Introduction

Economic development in LDCs [Least Developed Countries] is very hard and, historically, prone to failure.  It rarely fits neatly into corporate time frames, earnings requirements or agendas.  Nor does it fit neatly into either political time tables or within shifting political agendas in “donor nations”. To date, nobody has figured out how to do it on a consistently successful basis:  Not Corporate Social Responsibility [CSR] programs, not the World Bank, not USAID, not the UN, not NGOs — or any combination of the above.  That is what makes the problem so very interesting and so worthy of all of our efforts to honestly learn from experience and keep on trying.  

Further, those programs which have tried to use profits 1 to end poverty have been, in fact, hindered by their profit requirements.  The imperative to deliver 15% compounded annual profit growth rates becomes a harsh limiting factor on CSR programs. It is possibly the case that profits can not be appropriately extracted from a village until it has benefited from sufficient economic development to be able to develop and maintain stores of capital — i.e. to move beyond an early stage economy based on simple cash flows.

The exception that proves the rule, according to Michael D. Benge, Senior Agroforestry Officer, Agency for International Development and seconded to USDA Forest Service, International Programs division (FS/IP), was
The Joint Commission for Rural Reconstruction (JCRR). Benge described this in his 2005 paper “A Foundation to Mitigate Disasters, Restore the Environment and Stimulate Development in Rural Haiti”:

A similar, very successful, U.S.-funded foundation, the Joint Commission for Rural Reconstruction (JCRR), was created in Taiwan in the 1950. The Board of Directors consisted of three Chinese and two American Commissioners, each appointed by their respective governments. The Commission was totally autonomous and hired its own staff and administered itself. The JCRR’s first, major project was to implement Land Reform. With tenure secure, new technologies, agricultural extension and credit was provided to rural communities and agricultural production and rural income soared. Although JCRR was overwhelmingly successful in Taiwan, it was never replicated elsewhere due to tremendous opposition by bureaucrats both in the U.S. as well as in host country’s Ag Ministries, who viewed it as a great threat to their organizations and authority. JCRR is surely one of greatest triumphs in American aid.

This leads to a simple question, have our development dollars from the “donor nations” been guided by the right heuristics, flowing to the right people, with the right metrics, applying the money to the right projects over the right time scales? Our dismal historic rates of success suggest something is not quite right about our approaches. Thus it may be fruitful to ask new questions in order to find new answers.

For the full essay, please read the attached PDF file.

microgifts.pdf

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