Today’s top-down, economic development aid model is unavoidably flawed. The nature of economic development requires idiosyncratic solutions that can’t be successfully designed or administered by outsiders. Instead, locally grown solutions aimed at transforming the institutional environment in favor of market growth, primarily through securing economic rights for the poor, represent the best chance for accelerating the pace of poverty alleviation throughout the world.

For outsiders, this represents a serious dilemma. Is there a way to help without interfering? A new strategy offered by Atlas Network successfully combines the resources of philanthropy with the locally grown research and advocacy agenda of independent, market-oriented think tanks working to strengthen the institutions that foster growth for the world’s poor. Benchmarking their efforts to global indices like the “Doing Business” report published by the World Bank, those think tanks are making measurable progress. The results are significant.

A different approach is needed. A different approach is working. Let’s start doing development differently today.

Small Reforms, Big Impact

The statistical results are encouraging, but we can also look to broader insights about the nature of growth and development to know that this strategy is the best way forward. Entrepreneurship and economic development experts William Baumol, Carl Schramm and Robert Litan in their book, “Good Capitalism, Bad Capitalism,” emphasize the importance of economic freedom in achieving growth, particularly in countries with high levels of poverty. Recognizing the political realities many countries face, they concluded that significant results still could be gained even from achieving reform “policies at the margin” (emphasis in the original).

How do we identify such marginal policies? In essence, by their association with affirmative answers to the following questions:

— Is it easy to start, grow and close a business?
— Is it easy to realize the rewards of productive behavior?
— Is it hard to realize the rewards of unproductive behavior (fraud, theft, rent-seeking)?
— Is it hard to stop competitors, except by competing? (i.e., barriers to trade and investment?)

The world’s poor need better places to live and work where their productive efforts will not be blocked or punished. The think tanks that champion their cause at home have proven they can achieve results and, in so doing, they have earned the trust of philanthropists who are ready to overcome the outsider’s dilemma by putting their support in places where it can truly make a difference.

Today’s aid programs will never achieve the big results we truly desire — the end of poverty worldwide. Our best chance at nearing this goal is to advance a strategy that recognizes, at its core, the crucial knowledge and leadership that only local people can provide for their own exodus from poverty. With humility, outsiders can help by supporting independent, non-governmental organizations who are advancing institutional reforms shown to improve economic rights for the poor and economic prosperity for all. Then individuals acting for themselves will take care of the rest.

A different approach is needed. A different approach is working. Let’s start doing development differently today.

Atlas Network proudly adds its own unique perspective to the growing movement of academics, aid experts, and scholars who passionately believe change is needed. For more about the work of these reform advocates, please visit the DDD manifesto here.