local knowledge or at least dispersed knowledge rather than some expert who proposes some solution from the outside without local knowledge. These are both Hayekian insights.That is from a nice post by Russ Roberts on an entry by Bill Easterly titled "The answer is 42! Why Development is not about solutions, it’s about problem-solving systems."
Taken together, these two posts provide much of the theoretical underpinning of the approach we are pursuing at GlobalGiving, to wit: There are no universal panaceas, only solutions that work in specific places at specific times. We want to help lead the formation of a marketplace (in the broadest sense, not just our own online marketplace), that effectively intermediates demand (for solutions) and supply (of money, networks, and expertise).
In such a market, there are rich information flows that go far beyond simple transparency. Such a market generates information about what local people want (not what experts think they should have), about what approaches can meet those demands, and about whether ongoing initiatives are working - and how they could be improved. All voices - regular citizens as well as experts - are heard and considered. This market is iterative - needs and solutions change over time based on both learning and shifting conditions.
Such a market subsumes but goes beyond aid itself. It is part of a larger system of democracy. It is the Democratization of Development in the fullest sense. We are far from achieving it, but we are making progress. As I have written here and here, the question is whether the official aid sector is going to help lead the charge or is going to be left behind, slowly fading to irrelevance.