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CGD’s work in technology and development focuses on the macroeconomic implications of technology change as well as technological applications for specific development challenges.
Technological advances are a driving force for development. But policy choices determine who benefits. CGD focuses on three key questions around innovation, growth, and inequality: How can governments use existing technologies to deliver services more effectively to citizens? How can international institutions help create and spread new technologies to tackle shared problems like climate change and pandemics? And how can policymakers ensure advances in artificial intelligence, automation, and communications bring shared benefits and not greater global inequality?
How much innovation will be needed to meet the United Nations’ Sustainable Development Goals? Our results suggest that (i) best performers are considerably outperforming the average performance at a given income level, suggesting considerable progress could be achieved through policy change but that (ii) the targets set in the SDGs are unlikely to be met by 2030 without very rapid, ubiquitous technological progress alongside economic growth.
The IMF Fiscal Affairs Department is launching a new book entitled Digital Revolutions in Public Finance. Offering the first detailed assessment of the impact of digital technology on fiscal policy, this publication is a landmark of a collaboration between the IMF’s Fiscal Affairs Department and the Bill & Melinda Gates Foundation. It includes contributions from academics, former government officials and technologists, providing perspectives on how digitalization can revolutionize the design and implementation of fiscal policy—and on the risks and challenges that need to be faced.
Our new analysis shows that, despite recent improvements, rich countries' intellectual property policies are still worse for development than they were more than a decade ago. Here we look at why these policies became inflexible, and what countries should be doing to let technology flow more freely.
Technological progress, which mostly originates in developed countries, is at the heart of improving social well-being and advancing productivity across the globe. Despite the vital role of technology for development, we show here that after a promising start in 2003, rich countries have since impeded the spread of technology across borders. Even though there has been an upward trend lately, rich countries can do more to allow knowledge to spread, without hampering innovations at home. Smart intellectual property policies such as liberal copyright laws or eased access to health and agricultural innovations will improve the lives of people across the globe.
Stringent protection of innovations at home comes at a price
In our interdependent world economy, productivity advances occur not only through locally developed knowledge and skills, but also from the absorption of expertise and technologies developed in other parts of the world. To name a few examples, just look at how mobile phones and digitalization affect developing countries and how biometrics can make development outcomes more effective, if well designed. For smaller economies in particular, the major source of their productivity growth is the technology and knowledge produced by the leading developed economies. That said, there are often impediments to the flow of technologies from the developed world to the developing world that prevent the latter from fully benefiting from global knowledge. Part of the problem of access is commercial—the lack of trade and investment opportunities. But another is regulatory, such as intellectual property rules (IPR) that prohibit the free dissemination of innovative technologies, or which impose contractual conditions on the utilization of new technological knowledge.
A lost decade? Little progress in intellectual property rules after a promising start
Since 2003, CGD's Commitment to Development Index (CDI) has been tracking the commitment of 27 developed governments to support the spread of technology to the developing world. The CDI has focused on two ways in which the developed economies can affect this process: The first is to help create technologies that foster economic and human development as measured by public and private spending on Research & Development (R&D) and tax incentives for R&D. The second is to help make the technology created more accessible via appropriate IPR.
Independently, the World Trade Organization in 2003 (following the Doha Round) instituted procedures to help ensure that developed country governments were fulfilling their mandate to facilitate technology transfers to the least developed country members. Until that point, it was uncertain whether and how developed country members were complying with the mandate to foster technological development in the developing world. As we have demonstrated previously, it is still unclear whether these rich countries are sufficiently fulfilling those obligations.
While the CDI’s technology component is not a measure of developed country compliance with international technology transfer mandates (nor was it designed to be), the CDI assesses developed governments’ commitments to objectives that are similar in spirit, such as raising the productivity potential of poorer nations. We do this by measuring and analyzing the restrictiveness of the country's patent regime as laid out in its legislation and rules.
Moreover, the CDI heavily weights the role of IPR of developed countries in facilitating—or at least not harming—the developing world’s access to global knowledge goods. As the chart below shows, since 2003, there has been a downward secular trend in developed country commitments to the spread of knowledge and technologies. The rating shown is for the 27 countries as a whole. However, since 2014, their commitment to the global spread of technology appears to have increased again.
