-cited from Global Development 2. 0: Can Philanthropists, the Public, and the Poor Make Poverty History? (2008)
THE EFFORT TO defeat global poverty is one of the defining causes of the twenty-first century. Victory will require robust alliances waging the good fight on multiple fronts. Thus, venture capitalists, celebrity activists, technologists, and emerging global powers must join forces with traditional bilateral and multilateral donors. Representatives of all these fields and more gathered in August 2007 in Aspen, Colorado, under the auspices of the annual Brookings Blum Roundtable. For three days, they held a focused, forward-looking, action-oriented discussion about how to convert their sizable resources and shared sense of ingenuity and optimism into new ways to alleviate poverty. This book is the result. It answers in the affirmative the question posed by its subtitle: Can philanthropists, the public, and the poor make poverty history?
The contributors to this volume make the case for overcoming the once-deep divide between the public and private sectors, mobilizing public opinion and action on a scale before unseen, extending the boundaries of what impact and accountability should mean to poor people—in short, changing the face of global development. But the contributors are also candid about the complex, challenging obstacles faced by both new players and traditional donors that threaten to counteract the recent surge in funds and interest. The book thus also assesses the new development landscape in an effort to ensure that this unprecedented charitable groundswell will yield tangible improvements for the world’s poor.
Making Poverty History? How Activists, Philanthropists, and the Public Are Changing Global Development: |-LAEL BRAINARD AND VINCA LA FLEUR
THE INTERNATIONAL DEVELOPMENT community as we have known it for sixty years is undergoing an extreme makeover. If its roots go back to the Marshall Plan and the founding of the Bretton Woods institutions, its modern incarnation has branched both up and out—dramatically altering the landscape of humanity’s efforts to alleviate poverty.
During the postcolonial era of giving in the 1960s and 1970s, roughly thirty-eight official bilateral and multilateral donors annually disbursed an average of $43 billion in assistance (in 2005 dollars). Today, hundreds of development entities are spread across a larger group of countries, annually disbursing $158 billion (net of debt relief).
The fight against poverty, which was once almost exclusively restricted to aid officials and learned experts, has become one of the twenty-first century’s most popular causes. And the throng of new participants is not just niche players; the scholar Homi Kharas of Brookings’ Wolfensohn Center estimates that in 2005, their giving was approximately equal to official development assistance from traditional donors (figure 1-1).
Broadly speaking, there are five groups of newly prominent development players. First are what might be called the “megaphilanthropists”—the modern-day Fords and Rockefellers whose breathtaking commercial achievements have afforded them the resources and influence to engage in development on a global scale. Many of these new actors—such as Bill Gates of Microsoft, eBay executives Jeff Skoll and Pierre and Pam Omidyar, Virgin mogul
Richard Branson, AOL cofounder Steve Case, and Google wunderkinds Sergey Brin and Larry Page—earned their billions by pioneering transformative new information technologies.
Today, they are bringing that same bold vision and creativity to their antipoverty efforts. Indeed, though the megaphilanthropists’ money may have been their ticket to the development table, it is neither their only nor necessarily most important asset; they also bring to the cause convening power, an eye for breakthrough innovation, a keen drive toward efficiency, and marketing savvy. Many of these megaphilanthropists are test-driving new models of “venture philanthropy.”
These models seek to blend the best of the private and philanthropic sectors by investing in social enterprises that seek returns through market approaches. Others are spurring the growing interest in blending philanthropic and market investments to seed the growth of indigenous small and medium-sized enterprises (SMEs), which are too often starved for capital in poor countries.
Several megaphilanthropists are engaging in “knowledge philanthropy”— investing in the development of powerful science and new technologies to overcome the burdens of disease, malnutrition, poor water and sanitation, marginal agriculture, and unreliable power that encumber the lives of the poor.
Still others, such as George Soros, are setting their sights on social and political transformation, empowering local actors who seek to transform societies in which ingrained corruption and unaccountable regimes have held back progress for generations, or in which entrenched interests have obscured growing dangers to the environment. Collectively, they represent an infusion of entrepreneurial dynamism to the development field.
The second group of newly prominent development players are from the corporate sector, which is becoming increasingly engaged. We see this in the actions of a growing number of major multinational firms that are pioneering corporate social responsibility endeavors—from corporate foundations applying what the Brookings and Harvard scholar Jane Nelson calls “a more enterprise-based and competence-led approach to philanthropy” in order to advance long-term development goals, to innovative efforts to provide key services and products to the poor that encompass everything from Unilever’s sales of individual shampoo sachets in India to Citigroup’s thriving microfinance practice around the world.
The private sector is also fostering greater consumer involvement against poverty. (PRODUCT) RED , for example, has reached out to consumers through brands such as Gap, Apple, Converse (owned by Nike), Motorola, and American Express. Through profits made on sales of individual company products, the (PRODUCT) RED organization has channeled $30 million as of July 2007 through the Global Fund to Fight AIDS, Tuberculosis, and Malaria to provide antiretroviral drugs to AIDS patients and child care to AIDS orphans in Ghana, Rwanda, and Swaziland. (PRODUCT) RED cofounders Bobby Shriver and Bono have created a self-sustaining campaign that promotes greater awareness of the needs of the world’s poorest people while providing individuals with an avenue to make a difference by simply buying the products.
Third, more than two dozen new bilateral donors, from China to Chile to the Czech Republic, are asserting a more prominent role in providing assistance. Many of these new official donors have recently come through (or are still undergoing) the process of development themselves, and they feel they can offer more relevant advice than rich country donors. Despite being less wealthy than the traditional official donors, several of these new players are growing deep pockets. For example, China’s foreign assistance already surpasses that of Australia. Estimates suggest that new bilateral donors collectively gave about $8 billion in 2005.
The fourth group of unconventional development players can be broadly defined as “celebrities”: high-profile individuals—from rock stars to actors, preachers, and former presidents—who are maximizing the power of their public appeal to champion global poverty awareness and activism. These celebrities bring what the Oxford scholar Paul Collier has called “development buzz” to the “development biz.”
