William Easterly at Google
Critical Commentary-Italics are my own commentary
“Can The West Save the Rest?”
Easterly opens at google addressing the following massive tragedy: 30,000 children die every day from extreme poverty. They die because they are simply too poor to stay alive. This is preventable death, such as diarrhea, which can be prevented by re-hydration packets costing pennies. The other tragedy, according to Easterly, is that the West has already given $2.5 trillion over the last decades, and these deaths are still happening. This is the problem. This is the scandal. That so much money and effort has been spent on this problem, but there is so little evidence of the effectiveness. (This is a scandal. But a lot of the money needs to be seen for what it really has been; simple economic stimulus for western companies, doled out by national agencies, with little regard for outcome; as this money dwarfs other aid money, as it is coming from national sources, it can be seen as the bulk of the issue; but categorizing all aid, all development money as a failure is a gross oversimplification and simply not true).
Too much attention is focused on what is spent, and this creates incentives for spending more money, not for creating effectiveness and results, for actually reaching the poor. This is the second tragedy, according to Easterly. (certainly a problem, but there HAS been results. In many places that have been stagnant, without the input of aid, their growth rate would be, in fact, negative, as per Collier/Oxford Analysis).
According to Easterly, “Nobody is individually responsible for any individual result.” There is, thus, collective responsibility, which leads to unaccountability on the behalf of the aid and donor agencies. The aid plans, thus, give the appearance of action, using publicity, which substitutes for real action, as the money is not actually reaching the people intended, which is another tragedy. There is a lack of customer feedback (the recipients), there are a lack of incentives and accountability for results, and thus, there are a lack of good outcomes as a result. (this is being overly simplistic, though good points are made on the need for more accountability; however, the realities of the international geopolitical platforms in which the world conducts its business needs to be looked at in all fairness; while fraught with problems, the UN has still given the world a net benefit over the years, for instance).
The private market, according to Easterly, would be a good model for what needs to be done in this aspect. Introducing accountability, feedback, incentives for efficiencies. If customers are dissatisfied, they can take their business elsewhere. (However good a point, he fails to note that this is not the case in the developing world with services/government accountability, especially looking at the test case of resource-renting nations).
The markets should be a metaphor for how aid should work, according to Easterly. Donors should be thinking in this mindset to achieve good outcomes.
The poor are stuck with official aid which is caught in complex, top-down planning, which is non-accountable.
Why has this happened? Why have planners taken over foreign aid? If politicians are not to be held accountable for their promises, they might as well make the biggest promises possible. And there is no quick, easy answer to the end of poverty. (agreed).
The countries with the highest aid have had the lowest growth, and the countries with the lowest aid have had the highest growth, according to Easterly. There is no evidence that aid creates growth, according to Easterly's empirical data. (Easterly's data needs to be looked at with external “traps” factored in, such as conflict affecting growth, bad geography, coups, etc, to be seen in all fairness).
Recent UN Reports show that in many countries the Millennium Development Goals are not being met, that they have been a failure. Easterly again points to the need for accountability in the agenda as the answer to a lot of these questions, as a non-traditional answer to the problems. (The question is how to increase the feedback mechanisms with aid, in terms of the target audiences who have had no experience with accountability in their lives, ie: governments, institutions, etc. To many, even the non-effectiveness of the agencies is still much more effective than their own governmental institutions. And again, without the effect of aid, which has been fraught with failure, the realities in many areas would be much worse).
“There is no room for the sort of home grown effort that would get started on its own and attract financing (in Africa).” Easterly proposes a “searcher” model, in which the aid agencies search for people and organizations doing good things on the ground and supporting them. (This is a great idea! Ideally, this would be a fixed percentage of all agencies budgets).
Easterly's Policy Recommendations:
- When something doesn't work, discontinue it.
- Discontinue structural adjustment loans to poor countries
- Get rid of utopian goals and plans (MDG's, etc)
- For long-run development, most hope is not from aid, but from homegrown development, social entrepreneurs, and private investors
All good points. However, I will have to personally disagree with #3 and #4. I believe that large plans do have a place in the development of nations; and there has been success in meeting these goals, despite Easterly's critiques. There is simply a lot more to the data than he presents, aka: the “known unknowns” that occur in the least developed countries in the world, normally as a result of poverty, aka, the “traps” as presented by Collier. Only in lifting a country from these traps through massive pushes, which will be a combination of homegrown development, social entrepreneurs, and outside organizations, in addition to other massive country-led initiatives (such as, but not limited to the infrastructure-for-commodities deals arranged with China and India, which, despite serious issues, are a reality that cannot be debated at this point in time). An integrated approach will look at lot like a “massive push” such as the MDG's. And catchy slogans draw attention. And attention is a damn good start. I note that Easterly spends a lot of time slamming Bono and Angelia Jolie for their Sachs relations and globe trotting; while far from being policy experts, the ability to draw attention to an issue, the ability to bring a focus onto an issue from people who otherwise would simply not care, is something that cannot be discounted. Thus, I believe there is a roll for the “concerned actor” and many have done tremendous work in bringing issues to light. While teaching in the Bronx, I showed Hotel Rwanda and Save Darfur as part of a Human Rights curriculum I was teaching, and the impact of Clooney, Cheadle, and others on focusing the attentions of inner-city high school youths was immense. There is a place for this attention, and Easterly would do better by not simply dismissing it as a cheap publicity ploy. In terms of the need for homegrown development, I fully agree with Easterly. However, for this development to flourish, much macroeconomic change needs to occur in many of the poorest nations. In these nations, there is simply not room, due to terrible government policy, for social entrepreneurs to flourish; thus, the macro needs to be shifted through englightened governmental policies (trade, business, mineral extraction) before these “homegrown” initiatives can truly transform. And the macro will simply not change in a vacuum; there needs to be outside influence in many nations where the leaders are simply not looking out for the best interests of their citizens. Thus, both approaches are necessary; aid needs to be much more effective, this is a given; however, this is not a black or white issue; many of Easterly's proposals can only come with external funding (ie: homegrown development attractiing foreign investment and turning into viable social businesses) and a change in the domestic business environment. Capitalism cannot cure all; the platforms for capitalism need to be laid down before it can do so; in the meantime, as Paul Collier notes, much of the roll of aid will be to simply provide a basic decency in the lives of many.
The economic miracles of the East have come in the absence of foreign aid; in fact, China was a donor nations to its many Maoist friends during the worst of its economic debacles of the last decades; however, the reality on the ground is the reality-the Asian tigers have already seized the manufacturing and service based growth that is needed by African nations to grow themselves out of poverty, and there is very little chance of manufacturing becoming agglomerated in many of the countries of the bottom billion in the coming decades, and thus, the problems will persist, unless assistance is given, in the forms of aid, trade barrier resolution, and infrastructure development. A country such as Chad will simply not be able to compete its way out of poverty with a nation such as Vietnam or even Bangladesh. What, then, to do about the Chads of the world? Abandon them? Aid needs to be focused, targeted, and made more accountable for the truly needy of the world, of which there are many. It does not deserve to be abandoned, despite all its failings
