The Elusive Quest for Reform
Including William Easterly's response to Amartya Sen; Mark Weisbrot on Latin America's turn to the left; and others.
Professor of Economics, New York University
In The White Man's Burden, William Easterly offers important insights about the pitfalls of foreign aid. Unfortunately, his overblown attack on global "do-gooders" obscures the real point: that aid can work, but only if done right.
To the Editor:
Amartya Sen has provided a thoughtful and careful discussion of my book The White Man's Burden ("The Man Without a Plan," March/April 2006). To receive even qualified praise from so distinguished a source is an honor. However, Sen takes issue with the book's tone. He would have preferred that I engage in a "dialogue" with aid agencies instead of a "rhetorical drubbing" of them and thinks that I should have shown more respect for the feelings of political leaders and activists. I have two responses: first, a "rhetorical drubbing" can promote accountability; second, the book does in fact offer positive alternatives to the conventional approach being drubbed.
In any political system, there is room for both a dialogue within the existing system on how to operate it and protest -- even outrage -- from outside when there is a systemic failure. The evidence compelled me to choose the second path. The feelings of the poor whom the system failed deserve more respect than the feelings of the system's leaders and proponents. All the book asks is that someone somewhere be held accountable for spending aid money, in order that failed "structural adjustment" is discontinued, 12-cent medicines reach dying malaria victims, roads are repaired, and oral rehydration therapy reaches infants.
Far from being a "simple dismissal" of existing organizations, as Sen writes, the book proposes many constructive reforms to them, including making the results of aid more visible through independent evaluation, having aid agencies specialize in specific tasks that help the poor (which they can control and thus be accountable for), discarding accountability-free goals whose achievement is outside of the agencies' control, making individual agencies responsible for particular tasks (instead of having collective responsibility for big plans), and finding creative ways to back indigenous "searchers." Instead of pushing agencies to test such commonsense alternatives, the current system does ill by fostering, in Sen's words, "the belief that something good is being done" and so discouraging "a fresh examination of what is really needed to help the wretched of the earth."
Sen says the World Bank and the International Monetary Fund do not need him to defend them. Nor do they need me to caricature them -- they caricature themselves when the IMF preaches its usual cookie-cutter financial accounting amid chronic civil war in Sierra Leone, or the World Bank and the IMF both advocate that warlords in the Democratic Republic of the Congo prepare a Poverty Reduction Strategy Paper Sourcebook. I make clear in the book that these are extreme examples and that I admire the professional staff in both organizations. That such absurdities happen at all, however, is a sign of how little accountability the World Bank and the IMF face.
Related
The assumption behind the International Monetary Fund's recent bailout of Russia is that the country is gradually reforming its economy according to market principles. But Russia's economy is much smaller than official figures suggest. Workers, the government, and industry all accept the myth that the manufacturing sector produces value, when in fact what it makes is worth less than the labor and resources it consumes. The result is a mountain of wage and pension arrears and government debt that will continue to provoke crises. The day of reckoning will be much worse if the West does not pull the plug soon.
Paul Collier offers strong recommendations for helping "the bottom billion" -- those living in poor countries caught in growth traps. But he cannot overcome a basic problem: how to create growth where no functioning economy exists.
IT IS now nearly 12 years since the provision of economic assistance to other countries on a regular and organized basis became an established feature of American foreign policy. Such assistance had previously been offered to Latin American countries and during and after the war to the devastated and distressed countries of Europe and Asia. With the promulgation of the Point IV offer in President Truman's Inaugural Message of 1949, the provision of assistance to other countries for their economic development lost its character of emergency relief.

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