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Make aid, or buy it?

Embrace the increasing competitiveness of the aid 'market' and use it to make the market work better. There is no reason that the agencies that set priorities and donate money need to be the agencies that use the money to deliver services. Should aid agencies 'make aid' or simply 'buy aid'? Since competition would probably be much more productive between service delivery organizations than between donor organizations, this split has some attractions. There are several ways in which it might happen...

This is from chapter two of The Market for Aid, and also available in this short note on Aid Agency Competition.


The bigger question seems to be: why aid agencies in the first place? Perhaps a better way might be to limit (and downsize) aid agencies towards grant-delivery, and just letting developing countries access capital markets. It is possible (likely?) that profligate dictators like Marcos would have had a harder time stealing foreign money had his government been forced to float bonds.

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