The Future of Development Aid

South-South (and South-North) cooperation shows that effective aid requires more than money. Knowledge, experience, technical expertise, and coordination are equally important.

Finally, transparency and accountability are critical to long-term success. Indeed, a lack of transparency can turn even real progress into outright failure. For example, Indonesia’s Suharto, a benevolent dictator who favored small elites and fought poverty, but allowed corruption to flourish, eventually faced a population that was fed up with the lack of political reform. More recently, several leaders in the Middle East and North Africa who produced strong but non-inclusive growth met a similar fate.

Transparency is important both to developing countries and to donors. The World Bank is now publishing more information on its programs than ever before, and is sharing its development data for all to use, free of charge. We also monitor our performance and share the results in a public corporate scorecard.

As rich countries tighten their aid budgets and developing countries become more vulnerable to the effects of the ongoing crisis, the question is not whether aid works, but how it can work better. Learning from mistakes, working together, and making sure that countries are in charge of their own development are critical to successful aid programs. Anything less will prove the skeptics right.

Sri Mulyani Indrawati is Managing Director of the World Bank Group and a former finance minister of Indonesia.

Copyright: Project Syndicate, 2011.www.project-syndicate.org

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