The big 5 multilateral development banks(MDBs) (World Bank Group, African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, and Inter-American Development Bank) collectively provided close to $100 billion in concessional and non-concessional lending in 2012 or FY13. Of late, their size, traditionally an advantage, has become something of a disadvantage. The MDBs are facing intense challenges in at least three major ways. One - criticism from academics, developing nations and others that foreign aid is detrimental for a country’s growth. Two - technology has diluted the monopolistic advantages they had (knowledge, networks, access to funding) and is leading to new models of development. As echoed by World Bank President Jim Kim, there is a "need for alignment" for development institutions in "a rapidly changing world." Three - more and more countries are shifting from demanding traditional loans to demanding knowledge and knowledge products, and development institutions are only now starting to respond to this challenge.
Foreign aid in its modern form originated in the early 1940s. Following the Second World War, Europe faced a critical shortage of capital for physical reconstruction. The response was the commonly known Marshall Plan under which the USA transferred some 2-3% of its national income during the peak years to help reconstruct Europe. The achievements under the Marshall Plan spawned hope about the effectiveness of foreign aid in other contexts. The attention of rich nations turned to the emerging independent developing nations in the 1960s. The multilateralism of aid at the time was seen as more efficient and less political than bilateral aid leading to considerable expansion of the activities of the UN, World Bank, and other multilateral agencies.
Historically there have been many who claim that not enough aid is given. The immediate post-War period witnessed large-scale funding through the Marshall Plan and growing aid to developing countries, focusing on technical assistance. In 1951 a UN commission recommended an increase of aid, to about $5 billion a year, to help countries increase economic growth to 2%. The most commonly quoted Partners in Development report argued for an increase in aid to 0.7% percent of Gross National Income of donors and to increase the efficiency of aid.
Conditions changed abruptly towards the end of the 1970s with the second oil shock, leading to the international debt crisis. Macroeconomic imbalances became widespread among developing countries. Focus in development strategy and policy shifted to internal policy failure. Achieving external and internal balance was widely perceived as an essential prerequisite for renewed development. Trade, not aid, became the dominant slogan among many leaders and economists. The optimism around 1970 was followed by ‘structural adjustment’ and stabilization of economies, and ‘aid fatigue’. Nevertheless, throughout the 1980s there were calls for increasing aid. The 1990s witnessed sharp reductions in Overseas Development Assistance (ODA) with the end of Cold War and tightening budget constraints in donor countries.
A major convergence of economic and political factors around the early 1990s led to a widespread feeling of there being a problem in the field of aid-promoted development policy. Policymakers at a global level faced a new set of problems in the context of a shift arising from the end of the Cold War. Aid could move away from being regarded largely as a geopolitical strategic tool. In addition, the Asian economic crisis and the lackluster performance of sub-Saharan Africa posed serious challenges.
These are some of the views and reports relevant to our readers that caught our attention this week.
“Turning on a light, warming a house, and using an appliance are activities that most of us take for granted. But in many parts of the developing world, access to electricity is scarce. Enter “sOccket,” a soccer ball that harnesses the kinetic energy of play to generate electricity. When kicked, it creates energy that can be stored and then used later to charge a battery, sterilize water or light a room.
SOccket has received a lot of attention recently – from the likes of Aneesh Chopra, the first White House chief technology officer, to former President Bill Clinton, who called sOccket “quite extraordinary.” The attention isn’t surprising – the invention is clever, it’s creative, it’s relatively cheap, and it takes on one of the biggest challenges in the developing world.” READ MORE
- Egypt, Arab Republic of
- Iran, Islamic Republic of
- United Kingdom
- United States
- The World Region
- Social Innovation
- Foreign Aid
- Millennium Development Goals
- citizen journalism
- Community Media
- Civic Engagement
- Civic Empowerment
- Aceh Nias Reconstruction Radio Network (ARRNet)
- Financial Task Force
- Anti-Corruption Initiatives
- Small-Scale Corruption
Mentoring has become a very important means for social entrepreneurs to gain skills from an experienced entrepreneur. It has become one of the most effective ways to build an organization's capacity. Mentor's can give advice, encouragement and leverage their contacts to help an organization grow. Jennifer Lentfer offers some practical guidelines for developing an effective mentor relationship.
Stronger, more sustainable community-based organizations can contribute to a more effective and participatory civil society response to the needs of vulnerable people in the developing world.
Donors can support organizations even at the beginning stages of organizational development with an intent to leave groups stronger than when they first entered into partnership. Different types of capacity building activities such as mentoring relationships and exchange visits between organizations can offer the most relevant and supportive technical assistance through sharing on-the-ground experience among organizations at all levels of organizational development.
The authors of this post, Tom Grubisich and Jennifer Lentfer, will be co-moderating the session “Winds of Change: Will They Bring a New Paradigm to Development Assistance?” at the Civil Society Forum of the World Bank/International Monetary Fund Spring Meetings. Here is the full schedule of sessions with the Civil Society Forum. The session will be held on Friday, April 15, at 2 p.m. in the C1 Level of the Main Complex of the World Bank (room 100). A livestream of the roundtable will be available and you can also follow the discussion that day on Twitter via #windsofchange.
The Arab awakening in North Africa and the Middle East is shaking up what has been a slow-moving effort to reform the effectiveness of development aid. The awakening and aid reform share common goals – affirming human rights, social justice and transparency. As events in the Middle East continue to fundamentally reshape society, we must ask: How can development assistance also be reshaped to put more power in the hands of the people?
It's hard not to be inspired by Nick Kristof's article on "The D.I.Y. Foreign Aid Revolution" in the New York Times. His detail-rich story of energetic, socially conscious people routing around the bureaucracy of large aid organizations to tangibly and directly improve people's lives in the developing world is both important and thought-provoking. And it helps reframe the ongoing debate about the effectiveness of development assistance from one of "nothing works" to "there are so many ways to make this work."
In the book, The Idea of Justice, Amartya Sen motivates the discussion on the importance of processes and responsibilities by relying on an example. In the Gita (part of the Mahabharata), on the eve of the crucial battle episode in the epic, Arjuna expresses his doubts about leading the fight which will result in so much killing. Lord Krishna, tells him that he, Arjuna, must perform his duty, that is, to fight. And to fight, irrespective of the consequences.
Krishna’s blessing of the demands of duty is meant to win the argument from a religious perspective. But most of us would share Arjuna’s concerns about the fact that, if the war were to occur, with him leading the charge on the side of justice and propriety, many people would get killed. He himself would be doing a lot of the killing, often of people for whom he had affection.
The impact of the global financial crisis on infant mortality is a topic of great policy importance. However, estimates of the likely impacts of the crisis, cited by international institutions and in the popular press, differ wildly.
This blogpost summarizes the main conclusions from some of my own recent research on this topic, jointly with various colleagues.
These conclusions include:
At a recent conference that brought together African Finance and Education ministers, the keynote speaker, Tharman Shanmugaratnam, finance minister (and former education minister) of Singapore gave a beautiful speech about Singapore's experience that contained some potentially difficult and controversial messages for Africa.