Monthly Archives: June 2012

What Do I Think of Agriculture Development? Pt. 2

This is part two of a three-part post on agriculture economic development. Read part one here.

In the previous post, I explained my experience working in agriculture. In this one, I will talk more generally about the challenges of agriculture economic development in general.

Needless to say, the challenges are great, as I have written about before. And, while I feel the idea of market facilitation has merit and has seen some successes, particularly in cash crops like coffee and cocoa (differentiated from staples, like rice and maize), where the markets are ready to handle any volume that comes from the farmers. But, on balance, I think that the forces affecting agriculture markets are complex and global in nature, and the problems cannot be simplified to a lack of communication between buyers and sellers.

It is true – communication is a major impediment to efficiency in developing world agriculture markets. That is why many companies, like Esoko in Ghana and M-Farm in Kenya – are leveraging the penetration of mobile phones to close the knowledge gap between buyers and sellers. These companies offer subscription-based services that allow farmers to check prices in various markets around the country, preventing them from being ripped off by middlemen. They also allow the juice manufacturers, as an example, to communicate order sizes directly with their farmers. This creates a more efficient system, but does nothing to really address the underlying factors influencing these markets.

First of all, agriculture is truly a global industry. In the United States and other developed nations, agriculture production is highly subsidized, where large industrial farms are actually paid to produce more than they can necessarily sell on the open market. When the government explicitly agrees to purchase the surplus, there is little incentive on the part of the farmers to manage their farms according to market demand. Much of the excess corn in the country is either utilized for biofuels and, to a lesser extent, food aid. What’s more, industrial agriculture farms are able to leverage incredible economies of scale, in the form of mechanization, irrigation, and bulk-buying of inputs. These two factors allow large-scale farms to produce at far lower costs, rendering smallholder farmers – which comprise the bulk of the poor in Africa – uncompetitive in all but the local markets.

I once caught a ride back from a citrus stakeholders’ meeting in the central region of Ghana with a pineapple grower and importer of fruit-fly traps from India that protected mango trees from the insects that decimate the crop. My friend Mark, who worked with Engineers Without Borders Canada, knew them from his work with mango farmers in the Eastern Region, and he finagled a ride back to Accra for us. We were working on three hours of sleep after partying with a group of Canadian journalists and he promptly fell asleep in the back seat, leaving me to carry on the conversation for the two-hour ride.

Some rice millers I visited in Ghana

At one point, I asked him what he thought of organizations like mine and USAID in general. He had a tendency to use me as the embodiment of the aid industry in general, and told me that I was the like the defense lawyer for the criminals. In other words, here I was, trying to improve the competitiveness of the agriculture sector when my government, or, more generally, the entire industrial-agriculture complex, was responsible for creating the problem in the first place. I thought that his characterization, while a bit harsh, had some merit.

I stayed in a hotel room for $150 a night to try to work with undercapitalized rice millers on behalf of the U.S. government, only to see this advertisement next to the trading post.

In the next post, I will discuss my other criticisms of foreign aid for agricultural development.

Develop Economies’ Music Recommendation

What Do I Think of Agriculture Development? Pt. 1

2 Replies

This is part one of a three-part post on agriculture economic development.

After the better part of a year working for Negros Women for Tomorrow Foundation (NWTF), a microfinance institution in the Philippines, I decided to head west again – specifically, to West Africa. In late 2010, I moved to Ghana to work with TechnoServe, a non-profit specializing in market-driven solutions to economic development. This is really just a fancy way of saying that TechnoServe recognizes the importance of competitive markets in creating jobs for people living on less than a few dollars a day.

My mandate was a bit nebulous at first (and for the bulk of my time in Ghana). I was seconded to another organization – ACDI/VOCA – on a $30 million USAID project called ADVANCE (an acronym standing for Enhancing the Agriculture Chain in Ghana, or something like that). The project was a bit dysfunctional, having undergone substantial personnel changes when I arrived (the Chief of Party and Technical Advisor – the equivalent of the CEO and COO – either quit or were fired after being significantly at odds with one another over the direction of the project.

The methodology of the project was something called “Market Facilitation,” a relatively new and trendy approach to catalyzing positive change in the agriculture sector. For a much more detailed overview of what it is, my good friend Mark Brown with Engineers Without Borders Canada has a great overview at his blog, Kulemela. But I will give the quick and dirty.

