On Tuesday 19 January, Director of External Affairs Alexander Kohnstamm was one of the panelists invited to discuss development cooperation 2.0 during a debate organized by the Dutch Postcode Lottery, The Climate Group and De Balie.
As governments reduce their spending on development aid, philanthrocapitalists like Mark Zuckerberg and Bill Gates are filling the gap. Linsey McGoey spoke on how development aid has become ‘big business,’ focusing on the Bill and Melinda Gates Foundation. She explained that the notion of philanthrocapitalism is not as new as we think, referring to economist and philosopher Bernard Mandeville’s The Fable of the Bees, written in 1705. This poem describes a bee community which is thriving – until the bees are suddenly made honest and virtuous. As soon as their desire for personal gain disappears, their economy collapses. This touches on many key principles of economic thought, including division of labor and the ‘invisible hand,’ decades before these concepts were further explored by Adam Smith. Mandeville’s message is that without private vices there can be no public benefit. McGoey argues that this is reflected in today’s philanthrocapitalistic approach, where, she says, economic self-interest and altruistic acts go hand in hand.
Mark Kenber, CEO of The Climate Group, Dutch journalist Linda Polman and PharmAccess Director of External Affairs Alexander Kohnstamm then joined the debate, led by Dutch journalist Marcia Luyten. The panelists discussed topics such as transparency, accountability, sustainability and working with both local governments and the private sector. Where McGoey was critical of the amount of transparency given by private donors, Kohnstamm countered that market-based innovations such as loans for doctors or insurance plans for low-income people are not only empowering in the sense that they are providing the power to choose, but are also a way to boost transparency and accountability. The developments in the realm of mHealth, especially, will take this to a new level.
The debate also covered how the roles of NGOs, governments and the private sector have become blurred. In McGoey’s view, mixing public and private players in financing and implementation can lead to opacity and self-serving mechanisms. She noted that, more and more, for-profit organizations are depending on funding from non-profits and governments for their philanthropic activities. While some agreed that this was worrying, it also provides many opportunities. Kohnstamm noted that ‘When a public good hasn’t been delivered by the public sector for generations, PPPs can be an impetus for change.’ He provided the example of M-Pesa, which was kickstarted by a grant from the British government to Vodafone.
Finally, panelists noted that while working to achieve maximum impact is key, the focus on efficiency measures can sometimes stand in the way of developing and piloting the game changers of the future.
Watch the debate here.