Aid Thoughts

On political will and development fads

by constantly invoking Governance as an issue of concern, even in documents or policies that can have no hope of influencing it, we reduce it to white noise. We constantly hear the word, and even if it once referred to something real and important, we tune it out because it’s been reduced to meaninglessness. ... This week, I saw the first signs that climate change is going down this path. ... we cannot fall into the trap of using words as a substitute for action. Getting reference to climate change into a document is not a win. Getting a policy implemented that makes a real difference to it is.

On social entrepreneurship

while social entrepreneurs obviously have an altruistic objective, the sine qua non of their work is profit. However morally objectionable you might  find the idea of poor people purchasing goods and services, without the expected profit, many of those goods and services would no longer be available. Entrepreneurs aren’t sitting on huge piles of cash, just looking for ways to spend it: they have investors who will only commit when they smell a future return (even if they might accept a lower-than-average return for socially-beneficial enterprises). ...

The aid-giver’s dilemma is huge: identifying and meeting true need through a haze of mixed signals, political problems and changing priorities, then attempting to identify the impact of that aid by leaping back over the same hurdles.

The entrepreneur’s problem is much simpler: design and offer a product. If it is valuable to the poor then there will be demand and hopefully profits will ensue. If not, the product fails. Either way, all the risk (and the cash!) is borne by the entrepreneur, which creates enormous incentives to get things right. ...

[Markets give poor customers a voice that entrepreneurs listen to.] Entrepreneurship is not the ultimate solution to all our woes, but it plays an intriguing and perhaps crucial role in the big picture. I find it much more disconcerting knowing there are people out there wasting millions of dollars of aid money on bad projects than knowing that a few people make an honest buck on products that the poor value.