Despite Good Intentions: Why Development Assistance to the Third World Has Failed

Story Eleven: Spare No Expense—the Very Best

STORY ELEVEN Spare No Expense— the Very Best Pakistan, 1994 164 Ben’s heavy-duty ear protectors muffled the sound of the helicopter blades. He was uncomfortable enough sitting in the big machine with the six prominent members of the Program Development Committee with whom he’d have to behave so diplomatically over the next week. Not being able to talk for the next hour was a relief. Anyway, they were busy looking out the chopper’s windows as they flew up the Indus valley. Ben had done the trip a few times before, and as he was in a middle seat, he just closed his eyes and reflected on what he had learned about this hugely expensive development effort. In the very early 1980s a wealthy royal patron became deeply concerned about the poor quality of much of what passed for development in the “third world,” particularly in Africa and parts of southern Asia, areas he knew well. In the royal patron’s view, almost everything having to do with development in the “third world”—education, transport, financial markets, government, laws, health care, even tourism—suffered from a pervasive mediocrity. To some extent he saw this as an inevitable lag between what the industrial “north” had accomplished in its head start on modernization and the well-known disadvantages and handicaps of the “south.” But lags can be overcome, he believed, especially with investments in training and “institution building.” In the royal patron’s view, institution building as a development strategy had been generally neglected in the 1960s and 1970s. If development donors had thought about this at all, they had concentrated on the institutions at the top, those of the state, and then more with the bricks and mortar of those institutions than their structure or content. To redress this would mean a much broader approach. But he also saw mediocrity in development as a subtle plot, the outcome of the development industry itself not being willing to put in quality work to get quality results. For the royal patron, it was as if the mainstream actors in development really did not care enough to give their best. So the royal patron set up a foundation, with headquarters in Europe, to redress the problem of mediocrity. No expense was to be spared, since the royal patron recognized a first principle of quality: You get what you pay for. He therefore hired to run his foundation a core group of ten people who had decades of experience and in every other respect were top-drawer professionals. In the early 1980s, when the foundation’s work began in earnest, these ten people had an average age of about forty- five, all had worked in development for most of their careers, all had spent time with some of the most prestigious institutions in the industry (such as the World Bank), and all had high graduate degrees (M.D.s or Ph.D.s). To attract (and keep) them, he set up a salary scale that bore no relationship to salaries in the rest of the industry. Instead, it was pegged to what senior professional managers would make in the private sector. This meant salaries from one and a half to three times the norm in the development assistance industry. The royal patron had to answer to no one in making these policies and decisions, because he provided the overhead for the foundation’s operations and most of its initial grant funding, at least during the first years of operation. But since his ambitions were grand and his awareness of the seriousness of the problems he wished to address very realistic, he knew large efforts would be required. To that end he also knew he would have to leverage funds from other sources. He set up branches of the foundation in major industrial nations, putting in place chief executives and staffs whose main function was to raise funds from bilateral agencies for the foundation’s projects. These offices were also funded from the royal patron ’s own pocket. Spare No Expense—the Very Best 165 Branch offices of the foundation were also set up in the developing countries themselves, where loyal captains, handpicked by the royal patron , would receive and bank the funds and see that they supported the projects the foundation favored. The initial projects were schools and hospitals. These were relatively straightforward efforts, but again...