Development Grants and Loans - Are they worth it?

Today's New York Times ran an Op-Ed by a former colleague of President Obama's mother. In the piece, he writes about her dissertation which was based on 15 years of field work in a remote part of Indonesia. Read it.

Op-Ed Contributor
Dreams From His Mother
By MICHAEL R. DOVE
Published: August 10, 2009

It brought to mind several themes that I've considered through the years, and that have been more in the forefront of my thinking this summer as I returned to Ukraine, in part, to revisit my old stomping grounds and to meet up with my old colleagues from the early 90's. I'd first arrived in Ukraine 20 years ago, in the summer of 1989. By 1991, I had a politics degree from Princeton, and I was working in Kyiv at the Renaissance Foundation. We were at the forefront of grant-giving foundations in the newly-independent Ukraine. (It's likely that the Soros-backed Renaissance Foundation was actually the *first.*) Needless to say that the process of submitting grants, writing applications, vetting them, reviewing them, evaluating them, administering them, etc was not very well-developed at the time. Our mandate was to find worthy recipients and administer Mr. Soros's money responsibly. Most of my days were spent listening to a seemingly endless stream of people who made the pilgrammage from around Ukraine to our unique building at vul. Artema 46.



We didn't have much furniture in the office when I started working there, so frequently I met with people out on the park bench in the back yard or perched on the (narrow) windowsill on the second floor. It was like open mike night, except it lasted for hours and for days on end. All sorts of people came. Earnest academicians with neat stacks of papers wrapped with a папка для бумаг (sic). Crazy zealots with half-baked ideas. I remember one woman who came from Kryvij Rih, a city in Eastern Ukraine. She told me it had the most pollution of any city. She had been working with kids for a decade to keep them out of trouble and to get them healthier. (She was a 'community organizer.') Early on, we were not overrun by slick applicants who knew how to game the system.

It didn't take long for me to hone in on the questions surrounding the development of non-governmental media. I had run a nationally-syndicated news program while I was still in college. My dad is a reporter. Everyone in my nuclear family writes. It's what I knew.

I set out to meet journalists in Ukraine. I met with people one-on-one. I organized a few roundtable discussion sessions. People I met introduced me to other people. We partnered with a US-based non-profit. We sent some individuals on training internship programs overseas. We secured a starter grant of $65,000. We launched a Press Club, published a directory of media contacts, founded a national news agency, started several TV production houses. I'll write more about the details of that elsewhere and later.

One of the things I tried to do while in Ukraine, was to find the people who were likely to do the best work, as measured by having being the most-likely to support the sustained development of an open society in that country. I wasn't always right, but the majority of the bets paid off.

The debate about the value of aid (in the form of grants or loans) rages. And has been raging for decades. Dove's piece in the Times touches on it as well.

Dove wrote in the Times:
Based on these observations, Dr. Soetoro concluded that underdevelopment in these communities resulted from a scarcity of capital, the allocation of which was a matter of politics, not culture. Antipoverty programs that ignored this reality had the potential, perversely, of exacerbating inequality because they would only reinforce the power of elites. As she wrote in her dissertation, “many government programs inadvertently foster stratification by channeling resources through village officials,” who then used the money to further strengthen their own status.


How do you measure the value of those programs? If you were to go back and follow a paper trail of the handful of grants and programs that I worked on in Ukraine in the early-1990's would be able to trace a line from the dollars invested directly to the return to society today? My guess is, 'probably not.' Many of the specific entities that received the investments are gone.

However, if you were to do a Rolodex audit instead, if you were to look at the specific individuals who were involved in these early programs. And if you were to trace their careers from 1989 to 2009, then you will find evidence of value. Is it enough to justify the investment?

I will try to do just that in these posts. I'll endeavor to steer clear of generalizations. I'll keep things as specific as possible. And I'll show snapshots of my former colleagues, as they are living today.