The White Man's Burden

The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good by William Easterly, Penguin Books, 2006. 

Much aid to poor countries has failed to help the poor, because it is based on top-down planning, instead of asking the poor what they need.

The poverty trap explanation of why so many poor countries are unable to improve their economies is that being poor is in and of itself the main obstacle to economic growth. The author, Easterly, disagrees with this explanation, and instead asserts that bad government is the primary obstacle to economic growth. The author criticizes the World Bank and the International Monetary Fund (IMF) for giving aid to corrupt governments. He objects to gifts to corrupt governments, because only a small percentage of the money given reaches the poor. He objects to loans to countries with bad governments, because the poor people of the country are then saddled with a debt to pay for loan money that never reached them. He also points out that the IMF is not supposed to be an aid agency, which it effectively is when it makes loans to countries that are known bad credit risks.

The author mentions a couple spectacular failures of development aid. In Tanganyika the British Groundnut Scheme (1946-1951) attempted to grow peanuts on land that received not enough rainfall. In Nigeria the Ajaokuta steel mill has not produced any steel even after $5 billion investment. 

The author discusses several problems with top-down central planning. Planners are motivated by vanity and love big, showy projects and unrealistic, utopian objectives such as ending world poverty. Planners deny that trade-offs exist when making choices. There is a lack of feedback from the poor. Aid donors make the decisions regarding how the aid money is spent, because they believe that the recipients are too stupid to make such decisions themselves. Donor aid pays to build construction projects, but not to maintain them, and the locals do not pick up the tab for maintenance, spare parts and supplies. There is no independent testing to check effectiveness, only self-evaluation. There is a lack of accountability for aid officials and organizations. Donors gauge  success by measuring inputs rather than outputs. Collective responsibility for meeting goals makes it difficult to figure out who to blame when things go awry

The author discusses mistakes made by the political right. Aid is tied to the donor nation. That is, recipients are required to buy from donor-country corporations rather than from local sources. Sometimes there are religious obstruction to the promotion of condoms and birth control. Military intervention and nation building are a mistake. 

The author praises searchers, people who search for demand. He uses the analogy of capitalism, in which businesses base their choices on what to produce on what buyers demand, what they are willing to buy. Some searchers advocate simply giving money to the poor, and letting the poor decide what to spend it on. The author gives an example of a mother with AIDS, who, when asked what she most needed did not mention medical care, but rather a job, so she could support her children.

The author describes some differences between civil law and common law that parallel the difference between planners and searchers. Civil law is written by the legislature, originated in the French Napoleonic code, and lacks judicial discretion. Common law is written by judges, for particular cases that came before them, originated in England, is bottom-up, and is based on experience.

The author lists several countries that pulled themselves up by their own bootstraps, without much foreign aid: China, South Korea, Hong Kong, Singapore, Japan, Botswana, Chile, India, Turkey.

The author lists several examples of foreign aid that worked:  (a) vaccination in Africa, (b) mosquito and parasite control, (c) teaching prostitutes about safe sex, (d) teaching parents about oral rehydration therapy for children with diarrhea, (e) teaching people to boil water, (f) WaterAid in Ethiopia, (g) World Bank tuberculosis control in China, (h) World Bank’s Food for Education in Bangladesh, which pays parents cash to keep their daughters in school, (i) Mexico’s Progresa-Oportunidades conditional cash transfer program that rewards parents for keeping their children in school.