The cartel of good intentions: the problem of bureaucracy in foreign aid

Author: Easterly W.¹

Source: The Journal of Policy Reform, Volume 5, Number 4, December 2002 , pp. 223-250(28)

Publisher: Routledge, part of the Taylor & Francis Group

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Abstract:

Well-meaning national and international bureaucracies dispense foreign aid under conditions in which bureaucracy fails. 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 (glossy reports and "frameworks") and few high-return less observable activities like ex-post evaluation, (c) engage in obfuscation, spin control, and amnesia (always describing aid efforts as "new and improved") exhibiting 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, matching those who want to help the poor with the poor themselves freely expressing their needs and aspirations.

Keywords: Foreign Aid; Economic Development; Bureaucracy

Document Type: Research article

DOI: 10.1080/1384128032000096823

Affiliations: 1: Department of Economics, New York University and Center for Global Development

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