Continuing the diatribe over the aid paradigm, I am reproducing below a response to Jeffrey Sachs by his colleauge William Easterly (Professor of Economics, New York University). It was published on The Huffington Time.
Sachs Ironies: Why Critics are Better for Foreign Aid than Apologists by William Easterly (May 25th, 2009)
Official foreign aid agencies delivering aid to Africa are used to operating with nobody holding them accountable for aid dollars actually reaching poor people. Now that establishment is running scared with the emergence of independent African voices critical of aid, such as that of Dambisa Moyo. Jeffrey Sachs, the world's leading apologist and fund-raiser for the aid establishment, has responded here with a ferocious personal attack on Moyo and myself, "Aid Ironies."
Allow me to defend myself (I'll let the formidable Moyo handle herself). It's not so much my pathetic need to correct slanders, as if anybody cared. Sachs' desperation shows when he peddles what I will show he knew were falsehoods. Besides, the sight of two middle-aged white men mud-wrestling on African aid may entertain the audience.
Sachs accuses me of such a hard heart as to deny "$10 in aid to an African child for an anti-malaria bed net." Sachs offers: "Here are some of the most effective kinds of aid efforts: support for peasant farmers to help them grow more food, childhood vaccines... roads, .. safe drinking water...."
Sachs likes a lot more another writer whom he quoted in his book Common Wealth: "Put the focus back where it belongs: get the poorest people in the world such obvious goods as the vaccines,... the improved seeds, the fertilizer, the roads, the boreholes, the water pipes...." Wait, that was me!
Sachs was earlier quoting from my book, The White Man's Burden, which far from wanting to deny an African child bed nets, denounces the tragedy of aid impunity, in which "The West spent $2.3 trillion and still had not managed to get four-dollar bed nets to poor families."
Sachs complained that "most Americans know little about the many crucially successful aid efforts, because Moyo, Easterly, and others lump all kinds of programs -- the good and the bad -- into one big undifferentiated mass." Sachs again prefers another writer whom he quoted in Common Wealth: "Foreign aid likely contributed to some notable successes on a global scale, such as dramatic improvement in health and education indicators in poor countries."
You guessed it -- that was me again, illustrating how aid COULD work if only aid agencies were accountable for their actions.
Sachs denounces my callousness when I myself benefited from a government scholarship for grad school: "Easterly mentioned his receipt of NSF support in the same book in which he denounces aid," and now I am "trying to pull up the ladder for those still left behind." Either this is an intentional falsehood or Sachs inexplicably failed to read the next paragraph in the book: "Could you give many more scholarships to poor students? ...Could you give the poor "aid vouchers" that they could spend on aid agency services of their choice?"
Sachs suffers from the same acute shortage of truthiness as did the Bush/Cheney administration, all of whom have contributed to the current climate of fear and intimidation in foreign aid. Any aid critic is immediately denounced as a heartless baby-killer, which protects the establishment from the accountability so badly needed to see aid reach the poor.
My colleagues and I at Aid Watch have documented in recent months such examples of aid impunity as:
a) USAID was caught red-handed by its own Inspector General mismanaging one multi-million project in Afghanistan so badly that millions disappeared without a trace, and among the few tangible outputs was a bridge, reported as "completed," that was so life-threatening that nobody could use it.
b) The World Bank's own evaluation unit criticized them for having only 2 percent of its communicable diseases projects focus on TB, despite the huge mortality from this disease and the availability of effective treatments. For good measure, the World Bank also cut nutritional projects in half, despite the huge benefits from cheap and effective nutritional supplements for children so malnourished that they will suffer permanent brain damage.
c) the World Health Organization faked malaria statistics to make false claims of victories against malaria in the New York Times. The WHO later withdrew and then contradicted the numbers, but never issued a public retraction. How to know when and where to fight malaria if the numbers are faked?
None of these organizations suffered any consequences for their misbehavior. Only poor people suffer the consequences, and they are powerless.
As an alternative to the impunity of the establishment that Sachs defends, the emergence of a new wave of independent aid critics in Africa is most welcome. This new wave includes many more besides the remarkable Dambisa Moyo -- such as the Ugandan journalist Andrew Mwenda and two extraordinary colleagues of mine at NYU: the Ghanaian economist Yaw Nyarko and the Beninese political scientist Leonard Wantchekon. Instead of Sachs' attempt to shout down critics with slanders and falsehoods, let's have a climate of open debate in which we learn from past mistakes, the guilty suffer, the good are rewarded, and we can hope that aid does start to reach the poor.
