The Cartel of Good Intentions: The Problem Bureaucracy in Foreign Aid

Posted: 24 Jan 2006

See all articles by William Easterly

William Easterly

New York University - Department of Economics

Abstract

A group of well-meaning national and international bureaucracies dispensed foreign aid under conditions in which bureaucracy does not work well. The environment that created aid bureaucracies led those organizations to (a)define their output as money disbursed rather than service delivered, (b)produce many low-return observable outputs like glossy reports and frameworks and few high-return less observable activities like ex-post evaluation, (c) engage in obfuscation, spin control, and amnesia (like always describing aid efforts as new and improved) so that there is little learning from the past, (d) put enormous demands on scarce administrative skills in poor countries.

To change this unhappy equilibrium, policymakers in rich and poor countries should experiment with decentralized markets to match those who want to help the poor with the poor themselves freely expressing their needs and aspirations.

Suggested Citation

Easterly, William, The Cartel of Good Intentions: The Problem Bureaucracy in Foreign Aid. Journal of Policy Reform, pp. 1-28, 2003. Available at SSRN: https://ssrn.com/abstract=876634

William Easterly (Contact Author)

New York University - Department of Economics ( email )

269 Mercer Street
New York, NY 10003
United States

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