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Louis Boorstin Responds to Acumen Fund’s Lesson #8 – Governments rarely invent solutions, but they can scale what works

Acumen Fund is committed to sharing the learnings we have collected over our past 10 years. In this spirit, we have published  a document called “10 Things We’ve Learned About Tackling Global Poverty.” Each week on the Acumen Fund Blog, we will be posting the next lesson in this series of “10 Things,” along with a guest response from a valued member of our community.

8. Governments rarely invent solutions, but they can scale what works

I certainly agree that governments can be essential to scaling what works, but governments also have to be innovative in how they help scale successful programs.

Governments play a critical role in achieving scale given the scope of their reach and their permanence.  My preference is similar to Acumen’s, which is to scale through the private sector where possible, as incentives in the market system promote scale, sustainability, cost reduction and on-going innovation.   However, that’s not always possible when you’re trying to deliver goods or services that have high social benefits but are unaffordable to the poor or generate low willingness to pay.  Now we’re in the territory of bednets, pre-natal healthcare, sanitation and other ‘public goods’ where government can be an important partner.

So, what’s the right role for the government in these situations?  Start with the least intrusive, most catalytic approach and move towards direct implementation only if clearly needed.  First, make sure the policy environment provides the right incentives and penalties.  Second, keep a healthy distance between the government agencies overseeing a sector and the service providers, whether private or public, as that promotes accountability and good performance.  Third, if needed, provide targeted funding, such as giving vouchers to poor households to subsidize their purchase of specific goods or contracting to buy desired ‘outcomes’ such as payments to villages that have stopped defecating in the open (instead of the traditional subsidy per toilet installed).  Finally, and only if needed, use government to implement programs, but again focus on the outcomes you’re seeking instead of just funding activities.

An oft-cited example of a successful government scale-up is the Oportunidades program in Mexico, which reduces poverty by providing conditional cash transfers to families in exchange for regular school attendance, health clinic visits, and nutritional support.  The trick in this and other public sector programs is not whether to involve the government, but how to do so in the most effective way.

Louis Boorstin is Deputy Director of Water, Sanitation, & Hygiene at the Bill & Melinda Gates Foundation and a former Acumen Fund Advisor. Louis was also formerly the Manager of Environmental Projects Unit at the International Finance Corporation.

Click here for the full “10 Things We’ve Learned About Tackling Global Poverty.”

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