We’ll Always Have Paris?

Building a real partnership between donor and recipient countries based on better planning has been one of the big ideas in aid in recent years, set out in the Organisation for Economic Cooperation and Development’s Paris Declaration of 2005. The growing importance of philanthrocapitalists in development troubles some people, who fear that a flurry of new actors will disrupt this planned approach to aid.

In a fascinating new paper for the Center for Global Development, former British aid official and podcaster Owen Barder says that aid policies “rely too much on a planning paradigm”. Instead, he calls for a “collaborative market” for aid based on more decentralised decision-making. The foundation of an effective market, he points out, is information., which means better data on what donors are doing and what impact they are achieving.

Philanthrocapitalists are already working on this. The Hewlett Foundation has partnered with government aid agencies to get better results through the International Initiative on Impact Evaluation and the Gates Foundation has funded a big health evaluation programme at the University of Washington.

Even more exciting, as we discuss in the updated paperback edition of our book, is the potential of online giving platforms such as GlobalGiving to get feedback from recipients in developing countries and start to turn development into a collaborative process. Organisations such as, could potentially make a huge contribution to turning this into a reality. Philanthrocapitalists should be interested in transparency not just for reasons of effectiveness but also to build their own legitimacy – which is an essential part of the social contract that is needed to underpin rich individuals’ growing role in tackling global problems.

The biggest challenge, however, is for governments. Rather than clinging to the planning paradigm and trying to push private donors to conform to the procedures set out in the Paris Declaration, official aid agencies and developing country governments need to embrace ways of working that are adapted to the new collaborative marketplace.

All markets need rules. Barder’s thoughtful paper concludes with some imaginative ideas on how to make the market for aid more effective. Take one of the problems that the Paris Declaration was trying to solve – multiple donors competing with each other to talk to developing country governments that are already overstretched. He suggests a ‘flat tax’, of say $5 million, for all donors to pay to developing countries for the inconvenience they (undoubtedly) cause by taking up government officials’ time or poaching the best staff. Or a ‘cap and trade’ regime, whereby developing countries would limit the number of donor missions allowed each year and sell off the right to visit – government and private aid agencies would then have to compete with each other for the visiting rights, and developing country governments could pick the organisations they believed would have the biggest impact. Now that would be fascinating!