The List

Good Ideas For Bad Times

A look at the innovative thinkers and bold ideas that kept 2010 from being a total wash.

Was there any news this year that wasn't bad for poor people? Natural catastrophes seemed to be almost deliberately targeting the world's worst off, from the earthquake in Haiti to floods in Pakistan. A number of the countries that can least afford to fail have pinned their hopes on mineral wealth, which, at least according to conventional wisdom, harms more than it helps. Others look to foreign aid or paychecks sent home from overseas, but those are in tight demand as we face yet another year of grim numbers for global finance, budget cuts in rich countries, and toughening immigration rules. The poor need more from the world's governments and its big givers just as austerity is coming back into fashion.

And yet, all the bad news came with a surprising upside. Driven by the need to do more with less, the year's boldest innovators turned up better, simpler ways to use our shrinking resources to improve global quality of life: ideas like creating demand for development so that poor people can better help themselves and handing money directly to those who need it, as well as new approaches to measuring and mapping that offer better, faster information about what aid needs to go where. This moment of global insecurity has also called into doubt some old shibboleths -- not least that national borders as we know them are good and that resource wealth is bad.

In what sometimes looked like the worst of times, it was actually the best of times for ideas -- and these ideas will shape how the world recovers in the years to come.

Illustration by Guy Billout for FP

Reversing the resource curse: The notion that countries with plentiful natural resources will end up plagued by coup attempts and corruption, à la Bolivia or Chad, might have finally been put to rest after a long run that started when Richard Auty came up with the "resource curse" catchphrase in the early 1990s. The U.N. Development Program issued a report this year suggesting that resource-rich countries are actually doing better on measures of human development -- particularly education and health -- than resource-poor countries. The U.N. study echoed earlier findings showing a modest bump in growth between 1970 and 2000 for countries with large mineral deposits, agricultural land, and forests. Resource-curse-boosting studies by analysts including Jeffrey Sachs have looked at the level of natural resource exports and found a link between heavy exports and disastrous results for development. But the new research points out that dependence on exporting natural resources (as opposed to banking or software) generally means that a country is poor and uncompetitive to begin with; so the recent discovery of oil reserves in Ghana or mineral deposits in Mongolia doesn't necessarily imply that either country is about to drive off a cliff.

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Selling the good life: For the last 20 years, a widespread assumption among those who work on solving the world's problems has been that people know what they need, but governments stand in their way. Increasingly, that's looking a bit old-fashioned. The demand side matters, even when you're talking about something like quality of life: Sometimes you have to persuade people to want what they need. This can just mean a basic statement of fact, as with social entrepreneur Kamal Kar's brilliantly modest solution for open-field defecation, the practice of people relieving themselves among their crops, which leads to the spread of diseases like typhoid fever and cholera. Kar found that just telling people they will end up eating their own feces could dramatically increase the construction and use of village latrines. Other approaches borrow from traditional marketing campaigns. The BBC radio series Naway Kor, Naway Jwand (New Home, New Life), broadcast in Afghanistan, is a soap opera with numerous subplots about mine awareness. Survey evidence suggests that listeners are significantly less likely to be injured or killed by mines than nonlisteners. Finally, when words fail, there's always money. A program in Mexico that gave out cash to parents if their kids went to school increased girls' secondary enrollment by 15 percent and boys' by 7 percent.


Money for nothing: An even less complicated idea really took off this year: giving money away, no strings attached. Alaska pioneered the concept in the 1980s to keep oil revenues out of the coffers of a less-than-reliable state government, handing out amounts from $330 to more than $3,000 a year to each resident, the payouts depending on how the oil business was faring. Now parts of the developing world are rolling out similar ideas. Mongolia has set up a program that funnels mining revenues to children, and some of Bolivia's natural gas export earnings go into the country's pension system. Like conditional cash-transfer programs, such payments have been associated with increased investment in nutrition, health, education, and even microenterprise. Brazil's unconditional rural pension, for instance, increased school attendance by 20 percent among girls living in a household that received it. An unconditional pension in South Africa cut school absenteeism among 6-year-olds in half. And Haiti is testing a program that uses mobile phones to transfer cash directly to earthquake victims. Thus the refreshingly blunt title of this year's must-read book on development: Just Give Money to the Poor.

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Go north, young man (and woman): The earthquake in Haiti offered a laboratory for aid innovations, including a plan to take control of remittances outlined this year by Michael Clemens, a senior fellow at the Center for Global Development. Clemens noted that the vast majority of Haitians who have escaped poverty did so by escaping the country altogether. Eight out of 10 Haitians who make more than $10 a day live in the United States. And Haitians living abroad send home more than $1.5 billion per year -- more than a fifth of the country's GDP and more than it receives in foreign aid. So if you want to sustainably improve life in Haiti -- or in other desperately poor countries -- why not encourage remittances by giving more visas to migrants from countries with the most need? Adjusting immigration policies by just a small amount could make a huge difference in the quality of life in poorer countries.

