Lars says:

I'd just like to ask for a little less sugar-coating of the outcomes, a greater recognition of the complementariness of these efforts with traditional development, and a willingness to acknowledge that the risk of getting a $150 loan paid back is far less than the risk to an entire generation's future by not supporting the formal instruments of large-scale assistance, for example overseas direct assistance (ODA).

And I'd just like to agree!

Without governments being committed to large scale assistance, I think there will always be insufficient total investment in the tackling of world poverty. But without popular support for international development aid, governments will always be less than fully committed,

So the route to greater governmental commitment is through greater popular support. Yet popular support seems to wane whenever there is reduced popular involvement.

Thus the need for the complementariness of approach of which Lars speaks. The total amount of money made available for international development through, say, Kiva loans may be much less significant than the actual shift that such loans can achieve in terms of public awareness; and this can lead in turn to the approval of much larger- scale investment projects.

And again, one of the greatest factors leading to a loss of public confidence in governmental investment in international development aid is the corruption and waste associated with government-to-government investment. Perhaps this points again to the need for governments to channel much of their funding through development agencies and organisations that already command considerable public support.

Paradoxically, the more money that is donated by the public to non-governmental international development aid organisations, the easier it becomes for governments to do likewise and invest more in overseas aid themselves.

And since public awareness goes hand in hand with governmental resolve, it enpowers people to invest their resources in small scale development initiatives, in the sure knowledge that their small-scale actions will also contribute incrementally to an eventual likelihood of much larger government funding.

I don't delude myself into thinking that the World Connectory project could mobilise more than a fraction of the finances required to make even a modest dent in the problems of global poverty, but I do think that the more that people become aware of these problems by getting involved in an international development project, the easier it will become for governments to pledge greater international funding and then to honour their pledges in full.

David Bale said:

The total amount of money made available for international development through, say, Kiva loans may be much less significant than the actual shift that such loans can achieve in terms of public awareness; and this can lead in turn to the approval of much larger- scale investment projects.

Indeed! Which is why I marvel at the smarmy invitations to "change a life," "end poverty," or "change the world."

Thanks for your thoughtful reply.

Some videos that look at the downsides of "development as usual"

Andrew Mwenda: Let's take a new look at African aid

Arguing (among other things) you cannot reduce poverty but must focus on wealth creation. Reframe.

Wealth is a fiction of income, and income is a function of a well paying job. No one knows anyone that’s grown wealthy by receiving charity.

Also, see the online video (if you have a good connection)

They Come In the Name of Helping - a film by Peter Brock

Indeed, wealth creation is critical. At the same time, I think it is a bit apples and oranges: development is not synonymous with simply efforts to reduce poverty. Rather, development is the establishment of the conditions for wealth creation, especially in a highly competitive global marketplace.

This is where large-scale institutions play an important role. Infrastructure development, education, health, legal protection, etc.

Mark wrote:

No one knows anyone that’s grown wealthy by receiving charity.

Um, wow. Its like the opposite of Reagan's "welfare queen" imagery... The converse is so blazingly true that I'm afraid I've missed your point: almost everybody knows someone who has become successful because they received assistance, whether it is in the form of government, private, or non-profit assistance.

Think about the United States and its development: much of the finance for large-scale (and profitable) development came from Britain. Its why the revolution was so painful for so many.

That said, today's economy is not the economy of the 18th century.

Oops, I was going to include notes from the video, and that was part of it, then forgot to take that part out...please ignore.

>>Wealth is a fiction of income, and income is a function of a well paying job. No one knows anyone that’s grown wealthy by receiving charity.<<

And instead should have read function not fiction

Jeez. Sorry.

This wealth/development/modernize thing has been on my mind a lot.

When Clare Mulvaney was here - gads....almost 2 years ago - she was floored when she saw all of the computers and internet connections at the university. Computers in Thailand are something I had grown used to seeing.

When I was in the faculty administrative office a few months ago, I realized that most of the people in the office, although they had computers on their desks, had not a clue as to how to use them. They didn't know how to sort data using excell. They didn't know about mailing lists. When I commented on this problem to the Dean, he laughed and said Thailand was a country that had modernized but not developed.

I thought that was funny but the phrase has come back to me often since. Modernized but not developed.

Development requires education. So, what are the prerequisites of education? Infrastructure for sure and infrastructure for schools requires more than micro-credit...I think. There are schools and "education" in Thailand but most of the development is coming from outsiders or from Thai people who have been educated overseas.

More than schools are required for education and development. There is an attitude. An "institution" as my economics text describes them. An institution of trust in the future. An institution that is built on people's confidence in themselves to be able to solve their own problems. It is these kinds of institutions that many people are reporting are in serious trouble in Africa where bad and corrupt government has eroded all of the institutions of trust and confidence of the people. Institutions of ownership are required for development of market economies. Institutions of laws and enforcement are required.

I look at what has happened in Uganda, Kenya and Zimbabwe...how? How can we as outsiders support the people in these countries to be able to enable those required institutions? I am beginning to think we haven't a clue. Micro-credit certainly has a place but much bigger issues must be tackled.

