The Freak Theater of Aid

Recently, much has been written in the news about aid to the sluggish, destitute, and sinking economies – which constitute the so-called “developing” world; fortunately, these recent news have been positive in nature and shed a small gleam of light on this somber world. First, the announcement made by Warren Buffet that he would surrender his fortune to the Bill and Melinda Gates foundation –which foci include, but are not limited to aid to developing countries– reinforces the movement that sees the extremely wealthy giving away some, or all of their money. Another example, although quite different in nature, is the creation of Google.org, a for-profit philanthropic organization which also plans to reach to populations in developing countries among other activities. Both these efforts to improve the situation of our world could seem rather banal against the background of failed efforts up to now, but there is a difference. Though their approach is different, both the Gates foundation and Google organization, aside from the fact that their creators are computer maniacs, have a very important asset, business experience.

This might sound like an oxymoron, but business philanthropy is indeed a growing trend among non-traditional donors. William Easterly in his latest book, The White Man’s Burden, has advocated a kind of development led by searchers instead of planners ( To briefly summarize these two concepts, a searcher confronts a particular problem and gives incentives to solve it, a planner will impose a solution that he believes will solve everything at once). Searchers, that is exactly what Google and Gates are, some of the best of our time I might add. Despite the fact that Microsoft and Google’s business practices are not always the most ethical, it cannot be denied that both are some of the most successful contemporary business ventures. By applying their knowledge of business, and being searchers (of markets) in the developing world, they need both to be efficient, profitable (although not necessarily economically, has Google.org has stated) and most importantly to be accountable to the customer whose positive feedback should be the prime objective. Even if financial profits are not the main objective, a business venture still needs some profit, otherwise it becomes a waste of time and money, something a business cannot afford even if it has a budget of billions. Unfortunately, it is just the opposite approach that has been dominating development until now.

Big institutions such as the IMF and the World Bank have virtually unlimited funds and a highly advantageous balance of power with their customers which in no way makes them accountable and responsible for the failure of their projects. However, there seems to be some change in this area as well. At the eve of the IMF/WB summit in Singapore some shifts in the mentality of these pachyderms could ostensibly change their course. The choice to give China and other fast growing economies a larger say in the IMF’s decisions was long overdue in a world where cooperation should be prioritized. Regrettably, this shift still takes the form of a conflict of interest between countries which merely vie for more power; yet, this nonetheless balances the distribution of power and makes conflicts less likely at the same time. Meanwhile, the ongoing controversy among World Bank officials and staff concerns their president’s, Paul Wolfowitz, stance on corruption. Of course his background as one of the architects of the Iraq war does not allow him much trust or even credibility, but still the move should not be dismissed even if, as of now (and perhaps as expected), his stance is too extreme and pernicious. There is a real need for change in the way these all powerful institutions manage their funds and use their influence to curb such detrimental practices as corruption. I see this inside conflict as a real opportunity and test for the World Bank, it will say a lot about its viability and ability to change and most importantly listen, think and find a compromise. I will stop here for today, and make this entry a two part episode. With all this recent news, I wanted to comment a little bit before going into my reflection which I will be turning to shortly.