Aid and Big Data

ROI. It stands for “Return On Investment”. To put it crudely, it’s the “How much do you get in return?” question. A must-ask question in business, but considered a mark of selfishness in other fields. Like aid, philanthropy or charity.

That is why this comment by a reader of the Dish was so thought-provoking:

“Aid itself is a brilliant idea, and one with far-reaching and lasting effects, but there are basically no metrics for ROI, and nobody is acting to direct it intelligently. This happens because of the phenomenon Easterly notes, wherein people truly donate to feel good, not to actually effect change (which requires much more work).”

And when doing good becomes an end in itself (without caring about the results), people sometimes stop asking whether they are even focusing on the most important problem:

“The fact of the matter is that diarrhea is still the number-one infectious disease killer in the developing world, with HIV/AIDS so far off in the distance as to be virtually irrelevant. But money is still flowing in gobbets to a project that while compelling emotionally, is functionally useless in comparison.”

And so the reader ends with:

“Aid has to be intelligent, or it’s just rich people quacking about how great they are.”

Ricardo Hausmann points out that by definition, aid related activities cannot be “more of the same”. To make matters worse, one solution doesn’t fit every part of the world because “the world is often too complex and nuanced for such an approach”.

So how does one find the “right” solution? Jeff Hawkins’ has a proposal: use Big Data. Hausman elaborates:

“An alternative, Hawkins-like approach to economic development would take massive amounts of data about the world and ask what is likely to succeed next in a country or a city at a given point in time, given what is already present and in light of the experience there and everywhere else. It would be like Amazon’s recommendation system, proposing books you may like based on your and everybody else’s experience.”

An Amazon parallel for aid and development? Really? Yes, says Hausmann:

“Putting the development experience of the world at the fingertips of those engaged in promoting development is now perfectly feasible. We should seize this opportunity.”

That’s an interesting perspective, for sure.