by Charlene Chan and Michael French
During a time in which development aid is drastically changing, three experts in the development field convened to discuss the shift of aid away from official government channels to private giving. On April 2nd, the Hudson Institute’s Center for Global Prosperity (CGP), in conjunction with Georgetown University, held an event featuring Dr. Carol Adelman of CGP, Dr. Caroline Anstey of the World Bank, and Dr. Carol Lancaster of Georgetown’s School of Foreign Service. The esteemed panel discussed how philanthropy, remittances, and private capital flows have greatly outstripped official government aid, as well as the implications of these findings for the future of development. Besides being a lively discussion of a noteworthy and important topic, the event also marked the release of CGP’s 2012 Index of Global Philanthropy and Remittances.
Addressing the full capacity crowd, Carol Lancaster kicked off the proceedings by introducing Dr. Adelman and Dr. Anstey, providing a short biography for each.
Carol Adelman was first to speak, giving a short presentation on the CGP’s new findings on private aid and its potential effects on development. These new findings show that in 2010, private financial flows from developed to developing countries amounted to an astonishing $575 billion, much greater than the $128 billion in official government aid. US private flows reached nearly $300 billion dollars alone: $39 billion in the form of philanthropy, $95.8 billion in remittances, and $161.2 in private capital flows.
Observing that the private flows are more than 4 times greater than official aid flows, Dr. Adelman noted that aid has fundamentally changed, and that official aid must adjust—it is now, in effect, a “minority shareholder” in the grand scheme of development aid. She noted that the traditional donor-recipient relationships are becoming outdated, with new and exciting partnerships taking their place and “ending the definitions between for-profit and non-profit.”
Dr. Caroline Anstey was next to speak, addressing this new trend in aid from the perspective of the World Bank, articulating that labels such as first world, third world, north-south, developed, underdeveloped, donor, recipient, provider, supplicant, us and them, should now be viewed in a completely different dimension – partnerships to build “multiple poles of growth.” These new partnerships indicate development is likely to become more democratized, and citizens are likely to play a bigger role in their development through voice and social accountability, and are more focused on development solutions. In the old days, the Bank had a development blueprint, commonly known as the Washington Consensus, but time and again, countries have used policies that do not always conform to the blueprint to develop—nowadays, we must stress finding unique solutions that work for both sides. Dr. Anstey posits that the goal of development should not be charity, but “mutual interest in building prosperity.”
Anstey ended her part of the presentation with a discussion on how the World Bank must adapt to this new way of development. The Bank has focused on four things:
- Openness: to democratize development, all information has to be open, interactive, accessible and useable for anyone. The Bank has recently put all their analysis online, under a creative commons license, the most liberal copyright.
- Accountability: agencies in charge of public and private money have to be increasingly accountable to their funders – the results accrued, the failures, and foundations and civil society organizations (CSO) should be pressured to publish their results.
- A focus on results: everyone wants to know what the results are in a world are great resource scarcity.
- Partnerships: the future of development will be about partnerships, particularly the amalgamation of technology with development. Technology that allows beneficiaries to track the delivery of aid is not only reasonably simple and available for philanthropy and foundations to mobilize local citizens, but also builds up the beneficiaries’ ability to monitor their own governments.
After Dr. Anstey’s talk, Dr. Lancaster opened the floor to questions, while also including a few of her own. Several important topics were addressed, including collaboration and coordination between projects, social accountability, and how to best quantify the economic value of aid. The session gave the audience a chance to interact with the panelists, while also receiving answers to their own pressing questions.
Overall, the event successfully addressed the drastically changing nature of aid, as well as the different global dynamics we face today. The world we live in today is very different from the world that existed in 1944, and aid architecture has yet to catch up. In order to spur greater partnerships and philanthropy, we have to begin asking some honest questions about the future of the global economy, and if we can begin moving away from the power of the donor-beneficiary relationship, and toward one of partnerships of mutual interest in global prosperity.