ODIsMany organizations recently launched Open Data Initiatives (ODIs) to facilitate the production of a wide-range of socioeconomic data, ensure open access to data and improve the statistical capacity of countries and international partners. In 2008, the World Bank decided to throw open its rich database of more than 8,000 plus time series indicators for free. During the second birthday of the Bank’s Open Data Initiative on April 20th, 2010, President Robert Zoellick stressed that statistics tell the story of people in developing and emerging countries and can play an important part in helping to overcome poverty. The United Nations Economic Commission for Africa (UNECA), under the new leadership of Dr. Carlos Lopes, is undergoing an extensive restructuration of its activities with a strong emphasis on statistics as “the backbone of proper planning for Africa’s future.” Knowledge management and development was one of the key components of the African Development Bank (AfDB) mid-term strategy (2008-2012) and the Bank will continue enhance its knowledge services, a necessary and still underserved complement to its lending activities.  Other institutions like Data.gov and the Open Development Technology Alliance has also developed their ODIs.

The main objective of each ODI is  to improve data quality (timeliness, reliability, accessibility and relevance) and its availability. Data types suitable for an ODI include statistics used by citizens, governments, and the international and donor communities. The types of use for statistics depend on various factors and contexts including government policy measures, information to citizens, democratic debate on issues of public policy, need for information by potential foreign investors and visitors to the country, accountability and fiduciary responsibilities to foreign governments and international institutions for their assistance, and national surveillance requirements.

The balance between these different priorities and the overall demand for statistics has been affected by changes in the aid architecture. Poverty Reduction Strategy Papers (PRSPs) incorporate a set of indicators to monitor and  select outputs and outcomes. All developing countries and their development partners have signed the Millennium Declaration and need to monitor the associated Millennium Development Goals (MDGs) that assess development outcomes. The introduction of budget support and performance-based budgeting has led to a newer demand for more detailed information relating to service delivery and to results from smaller geographical areas. This latter demand more closely follows some of the needs of governments in managing the delivery of services and seems to be leading to stronger demand for national data.

These statistics are usually generated by economic surveys, and regular administrative collections corroborated by occasional sample household surveys. Improving data quality involves the art and science of creating useful surveys to provide to citizens, data about local conditions, headline per­formance indicators, topical, social, political, and economic issues. It also involves collecting high definition local data and fore­most economic and financial statistics for country management (including policy design, pub­lic sector performance, and resource allocation) and nationally representative data on development outcomes and impact (such as those captured by the MDGs) as prioritized by the international community.

Technically, an Open Data Initiative (ODI) is a freely available online service for the creation and dissemination of data for public consumption using Web 2.0 technologies. The idea is simple: you have the data and you provide the service to disseminate it to the public. Users discover and explore data in a rich, interactive, and intuitive application, rather than browse or read large documents of published tables and charts. The end-user can select and visualize any combination of data. It can be exported, printed, linked to, and shared in collaboration environments.

Various technologies are used for the development of the online open data systems. These tools include: a) Microsoft Visual Studio 2012, the development IDE for developers using C#;  b) the Web Technology ASP.NET MVC 4 and WEB API;  c) the Javascript Library for creating Web controls called Kendo UI; d) the famous Javascript library jquery; e) the Javascript Library providing a canvas for creating diagrams called Northwoods GoJS; f) Microsoft SQL Server 2008 for databases storage; g) Microsoft Team Foundation Server 2010 to provide source control for the code, integrates with Visual Studio 2012, and provides a powerful bug and task management system for internal development use as well as testing at a later stage; h) Microsoft Windows Server for hosting the web and windows servers and services (MS SQL and TFS); and i) the Web server  Microsoft IIS. Google AppEngine Cloud, for instance, enables providers of public data to create engaging and rich Web 2.0 experiences.

The issue of weak statisti­cal capacity and the impact this has on development is well documented. In a synthesis report on the first phase of the evaluation of the Paris Declaration, the authors emphasized that reliable statistics are vital for good policy, to measure progress, and to report on development results at local, national and international levels. Yet the findings of the first phase of this evalu­ation highlighted that of all the Paris commitments, progress has been slowest on ‘managing for development results’; and that there is therefore a strong need to strengthen statistical capacities and to use them more ef­fectively for decision-making.