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Putting maps to work: This year saw a boom in innovative uses of the Internet to crowdsource urgently needed information about conditions on the ground in the world's neediest places; such "geotagging" has worked to map everything from banana production to potholes, vaccination efforts to voter fraud. In Port-au-Prince, donor agencies used a program called OpenStreetMap to collect data on earthquake damage painstakingly gathered from satellite images by thousands of volunteers around the world. Agencies used the data to reduce transport times, target search-and-rescue efforts, and compile damage and needs assessments. Relief workers in Haiti also used Ory Okolloh's -- based on Google Maps and originally created to map violence in Kenya after the December 2007 elections -- to track collapsed buildings, fires, water shortages, blocked roads, and power outages, as well as the location of disaster-response efforts. In Cairo, HarassMap will use OpenStreetMap and text messages from victims to build a picture of where sexual harassment is most rampant. And the local electricity company in Lagos started using similar technology this year to pinpoint power-supply problems -- which must surely produce a map with a lot of pins.


Secret aid is bad aid: Geotagging is also being used to "map" aid spending, making it easier to monitor. The International Aid Transparency Initiative, a coalition of governments and NGOs worldwide, is signing up major donors to include both an origin and destination code in their funding records, showing who financed each donation and who or what is the designated beneficiary. The data will then be published electronically in an easy-to-track format. That would allow anyone -- beneficiary, agency, or taxpayer -- to follow donor funds much like they can already check UPS for the location of packages: Are the funds in a sorting warehouse in Baltimore, on the way to your door, or delivered last week to your (apparently unreliable) baby sitter? The World Bank (under the leadership of Robert Zoellick) jumped on the aid-transparency bandwagon with a new "access to information" policy, based on the U.S. and Indian freedom of information acts, which opened the bank up to healthy public scrutiny.


Treating policies like pills: All too often, "pilot programs" and "policy initiatives" have been judged on their success by ad hoc appraisals carried out after the fact. Even when evaluations are more careful -- involving survey evidence and before-and-after comparisons -- they often fall far short of giving an objective, definitive assessment of a new policy. But Esther Duflo and her colleagues at the Massachusetts Institute of Technology have pioneered "randomized controlled experiments" -- the same model used in drug trials -- to test a range of ideas. In the case of conditional transfer evaluations, for example, test subjects selected by lottery get the opportunity to receive a cash transfer or (in one case) a small bag of lentils if they send their child to school or get vaccinated, while the control subjects do not. The trials suggest that such schemes can show dramatic results in terms of participation -- even when the payoff is as small as a couple of servings of daal. There are limits, of course. You can't randomize or control for a lot of the things economists believe are important to the success or failure of development plans: a country's judicial structure, its access to ports, or its colonial history, for example. And randomization only shows that the policy works where it was tested -- it might not have the same impact elsewhere. But where it can be applied, Duflo's model is becoming the gold standard.

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Putting a number on poverty: People have known for a while that per capita income can't be used as the only measure of development. But other simple metrics have been hard to come by. This year produced a serious contender, the Multidimensional Poverty Index. Developed by Sabina Alkire, Maria Emma Santos, and James Foster for the U.N. Development Program, the index has already been adopted by the UNDP to replace its old Human Development Index, up until now the only significant rival to simple income per person as a gauge of progress. The new index assesses the deprivations faced by households across 10 measures covering health, education, access to services like clean water and sanitation, and assets like concrete floors. Results based on the new index are often quite different from those based on absolute income: In Ethiopia, 90 percent of people are poor on the new measure, compared with 39 percent living in absolute income poverty; in Tanzania, 89 percent are income poor compared with 65 percent multidimensionally poor. In short, this shows that some countries are far better at making a little go a long way when it comes to quality of life -- empirical support for the truism that it's not what you make, but what you do with it that matters.


Crossing out straight lines: Libya's Col. Muammar al-Qaddafi proposed this year that Nigeria be split into two countries to avoid further bloodshed between its Muslim and Christian halves. The president of the Nigerian Senate responded by calling Qaddafi "mad." But the colonel's sentiments surely struck a chord in Somaliland, Southern Sudan, and parts of the Democratic Republic of the Congo -- and perhaps for good reason. Economists William Easterly, Alberto Alesina, and Janina Matuszeski have looked at cases where the same ethnic group is present in two bordering countries or where a country's borders are largely made up of straight lines, usually set by old imperial treaty. Building on an intellectual tradition that traces back through scholar Jeffrey Herbst to the 1800s, they call such countries "artificial states" and find that they are significantly poorer and less politically stable than states with natural borders. For the sake of Africa's long-term prospects, perhaps it is time we got more relaxed about the sanctity of lines drawn on maps by white-bearded colonialists in 19th-century Berlin.