If the people can set up banking/microcredit institutions from a grassroots level but the government can come in and wipe them out in a single swipe, what incentive is there to do the work?

Just call me Ms. Friday Morning-Doom-n-Gloom!

That's a tidy summary, Linda: modernized but not developed. It summarizes so compactly what has been described as the failure of the "modernization theory" of development.

Sadly, I don't have a good answer to your question.

There is another related point though. And I think this gets back to some of your areas of enquiry.

I believe that there was a time, which has disappeared since (roughly) the '20s, when one could survive (more than subsist) without regular access to cash. Self-reliance, barter, sharecropping, and other instruments were in place to enable rural livelihood.

Today, money has penetrated nearly every corner of the earth, just about every aspect of daily living. I personally think it is very difficult to talk about "development" without assistance within this context, though I do not doubt that there are ways and examples...

In this regard, I find the MFIs providing value, though I am not at all certain it will prove much more than a tiny bridge for a relatively small proportion of the population (many will fail, many will require a constant infusion, and many, many others simply will not have the wherewithal to access the cash).

I agree with you that peer to peer relationships are vital. Matt Flannery of Kiva recently blogged about people posting pictures of their pets in their lender profiles. Flannery writes:

Kiva is all about connecting people over disparate worlds as equal business parters. It will be harder and harder to make the case that we are fulfilling our mission as cats become an increasing constituency among the lenders. I'm sorry, you can't be a business partner with a cat. Certainly, it can be very degrading to learn that the pet of an American was able to make a life changing loan to your business in Western Kenya. Are we commoditizing, rather than dignifying the low-income entrepreneurs getting loans on our site? If so, we need to pull a u-turn fast.

Sometimes sea changes are slow enough not to be really noticeable, I guess like putting a lobster in a pot of cold water and turning up the heat. There are many pitfalls along the way to inventing new ways of doing things. Your point about a little less smarm is well taken. Still I do see changes. Among the changes that are particularly significant are mobile phones. Some phone companies have been creative as have civil society groups. The ways that technology can be leveraged are just beginning to be invented.

I love your deep streak of realism, but I also want to say, in a not deliberately smarmy way:

Keep the faith, baby!

Linda, I came across this article at a blog about sustainable entreprise. Seemed somehow a part of a response to your question...

Business and Poverty: Opening markets to the poor

By Djordjija B. Petkoski, V. Kasturi Rangan and William S. Laufer (Development Outreach)

In recent years, business has played a significant role in alleviating poverty, especially in sectors such as telecommunications, information technology, and microfinance. Certain initiatives in these sectors, such as microfinance in urban Latin America and wireless telecommunication in Asia, have yielded impressive results, creating unrealistic benchmarks against which other corporate programs are being judged. Although businesses have made significant contributions in some sectors, in many others they have been unable to “move the needle” on poverty.(1)

John, hard to keep a faith that might not have been there in the first place, baby!

[My new word: smarmalade - a liberally applied fruity jelly of grandiosity applied to toast. Tongue in cheek, of course.]

Lars, I most appreciate your good humor towards me. Oh yes as much as I'm fond of magical thinking, I do think realism is best. Now if I could bring myself closer to realism...

I'm curious whether anyone here is a World of Good user? Just came across it the other day and couldn't help wondering about its relation to O.net in terms of goals, etc. This site seems to be strictly about "informing choices" through online discussion and networking.

The online discussion part at World of Good is a fairly recent addition to their model (like within the last year). I'd not heard eBay had acquired them.

Smarmalade, I like it ;-0

I've learned a lesson or two over the past few years about those that pitch the "come and help change" line soliciting collaboration and then don't reply when you actually take them at their word.

Now there's this chap called Gates, who's joined up with my way of thinking. He calls it Creative Capitalism, cos it's the economics that dare not speak its name.

Michael Kinsley and Conor Clarke host a conversation intended to produce a book which is getting quite interest ing

http://creativecapitalism.typepa d.com/

"Modernised but not developed" - sounds like an analogy that could describe society much closer to home ! I'm seeing analogies everywhere these days. I never thought I'd find myself musing on the economy, I've never paid much attention to money, but more and more I see it as one of many tools we should be using for the common good. Communication is another, and direct aid a third (in no particular order).

I'm actually not very keen on marmalade. I prefer jam :-)

Lars said:

Rather, development is the establishment of the conditions for wealth creation, especially in a highly competitive global marketplace.

I prefer, development is removing the impediments to wealth creation, especially in a highly competitive global marketplace.

Ebay did not buy world of good, they are just partnering with them and WoG is changing its business model to rely more on Ebay. I think its because they have a major inventory overhang and are hoping there are branding benefits. This has created major fights as many hard core Fair Traders are now anti-world of good as they think they have sold out.

I'll be curious to see how they can integrate the sale of that type of merchandise on eBay. That kind of partnership seems far from selling out to me, it will be interesting to see what eBay and WoG can make of it.

Lars,

The so called credit crunch might throw up some nice shenanigans. A downturn, seen analytical, might be seen as a negative thing. However, it probably makes for better conversations and healthier bodies. (have a look at some pictures from people in the 30's)