Reinventing Foreign Aid, Essay #5

This is a summary and commentary on the fifth essay in Reinventing Foreign Aid

Solutions When the Solution Is the Problem: Arraying the Disarray in Development

by: Lant Pritchett and Michael Woolcock

The authors describe how the classic problem of development aid is "getting to Denmark", i.e. reaching the point where a developing state has the same level of public services as the European country. In this light, the Washington Consensus, a popular view among large aid providers, is that the problems of the world are "needs" like food, healthcare, security, etc. The solution is some kind of "supply", and the means of providing the supply is the "civil service". In countries with a well established Weberian bureaucracy, this model works fairly well, and was in fact established due to political pressure to break up local political machines by providing a counter-balancing influence.

In development work, there are two types of government programs where this sort of effort works: non-discretionary, transaction intensive services like drivers licenses or mail delivery, where strict rules can be set for a broad population without ill effect. The other is in discretionary, non-transacting services like central banking and trade policy. Here, "10 smart people" can meet and determine the rules that govern how certain transactions will proceed without directly guiding those transactions.

However, this model fails rather spectacularly for discretionary, transaction intensive services like teaching, medicine and infrastructure maintenance. Here, local knowledge is required, as each decision made by the teacher, doctor or road worker must be the correct one for the individual student, patient or pothole. Because these require an educated, as opposed to simply trained, class of people who can think through problems, no one set of rules can cover all decisions.

Thus, when local knowledge is difficult to acquire, the best solution for an aid program is adopt a model that, with as few transactions as possible, empowers local experts to meet the needs in their communities. If this sounds an awful lot like the ongoing debate about federal vs. state vs. local control of school curricula in the United States, that's because it is the same problem, and the solution is not in the setting of rules, but that dynamic tension.

There's a broader question here about the need for greater empathy and engagement by service providers with and in the lives of recipients. Rational solutions only apply to rational problems, and some people just love their chickens (see the link). Providing services requires a level of trust proportional to the required expertise of the service provider. In most western societies, there is a strong tradition of accountability between civilian and state, but this has taken a long time to build up, and we cannot expect it to happen overnight abroad. The variety of institutions that accomplish largely the same thing in different countries speaks to the messy series of compromises required to get to Denmark.