Giving Compass' Take:

• Raj Kumar discusses his new book The Business of Changing the World: How Billionaires, Tech Disrupters, and Social Entrepreneurs Are Transforming the Global Aid Industry and the changes - good and bad - in the foreign aid sector because of these actors. 

• How can funders work to elevate the improvements and mitigate the damage that has been done to the aid sector? 

• Learn about the effects of development aid on migration

Kelsey Piper: A recurring theme in the book — maybe I’d go so far as to call it your thesis — is that there has been a sea change in the direction of caring about results and evaluating programs by their outcomes. But doing that turns out to be a really hard problem.

Raj Kumar: I think you’re right, that’s the thesis. We’ve gone from an industry that’s really been organized around good intentions to more of a competition for good results. We don’t yet know what that means.

There’s a lot of dysfunction that comes from this process of moving to results. You see suddenly a big explosion in randomized controlled trials, and then only later do we realize actually, maybe, they’re not applicable in all of these cases and they’re not the best tool. You see organizations going to things that are really short term and easily measurable and then maybe stepping back a little late and saying, “Actually, we should look at graduation models and longer-term investments.”

So it’s not a smooth path. But what I’m encouraged by is that if this becomes more of a competition for results and we’re heading in that direction, then we’re having the right conversation. Even if we’re getting some things wrong along the way, we’re heading in the direction where we’ll have more impact.

Kelsey Piper: What drove the sudden shift toward a focus on results?

Raj Kumar: I think a few things were happening. You’re getting lots of outsiders who are becoming part of the development sector. Development issues are increasingly becoming front-page issues — like climate change, migration, refugees. Things that might have been talked about in narrow segments of the development field are now big public policy questions. I see lots more brand new initiatives, some of which can scale pretty quickly because there’s more investment and more competition.

And then you have a lot of corporate and investor interest and involvement in development.

Read the full interview with Raj Kumar about foreign aid changing by Kelsey Piper at Vox.