May 28, 2009

Some Wisdom on Development Economics

While at this conference, I saw some quite interesting presentations on the recent developments in protectionist measures. However, one of the most striking statements I heard was only indirectly related to the conference’s topic. The argument was roughly the following:

Development agencies have to be risk averse when conducting their business since they use taxpayers’ money. Hence, developing countries which receive the donations form these agencies are subject to very stringent rules in the way they make use of the money. But if developing countries are not allowed to make mistakes throughout their development process the whole idea of development is put ad absurdum. It is only through trial and error and learning that countries can find their particular way to develop.

Now this seems like a well informed critique about the whole way that development aid is organized in most Western countries. But it comes even better: The argument was made by Pierre Jacquet, director and chief economist of the French Development Agency!

Maybe I should have asked him to give his money to the RDB!

2 comments:

Pierre-Louis said...

I don't understand the link between the risk aversion of donours and the fact that recipients need to follow very stringent rules...the two are uncorrelated to me...

but coming from the most corrupt and incomptetent aid agency in the world I'm not surprised it makes no sense!

they better give all their money to the RDB indeed!

Pierre-Louis said...

re-reading it makes me more confused...If donours are risk averse they would give money only to what they know works and recipients would win...but anyway this risk aversion is not translated in reality, first of all becuz donours are corrupt and second of all becuz there ain't no such thing as a risk free aid strategy...

donours don't actually know what works! so imposing rules is very stupid...and is not a risk averse strategy...

is that guy an economist really?