Questions: Technological advancement has worsened the problem of poverty. Do you agree?

The end of poverty will always remain just an ideal. Discuss. Should developed countries be responsible for the plight of developing ones? Poverty questions come in a few kinds: 1. 2. 3. The causes of poverty Obstacles to eradicating poverty Solutions to poverty What are the Millennium Development Goals?

Trying to explain why certain countries, communities or industries did not receive the aid they needed, Kharas said: "It is getting more difficult to make progress in development. Overseas development assistance (ODA) is not going where the greatest need is but rather, where the greatest return or reward is." It's a statement that encompasses many complex issues: the short-term nature of development, the increasing pressure to justify donor commitments during a recession, the burgeoning focus on resultsbased aid impact measurement and aid effectiveness and, what Kharas described as "the enormous volatility of aid: the more dependent a country is on aid, the less likely it is to receive it." There are of course merits to impact measurement and the aid effectiveness agenda. As the CEO of Unilever France, Bruno Witvoet, said: "You cannot improve what you do not measure." DfID economist, Hannah Ryder, writes that the policy shift from aid effectiveness to development effectiveness is essential.

Venture philanthropy and the quest for aid effectiveness

Philanthropists are increasingly shaping the development landscape but what drives them and how healthy is the focus on getting 'bang for their bucks'?

With no end to austerity in sight and aid to the developing world continuing to plummet (down 4% in 2012), donors from DfID to AusAid and Korea's Kaidec are exploring new financing mechanisms, including working with philanthropic organisations and foundations.

According to the 2012 index of global philanthropy and remittances, while government aid accounted for just 18% of total financial flows within international development in 2010, philanthropic giving, remittances, and private capital investment accounted for 82% of the developed world's economic dealings with developing countries.

Philanthropic organisations are also increasingly adopting corporate ethics, opting for venture philanthropy or

philanthrocapitalism, which, according to the European Venture Philanthropy Association, features six main
characteristics. It involves high levels of engagement, tailored financing, multi-year support, offers beneficiaries assistance beyond finance to include support for marketing or organisational infrastructure, organisational capacity-building beyond mere project delivery, and performance based management with a strong focus on measuring outcomes and impact.

New Philanthropy Capital, a UK-based consultancy, reports that venture philanthropy typically begins with funding basic frontline services where donors can see real 'bang for their buck', as they become increasingly familiar with the issues behind the challenges they seek to address.

NPC's head of charity effectiveness, Iona Joy cites the example of a family trust that has come to focus on the challenge of water and sanitation as the issues drive so many other challenges that occur in the developing world.

"Something like water and sanitation is a good area for funding market, rather than straight [traditional] aid, solutions," says Joy. "So how do you build the informal market for decent cheap toilets or affordable access to clean water? Sometimes the solutions can be market-based rather than do-gooders running around digging wells."

One development organisation that has built venture philanthropy into its DNA is India's Smile Foundation. Co-founded by Santanu Mishra in 2002, the organisation says it reaches out to more than 300,000 underprivileged children and youth across 25 states of India. Having benefited from a middle class upbringing and from cashing in on India's economic boom when the country liberalised its economy in the early 90s, Mishra and his associates felt the need to give something back.

They set up a foundation and chose to run it on a venture capital model. The approach enabled them to look for individuals who had talent, ideas and a wish to do something but lacked adequate resources.

"We decided to equip them with resources to become self-sustainable and scale up the good work they were doing on a smaller scale at grassroots level," says Mishra. "That is why instead of investing or focusing on building infrastructure we opted for social venture philanthropy as ... the social return on investment was high, impacting more beneficiaries."

However, associate professor of law, Garry Jenkins, in his paper 'Who's Afraid of Philanthropcapitalism', writes that the new venture philanthropists are "increasingly directive, controlling, metric focused, and business oriented with respect to their interactions with grantee public charities in an attempt to demonstrate that the work of the foundations is 'strategic' and 'accountable'."

The rise of development effectiveness

The UK is moving beyond aid. This reflects changes in the economics of poverty that development professionals must be aware of

A few months ago, Justine Greening, the secretary of state at the Department for International Development (DfID), announced the beginning of a new, non-aid based relationship with India focused on trade and the private sector. Around the same time, David Cameron, announced a focus for the UK's G8 presidency on changing tax, trade and transparency policies inside the UK and other G8 countries to have a positive impact on development. This new focus on "putting our own house in order", in the prime minister's words, will be the defining feature of this year's development campaign.

But these two big announcements were not just about a specific UK mindset. They are part of a broader shift that is taking place globally. It is the shift from "aid effectiveness" to "development effectiveness", which underpinned the establishment of the new Global Partnership for Effective Development Co-operation just over a year ago in Busan, Korea. The shift can be expressed more simply as a move away from concentrating on aid alone to address poverty reduction. It brings in a new focus on policy for example trade and investment policy and its effect on development.

A sceptical reader might wonder whether this shift is taking place simply because traditional donors such as the UK are under domestic pressure to cut their aid budgets. That pressure certainly exists, but in the UK the aid budget is being maintained. This year, the UK government will meet the 0.7% aid target, an ambition dating back to the 1960s. Meeting 0.7% is critical because aid does have a necessary role, particularly in fragile and conflict-afflicted states where governments may not even be able to prioritise gathering other sources of finance for development such as collecting taxes from citizens or business.

