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True Confessions: I’m still unable to conclude whether aid does more harm than good

Margaret Wente  in Toronto Globe and Mail perceives a growing backlash against humanitarian aid, that it may be doing more harm than good in Africa (she concentrates on seemingly everyone’s (including ours) recent favorite example of Ethiopia).

I’m quoted in the article accurately. Contrary to some perceptions (not in Wente’s article) however, I have never made a general argument that aid does more harm than good, or called for aid to be abolished or even cut. I said aid “has done so much ill and so little good” in the subtitle to the White Man’s Burden. The “ill” is well covered in Margaret Wente’s column and is similar to the recent posts on this blog about aid financing autocrats and political repression, with similar examples in my book.  However, I have also given examples of aid successes, particularly in health (vaccinations!) It is very hard to conclude what the net effect of the ill and the good is, and I’ve never attempted to do so.

Instead I think the viable arguments are that (1) aid’s record is sufficiently disappointing that it is unlikely to ever be the main driver of successful development, (2) if aid were more accountable it would do less ill and more good.

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20 Comments

  1. BPeterson wrote:

    This is a particularly timely blog post for me. I have students reading The White Man’s Burden, The End of Poverty and a couple of other books on development for a course this semester. I am occasionally worried that the discussions in class–which tend to focus on the problems with development aid, the ugly political causes and consequences of aid and general WB/IMF- bashing in many different contexts–lead students new to the study of development to a lopsided view of foreign aid. Like you, I am disappointed by aid’s performance and think it should be reformed, but I am also aware of many of the success stories. I think you do a fine job in the book of portraying them, but it is a natural tendency, especially when it is reinforced by discussions in class, for students to focus on the negatives. It’s easier to criticize in some ways, than to consider the benefits.

    I have to resist the frequent urge to spend an entire class period ranting about how aid, aid allocations and all the rest are really not quite as bad as we sometimes think based on all the negativity in the discussions. But sometimes that discussion is necessary, so I appreciate your post here.

    As an aside, are you aware of any attempts to quantify how much aid gets “wasted, stolen, etc” compared to how much is spent that MIGHT have a positive impact in the way we intended it? It would be interesting to try to construct a number based on the information put together by AIDData (formerly PLAID), but that would be pretty ambitious.

    Posted November 17, 2010 at 10:42 am | Permalink
  2. Greg Robie wrote:

    Owen Barder raised a similar question at his blog recently regarding drawing on evolution to improve the affect of aid work. This garnered some thoughtful criticism. In that vein, the point of my comment there would seem to apply here as well. Briefly, work done for compensation in any of the fiat debt-based currencies enabling global capitalism, but primarily the US dollar, are systemically challenged regarding aid work ever amounting to more than that of a loyal opposition. The same is true of the currency of donations.

    Posted November 17, 2010 at 10:46 am | Permalink
  3. El Hadji wrote:

    Aid has been vigorously criticized in the social media arena as of lately, and even though it has a lot of room for improvement I cannot agree that Aid did more harm than good if many lives were saved because of Aid…whether it was materialized by food supplies, medication, technical assistance in access to clean drinking water.

    Obviously, in terms of long term development, we have come to terms with the fact that social enterprises and other systems that include self-help from the BoP populations themselves work better but this doesn’t completely erase the immediate results generated by Aid.

    Aid is still a needed component for immediate needs in war torn regions and emergency situations (floods, droughts and other calamities). I just think we are too harsh with Aid because of unrealistic expectations, some social issues cannot just be fixed overnight and it takes several attempts and a good mix of strategies to make it work.

    At this point, we are in the right direction because we understand that traditional aid has to be tweaked a little to be more efficient and functional..(social businesses requiring participatory action from the poor).

    Thank you

    Posted November 17, 2010 at 11:41 am | Permalink
  4. Regarding the accountability of aid, let’s aim for accountability primarily to the people we are trying to serve, rather than the controllers of resources.

    Posted November 17, 2010 at 11:43 am | Permalink
  5. P. Francis wrote:

    clearly, individual aid projects do good. but more and more frequently, entities are simply putting chunks of cash into the coffers of repressive regimes.
    regardless of how it is used, these cash infusions perpetuate, even encourage, bad governance.
    ethiopia just this week received another big helping of dollars from the IMF. can it be said with any degree of certainty that aid money did not influence the outcome of ethiopia’s elections for parliament?

    Posted November 17, 2010 at 1:16 pm | Permalink
  6. Ana wrote:

    “has done so much ill and so little good”

    I’m sorry… is that not plain? “Much” is bigger than “little”. How can you say you have not yourself decided on a “net” effect, and at the same time re-affirm this simple clear phrase? Sound pretty wishy-washy for someone who stokes his reputation for “courage.” But maybe your publisher “forced” you to add that ambiguous subtitle against your courageous will. Your original subtitle perhaps was: “Why the West’s Efforts to Aid the Rest Have Done Some Ill and Some Good and It is Hard to Know the Net Effect So Let Us Do More Good Aid and Less Bad Aid.”

