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The third and final President to request aid from the Marshall Plan was President George Bush, March 14, 2002, due to the war on terrorism events of September 11th. Later, President Bush addressed the Inter-American Development Bank announced the largest increase in foreign aid assistance in 40 years of $5 billion dollars. To quote from the President’s speech, “The growing divide between wealth and poverty, between opportunity and misery, is both a challenge to our compassion and a source of instability. Even as we fight to defeat terror, we must also fight for the values that make life worth living; for education and health and economic opportunity.” The President was clear. However, that the new funds would be used for countries “that root out corruption, respect human rights and adhere to the rule of law, as well as encourage open markets and sustainable budget policies.” The most important question which development professionals must answer in order to make the aid system produce better and more sustainable results are this: what structures, what systemic pressures, and what incentives will overcome the inherent characteristic of human nature in all societies that opposes transformational change because it can be so threatening? One of the sad lessons we have learned through painful mistakes is that transformational change in a poor country cannot be imposed from the outside, not by the UN, not by the Banks, and not by donor governments. There must be national leadership and local support for transformational change to remove the impediments to microeconomic reform, to clean up corruption in the political system, and to make public management more accountable and transparent. What causes this leadership to form and act should be a question of considerable interest to us. Part of the answer lies in the nature of the incentive system in the international aid community.


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