Steven Pearlstein has an article in the Washington Post titled, "Aid Recipients Might Have the Best Ideas About Allocation" which covers alternate methods to allocate aid funding to needy states. The article challenges the orthodoxy that a small group of specialists are the best to determine what to do with donor money. Instead, GlobalGiving is using technology and the "wisdom of the crowds" to produce outcomes that are more efficient. This methodology has political implications, especially for models which incorporate ratification and sortition .

GlobalGiving

Dennis Whittle and Mari Kuraishi have set up GlobalGiving to connect individual and institutional donors directly to to projects around the world. They claim this gives higher impact as the donors know where their money is going and it avoids the donors money being lost in bureaucratic overhead of non-profit organisations.

The GlobalGiving site has a Donation Wizard which can identify projects that need funding. it is remarkable how little money some of these projects require. For instance this project in India to provide computer education to the rural poor involves a total cost of $5,000 of which $1,840 has already been donated. Another is the founding of a Women's University in Afghanistan which needs $10,000 of which $3,106 has been donated thus far. There are numerous variations in the projects, from Child journalists in the Congo , lead contamination in Peru or rural micro-credit in Honduras .

GlobalGiving recently conducted an experiment on their website;

On its Web site, GlobalGiving provided brief descriptions of 112 development projects, asking site visitors to rank them on a scale of 1 to 10. About 50,000 individuals generated 200,000 evaluations. Simultaneously, a much smaller group of several hundred aid experts was asked to perform the same task. Of the 12 projects chosen by the experts, nine were also chosen by popular vote.

Part two of the experiment involved allocating $100,000 in prize money among the 12 finalists. Hundreds of wealthy donors at a conference in Palo Alto, Calif., were given five-minute presentations on each project and asked to immediately divide the pot. At the same time, a jury of nine of them was told to spend several hours reaching consensus on how best to allocate the money -- a proxy for the committee-driven process by which most grants are now made. Again, the choices made by the more deliberative jury were strikingly similar to the collective, seat-of-the-pants choices made by the larger group.

This has been called the "wisdom of the crowds" by James Surowiecki. More often this is seen from a market point of view, where decentralised groups, made up of individuals, acting in their interest, and from information they can discern; make more accurate decisions than small groups of knowledgeable specialists. A good example of this is Index Funds beating managed Mutual Funds for returns. Another example is Bryan Palmer and Andrew Leigh checking any polling data against Centrebet .

Surowiecki places some caveats on what makes a crowd smart however;

There are four key qualities that make a crowd smart. It needs to be diverse, so that people are bringing different pieces of information to the table. It needs to be decentralized, so that no one at the top is dictating the crowd's answer. It needs a way of summarizing people's opinions into one collective verdict. And the people in the crowd need to be independent, so that they pay attention mostly to their own information, and not worrying about what everyone around them thinks.

He also sees it important that the crowd not be biased, in Surowiecki's opinion this is why specialists fail as well - they bring their bias with them, that leads to inferior outcome. The groups must be truly decentralised, and genuinely diverse.

Democracy

Political parties are the casting of political bias into the representative system. I have made the comment in the past that people are pretty much the same all over the world, the difference is in the quality of government which runs from bad to suckitude. Part of the reason for government's inferiority is that it is inherently biased by the political parties which inhabit it, entrench themselves in it, gorge themselves at its trough and project their bias onto the people.

To temper this skewing of the system from inferior outcomes, and the bias of political specialists, the wisdom of the crowds can be used instead to make policy decisions. These would be anonymous ratifiers, chosen by sortition for each issue; and casting secret ballots on their policies or ordering of priorities.

This would not exclude the professional politicians, policies would still need to be made, even if ratifiers line item vetoed them, or voted on prioritising different aspects of different policies. This would also not exclude citizens, who could present their own policies and legislation to compete with that of the professional politicians.

Gary Sauer-Thompson asked the question whether the internet had transformative power in the area of democracy. Gary quoted Mark Poster while exploring this issue;

The Internet seems to discourage the endowment of individuals with inflated status. ...If scholarly authority is challenged and reformed by the location and dissemination of texts on the Internet, it is possible that political authorities will be subject to a similar fate.

I would argue that the decentralised data networks will flatten the present system of status entirely, making us all equal, and wiser for it. Gary comments;

If this is so, then it represents a rupture with the old politics of the active expert addressing a passive audience and which only grants the space for the audience to ask a few questions at the end of the speech.

The challenge is to adapt our system of government so that where ratifiers and sortitionists provide superior outcomes to representatives, parties, factions and professional politicians, they are injected into the process. I suspect the present politicians, who enjoy their ability to spray bias at a passive audience from the pinnacle of Australian power will have to be brought kicking and screaming into the new decentralised democratic era.

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