    Posted November 17, 2010 at 1:45 pm | Permalink
  7. William Easterly wrote:

    Ana, your question is fair. I thought of it as relative to the expectation that aid with benevolent intentions should and does do a lot of good and not ill, I challenge this expectation. But I know words can be read many different ways. Of course, I prefer so if people read the whole book and not only the title. Thanks, Bill

    Posted November 17, 2010 at 2:06 pm | Permalink
  8. Bill Wyman wrote:

    We agree that aid should not be cut. However, based on our experience in Rwanda, we also believe that aid has been misallocated. The vast majority of aid in healthcare is going to the “big three” diseases (HIV, TB, malaria) when a much greater proportion of dealths and misery comes from intestinal and respiratory problems…that is primary healthcare. The only way to sustainably improve healthcare is through improving the system and the skills and knowledge of the people delivering the care. We argue this point in our blog on the Harvard Busines Review website at http://s.hbr.org/bqB3cE

    http://s.hbr.org/bqB3cE

    Posted November 17, 2010 at 3:06 pm | Permalink
  9. Justin Kraus wrote:

    Speaking in generalities can really get you in trouble. Despite (because of?) a lot of effort, I think it should be pretty clear by now that statements like “Aid does more harm than good” or the reverse “Aid does more good than harm” are not empirically verifiable. They are simply too broad, and because of that contain too many complexities. I wish we could simply resist the urge to engage with such generalities and spend more time working on, discussing, and judging the value of, specific policies and programs but thats probably naive.
    But could we at least stop pretending that debates over such generalities are, or even can be, empirically grounded and recognize that, whatever side of the issue you are on, they are political statements used to promote a political agendas.

    Posted November 17, 2010 at 8:48 pm | Permalink
  10. terence wrote:

    What Ana and Justin said.

    Also, I think the question ‘has aid done more harm than good’ is the wrong question to ask. Rather, I think the key questions are:

    1. What can we realistically expect aid to achieve? (what – as in what outcomes might be possible and in what areas).

    2. Is aid being devoted to the right tasks? i.e one’s where it might plausibly achieve something.

    3. Where it is being devoted to the right tasks, how can it be better put to work?

    Posted November 17, 2010 at 10:43 pm | Permalink
  11. I seriously doubt the possibility of having effective accountability with these kinds of money. They’re large sums and distributed to shady governmental bodies. Maybe it should be weaned down and get them to rely on their own economy to pull through.

    Posted November 17, 2010 at 11:47 pm | Permalink
  12. Its a crying shame wrote:

    Aid to Madagascar was cut off in early 2009. Things are worse now than before. Poverty is up and incomes down. Primary school teachers havent been paid in over a year except by parental donation. 30% fewer students enrolled in school this year than last. The University has been closed due to lack of payments for salaries and operations. The budget for the Ministry of Environment was cut by 70%. Both teachers salaries and Ministry budget support were financed by aid. Aid had a positive impact here.

    Posted November 18, 2010 at 12:08 am | Permalink
  13. Don Stoll wrote:

    Despite the justice of disappointment in aid’s efficacy and accountability—with lack of the latter explaining in some measure lack of the former—surely some of the rising backlash against aid springs from anxiety over the economic downturn which stubbornly persists in rich countries. Fear cries out for scapegoats and one can easily scapegoat the poor and those who (sometimes, and sometimes only sort of) help them.

    Posted November 18, 2010 at 2:01 am | Permalink
  14. Robert Tulip wrote:

    Schematising aid, there are at least three main categories:
    1. Emergency Relief after natural disasters
    2. Charitable Resource Transfers
    3. Strengthening Market Systems

    Everyone supports emergency relief. Where the debate is needed is in the balance between charity and market systems. The superficial and popular view is that aid should focus on charity, on giving things that directly ‘make a difference’ to the lives of poor people. Debate is needed because there is a woeful level of understanding of the role of market systems in driving economic growth and poverty alleviation. Even where main direct benefits accrue to the not-so-poor, market approaches produce more effective and sustainable results than charity. Charity often distorts incentives and produces dependency, just so donors can say they ‘made a difference’ with something that they can directly attribute to their compassion and generosity. Far better to fix the rules of the game to strengthen incentives for productivity.

    Posted November 18, 2010 at 4:20 am | Permalink
  15. tyronen wrote:

    Prof. Easterly, my jaw dropped on reading this post.

