Friday, September 17, 2010

Top Ten Reasons to Take the Money

Haddad and Roving Bandit each have a small set of reasons why (parts of) India should still accept DfID aid even if the central government says no thank you:

Roving Bandit quotes an unknown source:
1. Just because the Indian government doesn’t need UK aid (as demonstrated by the space program, nuclear program, and its own overseas aid programs), doesn’t mean that some of the millions of individual Indian people living in extreme poverty with chronic malnutrition would not benefit from foreign assistance.
2. India is cheap. This means that in general aid given to Indians can go much further than aid to Africans. The same amount of money will feed more people, build more schools, or pay more nurses in India than anywhere in Africa.
3. Because India is so big, we don’t have to worry so much about aid distorting the economy, or government accountability to citizens, or government spending decisions. The government (and the economy) don’t even notice. But those poor individuals certainly do.
Haddad's 5:
1. DFID works in 3-4 of the poorest Indian states. These are the size of medium countries with populations in the 50-60 million range and if ranked as countries, they would have some of the highest poverty numbers in the world. But this argument only goes so far. ...

2.  ... The poorest states have the weakest tax base and hence the lowest administrative systems. DFID helps these states to access these central resources to boost investments in child health, nutrition and education where they are most needed.

3. DFID can help state governments take risks and innovate ... [by acting] as a support and a lightning rod for risk-taking.

4. DFID has to back up this work by programming resources....
5. ... despite the rapid growth, GDP per capita is still just over $1000. This is 6 times lower than its frequent comparator, Brazil and 3.5 times lower than China.
That 5th looks a lot like Bandit's 1st. Anyone up for adding 2-3 more?

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