
A contender for the most effective development program in history - nols
http://chrisblattman.com/2015/09/24/is-this-the-most-effective-development-program-in-history/
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wodenokoto
The program sounds great, but, in order to call it the most effective program,
it would be nice if he compared it to other projects.

How much does building a well in a village give in return? How much did this
program actually give in return? While it spawned more companies than not
giving out money, do these additional companies produce more wealth, than was
spent on the program?

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aaronharnly
It doesn't have to be either-or. There is room to support entrepreneurship
programs and direct cash aid to the poorest and antimalarial nets and civil
society programs. The one lesson the past century of international development
efforts should have taught us is that there is no single silver bullet. A
complex web of measures, not all of them spectacularly successful, may not fit
in a blog post or a TED talk, but neither does the world and its complexities.

~~~
SixSigma
The west has given $23T in aid since the 1970s. The bullet isn't even made
from water, let alone silver.

One reason, according to William Easterly in his book "The White Man’s Burden:
Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little
Good" it is because the aid tries to meet the goals of the givers, not the
recipients.

This kind of scheme is more of the solution Easterly proposes, just give
people money and see what they come up with, rather than creating schemes that
attempt to implement a solution dreamed up in a nice office or by Bob Geldof
shouting "do something"

[1]
[http://www.independent.org/publications/tir/article.asp?a=63...](http://www.independent.org/publications/tir/article.asp?a=638)

~~~
knowaveragejoe
While it's not perfect(hasn't reached the "perpetual utopia" the author
describes as the goal), to suggest that all of the foreign aid going into
Africa and other developing regions has done "little good" is simply ignorant.

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AndrewOMartin
I don't know what a reasonable cash burn rate is for a Nigerian entrepreneur,
but is it possible that $50,000 simply lasts three years? I expect not but can
someone put my mind at rest?

~~~
nols
Average monthly salary of middle class Nigerians is ~500-700 USD[0].

0\. [http://www.howwemadeitinafrica.com/nigerias-middle-class-
how...](http://www.howwemadeitinafrica.com/nigerias-middle-class-how-we-live-
and-what-we-want-from-life/12563/)

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llamataboot
Counterpoint - Ory Okolloh explains why Africa can’t entrepreneur itself out
of its basic problems [http://qz.com/502149/video-ory-okolloh-explains-why-
africa-c...](http://qz.com/502149/video-ory-okolloh-explains-why-africa-cant-
entrepreneur-itself-out-of-its-basic-problems/)

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radu_floricica
> But 7000 people earning $7 a day they might not have earned otherwise—that
> is something.

That's actually 17 mil per year, or a little less than the original 60 mil
after 3 years. So far it's the typical communist economy: pay people to work,
based not on their market value but on some other criteria (ideology? a
scoring scheme?).

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maratd
Is the math right?

7000 (new jobs) * $7 (salary per day) * 365 (days per year) = $17,885,000

So that's 18 million dollars. You spent 60 million dollars to create jobs that
pull in 18 million dollars per year?

That's optimistically assuming those are full time jobs where the worker
spends every single day of the year working AND that those jobs would not be
created otherwise.

~~~
bcgraham
The salaries are spent, and the workers accumulate skills, contacts, etc.

The guy is an expert in his field. Do you think he is going to read your
comment and think, "Christ, why didn't I think of that?"

~~~
dpc_pw
> Do you think he is going to read your comment and think, "Christ, why didn't
> I think of that?"

He should. He's an expert in statistics. And on paper everything is OK, but in
reality 99% of this new "companies" are frauds. See my other top level
comment.

Part of the reason why socialist bureaucracies always look great on paper, but
fail miserably in reality is there are small lies, big lies, and statistics.
And bureaucracies care only about statistics.

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dpc_pw
How can one not see how much bullshit that is?

The very same program in European Union is called "Innovative Economy
Programme" (website of it's Poland implementation):

[http://www.poig.2007-2013.gov.pl/english/Strony/Introduction...](http://www.poig.2007-2013.gov.pl/english/Strony/Introduction.aspx)

It was just one huge fraud-fest. You apply for a grant, making something
completely useless, but with enough bullshit, that government minion can't
tell. You make it "online" (a website), so it's "innovative". Bullshiting the
grant is the hardest part - takes time, and creativity to write a good
bullshit story. But! there are whole companies that do it for your, with a lot
of experience how to bullshit government. Typical examples of projects are:
social website for cat owners, something for e-commerce. Essentially just
simple PHP websites with fancy names, and jargon to confuse the government.

You get free money ($50k and more), you buy yourself TV, new PC, HD projector,
and all the stuff you want. You put it into company expenses, but use to play
games in your free time. You hire a CS student to make the actual website for
like $1000. You pay yourself a nice salary for "maintenance" and fake
statistics of usage. After 5 years, when the government is off your back, you
close the "company".

Or you have your normal company, you open a "fake one" with a grant, and suck
all the resources into your normal company, keeping the fake company afloat
for just couple of years to close it eventually due to lack of profitability.

It's not even hard to cheat like this, as government does not care. They want
the stats to look good, so they can pretend like they're "helping the
economy". Last thing they want is the stupidity of such program to be exposed.
There are other programs: for mothers returning to workforce, for people with
disabilities, etc. etc. And there are all just one big transfer of public
money to fraudsters.

So yeah, I'm sure in Nigeria it was sooo much different... and it really
boosted the economy. Now, back to email conversation with Nigerian prince that
wants to share some inheritance with me...

~~~
vitd
Do you have proof that this type of fraud is occurring? We hear this a lot in
the United States about our welfare programs. They find one or two "welfare
queens"[1] and claim that the whole system is fraudulent. It turns out that
while there are some (sometimes spectacular) bad actors, the majority of
recipients are not fraudsters.[2]

[1]
[https://en.wikipedia.org/wiki/Linda_Taylor](https://en.wikipedia.org/wiki/Linda_Taylor)
[2]
[https://en.wikipedia.org/wiki/Welfare_fraud](https://en.wikipedia.org/wiki/Welfare_fraud)

~~~
dpc_pw
It's different than "welfare fraud", as there are people who really need
welfare, while if there was a business that would be profitable without
government grant, it would already exist. So grants like this by definition
support fraud or otherwise uneconomical businesses.

Here, have an example, check-out famous: "the world of cats":
[http://swiatkotow.pl/](http://swiatkotow.pl/) (see UE logo at the bottom) .

Government page about the grant: [http://www.web.gov.pl/bazy-
wiedzy/4_32_135_1353_swiat-kotow-...](http://www.web.gov.pl/bazy-
wiedzy/4_32_135_1353_swiat-kotow-platforma-e-uslug-dla-hodowcow-i-wlascicieli-
kotow.html) . Total UE grant: 790 600,00 PLN ($210k) .

I was talking personally with people who had projects using this scheme. I
know countless examples. There were whole web pages tracking the stupidest and
most daring grants.

Obviously, I don't have a proof about Nigerian program, but my Nigerian prince
suggests that Nigerians are as clever (if not more) as Polish people, and it
will work just as "well".

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kelvin0
That makes Ayn Rand and her followers sad. I for one think it's great if all
that is reported is true. Some places in the world need that extra nudge to
help them on the right economic track.

