I am not an economist, but even I can figure out that how development money is disbursed can have almost as much impact on success or failure as what it is spent on.
As the UN anti-poverty confab — the UN Millennium Development Goals Summit — winds down, I thought it worth pointing out these two economists arguing over how we approach foreign assistance.
The first article (requires a free subscription to the Financial Times) is by Jeffrey Sachs, at Columbia University.
Sachs makes the case that foreign aid will be more efficient if we truly collaborate and pool funding into multilateral initiatives like the Global Fund to Fight AIDS, Tuberculosis and Malaria.
Here is Sachs’ article.
The second article is by another New York economist, William Easterly, at New York University. Easterly points out that the last anti-poverty goal — MDG 8, basically aimed at developing fair trade — has largely been ignored. Easterly thinks business development is the way to go and direct assistance programs (like the Global Fund) are not.
He notes that truly committing to MDG 8 would mean calling for, among other things, an end to “rich countries perpetuating barriers that favor a tiny number of their businesses at the expense of impoverished millions elsewhere.”
Here is Easterly’s article.