In the past, most projects were unsuccessful because they were both short-sighted and unsustainable. They were short-sighted because the interventions focused on supply rather than demand. In other words, development agencies would provide fertilizer and tractors and other implements to improve yields for smallholder farmers. Yet, without simultaneously improving the infrastructure and building the market for the higher product volume, increased crop yields actually had the adverse affect of driving down prices, as there was nowhere to sell the surplus except for the same markets as before, which now had greater leverage in negotiation. And it was unsustainable because, once the funding for the project was complete, the gravy train would grind to a halt, and the tractors would sit in a garage somewhere – if they were lucky – broken-down and rusting away into oblivion. And a butterfly flaps its wings.

The logical response to these failures was to focus not on the production side, but rather the markets. Work with the buyers to develop their capacity to handle greater volumes, and they, in turn, will invest in suppliers to handle increased demand. Assisting a maize aggregator (a term for the middleman buying and selling the product) to get a loan in order to purchase an tractor-mounted maize sheller (a device that removes the kernels from ears of corn) which not only create an alternative source of income for them, allowing them to buy more maize from more farmers, but it will also save time by eliminating manual shelling. This is an example of a win-win situation that benefits the entire market in a sustainable way.

Market facilitation, specifically, tries to catalyze these connections. For example, on one side, a Swedish jatropha company in the northern part of Ghana has 40 tractors that it uses only during the planting and harvesting season, leaving them idle for the remainder of the year. On the other, a group of aggregators buying maize and soyabeans from more than 1,000 farmers needs tractors to prepare the lands for planting. Connecting these two entities in a mutually-beneficial business relationship creates a sustainable partnership, where the jatropha company earns additional income from maximizing utilization of its equipment, while the aggregators solve their tractor problem. In another example, a large juice manufacturer needs a reliable source of pineapples, mangoes, and citrus to keep its factory running at full capacity, while groups of small- to medium-sized farmers have no market for their products, other than the local “market women” – the aggregators who purchase for domestic sale. By connecting the two groups, the juice manufacturer can establish lasting partnerships, supplying farmers with inputs in exchange for a guarantee of the final product at a fixed price.

It is an elegant idea that works well in theory, but less so in practice. For one thing, relationships between buyers and sellers in these agriculture markets are notoriously plagued by years of mistrust. On this blog, I put up a guest post from Mark of EWB detailing this problem. The juice manufacturer says it needs twenty tons of pineapples, and then, when it comes time to purchase, scales back due to capital constraints and only buys ten tons, leaving the farmers with the remainder rotting on their farms. And, because of poor management, the manufacturer fails to pay the farmers for three months, leaving the farmers in the lurch. On the other side of the coin, the manufacturer provides fertilizer, seeds, and equipment to the farmers on credit in exchange for a guarantee of their products. But, come harvest time, the farmers find a better deal elsewhere and sell their crops to someone else, leaving the manufacturer out thousands of dollars and without produce for its factories. These are the realities of dealing in these markets.

In the next post, I will explain my thoughts on market facilitation.

Develop Economies’ Music Recommendation

HIV-Positive in Philadelphia vs. Uganda

Leave a reply

“What does it mean to say that one life is “worth more” than another? Aren’t all lives infinitely precious? Well, no, at least not in any sense that’s at all useful for making hard policy decisions about things like job safety and access to medical care.

Economists measure the value of a life by people’s willingness to pay for safety. Suppose you’d willingly cough up $50,000—but no more—to shave one percentage point off your chance of being killed in an accident. Then (except for some technical adjustments I won’t go into) we infer that the value of your life is 100 times $50,000, or $5 million.”

In economics, everything must have a value attached to it. There is no such thing as “invaluable.” Intangibles like life, liberty, and the pursuit of happiness have some value at which the opportunity cost of having them becomes too high. This is the value of abstract concepts. But, according to the article quoted above from Slate, a life is worth $5 million.

Thinking about this reminded me of something interesting I heard while I lived in Nairobi. I met someone who was working at a hospital in Uganda as an HIV counselor, disclosing the status of the test to the patient. He was finishing up his Masters of Public Health at UPenn and worked during the year at a clinic in Philadelphia, doing the same work. I asked him, between the two groups (Ugandans and Philadelphians), who took news harder? Without question, he said, the people he worked with in Philadelphia.

