28 February 2010


Ranil at AidThoughts has a pop at shrill advocates of cash transfers, migration, and aid transparency.

Being a shrill advocate of cash transfers, migration and aid transparency myself, I feel duty-bound to respond.

What is bugging him is simplistic arguments, but he couches his argument in terms of the complexity of development.

The trouble is, it is precisely complexity which makes market and network-based solutions so attractive – in a world where no single person or organisation can know everything, markets can harness the power of lots of decentralised sources of information.

Market-based solutions like giving aid as cash transfers direct to poor people and allowing greater international movement of people, or network-based solutions like aid transparency to allow for crowd-sourcing scrutiny to both rich and poor country citizens, are attractive relative to the central planning of state provision of public goods precisely because of complexity.

This is not to say that any of these issues are magic bullets. They will not solve the development puzzle. But I would argue that they are $100 bills lying on the sidewalk that aren’t being picked up. There is often a good reason that they aren’t being picked up, such as a guy with a gun standing there telling you not to (border guards); or someone who’s job depends on you being unable to pick it up (aid workers), but that doesn’t stop it being a good idea. That doesn’t stop it being a heinous waste, heinous because waste and inefficiency is so tragic when so many people have so little. And yet we let the dollar bills lie. That is why I am shrill.

And finally, Ha-Joon Chang? Really?


Ranil Dissanayake said...

Market based solutions are attractive, but only where the problems are not in themselves restricting the functioning of the market, or when the market you're trying to use is incomplete.

What you say about aid transparency is an example: as I said in the post, 'transparency' can be achieved without making really useful information available. you need to look in more depth at what exactly you need to know and how to present it.

What I argued is not that the ideas are wrong, nor that advocacy is a bad thing, but by making arguments without recognising how difficult and involved and contingent solutions we're peddling might be we don't give our solutions the best chance they have of succeeding.

btw, if you read it again you'll note my reference to chang is that he's engaged with the question of why some countries have developed and others not rather effectively - not because I think he's always right.

Ranil Dissanayake said...

Also, I feel compelled to add, I am an advocate of aid transparency - I presented on this issue alongside Karen Christiansen at the Accra HLF on Aid Effectiveness on behalf of the Government of Malawi, and I'm now pressing for increased transparency of aid in Tanzania, having worked with the Government of the URT and now with that of Zanzibar in making this a reality.

I just recognise that there are lots of different ways aid organisations are responding to calls for transparency and all are not equal.

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