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Beyond ODA: Philanthropy, Remittances, and other Transfers

Beyond ODA: Philanthropy, Remittances, and other Transfers


Official Development Assistance (ODA) is a key resource for development, and it typically reaches beneficiaries through governments in developing countries. Beyond ODA, significant additional resources are provided to private organizations, firms, and individuals or households through other channels. One of the areas of work for DDVE will be to document some of these flows, especially as they pertain to the role of faith-based organizations and philanthropy in development. DDVE is currently exploring different avenues to support analytical work in this area, but four projects are already underway, three managed by DDVE staff and another by the Africa Chief Economist office at the World Bank.

  • Mapping the Aid Landscape in Africa: The Africa Chief Economist Office is undertaking research to better understand the role of private aid flows and charitable “philanthropy” for Africa’s development. Private actors providing aid to Africa include among others private foundations (individuals, families, communities), corporate foundations, faith-based groups, business in-kind, and other types of programs including hybrid approaches combining commercial and social objectives. The work will lead to a mapping of the flows, characteristics, and trends of funding to Sub-Saharan Africa from the United States, Europe, Asia, the Middle East, and as possible South-South partners (e.g. India, Brazil). A number of country case studies will also be prepared and summary findings derived from the case studies will be provided in key sectors. The study will help in identifying opportunities and obstacles for improving the scale, effectiveness and sustainability of aid flows to Africa from private actors.
      
  • Measuring the role of zakat as a social protection mechanism in the Muslim world.  DDVE is using various sources of data to measure the size of zakat transfers, who contributes to zakat, who benefits from zakat, and how the transfers affect the distribution of consumption and income as well as poverty.  Preliminary results using data from nationally representative household surveys were presented for Bangladesh, Egypt, Pakistan, and Yemen at the 2nd World Congress of Muslim Philanthropists in Abu Dhabi in March 2009. DDVE will also be collaborating with the MENA (Middle East and North Africa) Region at the World Bank on a broader study on the role of informal safety nets in the Arab world.
  • Economic Crisis and Mechanisms of Solidarity Pilot Surveys.  DDVE is designing a pilot household survey instrument to assess the impact of the global economic crisis on households, as well as the mechanisms of solidarity that households have at their disposal to cope with the crisis.  These mechanisms include steps taken by households to diversify their income sources and reduce spending, as well as transfers received from three different sources: governmental programs, NGO and FBO programs, and private transfers such as remittances.  The pilot survey instrument should be implemented in several countries over the fall of 2009. 
  • Migration, Remittances and Poverty in Africa. DDVE staffs are finalizing a research project started in the Africa Region’s Poverty Reduction and Economic Management Department at the World Bank. The project provides case studies on migration, remittances and poverty in West Africa in order to contribute to a balanced view of the potential gains and costs of migration. The first part of the study is devoted to qualitative evidence on rural-to-urban migration by young individuals, and on the impact of migration on the livelihood of those who migrate and those who stay behind. This part of the study was done by the International Movement ATD Fourth World, a faith-inspired grass-roots NGO. Thereafter, the volume includes quantitative studies using data from Burkina Faso, Côte d’Ivoire, Cape Verde, Ghana and Senegal on the impact of remittances (both domestic and international) on poverty and on factors that affect the decision to remit by migrants and the level of the remittances sent back home. The empirical evidence suggests that remittances represent an important source of income for many households, and that the impact of changes in remittances due to shocks (such as a conflict) can be large, at least for those households who do benefit from remittances. But the analysis also suggests that while the volume of international remittances may be high, a lower share of international remittances is often likely to benefit the poor than is the case for domestic remittances, which also means that the overall impact of remittances on poverty reduction may be lower than expected. Key results from this work were presented by DDVE at the UNDP in New York in October 2008 as part of a seminar informing the next Human Development Report on “Human Development on the Move”.



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