Aid Ironies

The debate about foreign aid has become farcical. The big opponents of aid today are Dambisa Moyo, an African-born economist who reportedly received scholarships so that she could go to Harvard and Oxford but sees nothing wrong with denying $10 in aid to an African child for an anti-malaria bed net. Her colleague in opposing aid, Bill Easterly, received large-scale government support from the National Science Foundation for his own graduate training.

I certainly don't begrudge any of them the help that they got. Far from it. I believe in this kind of help. And I'd find Moyo's views cruel and mistaken even she did not get the scholarships that have been reported (Easterly mentioned his receipt of NSF support in the same book in which he denounces aid). I begrudge them trying to pull up the ladder for those still left behind. Before peddling their simplistic concoction of free markets and self-help, they and we should think about the realities of life, in which all of us need help at some time or other and in countless ways, and even more importantly we should think about the life-and-death consequences for impoverished people who are denied that help.

Nine million children die each year of extreme poverty and disease conditions which are almost all preventable or treatable or both. Impoverished countries, with impoverished governments, can't solve these problems on their own. Yet with help they can. The Global Fund to Fight AIDS, TB, and Malaria, and the Global Alliance on Vaccines and Immunizations are both saving lives by the millions, and at remarkably low cost. Goldman Sachs, Ms. Moyo's former employer, gives out more in annual bonuses to its workers than the entire rich world gives to the Global Fund each year to help save the lives of poor children. And when Goldman Sachs got into financial trouble it got bailed-out by the US Government. Rich people have an uncanny ability to oppose aid for everybody but themselves.

Recently Paul Kagame, President of Rwanda, wrote an op-ed for the Financial Times praising Moyo's fresh thinking. This is extraordinary. His government has depended on aid for more than a decade. Nearly half the budget revenues currently come from aid. Rwanda currently imports around $800 million of merchandise each year, but only earns $250 million or so in exports. So how does it do it? Aid, of course, helped to pay for around $450 million of the imports. Without foreign aid, Rwanda's pathbreaking public health successes and strong current economic growth would collapse. Kagame's op-ed did not help FT readers to understand this.

Americans are predisposed to like the anti-aid message. They believe that the poor have only themselves (or perhaps their governments) to blame. They overestimate the actual aid from the US by around thirty times, so they imagine that vast sums are flowing to Africa that are then squandered. Many believe, typically in private, that by saving African children we would be creating a population explosion, so better to let the kids die now rather than grow up hungry. (I'm asked about this constantly, usually in whispers, after lectures). They don't understand the most basic point of worldwide experience: when children survive rather than die in large numbers, households choose to have many fewer children, in fact more than compensating for the decline in child mortality. Africa's high child mortality is ironically a core reason why Africa's population is continuing to soar rather than stabilize as in other parts of the world.

Of course, most Americans know little about the many crucially successful aid efforts, because Moyo, Easterly, and others lump all kinds of programs - the good and the bad - into one big undifferentiated mass, rather than helping people to understand what is working and how it can be expanded, and what is not working, and should therefore be cut back. Nor do Americans hear that many poor countries graduate from the need for aid over time, precisely because aid programs help to spur economic growth and successfully prepare countries to tackle future priorities. US aid to India for increased food production in the 1960s paved the way for India's growth takeoff afterwards. There are countless other examples in which countries have benefited from aid and then graduated, including Korea, Malaysia, Taiwan, Israel, and others. Egypt is on that path today, and Rwanda, Tanzania, Ghana, and others will be as well if both donors and recipients carry forward with a sensible assistance strategies.

Here are some of the most effective kinds of aid efforts: support for peasant farmers to help them grow more food, childhood vaccines, malaria control with bed nets and medicines, de-worming, mid-day school meals, training and salaries for community health workers, all-weather roads, electricity supplies, safe drinking water, treadle pumps for small-scale irrigation, directly observed therapy for tuberculosis, antiretroviral medicines for AIDS sufferers, clean low-cost cook stoves to prevent respiratory disease of young children. Shipment of food from the US is a kind of aid that should be cut back, with more attention on growing local food in Africa.

Out of every $100 of US national income, our government currently provides the grand sum of 5 cents in aid to all of Africa. Out of that same $100, we have found around $10 for the stimulus package and bank bailouts and another $5 for the military. It is not wonderful that what has caught the public's eye are proposals to cut today's 5 cents to 4 or 3 cents or perhaps zero.