This is a good sign. But there is scope for greater efforts on the part of rich country governments. The recent efforts are still shy of the dedication to technological development shown by developed country leaders back in 2003.
How supporters for a free internet became advocates for development
Much of the trend in the CDI’s technology component is due to changes in IPR. During the 2000 decade, developed economies like the United States, Japan, and the European Union pursued regional free trade agreements with developing country partners that included more stringent intellectual property provisions—especially provisions that limited exceptions to IPR. For example, developing country governments were required to limit the use of compulsory licensing, whereby intellectual property holders could be compelled to license their technologies to third parties if the technologies were not widely supplied in the market or licensing fees were too prohibitive. Other provisions tended to limit “fair use”; namely the ability of the public to use certain copyrighted works in certain ways and conditions without obtaining permission. Developed economies also pursued global agreements like the Anti-Counterfeiting Trade Agreement (ACTA), which attempted to raise enforcement standards. Individual countries, like the United States, pursued legislation like the Stop Online Piracy Act (SOPA) which sought to more heavily regulate internet service providers and search engines.
The public and user rights groups pushed back against such legislation and international agreements, regarding them as undermining internet freedom, and as unduly restricting fair use and other intellectual property exceptions. Consequently, during the 2013–2017 period, developed country governments appeared to retreat somewhat from further reforms. This helped, by default, to raise their CDI scores since less stringent regulations better enable technologies to flow to the developing world.
At the same, developed country governments were also more proactive in enabling the flows of technological knowledge. The European Union issued a “stay” on the patenting of plants and animal subject matter, while New Zealand raised the bar for approving such patents. This should benefit the developing world’s access to medicines and agricultural innovations. Canada, France, Germany, and the UK helped make digital technologies more accessible by tightening standards for software patentability. In 2015 Australia created more exceptions for copyright law, potentially enabling greater scope for learning-by-doing and imitation.
Help innovations to arise and spread, even beyond borders
Intellectual property regulations have effects beyond national borders. While they support incentives for innovation, they do affect how innovation spreads across borders. Developing economies typically require standards of IPR appropriate for their technological needs. Realistically they are not likely to fulfill their needs for combating poverty, disease, and fragility to environmental shocks by raising their intellectual property standards to those of developed economies. This would not increase local R&D, not with their limited technological resources, nor stimulate global R&D, given their relatively small market size. If anything, access to goods may be hampered if higher intellectual property standards raise market prices. Instead, developed governments should continue to fill the global R&D gap by contributing resources for R&D and design regulations—with flexible exceptions and exemptions—to support the wide diffusion of technologies to the developing world.
Walter Park is a professor of Economics and the PhD program director (Economics) at American University.
How do you give over a billion people a digital ID within five years? How do you improve learning for 200 million children in India and countless millions worldwide within a decade? How do you improve health outcomes for billions of poor people and achieve the goals of Universal Health Coverage within a generation? How do you solve the world’s most pressing challenges, not incrementally, but with the urgency they demand?
The answer may lie in a completely new way of thinking about the solution—building societal platforms to address developmental challenges of the 21st century. Nandan Nilekani, the person responsible for India’s biometric unique ID program, or Aadhaar, unveiled this approach in an exclusive event at the Center for Global Development recently. He urged the development community to work collaboratively with those in the technological world to identify problems and implement solutions at scale. And the sooner, the better.
A societal platform is a public good built on three layers. The first is shared digital infrastructure, which enables and encourages a second layer of innovation. This is then amplified through the third layer, networks of individuals, communities and institutions. The shared digital infrastructure makes scarce resources abundant, such as teacher training, textbooks or clinical guidelines. The innovation and co-creation environment gives space for diversity of approaches and solutions—lesson plans in multiple languages, for example. Finally, the amplification network brings the resources and solutions to the millions whose education and health we seek to improve.
A societal platform is open, scalable and inclusive. It is also agnostic to ideological positions about who should deliver these services or propose solutions. Learning networks, for instance, can consist of public and private schools, informal learning institutions and parents. More importantly, it approaches developmental challenges from a systems perspective and not just solving individual parts of the problem. “Think of this as one more way of enforcing the rules of the game,” Nilekani told the audience at CGD, as you can see in the video clip below.
