Week 1: Advancing development objectives through data

Data Governance to Realize Development Impact

With: Malarvizhi Veerappan

Hello, I am Malarvizhi Veerappan, the report manager and senior data scientist with the World
Development Report 2021, Data for Better Lives. And today, I will provide a brief overview of the data
governance framework as described in the report.

In the earlier video, Dean discussed three important principles of the social contract: value, trust, and
equity. While social contracts provide the rules and compliance mechanisms for how data can be safely
shared, used and reused by all stakeholders, to truly realize data's potential, this framework in practice
must be built around data systems that not only ensure safety but also actively promotes access to data.
Odisha is one example which Robert discussed in an earlier video, where investing in data systems
produced tremendous social value and save many lives. There are countless other examples and the
WDR 2021 report offers an inspirational vision of what we are calling an Integrated National Data
System (INDS in short).

INDS aims to enhance data flows across different stakeholders, (as you see in the visual here) allowing
all to benefit from data use and facilitating innovative, creative uses of data to solve existing and quite
importantly emerging problems. But how do we go from the conceptual nature of the social contract to
creating the ambitious integrated data systems. All this requires tremendous improvements in data
governance frameworks in all countries. Well, it's clear that for most of the countries that are the focus
of this report, they are very far away from this aspiration of integrated national data systems, supported
by good data governance practices. None the less, it's important to provide a clear description of what a
country should be aiming for as they take steps towards improving their use of data. This journey will
vary for each country and there is no ‘one size fits all’ solution.

In the report, we offer a maturity model approach along three stages establishing fundamentals,
initiating data flows, and optimizing the system. In this video, I will provide an overview of the data
governance framework. In the modules two through six, we will discuss more in detail each of the data
governance pillars and an integrated national data systems using this maturity model approach.

So, what is a data governance framework? In the report, we discuss data governance framework as a
series of four layers that build upon and support one another. They are data infrastructure policies, laws
and regulations, economic policies and institutions and actors. We have dedicated a chapter in the
second part of report for each of these pillars. While the social contract is primarily a national affair,
there are important dimensions of the social contracts that are most effectively and efficiently dealt
with in an international manner. What this means is that there are certain aspects of data governance
challenges that need international cooperation, and this can take many forms ranging from bilateral
cooperation, regional collaboration or global or multilateral initiatives. For smaller economies for

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example, regional cooperation can play a valuable role by reducing costs of data infrastructure through
development of shared regional facilities, achieving economies of scale through physical and regulatory
integration of markets. Most importantly, this type of cooperation can enhance the voice and
negotiating strength of smaller and poorer countries in global processes. At the global level, key
agreements on taxation and trade for data driven businesses are pending international agreements.
Multilateral efforts can also do much to reduce transaction costs through harmonization of technical
standards by promoting interoperability, providing support for mobilizing funding, increasing technical
capacity and by creating global public goods. You can refer to the two spotlights in the report for more
information on these topics.

Now, for the first pillar in the data infrastructure policy that supports access to data, this is particularly
important to meet the goal of equity in the social contract. This includes both policies that make it
possible for people to connect to internet data services and the policies that ensure that countries have
adequate infrastructure to exchange, store and process data efficiently over the internet. Individuals
need to have access to essential data infrastructure without which their data is not captured nor can
they access the data of others. Significant progress has been made during recent years in rolling out
coverage of 3G internet services. However, internet coverage does not necessarily translate into
internet use. A staggering 40% of the world's population live within range of a mobile signal but none
the less fail to make use of it. And this share which is known as the usage gap has stubbornly persisted
over time even as the coverage is increased.

In the chart here, we take a quick look at the Africa region, you can see in green, especially in the
countries towards the right, the demand side barriers of the usage gap that still persists in many
countries. This means that people are often failing to access data services not because they don't live
close to a signal but because they cannot afford handsets or pay for expensive data charges or they
simply lack the data literacy to take advantage of these services. This requires rethinking of universal
coverage policies to also address these critical usage gaps.

