Five Second ... White Man's Burden

It is easy for people to misread Easterly's views. I'm not certain why, other than that people don't read him carefully. In White Man's Burden [the Click to Look Inside link on the picture doesn't work, so click the title here to look inside], he opens by introducing that there are two problems: one is the suffering of the poor, the other is the historic inability of the West to solve the problems. In particular, despite spending $2,300,000,000,000 on foreign aid over the last 50 years, that we are still unable to get twelve cent medicines to the people who need them most. His work focuses on the second problem.

He does not in the entire book argue that we should spend less trying to help the poor. He argues that we are trying to help in ways that are largely ineffective. "I ... keep trying, not to abandon aid to the poor, but to make sure it reaches them." "Western assistance ... can still play some role in alleviating the sufferings of the poor."

He does not argue that aid can never be effective. He argues that the way we have gone about it has often been ineffective and proposes some ways to help it be more effective. He cites Botswana as an example of aid "supporting reform and good government," though detailing how abysmally it has failed to do the same elsewhere; he cites pages and pages of World Bank, WHO, and IMF programs that were successful.

He does not claim that we should give up trying to help people. He pleads that we change the question from How can I use foreign aid to solve every problem in the world to "What can foreign aid do for poor people" and then do it. "Aid agencies cannot end world poverty, but they can do many useful things to meet the desparate needs of the poor and give them new opportunities."

He does not provide a blueprint for how to solve every problem with aid. He does suggest several dimensions where significant progress could be made by experimentation in making aid more effective. They include:

Accountability and Specialization "The utopian agenda has led to collective responsibility for multiple goals for each agency, one of the worst incentive systems invented since mankind started walking upright.... Have individual accountability for individual tasks. Let aid agencies sepcialize in the sectors and countries they are best at helping. Then hold aid agencies accountable for their results by having truly independent evaluation of their efforts." "Not overall sweeping evaluations of a whole nationwide development program, but specific and continuous evaluation of particular interventions."

Feedback and Meaningful Participation from Recipients. "The needs of the rich get met because the rich give feedback to political and economic Searchers, and they can hold the Searchers accountable for following through with specific actions. The needs of the poor don't get met because the poor have little money or political power with which to make their needs known and they cannot hold anyone accountable to meet those needs." The jargon is already there, but he takes down Poverty Reduction Strategy Papers as one set of planners talking to another set of planners, often written by the recipient government at the dictation of the donors, sometimes even undermining democratic processes and selections. "Visibility gives more power to Searchers while invisibility shifts power to Planners. The problem with aid is that the poor are mostly invisible." "Participation should mean more buying and voting power in the hands of the poor in aid."

Fund Maintenance. "Aid donors should just bite the bullet and permanently fund road maintenance, textbooks, drugs for clinics, and other operating costs of development projects. Politically dysfunctional governments that don't do maintenance can concentrate on other things. ... The return on spending on instructional materials in education is up to fourteen times higher than the return on spending on physical facilities." p. 190

On Peacekeeping: "Peacekeeping could be good, but just who is willing to be accountable for its success or failure. ... Interventionism suffers from the patronizing assumption that only the West can keep the locals from killing eah other. ... Peace usually succeeds war because of a decisive victory by one side, not because of negotiated settlements by outsiders. ... UN interventions produced a stable peace only a quarter of the time. With no intervention, a stable peace resulted nearly half the time." He is overall quite negative on military interventionism.

One thing that I have admired about Easterly is that he is willing to admit that he was wrong. He does so at least twice in the book, once discussing market reform "shock therapy" and once in discussing structural adjustment. I asked him at his blog whether some of his own work fell under a criticism he had just made, and he admitted that one of the papers I mentioned fell into the same category. He promised a bit more of a response which I'm still waiting for, but there's something comforting in talking with someone you know is willing to say "I was wrong." In the book he opined that the military would be the least responsive to criticism, but on his blog has noted with surprise that the military responded the most cordially and promisingly of any group he has criticized.

One of my few criticisms is that he simultaneously calls for more observability while deriding current aid projects for overly focusing on observability without differentiating what should be observable. That is, he wants to trim down the number of goals any agency is responsible for, so it is more observable who does what, but he laments incentives that support building facilities or roads because they are more visible than textbooks or maintenance.

