A striking article (title above) has just been released by Owen Barder. The paper argues that sustained improvements in the effectiveness of aid cannot be made by more planning. Rather, we need collaborative markets which draw on the different strengths of planning, networks and market paradigms. Donors would have to agree collectively to change. They would regulate the aid infrastructure better--positive spillovers (innovations) would be subsidised and negative ones (such as creating parallel systems or an excessive number of donor missions) taxed. Donors would repair the broken feedback loop from intended beneficiary to donor (a theme I have focused on many times in this blog) via new mechanisms. Donors would improve the transparency and accountability of their operations (examples include publish what you spend, and user ratings of technical assistance providers). Finally they would unbundle public service agreements so that funding and delivery are delinked and provision of services could be competed for, with the publication of subsequent performance data.
Why should donors do any of this? Because there might be political resonance in ideas of transparency, outcomes, and voice for beneficiaries of aid. The other reasons he gives (appealing to donor long term interests and the fact that it's easier to collectively agree on the rules of the game than agreeing on how to coordinate specific actions) seem less strong to me.
But should they do any of this? Barder makes it clear that this is no blueprint, but a way of injecting some evolutionary mechanisms into the ossified aid system. I don't agree with all of the specific mechanisms he proposes, but I like the direction of travel and the blend of new (networks), borrowed (markets) and old (planning) ideas. It should generate a good and much needed debate.