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Wednesday, April 5, 2006 12:00 AM

Why foreign aid doesn't work

An economist says big ideas to "end poverty" have failed for decades -- and that the West needs to fight the war one village at a time.

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Wednesday, April 5, 2006 01:04 AM

Another sweeping big idea

it is probably unfair to comment without having read the book, but I see several problems with what is suggested in your interview. One is that this idea (small local responses) is not new, and it has already been tried (variation of think globally, act locally). Moreover, the image of the white man persuading locals to change behavior is extremely dated. Not many agencies function without local staff anymore. NGOs are also very good at this kind of small locally managed projects aimed at solving community problems. I embrace that approach but not as another 'grand alternative' to public projects. Your reporter failed to asked basic questions raised by Easterly's argument. One contrasting argument is that some national responses (with the help of international aid) have worked. Many countries that have pulled out of poverty had strong national socio-economic strategies. Rising Asian countries all had such strategies. Another reason to doubt small independent projects is when you need a quick coordinated response, such as with AIDS eradication. Thailand had lots of small organizations working on HIV/AIDS in the early 1990s but when the government provided massive funding with a clear coordinated national plan (yes, plan, including cooperation with NGOs), the infection rate fell tremendously within 2 years. There are also lots of issues regarding overlapping, waste or a lack of institutional learning since aid is broken down into small-sized projects. Moreover, the end of poverty requires more than economic solutions. Jeffrey D. Sachs is right to underline the importance of health for instance. I won't even go into how pushing for local economic solutions is useless without a strong regulatory framework (a minimum of protection for consumers and producers, especially where corruption is rampant). In my opinion there are no simple solutions, but Easterly's approach should be part of a coordinated strategy between NGOs, aid agencies and governments. Perhaps Easterly worked for the World Bank too long. It is not all failure and by throwing the baby out with the bathwater, we just ensure to fail again and not learn from our previous mistakes.

Wednesday, April 5, 2006 01:34 AM

What works

What works in Africa (specifically, South Africa, where I lived for 3 1/2 years) is small-scale projects focused on sustainable energy (solar is perfect for much of southern Africa) and small-scale farming that feeds the people in the community. When the community becomes the solution, results are lasting.

Wednesday, April 5, 2006 03:03 AM

The individual's fate is controlled.

The individual's poverty is often a man made affair. Corrupt people in government creating famine, using food as leverage, not sharing the wealth of the nation with the people.

Easterly has no answer for Darfur. Helping an individual do anything in the Sudan is pointless when the Janjaweed are murdering the individuals. You obviously have to deal with the governments or institutions of power in poor countries. They are most often the cause of the poverty in the first place. Governments are people.

I also take offence at the distain with which 'rich white kids from America' is referenced. He seems to think that an educated person with training and a will to help those less fortunate doesn't have anything to contribute.

Please note that William Easterly is a rich white person from America.

Wednesday, April 5, 2006 06:01 AM

Typo

life would have been a place that was nasty, British and short.

I believe that the term is "nasty, brutish and short.

Wednesday, April 5, 2006 06:22 AM

No one wants to hear this, but...

I live in Ghana right now and have lived outside the shores of my native America for the last 19 years. I can tell you that all the money in the world won't resolve the economic woes of most undeveloped countries. The root of their economic woes tends to be cultural. And since messing with others' "cultures" is anathema to the west, there is little to be done.

In much of Africa, anyone who wants to build a business that will employ people has to make payoffs. Should he be successful, god forbid, the demands are likely to become even worse. Ask a wealthy Ghanaian where his wealth is kept. Is it in a local bank, where it can make loans to other Ghanaian businesses trying to expand? Is it in a pool of capital available for entrepenuers seeking start-up money? No and no. It is invariably in banks or securities in the U.S. or Europe. Why? Because it is safe there. And without capital to build businesses that employ citizens, the local economy goes no where, while the capital provided by wealthy Africans is lent out to Swiss and British businessman, improving economic conditions in Europe.

Unfortunately, Ghanaians, who live in the most successful democracy in West Africa, tolerate corruption among government leaders. Their attitude is more one of envy of those who have the opportunity to profit from power than of anger. If a local culture is tolerant of corruption at all levels of government, from the president to the local cop, then there is little hope for real economic progress. You can build a great highway to improve access to tourist sites, but if money earmarked for maintaining the highway is siphoned off before it can be properly used, they will crumble to dust.

Wednesday, April 5, 2006 06:59 AM

not a typo

life would have been a place that was nasty, British and short.

I believe that the term is "nasty, brutish and short.

It's a pun. He meant to say 'British'. You know, reference to colonialism and all.

Wednesday, April 5, 2006 08:36 AM

It's Not All Top-Down

From William Easterly's description of Jeffrey Sachs's approach to ending poverty, one might think that Sachs was fixated on a centrally planned, top-down approach in which self-satisfied experts tell local people what to do. But having just returned last week from the Earth Institute's "State of the Planet" meeting, which Sachs organized, I can testify that is far from true. One of the major recurring themes of the meeting was that aid program administrators, entrepreneurs and scientists all need to listen and learn from what the targeted communities can tell them. The bottom-up approach was painted as absolutely crucial. A variety of presented case histories backed up that point.

It's also dead wrong for Easterly to say that Sachs thinks corrupt governments in the developing world aren't "really so bad, let's give them money anyway." Rather, Sachs argues that the honesty or corruption of governance shows little correlation with the growth of national economies. Some highly corrupt Asian countries are prospering faster than more honest African ones. Corruption is just one influence on development among many. Thus it's more important to deal with the governments as they are and work around the problems as best possible--which seems to be what Easterly prescribes, too.

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