This is not just theory. There are already practical applications of this ‘solution architecture’ especially in India. The largest is, of course, Aadhaar itself. As Nilekani explained, Aadhaar was designed as an identification platform from the very outset, with the digital ID as the first layer. Starting from a clean slate, the number of digital IDs went from zero to 1 billion within a span of five years. Once the shared digital infrastructure—the first layer—was put in place, innovative applications emerged through the development of the “India Stack”. Nearly 200 million bank accounts were opened with electronic Know Your Customer (e-KYC) process, over 500 million accounts were linked to Aadhaar enabling the government to transfer subsidies such as cooking gas directly to the beneficiaries, and nearly 7 billion documents uploaded to the Aadhaar-linked DigiLocker. Linking accounts to the unique ID enables easy payments between accounts.
This, according to Nilekani, is just the beginning. As people come on board in increasing numbers, innovations will flourish and networks will become stronger. It is also time to move beyond digital ID into other sectors, such as education, health and livelihoods. Already, an education platform created by EkStep is being used for teacher training in India on a national scale. It is also being adopted widely by sub-national governments for diverse applications such as lesson plans, energized textbooks, learning assessments and remediation.
Creating societal platforms requires risk capital, since not all initiatives will succeed. While most digital platforms we use today, such as the internet and GPS, were largely publicly funded, societal platforms would require large scale mobilization of philanthropic investments in the long term. It will also have to provide incentives to unlock technical skills and investible capital from the private sector—making two critical scarce resources abundant. In the end, societal platforms are not about excluding market participants. It is about creating a level playing field for the private sector to become partners in solving the most important developmental challenges of our times.
CGD recently co-conducted the first ever widespread survey of Aadhaar users in India. Watch for the results, coming soon!
As the evidence of mobile money’s ability to improve financial access continues to grow, some in the development community are exploring whether a new wave of digital innovation, including digital currencies and blockchain technology, can play a similar role. To date, however, only a small number of start-ups using these technologies have been able to develop profitable business models, while others have struggled to overcome some of the same hurdles faced by more traditional financial actors. For this reason, some are skeptical that these new technologies will significantly improve financial inclusion. This event, which is co-hosted by the Center for Global Development and World Bank’s Blockchain Lab, will bring together policy experts working on the forefront of financial inclusion and technology, along with the CEO of BitPesa, a company that uses blockchain technology to facilitate payments between Africa and the rest of the world. The panel will discuss the opportunities and challenges facing start-ups seeking to use blockchain technology to expand financial access in emerging and frontier markets. CGD Policy Fellow Michael Pisa will moderate the discussion.
Transactional sex (sex for money) is a common risk-coping behavior in sub-Saharan Africa and is believed to be a leading driver of the HIV/AIDS epidemic. In her upcoming paper, Kelly Jones and her coauthors examine whether access to precautionary savings can mitigate the use of transactional sex as a response to negative shocks. In a field experiment in Kenya, half of the over 600 vulnerable women participants were randomly assigned a savings intervention that consists of opening a mobile banking savings account labeled for emergency expenses and individual goals. They find that the intervention led to an increase in total mobile savings, reductions in transactional sex as a risk-coping response to shocks, and a decrease in symptoms of sexually transmitted infections.
Global Burden of Disease (GBD) country rankings can strengthen the case of advocates at global and national levels for prioritising investment towards the major drivers of mortality and morbidity. But as discussed in our earlier blog post, when it comes to informing specific investment cases within these broader priorities, GBD data alone are not enough to allow consideration of trade-offs and of opportunity costs of alternative investment choices addressing the same problem. Further, the way the data are generated and presented makes it hard to get national researcher and policy maker buy-in (despite a broad engagement at country level and the introduction of “national GBDs”) as ownership remains with a Western centre of excellence (it is important to ensure coherence, standardisation and good quality, but not necessarily consistent with the whole idea of country ownership and local capacity strengthening).