Many of these well-known individuals have a demonstrated ability to raise money, attract the media spotlight, reach new audiences, and shape public opinion. And at a time when trust in government is generally low, such well-informed celebrities are injecting a dose of credibility and charisma into the foreign assistance and development debate. Indeed, several have had great success influencing official donors and government leaders. In 2005, the rock star Bono of rock band U2 helped convince world leaders at the Group of Eight Summit in Gleneagles to forgive a portion of Africa’s multilateral debts. Hollywood stars including Angelina Jolie, George Clooney, and Don Cheadle have focused public attention on humanitarian crises such as HIV/AIDS and the conflict in Darfur. And former U.S. president Bill Clinton’s annual Clinton Global Initiative, which aims to tackle a range of global challenges including public health and development, mobilized almost $10 billion in pledges in its first two years alone.
The fifth significant group of new development players is the global public itself. Often fueled by celebrity appeals and the “voice” power of Internet communities, the public is making its presence known. Witness the hundreds of thousands who attended the ten “Live 8” concerts in the run-up to the Gleneagles summit, the more than 2.4 million signatures for the ONE Campaign, and the 63.5-million-strong audience for the 2007 U.S. television special American Idol: Idol Gives Back. These campaigns owe much to the success of the Jubilee 2000 debt relief campaign, which utilized the Internet, celebrity, and a diffuse network structure to mobilize public support and achieve its goal. Along with lending its voice to specific issue-driven campaigns, the public has become an active participant in financing development and a growing contributor to development activities on the ground. Individual donations from the United States to the developing world have surged to approximately $26 billion a year, and innovative models promise to further facilitate this exchange.
Through the Internet, grassroots philanthropists can take their generosity worldwide—becoming bankers to the poor at Kiva.org, where a loan as small as $25 can help a microentrepreneur in a developing country; or browsing GlobalGiving.org’s “marketplace of goodness” in search of a specific project to support. And, according to the Brookings Initiative on International Volunteering and Service, more than 50,000 Americans volunteer their time in overseas service each year, returning home with firsthand appreciation of the challenges poor communities face.
How New Is New?
Critics might argue that many of these “new” development players are not new at all. After all, Audrey Hepburn was bringing attention to the plight of children in places like Sudan, Vietnam, and Somalia long before Angelina Jolie came on the scene. George Harrison and Ravi Shankar held their benefit Concert for Bangladesh fourteen years before Bob Geldof’s Live Aid in 1985. Generations of Americans have trick-or-treated for UNICEF, a tradition that dates back to 1950. And U.S. foundations like Ford and Rockefeller were revolutionizing development decades before the information technology explosion that ushered the Bill and Melinda Gates Foundation and Google.org onto the stage. But if these types of players are not new, strictly speaking, their outsized influence relative to the traditional players certainly is an innovation. The cumulative combination of enormous wealth among private donors, the messaging megaphone associated with new media and social networking, and the new flows of assistance from developing country donors and diasporas together herald a new era of global action on poverty—one that involves, as Nelson argues, “new types of cooperation and collective action across the traditional boundaries of public, private, and civil society sectors.”
Moreover, the increasingly competitive development field is causing established players to reexamine their role and raise their game. In 1997, the new U.K. government of Tony Blair created a cabinet-level Department for International Development with an exclusive and resolute focus on poverty reduction, fulfilling a campaign promise strongly supported by influential antipoverty groups. In 2003, U.S. president George W. Bush announced the creation of the $15 billion President’s Emergency Plan for AIDS Relief, winning the support of a powerful coalition of HIV/AIDS advocacy groups. For their part, the World Bank and the International Finance Corporation are increasingly pursuing cross-sector partnerships, as evinced by their Lighting Africa Initiative, which seeks to create the market conditions needed for the supply and distribution of “green” lighting products to the 250 million people in Sub-Saharan Africa who currently have no access to electricity. Meanwhile, iconic private foundations like the Rockefeller Foundation, which in its early years spent more on foreign aid than the U.S. government, are now reorienting themselves to better leverage their intellectual and financial assets—for instance, through collaboration with the powerful newcomer the Bill and Melinda Gates Foundation. It is fashionable to describe this ever-more-crowded development landscape as increasingly competitive, entrepreneurial, and market-led.
But this new “development market” must become more effective so today’s outpouring of generosity will yield sustained improvements in the lives of the world’s poorest people and not succumb to the familiar cycle of activism followed by withdrawal. In a conventional market, competition drives down costs and improves offerings as producers compete to win consumer spending. But in the development market, more producers (that is, donors) do not guarantee more effective antipoverty outcomes, because the demand for results ultimately rests with donor country taxpayers and philanthropists, not poor countries. Thus, a crucial challenge for the contemporary development community is to close the structural gap between the supply and demand sides of assistance—that is, between aid donors, activists, and service providers on the one hand and aid recipients on the other—to ensure that limited development resources go where they are needed most. Achieving this will require the engagement and creativity of both traditional and new players.
If humanity is to prevail in the fight against global poverty, the most important and empowered new actors must be the men and women of the developing world themselves—who must have more choices and a stronger voice in the decisions that affect their lives.
Promising Arenas for Action
Having achieved success as entrepreneurs in the corporate marketplace or in popular culture, many of the new players come to the development arena with different assumptions and different skill sets. As a result, they appear more inclined to test drive unconventional approaches—such as empowering social entrepreneurs and small-scale private enterprise, advancing bottom-up technological development, and deploying messaging and social networking tools for development ends.
These new actors are also freer than many official donors to work with in-country counterparts in the private sector and civil society, thus empowering a broad variety of players to stimulate development from the ground up.
Innovative Social Entrepreneurs
As the new sources of funding and advocacy-enabled public support are translated into results on the ground, the blended space where social value and market value converge is being singled out for special attention, owing in part to strong resonance with the new generation of givers and recognition of the limitations of top-down approaches to development. In the words of the Duke University scholar J. Gregory Dees, “philanthropists can add value by accelerating market development in ways that improve the lot of the poor, directing their capital and resources to the ventures most likely to engage the poor in a constructive way.”
Many of the new development players are casting their bets on “social entrepreneurs”—a term often credited to Ashoka founder and chair Bill Drayton. Social entrepreneurs are change agents who bring to social endeavors the same skills of innovation, leadership, team building, persistence, and implementation that are required to pioneer successful businesses.
Exemplifying these qualities is Fabio Rosa, who has been an Ashoka Fellow for almost two decades. In the 1980s, Rosa developed and deployed a system that brought low-cost electricity to rural Brazilians—dramatically improving villagers’ productivity and standard of living. After the privatization of Brazil’s electric industry, he launched a new effort to help remote villages rent solar power equipment—a business endeavor with important social, health, and environmental benefits.
