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Funnel the Money: Allocating Resources to Reduce Poverty

by Michael Colby — last modified Feb 05, 2013 03:12 AM
Contributors: Funnel the Money
In accordance with Title 17 U.S.C. section 107, any copyrighted material herein is distributed without profit or payment for non-profit research and educational purposes only.
Poverty in Africa has remained stubbornly high. Between 1990 and 2002, the proportion of Africans living on less than $1 a day has only declined by 2 percentage points to 44% - and due to population growth the absolute number increased. While Africa's citizens are faced by many challenges, Africa does have the natural and human resources necessary to build wealth and overcome poverty. However, well designed and carefully executed economic development strategies are requisite for Africa's economies to grow and for poverty to retreat.


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National and local policies must invest in ways that allow the poor to capitalize on local assets to create successful and vibrant local economies. Unfortunately, many African countries do not allocate their resources in ways that prioritize investment in their poorest areas. This tendency is typically the result of multiple flaws in the policy process. The formulae that determine allocation of fiscal transfers to local governments are usually not designed to prioritize poorer areas. In addition, wealthier areas have more clout and access to national government policy-makers than their poorer counterparts. This is exacerbated by the fact that local officials responsible for setting priorities and budgets in poorer areas often lack the information and tools necessary to make a strong case and successfully advocate for their localities in national planning processes. High levels of corruption exacerbate the problem in many countries by further diverting funds from those who need them most. As a result, investment in infrastructure development, services such as school, health care, and agricultural extension tend to be inadequate to successfully help people in poor areas increase the economic viability of local livelihoods. Funnel the Money is built on the belief that high quality information is a necessary component in effective policy-making and public accountability. Funnel the Money provides publicly accessible information and scenarios to help: Target investments to support economic development in poorer areas; Improve economic development strategies to focus on local assets, including ecosystem goods and services and traditional livelihoods; Increase the level of transparency and accountability. These maps in Funnel the Money will help raise awareness of how fiscal transfer policies support - and fail to support - poverty reduction goals.

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