Overcoming the Samaritan's Dilemma in Development Aid

Abstract

"We all have been in situations where we hear people criticizing aid to developing countries. Some people say, 'Don't do it anymore.' Others say, 'Do it better.' There is considerable doubt in the world that development aid is increasing economic growth, alleviating poverty, promoting social development, or fostering democratic regimes. We need to have a positive, sustainable impact, and that is not always happening. So it is important that we dig in and understand why some of our policies are not sustainable and why some people keep saying they need more money, while others say, 'Well, we just can't help from the outside. It's got to be from the inside.' Some focus on how long it takes to make a big impact, while others say the reason for diminished or unsuccessful outcomes is too many perverse incentives. This last reason is most important--many development aid incentives are perverse."