Some of the most prominent new philanthropists are looking out for more leaders like Rosa. The eBay veteran Jeffrey Skoll, for example, has devoted his Skoll Foundation to connecting and celebrating social entrepreneurs by awarding substantial prizes to “innovators who have achieved proof of concept, are poised to replicate or scale up toward systemic social change and have a message that will resonate with those whose resources are crucial to advancing large-scale, long-term solutions.” 9
Meanwhile, new intermediaries such as the Acumen Fund and the Grassroots Business Initiative are emerging to provide seed capital and managerial know-how to social enterprises. Indeed, we may be witnessing the emergence of a new market segment similar to the evolution of microfinance. Where microfinance institutions have developed to connect capital with microentrepreneurs, an intermediary philanthropic market may be emerging to serve social entrepreneurs—those whose endeavors propose large-scale social change and promise to have ripple effects throughout the economy.
In looking for worthy social development endeavors and entrepreneurs, the new philanthropists increasingly expect to apply the same notions of impact, cost-effectiveness, scalability, and sustainability demanded in corporate boardrooms. The most successful social entrepreneurs are equally pragmatic. Nick Moon is cofounder of KickStart, a nonprofit that designs and mass markets affordable agricultural equipment to enable Africa’s poorest people to move from subsistence to commercial farming. In his words, “We have to marry the bleeding heart with the hard head. If you can’t see, quantify, or measure impact, it probably isn’t there.”
Private donors and investors are also exploring ways to blend philanthropic and market investments to spark the growth of indigenous businesses in the cash-strapped SME segment. Indeed, private enterprise belongs at the very heart of the development enterprise, especially in narrowing the gap between aid supply and demand. After all, private enterprise is the greatest source of self-employment and jobs—the two factors poor people rank highest as having the potential to improve their lives. 10 And, given the right circumstances, the entrepreneurial spirit can be sparked within any society—a welcome counterpoint to the culture of dependence too often associated with foreign aid. 11
Although some investors are convinced that there are great opportunities to be found, there is still a need for nodal institutions or network enablers that can act as incubators, mentors, early investors, and talent scouts for promising SMEs, helping connect developing country entrepreneurs to money and markets. Organizations such as Business Partners Africa and the Small Enterprise Assistance Fund suggest that success is possible, but achieving scale and sustainability will require bridging the conventional divide between for-profit and charitable entities. Some of the most obvious areas for action are creating attractive exits for equity investors and exploring tax incentives that encourage private investors to consider markets they would otherwise deem too risky.
Some successful social enterprises may always require subsidies, but some donors are seeking to invest in SMEs expressly to demonstrate that commercial viability can go hand in hand with the provision of socially valuable goods and services—hearkening back to the beginning of the venture capital industry in the wake of World War II, when firms like J. H. Whitney & Company, Rockefeller Brothers Company, and T. Mellon & Sons actively invested in seeding ventures with social as well as economic merit. Today, foundations are taking the lead where angel investors fear to tread. The Shell Foundation, for example, looks for business-focused, enterprise-based solutions with efficient service delivery, and helps seed their growth in the hopes they can one day source capital from financial markets. Indeed, some socially transformative enterprises have proven commercially successful (box 1-1). Celtel, for example, a wholly commercial mobile telephony company that has built cellular networks in more than fifteen African countries, is enabling millions of Africans to raise their living standards through the power of communication. This decidedly for-profit company may not fit preconceptions of what an organization that helps the poor should look like. But its second-largest investor was the Department for International Development’s private sector investment arm, the Commonwealth Development Corporation (CDC). When the MTC Group acquired Celtel for $3.36 billion in 2005, the CDC claimed a 500 percent return; 12 meanwhile, Celtel founder Mo Ibrahim has gone on to become one of Africa’s most creative philanthropists. It is too soon to tell whether social enterprises and blended ventures will evolve sustainable models to address poverty.
Many practitioners face an uphill battle in moving from startup to scale; resources for expanding “proven models” are scarce, perhaps because funders’ transaction costs for rigorous evaluation are high, and the desire to fund the next new thing is more appealing than financing for scale (see below). The investor community is still waiting for signposts to navigate blended terrain; both philanthropic and private sector pioneers are still struggling to put a price tag on social value. And all involved have to grow more comfortable with the prospect of social enterprise failure if they are to take the daring risks that will spark dramatic gains. Yet, the vigor with which entrepreneurial approaches to social change are being pursued gives cause for hope. As Dees argues, “We need better understanding of the institutional structures and supports that would allow [them] to thrive. If we can deepen our understanding in these ways, we may find a new approach to social change, one that strategically blends philanthropy and business.” 13
Knowledge for Development
The public often associates development work with saving lives. And indeed, some of humanity’s greatest strides have been made in areas like child survival and life expectancy during the past fifty years.
Between 1960 and 1999, life expectancy for the poorest fifth of the world increased from 53 to 87 percent of that for the richest fifth—whose own life expectancy rose from sixty-nine to seventy-six years. Child survival for the poorest fifth has reached 80 percent of that for the richest fifth. Polio has been virtually eradicated from the planet; advances are being made against other killer diseases like measles and malaria. And the caloric intake of the poorest has gone from 57 to 70 percent of the rich country benchmark over the past forty years. Though the income gap remains stubbornly persistent, it is clear that poor countries with a range of institutional capacities have achieved substantial gains in absorbing and adapting knowledge and technology in areas such as medicine, family planning, sanitation, nutrition, education, and agriculture. 14
Although knowledge and technology can be powerful tools for development, market incentives too often tend to stratify the benefits of technology between the global haves and have-nots. Leveraging technology to improve the lives of the poor requires express efforts to promote adaptation and widespread adoption.
Though some of the greatest triumphs in development have come from the systematic dissemination of technologies developed for wealthy country populations to poor communities (for example, the elimination of smallpox), others have required the creation or adaptation of technologies to the specific conditions faced by poor communities (for example, the green revolution).
With much of the world’s poorest population concentrated in tropical areas, there is a pressing need to develop technology specifically for those areas rather than relying on the transmission of agriculture and medicines developed for rich country markets located predominantly in temperate climates.
