Privatize aid?

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Citing the Hudson Institute's 2007 Index of Global Philanthropy, the Wall Street Journal [subscription required] asks whether, on the grounds of efficiency, the private sector should take over foreign aid:

Yes, the wealthy world must attempt to pull lagging nations into the expanding, global economy. But an aid system that duns middle-income taxpayers for cash that is routed through Beltway contractors and into often corrupt Third World governments isn't the only way to do this. Those middle-class taxpayers seem to know how to give effectively on their own, and they have every incentive to be more careful and efficient with their own money.

[…] a moderately priced U.S. government consultant working in a developing country costs $300,000 per year, the private sector hires the same skilled professional at just over $100,000.

A growing portion - about a fifth - of all reported official and private aid to developing countries has been provided or managed by NGOs and public-private partnerships. With solid salaries, NGOs aren't having trouble attracting more and more MBA grads though an FT reader questions their motivation.

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