It seemed like a good idea while we were at it: coordination instead of competition

A few months ago, Owen Barder wrote a ground-breaking article: Beyond Planning, Markets and Networks for Better Aid. As a development practitioner, being confronted with the latest ideas on best practices from ODI and the daily chores of coördination, there seems to be little movement towards a more market based approach. Does the following story seems familiar?

Programming for success:
A country has retrenched its administration heavily, and when the country gets clogged up with traffic jams, mostly because of the potholes, it finds no engineers left to advise it. Something must be done.
The first step is to bring the construction firms together and ask them to propose the legal standards for road construction.The second step is to ask the same industry to prepare an annual investment plan for road construction, to be proposed to the government. An industry commission is created to prioritize when the government budget is not enough. However, if the traffic jams don’t diminish, budget will rise.
In order to keep the road building effective the following measures will be taken:

  • All companies in the industry should get a piece of the pie. No exceptions made. No strong companies sidelining weaker ones.
  • Companies should have their own technical or geographical niche. As overlap is inefficient it will be eliminated, coördination at all levels will be needed to make sure there are no gaps nor overlaps.
  • In order to be sure everything runs smoothly, all planning decisions are taking in consensus among all companies involved. Work should be coördinated at all levels.

As there could be some questions on accountability, it is agreed that the different regions of the country will be represented in the respective boards of the companies, and the same governments can delegate politicians to sit in the management.

What is illegal in business is a good idea in development

The practices described above have been used in different sectors, the energy sector and arms industry most notably.

However, it is only in the development and humanitarian sector these practices are seen as conventional wisdom. In a business environment this approach would be illegal.
An overview:

  • The government has the obligation to follow up on the expenses made, to assure the products were delivered. This cannot be done without a minimum of technical capacity.
  • An industry writing its own legal standards or its own investment plan is a clear conflict of interest. Sitting on the board and on being part of the management equally.
  • A cartel is created to cut the pie, competition is eliminated
  • Within specific niches, monopolies are created.

Perhaps we should be more active in searching for alternative approaches to the current partnerships in development.

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