So along with connecting individuals to data services, the policies also need to ensure that countries
have adequate national data infrastructure. And there are several components to this which we will
discuss more in detail. But as a quick example in this map, you’ll see that colocation data centers which
are important for data storage, represented in red and at present we see that there are more data
centers in California than the whole of Sub Saharan Africa which illustrates the extent of improvements
needed in building national data infrastructures, especially in low and middle income countries.

The second layer is laws and regulations, governing the use and reuse of data which is linked to the trust
principal of the social contract. We discuss laws and regulations within the framework of safeguards and
enablers and for both personal and non personal data.

Good data governance calls for balanced development of safeguards and enablers. The Covid-19 of
course has shed a spotlight on the need for safeguards, more importantly to protect people from misuse
of data. For example, the use of call detail records helps to monitor public health but can also potentially
be abused for other political purposes. Data safeguards here are laws and regulations that provides
safeguards against cyber security and protection for both personal and non-personal data, whether it is
exchanged domestically or across borders. These are the foundations of trust in the data system. Recent

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breaches of US gas pipelines and the meat supply chain demonstrate these threats. And this illustrates
the urgent measures needed to protect the integrity of data systems.

The report advocates for a strong data protection framework for personal data, grounded in the human
rights frameworks. This means that individual rights for data protection are first protected through
seeking individual consent before the data is used for any purposes. While personal data protection is
grounded in human rights considerations, the protection of non-personal data can be handled through
intellectual property rights. Along with safeguards, we also need data enablers which facilitate data
transactions through e-commerce legislations, open data regulations and open licensing and
determining the rules for sharing a public intent data produced by governments and private intent data
created by firms. These enablers are important for creating value by enabling the use and reuse of data.

In the future videos, we’ll use the results from the global regulation survey which was done for the
purposes of the report to illustrate these discussions and also highlight good data governance practices
and analyze the performance of the different dimensions of data regulations across countries. This we
will be doing in the video in module 4.

The third layer is economic policies that are affected by data, which is important again for the equity
principle of the social contract. We emphasize that data regulations have knock-on effects on the real
economy and we discuss this in three areas - competition policy, trade and taxation.

We find that a half a dozen U. S. data companies account for 40% of the global data traffic and two
thirds of top visited twenty-five websites in low- and middle-income countries. Here is an example in
this chart, you see on the left, you have the most popular websites and it goes all the way to 25 on the
right and the colors - red corresponds to Google and blue corresponds to Facebook and so forth. You
can see how dominant the position of these companies are, across low- and middle-income countries.
This huge concentration makes it difficult for new entrants in low- and middle-income countries to break
into the market and compete against globally dominant players. So anti-trust policies become important
and data sharing between firms becomes potentially an important regulatory tool for promoting
competition.

Such approaches have been tried in some landmark cases such as Uber-Careem case in Egypt. In this
case, Uber was obliged to grant future competitors access to Careem’s “points of interest map data” on
a one time basis and also provide current competitors with access to trip data, subject to data
protection laws and gives riders access to their own data.

The next which is trade and data enabled services, is the fastest growing area of trade growing twice as
fast as other service trade over the last 20 years. Here the issue of safeguards on personal data
protection becomes critical as personal data crosses borders as part of trade. Based on the analysis that
was done for the report, we find a wide range of regulatory approaches, from open transfers in the US
to more regulated transfers using the GDPR frameworks and to countries that are using more restricted
policies for across border data flows. And some of these are accompanied by data localization policies.
The growing interest in data localization of course is clearly a concern. The WDR looks at some of the
policy justification for data localization and arguments in the area. But the main point to note here is
that there are frustrations by low- and middle-income country policymakers that they're not able to tap

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into the value of their own data. And data localization is often seen as a response to those frustrations
and is linked to an equity principle.