The benefits of such initiatives are the following: a) the potential reduction of the workload on data analysts and researches (cost reduction and time efficiency); b) the provision of data that is complete; c) the provision of a new online data service to the public (data as a service); d) the provision of an engaging and rewarding experience for the public (improving trust relationship); e) the confidence that the public are seeing the right numbers, graphs, and maps, and reaching the correct interpretation and understanding behind those numbers (data integrity); f) the reduction of  the time between data collection and data dissemination to ensure maximum relevancy of the data to the audience (data responsiveness ); and g) the promotion of online experience that can be captured and shared by the public in collaborative environments such as blogs, LinkedIn, Facebook, Google+, or Twitter.

ODIs’ purposes and methods fall on a continuum. Some have far-reaching generalizable effects. Others are conducted to meet specific needs. Some ODIs (sometimes called data or knowledge discovery or data mining) are based on a process of analyzing data from different perspectives and summarizing it into useful information. An ODI can also include a set of advanced models and technologies that transform raw data into meaningful and useful information for business purposes. These business intelligence techniques can handle large amounts of information to help identify and develop new opportunities. Finally, ODIs involve knowledge management techniques with the ability to create and manage a corporate culture and structure that encourage and facilitate the creation, appropriate use, and sharing of tacit, explicit, and embedded knowledge to improve organizational performance and effectiveness.

Obviously, the above open data initiatives go beyond the simple manipulation of statistical data. They are part of a large spectrum of activities called Open Knowledge Initiatives (OKIs).  An Open knowledge initiative is a process that encompasses nine activity classes: five primary activity classes (acquisition, selection, generation, assimilation, and emission) and four secondary activity classes (measurement, control, coordination, and leadership). Knowledge is not data or information. Data is simply raw facts without context. Information is data that comes with context. Knowledge is information that is contextual and relevant of event, as well as actionable by something like human or agent. Knowledge is information in action.

With increasing recognition that organizations operate in hypercompetitive, high-velocity, or rapidly changing environments, the question of how they could manage knowledge merits an explanatory framework that reflects (a) the context where OKIs takes place, (b) processes that show how to conduct OKIs, and (c) consequences of such initiative.

The recent “amazing mea culpa” of the top economist of IMF, Dr. Olivier Blanchard, that the Fund blew its forecasts for Greece and other European economies because it did not fully understand how government austerity efforts would undermine economic growth is one of the reasons to consider OKIs. Dr. Blanchard agreed that he could not actually determine what multipliers economists at the country level were using in their forecasts. This number was implicit in his forecasting models, a background assumption rather than a variable that needed to be fine-tuned based on contextual circumstances and peculiarities.

Beyond this simple mathematical error (using a uniform multiplier of 0.5 when in fact the circumstances of the European economy made the multiplier as much as 1.5), there were recurrent problems in official Greek economic data on public finances, whose reliability has been impaired by inappropriate accounting methods, the application of poor statistical methods and deliberate misreporting. IMF failed to detect these issues. A robust OKI system that collects, collates, and analyzes countries data on deficits and debts could have helped IMF to better understand economic, fiscal, and financial policies that should be proposed to member states. One of the implications for the future of Blanchard’s mea culpa is how IMF should improve its surveillance methodologies by including OKIs for a better preparation of their Public Information Notices (PINs).

Statistics (data) are used not only by citizens or governments but also by the international and donor communities, among whom demand has been particularly strong in recent years. The creation of a global society with possibilities of knowledge sharing is among the contributions of the IT revolution and globalization. In the knowledge society, the value-creating strategies and long-term viability of organizations depend on sustaining open knowledge initiatives.  At their meeting in February 2013, heads of the multilateral development banks, the IMF, and the United Nations (U.N.) agreed to strengthen collaboration between their institutions on issues related to data and statistical capacity building in their member countries. A Memorandum of understanding was signed that sets out principles and modes of collaboration.