Developing this new technology will require changing incentives all the way through the systems for knowledge creation—from elevating the creation of solutions for the poor to a prestigious place in science and engineering curriculums in developing countries (for example, India) and rich country university systems (for example, the University of California, Berkeley; Massachusetts Institute of Technology; and Columbia University); to creating market incentives through innovations such as the Advanced Market Commitment mechanism designed by the Brookings and Harvard economist Michael Kremer and advanced by the Bill and Melinda Gates Foundation; to restoring research and development budgets and science and technology personnel in key development agencies; to involving poor communities directly in technology adaptation and uptake through organizations such as the Barefoot College run by Bunker Roy. The entry of new players promises to breathe fresh life into this agenda. Google is designing its development program with its core competencies in mind, emphasizing areas where expanding access to information can empower poor communities.
In one innovative partnership, it is deploying Google Earth satellite technology in collaboration with the U.S. Holocaust Memorial Museum to illuminate the devastation wrought in Darfur. 15 Funding from the Bill and Melinda Gates Foundation’s Global Health Program has helped to seed dozens of public-private partnerships that are researching new solutions to the so-called neglected diseases that disproportionately afflict poor people. The Bill and Melinda Gates Foundation is forming a partnership with the Rockefeller Foundation in the hopes of reprising the role Rockefeller played in providing seed capital for the green revolution, with today’s focus squarely on Africa.
Philanthropy is helping to introduce multidisciplinary approaches to development in university settings such as the Earth Institute at Columbia University and the Richard C. Blum Center for Developing Economies at Berkeley. And forums such as the annual Technology, Entertainment, Design Conference and InnoCentive are encouraging innovative collaborations among leading entrepreneurs, corporations, philanthropists, investors, and scientists to develop new ways to deliver clean water, clean energy, and new medicines to the poor. This new generation of social entrepreneurs and hybrid ventures will be critical in bridging the gaps among innovation, community engagement, and sustainability that too often have diminished the transformative potential of research and technology.
The Nobel Peace Prize winner Muhammad Yunus has adapted the Grameen Bank’s microcredit lending model to spread the power of communications technology to help lift millions out of poverty. The One Laptop per Child program led by the MIT Media Lab’s Nicholas Negroponte, the PlayPumps technology that generates clean water from child’s play, and KickStart’s innovative approach to developing and marketing new technologies each started with the power of a compelling idea. All require the support of private philanthropy and advocacy networks, the active engagement of community organizations, 16 and ultimately support from official donors or uptake by the corporate sector to achieve scale and sustainably change the lives of the poor.
Policy research also has a critical role in providing rigorous assessments of the impact of innovative ventures on the well-being of the poor relative to alternative approaches, disseminating findings to facilitate replication and achieving scale, providing recommendations to fill gaps in the institutional environment, facilitating accountability, and shaping policy. Without such critical partnerships and a favorable enabling environment, the promise of technology will remain elusive.
As the Brookings and New York University economist William Easterly reminds us, “Beware of technological quick fixes. . . . Regrettably, the experience of aid is that plenty of promising technologies exist but never reach many poor people.” 17
Mobilization and Messaging: Making Hope Sell
Some of the most visible new antipoverty advocates are global celebrities who have proven extraordinarily effective at mobilizing public support for ostensibly technocratic development issues. Their efforts owe a great deal to the success of the Jubilee 2000 debt campaign, which the Center for Global Development economists Nancy Birdsall and John Williamson have called “by far the most successful industrial-country movement aimed at combating world poverty for many years, perhaps in all recorded history.” 18 Whether rock stars, movie stars, moral leaders, or political icons, these “celanthropists” are infusing antipoverty campaigns with their own charisma and brand allure. Some are adept at crystallizing complex issues in catchy slogans like “Drop the Debt” and “Make Poverty History.”
Others have made energetic use of the popular media to attract new development audiences; witness MTV’s Diary of Angelina Jolie and Dr. Jeffrey Sachs in Africa. Seasoned performers on the global stage, these development champions are eloquent and impassioned in their appeals on behalf of the impoverished— invoking emotional language and images designed to anger, engage, and inspire action. And it works. The public is answering their call in unprecedented numbers.
At the same time, this high-profile celebrity advocacy may carry some unintended consequences. Some observers worry that black-and-white storylines obscure the nuances and intricacies of development, misleading the public to believe that solving poverty is just a matter of more foreign aid. As Collier cautions, “Unfortunately, although the plight of the bottom billion lends itself to simple moralizing, the answers do not.” 19 Raising public expectations too high could breed disillusionment and disengagement down the line. The blurring of celebrity brands with social movements creates challenges for both sides. Celebrities may be understandably leery of alienating their constituencies or tarnishing their reputation, which can crimp their desire to champion complex, controversial, or less media-friendly causes. Meanwhile, some nongovernmental organizations (NGOs) may be cautious about associating the serious causes on which they have been laboring for years with celebrity advocates whose own credibility, seriousness of purpose, and staying power may be untested.
In addition, the perceived validation that high-profile advocacy grants to a development cause may inadvertently cause other worthy priorities to be neglected. In Rwanda, for example, thanks to the success of the Global Fund, $48 million a year is available for HIV/AIDS, which affects about 3 percent of the population age fifteen to forty-nine years, in contrast to only $1 million for less publicly visible maternal and child health programs. 20 Despite these potential pitfalls, under the right circumstances, celebrity advocates and high-profile campaigns have a great deal to offer the development community.
Already, their efforts have delivered important—and in some cases, long overdue—gains for poor people, from debt relief to antiretroviral medications. Looking ahead, as the celebrity and high-profile advocacy movement matures, a range of opportunities can expand and intensify its reach. One such opportunity will be to take on some of the riskier obstacles to development.
It is not surprising that advocacy networks to date have proven more effective in instances of humanitarian crisis such as the Indian Ocean tsunami or the genocide in Darfur, where the face of human suffering is beamed into our living rooms in real time, than on trade liberalization or dismantling agricultural subsidies, where domestic opposition is strong and the connection to poverty is less starkly illustrated.
Grassroots donors want to feel that their contributions are making a real difference, which is easier in the case of appeals to alleviate visible catastrophes; meanwhile, celebrity and high-profile advocates are understandably drawn to black-and-white issues with a greater likelihood of success. But a future test for these advocates will be to leverage their power to mobilize the public on behalf of more complex issues that are tougher sells, such as trade and market access.
A second important opportunity is to help improve global perceptions of Africa’s progress by harnessing new development actors’ messaging and mobilization expertise toward a mantra of hope and partnership.