Comments

[Modular-Libertarian]

I really have a hard time understanding how anyone would tolerate sending millions of dollars to country X over giving that money to American causes. How about instead of sending 10 million to feed the children in another country giving that 10 million to a poor school district in the slums of New York or LA? If any of you were stranded on an island with your child and another person and you only had enough food to feed one person you would feed your child first. It should be instinct to take care of your own first and then take care of others. Children in the slums of America have little hope to get out of the slums and you’d prefer to tell them “sorry, we’d rather send this money to feed someone in a country that you’ve most likely never heard of because your public schools lack the funding to provide a good education.­” The sad truth is that we have no business giving out federal aid to other countries when we’re facing a 10 trillion dollar deficit. Think about the irony here –America donates more money to global causes than any other country on earth, yet America has some of the worst public schools of any civilized country on earth.

[ccyl]

We can take care of both domestic and global poverty if we commit to both efforts and give them the priority they deserve. It's not an either/or issue. Many of us lobby for and donate money to both international and American causes that fight poverty.

But, to answer your question, some reasons people advocate for the bottom billion of the world are:
- because the poorest of Americans still have far more than of the world...fr­ee basic primary education, clean water available in drinking fountains, etc. It's a moral imperative to help those in the very worst situations.
- because the dire situations of people in extreme poverty are linked to our national security (desperate people are fodder for extremist regimes) and global sustainability (lack of education and high rate of infant death lead to high numbers of children born).
-because sometimes we have to fight the instinct to feed our children to obesity so we can feed other children to get them to the point of survival..­.whether those kids like in the US or Kenya.

The problems with your ironic fact are in the words "civilized" and "more". America's aid commitment comes in LAST out of 21 developed countries that agreed to halve extreme global poverty by 2015 when you look at percentage of GNP. And if we come in last among the "civilized" nations, we are still miles above "uncivilized" nations where there are often no schools at all or no schools for girls.

[harlequin115]

Impressive response, and a good call-out on that oft-repeated misstatement about donating more money to 'causes' than any other country on earth--as a percentage of GNP, we're FAR behind.

[leatherneck1971]

Hypocrites, often expose themselves as these two obvious hypocrites have, aid to no one but them or those they deem fit to have it, reminds me of the GOP motto, gripe at poverty level welfare check to a poor family living in a slum section 8 housing project, but have no issue giving multi-million dollar bail outs to their friends on wall street, or executives getting million dollar golden parachutes as they glide out of a job failure bankrupting the company they led! No surprise here!

[mamapanya]

leathernec­k...Are you seriously comparing the situation in African nations and aid to the GOP's attitude towards the poor? I suggest you pick up a history book, if you can find one, (African History during the colonial period would be a good start...) then you might reconsider your description of the "hypocrite­s.." -

[Modular-Libertarian]

I think those teabaggers you like to make fun of were protesting the million dollar bailouts. (At least that's what they were saying.)

[truenortherner]

Ms. Moyo is apparently from one of Africa's privileged-class families.
While living in Africa for a few years, I became aware that there are privileged Africans who look down on the less-privileged. It is what I consider to be a form of conservatism. And in this case, a classic example of double standard and a type of elitism.
I agree that more effort should be taken to deal with the issue of aid. Primarily, the problem that the vast majority of aid funding actually goes to companies from the country giving the aid, almost none of it goes to support businesses in the developing world. So there are no incentives, for example, for the country to use more of it's arable land to grow food rather than say, tea or coffee that benefits Western business, and only benefits the country in that it is able to make interest payment on their debt.
And the same must be said of the issue Africa faces in terms of World Bank loans, privatization and austerity measures that the IMF imposes when the lender defaults.

[zola77]

Yes, its a legacy of British and french colonial era tactics - divide and rule. Elevate one clique/group of people in society via giving them power and money so that they will do the bidding of their western masters. The national struggles against colonisation in the region were only placated by forcing divisions in the native population (via handing over money, status and power) - nothing new.

The socioeconomic stratification and unequal class relations in the third world are more stark than in the 1st world - Just go to any third world country and look at the hordes of slum-dwelling folk living right next to newly constructed high rises that are virtually palaces for the native and foreign elites.

[alexandra hamilton]

Jeffrey, as much as I agree with your philantropy and think your efforts to be laudable, I also must wonder about your pronouncements.
As a former implementer of the shock-doctrine, you surely are aware how the game of capitalism works. Thus you know, that not everyone can be rich and once someone has made it, they don't allow others to come after them.
It is, after all, a pittyless fight for their place in the pecking-order, because loosing that place means certain economic annihilation for them.
Why then would you be surprised that people act that way to protect themselves?

http://alexandrahamilton.wordpress.com/2009/05/25/japanese-korean-and-us-crises/

[apoyo]

Why look so far when your own legislators have stood in the way of health care for all for decades, all the while they enjoy the best health care available paid for with tax payer dollars?