Friday, July 31, 2009
Thursday, July 30, 2009
The Debate on the Aid Paradigm Continues
The Huffington Post published on May 26th a response to Sachs' article by Dambisa Moyo (Zambian economist and author of Dead Aid: Why Aid is Not Working and How there is a Better Way for Africa).
Aid Ironies: A Response to Jeffrey Sachs by Dambisa Moyo (May 26th, 2009)
Ahead of the publication of my book Dead Aid, an author friend of mine cautioned me about responding to opponents who found it necessary to color their criticism with personal attacks. This, he argued, is a tried and tested way of side-stepping the issues and providing a smoke screen when faced with a valid argument.
Jeffrey Sachs's latest posting is just the latest example of using this tactic to obfuscate the facts and avoid addressing the fundamental issues regarding aid's manifest failure to deliver on its promise of generating growth and alleviating poverty in Africa.
And though I am responding here in order to refute his arguments, as a fellow economist, I intend to rely on logic and evidence to make my argument and show Mr. Sachs the professional courtesy that he has failed to show to me.
Development is not that hard. We now have over 300 years of evidence of what works (and what doesn't) in increasing growth, alleviating poverty and suffering. For example, we know that countries that finance development and create jobs through trade and encouraging foreign (and domestic) investment thrive.
We also know that there is no country -- anywhere in the world -- that has meaningfully reduced poverty and spurred significant and sustainable levels of economic growth by relying on aid. If anything, history has shown us that by encouraging corruption, creating dependency, fueling inflation, creating debt burdens and disenfranchising Africans (to name a few), an aid-based strategy hurts more that it helps.
It is true that interventions such as the Marshall plan in Europe and the Green Revolution in India played vital roles in economic (re)construction. However, the key and (often ignored) difference between such aid interventions and those plaguing Africa today is that the former were short, sharp and finite, whereas the latter are open-ended commitments with no end in sight. The problem with an open-ended system is, of course, that African governments have no incentive to look for other, better, ways of financing their development.
Mr Sachs knows this; how do I know? He taught me while I was studying at Harvard, during which he propounded the view that the path to long-term development would only be achieved through private sector involvement and free market solutions.
Perhaps what I had not gleaned at that time was that Mr. Sachs' development approach was made for countries such as Russia, Poland and Bolivia, whereas the aid- dependency approach, with no accompanying job creation, was reserved for Africa.
Mr. Sachs chooses to ignore that relying on aid at a time when the United States is facing 10 percent unemployment rate and Germany (another leading donor) could contract by as much as 6 percent, is a fool hardy strategy. The aid interventions that Mr. Sachs lauds as evidence of success are merely band aid solutions that do nothing to lift Africa out of the mire -- leaving the continent alive but half drowning, still unable to climb out on its own.
Yes an aid-funded scholarship will send a girl to school, but we ought not to delude ourselves that such largesse will make her country grow at the requisite growth rates to meaningfully put a dent in poverty. No surprise, then, that Africa is on the whole worse off today than it was 40 years ago. For example in the 1970's less that 10 percent of Africa's population lived in dire poverty -- today over 70 percent of sub-Saharan Africa lives on less than US$2 a day.
There is a more fundamental point -- what kind of African society are we building when virtually all public goods -- education, healthcare, infrastructure and even security -- are paid for by Western taxpayers? Under the all encompassing aid system too many places in Africa continue to flounder under inept, corrupt and despotic regimes, who spend their time courting and catering to the demands of the army of aid organizations.
Like everywhere else, Africans have the political leadership that we have paid for. Thanks to aid, a distressing number of African leaders care little about what their citizens want or need -- after all it's the reverse of the Boston tea-party -- no representation without taxation.
