How Feedback Loops Can Improve Aid (and Maybe Governance)

August 13, 2013

If private markets can produce the iPhone, why can’t aid organizations create and implement development initiatives that are equally innovative and sought after by people around the world? The key difference is feedback loops. Well-functioning private markets excel at providing consumers with a constantly improving stream of high-quality products and services. Why? Because consumers give companies constant feedback on what they like and what they don’t. Companies that listen to their consumers by modifying existing products and launching new ones have a chance of increasing their revenues and profits; companies that don’t are at risk of going out of business. Is it possible to create analogous mechanisms that require aid organizations to listen to what regular citizens want—and then act on what they hear?

This essay (part first-person account, part research and analysis) argues that the answer is yes. I first look at the current mental model in development, in which experts are largely responsible for determining which projects are implemented and for evaluating the impact of those projects. Partly because of information problems and partly because of incentives, this approach results in slow innovation and little responsiveness to what citizens really want. I then review the potential for new approaches such as randomized controlled trials, concluding that their applicability (and even desirability) is limited for cost, technical, and theoretical reasons. I conclude (along with others such as Pritchett, Samji, Hammer, Woolcock, and Easterly), that only approaches that provide a faster and more steady stream of information from varied sources—especially citizens—are likely to improve the quality of aid.

In the future, the default model should be that aid agencies need to demonstrate (a) why they believe regular citizens actually want each proposed project and (b) how citizen voice will be used to ensure high-quality implementation. Rather than creating an immediate mandate, however, the best approach in the near term may be to find out what works and then gradually phase in a series of requirements.

Fortunately, many examples have emerged in which direct feedback from citizens has been solicited as input into both the selection and the implementation of development initiatives. Not all have been successful, but some have led to significant improvements in outcomes. Being successful—having a closed feedback loop—requires not only that citizens be listened to but that their voices be acted upon in the form of changes to aid programs. The essay provides a set of principles that can be used by practitioners to design feedback loops with a higher probability of success. It also provides a set of key conceptual issues that remain to be explored in depth by researchers, as well as a potential implementation road map for leaders of aid agencies.

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