Foreign aid works best when key decisions are taken by the recipients, not the donors, writes MICHAEL EDWARDS.
IRELAND'S ANNUAL foreign aid budget is nearing €1 billion. That's a lot of money, so what's the best way to spend it? The answer is to stop treating other countries like patients in a hospital and start working with them as partners to find solutions to global problems.
The best recent research on international development by Ha-Joon Chang, Dani Rodrik, Paul Collier and others shows conclusively that there is no one path to economic and social success, so our focus should be on the capacities and opportunities that people need to decide things for themselves, with a minimum of external conditionality.
But "what about accountability to our taxpayers?" is the usual cry from rich-country governments. Forget it - the only accountability that works is exercised locally by constituencies who have a real share and stake in success. That was the recipe that helped the East Asian Tiger economies to transform themselves in record time after the second World War, and the same is happening in China and Vietnam today. South Korea was poorer than Chad in 1945. Today it has an aid budget of its own.
Although it may seem like a paradox, the best way to help developing countries is to forget about developing them, and to reject the idea that the South has all the problems and the North has all the answers.
Instead, let's be equal-minded participants in a joint search for solutions to the problems that face all of us in one form or another, like climate change, the global food crisis, rising inequality and the decline of our democracies. Either we solve these problems together or one country's success will always be bought at the expense of others with fewer resources and less room to manoeuvre.
Subsidising Brazilian farmers to grow crops for biofuels, for example, may help to protect the Irish environment but it won't do much to produce basic foodstuffs where they are needed most. And who knows, we might even learn something in the process from those who are supposed to be less advanced. The British government imported citizen participation in local government budgeting from Brazil last year, and it has been a great success. How many more examples like these might we find if we saw other countries through new and less paternalistic eyes?
HIV infection rates are as high among certain groups of African-American women in the US as in sub-Saharan Africa, and for similar reasons; and per capita incomes in parts of China, India, Brazil and South Africa are approaching those of Appalachia and the Mississippi delta in the US. So in the next 20 years, who will be helping whom?
So far so good, but the reality of foreign aid is moving in the opposite direction - towards greater external control and short-term metrics of success, buoyed up by a rise in government budgets and an explosion in private giving. There's something seductive about the can-do spirit epitomised by celebrities like Bono and philanthropists like Bill Gates, but taken too far it can bring on a terminal case of hubris.
To hear them talk of the new green revolution in Africa, the production of vaccines for HIV and malaria, the benefits of the market through micro-lending and social entrepreneurs, and the possibilities for implanting democracy in other people's countries, you'd think we had been transported back to the 1960s and 1970s when science, planning and technology were king, and the role of the North was to help the less fortunate South; if possible, to save it from drifting ever further away from modernity, defined in liberal democratic terms (heaven forbid there is a viable alternative, like Islam); and, if that failed, then at least to prevent it from wreaking havoc on Northern societies through the effects of terrorism and immigration - not a very inspiring vision for the future.
Rising aid flows may appear to be a good thing, but not if they act as a security blanket that blocks new relationships and necessary reforms. So what if annual aid flows have reached $100 billion (€64 billion), if more than $800 billion is lost each year in developing countries from illicit cross-border flows and corporate tax evasion?
So what to do? Ireland has more flexibility to try out new ideas than much larger donors like the US. So let's not copy them or subsidise their efforts with that extra €1 billion. That won't make a difference.
Instead, let's use our courage and imagination to strike out in bold new directions and hope that others will follow our example. Developing countries would benefit enormously, and so would we.
Dr Michael Edwards is the director of the Ford Foundation's Governance and Civil Society Unit in New York. His latest book is Just another Emperor? The Myths and Realities of Philanthrocapitalism. He is participating in the 2008 Universitas 21 Symposium, Strategic Partnerships with the Developing World: A New Direction, tomorrow at University College Dublin.