There was an article in the New York Times recently with the title 'What's Really Wrong With Wall Street Pay?' In the article, the writer discusses a problem world leaders want to do something about but are not sure how. How do you stop compensation packages for bankers and traders in global markets from encouraging them to take the kinds of wild risks that have done so much damage to the global economy? I wish the leaders the very best of luck in dealing with that one. Success in the endeavor is far from certain...to put it gently.
What caught my eye as I was reading the piece is what the writer says bankers call the "I.B.G-Y.B.G." problem, as in 'I'll be gone and you will be gone'. It is the moral hazard problem. Traders in global markets take incredible risks and recklessly, they collect their bonuses and move on. The firm takes all the risk. Well, it turns out that taxpayers take risks as well, since governments have had to bail out so many banks deemed too big to fail.
Well, my point is this: in international development don't we have our own version of the "I.B.G.-Y.B.G." problem? When those who design development projects and get them approved by relevant authorities, move on, get promoted, and are not held accountable for results, is that not a case of you'll be gone and I'll be gone? If you are not going to be held accountable for implementation and results you don't have to worry about whether or not the project will produce results under real world conditions. You can cut and paste global best practice on a technical issue into projects to be implemented in vastly different environments. Job done. When implementation challenges inevitably arise and hold things up, well, that is somebody else's problem. For the design team it is a case of ' I'll be gone and you'll be gone'.
There is talk that just as the G-20 leaders are grappling with this problem as it affects global financial markets, leaders in international development institutions are worrying about incentives and accountability with regard to the design of development projects. I am not at all clear which set of leaders has the easier task. And that says a lot.
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