Monday, March 4, 2013

Private Sector Cooperation in Public Sector Development Aid

Today I wish was in Washington D.C. to attend the launch event for the Center for Strategic & International Studies' (CSIS) newly released report entitled "Our Shared Opportunity: A Vision for Global Prosperity". The report is said to push for the US government's official development assistance (ODA) to work more closely with the private sector.

The report quotes stats from the Hudson Institute’s Index of Global Philanthropy and Remittances, which shows that the flow of capital investment from the private sector is now much greater than the flow of ODA; it says that 87 percent of capital flows to the developing world are private. The report also encourages viewing aid recipients rather as economic partners, and recommends that aid should be reoriented towards encouraging economic growth by partnering with private investors and building existing incentive programs.

William Easterly must be jumping with joy since the report seems to validate a great deal of the criticism of foreign aid that he detailed at length in his book "The White Man's Burden" over five years ago. Aid critics like Easterly have for years been calling for more businesslike approaches to development assistance. Of course this isn't totally new ground for CSIS either, as their report from just over a year ago entitled "Leading from Behind in Public-Private Partnerships" also identified that there is a huge missed opportunity in that governments do not leverage private partnerships as a force multiplier of their aid programs in any significant manner.

Perhaps this is about to change? Here at Fourth Watch we certainly hope so. Although we agree with Jeffrey Sachs' argument that ODA needs to be increased significantly, it is the Easterly/CSIS approach to delivery that seems to us to be the more effective method of deploying it. It will be interesting to see what media pickup comes in response to today's launch event, particularly in connection with the much-covered recent sequestration of the American government's budget.

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