In conclusion let me respond to four of Mr. Sachs' specific points:
1) Regarding Rwanda: It is absolutely true that Rwanda depends on substantial amounts of foreign aid. The point is that President Paul Kagame is working tirelessly to wean his county off of aid dependency (which is precisely the approach to exiting aid that I have been arguing for). To focus on the point that Rwanda relies on aid is to miss the more interesting point: Here in a country where over 70 percent of the government budget is aid supported, the leadership is pushing for less, not more aid -- what is it Mr. Sachs that President Kagame sees that you do not see? Let's face it, the leadership could guilt-trip us all into giving it even more aid after the international community turned its back on the country at its time of need during the 1994 genocide, yet it does not.
2) Mr. Sachs claims that I, alongside the compassionate Bill Easterly, lump all kinds of [aid] programs in one undifferentiated mass. I would point Mr. Sachs to page 7 of my book which explicitly makes a delineation between different types of aid.
3) Regarding the "countless" examples in which countries have benefited from aid then graduated: Here I would point Mr. Sachs to page 37 of my book to a discussion of these countries; The difference again with these success stories is that they did not rely on aid to the degree and length that African countries do today. Moreover, they very quickly adopted the market-based, job-creating strategies outlined in my book, for which Mr. Sachs seems to have an apparent aversion, in favour of the status quo.
4) Finally, with respect to Mr. Sachs' remark that I would see nothing wrong with denying US$10 in aid to an African child for an anti-malarial bed net -- even labeling me as cruel; I say, if working towards a sustainable solution where Africans can make their own anti-malaria bed-nets (thereby creating jobs for Africans and a real chance for continents economic prospects) rather than encouraging all and sundry to dump malaria nets across the continent (which incidentally, put Africans out of business), then I am guilty as charged. Don't forget that the over 60 percent of Africans that are under the age of 24 need jobs not sympathy.
As a final plea, I urge Mr. Sachs to heed the words of his former boss, Mr. Kofi Annan when he says "The determination of Africans, and genuine partnership between Africa and the rest of the world, is the basis for growth and development."
Aid Ironies: A Response to Jeffrey Sachs by Dambisa Moyo (May 26th, 2009)
Ahead of the publication of my book Dead Aid, an author friend of mine cautioned me about responding to opponents who found it necessary to color their criticism with personal attacks. This, he argued, is a tried and tested way of side-stepping the issues and providing a smoke screen when faced with a valid argument.
Jeffrey Sachs's latest posting is just the latest example of using this tactic to obfuscate the facts and avoid addressing the fundamental issues regarding aid's manifest failure to deliver on its promise of generating growth and alleviating poverty in Africa.
And though I am responding here in order to refute his arguments, as a fellow economist, I intend to rely on logic and evidence to make my argument and show Mr. Sachs the professional courtesy that he has failed to show to me.
Development is not that hard. We now have over 300 years of evidence of what works (and what doesn't) in increasing growth, alleviating poverty and suffering. For example, we know that countries that finance development and create jobs through trade and encouraging foreign (and domestic) investment thrive.
We also know that there is no country -- anywhere in the world -- that has meaningfully reduced poverty and spurred significant and sustainable levels of economic growth by relying on aid. If anything, history has shown us that by encouraging corruption, creating dependency, fueling inflation, creating debt burdens and disenfranchising Africans (to name a few), an aid-based strategy hurts more that it helps.
It is true that interventions such as the Marshall plan in Europe and the Green Revolution in India played vital roles in economic (re)construction. However, the key and (often ignored) difference between such aid interventions and those plaguing Africa today is that the former were short, sharp and finite, whereas the latter are open-ended commitments with no end in sight. The problem with an open-ended system is, of course, that African governments have no incentive to look for other, better, ways of financing their development.
Mr Sachs knows this; how do I know? He taught me while I was studying at Harvard, during which he propounded the view that the path to long-term development would only be achieved through private sector involvement and free market solutions.
Perhaps what I had not gleaned at that time was that Mr. Sachs' development approach was made for countries such as Russia, Poland and Bolivia, whereas the aid- dependency approach, with no accompanying job creation, was reserved for Africa.
Mr. Sachs chooses to ignore that relying on aid at a time when the United States is facing 10 percent unemployment rate and Germany (another leading donor) could contract by as much as 6 percent, is a fool hardy strategy. The aid interventions that Mr. Sachs lauds as evidence of success are merely band aid solutions that do nothing to lift Africa out of the mire -- leaving the continent alive but half drowning, still unable to climb out on its own.
