In a recent interview on the effectiveness of aid, the economist Ha Joon Chang stated, “I’m not, in principle, against private involvement in the aid business – in fact, if aid money can be a seed or a catalyst to bring in more money, why not? The danger is that if you don’t monitor it properly, the private sector can actually destroy the nature of the original programme.”

This idea of monitoring the interventions of the private sector in the development sphere, mirror the recommendations made by the Advisory Group Report on the National Round Tables on Corporate Social Responsibility (CSR) and the Canadian Extractive Industries in Developing Countries.

The first recommendation is to create “The Canadian CSR Framework”.  This report was published in 2007 and the timeline recommended for this framework was between 3 and 5 years.  It is now 5 years later, and although debates around this topic have continued, a framework per se has not been created.  The current policies that are shifting CIDA’s role do not discuss any cohesive accountability mechanism for the extractive sector that is now engaged in international development.  To be fair, the 2007 report does not discuss voluntary vs. mandatory regulation within a framework, but the spirit of the recommendation is to have a certain standard that Canadian companies comply with.

Why is this idea important?  This brings us back to Ha Joon Chang’s statement that if private aid is not monitored properly, it can destroy the original intention of the development programme.  Although not incompatible, the private sector has different goals than the development sector.  Only where these goals overlap and where partnerships are regularly monitored and rigorously evaluated can Canada become a true thought leader and develop best practices for the private sector to contribute to development.

What are the areas where a complementary monitoring strategy could be implemented?  Ha Joon Chang has already identified one – leveraging resources.  Both the private sector and the development sector must leverage resources successfully (from local communities or from outside sources of funding) for interventions to be sustainable.

 

What other areas would you identify as complementary?  Do you have other thoughts on this topic?