After presenting a fairly convincing case that Planning really doesn't work, I also noted with some irony that there was a heavy element of planning involved in the homegrown development cases he lauds at the end of the book. He acknowledges some of this, that "the success stories follow a variety of formulas," but prefers to call South Korea and Japan's actions intervening in economies rather than planning and to note that China and Singapore are "quite far from a laissez-faire model." "What we do know ... is that the West played small part in them." This leaves open a door for domestic planning to be good and foreign planning to be bad, a door I think he could do a much better job turning into a window or a peephole.

"Success attracts paternity claims." So every theory of development claims success for the various successes. When Sachs visited Cornell, for instance, he laughed at Easterly's assertion that aid hasn't done much and cited the total figure of aid given to China and India. Easterly notes that those large sums only amount to $0.001 per day for each Chinese person and $0.005 for each Indian person. Compare that to the much larger sums spent in Africa (which Sachs calls a mere $0.50 per person) and you wonder how so little could do so much while so much does so little.

Some very good 'side note' sections: The importance of social networks (p. 82-87), property rights (p. 90-99), the difficulties of making democracy work and its evolution (p. 116-129), comparing the cost effectiveness of health initiaives (HIV prevention, AIDS treatment, and others; p. 249-258). He also has some excellent snapshots of World Bank publications from the 1950s or 1980s to today, all saying the exact same thing: things are bad, but there are promising signs out there. I learned that it is much easier for me to be sanguine when reading about the colonial disasters of England, France, and Portugal than to read about the (usually CIA-backed) disasters the US sponsored (270-338).

Notable Quotables after the break:

Five Second ... Bottom Billion

I finished Paul Collier's The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It last week.

The thing I value most in the book is the different mindset he proposes for considering "poor countries." Rather than dividing the world into 1 billion rich and 5 billion poor people, he further subdivides the poor into two groups: those in countries whose economies are growing regularly, so who - if we do nothing - are expected to become rich eventually; and those in countries that have seen essentially no growth for decades. He avoids making a list of the specific countries, though throughout the book a few names do keep creeping up. He is also careful to point out that this is not "Africa" and "Everyone else," because there are countries in Africa that have made and are making significant progress and countries in other regions that are real trouble.

He proposes four traps that go a bit beyond the typical poverty trap discussion (which even its proponents demonstrate is circular reasoning, see right) by identifying specific features other than poverty that make it a trap. His top four traps are conflict, abundant natural resources, landlocked with bad neighbors, and poor governance. When combined with deep poverty, these factors make it much more difficult for individuals to work their way out of poverty. There is a significant amount of research - much of it his own - behind his descriptions of each trap.

He also presents four policy options that would support countries' exit from these traps in particular circumstances: modest aid policies; invited, committed, long-term military interventions; international laws and standards; and differently-unfair trade practices. Each of them is fun for a long debate by itself.

He does not advocate applying any of these indiscriminately even in the bottom billion. For countries locked in conflict, he recommends using most of them: invited military interventions where donors are committed to having a presence for a decade (but not much more) and to engage rebel groups to reduce the risk of future conflict and reduce payments to domestic military services to prevent coups; aid to competitively fund reconstruction projects; and standards that would dictate the roles of the countries sending support so that it's all less ad hoc.

For natural resource trapped countries, though, his only recommendation is international standards for good governance and resource management practices; and landlocked countries with bad neighbors are likely to have problems for a very long time to come, so just accept that aid will be a long-term factor until outside conditions improve and provide promises of military support to reduce coups.

I am fascinated that nowhere in his matching up of traps and solutions does he mention his trade proposition, which is to give Africa a better deal than Asia. It's not about 'justice' or 'fairness' or other catchy slogans, but would give them a temporary advantage in trade that they currently don't have and won't be able to have in a few years' time once Asia has done more catch up. He would also like to see the WTO add a branch specifically to arrange trade grants for developing countries before each trade round, much as the World Bank added a poverty/grant element to its loaning business.

And for ordinary people?

"The left needs to move on from the West's self-flagellation and idealized notions of developing countries. Poverty is not romantic. The countries of the bottom billion are not there to pioneer experiments in socialism ... The international financial institutions are not part of a conspiracy against poor countries... The left has to learn to love growth. ... Much as I agree with Sachs' passionate call to action, I think he has overplayed the importance of aid. ...

"The right needs to move on from the notion of aid as part of the problem - as welfare payments to scroungers and crooks. ... It has to face up to the fact that these countries are stuck, that competing with China and India is going to be difficult. Indeed, it has to recognize that private activity in the global market can sometimes generate problems for the poorest countries that need public solutions. ... We are not as impotent and ignorant as Easterly seems to think. ...

"Electorates tend to get the politicians they deserve."