Last Rejoinder to Milanovic

Milanovic must live on another planet if he thinks that China and India in pursuit of a multi-polar world will promote a Tobin tax. Having been involved with policy discussions in these two countries for the last few decades, the Tobin tax has never been and is still not even on their distant horizon. I am afraid, painful as it must be for idealists like Milanovic to accept, the world’s great powers are still moved by their national interests, and given their growing weight in the global economies, these emerging giants like the US will be unwilling to have their financial transactions taxed and handed over to some international agency. If he thinks Brazil is moved by a cosmopolitan morality, let him suggest that Brazil agree to a world tax on commodities to be handed to the UN for cash grants to the poor. Unless Brazil has changed radically since I worked there in the 1980s he is likely to get short shrift for such a proposal.

As regards his proposal to hand cash grants to the deserving poor from Angola to Zimbabwe, who is going to be getting these cash grants to these intended beneficiaries? World Bank apparatchiks? Humanitarian activists and NGOs? If they can’t get food and medicines to the hungry and sick because of local government impediments, does he seriously believe these foreign agents carrying their sacks of dollars will be able to hand out their $100 to each targeted family without it being ‘misappropriated’ by local government agents?

On migration, the central question is: would Milanovic support unrestricted migration into the developed world by the world’s poor? Instead of selecting legal migrants by their skills, would he advocate that they be selected instead by their relative poverty? If not, why not, given the universal moral code he espouses in favor of a global welfare state? If he does not advocate this because of political constraints why does he feel free to ignore them in his advocacy of a global welfare state?

His statement that the 19th century globalization “ended in self-induced imperialist carnage,” is wrong in the use of the adjective ‘imperialist’. Even if he doesn’t want to read my book on empires, he should at least read the work of serious historians who long ago refuted the Leninist thesis about the imperialist origins of the First World War, which no doubt Milanovic remembers from school. As a start I would recommend Niall Ferguson’s excellent The Pity of War.

Also from this issue

Lead Essay

  • It is a tragedy that billions suffer from extreme poverty. The second tragedy of the world’s poor, William Easterly maintains in this month’s lead essay, is that trillions spent on foreign aid have done so little to help. Aid efforts so rarely succeed because they so often lack feedback and accountability. The way forward, Easterly argues, is “truly independent scientific evaluation of specific aid efforts … continuous evaluation of particular interventions from which agencies can learn.”

Response Essays

  • In his spirited reply to this month’s lead essay the World Bank’s Branko Milanovic claims that William Easterly’s argument is misleading. Easterly, Milanovic argues, is not clear about the definition of “aid,” and he both underestimates how much governments can do to help the poor and overestimates the likely effectiveness of his proposed new “grandiose bureaucracy” to assess aid effectiveness. Easterly, Milanovic writes, “provides an argument for those who have long argued that the best policy is to do nothing and ignore the poor world.”

  • In his reply essay, Deepak Lal, the James S. Coleman Professor of International Development Studies at UCLA, argues that like almost all aid efforts, Easterly’s proposed evaluation initiative is likely to fail. “Short of direct or indirect imperialism,” Lal argues, “there seems to be little hope of overcoming the domestic political obstacles to the efficient utilization of foreign aid.” Easterly’s proposal is just more fodder for the “Lords of Poverty,” the middle class professionals who derive a good living from the international business of alleviating world poverty.

  • The Center for Global Development’s Steve Radelet argues against Easterly that, in fact, “aid amounts have been modest” and that the evidence shows that aid is often effective. Without successful health interventions, “millions of these people would be dead,” Radelet writes. Furthermore, he argues, aid does promote economic growth. “Here is the dirty little secret: most of the published research over the past decade has shown a modest positive relationship between aid and growth.”