Why doesn't aid work?
Not enough feedback and accountability, among other things, according to Bill Easterly in this CATO-hosted excerpt from his new book. Branko Milanovic, Deepak Lal and Steve Radelet offer their (critical) reactions to Easterly's arguments.
Milanovic argues that Easterly misleads:
Easterly stacks the deck by creating a false dichotomy between successful “searchers” for solutions and inept and corrupt bureaucrats who impose (wrong) solutions. This dichotomy is a “no-brainer.” The advantage of the first (searcher) is already contained in the premise. The point is to see whether there is anything that governments can do to make life easier for the “searchers”. Easterly seems to believe that there is nothing. But this cannot be true.
Lal believes such debates are mute – since there is no fix for aid:
The truth is that aid is not only ineffective; it is actually counterproductive… it is best to end the futile attempt to fix "aid" to make it more effective. It is best to just hand the requisite checks to the governments of the poor, in the full knowledge that this will not do much for the world's poor but will make us feel less guilty!
Radelet is more optimistic than all three, and argues that the facts reveal a more accurate picture than Easterly's 'rhetoric':
Claiming that aid has been a miserable failure is popular with journalists, ideologues and naysayers (and it helps sell books). But the accumulated evidence over the past decade suggests a much more nuanced and more positive story whereby aid has done a fair amount of good despite it weaknesses and failures in some countries. Certainly, much can be done to make aid more effective. But those that argue the extreme view that aid doesn’t work are just as wrong as those that argue that it is the magic elixir for growth.
Update 1: more comment via Trade Diversion.
Update 2: Easterly responds. So Radelet and Milanovic do the same.
Comments (4)
Bookmark
E-mail
Facebook
To take a polarised stand, either that aid works or aid does not work is rather naive. In practice aid usually does have positive impacts and is seldom a total failure/write off. The challenge the donors face is to shed their vested interests and poor management of aid so that the aid projects could achieve at least 70 to 90 % of its targets. In my opinion this is not so hard to do but donors fail to do so.
Posted by: Darrell Sequeira | Apr 20, 2006 2:14:16 AM
Actually any influence can hardly be estimated when taken all by itself.
Posted by: First aid nurse | Apr 21, 2006 7:24:03 AM
Of course Easterly's dichotomy between Planner's and searchers is an oversimplification, but it is one which serves a useful purpose; to counteract the latest trend toward big plans lead by Jeff Sachs.
Easterly himself would admit, I believe, that some big plans have worked in ways that never would have worked in a bottom-up fashion by searchers (e.g. guinea worm, polio and smallpox eradication campaigns). That said, there is a huge imbalance in favor of the planners.
As an aid practitioner and non-academic, I have to salute Easterly's brutal honesty about some of the more collosal failures of aid. As much as aid practitioners complain about the frustrations and failures to get things working among ourselves, there is a kind of "omerta" with regard to public pronouncements about these failures, basically on the assumption that if we are too open about our failures we will run out of money to do the few good things we do. I disagree with this attitude and believe we do have to confront the brutal facts of failure in order to get things right.
I find the debate about whether "aid" succeeds in creating growth or helping the poor to be somewhat sterile. This assumes falsely that the purpose of all aid is to help the poor or achieve growth and my experience is that very little is really intended to achieve this. When you take out the aid which is given to achieve foreign policy objectives, the relief aid intended to saves lives (and prop up farm prices for developed country farmers and shippers), the aid intended to generate research data, etc. you actually have very little left to achieve growth or help the poor.
Finally, while I believe in customer feedback, it is much easier said than done. One of the key problems is who represents the poor. Do bureaucrats in host governments represent the poor? I would argue that one of the reason that World Bank, IMF and UN aid has been so ineffective is that they are institutionally constrained to work through host governments which have no accountability to their own population, and least of all the poor segment. Does the village chief? As one who has tried to design and implement projects in partnership with both such representatives of the poor, I can tell you that there are very few good advocates of the poor. Nearly everyone has an interest and an agenda which may or may not work to the benefit of the poor.
Posted by: Jeffrey Barnes | Apr 27, 2006 8:36:04 PM
Aid is objectionable not only for the obvious fact that it sustains and encourages corruption where-ever it has been applied, but more importantly because it humiliates, politically, the receiver. In many ways it is a remnant of the white man's burden, and is simply not compatible with human diginity and sovereignty. It is the business of sovereign nations to take care of their peoples.
There are many ways to do good for poor countries, such as ensuring global free trade and free labour markets, and pro-actively dealing with externalities such as pollution that the West has largely been responsible for over the past 100 years.
I have outlined one of the many ethical, alternatives for supporting the efforts of poor countries in my blog (http://sabhlok.blogspot.com/), and hope to elaborate on related arguments in a forthcoming book.
In other words, instead of giving 1% of a Western nation's GDP as aid, a much greater and moral purpose will be served by the West voluntarily using this 1% as compensation for poor nations for the pollution caused by the West in the past. This 1% should be used to plant trees and maintain existing natural resources such as national parks, in the poorer nations.
But whether alternatives that make the world a wealthier and healthier place (and a more moral place to live) are agreed to, foreign aid is sheer evil, sheer poison, and efforts must be made to stop it at the earliest.
Sanjeev Sabhlok
(in personal capacity)
http://www.linkedin.com/in/sabhlok
Posted by: Sanjeev Sabhlok | Feb 15, 2007 4:09:37 AM