Development and Cooperation in the 21st Century

Lately I had a discussion on the bytesforall mailing list about the dangers of donor funding, particularly in Information and Communication Technology for development projects (ICT4D). I tried to show why entrepreneur-based approaches in offering ICT services in financially poor areas are in many (of course not all) instances better:

If I am an entrepreneur or company I will offer my customers a service they a) need and b) are willing to pay for. As a consquence, if the services are useless nobody will buy and if they are too expensive nobody will pay. Hence, the entrepreneur or company will either adapt his product or lower the price. If not, he will go bankrupt...

In the case of the Grameen Village Phone project the rural poor were willing to pay a certain price for access to communication for various reasons.

Now, in many donor-funded projects these incentives are just inexistent... That is simply a fact. There is little reason to a) automatically adapt the service to the needs of the "customer" and b) do it at reasonable cost (i.e. price)... As somebody lately told me: donors often have their own agenda and goals that do not necessarily coincidence with those of the communities they address.

Following from this I conclude: Donor-funded ICT4D projects should only concentrate on areas where market mechanisms don't play and where there is little opportunity to build on a sense of entrepreneurship and ownership.