Public Finance

The World’s Best-Kept Financial Inclusion Secret Revealed: The Untold Success Story of BRI Microbanking Since 1895

Jay Rosengard, November 2022 

Bank Rakyat Indonesia (BRI), Indonesia People’s Bank, has been the most successful promoter of financial inclusion in Indonesia since the country declared independence in 1945. 

BRI’s first major financial inclusion initiative was the 1970 creation of a nationwide network of BRI “unit desas,” or village units, for channeling Bimas (Mass Guidance) agricultural credit. The primary objective of Bimas was to promote national self-sufficiency by bringing the Green Revolution to Indonesia. However, by the 1983–84 planting season, successful rice farmers no longer needed Bimas support, leaving only marginal and failing farmers in the program.

BRI thus began its microbanking metamorphosis and rebirth with painful adjustment and slow adaptation, subsequently laying the foundation for dramatic growth and rapid expansion. Three principal policy changes turned unit desas from marginally useful, extremely costly entities that had outlived their initial mission into profitable rural banks providing vital financial services: 1) transformation of unit desas from Bimas conduits to full-service rural banks; 2) internal treatment of unit desas as semi autonomous units of account (discrete profit/loss centers); and 3) evaluation of unit desas based primarily on their profitability rather than on hectares covered or money lent. BRI has built on its successful commercialization of microbanking in the mid-1980s to grow, broaden, and deepen its microbanking business over the past three decades. 

BRI faces two significant future challenges if it is to remain a profitable and effective global leader and national driver of financial inclusion. First, it must continue to evolve and adapt amidst an increasingly difficult political and economic environment. This is indeed a formidable challenge but one BRI has successfully met since Indonesia declared independence in 1945. However, the second challenge facing BRI is even more daunting. While continuing to navigate the treacherous waters of well-intentioned but counterproductive national policies that threaten to undermine past accomplishments in financial inclusion, BRI must also manage a transition back to sustainable, market-based microbanking.

BenePhilly, City of Philadelphia: Innovations in American Government Award Case Study

Betsy Gardner, January 2022 

The American social safety net exists to meet needs for: unemployment assistance, supplemental money for food, help with health care costs and medical expenses, and more. However, the process of signing up for these services is often time-consuming, confusing, repetitive, and frustrating.

To address these challenges, the Philadelphia-based nonprofit Benefits Data Trust (BDT) developed BenePhilly, in partnership with the City of Philadelphia and the Pennsylvania Departments of Aging and Human Services, to inform people of their eligibility for benefits and assist them in quickly and efficiently enrolling. This paper is a case study of the BenePhilly program and will serve as a guide to replicate its success. By using proven, data-driven methods, the program connects high-need, eligible individuals with up to 19 different benefits, all while reducing overall poverty, providing a better application experience, and increasing trust in local government.

BenePhilly is a network of government agencies, nonprofits, and community-based organizations connecting Philadelphians to benefits through targeted, data-driven outreach, referrals from a network of organizations, and in-person and telephone application assistance. The trained staff at both BDT and the nonprofit organizations embedded in the communities they serve help individuals easily find and enroll in benefits. According to BDT’s Chief Strategy Officer Pauline Abernathy, BenePhilly has helped more than 125,000 Philadelphia residents secure over $1.6 billion in benefits as of January 2021.

New Harvard Project Research Examines ARPA Distributions to Tribal Nations, Finds Funding to be “Grossly Inequitable”

New Harvard Project Research Examines ARPA Distributions to Tribal Nations, Finds Funding to be “Grossly Inequitable”

November 3, 2021

Cambridge, MA – In a new policy analysis published today by the Harvard Project on American Indian Economic Development (Harvard Project), researchers found that funding provided to tribal governments as part of the American Rescue Plan Act of 2021 was “grossly inequitable... Read more about New Harvard Project Research Examines ARPA Distributions to Tribal Nations, Finds Funding to be “Grossly Inequitable”