Open knowledge initiatives are growing areas of work, particularly with the increasing demand for better knowledge to monitor development efforts. A global strategy for OKIs is vital for planning, implementation and monitoring of country management initiatives and development outcomes and impacts. Among other things it identifies capacity needs, organizational change proc­esses, priorities, and resources requirements.

In terms of Millennium Development Goals (MDGs), a worldwide strategy for OKIs should address the assessment of the blueprint agreed to by all the world’s countries and leading development institutions with the intention of halving extreme poverty rates to halting the spread of HIV/AIDS and providing universal primary education, all by the target date of 2015.

OKIs should address coordination prob­lems and facilitate the understanding of countries challenges with appropriate methods and tools. Extensive open knowledge initiative coordination and collaborations should be carried out among the key international organizations such as the World Bank, IMF, OECD, AfDB, the U.N. system, etc. For example, the various institutional OKIs need to be flexible to facilitate their integration with national databases when available through service oriented architecture and web services.

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The author’s involvement in Open Data/Knowledge Initiatives:

Dr. Nkoyock is a scholar and a professional. He is a Professor of Management, Leadership, Mathematics, Statistics and Computer Science. He earned a doctorate degree in Management in Organizational Leadership with a Specialization in Information Systems and Technology, a Master’s degree in Software Engineering and a Bachelor degree in Mathematics. Nkoyock’s PhD quantitative research project used Structural Equation Modeling (SEM) with the multivariate analytical software LISREL 8.8 and the statistical software SPSS 16.0. Currently, he is involved in a research project, called LmiData, an Open Data/Knowledge Initiative that covers the  full life-cycle of online surveys, data analysis, automatic data interpretation, and dissemination. As a professional,  Dr. Nkoyock  is currently a project manager for the development of the Public Procurement Review Software (goPRS, available at goprs.unodc.org), a suite of software packages comprising of goPRS Enterprise, goPRS Web, goPRS Intelligence, goPRS Learn, and goPRS eGP. goPRS is a prevention corruption tool for public procurement regulatory authorities.

Posted on May 6, 2013 by DrAN | 1 Comment

The Washington Post reported on January 03, 2013 that IMF top economist, Olivier Blanchard issued an “amazing mea culpa” for failing to foresee how austerity measures would undermine economic growth.

Blanchard and co-author, Daniel Leigh, a fund economist, wrote on growth forecast errors in a paper that states “forecasters significantly underestimated the increase in unemployment and the decline in domestic demand associated with fiscal consolidation.”  The authors basically admit that they failed to consider important factors about how regions might react to austerity in times of financial crisis when they advised IMF austerity policy.

The paper, which is not the official line of the IMF but rather the opinion of its top economists, stresses that fiscal consolidation (austerity) is not necessarily undesirable, but that “the short-term effects of fiscal policy on economic activity are only one of the many factors that need to be considered in determining the appropriate pace of fiscal consolidation for any single country.”

IMF’s Policies and Programs

The IMF is an organization of 187 countries, working to (a) foster global monetary cooperation; (b) secure financial stability; (c) facilitate international trade; (d) promote high employment and sustainable economic growth; and  (e) reduce poverty around the world. The IMF’s fundamental mission is to help ensure stability in the international system.  It does so in three ways: (a) keeping track of the global economy and the economies of member countries (Surveillance); (b) lending to countries with balance of payments’ difficulties (Lending); and (c) giving practical help to members (Technical Assistance).

Is the world economy stable today?

The response is negative based on what happened in African countries that adopted structural adjustment programs (SAPs) and what is currently happening in Europe with IMF’s austerity measures. Our hope is that the IMF will shout another mea culpa for imposing SAPs to developing countries. Structural Adjustment Programs have gained such a negative connotation that the World Bank and IMF launched a new initiative, the Poverty Reduction Strategy Initiative, and make countries develop Poverty Reduction Strategy Papers (PRSPs). While the name has changed, with PRSPs, the World Bank has  being having to convince countries to adopt the same types of policies as SAPs.