HIV prevalence in Uganda, 1990-2007

I did not expect to hear that. In the United States, anti-retroviral drugs allow people who can afford them the ability to maintain a normal life expectancy. The drug cocktail that contained a regimen of dozens of pills per week has been concentrated to a single pill – Complera – taken daily, which keeps the virus from turning into full-fledged AIDS. In other words, while it is no doubt traumatizing to learn you are HIV-positive, I wrongly assumed that, because it is no longer a death sentence, the personal devastation would not be nearly as severe.

In Uganda, on the other hand, HIV could very much be a death sentence, particularly for the poor. Anti-retrovirals are available for free through clinics and churches, but the availability of these and other ancillary services, like counseling or support groups, are limited. Even though the HIV incidence in Uganda has declined from 15% in 1990 (one in eight people) to ~5% today (one in 20), it is not a small problem, particularly when you consider that the incidence is much higher in slums and other communities where unemployment is high and prostitution common.

Despite these facts, my friend told me that people he spoke with about their condition reacted calmly, almost with a sense of resignation and practicality. They would want to know what they needed to do, what drugs they needed to take, and then move on. While people in Philadelphia would break down under the weight of the realization that they contracted the virus, people in Uganda seemed to look at it as another problem to deal with and move on with their lives.

I don’t know why this is the case or whether I can extrapolate any conclusions beyond this localized case (which I only heard about through a single conversation). But I thought about it a lot. One theory is that HIV/AIDS in parts of Uganda and, to a greater extent, Sub-Saharan Africa, is just a part of life. People contract the virus with a high-enough frequency that people know other people with the virus, and they understand the implications contracting it will have on their own life. Maybe in Philadelphia the feeling that you are alone in this might make it more difficult to deal with, especially when you have so many preconceived notions about what life with virus entails. So, in Uganda, maybe understanding the day-to-day implications causes people to accept the consequences.

Maybe it is exactly the opposite. Maybe people in Philadelphia can really understand and conceptualize the extent to which their life will be different after contracting the virus. It means taking one pill every day for the rest of your life, and disclosing your status to all potential sexual partners. It places a huge amount of responsibility on your shoulders, not only for your own life, but those of others as well. And in this hospital in Uganda, maybe the patients don’t understand at all just the significance of contracting the virus. It could be that this is their first time in their lives they have been to the hospital and cannot really process the gravity of the situation.

Another theory is that poorer Ugandans who contract the virus have so much to deal with already that the added weight of knowing they are positive is an afterthought compared with the immediate concerns – specifically, how to make money and buy food for your family. This is not to diminish the problems of the Philadelphians. It is only to say that immediate concerns about the here and now trump those of the future, particularly when the treatment is offered free of charge.

And lastly, and maybe most controversially, maybe people in different countries and different socioeconomic levels place a different value on life. Economists would say that every life is worth $5 million. That, of course, is context-dependent. It is an abstract idea that cannot be quantified. But governments do place a specific value on the lives of their citizens. I don’t know what it is in Uganda, but it is probably a lot less than $5 million.

Develop Economies’ Music Recommendation

Luck of the Draw: Poverty and Success

5 Replies

On the way to school in the town of Valladolid in the Philippines. Some of the unlucky ones.

A few weeks ago, the class of 2012 graduated from university and stepped out into the world. And one commencement speech, in particular, has been attracting a lot of attention for its candor and unexpected message: that the success of the graduates sitting in the audience is due, in large part, to luck.

Michael Lewis, author of Liar’s Poker and Moneyball, spoke to the graduates of Princeton University and tried to make them recognize just how lucky they are:

People really don’t like to hear success explained away as luck, especially successful people.

As they age and succeed, people feel their success was somehow inevitable. They don’t want to acknowledge the role played by accident in their lives. There’s a reason for this. The world doesn’t want to acknowledge it either.

Don’t be deceived by life’s outcomes. Life’s outcomes, while not entirely random, have a huge amount of luck baked into them. Above all, recognize that you have had success, you have also had luck. And with luck comes obligation. You owe a debt, and not just to your gods. You owe a debt to the unlucky. I make this point because, along with this speech, it’s something that you’re very likely to forget.

