Development policy: time to look beyond simply managing aid

From Aid | The Guardian Tue Nov 27 2012, 08:07:51

Powerful nations need to do more to reform the governance of the global institutions they dominate, says Owen Barder

Europe at the fin de siècle - the end of the 19th Century - is thought of today as an opulent, decadent and cynical end to la belle époque. This mood of fin de siècle is echoed in today's development policies and aid agencies, similarly following a golden era for aid. Like the European elites of a century ago, the development policy community seems to be paralysed in the face of widely-anticipated (and largely desirable) change.

The structure, incentives and priorities of today's aid agencies reflect their history in a disappearing era when development policy meant rich countries giving aid to poor countries for the alleviation of extreme poverty.

Today's development challenges look quite different, in at least five ways. First, most of the world's poor live in middle-income countries, such as China, India, Indonesia, Pakistan and Nigeria. Second, private investment, remittances and private giving are now far bigger than official aid. Third, there has been healthy growth in many developing countries, bringing increases in prosperity for many, but also great challenges of inequality, environmental degradation and dislocation. Fourth, we are moving from a world dominated by a few rich countries to broader spread of emerging global powers. Fifth and finally, we face a growing array of challenges requiring global solutions, including climate change, macroeconomic imbalances, inadequate financial regulation, tax avoidance, insecurity and corruption.

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