Thoughtful observers have expressed concerns that some well-intentioned Western antipoverty campaigns may inadvertently reinforce troubling stereotypes, for instance, by downplaying the agency of Africans while emphasizing the role of outside actors.
Though images of human misery may spur charitable donations, they also perpetuate notions of wholesale suffering and instability—dissuading potential private sector investors from giving the continent a chance. As Easterly has argued, the emphasis on war, famine, disease, and death often present in popular portrayals of Africa creates a “dark and scary image of a helpless, backward continent,” when, in fact, Sub-Saharan Africa has seen its gross domestic product grow at an impressive 5 percent for the past three years, its mobile telephone and Internet usage double each year for the past seven years, and its foreign direct investment surpass foreign aid. 21
In partnership with the increasing numbers of inspirational African leaders in government, business, and civil society, new development actors can help bring more of Africa’s “good news” stories to light—and in the process, improve the investment climate and global image of many African countries—making clear that African initiative ultimately will be the critical engine for sustained growth. Already, a number of pro-poor advocates and NGOs are taking this challenge to heart.
In Oxfam America’s campaign against the U.S. farm bill, for example, the organization brought African farmers to the American heartland to emphasize a message of dignity, not despair. Kiva.org cofounder Matthew Flannery defines the organization’s goals in terms of progress, not poverty, and describes its work as building partnerships instead of giving aid. And (PRODUCT) RED and DATA (Debt, AIDS, Trade, Africa, now merged with the ONE Campaign) are exploring how to use their formidable profile and savvy to help brand Sub-Saharan Africa as open for business—a region where free markets are growing, democracy is spreading, conflicts are ending, and the potential middle class could be 43 million strong by 2030, according to World Bank estimates. Celebrity and advocacy movements are one of the most visible distinguishing features of the contemporary development landscape.
In the months and years ahead, these new development actors should be encouraged to put their credibility, charisma, passion, and power to even greater benefit—both in educating the Western public and policymakers about development challenges and solutions and in amplifying the voices of the agents of change within developing countries.
More Than the Sum of Its Parts
Risk taking, empowering change agents, innovation, messaging, and public mobilization could help transform the sometimes stodgy development field. Yet there are no guarantees that the whole will amount to more than the sum of its parts. Although impromptu coalitions may be the ideal mechanism for catalyzing action in a critically neglected area, unless they are institutionalized, they may fall short in delivering sustained value.
Similarly, pioneering approaches will only be taken to scale and sustained if their impact can be evaluated using commonly accepted metrics, their results are widely disseminated, and they are successfully handed off to official entities. And the enthusiasm philanthropists bring to the quest for transformational breakthroughs may not always translate into the less glamorous, daily labor of building functioning, self-sustaining societies from the bottom up.
If we accept that more hands on the development deck is a powerful and positive thing, then where might those hands best apply their strength to improve the lives and prospects of the poor? Beyond improving the life chances of impoverished people, how can donors and development actors catalyze systemic social change? And what can be done to improve aid’s impact and effectiveness, with a greater emphasis on meaningful input from—and outcomes for—its intended beneficiaries?
Complementing Rather Than Duplicating Aid Efforts?
Many of the newcomers to the development stage are less constrained than governments by rules and regulations, or even than their private sector predecessors by the oversight of corporate or foundation boards. The absence of such limits should free them to pioneer activities at the riskier end of the spectrum, where official agencies are often unable to operate. The proliferation and diversity of these new actors is also leading to new partnerships and coalitions to take on specific challenges such as HIV/AIDS. Yet this burgeoning cast of characters also carries risks of duplicated effort and inefficiency. According to the Brookings expert Joseph O’Keefe, on the official side alone, the average number of donors per recipient country grew from twelve in the 1960s to more than thirty in the period 2001–05, which suggests that multiple actors are trying to address the same challenges. The greater number of possible funders and development partners also puts greater burdens on strapped recipients—in face-to-face meetings, idiosyncratic reporting and assessment requirements, and differences in donordriven priorities. A recent survey by the Organization for Economic Cooperation and Development (OECD) found that traditional donors reportedly fielded 10,453 missions in thirty-four countries in 2005—an average of more than 300 per country, or 1 every 1.2 days.
In addition, because of the structural disconnect between supply and demand, even though more external actors are trying to make a difference, the areas they are focusing on may not reflect recipients’ priorities—which can lead to mutual frustration and reduce the effectiveness of aid. To address these problems, the last decade has seen a rising emphasis on coordination among official donors in support of “country ownership.” Some successful instances have built on coordination processes led by the recipients themselves—as in Uganda and Tanzania—while others have relied on coordination mechanisms agreed upon by official donors, such as the multilaterals’ in Poverty Reduction Strategy Papers.
In some cases, multilaterals like the Global Fund are integrating funders into coordination processes. These donors include several large new players like the Bill and Melinda Gates Foundation, (PRODUCT) RED and its partners, and UNITAID. Continuing, strengthening, and deepening these efforts will be a key priority for the future, to ensure that the contributions of significant private players and new bilaterals are harmonized with the broader community’s efforts, and to align donors’ good intentions with beneficiaries’ greatest needs. Ultimately, such focused coordination will have to reach all the way to efforts on the ground. A recent mapping of development assistance in Ghana and Mali by Save the Children with CARE, Millennium Promise, and McKinsey & Company found hundreds of players on the field. It is high time to revisit the lessons from experience—for example, the effort to support the Bangladesh Rural Advancement Committee in the 1970s—and create systems that will enable the whole throng of development players to routinely coordinate their efforts sectorally or geographically.
Other promising approaches to improving coherence and efficiency may emerge in the virtual arena, for example, through Raj Kumar’s Development Executive Group (www.developmentex.com), a searchable, online clearinghouse for multiple aspects of development work—from hiring project managers to procuring engineers. Achieving the greatest impact from the efforts of both new and old development players, however, will require going beyond coordination to achieving strategic complementarity. Though often sharing the same broad goals, private philanthropists, official donors, and corporations approach the development endeavor with different skill sets, objectives, and approaches for measuring success. They too seldom make strategic choices about how to align their efforts with other new and old actors and thus too frequently fund overlapping projects.
Private philanthropists bring considerable strengths to the table. They are often nimble, lightly burdened by oversight and strictures, and able to take risks. But they rely heavily on intermediary organizations, often have a limited presence in the field or in-house research capacity, and generally must use their smaller funding for catalytic purposes rather than to make sustained large-scale investments.
