Not just foreign aid was involved; the West promoted advice, diplomatic relations, and military intervention as part of the crusade to transform the Rest. Cold warriors sent spies, soldiers, and guns to poor countries to try to save them from communism and implement capitalism.
A whole new field of economics was invented called “development economics.” A Polish-born economist named Paul Rosenstein-Rodan in the 1940s called for a “Big Push” to move the third world into the first. Scholars in politics and sociology and many other fields studied “development” of the poor countries.
Economist, sociologist, and later Nobel laureate Gunnar Myrdal said in 1956 that the answer to poverty was a plan: “It is now commonly agreed that an underdeveloped country should have…an overall integrated national plan…under the encouraging and congratulating applause of the advanced countries.” Myrdal used dramatic language in favor of such plans, language that echoes today’s (italics in original): “The alternative to making the heroic attempt is continued acquiescence in economic and cultural stagnation or regression which is politically impossible in the world of today.” 38 Amen to that, except that the heroic plan failed to end economic stagnation or even to realize its potential to address simpler needs.
With some fluctuations in intellectual favor since, these are the same ideas that inspire today’s version of the White Man’s Burden. A rare early dissenter was the Hungarian-British economist Peter Bauer, who four decades ago presciently predicted the failure of planning “development” through foreign aid.39
The fallacy is to assume that because I have studied and lived in a society that somehow wound up with prosperity and peace, I know enough to plan for other societies to have prosperity and peace. As my friend April once said, this is like thinking the racehorses can be put in charge of building the racetracks.
The Poor Help Themselves
In his introduction to Sachs’s The End of Poverty, Bono said, “It’s up to us.” Sachs writes of “our generation’s challenge.” Gordon Brown, in announcing his Big Push aid plan, saw himself telling Africans: “We have to say,” ‘We will help you build the capacity you need to trade. Not just opening the door but helping you gain the strength to cross the threshold.’"40
The most infuriating thing about the Planners is how patronizing they are (usually unconsciously). Here’s a secret: anytime you hear a Western politician or activist say “we,” they mean “we whites”—today’s version of the White Man’s Burden. (This is not automatic for any Western effort to help the poor; there are other rich people who genuinely care about the poor and are not patronizing.)
Cameroonian lawyer and journalist Jean-Claude Shanda Tonme protested in a July 2005 New York Times Op-Ed column about the Live 8 concert organizers that “they still believe us to be like children that they must save,” with “their willingness to propose solutions on our behalf.”
We will see in the rest of the book the refreshing changes that can happen once the patronizing mind-set is abandoned—from ending conditions placed on aid and IMF loans, to ending military interventions, to giving matching grants that increase the opportunities of individuals rather than coddle bad governments.
The world’s poor do not have to wait passively for the West to save them (and they are not so waiting). The poor are their own best Searchers. While Western Planners were discussing whether to increase foreign aid by $50 billion for all poor countries, the citizens of just two large poor countries—India and China—were generating an increase in income for themselves of $715 billion every year.41 The Gang of Four—Hong Kong, Korea, Singapore, and Taiwan—went from third world to first over the last four decades. China, India, and the Gang of Four did this through the efforts of many decentralized agents participating in markets (the ideal vehicle for feedback and accountability) without significant Western assistance as a share of their income, with some efforts by their own governments (at their own top), and without the West telling them what to do. The developing countries that are in the bottom fourth in terms of aid receipts as a percent of their income have had no trouble achieving healthy growth rates, seeing a 2.5-fold increase in income over the last four decades.
Homegrown development does not always work, as the poverty and political chaos in various parts of the world shows. Yet even when national development fails, the poor are more resourceful than Planners give them credit for. In Ethiopia, Etenesh Ayele, thirty-eight, spent twelve years carrying firewood into Addis Ababa. Now she is trying to help women and girls like Amaretch. She runs the Association of Former Women Fuelwood Carriers, whose members teach girls so those girls can stay out of the firewood brigade. Etenesh Ayele and her colleagues also teach women alternative skills, such as weaving, and give them small loans for start-up capital. “Most women know how to weave but do not have enough money to buy materials,” says Ayele, “so we provide that and we also help them with new and different designs so that they can sell the shawls and dresses that they make more easily.42 This association is no panacea—it still has not reached Amaretch—but it shows the kind of homegrown effort that foreign donors could support much more.
Poor people have already accomplished far more for themselves than the Planners have accomplished for them, as we will see in a chapter on “home-grown development.” Although the West could help alleviate more of the poor’s sufferings if it relied more on Searchers in aid agencies and those on the ground such as Etenesh Ayele, the West cannot transform the Rest. It is a fantasy to think that the West can change complex societies with very different histories and cultures into some image of itself. The main hope for the poor is for them to be their own Searchers, borrowing ideas and technology from the West when it suits them to do so.
We have to separate two questions that are usually lumped together: What can Western aid do? How can long-run prosperity be achieved in the Rest? This book is only about question one, except to argue that Western aid is not the answer to question two.