Yes an aid-funded scholarship will send a girl to school, but we ought not to delude ourselves that such largesse will make her country grow at the requisite growth rates to meaningfully put a dent in poverty. No surprise, then, that Africa is on the whole worse off today than it was 40 years ago. For example in the 1970's less that 10 percent of Africa's population lived in dire poverty -- today over 70 percent of sub-Saharan Africa lives on less than US$2 a day.
There is a more fundamental point -- what kind of African society are we building when virtually all public goods -- education, healthcare, infrastructure and even security -- are paid for by Western taxpayers? Under the all encompassing aid system too many places in Africa continue to flounder under inept, corrupt and despotic regimes, who spend their time courting and catering to the demands of the army of aid organizations.
Like everywhere else, Africans have the political leadership that we have paid for. Thanks to aid, a distressing number of African leaders care little about what their citizens want or need -- after all it's the reverse of the Boston tea-party -- no representation without taxation.
In conclusion let me respond to four of Mr. Sachs' specific points:
1) Regarding Rwanda: It is absolutely true that Rwanda depends on substantial amounts of foreign aid. The point is that President Paul Kagame is working tirelessly to wean his county off of aid dependency (which is precisely the approach to exiting aid that I have been arguing for). To focus on the point that Rwanda relies on aid is to miss the more interesting point: Here in a country where over 70 percent of the government budget is aid supported, the leadership is pushing for less, not more aid -- what is it Mr. Sachs that President Kagame sees that you do not see? Let's face it, the leadership could guilt-trip us all into giving it even more aid after the international community turned its back on the country at its time of need during the 1994 genocide, yet it does not.
2) Mr. Sachs claims that I, alongside the compassionate Bill Easterly, lump all kinds of [aid] programs in one undifferentiated mass. I would point Mr. Sachs to page 7 of my book which explicitly makes a delineation between different types of aid.
3) Regarding the "countless" examples in which countries have benefited from aid then graduated: Here I would point Mr. Sachs to page 37 of my book to a discussion of these countries; The difference again with these success stories is that they did not rely on aid to the degree and length that African countries do today. Moreover, they very quickly adopted the market-based, job-creating strategies outlined in my book, for which Mr. Sachs seems to have an apparent aversion, in favour of the status quo.
4) Finally, with respect to Mr. Sachs' remark that I would see nothing wrong with denying US$10 in aid to an African child for an anti-malarial bed net -- even labeling me as cruel; I say, if working towards a sustainable solution where Africans can make their own anti-malaria bed-nets (thereby creating jobs for Africans and a real chance for continents economic prospects) rather than encouraging all and sundry to dump malaria nets across the continent (which incidentally, put Africans out of business), then I am guilty as charged. Don't forget that the over 60 percent of Africans that are under the age of 24 need jobs not sympathy.
As a final plea, I urge Mr. Sachs to heed the words of his former boss, Mr. Kofi Annan when he says "The determination of Africans, and genuine partnership between Africa and the rest of the world, is the basis for growth and development."
Debating an Established and Crystallized Paradigm
Maintaining a critical stance on our actions focuses us on the values and principles that that drive them. Reflecting on our practice helps us to see if what we do reaches the intended outcome. And if that is not the case, new understandings will lead to new actions.
I believe it is even more so, when we are engaged in socio-economic development issues. Lately, the debate around the meaning and effectiveness of the traditional aid paradigm has revived again.
Below I am reporting an article published by Jeffrey Sachs (Director of the Earth Institute, Economics Professor, Columbia University) and published by The Huffington Post (www.huffingtonpost.com).
In the next few entries of this blog I will follow this debate.
Aid Ironies by Jeffrey Sachs (May 24th, 2009)
The debate about foreign aid has become farcical. The big opponents of aid today are Dambisa Moyo, an African-born economist who reportedly received scholarships so that she could go to Harvard and Oxford but sees nothing wrong with denying $10 in aid to an African child for an anti-malaria bed net. Her colleague in opposing aid, Bill Easterly, received large-scale government support from the National Science Foundation for his own graduate training.
I certainly don't begrudge any of them the help that they got. Far from it. I believe in this kind of help. And I'd find Moyo's views cruel and mistaken even she did not get the scholarships that have been reported (Easterly mentioned his receipt of NSF support in the same book in which he denounces aid). I begrudge them trying to pull up the ladder for those still left behind. Before peddling their simplistic concoction of free markets and self-help, they and we should think about the realities of life, in which all of us need help at some time or other and in countless ways, and even more importantly we should think about the life-and-death consequences for impoverished people who are denied that help.
