The Role of Government and International Development Organizations in Social Innovation

This weeks articles focus on the role of the Government and the private investors funding the social innovation. The worldwide focus is shifting from purely philanthropic work to a mix of both social work and profit. It is indeed a big relief for the government that the private sector raises money for various social issues which otherwise the government would have to do on its own. Particularly the governments of the developing nations need more investment from various types of investors like the Angel Investors, Philanthropic foundations, or the International development agencies as highlighted in the article ‘The funding Gap by Michael Chertok, Jeff Hamaoui & Eliot Jamison” However, there is an acute paucity of Angel Investors in the developing world and hence more reliance is placed on the philanthropic foundations and the international agencies which are carrying out a lot of humanitarian and social ventures. It is indeed a great financial support for the governments of the third world as most of the countries have a low GDP and are entrenched in spiraling fiscal deficits. Countries in Africa and Asia have very low GDP, low literacy rates, inferior health facilities , malnutrition and most importantly rampant corruption in government and the private sector.

                Geoff Mulgan in his Article Measuring Social Value highlights that measuring social value is hard because people disagree on what the desired outcome should be. It is never easy to measure the social value  of interventions being carried out in these countries due to a number of factors. The intentions of the international donor organizations might be good but the actual social value they create in these developing countries might be on the lower side. A number of factors could be responsible for the low social value.

                Firstly, the international organizations have a difficulty in identifying the area which need intervention because of unawareness of the local systems. Most of the developing world is being ruled by despotic rulers or some form of a so called democracy in which  hardly a few percent of the people have voted. The international agencies have to rely on the priorities set by the respective governments rather than the demand of the people.  This reduces the value of the desired social intervention because majority of the people do not get the most demanded social value. For instance in the education sector the primary focus of the international agencies is to construct more schools in areas which do not have adequate schools. What is ignored is the quality of education the children will get in these schools. Non availability and poor quality of teachers is another social issue which is ignored at times. We might have a beautiful school constructed in a remote village but will we be able to impart quality education to the children so that they can compete internationally? The concept of social value should take a holistic view and interconnected social issue should not be addressed separately.

                Secondly, rampant corruption and mismanagement on part of the governments in the low income countries also results in low social value. This discourages the international community and other philanthropic organizations from investing in such countries hence creating a funding deficit which further exacerbates the already existing social problems.  

So keeping in view the low income countries is it advisable for the international agencies to rely solely on the respective governments or to carry out interventions without keeping the government in the loop? Will the governments allow independent interventions and what will be their success rate?