[NewAfrican]

I haven't read the book "Dead aid" but I think the lady has a point when it comes to accountability. No one can seriouly expect any progress on developpement, if governments are accountable to aids sources and not to their people.
There is no way you will mobilize local ressources without this accountability. If Mr. Sachs can fix this then he will get my support.
"We want Washington to work for us not for Wall street" that was the mantra for USA2008 elections.
That's the only way people stop being part of the problem (fertility, corruption, AID etc ...) to become part of the solution.

[David Grundy]

Both Easterly and Moyo have made it clear that they don't object to humanitarian and charitable aid and have never said that they did.

You can watch Moyo outline her position in an interesting discussion with a Norweigan MP: http://www.youtube.com/dambisamoyo#uploads/7/L5Pkk2sq9Cg

60% of Africans are under the age of 24 and many of them don't have job prospects. There has been a surge from 10% of Africans living in poverty to now over 70%. This isn't a coincidence. It's a direct result of failed aid policies which leave Africa perpetually dependent upon the whims of people like Sachs.

His ad-hom attacks about Moyo's scholarship and Easterly's funding would be laughable if it weren't so hyppocritical. Sachs took it upon himself to grace the Communist world with "shock therapy" in the 90's. Based on his logic, unless he had fully funded his own private education, healthcare and every other public service then he would be in no position to liberalize Communism. After all, wasn't the Communist experiment a noble cause with the aim of helping the proletariat? Perhaps Communism simply didn't work because they needed more aid and the West was too selfish to share their ideals?

Moyo and Easterly know what works and are advocating an Africa that has many ladders to climb - not just ones that Sachs takes it upon himself to permit. It's hard to teach Africans to fish when Sachs is snapping all the fishing rods in a hissy fit.

[avam2009]

Fully agree - and well put.

[anthroguy]

Jeffery Sachs eloquently and persuasively presents a case ... that willfully misunderstands and parodies the arguments of his critics. William Easterly and Dambisa Moyo are not free-market fundamentalists, as Sachs implies. They're not "pulling up the ladder" after they themselves benefitted from "aid." They're simply two among many who have noticed that, empirically, billions upon billions of dollars in aid to Africa generally failed to produce beneficial results. Africa as a whole is worse off now than it was in the '70s.
What is the solution? To Moyo, it's breaking the cycle of dependency African nations have with the West. To Easterly it's micro-level, locally-conceived, results-tested development with accountability -- with a dose of humility, self-examination, and "searching" thrown in -- something quite different from what we in the Weat have been doing for decades.
To Sachs, alas, the "solution" is just more of the same, but this time better somehow. Second verse, same as the first.
I urge those interested in this debate to take a look at Sachs eloquent and passionate (and, in my view, ultimately, misguided) book, The End of Poverty: Economic Possibilities for Our Time (2005). Follow it with Moyo's Dead Aid: Why Aid is Not Working and How There is a Better Way for Africa (2009) and then reconcile the two (a bit) with Easterly's ironically titled White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good (2005).

[Lynda Gilmartin]

One of the best ways to help Africa is to educate its women. Educated women invariably work for the good of all rather than their own enrichment, as men generally do. But I despair that this will happen in my lifetime.

[anthroguy]

I'd go so far as to say that without making women and children the centerpiece of develpment, development projects generally will fail.

[SaundraS]

The debate over what works and what does not work in international aid is a critical one and we need to ensure it happens in a professional manner. Personal attacks will not add anything of substance to this debate.

There are currently aid programs, led by well intentioned people, that are doing more harm than good. As a teacher I always kept in mind the saying - Whether what we are doing is right or wrong, we are doing it to someone else's child. As an aid worker I think - Whether what we are doing is right or wrong, we are doing it to people who can least afford us to fail.

An honest, professional debate backed by research will help us get closer to what is right and what is wrong. I ask that the Huffington Post help facilitate that debate, polarizing the issue will not serve those we are trying to help.

[edva]

The bad news is: greed is a part of human nature. The good news: it can be overcome, or at least controlled, just as other destructive elements of our nature have been (with varying degrees of efficacy, I admit). But, we have to muster the societal will to do so.

[schatsie]

We have to look back to the 1950s when John Nash proved GAME THEORY. That we are all on each others shoulders (imagine that) and that we all benefit together and that is how the top 1% works....T­hey all have insider information and will spend whatever it takes to get their welfare benefits that the rest of us do not deserve...­. That is they write off everything, you don't really think that Warren Buffett lives off of 100 grand a year, heck no, he runs everything thru his businesses­...You and I should get a writeoff for commuting, he gets a writeoff for a jet, and fuel and pilot and stewardesses and insurance and airport fees etc and it is all either a business expense or a charitable deduction,,, WE HAVE BEEN SUCKERED..­.

