A club sandwich, a pair of trousers, a ticket to the movies – in a typical market transaction, I choose and pay for my own desires.
Sometimes, however, I might buy something for someone else, and here trouble begins. If I am buying something – a goat, an HIV prevention course, a bit of paved road – for a complete stranger in a far-off land, the risks that something will go awry are far higher. How am I to know what is needed, where to send it, even whether it has been stolen en route?
This may be why we have aid agencies. Aid agencies are popular symbols of national generosity – witness the Tory commitment to ring-fence the Department for International Development’s budget, even as they speak of inevitable spending cuts elsewhere – and in principle should make better-informed decisions because they are in a position to put expert decision-makers on the ground.
In practice, things are not quite so simple. Aid agencies are government bureaucracies, of course. They are funded by governments and governments are also their typical beneficiaries. Even sympathetic critics tend to agree that aid agencies often spread themselves thinly across countries and sectors. Civil servants in poor countries are constantly tied up in meetings with aid agencies, while the agencies themselves fail to focus on what they do well. Read the rest of the article.