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The List

The Fake Taliban and Other Great Diplo-Scams

The United States was just bamboozled by a con artist purporting to be a high-ranking Taliban official. Here are five other unbelievable and embarrassing historical diplomatic frauds.


The scam: The Scottish adventurer Gregor MacGregor knew how to impress the well-to-do European nobility of the 19th century -- particularly those with money to invest in the potentially lucrative new territories opening up in the Americas. "His erect, military bearing carried elegant clothes well on his sturdy but trim frame," according to historian David Sinclair's The Land That Never Was. A former officer for the Spanish and Portuguese armies, he returned to England in 1820 announcing that he had been appointed the leader of Poyais, a newly independent South American country.

His Highness the Cazique of Poyais, as MacGregor styled himself, claimed that this new nation possessed untapped resources and a friendly local population -- all it needed to flourish was European money and, eventually, settlers. MacGregor quickly began selling land rights in Poyais, even publishing a guidebook that described the country's rich land and developing institutions. There was only one problem with this investment, however: Poyais was a fiction that existed only in its cazique's mind.

The unraveling: MacGregor eventually took his scam one step too far. In 1822 and 1823, more than 200 settlers boarded two ships and set sail for Poyais, eager to take up the jobs in the country's nascent civil service that they had been promised. They found themselves left on an uninhabited jungle shore with no discernible sign of civilization.

When the survivors finally made their way back to Britain, the government charged MacGregor with fraud. But it was too late -- he had already fled for Paris, where he was hard at work drafting a constitution for Poyais, which established a republic meant to be "an asylum only for the industrious and honest."


The scam: No sooner had the Ottoman Empire entered World War I on the side of the Central Powers than Britain attempted to devise a separate peace, meant to get the Turks out of the Great War. In the fall of 1916, an unlikely figure advertised himself as a possible mediator. J.R. Pilling, a businessman who had bankrupted himself in an attempt to construct railroads through the Ottoman Middle East, was lucky enough to win the trust of a friend of David Lloyd George, then the British secretary of war and soon-to-be prime minister.

According to Jonathan Schneer's The Balfour Declaration: The Origins of the Arab-Israeli Conflict, British officialdom had its doubts about Pilling from the beginning. Lloyd George "formed rather a low opinion of him"; another British diplomat referred to him as "rather a muddle-headed person."

Nevertheless, Lloyd George dispatched Pilling to studiously neutral Switzerland to develop contacts with Turkish mediators. Despite the British Foreign Office's best attempts to convince him to abort his freelance diplomatic assignment, Pilling penned two letters to Mehmet Talat, one of the "Young Turks" who led Turkey during the war.

In May 1917, he relayed exciting news back to Lloyd George: A Turkish intermediary in Switzerland, speaking on behalf of Talat, said that the Ottomans were prepared to withdraw from the war and even relinquish Iraq and Egypt to Britain in a peace deal. On June 9, Pilling declared that he had received a letter from Talat himself, though he would never show an actual copy of it to anyone. As months passed, the specificity and the generosity of the Ottoman "offer" increased. By November, he wrote, "I have arranged for Syria (which includes Palestine) to be entirely ceded to England."

The unraveling: Pilling's inability to produce Talat's letter gradually undermined his standing within British officialdom. On June 16, he was sent back to London, where the government refused to reimburse him for his expenses while in Switzerland. Pilling became increasingly desperate, even writing a letter to the British king, but the tide of events was already moving against him. Chaim Weizmann, the leading Zionist figure in Britain, became aware of Pilling's actions and concerned that a British-Turkish peace deal would endanger his plans for an independent political state in the region. After Weizmann expressed his concerns to the Foreign Office, a British official suggested that Lloyd George "take steps to get Mr. Pilling to hold his tongue."


The scam: Robert Hendy-Freegard had the tailored suits and fast cars of a real-life James Bond -- he just lacked the actual job. Starting in 1992 and proceeding over the next decade, the former car salesman convinced a dozen people that he was an undercover agent for MI5, the British counterintelligence agency, charged with combating the Irish Republican Army (IRA). In the process, he was able to extort around 1 million pounds from his unwitting victims.