Question two is certainly worth asking! It will continue to be a fertile area of exploration for researchers and policymakers. For readers understandably impatient to answer the Big Question of “What can we do now to achieve prosperity?” let’s just note that the previous fifty years of research have not yielded any simple answers. If there were such simple answers, there would be many more development success stories than there are now. There have been many little answers to particular parts of the Big Question, and further progress is likely to continue in the same way—not through a frontal assault on the Big Question. As Sir Francis Bacon said in the seventeenth century, “So it cometh often to pass, that mean and small things discover great better than great can discover small.43 This book is about those little answers that can be implemented through Western aid.
One of those uncommon success stories was the country that registered the world’s highest per capita growth rate from 1960 to the present. This country is not in East Asia; it is in Africa. Botswana registered 6 percent per capita growth over this period, a historically unprecedented number for so long a period. How much of Botswana’s success was due to foreign aid? In the early years, per capita aid was a significant fraction of per capita income. But then aid declined while income soared (see figure 1). While aid may have played some formative role early in independent Botswana’s history, the era of rapid growth soon made it an afterthought. Botswana was lucky to have rich diamond mines, but many other poor countries had natural resources but squandered rather than developed them. What was more uncommon for a poor country was that Botswana embraced democracy.
Moving Forward
As for the actions of the West, asking the aid agencies and development workers to attain utopian ideals makes them much worse at achieving the doable things called for by the Searchers. It also makes them much less accountable for making specific things work, as the focus on the Big Goals of the Big Plan distracts everyone’s attention from whether more children are getting twelve-cent medicines. Acknowledging that development happ
ens mainly through homegrown efforts would liberate the agencies of the West from utopian goals, freeing up development workers to concentrate on more modest, doable steps to make poor people’s lives better.
Idealists, activists, development workers of the world, you have nothing to lose but your utopian chains. Let’s give more power and funds to the many Searchers who are already working in development. You don’t have to immediately eliminate world poverty, bring world peace, or save the environment. You just have to do whatever you discover works with your modest resources to make a difference in the lives of poor people.
If you want to work on issues at a higher level, there should also be Searchers for how to make piecemeal changes to the foreign aid system to give more power and money to the working-level Searchers. One piecemeal change is honest and independent evaluation of aid agencies, which would make possible rewards for finding things that work and redirection of money to do more of those things. Searchers could think of mechanisms to let the poor themselves show what they want most and what they don’t. We will see that there is much scope for improvement just by having the West follow the rule “First do no harm.” This book will offer plenty more suggestions for experimental improvements to Western assistance, but don’t expect a Big Plan to reform foreign aid. The only Big Plan is to discontinue the Big Plans. The only Big Answer is that there is no Big Answer.
Only an elite few in the West can be Planners. People everywhere, not just in the West, can all be Searchers. Searchers can all look for piecemeal, gradual improvements in the lives of the poor, in the working of foreign aid, in the working of private markets, and in the actions of Western governments that affect the Rest. Many Searchers can watch foreign aid at work in many locales around the world and let their voices be heard when it doesn’t deliver the goods. It is time for an end to the second tragedy of the world’s poor, which will help make progress on the first tragedy. Searchers can gradually figure out how the poor can give more feedback to more accountable agents on what they know and what they most want and need. The big plans and utopian dreams just get in the way, wasting scarce energies. Can’t the Searchers just look for how the agents of charity can get twelve-cent medicines to children to keep them from dying of malaria, can get four-dollar bed nets to the poor to prevent malaria, can get three dollars to each new mother to prevent child deaths, can get Amaretch into school?
SNAPSHOT: GHANA ACROSS A LIFETIME
A VOLKSWAGEN BEETLE CREEPS THROUGH a small town in Ghana along the road from Accra to Cape Coast. It is night. It is hot. The Beetle is small for its five passengers. The air smells of wood smoke. There are no streetlights. The driver—my father—picks his way through the Ghanaian walkers on the road. The car hits frequent potholes. Unlighted vehicles pass us going in the opposite direction. We come out of the town and are in the bush. The smells are now of tropical flowers. We come to the guesthouse where we will spend the night. The bungalow has no light. Somebody lights a kerosene lantern. The odor of kerosene drives out every other smell. For the rest of my life, whenever I smell kerosene, I think of Ghana. My brother, sister, and I stumble sleepily into the wooden guesthouse with verandas, a leftover from British colonizers. My nervous mother, to whom every blind curve in the road was an existential crisis, copes with tropical disorder. The bungalow has only one bedroom; the rest of us make do with sofas or chairs pushed together. We are skittish after sighting a few insects and even bats in the bungalow. We go to sleep anyway, to the rhythms of drums in nearby villages and surf on the nearby coast. My father is a biology professor at the University College of Cape Coast, Ghana, part of the American program to lend knowledge to the development of Africa. We are a family of five from Bowling Green, Ohio. We are white people and we have come to save you. I am twelve years old.