This is something I have thought about a lot over the last few years. In the beginning, I just wanted to learn about something I didn’t know and try to better understand different cultures. When I began visiting clients of NWTF, the microfinance institution I worked with in the Philippines, I began to see firsthand the degree of socioeconomic disparity between myself and three-quarters of the world. I saw it again in Ghana when I spent a few days living with a rice farmer in the Eastern Region, and again in the industrial slums near my office in Nairobi. No electricity, no running water, no steady source of income. People earn the money in the morning to feed their families at night. This is living hand-to-mouth, and it is an existence altogether unfamiliar to me.

At first, I felt a sense of obligation, and, to an extent, that sentiment still exists today. I would like to think that I will make the world a better place in the future (or, at the very least, not make it worse). And today, more so than I did back then, I feel very, very lucky. I understand the truth that Michael Lewis conveys in his speech – that only so much of your own success can be attributed to your innate abilities and ambition. Working hard and being smart certainly help. But to simplify the formula of success to these two dimensions fails to account for the most critical conditions for even allowing success.

Paramount among these is where you were born. 85% of the world lives in what are considered to be developing countries. This is a broad category that excludes just about everywhere except North America and Western Europe. A wide spectrum separates the countries verging on second world and those at the very bottom of the development index, also known as the “least developed countries,” which, by definition, have a per capita GDP of $905. The LDCs are mainly in Sub-Saharan Africa and Southeast and Central Asia. About 15% of the world’s population lives in LDCs, and 50% of them live in extreme poverty. If you are born to a poor family in an LDC, the chances of getting out are slim to none.

Within these developing countries, three billion people – or 50% of the population of the planet – live on less than $2.50 a day. That translates to about $1,000 per year, in PPP (purchasing power parity). That is not a lot of money. Sending multiple children to primary school, let alone secondary school and ultimately university, is tough when you are earning that little money. Between half and two-thirds are subsistence or smallholder farmers, working an acre or two of land, or, if they are lucky, raising pigs, cows, or goats. For a smart kid in a rural farming community, whose parents may or may not be literate, let alone educated, it takes incredible maturity, drive, and, above all, a stroke of luck to get out of there and do something else. And that assumes there is even a chance at all, since many children are pulled out of school during planting and harvest to help the family and fall too far behind in school to justify going back.

I could continue, but the point is clear. The role luck played in my own success became clearer and clearer as time went on. I came to realize that my own talents and ambition were really secondary when compared to the circumstances of my birth and upbringing. If there is one universal truth about less developed countries, it is that most people would move to the United States in a second. People may not believe it here in the States, but, to the rest of the world, it is still a place of promise and opportunity where fortunes can be made and a new life created. The fact that I was born here and can re-enter this country through the “Citizens” line at customs is something for which I am grateful.

Preparation for citizenship.

I am grateful that my parents value education and pushed me to work hard in school. I’m grateful for the fact that we had money and I didn’t have to struggle growing up. I am grateful that I had mentors, and that I grew up in a town so uncool that temptation toward potentially derailing vices weren’t even really an option. All of these factors were beyond my control. I was simply lucky enough to have them, and took it from there.

In an interview with PBS, Lewis explains what he was thinking when he wrote this speech:

I would say that, look, that the successful in our society owe so much of their success to things outside of themselves. They owe it to the society, that they’re born into this affluent and peaceful society that was not of their making, that they should acknowledge that obligation.

I think that is right on. Recognizing that fact and internalizing it is important. Within the United States, there is an increasingly troubling income gap. The disparity of wealth in this country is growing, and there is little recognition of the conditions that allowed it to grow. In his speech, Lewis focuses on this point, so I will not. But try to remember it when thinking about Obama’s decision to grant amnesty to the children of illegal immigrants, or the decision to extend unemployment benefits, or efforts to raise education standards in low-income communities, or any other effort to aid the unlucky.

But I would take a step even further back and say that, if you are reading this from an address in the United States right now, count yourself as one of the lucky ones. Recognizing this fact, and appreciating it, has led me to the realization that some things simply are the way they are, and that is OK. But, like Michael Lewis says, the realization brings a sense of humility, and an obligation to, at the very least, recognize the role that luck plays not only in my own life, but in the lives of others less fortunate than me.

