Development, and specifically foreign aid, is a perplexing, bewildering topic that, under a certain utilitarian criterion, is the most important issue in the world. That’s why I get disappointed when I read articles like Michael Knox Beran’s recent anti-Jeffrey Sachs screed in City Journal. While Beran is right on the big picture - ultimately it’s the development of functional markets with solid legal protections for their operating that reduces poverty - his treatment of those who want a more active governmental and foreign role in development is downright childish. It basically functions as “nyah nyah nyah, foreign aid has been tried for 50 years, and still millions of Africans are trapped in poverty, nyah nyah nyah.” Maybe it’s just my liberal inclinations, but the issues of development and aid are just too damn important for conservatives and free marketers to come in with just bleating about Hayek while scorning most active efforts to actually alleviate the symptoms of extreme poverty. Take this bit, for instance:
Like earlier practitioners of paternalist charity, today’s Africrats propose policies that treat the material effects of Africa’s problems—disease, dirty water, hunger—not their underlying causes, which the West, too, once struggled with. For thousands of years, high rates of death from infectious diseases were the norm throughout the world. Before the twentieth century, Western parents expected to lose at least one of their children to illnesses that are preventable today. Not until late in the nineteenth century did the White House itself have clean water; in 1862, Abraham Lincoln’s son Willie died of typhoid, likely contracted from the mansion’s tainted plumbing. Hunger, too, once darkened what is now the prosperous world, though so effectively has the problem been solved that countries like the United States face a looming obesity crisis.
How did today’s prosperous nations create the embarrassment of riches that they now enjoy? No benign magician descended, à la Jeffrey Sachs, on London or Washington to shower its inhabitants with money. Instead, the rich nations developed laws and freedoms that enabled people to take their futures into their own hands. As Peruvian economist Hernando de Soto has argued in The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else, the world’s poorest countries remain poor in part because they lack legal protections—property rights foremost among them—that enable people in the West to tap the potential of “dead” capital and invest it in wealth-generating enterprises.
Beran is right, the West didn’t get rid of the scrooge of massive, public pestilence until it got wealthy, and it’s likely that Africa will only truly be out of its public health hell when it’s richer, but what Beran’s trite historical example ignores is that today, part of the world has eliminated malaria, decreasing AIDS spreads and access to clean water. Another section of the world, has hundreds of millions without these basic health goods. This circumstance implies that there’s something that the rich part of the world, the Industrialized North, can do for the developing South. Sure, it seems like a Sisyphean task to eliminate malaria or various water borne diseases in Sub-Saharan Africa, but can Beran think of another thing to do?
Beran provides all sorts of examples of how food aid is bad, and while he distorts history to fit his ideological vision, he’s right, food aid is problematic because it can be easily manipulated and re-directed by corrupt leaders for their political ends and Africa actually has pretty decent food-production capabilites. The case for public health assistance is much different. Africa doesn’t have great malaria drugs or bed nets or DDT capabilites, there’s a certain level of western knowledge and expertise that probably can be exported out, and since it’s hard to spin out a scenario like Ethiopia in the 1980s, where Geldofian food aid was mainly used as a political weapon by the dictatorship, where water purification plants or bed nets are used to entrench corrupt leadership, it’s probably worth it to have signifigant investments in improving the public health capability of the poorest parts of Africa.
Beran also has an irritatingly triumphant view with evidence that foreign aid has often gone to bad regimes:
The cycle is vicious. The aid that ends up in corrupt rulers’ bank accounts enables them to stifle both free markets and the political and legal reforms that free markets need to operate efficiently. A recent Heritage Foundation study found that, of the 70 least-free countries on earth, nearly half have received U.S. foreign aid for more than three decades. The result is more poverty, more aid money, and more corruption. In Zimbabwe, for example, foreign aid enabled strongman Robert Mugabe to destroy property rights, introduce a command economy, and create a kleptocracy where the inflation rate recently reached 11,000 percent. Once southern Africa’s breadbasket, Zimbabwe now depends on subsidies to feed its people.
This is a bogus point for two reasons. The most obvious is that foreign aid, especially during the cold war (which was at its highest point “three decades” ago) was not all about helping those countries who could use it the best, it was often about buying support so that it wouldn’t go to the Russians. The second point is almost blindingly obvious - of course the poorest countries get aid! This is just representative of the type of myopia that these anti-aid critics like Beran so commonly display. To them, the fact that foreign aid hasn’t resulted in massive successes on the same proportion of its large scale is a sign that we should probably just give up on the entire idea of helping the developing world. Yet, it’s these same critics who tell us why foreign aid won’t work. What Beran ignores is that there is a strong possibility that some aid has worked, and that not all aid is the top-down, centralized, buerecratic, egotistical mess he depicts.
Look at, for example, the Green Revolution. Normal Borlaug’s project was as top-down and centralized as you could get. He developed breeds of seeds and grain that were then exported to Mexico, India and Pakistan. He also received signifigant western philanthropic funding. And look what he achieved — he probably saved tens if not hundreds of millions of lives by making India agriculturally self sufficient. Or the eradication of smallpox. Even in the Horn of Africa, there was intense disease surveillance and immunization efforts - the type of interventions that Beran would probably call “paternalistic” - and smallpox was eliminated by 1980. Did these efforts result in economic growth — well in India they probably did — but the point is that foreign aid, when done well in the public health and education sector, has the potential to save millions of lives, which should hardly be scoffed at. There are definitely problems with bad aid, aid dependence, propping up bad regimes, and sensible aid advocates and development specialists are very aware. It’s no coincidence that while Beran is criticizing a model of aid that hasn’t been all that popular since at least the 1970s, there has been a proliferation of smaller scale, narrowly focused and even randomly tested aids. Beran’s criticisms seem rather lame when looking at the Millennium Challenge Account, which puts better governance at the forefront, or the MIT Poverty Lab, which does randomized trials to see if aid projects actually work.
Beran’s seriousness is again rendered questionable because he, unlike most development economists, actually thinks that “stop giving aid and privatize everything” is a real development strategy. It isn’t. There’s a reason the Washington Consensus is basically in tatters, and that’s because real development situations are complicated and a wide range of policy interventions can work in any given context. But I seriously doubt whether Beran cares about what the best strategy is to address the most daunting challenge, by a sheer utilitarian calculation, of our times: extreme poverty. Instead, he seems more interested in insulting the motives of foreign aid advocates and seriously distorting the record of foreign aid not so much to open up intellectual space for alternatives to aid, but instead to score ideological points. Not a very useful exercise, if you ask me.