Thirty-five years later, I am again on the road from Accra to Cape Coast. I am a development economics professor, having spent many of the intervening years working on the quest to transform the poor countries of the world, sixteen of them working for the World Bank. Our car is bumping along on one of the worst roads I have ever seen; the donors are building a new road next to the wretched road. Our car swings into the small town of Mprumem, a village of mud huts with thatched roofs. My traveling companion knows the chief of Mprumem, who curiously enough is a Ghanaian immigrant to the United States, working as a university professor in Akron, Ohio. He spends part of every year in Mprumem.
The village elders come to greet us, marching in a dignified file with ceremonial robes and carved walking sticks, scattering goats and chickens, followed by a crowd of curious children. As part of the welcoming ceremony, the elders pass around a glass of schnapps. Each of us in turn (excluding the children) drinks half the contents of the glass and throws the rest on the ground; the attendant then refills the glass for the next person.
The older village elders tell us about how life has changed over time. Many villagers used to suffer from Guinea worm disease when they had to get their water from a contaminated water hole. Guinea worm disease is caused by a tiny water flea that contains the worm larvae. When people drink water containing such fleas, they get infected with the larvae. The larvae hatch inside their bodies, eventually growing to worms as long as three feet. The worms eventually emerge from open sores on the skin. They take weeks to emerge, during which the victim is in agony and cannot work or attend school.44
Now the villagers get piped water from the nearby city of Winneba, and there is no Guinea worm. The expansion of water services was financed partly by foreign aid. Even though the water supply is periodically interrupted, the chief has built a water reservoir (financed by Western donations) to store water to tide the people over during water cutoffs. Children are healthier. What’s more, the returning chief has also built a junior high school, also financed by Western donations.
Night falls. With only a few homes with electricity, the village is deep in a darkness that few Western urbanites could imagine. The Milky Way is visible in the sky overhead. Walking along the main street of the village, I try not to bump into other walkers in the darkness. A little light comes from vendors selling omelets by candlelight on the street. Fifty people are gathered around to watch television outdoors on one of the few electric hookups. They are watching a funeral. Another part of the funeral occasion that I don’t fully comprehend: across the street, speakers are booming out heavy metal, quite a change from the drums of thirty-five years ago. Even the few electric hookups are an improvement from thirty-five years ago (although I personally prefer drums to heavy metal), when so many villages had no electricity at all. Accommodation for the night is basic, but free of insects or bats.
This snapshot, like the other ones interspersed throughout the book, shows anecdotal evidence of how Searchers, like the chief from Akron, Ohio, or some in the aid agencies, find piecemeal improvements that work, such as electric power, piped water, a water reservoir, the wiped-out Guinea worm, a junior high school. I mean these anecdotes to be suggestive, not “proof” that aid Searchers do better than Planners. (The main text of the book addresses that big issue.) Few of the small interventions that I will describe have been rigorously evaluated, which the book will argue is necessary to make progress. But few things have been rigorously evaluated in foreign aid, period. We have to start somewhere to get ideas on things that could work.
There is still so much more that could be done in Ghana to prevent needless tragedy. Only 46 percent of infants with diarrhea receive the cheap treatment of oral rehydration therapy that dramatically lowers the risk of death. Twenty-nine percent of children are still stunted from malnutrition, which could be alleviated with timely treatment of anti-diarrhea programs, feeding programs, and nutritional supplements. Thirty-one percent of children do not receive the cheap immunizations against childhood killer diseases.45
These interventions always seem puny compared with the grand visions of the Planners. Yet if you multiply the Searchers exponentially and contrast their numerous interventions
to plans that don’t actually work, if you consider the doable things that don’t get done because aid does not have enough Searchers, you have a way of thinking about aid that will help the poor more than Gordon Brown’s eloquence.
PART I
WHY PLANNERS CANNOT BRING PROSPERITY
CHAPTER TWO
THE LEGEND OF THE BIG PUSH
It is undesirable to believe a proposition when there is no ground whatsoever for supposing it is true.
BERTRAND RUSSELL
WHY DO INEFFECTUAL UTOPIAN plans dominate the debate on economic development? We have already seen that it is partly explained by the political appeal of utopian plans to rich-country politicians. In addition, the Planners’ intellectual inspiration was an old legend about how Western efforts could achieve long-run development, which has come back with a vengeance.
The legend dates back to the 1950s. Many things have changed since the 1950s—we now have air-conditioning, the Internet, new life-saving drugs, and sex in movies. Yet one thing is unchanged: the legend that inspired foreign aid in the 1950s is the same legend that inspires foreign aid today.
The first chapter in this book presents parts of the legend. The full version goes like this: The poorest countries are in a poverty trap (they are poor only because they started poor) from which they cannot emerge without an aid-financed Big Push, involving investments and actions to address all constraints to development, after which they will have a takeoff into self-sustained growth, and aid will no longer be needed. This was exactly the legend that gave birth to foreign aid in the 1950s; it is exactly the legend that the advocates of a massive aid increase are telling today. This chapter will test this legend against the evidence that has accumulated over the past fifty years in between the original legend and its remake a half century later. I will tell you up front what you have already guessed: the evidence does not support the legend. This is a classic example of trying again something that didn’t work before, one of the traits of Planners.
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