AUTHOR: Bernard Laurendeau (Managing Partner, Laurendeau & Associates)
At the heart of most International Development efforts is the noble goal of reducing poverty, although it is often coupled with geopolitical interests. Since the 1970’s, trillions of dollars have been poured into International Development interventions, flowing from the West into what was then called the third world, now referred to as frontier or emerging economies.
After a few decades in action, the trillion-dollar development industry has yielded limited results in alleviating poverty in southern hemisphere nations. In the meantime, a nation like South Korea lifted itself out of poverty through industrialization and innovation- instead of external assistance - grew to become the 10th largest economy in the world and transformed into a significant donor.
If the development industry could be likened to a piece of software, it would require a major upgrade to address all the bugs and issues accumulated over the years.
But before considering a ‘product’ upgrade, let us examine the current user manual of this industry. It is rather straight forward – see figure below.
At first glance, the user manual seems comprehensive, efficient, and effective. However, when performing a more thorough troubleshooting of the industry, what emerges as the root cause of all its bugs and issues is the operating system itself.
Indeed, the underlying premise of the industry is that poverty exists in many forms around the world, and it needs to be reduced.
Case in point: as a young engineering student in France, I remember organizing fundraising events to build a kindergarten in Ethiopia. A few years later, after I graduated and stopped raising funds, the kindergarten budget started running dry. The playground equipment was not maintained, some teachers were not getting paid on time; in short, what we had built was not sustainable.
To alleviate the “poverty” in education, we forced the construction of a kindergarten. Instead, we should have approached this problem by finding a solution to create “wealth”, obviously for the kids in the of form of knowledge, but also for the whole ecosystem serving them. Indeed, the solution could have been to invest in an entrepreneur with a sustainable model, able to raise funds and resources to build an innovative kindergarten.
Similarly, for large international development interventions, addressing poverty by poverty reduction interventions yields limited result. Instead, these interventions should be planned and designed as wealth creation programs. Such programs would create self-sustaining ecosystems that are bound to yield greater results.
There are positive signals in the development industry indicating that it is headed in that direction. It is reflected in the program taxonomy (e.g. catalytic) as well as in the type of funding deployed recently (e.g. risk capital). It also reflected in the evolution of the type of assistance; Between 2000 and 2017, Development Finance Institutions (DFI’s) contributions have increased seven-fold from US$12 billion to US$87 billion when development assistance only tripled, going from US$54 billion to US$146 billion during the same period.
These signals are encouraging however they seem to be only minor upgrades.
To create real and sustainable impact in emerging economies in a short amount of time, the industry requires a major upgrade, a paradigm shift.
In essence, there needs to be a Disruption of International Development for Good (DIG4Good). For good because it remains a noble cause. Also, because the industry should cease to exist for good after a set amount of time when all problems are solved in a sustainable manner.
A key recipe for success in the new paradigm is the ownership of the disruption journey. Indeed, the disruption journey needs to be owned by recipient countries in collaboration with partners. Rephrasing the latter sentence in the new paradigm, the disruption journey needs to be owned by investee countries in collaboration with stakeholders.
Decision makers from investee countries should define a tailored, localized, and agile DID4Good Playbook- rather than a static user manual- to create wealth within a timebound roadmap, to progressively sunset all external assistance while ensuring local market dynamics take over.
In the second part of this paper, we will dive deeper into the specific aspects of the DID4Good Playbook.
 Developing countries face $2.5 trillion annual investment gap in key sustainable development sectors, UNCTAD Report, Geneva, Switzerland, 24 June 2014
 The Role of Development Finance Institutions in Enabling the Technology Revolution, Center for Strategic and International Studies (CSIS), June 17, 2019