The green shoots of a new aid industry

WASHINGTON — Working at the World Bank’s office in Nairobi, Kenya, in 2011, Sachin Gathani did something uncommon. He quit. The research firm this East African and his co-founder Dimitri Stoelinga, a Greek-Dutchman who grew up in West Africa, left to start is known as Laterite and is currently headquartered in Addis Ababa, Ethiopia, and Kigali, Rwanda. It’s an example of two trends bubbling up in the global development business today: localization and a focus on results. The duo had a couple of goals when they hung out their own shingle, Gathani told Devex in an interview. First they wanted to “change the paradigm” away from the “fly-in fly-out” consultants so often used for research projects of the kind World Bank officials typically commission. Second, they wanted high-quality research to come from within the countries where the evidence was needed. Laterite now has 50 full-time employees. Some are expats, but all live in the countries where they work across East Africa. These researchers fan out across the region, collecting primary data in door-to-door household surveys, and then analyze the results for donors, implementers, and government. The goal is to use feedback from citizens to design projects that get better results. Some of what Laterite does is ad hoc projects, according to Gathani. They might get hired by a multilateral bank or aid agency to do a research study. And they respond to tenders and apply to research grants like an academic institution might. But Laterite also gets hired to place their researchers within organizations or larger initiatives, Gathani says. One example is Technoserve’s East Africa coffee business for which Laterite provides in-house research capabilities. Another is MasterCard Foundation for whom Laterite is a “learning partner” ensuring the foundation’s 14 implementing partners improve their data collection capabilities. Laterite also provides embedded research services to a project called Ignite, funded by the Bill & Melinda Gates Foundation, which focuses on improving gender and nutrition programing within agriculture interventions. According to Gathani, being “embedded” in these cases means Laterite’s researchers can better understand the “operational and financial constraints” that project implementers are dealing with. That makes the research more rigorous and more practical. And sitting shoulder-to-shoulder as colleagues means researchers can see all the data implementing organizations are already collecting and assess the value of it. Part of a growing trend While still relatively small, Laterite has been growing fast and exemplifies the rising demand for data and evidence in global development. The data that organizations such as Laterite collect is increasingly used by implementers not just to design a project at the outset, but more importantly to iterate and pivot over time in order to ensure results are being achieved. This is a bit of a shift from earlier this decade. As randomized controlled trials gained favor, especially among academic economists, there was an explosion of expensive research that took years to complete. Organizations such as Innovations for Poverty Action were born out of that trend and have grown into substantial institutions. Today, RCTs have somewhat fallen out of favor and cheaper, nimbler models have gained traction. Enterprises like San Francisco, California-based IDinsight have become large players in an era where project leaders expect to run their project from a dashboard filled with real-time results. There is a growing recognition that results data such as key performance indicators can be a productive part of a successful project and not just something done to fulfill a donor requirement. Gathani says growing demand for data and research means “it’s a matter of time” before firms like Laterite take on a larger role in the global development industry. But there remain risks. For one thing, there’s still much education of funders and implementers needed. Many haven’t yet warmed to the opportunities for faster, cheaper research that can meaningfully improve project results. For another, there’s a risk that driving down research costs will lead to less rigor, a kind of “race to the bottom” according to Gathani. Already he has witnessed some smaller organizations trying to take shortcuts on data collection and analysis due to small research budgets. We “need to enforce a minimum threshold” on quality, he said. Seeing opportunity, other firms are increasingly joining the fray. The strategy consultancy firm Dalberg recently launched a research business unit, London-based Traverse — until recently known as OPM Group — has a 40 person permanent staff and a focus on policy research, and Princeton, New Jersey-based Mathematica now has a research firm based in Tanzania through its acquisition of EDI Global there. Beyond these, some of the largest development consulting firms are expanding their capabilities and work in this area. As internet connectivity expands to more places, opportunities for research may grow and costs could shrink. Even the door-to-door household survey could diminish in importance in favor of data gleaned from mobile phone usage including payments or digital surveys. Perhaps drones or crowd-collected data of the kind Premise has pioneered will take over. But, especially in rural areas, we’re a long way from that. Gathani noted that he just came back from doing a household survey in Ethiopia that required a flight followed by five hours of travel in a four-wheel drive. To properly evaluate quality of care across rural health facilities, for example, it’s important to be there in person. In these kinds of contexts, perhaps one day we’ll move to mainly digital data collection, but we’re “not going to see that anytime soon,” he said. Update, May 20, 2019: This story has been updated to clarify the nature of Laterite's work with the Gates Foundation.