By Nuno Gil, Professor of New Infrastructure Development, Alliance Manchester Business School, The University of Manchester
After many decades of development assistance, we are still failing the poor. We have reached a broad consensus that promoting economic growth and welfare requires a two-pronged approach: building institutions matters, but building infrastructure matters too. Hence, focusing development assistance on one goal at the expense of the other will not work. Yet, frustratingly, development assistance is only now starting to look for ways to become truly ambidextrous.
If we go back to the first decades of development assistance, the prevailing approach was to emphasise stand-alone infrastructure projects. At the time, traditional donors used limited conditionality and the deals were not transparent. But by the mid-1980s, the donor community realised that this choice was leading to disappointing results in terms of poverty alleviation and economic growth. By focusing on quick infrastructure building at the expense of institutional reforms and local capability building, the ruling elites could exploit weak institutions, turning the new infrastructure projects into instruments to enrich themselves and capture more rents.Continue reading