Assessing the U.S. Treasury Department’s Allocations of Funding for Tribal Governments under the American Rescue Plan Act of 2021

Eric C. Henson, Miriam R. Jorgensen, Joseph P. Kalt, & Isabelle G. Leonaitis; November 2021  

The American Rescue Plan Act of 2021 (“the Act” or “ARPA”) has resulted in the single largest infusion of federal funding for Native America in U.S. history. The core of this funding is $20 billion for the more than 570 federally recognized American Indian and Alaska Native tribal governments. As required by the Act, the Department of the Treasury (“Treasury” or “the Department”) devised and has now implemented a formula for allocating these monies. In this report, the authors find that the allocations that have been made are grossly inequitable and contrary to the policy objectives of Congress, the Biden Administration, and the Treasury Department itself.

 

This study uses publicly available information to estimate enrollment and employment counts for tribes. These figures are only estimates created for the express purpose of analyzing the appropriateness of the US Department of the Treasury’s American Rescue Plan Act allocations. Our estimates have not and cannot be verified against actual enrollment or employment data submitted to the Department of Treasury by each tribe.  We believe the estimates are as accurate as possible and reliable for the purpose of assessing the relative positions of tribes under Treasury’s ARPA allocations, but should not be extracted and used as accurate for any individual tribe or for any purpose other than how they are used here.

 

Ash Researchers Lay Out Case for Increased Investments in Intelligent Civil Infrastructure

Ash Researchers Lay Out Case for Increased Investments in Intelligent Civil Infrastructure

August 18, 2021

Cambridge, MA – In a new paper published by the Ash Center for Democratic Governance and Innovation, a research center housed at Harvard Kennedy School, Professor Stephen Goldsmith and his co-authors Betsy Gardner and Jill Jamieson argue that intelligent infrastructure should be a priority... Read more about Ash Researchers Lay Out Case for Increased Investments in Intelligent Civil Infrastructure

Federal COVID‐19 Response Funding for Tribal Governments: Lessons from the CARES Act
Henson, Eric C., Megan M. Hill, Miriam R. Jorgensen, and Joseph P. Kalt. 2021. “Federal COVID‐19 Response Funding for Tribal Governments: Lessons from the CARES Act”. Read the full report Abstract

The federal response to the COVID19 pandemic has played out in varied ways over the past several months. For Native nations, the CARES Act (i.e., the Coronavirus Aid, Relief, and Economic Security Act) has been the most prominent component of this response to date. Title V of the Act earmarked $8 billion for tribes and was allocated in two rounds, with many disbursements taking place in May and June of this year.

This federal response has been critical for many tribes because of the lower socioeconomic starting points for their community members as compared to nonIndians. Even before the pandemic, the average income of a reservationresident Native American household was barely half that of the average U.S. household. Low average incomes, chronically high unemployment rates, and dilapidated or nonexistent infrastructure are persistent challenges for tribal communities and tribal leaders. Layering extremely high coronavirus incidence rates (and the effective closure of many tribal nations’ entire economies2) on top of these already challenging circumstances presented tribal governments with a host of new concerns. In other words, at the same time tribal governments’ primary resources were decimated (i.e., the earnings of tribal governmental gaming and nongaming enterprises dried up), the demands on tribes increased. They needed these resources to fight the pandemic and to continue to meet the needs of tribal citizens.

Will Biden’s Infrastructure Proposal Meet America’s Urgent Need?

President Biden unveiled an ambitious $2 trillion jobs and infrastructure proposal this week. The plan calls for $621 billion in spending for a variety of transportation initiatives, including funding roads and bridges, public transportation, rail improvements, airports and ports, as well as a bevy of new and expanded electric vehicle incentives. Congress is expected to act on the ambitious legislative proposal in the coming months. Stephen...

Read more about Will Biden’s Infrastructure Proposal Meet America’s Urgent Need?
New Jersey state capitol building

What’s the Value of Being a State Capital?

