Hayekian Moment Watch

Dennis Whittle writes,

1. Who decides which problems aid should address?
2. Who comes up with the solutions?
3. Who gives the funding?
4. Who competes to implement the solutions?
5. Who gives feedback on how well the solutions work?

The existing system is closed. It assumes these questions will be answered by experts within one of the "mainframe" organizations like the World Bank, the UNDP, USAID, or one of the big NGOs.

Unlike 60 years ago, the expertise, resources and technology now exist to make a new decentralized and distributed aid system possible. Many more people--and not just experts--have relevant developing country experience (for example, the Peace Corps alone has over 250,000 alumni). Regular Americans give over $25 billion each year to charitable causes abroad--about the same amount as the US official aid budget. And PCs, internet, cell phones and related technologies now make it possible to connect all of these people and resources directly to the people who need help.

What Whittle describes as true for development aid I would describe as true for many issues that involve public policy. We are in a Hayekian moment, in which distributed knowledge is more powerful than central technocratic wisdom.

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