Nine million children die each year of extreme poverty and disease conditions which are almost all preventable or treatable or both. Impoverished countries, with impoverished governments, can't solve these problems on their own. Yet with help they can. The Global Fund to Fight AIDS, TB, and Malaria, and the Global Alliance on Vaccines and Immunizations are both saving lives by the millions, and at remarkably low cost. Goldman Sachs, Ms. Moyo's former employer, gives out more in annual bonuses to its workers than the entire rich world gives to the Global Fund each year to help save the lives of poor children. And when Goldman Sachs got into financial trouble it got bailed-out by the US Government. Rich people have an uncanny ability to oppose aid for everybody but themselves.
Recently Paul Kagame, President of Rwanda, wrote an op-ed for the Financial Times praising Moyo's fresh thinking. This is extraordinary. His government has depended on aid for more than a decade. Nearly half the budget revenues currently come from aid. Rwanda currently imports around $800 million of merchandise each year, but only earns $250 million or so in exports. So how does it do it? Aid, of course, helped to pay for around $450 million of the imports. Without foreign aid, Rwanda's pathbreaking public health successes and strong current economic growth would collapse. Kagame's op-ed did not help FT readers to understand this.
Americans are predisposed to like the anti-aid message. They believe that the poor have only themselves (or perhaps their governments) to blame. They overestimate the actual aid from the US by around thirty times, so they imagine that vast sums are flowing to Africa that are then squandered. Many believe, typically in private, that by saving African children we would be creating a population explosion, so better to let the kids die now rather than grow up hungry. (I'm asked about this constantly, usually in whispers, after lectures). They don't understand the most basic point of worldwide experience: when children survive rather than die in large numbers, households choose to have many fewer children, in fact more than compensating for the decline in child mortality. Africa's high child mortality is ironically a core reason why Africa's population is continuing to soar rather than stabilize as in other parts of the world.
Of course, most Americans know little about the many crucially successful aid efforts, because Moyo, Easterly, and others lump all kinds of programs - the good and the bad - into one big undifferentiated mass, rather than helping people to understand what is working and how it can be expanded, and what is not working, and should therefore be cut back. Nor do Americans hear that many poor countries graduate from the need for aid over time, precisely because aid programs help to spur economic growth and successfully prepare countries to tackle future priorities. US aid to India for increased food production in the 1960s paved the way for India's growth takeoff afterwards. There are countless other examples in which countries have benefited from aid and then graduated, including Korea, Malaysia, Taiwan, Israel, and others. Egypt is on that path today, and Rwanda, Tanzania, Ghana, and others will be as well if both donors and recipients carry forward with a sensible assistance strategies.
Here are some of the most effective kinds of aid efforts: support for peasant farmers to help them grow more food, childhood vaccines, malaria control with bed nets and medicines, de-worming, mid-day school meals, training and salaries for community health workers, all-weather roads, electricity supplies, safe drinking water, treadle pumps for small-scale irrigation, directly observed therapy for tuberculosis, antiretroviral medicines for AIDS sufferers, clean low-cost cook stoves to prevent respiratory disease of young children. Shipment of food from the US is a kind of aid that should be cut back, with more attention on growing local food in Africa.
Out of every $100 of US national income, our government currently provides the grand sum of 5 cents in aid to all of Africa. Out of that same $100, we have found around $10 for the stimulus package and bank bailouts and another $5 for the military. It is not wonderful that what has caught the public's eye are proposals to cut today's 5 cents to 4 or 3 cents or perhaps zero.
I believe it is even more so, when we are engaged in socio-economic development issues. Lately, the debate around the meaning and effectiveness of the traditional aid paradigm has revived again.
Below I am reporting an article published by Jeffrey Sachs (Director of the Earth Institute, Economics Professor, Columbia University) and published by The Huffington Post (www.huffingtonpost.com).
In the next few entries of this blog I will follow this debate.
