Michael U. Klein

This timely volume offers - in an accessible and engaging style - digestible surveys on some of the hottest topics in the aid industry today, Klein and Harford examine the supply of aid and the demand for loans, the ""grants versus loans"" debate, debt restructuring in developing countries, aid effectiveness, and the role of the private sector. The authors also present two scenarios for the future of the aid industry: a world of booming private remittances and nongovernmental aid flows put to innovative uses? Or a world with falling numbers of people in absolute poverty, where aid agencies are forced to cooperate to survive? The authors argue that the aid industry is changing, old models of aid are under pressure, and both donors and recipients will ask more and more of aid agencies in future. The chaos of competition and the search for new ideas is frightening to some, and risks harming the people who the industry is supposed to benefit. Yet at the same time, there is a tremendous opportunity to harness competition to improve performance and find better ways of helping the poor. Klein and Harford argue for rigorous methods of evaluation and creative use of the private sector to produce a more effective aid industry in which new experiments are encouraged.

Over the years, the term private sector development has been misunderstood and misconstrued-variously vilified and sanctified. During the decade of the 1990s, the role of the private sector in economic development received increasing attention, with controversy surrounding such issues as privatization and corporate scandals. The Private Sector in Development: Entrepreneurship, Regulation, and Competitive Disciplines provides the first comprehensive treatment of the topic. Central to the discussion is the design of public policy that promotes an appropriate balance between competition and regulation. This book places special emphasis on the means by which private initiative is channeled into socially useful directions, particularly job creation and basic service delivery for good people. Finally, there is discussion of the implications of private sector involvement for policies of development institutions. Written principally for policy makers and their advisers, The Private Sector in Development thoroughly explores the challenges inherent in creating public policy that encourages and enhances the development role of the private sector.