About April 2006
When Angelina Jolie appears on MTV trekking across Africa with a world-famous development economist and Bono makes it to the cover of Time for his work on behalf of the world’s poor, you can be sure that the issue of world poverty isn’t just for wonks any more. Wealthy citizens of wealthy countries seem to increasingly recognize the gulf between them and the rest of the world. But what, if anything, can the wealthy people of the world do that will really help? Billions upon billions have been spent by governments and institutions like the World Bank over the last half-century to launch less developed countries onto a trajectory of growth. Yet despite all this money—or perhaps because of it—many countries continue to languish in abject poverty. Do we need to spend even more, faster? Or have development efforts misunderstood the deeper causes of growth? How important are political and social institutions to the effectiveness of aid? And how important are intangibles like culture, belief systems, and human capital? Are there underappreciated opportunities for aid that we should hear from Ms. Jolie’s bee-stung lips and that Bono ought to be singing from the rooftops?
William Easterly, Professor of Economics at New York University and former World Bank economist, will kick off the conversation with an essay based on his new book, White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good. Branko Milanovic of the World Bank, Deepak Lal, Jules S. Coleman Professor of Economics at UCLA, and Steve Radelet, Senior Fellow of the Center for Global Development, will round out the conversation with their expert comments.
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.”
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.”