The next step in using data to trigger action ought to be the generation, in conjunction with domestic stakeholders, of what we call below “super-local data.” For example, data that are granular enough to inform and defend usually very political local resource allocation decisions (and whose generation is in fact driven by those decision makers’ very political questions).
SDG data can make a strong case for addressing through reallocation and targeted interventions the geographical mismatch between need and resources (e.g. see here for an exposition of that mismatch when it comes to malaria in Nigeria) as long as the endogeneity between funding flows and outcomes over time can be controlled for.
However, for any analyses seeking to attribute causality between investment (quantity and quality) and achievement, as the GBD authors are promising, one may need much more granular “super-local” data, of the kind currently not included and hard to include in GBD, on things such as spending on interventions (which, by the way, can include population level public health programmes as well as individual pharmaceutical or diagnostic technologies) and their costs and benefits compared to the next best alternative for that specific setting. Further, only such “super-local” data could underpin a convincing case made to local payers and Treasuries for investment (or co-financing) using domestic resources, in effective interventions. And an accumulating body of such incremental decisions about, say, additions to the benefits’ package or to the medicines’ list, reimbursement rates and managed entry agreements, investing in primary care clinics for certain types of service provision or phased expansion of coverage to certain population groups, could then help tell a convincing story to domestic players about how GBD-informed targeting of investment can help drive better outcomes on the ground.
What’s included in super-local data
Super-local data include but are not limited to:
local unit costs and resource use data: the Global Health Costing Consortium is a great start in terms of norm setting in methods and as a data repository, but it would need to go well beyond TB and HIV and include more granular resource-use data to be of use to national and subnational payers considering making listing, pricing and reimbursement decisions about technologies and services;
an understanding ofcurrent practice, which, unlike the WHO CHOICE assumption, is rarely “the null”, i.e. a purely hypothetical and highly unrealistic situation where nothing is currently done in a country to address a certain problem (for a detailed critique see here);
local patient and general population preferences for alternative health states, as opposed to extrapolating “value of life” estimates from the USA (see here for an attempt at setting priorities for spending for Bangladesh, somehow placing the value of life at exactly $8,503) or eliciting individuals’ values unrelated to national budgetary constraints (see here for one example of the latter, which places the value of an additional life year to over twice a developing country’s per capita GDP). Such approaches are frequently applied in global cost effectiveness and cost benefit evaluations. And by being completely disconnected from countries’ budgetary realities and hence highly hypothetical and unrealistic, they are perhaps less likely to convince national Treasuries to invest in health. In fact, were South Africa’s Treasury to adopt the value thresholds posited in the Global Health 2035 analysis, then scaling up four effective maternal, new-born and child interventions could absorb almost one quarter of the country’s public healthcare budget and still be deemed to be cost-effective;
linked to the above, well calibrated decision rules, which are empirically rather than normatively based. Such granular data on inputs and outputs are currently hard to get at the country level in most LMICs (see here for such an attempt using country panel data and extrapolations);
data on baseline distribution of attributes such as access to care, healthcare outcomes and spending coupled with an understanding of how new interventions may amend such distribution including on who the costs and benefits of introducing new interventions or scaling up existing ones, may fall. And, ideally, some societal (local) valuation of such changes. Extended CEA and distributional CEA are attempts at least at identifying the significant informational requirements of incorporating distributional concerns in coverage decisions, and have on occasions offered an exposition of trade-offs which could potentially inform actual policy decisions (e.g. neuropsychiatry and vaccines in Ethiopia or colorectal screening in the English NHS);
context specific estimates of comparative clinical effectiveness of the interventions under consideration, ideally drawn from pragmatic trials carried out in the setting in which the adoption or scale up decision is about to be made, accepting that any progress towards the SDGs and UHC in particular that supports high-quality care “…will require that health systems are designed to integrate the delivery of health services with the generation of new knowledge about the effectiveness of these services.” (e.g. see here and here for a discussion of Learning Health Systems in LMICs)
epidemiological evidence including incidence data for the major diseases and underlying risk factors that drive disease burden which must include NCDs and related risks such as high blood pressure. It could be that recent initiatives such as Resolve, could help fund research into filling this informational gap so that action to prevent NCDs can have an impact;
evidence on likely mechanisms of successful adoption and scale up of cost effective interventions, of the kind provided by highly context sensitive realist evaluations, which seek to disentangle and interpret causal mechanisms interfacing with social and individual behaviour, in order to understand the mechanism of action of complex interventions. Though hardly applied in a systematic way to development interventions, this kind of realist evaluation is what Rob Baltussen and others describe when they talk about “evidence-informed deliberative processes” through which country allocation decisions are made en route to UHC.
