Paulo R Almeida
OFF THE SHELF
A Surprising Case Against Foreign Aid
By FRED ANDREWS
The New York Times, October 12, 2013
IN his new book, Angus Deaton, an expert’s expert on global poverty and foreign aid, puts his considerable reputation on the line and declares that foreign aid does more harm than good. It corrupts governments and rarely reaches the poor, he argues, and it is high time for the paternalistic West to step away and allow the developing world to solve its own problems.
It is a provocative and cogently argued claim. The only odd part is how it is made. It is tacked on as the concluding section of “The Great Escape: Health, Wealth, and the Origins of Inequality” (Princeton University Press, 360 pages), an illuminating and inspiring history of how mankind’s longevity and prosperity have soared to breathtaking heights in modern times.
Mr. Deaton is the Eisenhower Professor of Economics and International Affairs at Princeton. He has spent decades working with the World Bank in creating basic yardsticks for measuring global poverty and with the Gallup Organization in creating survey-based measures of well-being.
The “great escape” of the title, he writes, is “the story of mankind’s escaping from deprivation and early death.” His book gives a stirring overview of the economic progress and medical milestones that, starting with the Industrial Revolution and accelerating after World War II, have caused life expectancies to soar.
Professor Deaton is a fluent writer, but his book is a demanding read. Its guts are his statistical comparisons, region by region and country by country, of how things stand today. They show how, when and whether higher incomes have promoted greater life expectancies and higher well-being across the globe. Professor Deaton tells us that a rising tide has lifted almost all the world’s boats — but some far higher than others. Some have scarcely moved; a few have sunk. Obviously, some developing nations have done phenomenally well, yet, on average, the distance between “rich” and “poor” countries remains the same.
China and India continually come to the fore. For all their extraordinary progress in lifting millions of people out of poverty, it is still the case that about half of the world’s poor are Chinese or Indian.
In today’s world, with all we have mastered in medicine, public health and development, Professor Deaton says, it is also still the case that almost a billion people “live in material destitution, millions of children still die through the accident of where they are born, and wasting and wanting still disfigure the bodies of nearly half of India’s children.”
That troubling statement leads to his indictment of foreign aid, which is jarring and odd only in that nowhere in the first 266 pages of his historical analysis has he even mentioned foreign aid, either positively or negatively. A new character joins the play in its final act and becomes the villain of the piece.
In his considered judgment, global poverty today is no longer a result of lack of resources or opportunity, but of poor institutions, poor government and toxic politics. Though about $134 billion in official aid still flows from donor governments to recipient governments, there is no mystery, he says, as to why foreign aid fails to erase poverty. That is not its mission, he asserts: typically it serves commercial interests at home or buys political allies abroad, too often unsavory ones.
All aid is distorted by politics at both ends, he says, citing the example of Mauritania several years back, when aid was in danger of being cut off. The country’s president hatched the brilliant idea of becoming one of the few Arab countries to recognize Israel. The aid taps were reopened and the reforms rescinded.
THE author has found no credible evidence that foreign aid promotes economic growth; indeed, he says, signs show that the relationship is negative. Regretfully, he identifies a “central dilemma”: When the conditions for development are present, aid is not required. When they do not exist, aid is not useful and probably damaging.
Professor Deaton makes the case that foreign aid is antidemocratic because it frees local leaders from having to obtain the consent of the governed. “Western-led population control, often with the assistance of nondemocratic or well-rewarded recipient governments, is the most egregious example of antidemocratic and oppressive aid,” he writes. In its day, it seemed like a no-brainer. Yet the global population grew by four billion in half a century, and the vast majority of the seven billion people now on the planet live longer and more prosperous lives than their parents did.
So what should the West do instead of providing aid? Well, it can invest in finding a vaccine for malaria, still a mass killer. It can push drug companies to tackle diseases that threaten poorer countries. It can support the free flow of information about inventions and new management techniques. It can relax trade barriers and provide poor countries with expert advice at the bargaining table. It can ease immigration restraints and accept more newcomers.
Many options exist, but Professor Deaton suggests that the question is fundamentally wrong and self-centered. “Why is it we who must do something?” he wonders. “Who putus in charge?” What the West should do, he says, is stand aside and let poorer countries find their own paths, in fits and starts, at their own pace, to development and prosperity, just as the West had to do a century or so earlier.
That is a powerful argument from a scholar who has done his homework, but it is more provocative than ultimately convincing. Defenders of foreign aid would reply that past efforts have contributed greatly to the enormous gains in life expectancy that the professor celebrates. The professor’s maverick views fly in the face of an enormous global effort, and he paints with a very broad brush. The World Bank counts nearly 12,000 projects under way in 172 countries. It’s hard to believe that all are nearly as flawed or misguided as Professor Deaton suggests. Aid is not a door that should slam shut.
