Time For a Grand Re-think of Grand Aid Plans
Aid donors should re-think their self-appointed role as saviours of the poor, and try more modest and realistic approaches, argues William Easterly.
Over the past five decades, the West has donated US$2.3 trillion in foreign aid to poor countries. Most of this money has been funnelled into a series of grand plans to eradicate poverty — plans that have become increasingly high-profile in a bid to attract money from both public and private purses.
After being lobbied by rock stars to “make poverty history” in Africa, G8 countries doubled foreign aid to Africa from US$25 billion to $50 billion in 2005. But as advocacy for increased aid grows ever stronger, what do we have to show for it?
Value of piecemeal projects
African children are still dying of malaria for sleeping without a mosquito net and for lack of 12 US cent medicines that could treat them once infected. Of course, aid has helped, mainly through piecemeal efforts such as oral rehydration therapy to counteract the effects of diarrhoea, or with sanitation projects. It is this type of success that is more feasible than a grand plan aiming, for example, to provide everyone in the world with clean water by 2015.
Take bednets, for example: development economist Jeffrey Sachs, along with celebrities such as Bono and Bill Clinton, has often lobbied for free bednets to protect against malaria. But a study of a free-bednet programme in Zambia showed that 40 per cent of recipients didn’t use them. By contrast, a project to sell nets for 50 cents to mothers in Malawi by the non-profit organisation Population Services International increased the national average of the number of children under five using nets from eight per cent in 2000 to 55 per cent in 2004, and a comparable rise in use by pregnant women. The nets were bought by those who valued and needed them most.
Although the West’s ambitious plans to end poverty are well intended, they are doomed to failure by an apparent refusal to learn from previous mistakes, their unaccountability and because they try to solve everything at once. It’s time for a re-think.
Aid programmes must be driven by economic principles: find out what is in demand, rather than assuming what poor people need. Ensure that aid actually reaches the people it’s aimed at. Rather than planning what Western aid should do, we should find out what it can do.
Western aid has been plagued by a utopian mindset that poverty can be eradicated simply by money. This mentality has persisted since the 1950s, influencing the way the United Nations, World Bank and International Monetary Fund work, but has not yet solved the problem. ‘Big plans’ set admirable goals without taking full responsibility for implementing them. There are no real consequences to the planners for failure.
The eight Millennium Development Goals to eradicate poverty and promote good health by 2015 are beautiful. But they will almost certainly not be met. A 1990 UN summit planned for universal primary school enrolment by 2000 and a 1977 UN summit set a target of universal access to water and sanitation by 1990; both targets have now been pushed to 2015.
Grand-plan proponents argue that aiming high is motivational. But the more grandiose the plan, the harder it is for aid workers trying to realise its numerous targets. Small-scale, piecemeal plans are far more likely to succeed and be taken up by local communities.
Aid from the West also rallies support with the ‘poverty-trap’ myth — that the poor cannot save for the future and alleviate their own poverty. But between 1950 and 2001, the economic growth of poor countries did not stagnate, a fact not explained by foreign aid. Statistics indicate that when poor countries don’t grow, it’s because of bad governance rather than a poverty trap. But bad governance is not a useful tool for attracting aid.
The West can help countries create sustainable plans to save themselves, and forgo the big plans. Big plans may garner public support, but they can backfire as a cynical backlash if their promises are not kept. By contrast, public goodwill is generated when many poor people are seen to benefit through smaller, accountable initiatives.
Better accountability is crucial. Rather than several agencies working towards massive, unattainable goals for which no one agency holds responsibility, let aid agencies find their own methods for specific interventions (rather than having them dictated from the top) and let them be accountable for their results through independent evaluation.
One approach would be to use development vouchers for the extremely poor, which could be redeemed at any aid agency for benefits such as vaccinations, textbooks or seeds.
China, India and Japan have achieved staggering economic growth, largely under their own steam. Their example should surely convince the aid community to re-think their role as saviour of the poor.
William Easterly is Professor of Economics (Joint with Africa House), New York University, and Visiting Fellow, Global Economy and Development Program, The Brookings Institution.