Develop Economies’ Music Recommendation

Happy Father’s Day (Develop Economies Becomes a Book)

4 Replies

Just shy of three years ago, this blog came into existence. It had a very simple layout and was located at joshweinstein.wordpress.com. Over time, it grew in both scope and traffic, precipitating the move to a more professional layout and a re-branding as Develop Economies, a name I came up with at the spur of the moment. This week, the blog will reach half a million pageviews, which is something I never could have imagined. And in the beginning, there was only one reader – my dad.

Today is Father’s Day, so I want to talk a little bit about the support my family gave me through this process. After college, I started on a more traditional path, working as a strategy consultant for three years in Boston, before moving all my belongings into the family basement and leaving for the Philippines. In the last three years, I have traveled and lived all over Africa and Asia, with seemingly little direction other that pursuing fulfilling jobs where I am challenged and doing meaningful work. And, while he doesn’t always approve of the places I choose to go, at the end of the day, what matters most to him is that I am pursuing the things that I am passionate about. One of the best manifestations of that support has been through this blog.

In the beginning, my father was the one and only reader. He used to comment on my articles under different pseudonyms – mostly characters from the Ayn Rand novel Atlas Shrugged. I am not sure he really cared much about the posts on development, but read them anyways because he enjoyed my writing and wanted to learn more about what I was doing. The posts about travel and culture appealed more to him, but, again, he was happy to read and comment on it all.

A few days ago, after nearly three years living abroad, I moved back to the United States for good. This blog serves as a record of those three years, and it charts my own personal and professional growth. So, for Father’s Day this year, I am going to publish Develop Economies – all 200,000 words – into a book. This will be the final post in that book, even though I will continue to write posts for the blog. It is a way of showing my gratitude for the support he has given me these last few years.

So, thanks for the support dad, and happy Father’s Day.

What Do I Think of Social Enterprise?

1 Reply

In the last five posts, I have described in detail how Bridge International Academies has created a scalable model that can profitably serve the poorest segments of the population. They use data to make decisions, processes to ensure quality, and technology to streamline systems. In other words, they act like a business.

This is how every social enterprise should work. In fact, this is how every company should work. Pilot, test, measure, implement, and repeat. But this is not how social enterprises typically operate. There are a few that pushing the bar and doing some really exciting work. Nairobi happens to be a mecca for innovative social enterprises. Sanergy, for example, was started by three MIT Sloan graduates. They are manufacturing toilets, selling them to entrepreneurs in the slums, and collecting the waste to convert to biofuel and fertilizer. Mobius Motors is building a car for Africa – a cheap, durable, stripped-down beast that looks like a Hummer and is specifically designed for the rough roads in the rural areas of Sub-Saharan Africa. Healthcare companies like Penda Health, a chain of primary-care clinics, and energy companies like One-Degree Solar and Nuru Energy, understand the importance of profitability above all else.

There are other companies outside of Africa that are doing great work as well. Aravind Eyecare in India trains healthcare professionals to perform one procedure – removal of cataracts – and have managed to lower the cost to a fraction of a percent of the normal cost of the surgery. And Hapinoy, the chain of sari-sari stores in the Philippines, uses a hub-and-spoke franchise model to drive down operating costs for the small general stores that are so common among the poor in the country.

These social enterprises are the exception, rather than the rule. That is largely because the term “social enterprise” is somewhat silly in my opinion. An organization is either for-profit – focused on the bottom line – or not-for-profit – focused on the social mission. It is true that hybrid models exist. Good examples are Samasource, One-Acre Fund, and many microfinance institutions, which are partially subsidized, but perhaps moving toward financial sustainability. But being firmly in one camp or the other is what separates the wheat from the chaff in this world.

The key to success as a social enterprise is to offer a product or service that is inherently a social good, and make sure that the success of the company is tied to creating the best, most competitive product, and the highest-quality service. The reason that working for Bridge is so liberating is that there is never any question that what we are doing is a social good. We avoid the pitfalls of other “social enterprises” because of the very nature of our business model. As a low-cost school, we couldn’t move upmarket even if we tried, since comparatively wealthier families could easily afford better schools if they had the money to pay for it. We can’t compromise on quality in order to increase our already-low margins because, if we do our parents will pull their kids from school and the schools will no longer be profitable.

