Search

• Discretionary or ex gratia payouts are widespread in parametric insurance programs. • Payouts attempt to secure social license to operate despite contractual basis risk. • Discretionary payouts obscure and entrench insurers' market power. • Attempts at conciliation often stoke further demands from aggrieved collectivities. • Geospatial monitoring alone cannot resolve questions of post-disaster distribution. The past decade has seen the dramatic proliferation of geospatial tools to remotely monitor, measure, and transfer weather and climate risk, particularly in the Global South. These "parametric" tools are calculative market devices used to commodify risk and facilitate its distantiated exchange via insurance markets. Yet the environmental estimates they generate are frequently wrong, sometimes grossly so. This paper investigates what happens after calculative market devices fail, analyzing so-called ex gratia ("from grace") practices in which insurers make payouts to aggrieved clients even when none are due under contractual terms. Though these payments are commonly deployed to dispel discontent, these "public secrets" of the industry have gone unnoticed in insurance scholarship. This paper documents numerous ex gratia payouts in parametric programs across Africa, disputing the myth of autonomous insurance markets that function according to formal, transparent rules administered by dispassionate calculative devices. Instead, these "discretionary" monetary transfers reintroduce human decision making in informal, black-boxed ways, cloaking the inadequacy of the parametric contracts they shore up. Far from incidental, I argue that these practices have been constitutive of the parametric insurance market's persistence and expansion. Though ex gratia payments sometimes give rise to negotiations over indemnification with aggrieved collectivities, these unfold on insurers' terms, informalizing power and delegitimizing complaint. The growing emphasis on parametric insurance as a tool for climate adaptation makes it all the more important to excavate the mechanics and politics of ex gratia, and to relinquish expectations that geospatial algorithms alone can resolve questions of post-disaster redistribution. [ABSTRACT FROM AUTHOR]

Abstract African countries are in a unique position to reap the socio-economic and environmental benefits of renewable resources as a means for meeting increasing energy demand in a sustainable way. A critical obstacle for the deployment of renewable energy technologies in Africa is the difficulty of attracting sufficient and affordable finance. This paper compares the impact of financial conditions on the cost of electricity generation across six renewable and three fossil-based technologies in 46 African countries. The results show large cost variations and highlight the extent to which renewables are disadvantaged by current financial practices. The energy-economy-environment model TIAM-ECN is used to show how lowering financing costs results in a much higher deployment of renewables. For example, solar PV could account for 10–15% of total electricity generation by 2050, even without explicit climate policy, thanks to financial de-risking programmes. The results demonstrate that changes in financing schemes could outweigh the impact of technology learning. This paper also demonstrates that, once ambitious climate policies are in place, reducing financing costs for renewables could be an efficient way to lower greenhouse gas emissions. Financial de-risking is thus a key ingredient for unlocking the renewable energy potential in Africa. Highlights • We show how renewables are disadvantaged by today's financial practices in Africa. • We show how lower financing costs result in a higher deployment of renewables. • PV can account for 10–15% of electricity generation by 2050 without climate policy. • Changes in financing schemes could outweigh the impact of technology learning. • Financial de-risking is key for unlocking the renewable energy potential in Africa. [ABSTRACT FROM AUTHOR]

In the past decade inclusive growth, that is job-rich growth, has topped the policy agenda in developing countries. This paper investigates how the access to finance affects employment in small and medium-sized enterprises (SMEs) in Sub-Saharan Africa. It first presents a model where firm creation requires entrepreneurial search and paying the start-up costs, while the firm's size in terms of employment depends on the access to credit. Under the financial market imperfections, access to credit can be a binding constraint on firm entry and employment even when the banks have sufficient liquidity. Using an impact evaluation-based approach on firm-level data from 42 African countries, we show that SMEs with access to formal financing create more jobs than firms without access, with employment in firms having access to more affordable and larger loans growing the fastest. The impact of access to finance is stronger for firms in manufacturing than in services, pointing to sectoral targeting of finance as a possible policy supporting industrialization. [ABSTRACT FROM AUTHOR]

The paper provides evidence on the number and volume of financial transactions undertaken by agents (local businesses that double as more convenient, lower cost alternatives to formal branches) of the largest microfinance institution operating in the Democratic Republic of Congo (DRC). To our knowledge, this is the first econometric study of the activities of agents in a country as underdeveloped as the DRC. More important than agents’ personal characteristics, transactions are higher in low income, densely populated areas with high levels of commercial development, suggesting that the agent network has been best at supporting financial transactions among the urban poor. In addition, branding and effective liquidity management are strongly linked to agent activity. The results suggest that agents can be effective providers of basic financial services among the urban poor who lack suitable alternatives. But it remains to be seen how the agent banking model will play out in less densely populated areas of the DRC and other developing countries. [ABSTRACT FROM AUTHOR]

Promoting access to modern energy forms in developing countries to replace traditional fuels is high on the political agenda. This paper describes the development and application of a global model for rural electrification. The model is used to assess future trends in electrification, and the associated investment needs. The model is applied for a set of electrification scenarios. We find that the trend in increasing electrification differs considerably among world regions: in Latin America and Asia access to electricity takes place at lower income levels than in Africa. Under business-as-usual developments, universal access to electricity is not reached by 2030 in Latin America, Asia or sub-Saharan Africa. Investments per household depend strongly on population density, implying relatively low costs in most Asian subregions. Global cumulative investments to reach universal access to electricity by 2030 amount 477–868 billion USD2005, which would be 238–400 billion additional to business-as-usual (or 12–20 billion USD2005 per year). The potential for mini-grid and off-grid technologies is expected to be high in Latin America and sub-Saharan Africa, and lower in Asia. This is a result of high costs of grid electrification at low population densities in large parts of rural Africa and Latin America. [Copyright &y& Elsevier]

The recent increased emphasis on impact assessment is due in part to the rapidly changing nature of funding for agricultural research and the shifts that have occurred in what is expected of the agricultural research community. The reasons for doing impact assessment are relatively clear: ex post studies can determine the impact of past investment in research on target beneficiaries and are a way to learn some of the lessons of the past. Ex ante studies can provide information to assist in the allocation of scarce research resources to activities that best match donors’ development objectives. In practice, impact assessment is often contentious and almost always difficult, particularly when livestock are involved. In this paper, we outline methods that can be used in ex ante impact assessment, and illustrate some of these in relation to three recent studies on improved food-feed crops in different places: improving the quality of millet and sorghum stover in India, using dual-purpose cowpea in West Africa, and alternatives for utilizing maize stover in the mixed systems of East and Southern Africa. Such impact assessments are neither cheap nor quick, and the methods that are most appropriate in any situation will depend not only on the resources and expertise available but most importantly on the exact nature of the questions being asked and the end-users of the results. Much remains to be done to maximize the utility of such assessments, particularly in the areas of quantitative model development, rapid qualitative method development, more effective integration of biophysical and socio-cultural indicators and approaches, and provision of baseline data against which to measure progress. Research resource allocation may well retain its somewhat haphazard nature in the future, but given the challenges facing agriculture in developing countries, a mechanism for attempting to ensure that research and extension really do contribute to widely held development goals has to be based on more than trial and error. [Copyright &y& Elsevier]