In his new essay on aid, Owen Barder argues that policies to improve aid have - and continue to - rely too much on a planning paradigm that attempts to ignore, rather than change, the political economy of aid:
It is tempting to conclude that the answer is for donors to defer to the leadership of developing country governments, especially given the commitments to this in the Paris Declaration and the Accra Agenda for Action. But that assumes away the problem. The balance of power between donors and recipients converges on an equilibrium which balances the various interests of the givers and receivers of aid, and the implementing agents. If we find this equilibrium unsatisfactory, we have to change the determinants of the equilibrium, not simply try to move away from it.
Barder posits a combination of market mechanisms, networked collaboration and collective regulation as more likely to herald the desired results than the hitherto pursued policy approaches. Such coordination, he argues, can improve accountability, reduce information asymmetries, and reduce principal-agent problems currently faced by donor agencies. In so doing, they can help to change the political economy of aid, and so move the political equilibrium.
Arguably Barder's most controversial suggestion is the unbundling of funding from aid management to create more explicit markets for aid delivery. What this means in practice is opening up contracts to competition among a range of aid delivery agencies, both public and private. Such competition could lead to greater specialisation and division of labour, incentives to define and measure results, etc.
The UNDP (among countless such aid agencies, to be sure!) must be reeling. What are your thoughts?
(PS. For more from Owen have a look at his blog, found here)