Aid Ironies by Jeffrey Sachs (May 24th, 2009)
The debate about foreign aid has become farcical. The big opponents of aid today are Dambisa Moyo, an African-born economist who reportedly received scholarships so that she could go to Harvard and Oxford but sees nothing wrong with denying $10 in aid to an African child for an anti-malaria bed net. Her colleague in opposing aid, Bill Easterly, received large-scale government support from the National Science Foundation for his own graduate training.
I certainly don't begrudge any of them the help that they got. Far from it. I believe in this kind of help. And I'd find Moyo's views cruel and mistaken even she did not get the scholarships that have been reported (Easterly mentioned his receipt of NSF support in the same book in which he denounces aid). I begrudge them trying to pull up the ladder for those still left behind. Before peddling their simplistic concoction of free markets and self-help, they and we should think about the realities of life, in which all of us need help at some time or other and in countless ways, and even more importantly we should think about the life-and-death consequences for impoverished people who are denied that help.
Nine million children die each year of extreme poverty and disease conditions which are almost all preventable or treatable or both. Impoverished countries, with impoverished governments, can't solve these problems on their own. Yet with help they can. The Global Fund to Fight AIDS, TB, and Malaria, and the Global Alliance on Vaccines and Immunizations are both saving lives by the millions, and at remarkably low cost. Goldman Sachs, Ms. Moyo's former employer, gives out more in annual bonuses to its workers than the entire rich world gives to the Global Fund each year to help save the lives of poor children. And when Goldman Sachs got into financial trouble it got bailed-out by the US Government. Rich people have an uncanny ability to oppose aid for everybody but themselves.
Recently Paul Kagame, President of Rwanda, wrote an op-ed for the Financial Times praising Moyo's fresh thinking. This is extraordinary. His government has depended on aid for more than a decade. Nearly half the budget revenues currently come from aid. Rwanda currently imports around $800 million of merchandise each year, but only earns $250 million or so in exports. So how does it do it? Aid, of course, helped to pay for around $450 million of the imports. Without foreign aid, Rwanda's pathbreaking public health successes and strong current economic growth would collapse. Kagame's op-ed did not help FT readers to understand this.
Americans are predisposed to like the anti-aid message. They believe that the poor have only themselves (or perhaps their governments) to blame. They overestimate the actual aid from the US by around thirty times, so they imagine that vast sums are flowing to Africa that are then squandered. Many believe, typically in private, that by saving African children we would be creating a population explosion, so better to let the kids die now rather than grow up hungry. (I'm asked about this constantly, usually in whispers, after lectures). They don't understand the most basic point of worldwide experience: when children survive rather than die in large numbers, households choose to have many fewer children, in fact more than compensating for the decline in child mortality. Africa's high child mortality is ironically a core reason why Africa's population is continuing to soar rather than stabilize as in other parts of the world.
Of course, most Americans know little about the many crucially successful aid efforts, because Moyo, Easterly, and others lump all kinds of programs - the good and the bad - into one big undifferentiated mass, rather than helping people to understand what is working and how it can be expanded, and what is not working, and should therefore be cut back. Nor do Americans hear that many poor countries graduate from the need for aid over time, precisely because aid programs help to spur economic growth and successfully prepare countries to tackle future priorities. US aid to India for increased food production in the 1960s paved the way for India's growth takeoff afterwards. There are countless other examples in which countries have benefited from aid and then graduated, including Korea, Malaysia, Taiwan, Israel, and others. Egypt is on that path today, and Rwanda, Tanzania, Ghana, and others will be as well if both donors and recipients carry forward with a sensible assistance strategies.
Here are some of the most effective kinds of aid efforts: support for peasant farmers to help them grow more food, childhood vaccines, malaria control with bed nets and medicines, de-worming, mid-day school meals, training and salaries for community health workers, all-weather roads, electricity supplies, safe drinking water, treadle pumps for small-scale irrigation, directly observed therapy for tuberculosis, antiretroviral medicines for AIDS sufferers, clean low-cost cook stoves to prevent respiratory disease of young children. Shipment of food from the US is a kind of aid that should be cut back, with more attention on growing local food in Africa.
Out of every $100 of US national income, our government currently provides the grand sum of 5 cents in aid to all of Africa. Out of that same $100, we have found around $10 for the stimulus package and bank bailouts and another $5 for the military. It is not wonderful that what has caught the public's eye are proposals to cut today's 5 cents to 4 or 3 cents or perhaps zero.
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