Finally, taxation of data platform businesses is another important part of the equity agenda. Because we
find the low- and middle-income countries governments either don't have clear right to tax profits
accruing in their markets from data driven businesses or they are unable to levy value added taxes due
to administrative complexities. Here you see some simulations that were done in Asia to show the
magnitude of tax revenues that are being lost as a result of these administrative problems.

Of course, a much greater concern is the discussion on corporation tax where the current international
rules are still being debated facilitated by the OACD. Again, this raises the need for global coordination
and agreements both on international tax treaties as well as the trade agreements on cross border data
enabled services.

Finally, an institutional ecosystem can ensure that data delivers on its potential by implementing and
enforcing the laws, regulations, and policies pertinent to the other three layers. The new demands of
the data economy are redefining the roles and responsibilities of institutions and actors engaged in the
data ecosystem. So, we’ll discuss the essential data management and governance functions and the role
of key institutional arrangements including national statistical offices, data protection authorities and
new arrangements such as data intermediaries in module six. But in respect to how the institutions are
organized to perform these functions, they need to be tailored to accommodate the local context. And
also, in addition, institutions and actors must have the leadership, technical capacity, resources and
incentives to perform their roles and harness the value of data.

Finally, multi stakeholder governance which has been seen as a success in internet governance that is
collaborative, coordinated and mutually reinforcing, would be important to truly advance good data
governance practices. This approach can enable data flows between different institutions and actors
eliminating siloed decision making and guiding data management decisions along the data life cycle.

So, with all of the discussions you see, you can understand these are large challenges to solve. But these
challenges are significantly bigger for poor people in poor countries. So, what are the types of questions
policymakers need to know about data governance that can help improve the lives of poor people?

In the next few slides, I will frame these questions inspired by a story that Al Kags, one of the co-
founders of Open Institution shared to illustrate what all this means for poor people in practice.

So let’s say we take this as an example and call her Mama Kuraha. And she's forty years old. She left
school when she was in class seven. She was fourteen years old when she got married. She has eight
children and she does not have a digital ID. She and her family live in one of the poor and rural
communities in Africa. So, how does data governance impact her life? In the case of infrastructure
policies for example, if you take the COVID 19 pandemic, contact tracing apps were used by
governments and health officials. These apps rely on mobile phone records and if she cannot afford or
use the phone, how will her interest be reflected in the design of policies that rely on mobile phone
records?

The second aspect here is about the effectiveness of our country’s data infrastructure, which means that
are the data systems in our country designed and have the capacity to address the needs for health,

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financial inclusion, education for her children, job opportunities? Are these needs represented in the
data collected and are they being effectively used to design policies?

In the case of laws and regulations, we discussed the state of weak data regulatory environment in
many countries and often the poor are easy targets for cyberattacks and other data traps. So, what kind
of safeguards can protect her rights and data? Is she enfranchised to decide how her data can be used to
benefit her and is she able to make informed decisions about how her data can be used for other public
good purposes?

In the case of economic policies, this can mean many things. But let's just take one example, which is the
case of the cross-border data flows that we discussed earlier. New innovations in telemedicine allows
doctors to deliver health services across borders which can help save many lives. This means these
services transcend borders and hence data about patients and their records can get exchanged across
countries. So, policies that enable and support such innovations can have a significant impact on the
lives of poor people such as Mama Kuraha.

And finally, institutions and actors. We discussed the importance of multi stakeholder engagement. So
how can institutions and actors engage her in the discussions about the design of data governance? How
can we create incentives, so she can participate in these discussions? How can we improve her literacy
and understanding about plain data that might be useful to empower her? So we will delve deep into
these questions in the future modules and hope this example helps you to reflect on how data
governance impacts poor people’s lives in practical terms.

I leave you these five bullet points here as a summary of main messages. But I would like to conclude by
saying that as of today, a majority of countries across all income levels do not yet have a solid data
governance framework in place and huge progress is needed. Thank you.

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