Dr. Blanchard acknowledged that the Fund blew its forecasts for Greece and other European economies because it did not fully understand how government austerity efforts would undermine economic growth. He agreed that he could not actually determine what multipliers economists at the country level were using in their forecasts. This number was implicit in his forecasting models, a background assumption rather than a variable that needed to be fine-tuned based on contextual circumstances and peculiarities. Blanchard and his colleague deduced that IMF forecasters have been using a uniform multiplier of 0.5, when in fact the circumstances of the European economy made the multiplier as much as 1.5. In other words, a $1 government spending cut would cost $1.50 in lost output!

 IMF should improve surveillance methodologies and tools for a better preparation of their PINs.

Coming back on the IMF’s surveillance process, when a country joins the IMF, it agrees to subject its economic and financial policies to the scrutiny of the international community. It also makes a commitment to pursue policies that are conducive to orderly economic growth and reasonable price stability, to avoid manipulating exchange rates for unfair competitive advantage, and to provide the IMF with data about its economy.

The IMF’s regular monitoring of economies and associated provision of policy advice is intended to identify weaknesses that are causing or could lead to financial or economic instability. This process is known as surveillance.

There are three methods of surveillance: (a) country surveillance, (b) regional surveillance, (c) global surveillance. Country surveillance, for example, are done through regular annual missions under Article IV consultations conducted by a team of IMF economists. They meet with politicians, parliamentarians, civil society, and central banks to discuss economic and financial policies of the country to elaborates Public Information Notices (PINs). Regional surveillance are conducted with the RECs, whereas global surveillance is to review global economic trends and developments.

The country surveillance process must remind you of another, more controversial, process of calculating one of the common indices used in the measurement of corruption, and this is the German-based Transparency International’s (TI) Corruption Perception Index (CPI). The CPI assesses the level at which corruption is perceived by people working for multinational corporations and institutions as impacting on commercial and social life.

Various scholars, practitioners, and institutions have argued that the CPI is highly unsatisfactory. Some critics pointed out that TI’s perception indices simply register the level of corruption as perceived by primarily the international private sector that (a) do not always reflect the real situation in the countries surveyed, (b) do not involve the victims of corruption in these countries, (c) offer little or no guidance of what could be done to address the problem; and d) can discourage countries from taking serious measures when their anti-corruption program efforts are not seen as being successful by an improved score against the TI Index.

Unfortunately, this is the only index currently available pending the maturity of the Ibrahim Index of African Governance, but  that’s another story.

Why IMF did not see this global crisis coming?

This was the same question posed by the Independent Evaluation Office of the IMF in its report published on January 10, 2011 for the Asian crisis (more details are available here). The IMF’s surveillance processes and their respective PINs are misleading. Nearly a quarter of the board’s time is spent on each of bilateral surveillance (Article IV reports) and policy issues at the IMF. Some board members admit their uselessness in handling bilateral surveillance, as only 20 per cent of them think they add significant value to the Article IV process.

There were recurrent problems in official Greek economic data on public finances, whose reliability has been impaired by inappropriate accounting methods, the application of poor statistical methods and deliberate misreporting. IMF failed to detect this as the institution predicts the Asian financial crisis. A robust system that collects, collates, and analyzes countries data on deficits and debts could have helped IMF to better understand economic, fiscal, and financial policies that should be proposed to member states. We hope that one of the implications for the future of Blanchard’s mea culpa is how IMF should improve its surveillance methodologies and tools for a better preparation of their PINs.

As a final note, I have a comment in the form of a question: Is it that someone like Dr. Blanchard has the right to say he did not know with the intellectual and financial resources, and information which he has?  I think at best, he was slight in his approach and that is exactly the same problem plaguing the IMF. They are so lightweight that analyses and advices they give to our countries are of limited utility! The biggest problem is that they have an account to make a person even when they admit their false analyses were misfortune to people! These people and institutions should be more “accountable” but I do not know how!

The IMF, while making good governance one of the key pillars in their operational strategy, and rightly so, have lagged behind in fully adopting the same principles when governing itself. In an increasingly globalized world, where multilateral authority is measured by the yardsticks of accountability, the  institution can no longer put off a long-awaited reform. Accountability is one of the weakest features of the Fund’s governance and this weakness entails risks to the Fund’s legitimacy, which in turn has a bearing on its effectiveness.

Posted on April 6, 2013 by DrAN | 1 Comment