Development, From the Ground Up

    How can aid programs be sustainable? Consider focusing on empowering individuals at the local level instead of the usual solution of expanding centralized bureaucracies, which could give rise to more complications. 

    This approach to aid is the subject of Nobel-prize winning social scientist Elinor Ostrom’s book “The Samaritan’s Dilemma: The Political Economy of Development Aid.”

    Ostrom uses the Institutional Analysis and Development framework, which she developed, to analyze the local context of individual decision making and expand it to cover all types of rules that provide various “perverse incentives that hinder sustainability and project success,” according to Claudia Williamson, a post-doctoral fellow at the Development Research Institute.

    The IAD approach views development as a series of collective action problems, and examines the incentives for providing public goods and managing common pool resources. Taking this framework and applying it to aid entails careful study from donors, who must first get to the root of development failures before they can accurately access whether intervention is appropriate, Williamson says.

    “Ostrom’s approach to understanding development is to shift our focus towards the underlying incentives surrounding collection action problems. The traditional solution to such problems is central planning and government regulation, including the use of foreign aid. Ostrom argues, however, that expanding centralized bureaucracies is often counterproductive and may create additional unintended consequences,” Williamson writes in the “Aid Watch” blog.

    “Instead, we should focus on individuals at the local level who are better equipped to develop solutions that are responsive to the complex local conditions generating these problems in the first place,” she says. 

    The title “Samaritan’s Dilemma” comes from an article by another Nobel laureate, James Buchanan, which “explains how donors’ willingness to be charitable incentivizes recipients to alter their behavior in counterproductive ways,” Williamson writes.

    “Recipients may, for example, reduce the amount of resources they themselves devote to the problem at hand. The original problem worsens and donors feel even more compelled to continue support, establishing a cycle of interventionism and reducing the chances of sustainability,” Williamson explains.

    About the author

    • Ma. Rizza Leonzon

      As a former staff writer, Rizza focused mainly on business coverage, including key donors such as the Asian Development Bank and AusAID.