Waylaid Dialectic

June 16, 2010

The Pendulum Swings

Filed under: Aid — terence @ 10:15 am
Tags: , ,

From an Upside Down View of Governance [PDF] (page 21)…

For years, developing countries have been on the receiving end of well intentioned advice from international donors about how to increase economic growth. As is often the case, the prescriptions have fluctuated widely according to prevalent donor fashions: enthusiasm for state-led development gave way to urgent advocacy of liberalisation, privatisation and retrenchment of government, followed by a rediscovery that public institutions matter for growth.

…and so the pendulum swings.

It strikes me that there is one simple intellectual change to the world of aid likely to make it a lot more effective. This is for policy advice and prescriptions to developing countries to cease being dictated by intellectual fashion in the donor community. Instead, before aid agencies do anything new in a country, they ought take time to carefully learn about the place. Both to try and figure out what its ‘binding constraints’ to development are and, importantly, which of these constraints might be addressed. And then act.

In some countries maybe the state is needed to drive growth, in others perhaps markets do need to be freed and the state shrunken, in others institutional reform could be critical, in others still tackling disease might be the best thing we could do.

The point is: context matters. Both to what can be done and to how it should be done.

Context matters but you’d be surprised how often that fact gets forgotten in the pendulum-esque world of development ideas.

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