Thursday, June 16, 2011

Aid effectiveness on a bad day

But all three books make the case that the ineffectiveness of much philanthropy is actually the fault of the philanthropist. They applaud the motives for giving, but all make the point that people too often let their philanthropy be guided by their hearts alone. “Deciding what you will do to make change happen is a choice that requires both your head and your heart”, write Messrs Fleishman and Tierney in the best chapter in “Give Smart”, entitled “What Am I Accountable For?” The biggest problem for philanthropists, they argue, may be that “they are essentially accountable to no one but themselves.”
Some of the problems:

1 - There’s the overall lack of evaluations being done, and even when we do them we can’t simply aggregate the results and call it done, as Blattman points out:
We’re selective in which programs we evaluate, and ten[d] towards the decentralized, uncoordinated, and less sensitive programs. I call it the “non-random impact of random impacts
2 - Then there's the question of who receives the aid. Do we give to "bad governments"? On the one side, giving aid supports a corrupt regime. On the other, removing aid is likely to harm the poorest instead of the targets. Admittedly, there is a lot of disagreement about the model here: aid is hurting when it goes in and when it goes out. One of the ethical underpinnings, though may just be "strongly determined by how much you discount future suffering versus suffering today," writes Aid Thoughts.

Note: in the case being discussed at Aid Thoughts (Malawi and the British) I do not intend to imply that the Malawi government is “bad” on the basis of their insulting an ambassador. A little more care should be given, in my view, to differentiating between “behavior we don’t like” and actual villainy. If someone wants to argue that the government is villainous, then the debate should be about whether aid should be cut for that reason, rather than because a diplomat was expelled. Although, from an economist's perspective, I guess it reveals the true British preferences.
3 - And then Tales from the Hood tells us it may be time for aid -- all international aid -- to leave Haiti. His argument is that Haiti has been constantly interfered with without ever being given the chance to govern itself.

Tucker argues that this may not be the best thing, that the root cause of Haitian poverty is lack of capital, and the root cause of lack of capital is incredibly bad governance. He concludes unusually, however:
Now, to be sure, there are plenty of Americans who are firmly convinced that we would all be better off if we grew our own food, bought only locally, kept firms small, eschewed modern conveniences like home appliances, went back to using only natural products, expropriated wealthy savers, harassed the capitalistic class until it felt itself unwelcome and vanished. This paradise has a name, and it is Haiti.
Where Tucker gets the idea that Haiti only eats the food it produces is a little beyond me. Starvation is high, but so are food imports. The standard story (which Erica Philips and I debate in a forthcoming case study) is that massive US rice imports have harmed local agriculture significantly.

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