
Allocating Global Aid to Maximize Utility
In a paper and blog, Charles Kenny discusses the idea of the declining marginal utility of income and its potential use in allocation decisions.
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In a paper and blog, Charles Kenny discusses the idea of the declining marginal utility of income and its potential use in allocation decisions.
As development agencies transition from their immediate COVID-19 response towards a medium-term strategy, their leaders see a clear need to rethink some key aspects of their underlying business models. The Development Leaders Conference brought together heads of bilateral development agencies and senior management from selected multilateral institutions.
In Norway last year I met with the impressive staff of one of the world’s largest and smartest NGOs. They were unhappy that Norwegian aid money was being used to discourage deforestation in Brazil instead of to immunize children and educate girls in low-income Africa—in other words, to deal with climate change rather than “development.” I countered that minimizing climate change is a crucial piece of development, and urged them to rethink the issue.
Something’s stirring out there, as the perennial grumbles about official development assistance (ODA) morph into claims of its demise. Last year, Jean-Michel Severino and Olivier Ray ventured a coup de grace in a CGD working paper, The End of ODA: Death and Rebirth of a Global Public Policy. Their proposals for resuscitation have just appeared in a second CGD working paper, The End of ODA (II): The Birth of Hypercollective Action.
This is a joint posting with Ayah Mahgoub
To all those concerned about the future of foreign aid, please take the opportunity to read the works included in CGD’s new Innovations in Aid mini-series. The first paper in this series “The End of ODA” is by Jean-Michel Severino and Olivier Ray, and though it was started before the current global financial crisis reached its height, it is more relevant today than ever before. In this paper Severino and Ray describe shifts in the objectives of ODA (official development assistance) over time, and conclude that it is time to reform the concept and rename it “Global Policy Finance”.
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