Referencing Gordon Brown’s January 2005 speech calling for “a doubling of foreign aid, a Marshall Plan for the world’s poor, and an International Financing Facility (IFF) against which tens of billions more dollars toward future aid could be borrowed to rescue the poor today” as a vision of “how easy it is to do good” (a mere 12 cents buys a dose of anti-malaria vaccine, a mere four dollars an anti-malaria bed net, etc), William Easterly wryly notes that:

In a single day, on July 16, 2005, the American and British economies delivered nine million copies of the sixth volume of the Harry Potter children’s book series to eager fans. Book retailers continually restocked the shelves as customers snatched up the book. Amazon and Barnes & Noble shipped preordered copies directly to customers’ homes. There was no Marshall Plan for Harry Potter, no International Financing Facility for books about underage wizards. It is heartbreaking that global society has evolved a highly efficient way to get entertainment to rich adults and children, while it can’t get twelve-cent medicine to dying poor children.
Easterly, 2006. p.4

Highlighting a lack of evidence that overseas aid makes a discernible difference in a country’s long-term social and economic development (p.45, 49, et passim), Easterly’s central thesis is that “dying poor children don’t get twelve-cent medicines, while healthy rich children do get Harry Potter, [because] twelve-cent medicines are supplied by Planners while Harry Potter is supplied by Searchers”:

In foreign aid, Planners announce good intentions but don’t motivate anyone to carry them out; Searchers find things that work and get some reward. Planners raise expectations but take no responsibility for meeting them; Searchers accept responsibility for their actions. Planners determine what to supply; Searchers find out what is in demand. Planners apply global blueprints; Searchers adapt to local conditions. Planner at the top lack knowledge at the bottom; Searchers find out what the reality is at the bottom. Planners never hear whether the planned got what is needed; Searchers find out if the customer is satisfied. (ibid. pp.5-6)

And returning to a variant on the last point on pp.181ff, he highlights what intuitively must seem an eminently sensible observation: that Planners only measure input (promises of exactly “doubling aid” are apparently common both in the World Bank and in Western governments) when what actually matters in the end is tangible output. Thus “Despite the billions of dollars spent of development assistance each year, there is still very little known about the actual impact of projects on the poor” (p.194, quoting Baker, 2000).

By way of example, he later notes how

In Africa since 1996, the number of cell phones has been increasing by a factor of ten every three years. The explosion of cell phones shows just how much poor people search for new technological opportunities, with no state intervention, with no structural adjustment or shock therapy to promote cell phones. These are not just consumer pleasures. Cell phones help farmers, fishers, and entrepreneurs check out prices, suppliers, and consumers; arrange meetings; transfer funds; and a lot of other things that are logistical nightmares in societies without good landline phones, functional postal services, or adequate roads. (ibid, pp.103-4)

This cannot, of course, be the whole story. The majority can still not afford mobile phones and the contracts that go with them (or laptop computers or any other technology you might wish to mention); and even were they able to, it is not clear that their mode of life would relevantly benefit from owning them. But the point in general seems good to me: where those who can buy into the technology, and see the advantage in buying, do buy, their bottom-up initiatives may turn out to be more effective than money thrown by top-down planners, not solely because they have what they need and not what some faceless bureaucrat thousands of miles away tells them they ought to want, but also because they have taken ownership of their own futures and that is very empowering.

Easterly concludes (or, at least, up the the point in the book to which I’ve now read) that:

Piecemeal reformers, foreign and domestic, can try to move toward better systems that are sensitive to local conditions and that unshackle the dynamism of individuals everywhere. The dynamism of the poor at the bottom has much more potential than plans at the top. (ibid, p.108)

This seems reasonable, and certainly rings true in my own profession. In the Faculty of Computing, Information Systems, and Mathematics in which I lecture we drive home to students, in the teaching of system design, the importance of consulting the end-users. Information systems imposed on users without such consultation, and without consideration of established effective working practices, are inclined to fail.¹ And many World Bank and IMF projects have failed for just that reason (but I write about that elsewhere).

There are, of course, many factors that determine poverty of a nation and the poverty of its peoples. A major if not the main cause is ‘bad govenment’. (We should also add internal and external conflict, natural disasters, cronyism, exploitation by foreign corporations, etc.) A problem faced by donor agencies is that they are constrained by their charters to “operate only through governments in the recipient countries. If virtually all poor countries have bad governments, then the donor agencies will give aid to countries with bad governments” (ibid, p.132). This is further complicated by the sad fact that “foreign aid is used as a political reward to allied governments, no matter how unsavory they are” (ibid).

we had the world’s twenty-five most undemocratic government rulers (out of 199 countries the World Bank rated on democracy) get a sum of $9 billion in foreign aid in 2002. Similarly, the world’s twenty-five most corrupt countries got $9.4 billion in foreign aid in 2002. The top fifteen recipients of foreign aid in 2002, who each got more than $1 billion each, have a median ranking as the worst fourth of all governments everywhere in 2002 (ranked by democracy, corruption, etc.). It would be good to get aid from the rich of rich countries to the poor of poor countries, but what we see happening is that aid shifts money from being spent by the best governments in the world to being spent by the worst. What are the chances that these billions are going to reach poor people? (ibid, p.133)

The sobering message is clear: rich nations go through the motions of aiding poor nations, but with little accountability as to whether aid reaches those, the citizenry, by whom it is most needed.

