The Banking Executive Magazine - April 2023 Issue

Bottom-Up Solutions achieves something." Our planetary system is failing because humans have organized the elements they can control in ways that produce negative outcomes. To optimize the functioning of our social, ecological, and economic systems and ensure human and planetary well-being, we must recognize their interconnected nature and address problems holisti- cally. Governments overwhelmingly em- brace top-down, siloed solutions that are often ineffective. For example, when governments deploy special- ized agencies to support rural village development, they increase transac- tion costs by delivering physical in- frastructure piecemeal and failing to build shared databases that facilitate coordination. Weak ties to the local community can also undermine the efficacy of interventions. Meanwhile, multilateral action implemented by nation-states is often inefficient be- cause the scale of multilateral devel- opment banks and aid agencies is simply too large, with individual en- tities and actors each operating ac- cording to its own goals and standards. What is needed instead are bottom- up strategies underpinned by com- munity-based and nonprofit social enterprises - entities with social ob- jectives in addition to economic tar- gets. Effective social enterprises are ISSUE 172 APRIL 2023 the BANKING EXECUTIVE 29