Why is foreign aid so often ineffective? Donors have slowly come to realize that the failure of foreign assistance is not rooted in insufficient funding, but is instead institutional in nature. On the one hand, local business owners are rarely involved in project design. On the other hand, without the ability to monitor and control the progress of interventions, donors face formidable challenges, such as unanticipated mistakes, malfeasance, and shirking.
Answering the demand for foreign aid alternatives, Clifford Zinnes assesses a new class of "tournament" approaches that promise to improve on the lackluster performance of conventional methods. In such "games," beneficiary groups—often local-level governments—act as teams and compete against each other, under explicit predefined rules, to achieve the best implementation of a particular project. Those teams that cooperate internally are thus the likeliest to win the awards. This cooperation through competition allows the tournament approach to avoid the perverse incentives that often hamper intervention effectiveness.
Zinnes assesses the performance, sustainability, time frame, and cost of a dozen recent applications, including those sponsored by the World Bank, USAID, the United Nations Industrial Development Organization, the government of Indonesia, and the Rockefeller Foundation. He also discusses new opportunities for improving and scaling up the application of tournament-based projects.