Corporations often can leverage an extensive, long-term staff presence in a country along with considerable in-house skills and resources. However, their deployment is often constrained by a primary mission that is not related to development. In contrast, both newer and established official donors tend to have extensive resources and a strong field presence along with the capacity to push bilaterally and multilaterally for governance changes (see below) but are highly constrained by changing domestic political agendas. Too often, any or all of these players might be funding the same sector or even the same project through the same NGO in a particular country without any prior consultation or coordination.
Several of the large traditional official donors, in particular, have been slow to appreciate the sheer size of assistance from the private and philanthropic sectors and even slower to pursue synergies.
Some of the new megaphilanthropies have been pressed to disburse funding rapidly without having the luxury of fully studying the field and identifying complementary efforts. As a result, the impact of these efforts has been less than the sum of their parts. In the words of FSG Social Impact Advisors’ Mark Kramer, “The greatest impact will be achieved when each sector directs its funding to projects that it can undertake more efficiently or effectively than other sectors, but which simultaneously help support the developmental needs of those other sectors. This shift in thinking is precisely what is needed if each of the sectors is to accomplish their agendas more effectively.” 22
Despite the same broad goals—such as reducing malaria and increasing the number of girls completing primary school—new and old actors have different notions of how to achieve and assess success. Strategic complementarity will be greatly aided not only by developing a division of labor among the various players up front but also by sharing lessons informed by common metrics of assessment. The resources for development—financial, human, and political—are too scarce to be wasted repeating the same old mistakes underwritten by different types of funders.
Ultimately, the goal for donors and development service providers must be to find ways to coordinate their efforts that go beyond simply dividing up the terrain—“You take education, I’ll take sanitation.” The more that development strategies can be driven by beneficiaries’ priorities and plans, and the more the various aid providers are strategically positioned to deliver the best outcomes for the poor, the more likely it is that the development community’s efforts will breed widespread success.
Strengthening Governance: Selectivity and Accountability
If there is one universal truth in development, it is that governance and institutions matter fundamentally for the quality and durability of outcomes. Leaders from donor and recipient countries alike emphatically underscore the prerequisite of good governance for growth—to provide not only hard infrastructure like power, roads, and sanitation but also the soft infrastructure of a transparent and predictable regulatory system, voice and accountability, an independent judiciary, and the rule of law.
Traditional donors practice selectivity bilaterally and through multilateral channels to create incentives for recipient governments to improve policies, institutions, and overall governance (admittedly, with mixed success). World Bank and International Monetary Fund loans have long been conditioned on assessments of recipient policy environments, and traditional donors have worked through organizations such as the OECD Development Assistance Committee (DAC) to agree on common standards, such as environmental impact.
In recent years, this trend has accelerated. The new U.S. Millennium Challenge Corporation (MCC) conditions country eligibility on sixteen governance and policy indicators, ranging from voice and accountability to the number of days it takes to start a business. Countries that score well on these indicators can determine their own priorities for assistance—and the resources come in the form of grants, rather than loans to be repaid. MCC chief executive John Danilovich describes the system as granting a “seal of approval” to developing countries, which then can leverage further investment and trade from the private sector.
Similarly, the European Union and the World Bank have each developed their own sets of quantifiable criteria for making aid allocation decisions. Yet, even as established official donors work to fine-tune conditionality and selectivity, the entire system is being challenged by the emergence of new bilateral donors. The more sources of assistance there are from which to choose, and the less coordinated they are, the more tempting it is for recipients to “donor shop” to avoid the strictures of conditionality and selectivity associated with mechanisms such as the MCC and the World Bank’s performance-based allocation system. China’s willingness to provide unconditional aid to various African nations is provoking particular concern in Western capitals.
Officials are troubled by China’s willingness to deal with unsavory regimes like those of Sudan and Angola, reducing such countries’ incentive to change. Many also fear that China’s voracious appetite for natural resources will result in exploitative aid-for-trade deals with developing African nations—an issue on which many Western governments have their own unfortunate histories. In addition, some experts worry that access to loans from China could undermine low-income countries’ hard-won gains on debt relief. It must be noted, however, that Western governments have been slow off the mark to welcome China into their own aid deliberations.
Moreover, even Western observers concede that China has shown a willingness to spend in sectors that traditional donors have recently neglected, including major infrastructure projects that are essential to durable growth. And African partners are quick to point out the benefits of China’s interest in investment and trade. Looking to the future, an urgent challenge for Western, Chinese, and African actors alike is to fortify channels of communication, coordination, and collaboration toward development goals—so that the impact of Chinese investment in Africa is to catapult progress, not delay or undermine reform.
More broadly, given the rising influence of other nations such as India and Brazil, it may be time for a fundamental reappraisal of who sits at the official donor table. A range of approaches could encourage closer cooperation among old and new donors, from expanding the DAC to fostering professional contacts and exchanges among development experts around the world. But one thing is clear: With the magnitude of funding from nontraditional sources, both new and old donors will need to reach some kind of accommodation or risk undermining their own stated goals.
Although individual philanthropic resources are too small to enforce selectivity, private philanthropists are finding ways to play a catalytic role in the good governance equation. George Soros has targeted philanthropic efforts to countries experiencing democratic transitions because they are especially receptive to reform yet are often ill-equipped to effectively absorb official aid. Private philanthropy, which can be more flexible and responsive than government funding, can provide the experts and technical assistance to help a new government move forward while training local civil servants to carry on after they leave.
To that end, Soros’s Open Society Institute (OSI), in partnership with the United Nations Development Program (UNDP), has pioneered a fellowship program for diaspora communities to take high-level jobs in Georgia, Serbia, and Montenegro to build the capacity of new democracies to make the most of their transition period. These relatively low-cost investments can pay multiple returns, as countries put in place sound policies that attract official aid and private investment down the line.
Beyond timely support for new democracies, philanthropies can bolster governance by helping build institutional, administrative, and research capacity in developing country public sectors. As Nelson writes, sometimes the real problem is not bad governance but weak governance:
“Even when governments want to provide their citizens with transparent and readily accessible information and with reliable and efficient services, they are all too often constrained by lack of human capital, lack of modern technology, and lack of administrative capability.” 23
Private and official donors alike can help address this problem by supporting public policy and research institutes, universities, and evaluation programs in developing countries themselves. Some encouraging models are the Global Development Network, a consortium of public and private research and policy institutes that aims to share and apply locally generated research to promote development; and the Mohammed Bin Rashid Al Maktoum Foundation, which plans to invest in universities, research institutes, and youth development throughout the Middle East.
