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Development that Works
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    This blog highlights effective ideas in the fight against poverty and exclusion, and analyzes the impact of development projects in Latin America and the Caribbean.
  • Are School Funds like a Party Cake? Taking Leftovers Home



    school window

    Imagine that you are a parent and that last year you contributed US$20 to your child’s school to buy cleaning supplies, fix broken windows and pay for the phone service. Different from last year, now imagine that this year you get to choose with other parents what to do with government funds that could be used to buy cleaning supplies, fix broken windows, and pay for the phone service in the school. What would you do? Well, if you could use some of the government funds to pay for those expenses and reduce the voluntary contributions, you could buy your child other needed things at home.

    Do parents take some of the government funds home via a decrease of voluntary contributions? Are they treating school funds like a party cake where you can split it and take a piece home?

    In a recent study, we test this idea. Read more…

    Once the Colombian conflict ends: Where will the internally displaced population go?



    By Ana María Ibáñez**

    Displaced Colombia

    The end of a conflict poses new challenges. Post-conflict is a fragile period: political forces need to accommodate to the new realities, a flow of ex-combatants enter the society, victims become active political actors claiming truth and restitution, and uncertainty is still high, among others. This implies that the risk of the war resuming is ten times higher than before the war started (Hegre et al, 2001).

    The return of internally displaced population (IDP) is among the many challenges in post-conflict periods. The ease of violence allows IDP to settle in permanently and must decide whether to return to their hometown, stay in the host destination or resettle in other region. The return of IDP to their hometown provides some benefits and entails significant challenges. Return increases the chances of IDP recovering their assets and social networks as well as resuming economic activities in a familiar setting. Better knowledge about social norms, markets and informal institutions of their hometowns helps families to connect rapidly to labor markets and economic opportunities. Nonetheless, resuming economic activities may require large investments and institutional support. In addition, the hometowns of IDP usually were amidst intense conflict and destruction, implying markets eroded or disappeared, social dynamics changed and institutions were weakened.

    Few IDP return to their hometown after the conflict ends. Data of the United Nations Refugee Agency (UNHCR) estimates only 3.2% of IDP returns. A recent survey for Colombian IDP reveals 20% of them are willing to return to their hometown.

    What drives the return of IDP to their hometown?

    A paper I wrote with María Alejandra Arias and Pablo Querubín examines the correlates of the desire to return of Colombian IDP. We use a household survey that asks displaced households about their preferences to i) return to the municipality of origin; ii) stay in the current reception municipality; or iii) relocate to a new municipality. Since the survey was applied during the most intense period of the Colombian conflict, only 11% of households expressed a desire to return.

    Four conclusions emerge from the findings of the paper. Read more…

    Credit or no credit? Is that really the question?



    By Mario González Flores* & Leonardo Corral**

    Is access to credit enough to improve welfare indicators at the firm or farm level?

    Mario Leonardo Credito EngIn recent years, a great deal of hope to promote development has been placed on the potential transformative power of financial access (World Bank 2007; Karlan and Morduch 2010).  At the firm or farm level, having access to credit can facilitate the purchase of necessary inputs in a timely manner, it can increase investments and adoption of new or improved technologies, it can decrease risk, and overall, it has the potential to improve production, productivity, and ultimately welfare for those receiving the credit.

    Yet, using credit to invest in a greater use of inputs or to invest on new machinery and equipment does not necessarily lead to the desired or optimal outcomes.  For example, farmers with no prior knowledge on the proper use of inputs—such as fertilizers or fungicides, may over or under use these in a way that their use leads to no improvements on yields or no improvements in damage abatement.  Similarly, a farmer that invests in a new technology, such as a modern irrigation system, may not obtain the optimal results in production or water usage (efficiency) if the farmer is not well trained on the appropriate way of using and maintaining her new irrigation system.

    Thus, if financial access facilitates input use, technology adoption, and investments in new machinery, the only way that greater financial access can have a development impact is by assuring that complementary training on the correct use of new inputs and technologies is provided to those unfamiliar with their use . This, in fact, is one of the key findings of a recent meta-evaluation published by IFC focusing on private sector interventions in agribusiness using Access to Finance (A2F) and farmers/business training. Read more…

    An informal Uber?




    At rush hour it is virtually impossible to get a cab ride in Bogota or Lima. The last time I went to Bogotá, the line for taxis at the airport was even longer than the queue for immigration. I was tired, it was 10:30 pm and it drizzled. I would have given my kingdom for an Uber, which does charge more if demand is higher. Finally, and after an hour long wait, I got into a dirty taxi after putting my bag in the trunk which was full of packages and at least three opened stale Coca-Cola bottles.

    In the regulated taxi market, the client has little choice, no matter that many are willing to pay more for a cleaner, safer, faster and more punctual service, even if the price fluctuates with the supply and demand tides.

    Taxi fares are typically set by regulation (Cab meters), and the driver cannot negotiate the fare.

    Unless (s)he can, because it is informal. Read more…

    Democratizing public transportation



    By Sergio Deambrosi*

    Despite the great benefits that Cali, Colombia’s new mass transportation system has brought to the city, low useage poses a challengefor its long-term sustainability.

    COLOMBIA - Users prepare to board the recently inaugurated MetroCali. Photo: David Alejandro Rendón-Wikicommons.

    COLOMBIA – Users prepare to board the recently inaugurated MetroCali. Photo: David Alejandro Rendón-Wikicommons.

    Just three years ago Cali, Colombia’s third city by population, had chaotic traffic. Streets and avenues were congested most of the day with a proliferation of buses, which contributed to long travel times, numerous accidents and high pollution.

    In 2006 the IDB gave the city a US $ 200 million loan through the federal government to implement an urban mobility improvement project. Its goal was to set up a modern, efficient and reliable public transport system that would connect the low and middle income population zones with areas  offering employment and social services. Read more…

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