Cash on Delivery Foreign Aid

In Capacity Building, Economic Development, International Development, Sustainable Development on July 14, 2010 at 1:52 pm

This is intriguing.  I used to read William Easterly’s papers in grad school.  As I’ve been reading up more on development lately I’ve come across his missives from his aidwatch blog.

In any case, there’s a debate about a resurgent approach called Cash on Delivery.  Read the article on it just now.   It’s an interesting approach.  Basically, you help the recipient country develop the goals, and you promise to basically reimburse the country when they’ve achieved the goals.

My initial thoughts are that this could only work if the policy environment is altered to make it easier to achieve the results.  For instance, if your objective is to increase overall crop yields in a country, it would be helpful to make the inputs more affordable to the producers.  Then, once the commodity has been grown/produced, it would then be helpful to make it easier to export said commodity.  They also raise some valid points in the article about the capacity of the host country to perform the work in the first place.

This is basically like cash-for-work on a much, much larger scale.


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