Making Development Work

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Interesting piece from Robert Hahn of AEI-Brookings and Paul Tetlock, a finance professor. They argue for two things:

  • Contracting out the provision of aid services on a competitive basis. For example, auctioning off the right to collect $5 per successfully vaccinated child.
  • The use of information markets to collect information about the likely success of different projects. For instance, an openly traded contract that will pay one cent per child vaccinated in Ethiopia by the end of 2007 will rise and fall in value depending on the market's view of how well the vaccination program is likely to work.

This is in the spirit of 'The Market for Aid', although in that book we argued that there were many ways to harness competition and many ways to get better information. Still, competitive disciplines and good information are what's needed, and they can reinforce each other.

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