussed their report at an event hosted by my colleague Stewart Patrick, director of CFR’s International Institutions and Global Governance program. (Stewart also wrote a blog post about the report yesterday.) Read more »

The world’s poorest struggle to survive day to day, living with almost no safety net. This makes them particularly vulnerable to financial risk. They are one illness or one injury away from losing their businesses or defaulting on a loan. When that happens, families go hungry and children are pulled from school. Read more »

Charles Landow highlights developments in Africa and Asia in this edition of Missing Pieces. Enjoy!

• South Africa’s Struggles: As South Africa’s labor unrest finally seems to abate, two Economist articles (here and here) survey the country’s unsettling scene. “After 18 years of full democracy,” the magazine says, “South Africa is one of the most unequal countries in the world.” A leading culprit is education. Despite healthy spending, outcomes lag: just 15 percent of 12-year-olds reach minimum proficiency in language, and 12 percent do so in math. Unemployment is officially 25 percent—but 29 percent for blacks against 6 percent for whites. The Economist says that “economic malaise and the chronic failure of government services are an indictment of South Africa’s politicians.” Many view positions with the African National Congress (ANC) as “a ticket for the gravy train.” Officials, generally elected on party-controlled lists, “have little incentive to provide for their voters.” Despite these failings, the magazine reports, the ANC’s dominance is not yet in doubt. Progress might not come until it is. Read more »