Ultimately, outside donors’ most important contribution to good governance may be to strengthen developing countries’ internal accountability capabilities. Programs such as OSI’s Revenue Watch (now the independent Revenue Watch Institute) and the William and Flora Hewlett Foundation Brookings Transparency and Accountability Project aim to equip independent civil society watchdog organizations and think tanks to monitor and analyze public spending and revenues, arming the media and citizen groups with data and analysis to demand better government performance themselves.
Another bold endeavor, the Mo Ibrahim Prize for Achievement in African Leadership, each year rewards a former African executive head of state or government who has demonstrated excellence in leadership, based on a ranking of governance performance as evaluated by an independent, high-level panel. As Ibrahim has explained, “The heart of the project is the index, not the prize”—meaning that the primary goal of the endeavor is to establish metrics for good governance that citizens can use to evaluate their own leaders. Though leadership deficits are hardly confined to African nations, the cost of bad leadership in many African countries is higher because of weak institutions. Governance indices help to empower African citizens to hold their leaders accountable and demand lasting institutional change to ensure that growth continues well after any particular leader has left office.
The Commission on the Legal Empowerment of the Poor, sponsored by the UNDP, aims to identify and advocate for reforms that ensure the legal inclusion and empowerment of the poor, including property rights, legal protection of their assets, access to justice, and legal mechanisms to facilitate informal businesses. In the spring of 2008, this high-level commission, cochaired by Madeleine Albright and Hernando de Soto, will release its final report. Finding ways to support the commission’s recommendations should be a focus for development advocates and funders in the months ahead.
Service provider organizations are also taking a harder look at empowering civil society in the countries where they operate. According to Charles MacCormack of Save the Children, 95 percent of his organization’s work is done through service delivery—yet more could be done to work with developing country partners on advocacy in their own countries. In MacCormack’s words, “Looking forward, we need to support and fund national organizations for their in-country advocacy work. We need to move some of our philanthropic dollars to social mobilization and constituency building.”
Enhancing Accountability and Evaluation for Superior Impact
More broadly, the proliferation of new actors and the dazzling growth in the volume of resources is raising new questions of accountability and democratic participation or “voice.” Simon Zadek, the chief executive officer of AccountAbility, argues that accountability is the “DNA of civilized societies, and so also of meaningful development.” 24 But most development accountability mechanisms were established to manage the old order dominated by governments and official donors. The question today is which new accountability mechanisms should be established, by whom and for whom.
Questions of accountability are too often oriented toward the provider of funds rather than the communities the development interventions seek to serve. Who should judge success—donors or recipients? And most important, what should be assessed?
The power—some would say imperialism—of the traditional market mechanism is the reduction of billions of complex transactions into a common metric along a relatively small handful of dimensions—most notably profits, costs, and prices. Even nonmarket side effects (so-called externalities) can be addressed once monetized and integrated into the price system. No such common agreement or parsimony determines the right “bottom line” when fighting poverty with a diverse array of actors.
Devising more accurate, accessible means to measure aid’s impact and effectiveness—particularly from the perspective of beneficiaries—is a crucial challenge if the development market is to reach its fullest potential. Yet, measuring the impact of particular development interventions is inherently difficult. The contributing factors are many and varied, and players coming from the corporate, nongovernmental, philanthropic, and public sectors bring with them different practices and approaches to assessment. Nongovernmental organizations are handicapped in performing long-term impact assessments because their projects are only funded for their duration. For many startup social enterprises, the relevant data are often not collected, and methodologies for analysis are often lacking even when they are. Even the most established official donors have been slow to undertake rigorous, systematic impact assessments (for example, randomized trials, control groups), even when those techniques are routinely applied to their domestic programs.
As Smita Singh of the William and Flora Hewlett Foundation points out, it is tempting to focus on inputs instead of outcomes because outcomes are inherently more difficult to measure. Counting the number of boys and girls enrolled in school is easier than determining what they have learned; tracking the number of antimalarial bed nets distributed is easier than tracking improvements in public health attributable to the bed nets. And measurement is particularly difficult when the goal of an intervention may be to prevent something from happening. How, for example, should donors evaluate an anticorruption effort—in monies that did not disappear?
In addition, the success or failure of a specific intervention may give a false impression of overall progress toward a goal. Some experts are concerned, for example, that the massive infusion of resources to tackle HIV/AIDS is leading low-income countries to focus their strapped public health systems disproportionately on this one challenge at the expense of other more prevalent public health problems.
For assessment to be meaningful, the appropriate benchmarks have to be set from the start—a task that is harder than it sounds.
Olara A. Otunnu, president of the LBL Foundation for Children, points out that though the Millennium Development Goals were established with the best of intentions, the education goal is backfiring. In many countries, even as the stated goal of universal primary enrollment is being met, it is being achieved without additional investments in school facilities, teacher hiring and training, or supplies, with the result that what little adequate primary education used to exist for poor children is being eroded.
Similarly, the more ambitious an endeavor, the more difficult it is to pinpoint causality. As both old and new donors and service providers, from rich and developing countries alike, join forces in promoting broad goals, how does each organization hold itself accountable for collective results?
There is also a risk that the push toward quantifiable metrics and results will lead donors and philanthropists to demand meaningful, measurable change in ever-shorter time horizons. As Susan Berresford, the former president of the Ford Foundation, has warned,
“There is a danger that some venture philanthropists will support only what can be measured or leave in frustration when results don’t come quickly. Some social problems, almost by definition, are messy and so is the search for their solutions, requiring experimentation, patience, and often a leap of faith.” 25
These are thorny challenges. Yet it is clear that improving accountability for impact is one of the most pressing opportunities and obligations for the twenty-first-century development community—including by establishing a greater willingness to reward programs that work and be honest about those that do not. Indeed, the New York Times columnist Nicholas Kristof has suggested the need for a “Journal of Development Mistakes”—a catalogue of pro-poor endeavors that have failed to work as planned—which would enable those engaged in such work to learn not only from one another’s home runs but also from missteps.
Several foundations are already taking stock of their failures and disseminating their findings so that others can avoid repeating their mistakes. For example, the William and Flora Hewlett Foundation recently published an eighty-one-page analysis of its Neighborhood Improvement Initiative, a program to reduce poverty in San Francisco, which detailed how the foundation spent more than $20 million over a decade but failed to “fulfill its participants’ hopes and expectations for broad, deep and sustainable community change.”
