Markets in everything: foreign aid edition

It is tempting to conclude that the answer is for donors to defer to the leadership of developing country governments… But that assumes away the problem. The balance of power between donors and recipients converges on an equilibrium which balances the various interests of the givers and receivers of aid, and the implementing agents.

If we find this equilibrium unsatisfactory, we have to change the determinants of the equilibrium, not simply try to move away from it.

That is from a new essay on aid by Owen Barder. His message: stop the pointless planning and navel-gazing. Aid is not going to be improved by better donor coordination.

Probably his most controversial suggestion: unbundle funding from the implementation of aid programmes and create a market for aid delivery.

Another: introduce entry fees to stem the proliferation of NGOs.

Comment here or on Owen’s blog.