    I have read both your books and came away with the clear impression that you are an opponent of international aid. You are widely cited around the world as a leading authority on the arguments against aid. You are the P.T. Bauer of this generation. You and Jeffrey Sachs are usually described as the leaders of the pro- and anti-aid camps.

    The anti-aid camp is winning. None of the G7 countries are meeting their Gleneagles commitments. Your writings aren’t the only reason for this, of course, but it’s hard to deny they have had a major impact.

    If in fact, your position on aid is more neutral than practically the entire political and journalistic community believes, you’d do well to clarify this in an op-ed somewhere.

    Posted November 18, 2010 at 8:03 am | Permalink
  16. Tyson wrote:

    tyronen, I don’t think of Easterly and Sachs as anti-aid and post-aid camps, I think of them as an aid skeptic/realist and aid optimist. It seems clear to me that Easterly wants aid to work, but it willing to acknowledge that it often doesn’t. I can’t find the quote but I think in the Elusive Quest book he reports that Burnside and Dollar find that aid+good policy = growth, but then he checks the robustness of this and its not clear that is true, so he reports that in the Burden book. But it seems to me he made an effort in the Burden book to approvingly report cases in which aid did make a positive difference.

    Aid isn’t an unambiguous good. Good aid is good and bad aid is bad. We need to know which is which if we want to help the poor. (Unfortunately, though, a lot of aid isn’t to help the poor, it is to advance some other agenda, but we’re all ignoring that part of reality for now, right?). And it would be helpful to look also at alternatives to traditional aid. Like what if the US eliminated its foreign aid budget and its agricultural subsidies budget, gave African food exports free entry into the US, and also allowed free access to African immigrants or guest workers, and then took the money saved from the aid and subsidies and used it to retrain or provide business loans to any American farmers or workers that lost income because of those changes? I suspect that would do more good for the average income level in Africa than aid (unfortunately that is politically impossible, but I’m ignoring that for now).

    Posted November 18, 2010 at 5:43 pm | Permalink
  17. Dan Kyba wrote:

    @Tulip
    Yes, schematising is definitely in order since so many of the comments are based upon differing definitions of aid with the resulting parallel conversations.

    Tweaking the aforementioned list there are:
    4. Voluntourist NGOs populated by idealistic and well-meaning individuals whose effectiveness is limited.
    5. Professional and experienced international aid workers and advisors, client, NGO or multilateral paid who tend to provide value for money.
    6. Predatory operations which target the naive and politically correct who tend to have low self-esteem and are prone to scapegoating.

    As stated before, emergency aid is a given. For the long-term, I believe in the need to strengthen market systems. If, to this end clients are empowered, we will see the need to regulate the aid industry as per category 5, and at the same time, reduce if not eliminate, category 4 which can be a drain on client resources and category 6 which is a danger to the individuals caught.

    re: Easterly, The Elusive Quest for Growth is the better book.

    Posted November 18, 2010 at 10:40 pm | Permalink
  18. Olivier wrote:

    William, don’t you reap what you sow ?

    Posted November 19, 2010 at 10:34 am | Permalink
  19. Robert Tulip wrote:

    @ Dan Kyba
    Yes, popular images of aid can be different from the reality. Your term ‘voluntourist’ is a case in point regarding how different perceptions of aid can talk past each other. The tabloid media see the heroic rich surgeon giving his time to perform plastic surgery in poor countries as the epitome of good aid. No matter if the local hospital closes to all other patients for a week while the voluntourists and cameras are in town. No matter if an ‘offer you can’t refuse’ distorts the allocation of local resources away from increasing disability adjusted life years towards whatever will pull the heart strings and open the wallets of rich country TV viewers.

    Work to improve market systems tends to be boring and invisible, even if it is sustainable and effective. Witness the lack of popular interest in rich countries around the IFC’s work on regulatory reform through the Doing Business comparisons.

    It is a paradox that some donors who want to reduce poverty do not see this as involving a focus on how to increase prosperity.

    Posted November 19, 2010 at 3:59 pm | Permalink
  20. Sheba Muturi wrote:

    I agree with Tyson’s idea to look at alternatives to traditional aid. Has anyone studied the impact of microcredit programs such as http://www.kiva.org/? What other innovative alternatives to handouts are out there?

    Posted November 22, 2010 at 2:42 am | Permalink

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  2. […] Easterly, a long-term critic of aid, says in his AidWatch blog, “It is very hard to conclude what the net effect of the ill and the […]

  • About Aid Watch

    The Aid Watch blog is a project of New York University's Development Research Institute (DRI). This blog is principally written by William Easterly, author of "The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics" and "The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good," and Professor of Economics at NYU. It is co-written by Laura Freschi and by occasional guest bloggers. Our work is based on the idea that more aid will reach the poor the more people are watching aid.

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