February 10, 2021

Cambridge, MA — In a new study released today by Harvard Kennedy School, Linda Bilmes, the Daniel Patrick Moynihan Senior Lecturer in Public Policy, and a team of researchers published a detailed examination of the costs and benefits that accrue to capital cities that come from hosting state government. Specifically, the study, launched at the request of Trenton Mayor Reed Gusciora, examined the unique costs incurred by the City of Trenton and the overall economic value...

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The view of Yosemite Valley from Tunnel View in Yosemite National Park, California, United States

For a moment, partisanship takes a backseat to conservation in the nation’s capital

July 28, 2020

As election season descends across the country and the political rhetoric emanating out of Washington only becomes more bitter, something rare happened last week on Capitol Hill—large bipartisan majorities passed one of the most far-reaching pieces of conservation legislation in a generation. The bill, known as the Great American Outdoors Act (GAOA) will pump billions of dollars into overdue repairs and maintenance of the country’s national parks and permanently fund a slew of other federal conservation programs. President Trump tweeted his support ahead of its passage before the House and is expected to sign the bill later this month.

For a moment, partisanship takes a backseat to conservation in the nation’s capital

July 28, 2020. As election season descends across the country and the political rhetoric emanating out of Washington only becomes more bitter, something rare happened last week on Capitol Hill—large bipartisan majorities passed one of the most far-reaching pieces of conservation legislation in a generation. The bill, known as the Great American Outdoors Act (GAOA) will pump billions of dollars into overdue repairs and maintenance of the country’s national parks and permanently fund a slew of other federal conservation programs. President Trump tweeted his support...

Read more about For a moment, partisanship takes a backseat to conservation in the nation’s capital
Policy Memo Regarding the Allocation of COVID-19 Response Funds to American Indian Nations
Akee, Randall K.Q., Joseph P. Kalt, Eric C. Henson, and Miriam Jorgenson. 2020. “Policy Memo Regarding the Allocation of COVID-19 Response Funds to American Indian Nations”. Read the full memo text Abstract

The COVID-19 crisis poses an immediate threat to three decades of improvement in economic conditions across Indian Country. Federal policies of tribal self-determination through self government have gradually, if unevenly, allowed economic development to take hold in Indian County. Nevertheless, the poverty gap for American Indians is large and hard to close. American Indian/Alaska Native household incomes remain barely half that of the typical household in the US. Tribes now routinely undertake and self-fund the full array of basic governmental services – from law enforcement and public safety to social services and educational support – that we expect any state or local government to provide.

Tribes lack the traditional tax bases enjoyed by state and local governments. Tribal enterprise revenues – both gaming and non-gaming – are tribes’ effective tax bases. Prior to the total shutdown of their casinos, tribes’ gaming enterprises alone were channeling more than $12.5 billion per year into tribal government programs and services . No tribal casinos are operating at this time. The same applies to many non-gaming enterprises and many tribal government programs. The COVID-19 crisis is devastating tribes’ abilities to fund their provision of basic governmental services and forcing tribes to make painful decisions to lay off employees, drop workers’ insurance coverage, deplete assets, and/or take on more debt.
 

3-in-1: Governing a Global Financial Centre
Woo, Jun Jie. 2017. 3-in-1: Governing a Global Financial Centre. World Scientific Publishing, 128. Publisher's Version Abstract

Jun Jie Woo, World Scientific Publishing, August 2017

3-in-1: Governing a Global Financial Centre provides a comprehensive understanding of Singapore's past development and future success as a global financial centre. It focuses on three transformational processes that have determined the city-state's financial sector development and governance — globalisation, financialisation, and centralisation — and their impacts across three areas: the economy, governance, and technology. More importantly, this book takes a multidimensional approach by considering the inter-related and interdependent nature of these three transformational processes. Just like the 3-in-1 coffee mix that is such an ubiquitous feature of everyday life in Singapore, the individual ingredients of Singapore's success as a global financial centre do not act alone, but as an integrated whole that manifests itself in one final product: the global financial centre.

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