Owen Barder, of the Centre for Global Development, delivered a fascinating talk to the Children’s Investment Fund Foundation, that you can read here. He was talking about how to think about scaling up development initiatives, and the importance of local adaptability, the ‘process’ of institution building, measuring outcomes, and autonomy for local implementors. He cites evidence for a link between the last two – measurement and autonomy. He then draws parallels with business when he says:
I know more about development than I do about managing a hedge fund, but I would hazard a guess that most of this is common sense to a business investor. As I understand it, a large part of being an excellent venture capitalist is identifying great teams with great strategies, and giving them a sufficient degree of latitude to get on to deliver.
It was this comment that inspired this post, since it strikes at the heart of the ‘aid as business’ perspective that is in vogue. Barder makes the link between autonomy and feedback, but doesn’t make it clear that in business consumer/client purchasing behaviour is the feedback, and is an in-built assessment of value of the business. The market administers the evaluation: the value is expressed in such a way that the recipients (clients, customers) dictate it directly, and it can be packaged up and consolidated for the investors (as returns).
Delivery of public services to the poorest of the poor cannot function in such a way, since the recipients are not customers with either:
- a) choice to express a personal evaluation in a market, or
- b) the means to express it in a way that can be consolidated directly by donors.
The ‘common sense’ for business investors doesn’t translate. As Barder suggests, the aid as business model doesn’t work without rigorous assessment and evaluation taking on the role of market mechanism, that is, unless recipients are given real choice to allocate things that really matter to the programme administrators (i.e. money or credits). While I agree with very much of what Barder says in this talk, I am concerned that the parallels drawn with businesses overlook the challenges of best addressing the needs of the powerless and the poor.