The article below originally appeared in The Economist.
“THE gold rush is on!” That is how a cable from the American ambassador to Haiti described the descent of foreign firms upon Port-au-Prince in early 2010. An earthquake had flattened the city and killed hundreds of thousands. But a deluge of aid presented an opportunity. The message, released by WikiLeaks, noted that AshBritt, a Florida-based disaster-recovery firm, was trying to sell a scheme to restore government buildings, and that other firms were also pitching proposals in a “veritable free-for-all”….
A separate study published in 2014 by Marieke Huysentruyt, then at the London School of Economics, examined 457 DfID contracts from 1999 to 2003. She found that, when controlling for the type of contract, the total personnel costs proposed by non-profit firms were on average just two-fifths those proposed by private firms. What is more, the contracts won by for-profit outfits were more likely to bust their budgets and miss deadlines.
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