The debate over aid does not want to go away, but it is moving away from general statements about whether it works or not. Regardless of who is right and what we believe, it is promising to see the conversation taking a far more constructive tone. However, the present discussions are not likely to convert people to the pro- or anti-aid camps.
The latest round of disagreement follows on the heels of NYU economist and aid skeptic Bill Easterly’s new book. In it, he argues that technocratic experts have undermined the rights of people around the world. Aid, at times, has been a tool to provide support for leaders that restrict things people can say and do in their countries. In the long term, that undermines advances within a country or region.
Easterly has been making the media rounds to debate whether foreign aid is on the wrong side of human rights. On Wednesday, Easterly joined CARE USA’s CEO Helene Gayle to debate foreign aid on Fareed Zakaria’s television show. Zakaria plays a moderator of sorts who seems a bit of an aid supporter.
This debate followed yet another debate featuring Bill Easterly that took place last week. In a much more formal and academic setting, the Center for Global Development pit its own Owen Barder against Easterly. The much longer discussion (starting at minute 12) allowed the two to present their cases for and against aid.
Meanwhile, the From Poverty to Power blog run by Oxfam GB’s Duncan Green had an aid debate of its own. This time Easterly was given a break and Princeton University economist Agnus Deaton took the side of aid critic. The conversation began with Green refuting the claims laid out by Deaton in his recent book, which featured conclusions on the failure of aid.
Deaton is not against all aid, and suggests health, humanitarian emergencies, and countries where aid remains a low percentage of overall government revenues. He also advocates aid for basic research, technical assistance to governments that want it, and support for poor countries in the innumerable international negotiations. He advocates a good ‘put your own house in order’ list of sanctions on odious regimes, transparency in corporate payments to governments (e.g. on minerals extraction) and tackling northern restrictions on trade and migration, and perverse biofuel subsidies. He misses tax havens and illicit flows, but I imagine he would support their inclusion.
The response by Deaton makes the case that essentially aid slows down economic growth in countries. Like Easterly, Deaton criticizes the provision of aid to countries and leaders that are bad. He says that, “we make trade-offs between different freedoms at our practical and ethical peril.”
Why might aid fail in aggregate? One of my favorite stories in Duncan’s book is about owners of fishponds being violently dispossessed by more powerful people, and then getting them back through political action. Money and know-how were not the issues; power was the problem, and politics the solution. But this good outcome is unusual. The worst case I know happened in Goma in 1994, when the perpetrators of the genocide in Rwanda fled into the eastern DRC with their wives and families. Perhaps two-thirds of the aid for the humanitarian emergency was diverted for training the murderers to go back to finish off the Tutsi “cockroaches.” Alex de Waal, in Famine Crimes, explains over and over how aid can only reach the victims of war by paying off the warlords, and sometimes extending the war. Such aid saves lives, but at the price of other lives later.
An informal poll carried out by Green following the change has most people agreeing that “aid undermines national politics, but such damage can be minimized by designing it better.” Smart aid supporters like Green and Barder will tend to agree with that sentiment. Skeptics like Deaton and Easterly will see those changes as more technocratic solutions that will cause problems.