Another critical factor to which Easterly draws attention, however, is the internal obstacles to self-empowerment, these (one suspects) too often themselves structurally endemic to ‘bad government’:

Simeon Djankov² at the World Bank, with many collaborators, has started a promising initiative to reduce obstacles to doing business in poor countries. He has found in his research that countries that require more red tape to start a new business have higher corruption and large informal sectors operating outside the law. Business is also shackled in poor countries by cumbersome procedures to collect debts, enforce contracts, register property, and collect from bankrupt business partners. “It takes 153 days to start a business in Maputo, but 2 days in Toronto. It costs $2,042 or 126% of the debt value to enforce a contract in Jakarta, but $1,300 or 5.4% of the debt value to do so in Seoul. It takes 21 procedures to register commercial property in Abuja, but 3 procedures in Helsinki. If a debtor becomes insolvent and enters bankruptcy, creditors would get 13 cents on the dollar in Mumbai, but more than 90 cents in Tokyo.” (Easterly, 2006, p.111)

Cynically, one might suspect a strong motive in easing such restrictions could rather be to assist entry for wealthy foreign companies than to facilitate internal entrepreneurship. ‘Foreign investment’ can sometimes do good, of course; but the track record frankly doesn’t look too impressive to date in terms of workers’ rights and equitable salaries. Nevertheless one can readily appreciate that such restrictions are clearly an impediment to worker self-empowerment.

By way of personal conclusion, I can’t resist the temptation to close with an extract from Oscar Wilde’s The Soul of Man under Socialism which, it seems to me, captures something of the spirit of what we’re talking about here:

The majority of people spoil their lives by an unhealthy and exaggerated altruism—are forced, indeed, so to spoil them. They find themselves surrounded by hideous poverty, by hideous ugliness, by hideous starvation. It is inevitable that they should be strongly moved by all this. … Accordingly, with admirable though misdirected intentions, they very seriously and very sentimentally set themselves to the task of remedying the evils that they see. But their remedies do not cure the disease: they merely prolong it. Indeed, their remedies are part of the disease.
They try to solve the problem of poverty, for instance, by keeping the poor alive; or, in the case of a very advanced school, by amusing the poor.
But this is not a solution: it is an aggravation of the difficulty. The proper aim is to try and reconstruct society on such a basis that poverty will be impossible. And the altruistic virtues have really prevented the carrying out of this aim. Just as the worst slave-owners were those who were kind to their slaves, and so prevented the horror of the system being realised by those who suffered from it, and understood by those who contemplated it, so, in the present state of things in England, the people who do most harm are the people who try to do most good; and at last we have had the spectacle of men who have really studied the problem and know the life – educated men who live in the East End – coming forward and imploring the community to restrain its altruistic impulses of charity, benevolence, and the like. They do so on the ground that such charity degrades and demoralises. They are perfectly right. Charity creates a multitude of sins. …
We are often told that the poor are grateful for charity. Some of them are, no doubt, but the best amongst the poor are never grateful. They are ungrateful, discontented, disobedient, and rebellious. They are quite right to be so. Charity they feel to be a ridiculously inadequate mode of partial restitution, or a sentimental dole, usually accompanied by some impertinent attempt on the part of the sentimentalist to tyrannise over their private lives. Why should they be grateful for the crumbs that fall from the rich man’s table? They should be seated at the board, and are beginning to know it. As for being discontented, a man who would not be discontented with such surroundings and such a low mode of life would be a perfect brute. Disobedience, in the eyes of any one who has read history, is man’s original virtue. It is through disobedience that progress has been made, through disobedience and through rebellion. Sometimes the poor are praised for being thrifty. But to recommend thrift to the poor is both grotesque and insulting. It is like advising a man who is starving to eat less. For a town or country labourer to practise thrift would be absolutely immoral. Man should not be ready to show that he can live like a badly-fed animal. He should decline to live like that, and should either steal or go on the rates, which is considered by many to be a form of stealing. As for begging, it is safer to beg than to take, but it is finer to take than to beg. No; a poor man who is ungrateful, unthrifty, discontented, and rebellious is probably a real personality, and has much in him.

References

Baker, J.L. (2000). ‘Evaluating the Impact of Development Projects on Poverty: A Handbook for Practitioners’. Washington, DC: LCSPR/PRMPO, The World Bank. [Web]

Easterly, W. (2006). The White Man’s Burden: Why the West’s efforts to aid the rest have done so much ill and so little good. New York: The Penguin Press. ISBN: 1594200378. [Amazon]

HM Treasury (UK) / Brown, G. (2005). ‘International Development in 2005: the challenge and the opportunity’, Speech by the Rt Hon Gordon Brown MP, Chancellor of the Exchequer at the National Gallery of Scotland, 6th January 2005. [Web]

Wilde, O. (1891). The Soul of Man under Socialism. (First published in the Pall Mall Gazette, 1891, first book publication 1904.) [Web]

Convert this post to PDF

1. Parenthetically, a personal observation. Echoing my own strong misgivings about the introduction into our university of Blackboard as a campus-wide LMS some years back, Casey Bisson reflects in a recent podcast on why it is that students eschew use of Blackboard or WebCT in favour of collaboration in MySpace or Facebook: “If learning environments are built for the administration are they going to have the same functionality that students would expect in their environments?” To impose a learning management system / virtual learning environment without consulting end-users—the staff and students who will have to use it—with respect to the functionality that, experience tells them, best supports the pedagogic process is not only to invite opposition but also to undermine provenly effective practices of teaching and learning.[back]
2. Senior Economist in the Private Sector Advisory Services Department of the World Bank. His research articles are available for download from the World Bank’s Doing Business web site.[back]