The French have it right, they have their healthcare, their pensions, their 6 weeks of vacation their sick leave, their banks are not failing nor are they getting bailed out...If the banksters tried this there the French would know what to do with them....

[maryyooch]

"Rich people have an uncanny ability to oppose aid for everybody but themselves. "

aid has always been that way. Here in America, when they cut the AFDC program, they didn't even think about cutting corporate welfare. AFDC helped a lot of poor families from being homeless. It was a very, very small part of the federal budget. But corporate welfare? Just in the budget alone, was quite a few billions. Not counting the extra aid they received that was outside the budget numbers.
When you help rich people and corporations, who already have the money, it's called aid. When it comes time to helping families that truly need it just to survive, it's called socialism.
Just look at the bank bailouts. Where are the bailouts for the pople who were screwed over by the banks, who were paying their martgages with obscene intrest rates, who lost their jobs? Where is the "aid" for them?

[schatsie]

Darn tooting, I want to get in line for my SPA VACATION .... oh my that is right, in France I would get that as part of Socialized Medicine, but here only the pampered and privileged get that and then they write if off as a business expense...­...

[AprilH]

Sach's post has plenty of vitriol, but lacks substance to support his points.

Anyone who follows the aid and development literature with an open mind knows that some development assistance works, and some doesn't. And some strategies and approaches work in some places, but not elsewhere. And we are getting a better handle now on deeper dynamics (e.g. how large aid flows may undermine nascent pressures from the population on their leaders to be accountable) - which we haven't taken into account in evaluations of aid impact until recently. But to make such statements is to risk the ire of Professor Sachs.

Why? I wonder. Why is it reprehensible for thoughtful people to look at the evidence on impact of aid programs? Why are you not willing to engage more in discussions of how to make aid programs more effective? And why should people who have received a scholarship (or one assumes any other type of support) be disqualified from analyzing aid program effectiveness? Will you be the Grand Inquisitor now? And decide who is pure enough to work in our field? One presumes the criteria for admission boils down to: they must always agree with you.

[John Duffell]

Sachs makes some good points about the successes of aid, but his attacks on Kagame, Moyo, and especially Easterly are bogus, and he knows it. Sachs makes no distinction between the grants that Easterly received for his graduate work, and the SPECIFIC TYPES of projects that Easterly proposes either scrapping or reforming. Easterly has never called for an end to aid. Never. Easterly HAS called for reform and transparency in aid projects, and suggested that, if a project is shown to be hurting rather than helping, it really ought to be scrapped (imagine - the unmitigated gall!). I don't always agree with the guy, but I do celebrate his brutal honesty and his willingness to face hard truths.

Or maybe Africans should just accept the help they're given...an­d anyone with reservations about any of this (including African heads of state) should shut the hell up and be grateful for the benevolence of the West. After all, if some aid projects are working, it is morally repulsive to ask questions about any aid projects. Ever.

[schatsie]

I am not understanding your last sentence..­...I do not mind helping out our people with ESRD, but I have a real problem that we are totally ignoring the precursors including hypertension and our polluted food supply....­did you know that Yale or Princeton did autopsies on Alzheimers patients and almost 10% were victims of MAD COW disease, not alzheimers at all....

[toxicbrainpoison]

Uh... if Rwanda wasn't importing so much maybe they'd be ok. You know the markup that they must see on all that?! Nevermind that the corporations there are have the same greedy mentality that all ours do. They slave people and keep the profits and tell them to import all their needs.

That is wage slavery. And the world bank probably is responsible for the fact that they have no public infrastructure. They also bring in mandatory import quotas and terrible labor law cuts. Psssh.

[mamapanya]

toxicbrain­poison....­..Uhhhhh "They slave people and keep the profits and tell them to import all their needs"..? What on earth are you talking about? And, the World Bank is not the reason Rwanda has no infrastruc­ture...It is because of a government that was proppd up by France for 30+ years, receiving tons of aid from the usual suspects, with no questions asked! No accountability, no follow ups, no nothing! What they were busy doing was importing machetes en masse from Egypt and China, ammunition fit for a war, all in preparation for a massacre that would kill a million people. Are you kidding me? At some point, every newborn has to stop taking baby formula and move on up to regular milk.....a­s Afircans, we have got to get it together and begin to get away from this "pacifier" we keep sucking on! I applaud President Kagame for having the guts to say it out loud even though everyone else in the room is "thinking" it but afraid to say it.
Mr Sachs, your concern and efforts are certainly appreciated however, we need to re-visit what works and what does not.