When the profit motive is inseparable from the social mission, a “social enterprise” is liberated from the concern of mission drift. And at that point, it ceases to become a social enterprise altogether. It is simply a company that happens to be making the world a better place.

Needless to say, I have tremendous optimism for what Bridge is doing. If this experiment succeeds, it will change education for the poor across the world. Aid agencies will continue to pour money into education systems that fail the poorest students, and continue to criticize private education institutions for co-opting the public system that should be providing them. But people are beginning to come around. Acumen Fund just launched its education portfolio, and made its first investment with Lok Capital, an Indian impact investor, in Hippocampus Learning Centers, a for-profit chain of education institutions. The tide is turning, and much of the credit belongs to the founders of Bridge International Academies and the hundreds of people who work in the operations, construction, research, IT, curriculum, and training teams to make the system work.

It was a difficult decision to head back to school when Bridge is on the cusp of something truly great. I will be watching it and cheering it on from the sidelines.

If you have questions, feel free to email me at josh@developeconomies.com.

What Do I Think of Education and Bridge International Academies? Pt. 5

Leave a reply

The following is part five of a five-part post about education in development and Bridge International Academies.

In the last post, I talked about how Bridge is able to leverage its economies of scale to both utilize huge amounts of data to make decisions and, once those decisions are made, they can be rolled out en masse. I will give a few concrete examples of how this works in practice.

Last September, we wanted to see whether offering a free month of school and having a grand opening ceremony with a bouncy castle would boost enrollment. So we did what most respectable startups exploring a new product or market would do: we tested it. Of the nine schools we opened last September, four had a grand opening ceremony (GOC) and first month free (FMF), two had only FMF, one had only GOC, and two had neither. When I looked at the numbers, the results were amazing. Not only was initial enrollment nearly three times what we had experienced in the past, but the conversion rate – the most important factor in measuring the efficacy of a marketing promotion in retail – was 85%. This is practically unheard of in retail. In other words, 85% of people tried the product and decided to buy it. When was the last time you started paying after the free trial expired?

When I shared the results with the management team, the action was relatively decisive. With the 30 January-2012 schools scheduled to be opened in only eight weeks, they changed everything. Effective as soon as possible, every new school would have a grand opening ceremony and every new student would be given a free month of school. And, to make it fair, all 60 schools would have a GOC in January and every student would receive January free. One by one, the managers detailed what needed to be done and set to work.

The IT team began making changes to the billing system and the smartphone application; the training team began prepping the training facilitators to communicate the new policy, and the operations team went out to each school to explain the changes directly. Marketing began contacting companies that rent bouncy castles and negotiating prices, while government relations reached out to the elders in the community and invited them to attend as “Friends of the Academy.” Within 24 hours of my sharing the analysis, the company began preparing for a monumental change in the way things were done. In January 2011, our largest school opened with 200 students. In January 2012, the biggest had more than 700.

For me, the policy change had even greater implications. Since each cohort of schools opened with different policies, regulations, and circumstances, it was difficult to isolate determinants of performance without introducing incredible amounts of bias. But now, every school had a grand opening ceremony and January became a free month for every single student. Therefore, the maximum attendance in January effectively equalized every school and made them as close to comparable as they would ever get. Now, all of a sudden, we were able to actually measure the how factors like population density, school location, cost competitiveness, income levels, urban/rural, and relative importance of education, influence school size and profitability.

From our market research, we had hundreds of consistent variables about each community. So I built a massive Excel model and ran some basic correlation analyses and scatter plots to identify the most important factors in determining where to open a school. Based on the analysis, I created an algorithm to actually project the size of the school after one year that was accurate within a range of 100 students at 80% of schools. We automated the report creation and incorporated a profitability model into each one, which would dictate land price and school size. And, just like everything else at Bridge, once we had it right, the new report became part of the Bridge model, and is there to stay until the data proves it wrong.

In the next post, I will talk about other social enterprises and why I think the term is a misnomer. If you have questions, feel free to email me at josh@developeconomies.com.

Develop Economies’ Music Recommendation

What Do I Think of Education and Bridge International Academies? Pt. 4

Leave a reply

The following is part four of a five-part post about education in development and Bridge International Academies.

