From Poverty to Power: Rise of Somaliland challenges conventional wisdom

Oxfam Blogs has an extremely interesting article that compares the rise of Somaliland vs. the fall of its neighbor Somalia, and points out how this completely upends conventional wisdom regarding foreign aid and other aspects of building a country.

Here are some excerpts:

The peace process was almost entirely locally funded, due to Somaliland’s unrecognized status (so no bilateral aid or loans were available). That produced a strong sense of local ownership (literally). In the words of one minister, when asked by Phillips about aid ‘Aid is not what we desire because [then] they decide for us what we need’.

And, in some aspects of country-building, there was no pretense at “democracy” or fairness, ideas that would have been imposed by outside in case of foreign aid. For example, consider this:

The second president used private loans to demobilise about 5,000 militia fighters. He offered stability (and tax breaks) to the business elite in exchange for funding demobilisation and the nascent state institutions. This was effective but certainly not inclusive – the elite came mainly from the President’s own clan. But according to Phillips, Somalilanders generally still see it as a legitimate process – that’s what leaders do.

And the most revealing aspect, for me, was the approach to education. Elite education available to only a few was found to be more important than universal elementary education:

The paper highlights the critical political importance of elite secondary schools in forging leadership. Available to a relatively small group of often privileged Somalilanders, this is in stark contrast to the donor emphasis on universal primary education. In particular, many of Phillips’ interviews led to the Sheekh Secondary School, set up by Richard Darlington, who fought in WWII as the commander of the Somaliland Protectorate contingent. Sheekh took only 50 kids a year and trained them in leadership, critical thought and standard (Darlington borrowed from the curriculum of his old school, Harrow). Sheekh provided 3 out of 4 presidents, plus any number of vice presidents, cabinet members etc. And no it isn’t a weird Somaliland version of Eton and Harrow (I asked) – it stressed student intake from all clans, especially from the more marginalized ones.

Read the full article – it’s quite short, and must read if this is an area of interest for you.

Source: @makarand_s

More information and openness is not always a good thing – via @TimHarford

Tim Harford has an interesting article on the murkier side of transparency – i.e. how more information is not always better.

For example, he talks about how Toronto installed countdown timers at various traffic signals, giving pedestrians an idea of how many seconds they have to cross the road. Since they installed these signals on only some intersections and not others, some researchers used this opportunity to study the impact of the timers on the accident rate.

Their findings:

You might well anticipate that the countdowns would make junctions less dangerous, by telling pedestrians whether or not they have time to cross in safety. Toronto’s traffic planners certainly seemed to believe that would be the case. They were wrong. The new signals caused more accidents.

How is this possible? Here is the suggested explanation:

If a signal is about to turn red for pedestrians crossing at a junction, then drivers who are trying to get across the junction in the same direction are also about to get a red light. Since there was more speeding and more rear-end collisions after the countdown signals were installed, Kapoor and Magesan reckon the natural explanation is that some drivers were accelerating into the junction to avoid being delayed, just as other drivers were slowing down.

This idea, that more information can actually hurt, shows up in other places too. Here is an example of a study conducted on hospitals which insisted that success rates of individual doctors/surgeons be published.

Ten years ago, David Dranove, Daniel Kessler, Mark McClellan and Mark Satterthwaite looked at the impact of mandatory “report cards” in New York and Pennsylvania, which published data on the performance of individual doctors, hospitals or both.

One might imagine that this information would, at the very least, be convenient. At best it should spur physicians to improve their skills because patients would seek out the very best. But the researchers looked at the impact on cardiac surgery, and found a tragic side effect: once doctors and hospitals knew that their success rates would be published, they had a strong incentive to operate on the healthiest patients. The best hospitals had their pick of the sick and selected easy cases. Meanwhile patients with more complicated conditions were more likely to have surgery postponed. The net result: more money was spent, yet more people died of heart attacks.

In other words, sometimes it pays to make information available only selectively:

Publishing clear information is often a way to make the world a better place – but not always. Sometimes it pays to be selective. Doctors could benefit from report cards, provided their patients never find out what they said. And Toronto’s countdown signals would work perfectly if only they could be hidden from drivers.

Read the full article

Pairing up startups with large local corporates for greater success

@ShridharShukla points us to an interesting Chicago Tribune, with example of how large companies in Illinois, USA are connecting with local startups to tap the “innovation pipeline”, and at the same time improve the chances of the startup succeeding.

This news item should be especially interesting to the Pune tech and startup ecosystem because PuneConnect, a local initiative of Software Exporters Association of Pune (SEAP), PuneTech, Pune Open Coffee Club, and a bunch of other organizations has been trying to do something similar in Pune for the last 3 years.

The folks in Illinois have slightly different methods, which we should study and implement locally.

Excerpts:

When Cheryl Harris sought to bring fresh ideas in analytics, data crunching and cyber security to top brass at Allstate Corp., she tapped a startup pipeline engineered to save Illinois companies time and money.

Harris and others at Allstate, who were accustomed to an eight-step procurement process that resulted in months of waiting, were skeptical they could learn most of what they needed in a 10-minute pitch from people they’d never met in the Illinois Corporate/Startup Challenge.

and:

Equal parts shark tank pitch competition, Match.com and “American Idol,” the program solicits the interests of big companies, gathers suggestions for prospective matches from the portfolios of local incubators and venture firms, and allows the companies to select which will present their solutions to corporate brass.

and finally:

By pairing scale-up companies with corporate mentors, however, the odds of success improve. At the same time, firms eager to stay abreast of fast-paced innovation outside corporate walls can engage with firms earlier, experts say.

Read the full article