A standardised Reference Case for economic analysis, widely used by high income countries’ payers when they make decisions on investing in services and technologies, includes most of the elements above and can serve as a useful reminder of methods and data gaps that must be filled if countries are to make their own informed decisions on spending for reaching UHC and meeting the SDGs.
The burden of collecting super-local data should not be placed squarely on the shoulders of the GBD team. As the researchers point out in their conclusion, “…GBD is not, and should not be, a replacement for investing in high-quality, routine health information systems that are crucial for measuring and evaluating SDG progress at national and subnational levels.” Other initiatives such as the recently launched Global Partnership for Sustainable Development Data or Paris21, may be better suited data collection and validation conduits. Perhaps a first step towards better quality relevant data would be committing some resources to implementing with select countries a Data Compact, a performance-based agreement between national and subnational governments, funders, technical agencies, private players and other stakeholders to reward country governments for progress made in producing and publishing better (more timely, more open, more accurate, more complete) data in one or two key areas. With better denominator data, and a stronger culture of good quality verifiable, openly available data, further progress towards sourcing and using more granular information such as costing data, could be achieved.
Such granular super-local data coupled with the technical and process support needed to bridge “the priorities ditch” for national authorities to apply them to difficult decisions locally, may change the nature of the discussion between Ministries of Health and National Health Insurance Funds on one hand, and National Treasuries, on the other. High profile calls to action and global cases of the billions of USD and millions of lives to be saved, made in prominent public health journals and conferences, may be less powerful unless there is evidence that national and subnational Ministries of Health:
can spend their already allocated budgets (health ministries in 16 SSA LICs have underspends ranging from 10 to 40 percent of their budgetary allocation—see the figure below);
Share of health budget spent and unspent, percent of total sector allocations
do not commit publicly to major expansions in service and population coverage unless budgetary implications have been assessed and the fiscal space secured. In other words, unless they have demonstrable PFM competencies (e.g. over 20 Indian State governments have announced/are in the process of rolling out one or more of their own insurance schemes with variable “free healthcare” ceilings, limited/no coordination with the centrally managed RSBY, no analysis of current or forecast spending and a wide range of vague, rarely costed and often overlapping and all-encompassing benefits packages—see here for an analysis of the multitude of schemes across the country and here for the latest UHC announcement from State of Karnataka);
are able to make convincing incremental, evidence-informed and locally relevant investment cases for individual technologies, services or programmatic reforms towards which growth monies ought to be channelled. Albeit not as impressive in terms of overall ROI and health impact, incremental analyses reflecting structured thinking as to how benefits packages ought to be expanded in terms of services and technologies and target subpopulations, at what price levels and to what cost to individuals, can boost confidence of Treasury officials in healthcare payer authorities making a case for more resources. Not unlike global investment cases and country rankings, cost effectiveness league tables of select technologies (see here for a recent example), devised outside the country with limited involvement and buy-in of local policy makers, do little to contribute to such confidence-boosting exercises between national Treasuries and national and subnational payer authorities.
In light of most countries transitioning away from aid dependence, monitoring progress towards the SDGs becomes all about holding the right people accountable and, at the same time, empowering the right people to act. The global perspective, whilst valuable, is perhaps no longer sufficient to trigger action at the local level.
CGD, in partnership with the World Bank Group, Bill and Melinda Gates Foundation, and Omidyar Network, is delighted to host Nandan Nilekani, the founding chairman of UIDAI (Aadhaar), the unique identification system of India, which has enrolled more than a billion people. Nilekani will speak on “Societal Platforms: A Cambrian Approach to Sustainable Development”—how we can distill principles from the unique architecture of Aadhaar to develop new platforms, like EkStep, that can enable people to access an increasingly wide array of transformative services.