The first and most obvious criticism of the Bridge model of education is that a scripted curriculum creates a non-dynamic learning environment for children. The western model of education is presmised on the idea that critical thinking is essential to success. The very idea of a liberal arts education is a distinctly Western concept. So, naturally, when people here that our teachers are high school graduates who are taught to teach by reading to children from a script, they automatically assume that the quality of the education is poor.

It is true that the standard of education at a Bridge school is going to be far below that of more expensive schools. But when compared with the alternatives – which include government schools staffed by unmotivated teachers and other non-formal schools offering little in-house teacher training – Bridge offers an education that is subject to rigorous testing and review. For example, our curriculum is written by a team of Kenyan education professionals and managed by Teach for America alumni, all of whom have Masters Degrees in education. It has a video team that films lessons to be reviewed by the curriculum writers. They look for level of engagement among the students and adjust the approach to maximize comprehension and retention. Student exams are digitized and reviewed both to identify weaknesses in the curriculum, but also review teacher performance. Lastly, the school managers audit the teachers on a regular basis to ensuring that they are performing adequately.

Lastly, and most importantly, Bridge undertakes a rigorous longitudinal testing study of 5,000 students every six months to monitor improvements in reading and math. Using a test developed by the Research Triangle Institute and USAID called the Early Grade Reading Assessment and Early Grade Math Assessment (EGRA / EGMA), Bridge compares the performance of 3,000 of its own students with that of 1,000 students at government and other non-formal schools. The results, which are shown on the website, show strong performance gains in basic reading skills, compared with its peers and less strong, but still measurable, gains in math. I know this because I was responsible for leading this student testing and performing the analysis. Using this data we can then tailor our curriculum to address our problem areas and improve the curriculum.

This level of analytical rigor is simply not possible at other non-formal schools. Why? Because Bridge is able to leverage economies of scale. It can invest huge amounts of resources into improving its model because it knows that all changes can easily be rolled out across every single school in a day. When I first met Jay in January 2011, Bridge had just broken 10 schools and opened its first school outside Nairobi. By the time I left, the company had 73 schools across Kenya.

This level of growth means two things. First, since the unit economics are such that each individual school is profitable at a relatively small size, more schools mean additional revenue that can be poured back into the company. And second, any major policy changes can be backed with incredibly rich data sets. As the company’s business analyst, I was working with datasets with sample sizes in the tens of thousands. For someone trying to use data to better understand how our parents think, pay, and act, and understand what makes a good school, I was in heaven.

In the next post, I will give some concrete examples of how Bridge uses data to perfect the model. If you have questions, feel free to email me at josh@developeconomies.com.

Develop Economies’ Music Recommendation

What Do I Think of Education and Bridge International Academies? Pt. 3

Leave a reply

The following is part three of a five-part post about education in development and Bridge International Academies

The Bridge model is a fundamentally libertarian idea. It is premised on the belief that school choice is a good thing. Many organizations, including development titans like UNICEF, believe that education should be a public good, provided free by the government. This may be true in theory, but, like most development theories, it is rarely true in practice.

For example, Kenya already technically has a free primary education system, where all students, regardless of socioeconomic status, are guaranteed the right to an education at no cost. Yet, in the slums, where the houses built illegally, few government schools exist to serve the communities. And even in areas where public schools do exist, additional fees payable to the head teacher and others mean that parents are paying almost as much for school as they do at Bridge. Outside of Nairobi, many of the government schools are as close to free as a school can get in Kenya, but they are often overcrowded, far away, and staffed by complacent teachers who are either overburdened with too many students or complacent when it comes to teaching.

Much of the free primary education system in Kenya was subsidized by foreign donors. But these donors eventually decided to scale back funding after massive corruption scandals were exposed. In the main Kenyan daily newspaper, the Daily Nation, every day exposes a new corruption scandal. Needless to say, the state of the government education system is underwhelming at best.

Because of the failures of the government system, thousands of non-formal schools have sprung up throughout the slums to serve these communities. Education entrepreneurs, churches, NGOs, and other groups build and operate schools to fill the void left by poor state-run education. While UNICEF and others would like to believe that these schools do not exist, they are everywhere.