The long con began in October 1992, when he befriended a group of students in the western English county of Shropshire. Although he was working as a barman, he intimated that his real job was more romantic: He was charged by Scotland Yard with rooting out IRA students at the local university, he told them. By playing on their fears that IRA hit squads were closing in, Hendy-Freegard controlled their movements and convinced them and their parents to hand over money. He also enlisted their help in strange espionage "missions" and tests of their loyalty, including sleeping on park benches during the winter and surviving on just bread and Mars bars for a week.

The unraveling: In the end, Hendy-Freegard was undone by greed. The mother of one of his victims, Kimberley Adams, agreed to give him an additional $10,000 -- but only if she could hand over the money personally and see her daughter first. Hendy-Freegard accompanied Kimberley Adams to Heathrow Airport, where he was arrested by the real Scotland Yard.

In his initial trial in 2005, Hendy-Freegard was convicted of kidnapping and sentenced to life in prison. In 2007, however, he successfully challenged the kidnapping charge, arguing that he never forcibly restrained any of his victims, which reduced his sentence to nine years.


The scam: In the mid-1980s, Israeli and U.S. officials met with an Iranian arms dealer, Manucher Ghorbanifar, to discuss selling arms to the Islamic Republic, still in the throes of revolutionary fervor and in the middle of a bloody war with Iraq, in exchange for the release of seven American hostages held in Lebanon by Iran's allies.

The offer would evolve into the Iran-Contra scandal, whereby Israel would sell advanced weapons to Iran, and the United States would resupply Israel and pocket the money from the sale -- which it would then plow into the anti-communist rebels in Nicaragua, known as the Contras.

The arms-for-hostages deal would have been problematic even had it gone as planned. But a large part of the reason it didn't was Ghorbanifar, who brokered the transfer of weapons between the United States and Iran. During a critical trip to the Islamic Republic by Robert McFarlane, then President Ronald Reagan's national security advisor, Ghorbanifar antagonized U.S. officials by promising to set up meetings with senior Iranian leadership figures, including Mir Hossein Mousavi and Akbar Hashemi Rafsanjani, and then failing to deliver. The final straw came when Ghorbanifar tried to convince McFarlane to return home with only two of the four hostages that he had promised to help release. McFarlane declined, flying back to Washington without consummating the deal.

The unraveling: The CIA had doubts about Ghorbanifar since the early 1980s, when it issued a "Fabricator Notice" that warned government officials that he "should be regarded as an intelligence fabricator and a nuisance." These doubts spread as the Iran-Contra deal failed to secure the release of all the U.S. hostages. CIA Director William Casey ordered that Ghorbanifar undergo a polygraph test, which he failed; nevertheless, the legendarily aggressive director continued to rely on his services.

The affair did not manage to completely sink Ghorbanifar's reputation in Washington. In December 2001, Michael Ledeen, Ghorbanifar's ally during the Iran-Contra affair and currently a fellow at the American Enterprise Institute, reportedly organized a meeting between him and Pentagon officials to discuss Iranian involvement in Afghanistan. Another meeting was held in June 2002. If anything came out of the meeting, Ghorbanifar is keeping quiet this time.


The scam: U.S. President George W. Bush, in his January 2003 State of the Union address, said, "The British government has learned that Saddam Hussein recently sought significant quantities of uranium from Africa." The statement was the product of a long line of shaky information, failed vetting procedures, and wishful thinking.

The evidence that Saddam's regime was trying to purchase "yellowcake," a uranium powder that can be used to construct a nuclear weapon, from Niger was primarily based on a series of documents that purported to detail negotiations between Nigerien and Iraqi officials over the delivery of the uranium. The documents were originally passed to the U.S. government by the Italian intelligence services, but British intelligence would later support their conclusions, saying that separate evidence confirmed the deal.

The unraveling: In February 2002, the CIA sent Joseph Wilson, a former ambassador to Niger, to investigate the claims. After interviewing Nigerien officials and businessmen involved in the production of the country's uranium, Wilson determined that the document's assertions were "bogus and unrealistic." In March 2003, Mohamed ElBaradei, director general of the International Atomic Energy Agency, said that the documents were likely forged. By whom remains a matter of debate -- the New Yorker's Seymour Hersh even reported that a source told him the phony documents had been prepared by retired CIA officials, who were hoping to embarrass the Iraq hawks by getting them to regurgitate flawed intelligence.

The backtracking from U.S. officials began in July 2003, when CIA Director George Tenet said that the claim "should never have been included in the text written for the president. This was a mistake."

Bush, however, is less apologetic. "The single sentence in my five-thousand-word speech was not a major point in the case against Saddam," he wrote in his memoir, Decision Points. "Yet those sixteen words became a political controversy and a massive distraction."