The fact is that the shift needs to take place because of changes in the economics of poverty. Ten years or so ago, reducing poverty was in many ways simpler than it is now. At the time, most of the world's poorest people lived in low income countries such as Kenya. They lived in rural areas, and aid was one of the largest financial flows globally. Aid was the major tool to help address the needs of the poorest people around the world.

A decade on this is no longer the case. As Andy Sumner, a development economist at Kings College London, explains in this podcast, the majority of poor people no longer live in low-income countries. They now mostly live in middle income countries. In these countries, aid represents a declining proportion of budgets and overall income. Revenues from internationally traded commodities, such as oil and copper in countries like Nigeria and Zambia, far exceed aid flows. Many developing country governments are collecting more and more personal income and consumption taxes. Kenya's tax receipts are equivalent to almost 20% of its GDP. Remittances are rising globally. Aid from the UK to Pakistan in 2011 was just over 210m, compared to the 627m sent from migrants in the UK to Pakistan.

This changed global setting, where all poor people no longer live in the poorest countries, and aid is no longer their main flow of finance, creates the need for a non-aid-based development relationship. But what should this look like? How can it take place?

Some economists, such as Acemoglu and Robinson, suggest that a non-aid-based development relationship is about ensuring good governance in low and middle-income countries. Others say it's about ensuring that governments enable the private sector enough to stimulate jobs and entrepreneurship. The latter was a major feature of Greening's speech at the London Stock Exchange on Monday, 11 March but both approaches are important.

But the shift of poverty to middle income countries also brings with it a more direct role for governments such as London. Governments can work to make positive shifts in their domestic policy in areas such as trade and investment. Though there is a great deal of evidence to gather on this, ultimately, these shifts are likely to be more transformational and sustainable for poverty reduction in a middle-income country such as India than aid, and can complement the good governance and private sector agendas.

That said, working towards more "development friendly" domestic policies is not an easy agenda. One of my first jobs in government was working on the economic effects that domestic British and EU farming policies had on development. The specific commodities I worked on sugar, wheat, corn and soya were critical to the lives of poor people all over the world. Yet years later, the battle over agricultural policy rages on in international forums such as the World Trade Organization. It is very difficult to change the status quo.

But the more that countries successfully reduce aid dependency, the more the pressure will build for synergistic policy relationships. Concentrating on aid alone will no longer be sufficient for development. And aid itself will have more impact and value for money where, for example, trade, tax and transparency policies are all pushing in the same positive direction.

The G8 and the new UK-India relationship represent the start of a new strategic agenda for effective development partnerships that reflect the more complex setting we now live in. My hope is that these first steps will be successful and extend to other policy areas as we move into the post-2015 world, including through the post-Busan Global Partnership.

Foreign aid: transparency will help African nations prosper

As humanitarian pressures slowly decrease, the need for openness to avoid exploitation or corruption will increase

This year, each person in Britain will give the people of Ghana about 1.50. That money, 95m, will be spent through the offices of the Department for International Development in Accra on a range of programmes that currently prioritise two things: supporting girls and women in education and helping in humanitarian efforts in the desperately poor northern savanna region. Ghana receives one of the largest development budgets through DfID because it is a country in which aid is seen to work: extreme poverty has been halved in the last decade, infant mortality rates are in sharp decline.

By 2015, the money given by Britain to help Ghana progress toward the Millennium Development Goals will have seen 4.75m mosquito nets distributed to prevent malaria, cash grants provided directly to 100,000 people still living on less than a dollar a day, 70,000 girls remaining in school and 50,000 subsistence farmers given access to business services.

The end of 2015 marks the finishing line of those goals for development originally established by a Ghanaian, Kofi Annan. It also marks what will be the beginning of a new compact between the world's richest and poorest nations. The terms and objectives of that new relationship are still being debated but as the report from Ghana in today's paper argues, the changing narrative of sub-Saharan Africa in particular will require a changing emphasis. The economy of Ghana is currently growing at more than 7% a year. It is a country rich in natural resources, not only gold and cocoa, but now also significant oil and gas reserves.

Its president, John Dramani Mahama, has stated his ambition for the country to be free of direct government aid within 10 years. The challenges Ghana and other newly stable democracies face in achieving that self-reliance, while supporting and transforming the lives of their poorest people, are complex, but there is one word that will ease all of them: transparency.

Transparency works both ways. If multi-national companies investing in countries such as Ghana in order to extract natural resources are required by law to be open in their contracts with government, then the temptations of corruption, and the history of exploitation that has seen so little of Africa's natural wealth benefiting its own people, can be reversed. If governments are open to full scrutiny in their budgeting and spending, then the people, whose taxes must eventually replace donor funds, can hold their elected officials to account. Technology and the freeing of information can expand this engagement. There are, increasingly, smart and mobile solutions to many of the entrenched logistical and geographical obstacles to development and the democratisation of knowledge is only beginning.

The highly motivated young entrepreneurs, that "e-generation" of educated and resourceful Africans who are looking to make their opportunities at home, can drive that change. But it will also require a shift in emphasis from the west. As humanitarian pressures slowly decrease, the need to support robust civil society institutions that can demand accountability and enforce a fairer deal will increase. The existing development goals have not much to say about trade and justice and transparency; the new ones must.