Does International Aid Work? Yes, But…

International Aid image

Social entrepreneurship, as a counterpoint to the traditional central planning model in international aid, is showing a great deal of promise.

Social entrepreneurship in international development is getting a lot of media attention. Down on the ground, it’s still embryonic. While the practice is accelerating dramatically, at this writing there is still more talk than action. The Big Plan still dominates the aid industry–the top-down, cure-poverty approach to the developing world.

There are libraries full of literature on this subject. The classic, The White Man’s Burden, a 2006 study by former World Bank economist William Easterly, makes a convincing argument for the bottom up approach of social enterprise versus the top down approach of the grand central plan to eradicate poverty.

Down here on the ground, we see Easterly’s arguments put into practice, and we think he’s largely correct. As economists, we have come to understand the absolute necessity of sound macro-economic structures. But we believe that the grand vision of eradicating poverty is unrealistic, and that the centralized planning approach has proved itself inadequate to the task of minimizing poverty. The bottom up, community and market-driven approach will grow, because it’s working.

In Africa, we are investors in, and witness to, a magnificent and successful exercise in social entrepreneurship, conducted by our Kenyan partner in a community health project. In seven years of practice, they are achieving several closely identified, measurable goals.

They aren’t trying to cure poverty with a grand plan. They are trying to create a decent healthcare system as a springboard to productivity. Their goals are discrete. Their plans are bottom up–they ask their community constantly: what do you want, what will work? As major philanthropic investors in their social venture, we listen hard, do a lot of due diligence, get out of their way, and then come back and measure impacts.

We’ll continue to put the ideas into practice on the ground and report back here.



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