The Mojaloop Foundation embodies a new cash-driven development ethos

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This morning, Fortune was able to exclusively report on the founding of the Mojaloop Foundation, a coalition of companies and nonprofits intended to advance next-generation financial technology around the world. The group’s founding sponsors include the Gates Foundation and Google, and the main thrust is increasing access to banking and digital payments in developing nations.

The group will do this by advocating for an open-source software package, Mojaloop, that makes it easier for countries and central banks to adopt technology comparable to the U.K.’s Faster Payments. Those enhanced banking pipes will in turn enable better digital finance tools for users, making saving and trading easier and more affordable, and economies more robust.

The news is emblematic of ongoing changes in how we think about developing countries, international aid, and disaster relief. After all, the idea that an enhanced banking system is a way to improve the lives of subsistence farmers or small traders in, say, rural Gambia, is a relatively recent one.

Instead, the standard model for development and disaster relief has for decades too often exemplified the Aid Industrial Complex. The system of nonprofits and agencies who provide goods, services, and training to reduce global poverty do crucial, life-saving work, but they also inevitably bring their own foreign biases and motives, and have moreover become self-protecting institutions with large, sometimes well-paid staffs.

At their most extreme, these agencies and nonprofits become part of Anand Giridharadas’ “elite charade,” just another way for the richest people in the world to show how smart and effective they are (and hey, maybe advance their own goals a little along the way). They’re why Nobel economist Joseph Stiglitz has singled out the supposed do-gooding of the World Economic Forum to skewer its chi-chi meetings at Davos. (Though it has other reasons for existing, it’s also hard here not to think of the Peace Corps, which for decades has sent American college students abroad to, somehow, teach Africans to farm).

Implicit in the DNA of many traditional development projects is the idea that the person dispensing the aid ‘knows better’ than the people receiving it. Agencies often engage in top-down planning of what a developing economy should become, effectively deciding what people in need really need.

But this old model of development and aid is being slowly but steadily replaced by a much simpler, less self-aggrandizing ethos: Give People Cash.

That was one of the main takeaways from my recent conversation with economist Richard Davies, a former advisor to the U.K. finance minister who recently published an amazing book on disaster economics. Cash relief is suddenly a major topic of U.S. political discourse thanks both to coronavirus relief, and Andrew Yang’s advocacy for Universal Basic Income.

Cash aid assumes that every human knows what they need, and that given the economic raw material, they can find it or build it. It rejects the implicit superiority of the Development Industrial Complex, and the idea that you can know what’s best for someone else just because you were born in a developed country, or because of your skin color, or your family name. A growing laundry list of scientific studies has borne that premise out.

Mojaloop pitches itself as a key part of that new aid formula: the part that helps actually get money directly to people, wherever they are. Ultimately, that helps make people worldwide richer, happier, and healthier – on their own terms, not someone else’s.

David Z. Morris

@davidzmorris

david.morris@fortune.com

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