The Foreign Aid Debate

http://econlog.econlib.org/archives/2006/04/the_foreign_aid_1.html ^

[stickman20089]

The two key elements necessary to make aid work, and the absence of which has been fatal to aid’s effectiveness in the past, are FEEDBACK and ACCOUNTABILITY. The needs of the rich get met through feedback and accountability. Consumers tell the firm “this product is worth the price” by buying the product, or decide the product is worthless and return it to the store. Voters tell their elected representatives that “these public services are bad” and the politician tries to fix the problem.

...If a bureaucracy shares responsibilities with other agencies to achieve many different general goals that depend on many other things, then it is not accountable to its intended beneficiaries—the poor. No one aid agent is individually responsible for successfully achieving any one task in the current aid system. Without accountability, then the incentive for finding out what works is weak.

[kipita]

The two key elements necessary to make aid work, and the absence of which has been fatal to aid’s effectiveness in the past, are FEEDBACK and ACCOUNTABILITY.

ACCOUNTABILITY: The richer become richer and the poor become poorer in the rich country and the rich become richer and the poor become poorer in the poor country. Just look at what domestic aid has done to black America in the last 40 years.

FEEDBACK: Try DOHA and similar programs.