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How "Big Ideas" Are Actually Hurting International Development
schnell writes: The New Republic is running a fascinating article that analyzes the changing state of foreign development. Tech entrepreneurs and celebrities are increasingly realizing the inefficiencies of the old charitable NGO-based model of foreign aid, and shifting their support to "disruptive" new ideas that have been demonstrated in small experiments to deliver disproportionately beneficial results. But multiple studies now show that "game changing" ideas that prove revolutionary in limited studies fail to prove effective at scale, and are limited by a simple and disappointing fact: no matter how revolutionary your idea is, whether it works or not is wholly dependent on 1.) the local culture and circumstances, and 2.) who is implementing the program.
For anyone who makes the mistake of believing this AC, the actual TL;DR is: Ideas that work well, even ideas that have been demonstrated to work very well through rigorous study, oftentimes only apply to the specific area which was studied. For this reason charitable development needs to stop thinking big and start working incrementally, village by village. Nothing and nobody can pull an entire country or continent out of poverty in a timeframe that isn't counted in decades.
He gives examples - a rigorous four-year study found that giving deworming pills to children in a particular area in Kenya had a larger impact on school attendance than giving them textbooks, even though they were very short on textbooks. A deworming program has subsequently been rolled out to cover millions of children in Africa and India, with a hope for similar results, but they've stopped with the rigorous testing with the feeling that they've sufficiently demonstrated the program's usefulness. The author points out several reasons why, for some areas, textbooks might still be a better answer and makes the claim that grand programs like this one can be both ineffective at their goals and have pretty crazy unforeseen consequences. There's a funny example of unforeseen consequences with a group of teenage latina girls who went through a workshop intended to keep them out of gangs, a successful workshop: not one of them was arrested for violence within six months of the end of the program. However, within those six months every one of them had become pregnant. Apparently gang membership was fulfilling a need for them that found they had to satisfy in some other way.
this is really really important: anyone wishing to make a difference in the world really REALLY needs to read the book written by Professor Yunus, the joint winner of the 2006 Nobel Peace Price, "Creating a World Without Poverty".
in his book, Professor Yunus describes how he naively studied Economics because he believed that he would be able to change his country's financial situation through studying first world economies. after graduation he set out just after one of the worst natural disasters his country had experienced and realised how completely pointless his studies had been. however he did not give up, and set out to work out what the problem actually was.
he learned that the poor are first and foremost incredibly resourceful... mostly because they have to. he also learned that many of them are, because there are no enforceable usury laws, permanently kept in debt to money-lenders. this shocked him so badly that once he freed an entire village from debt just from the small change in his wallet: something like $USD 15 was all it took to pay off a decade of usury.
what he discovered is that the gratitude of these people when freed from their former situation is immeasurable. the Grameen Bank doesn't have lawyers or debt collectors. the people that they lend money to are so GRATEFUL that they work non-stop to turn their lives around and pay off their loan. in fact, the repayment success rate is around NINETY EIGHT percent. it's so high that the *GRAMEEN BANK* considers it to be THEIR FAULT if one of their customers is ever in default. by contrast in the western world the default rate is 88%. i'll repeat that again in case it's not clear: only TWELVE PERCENT of creditors in the western world pay their debts on time, every time, and in full.
but the main reason why anyone wishing to help the emerging markets and the third world should read his book is because he patiently, with all the knowledge from his economics background, outlines why NGOs, Charity and the "Corporate Social Responsibility" clauses of standard profit-maximising Capitalist Corporations are all worse than doomed but are guaranteed to be ineffective at best and invariably seriously damaging and counter-productive.
right at the start of his book he outlines a surprising offer by Danone to work with him (follow his advice) to actually be effective. it was Professor Yunus's first experience of having been "under the microscope" of people with both big resources and heart. in other words the team at Danone were huge fans of what Yunus was trying to achieve: when he explained to them the financial structure that was needed, they listened, and they did it. they did not go in with a charity, or with donations: they set up a "non-loss, non-dividend" business, selling *locally-produced* yoghurt that happened to have the nutritients that the local population happened (by a not-coincidence) to be chronically deficient in.
the yohurt was sold not at a loss but at an affordable financially sustainable price because the focus was on remaining *stable*, not on exploitation through maximisation of profits: the focus was on allowing people to feel proud of what they achieved, and to take responsibility for their own wealth. they were EMPOWERED through the enormous generous resources of Danone's, but it was a successful venture because they LISTENED to what Professor Yunus had to say.