An Economics Professor, who formerly worked for the World Bank, William Easterly reports that the West has spent $2.3 trillion on foreign aid over the last five decades without much to show for it–in what he calls the Rest. For example, donors haven’t gotten the 12-cent medicine to children that could prevent half of the deaths from malaria. Free bed nets to prevent mosquito bites often end up in the black market or are used as fishing nets. Nets are more likely to be used if people want them and pay for them. Donors spent two billion dollars in Tanzania the last two decades building roads, without improving the roads. [i]About three billion people still live on less than two dollars a day.
The problem is the Planners think in terms of big bureaucratic plans, like the UN’s Millennium Development Goals for 2015 or Professor Jeffrey Sachs’ plan with 449 interventions. The UN, the World Bank, and IMF advocate a big plan explained in the Poverty Reduction Strategy Paper. They generate utopian reports and conferences without knowing what the poor really can use on the local level. The lack feedback is one of the most critical flaws in aid programs. They consistently work top-down through governments even if they’re corrupt: The world’s 25 most corrupt countries received $9.4 billion in foreign aid in 2002. [ii] Many agencies overwhelm governments with paperwork. Simplistic big plans always fail because poverty is complex. For example, trying to impose a system like a free market from outside doesn’t work, as Russia shows, where per capita income is below the Soviet peak.
Myths around aid programs are that they pull nations out of poverty with a Big Push, but successful countries did it on their own like China, Taiwan, South Korea and Singapore. Countries with below-average aid had the same growth rate as countries with above-average foreign aid, 1950-2001.[iii] Heavy World Bank and IMF involvement isn’t associated with national stability.[iv]
In contrast, Easterly calls the effective helpers the Searchers. They think local not global, and specific, not general or simplistic. Searchers get feedback and evaluations from those they serve and are accountable for their expenditures. They don’t try to change governments. Specific agencies should be heelpd responsible for a particular issue
[i] William Easterly. The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much ill and So Little Good. Penguin Books, 2006, p. 165.
[ii] Ibid, P. 133
[iii] William Easterly. The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much ill and So Little Good. Penguin Books, 2006, p. 39.
Indoor smoke from cooking kills around 1.8 million people a year. P. 109
Deworming medication decreased school absenteeism by one quarter in the Busia district, Kenya. P. 54
Food For Education programs pay families to keep kids in school and get health checkups in Bangladesh
In Bangladesh, a doctor set up the “People’s Health Center,” where teenage girls are trained to provide health care and refer emergenies to the hospital he built. The poor pay small fees for the services, which means they complain if they don’t get good care.
[iv] William Easterly. The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much ill and So Little Good. Penguin Books, 2006, p. 67.