Editor’s Note: The rise of private aid donors—foundations, NGOs, corporations, and individuals—is changing the landscape of development assistance. As private aid has doubled within the past decade, the developing world welcomes these new players, and Raj Desai and Homi Kharas argue that they have the potential to be more effective in ending global poverty than the traditional bilateral and multilateral aid agencies.
Global philanthropy is remaking the relationship between the world’s rich and poor. Private aid – aid provided by foundations, corporations, non-governmental organisations, and individuals – has doubled over the past decade and may soon overtake ‘official’ foreign aid. Something of a consensus has developed around the emergence of private aid – that is it is less prone to corruption and more likely to benefit the poor. While private aid has the potential to be a more effective form of aid, it remains vulnerable to many of the same problems affecting official development assistance. Private aid that is both accountable and well monitored, however, can potentially catalyse more competitive markets for foreign aid, and dismantle the monopoly held by traditional bilateral and multilateral donors.
This is a proof version of an article whose final and definitive form has been published in Survival 2008, The International Institute for Strategic Studies; Survival is available online at http://www.iiss.org/.