When people speak and write about Bridge, they credit the company with a radical new approach to education, offering private education as a means of providing quality education. But Bridge is hardly innovative in this respect. Non-formal schools like Bridge have existed for decades. It was not until the early 2000’s that a British academic named James Tooley began seriously researching education in the slums of India, Nigeria, Ghana, Kenya, and other countries, and finding bustling schools with hard-working teachers. He published a book called The Beautiful Tree and several articles for the Cato Institute detailing his findings, which were influential in seeding the idea for Bridge.

Rather, the real innovation Bridge brings to this sector is its relentless pursuit of efficiency gains and systematization of the day-to-day running of a school. Technology as a means of creating scalable payment and performance monitoring systems, a scripted curriculum written by subject-matter experts, modular school construction using low-cost materials – these are all key innovations that have the potential to revolutionize this sector. But the concept of a low-cost private primary school for the poor is nothing new.

In the next post, I will address some of the criticisms of Bridge’s model of education. If you have questions, feel free to email me at josh@developeconomies.com.

Develop Economies’ Music Recommendation

What Do I Think of Education and Bridge International Academies? Pt. 2

Leave a reply

I think that one of the reasons that Bridge has been so successful at innovating has been its willingness to bring in a multidisciplinary team to run the show. People like me, who have no background in education, but a good deal of experience in other areas, bring fresh ideas to an industry that, apart from certain ed-tech companies and charter schools like KIPP, is not known for innovation. Our head of operations was the former director of business development for Dominoes Pizza in Asia, responsible for introducing the retail chain to a completely new market. The founders include one successful tech entrepreneur, a division lead at IDEO, the design firm, and an anthropology PhD. It doesn’t get much more interdisciplinary than that.

Another reason I think it has seen success where others like it have seen failure is that it refuses to accept excuses for poor performance on the part of its employees and vendors, and sees itself first and foremost as service provider that puts its customer first. As a generality, business in Africa moves more slowly and expectations are sometimes different. The business culture – with many notable exceptions – is such that the customer is never at the top of the priority list. The other day, a coworker told me that a vendor to whom we paid a lot of money to perform a service which he performed poorly – was upset that the management was too busy to see him. “This is an outrage – I am a client,” he said. The fact that we were, in fact, the client and he the service provider undoubtedly never crossed his mind.

Bridge demands quality from it suppliers, timeliness from its vendors, and results from its employees. This mentality ensures that the best people for the job are in place, and they can perform their jobs efficiently. In the NGO world (or at least the ones I have seen), this approach to doing business is hardly, if ever, the norm. If a deadline is missed, people say “what can we do – it’s Africa time.” Or an NGO holds a conference that only attracts participants for the per diems and lunch provided. Accountability is not part of the lexicon. At Bridge, on the other hand, if a vendor screws up the logo on the 1,000 shirts it ordered, it refuses to pay until the mistake is corrected. It’s only business.

That is because Bridge, above all else, is a business. It happens to be building low-cost primary schools in slums, but it is first and foremost a profit-oriented enterprise. If Bridge is going to reach 1,000 schools and one million children in countries around the world, it has to be laser-focused on the bottom-line to succeed. Drawing from a talented pool of private sector veterans and a founder who started and sold a company in his twenties, Bridge understands this well.

This kind of truly business-minded approach to development is rare, even within the relatively new and trendy industry calling itself “social enterprise.” While many social enterprises – companies that try to turn a profit while doing good – struggle to balance the demands of a double bottom-line, Bridge has create a model where the profit motive is inseparable from the social mission – one cannot exist without the other. If Bridge students perform poorly on the KCPE exam – the test culminating primary education in Kenya – parents will pull their kids from Bridge schools en masse. On the other hand, if they perform better than students at other schools, Bridge schools will double in size in a day.

That is because poor parents, just like middle- and upper-income parents, are discerning consumers when it comes to education. They look for quality and, more importantly, value for the little money they have. This is generally true for most products and services, but particularly so for education, which parents see as a means of getting out of the slums. For Bridge to grow, it must be educating its students better than the alternatives in the community – either government schools or other non-formal schools. In this case, it means ensuring that we outperform other schools – both government and other non-formal schools.

In the next post, I will explain the public education system and the origins of non-formal schools. If you have questions, feel free to email me at josh@developeconomies.com.

Develop Economies’ Music Recommendation