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Less Is More
- Article from:
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Stanford Social Innovation Review
- Article date:
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July 1, 2008
- Author:
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Copyright informationCopyright Stanford University, Center for Social Innovation Summer 2008. Provided by ProQuest LLC. (Hide copyright information)
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Financial aid discourages innovative solutions to poverty by Liisa Välikangas & Michael Gibbert
The prevailing orthodoxy when it comes to helping the poor has boiled down to a catchphrase: Give adequate resources to those with inadequate resources.
In our experience, however, flooding a country with financial aid reduces, and sometimes voids, the incentives to find innovative solutions to overcoming resource constraints.
Afghanistan, for instance, has proved a dismal failure in development, despite an investment of some $20 billion in development funds. Sure, the numbers per capita are small, but at the least, people's living standards should have improved in the capital. But as a ...