On the flip side, in the push for bigger, bolder ideas and the quest for the “new new thing,” both new and old development actors must take care not to neglect demonstrated solutions that could be replicated or scaled— whether indigenous technologies, service delivery models, or effective social enterprises. Indeed, some practitioners note the need for a “replication fund” precisely to ensure that proven approaches receive the necessary funding to expand, and they worry about a perceived bias in favor of funding a multitude of “pilots” that never get taken to scale. It is critical not only to be clear on establishing accountability for what, but also by and to whom.
AccountAbility’s Zadek and the Brookings and Harvard expert Nelson suggest that traditional and new development actors should work together to achieve “mutual accountability,” building mechanisms that share responsibility and empower aid recipients to be greater stakeholders in development efforts. Collective or mutual accountability starts by forging agreement among diverse actors on the goal, specifying the different contributions that each participant in a cross-sectoral partnership or network will make, recognizing their interdependence, and holding each partner responsible to the others laterally—in contrast to the conventional hierarchical approach.
Official donors are missing a critical opportunity to contribute to these efforts. Whereas donor governments have traditionally demanded accountability to their own taxpayers and parliaments, they have largely neglected empowering intended beneficiaries to hold service providers and donors accountable.
Development programs do not work unless beneficiaries are engaged. Official donors should challenge themselves to build accountability systems and feedback mechanisms into their giving, creating in-country capacity that will outlive the assistance flows. One idea would be to assess innovative, field-based governance strategies such as polling and local governance report cards to see if they could play a useful role in improving impact. After all, if the United States and other bilateral donors are serious about supporting strong grassroots democratic institutions in developing countries, where better to start than by engaging the communities that their aid dollars are intended to reach in evaluating and demanding performance?
In 2005, more than 100 donors and developing countries agreed on the Paris Declaration for Aid Effectiveness, pledging a series of concrete reforms in the way aid is delivered and managed. A fundamental precept of the declaration was the need to move from “donorship to ownership”—including by strengthening developing countries’ parliamentary oversight of development policies and budgets, enhancing the role of civil society, and requiring donors to rely as much as possible on country systems and procedures. The obvious next step is to craft a similar set of principles that would also involve private donors.
Going from New to Newly Effective
Many of the new development players are entering the field unburdened by the weight of conventional wisdom and are blessed with confidence in their own ability to achieve outsized results. By taking development outside the realm of the cognoscenti and bringing practices and approaches from other sectors, they are infusing the community with a healthy dose of out-of-the box thinking and innovation.
These new players’ business, financial, and media roots make them receptive to sector blurring, with financiers investing in social entrepreneurs and philanthropists looking for ways to seed indigenous business enterprises. Those who made their own mark through innovation are seeking ways to leverage science and technology to improve the lives of the poor, which will require changing incentives and participants throughout the system for knowledge creation and adaptation. Meanwhile, a growing group of philanthropists is investing in advocacy and agenda-setting for social transformation rather than charity.
A new generation is being drawn into the development tent, as young people heed the call of celebrity and high-profile advocates to enlist in antipoverty campaigns and engage in global service. And this proliferation and diversity of the new actors alongside the old is also leading to new partnerships and coalitions—many on an ad hoc basis—to take on specific and pressing challenges such as HIV/AIDS.
The ultimate test is whether this new marketplace of development players delivers superior outcomes. The new players differ mightily from the old ones in their specific objectives, capabilities, and metrics for evaluating success. Nonetheless, they confront the same tough challenges faced by all development players: accountability, effective deployment of resources, agenda setting, and achieving scale and sustainability.
If these diverse players can learn to collaborate effectively in partnerships and networks that cross the traditional boundaries between the public, private, and nongovernmental sectors, their efforts could amount to more than the sum of the parts. But to do so will require strategically exploiting complementary [parts] between capabilities, adopting common methods for assessing impact and disseminating lessons, supporting a shared governance agenda, and creating effective new models of mutual accountability that put poor people, communities, and nations in the driver’s seat. However, if there is much to learn to ensure that this newly crowded field delivers lasting benefits to the poor, there is even more to celebrate.
At the midpoint between the launch and the target dates for the world’s Millennium Development Goals, the energy, imagination, and determination of the growing cast of development players gives hope that conquering extreme poverty need not be an impossible dream.
As both traditional and new actors hone their ability to collaborate and coordinate on behalf of common goals, and as donors and recipients continue their journey from a relationship of aid to one of partnership, persistent problems may be transformed into fresh opportunities—and good intentions may lead to great advances for humanity as a whole.
- “Skoll Awards for Social Entrepreneurship Guidelines” (www.skollfoundation.org/ skollawards/index.asp# [August 2007]).
- United Nations Commission on the Private Sector and Development, “Unleashing Entrepreneurship: Making Business Work for the Poor,” 2004.
- 11. See Lael Brainard and Vinca LaFleur, Expanding Enterprise, Lifting the Poor: The Private Sector in the Fight against Global Poverty (Brookings, 2005).
- Sylvia Pfeifer, “Government Fund Makes Millions on African Stakes,” March 4, 2005 (www.cdcgroup.com/files/NewsItem/UploadPDF/Government%20fund%20makes %20millions%20on%20African%20stakes.pdf [August 2007]).
- Lael Brainard, “Investing in Knowledge for Development: The Role of Science & Technology in the Fight against Global Poverty,” AAAS Forum on Science and Technology Policy, 2005.
- For more information, see www.ushmm.org/googleearth/projects/darfur/.
- See chapter 8 in the present volume by Ashok Khosla.
- William Easterly, “Four Ways to Spend $60 Billion Wisely,” Washington Post, July2, 2006.
- Nancy Birdsall and John Williamson, Delivering on Debt Relief: From IMF Gold to a New Aid Architecture (Washington, D.C.: Center for Global Development, 2002), 1.
- Collier, Bottom Billion, 4.
- These data are from UNAIDS and the World Health Organization (WHO).
- William Easterly, “What Bono Doesn’t Say about Africa,” Los Angeles Times, July 6, 2007.
- See chapter 10 in the present volume by Simon Zadek.
- . Susan Berresford, “Philanthropy in the 21st Century,” lecture at Washington University, Saint Louis, February 7, 2001.
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