Development aid is in need of a major overhaul. This must include a better assessment of the priorities in specific developing countries: governance reforms designed to achieve a fairer distribution of income or economic reforms to increase growth. This is one of the important research conclusions reached by Rutger van den Noort, who will be awarded a PhD for his work on this subject on Thursday, 22 December at Delft University of Technology (TU Delft, the Netherlands).
Since 1952, developing countries have been classified as Third World countries. According to Rutger van den Noort, this classification has now become outdated because the differences between developing countries have increased significantly in the intervening years. 'As a result of this, there are now five clusters of countries, rather than three. The new classification takes account of differences between developing countries in terms of factors that are relevant today, such as the proportion of poor people in the population, the gross domestic product per head of population, energy consumption and labour productivity. Half a century ago, these factors did not seem important in the fight against poverty, but they are now essential in order to gain an effective understanding of what is and is not possible in developing countries.'
This new perspective clearly demonstrates that a 'one-size-fits-all' approach cannot be applied to development aid and highlights the necessity to first make an assessment, from a global perspective, in terms of what are known as the five Global Poverty Clusters (GPCs). Only then should there be a focus on a specific country in order to set priorities, argues Van den Noort.
In his thesis, Towards the end of global poverty, the TU Delft PhD student proposes a radical innovation of the development aid sector, based on this classification into GPCs, combined with what is known as the Cyclical Innovation Model. According to this model, it is necessary to coordinate three complimentary leadership tasks at the highest level: formulating a future vision (what do we want to achieve with the development aid sector?), developing a roadmap to achieve it (what approach will we adopt?) and applying a cyclic process model (how will we actually achieve these changes?).
The cyclic process model provides an outline of the related activities on which the development aid sector will need to focus. These are: conducting academic research into the technical and economic possibilities of the specific developing country; applying technologies that are appropriate for what may be limited infrastructure in that country; developing new products that are not only needed by the developing country itself, but will also enhance its competitive position and, finally, establishing trading relations in order to bring new products to the world market under fair and competitive conditions.
Van den Noort: 'This will make it possible for countries to develop their own knowledge economies, which can compete effectively in the global economy. Clearly, this new approach will call for a completely new skill set from the development aid sector. In this, the Cyclical Innovation Model will serve as a game-changer for the sector.'