Three reasons Nobel laureates state: “Buzzwords … won’t fix a broken aid system” — and where to look for help
Again a group of renown economists gave a very critical assessment of the global development aid system: “Buzzwords and tortuous impact studies won’t fix a broken aid system”.
Three Nobel Prize winners — Angus Deaton from Princeton, James Heckman from Chicago and Joseph Stiglitz from Columbia — among them, even the chief economist of AFD, the French Development Agency, this is definitely a (rather short) piece to read if you are interested in these issues or even working in the sector.
The analysis presented is not so much of a surprise for anyone who follows the discussion about development aid. The buzzword the headline is referring to is: aid effectiveness. And “tortuous impact studies”, that is the flavor of the day regarding implementing the aid effectiveness agenda. The idea is to a radical audit process on development aid projects to focus on interventions that work.
“Some go so far as to insist that development interventions should be subjected to the same kind of randomized control trials used in medicine, with “treatment” groups assessed against control groups.”, the article says.
So here are the three reasons these economists do not think this will overcome the current problems.
1. Clinical test do not work in social systems
“But truly random sampling with blinded subjects is almost impossible in human communities without creating scenarios so abstract as to tell us little about the real world.”
“And trials are expensive to carry out, and fraught with ethical challenges — especially when it comes to health-related interventions.”
2. Micro interventions alone don’t do the job
“At first glance this [focus on micro-interventions at a local level] might seem reasonable and even beguiling. But it tends to ignore the broader macroeconomic, political and institutional drivers of impoverishment and underdevelopment.”
“Aid projects might yield satisfying micro-results, but they generally do little to change the systems that produce the problems in the first place.”
3. Overcome impoverishment and underdevelopment needs to work broader macroeconomic, political and institutional drivers
“What we need instead is to tackle the real root causes of poverty, inequality and climate change.”
“If we are concerned about effectiveness, then instead of assessing the short-term impacts of micro-projects, we should evaluate whole public policies.”
“In this respect, there is a wealth of underused data provided by decades of household surveys by national statistical offices.”
“[This data] can now be used for detailed analysis, capable of providing clear information on the public policies that have been most successful.”
So as the analysis is not so much of an surprise, the way forward is somewhat opaque: So what should be the solution? Focus on macro policies based on big data?
There is a certain helplessness after decades of methodological variation with limited effect. This is surprising, since new technical possibilities are currently available, of which Distributed Ledger Technology (DLT), or the Blockchain, is likely to be the decisive one in this context. Experimentation is already happening:
- New ways to assess and document impact — Ixo
- Service to ensure more transparent, efficient & effective flows of aid finance — Disberse
- An entirely free, open-source platform for charitable giving, cutting out bureaucracy, boosting transparency and accountability— Giveth
If these approaches seem interesting to you, don't stop here! See so many other projects listed in the development finance / donation&aid category of PositiveBlockchain.io, an open-source database of projects that use blockchain technologies to generate positive social impact.
If you want to see a glimpse of a currently emerging development aid ecosystem, go to PositiveBlockchain.io. Scroll through hundreds of inspiring projects and use cases for Distributed Ledger Technology generating positive social impact and starting to solve some of our world’s burning problems.
