Smart Samaritans
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.
Michael A. Clemens is a Research Fellow at the Center for Global Development and an Adjunct Professor at Georgetown University.
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How can rich outsiders help the poor in places where nothing seems to work? Fresh out of college, I worked on a United Nations project to bring new farming methods to a remote and impoverished jungle village in Colombia. The first clue as to the difficulties we would face hit me as soon as I stepped off the bus and saw the moldy, abandoned headquarters of an earlier project -- apparently its only lasting achievement. Ninety minutes later came a second clue: guerrilla fighters massacred 18 people right outside town by firebombing the very bus route I had just taken.
As I talked to farmer after farmer, a landscape of challenges emerged. Which of many competing locals represented "the community"? Why should farmers listen to us when there were so many officials, indigenous leaders, businesspeople, traffickers, soldiers, rebels, and missionaries peddling different, and often conflicting, advice? And even if our UN team somehow got the agronomy and the politics right in this village, what would that matter if the four-decade cycle of civil war continued?
Three years later, I found myself on a World Bank mission in the office of a government minister in Guyana, one of the poorest countries in South America. The minister's telephone interrupted our conversation. On the other end, he explained after hanging up, was an anonymous voice hinting that his children might not arrive home safely that night. Earlier that day, the minister had announced plans for court proceedings against a powerful Asian company active in the same area as our World Bank project. "That's why I carry this," he said, hoisting a leg onto the desktop to reveal a revolver strapped to his lower calf.
As an outsider, it seemed to me that the minister was a hero engaging villains in a high-stakes showdown to which I was largely irrelevant. No matter how carefully we on the World Bank team did our work, what could it achieve if we did not somehow help this man? How, exactly, could we help him from Washington? And anyway, how certain could we be that he was in fact a hero?
These are standard dilemmas for anyone involved in development projects. After being spurred to act, most are quickly forced to ponder the complexities of the systems with which they are interacting and consider what they can actually achieve -- and what sorts of unintended consequences their efforts might have. Most go home -- as I did -- to opulent lives, while those left behind continue to live with few opportunities.
Two recent influential books by brilliant economists mark opposite poles in the debate that has arisen from such dilemmas. These works have come to define the policy discussion for anyone who studies how rich countries can help poor countries. It is a debate of great importance: where you come down between the opposing views leads to enormously different acts in government offices and in villages all over the world.
The first is Jeffrey Sachs' The End of Poverty: Economic Possibilities for Our Time. Sachs presents a deeply affecting moral argument for a carefully designed $195 billion annual program of village-level interventions in schooling, nutrition, sanitation, road paving, and malaria prevention. He is currently piloting his approach in around a hundred "Millennium Villages," most of them in sub-Saharan Africa.
The second is William Easterly's The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good. Easterly is dramatically more skeptical of aid's potential. He details a wide range of interventions in poor countries that -- despite careful design and moral fervor -- produced only waste or, in many cases, harm.
Sachs stresses the ethical imperative of bold, concerted action and derides "armchair economists" who do not offer constructive alternatives. Easterly criticizes "planners" such as Sachs, seeing more promise in the "searchers" who have historically solved economic problems in a decentralized, piecemeal fashion. Sachs highlights sins of omission, Easterly sins of commission. (Both men are affiliated with my employer, the Center for Global Development, Sachs as a board member and Easterly as a fellow.)
Many of those working day to day on poverty reduction, in both rich and poor countries, express dissatisfaction with both sides in this argument. Sachs' exhortations do not convince many insiders because, according to the refrain, he promises too much and does not see the limits of money and technology. (One memorably described Sachs' book to me as reflecting the thoughts of a "great preacher, mediocre theologian, and lousy minister.") Yet even many of the battle-hardened assert that Easterly's doubts go too far; they see him as a wise but blithe naysayer, comforting cynics who would happily leave poor countries to their fates.
TRAPSHOOTING
Paul Collier, an economist at Oxford, aims to fill the gap between the two poles. His new book, The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It, is meant to surmount the Sachs-versus-Easterly debate by remedying what Collier sees as the limitations of each view. Collier wants to temper Sachs' grandiose claims by arguing that a worldwide aid plan will be ineffective and that assistance should be more focused in both space and time. And he seeks to temper Easterly's aid skepticism by arguing that less should be expected and that the instruments of assistance should extend far beyond mere aid. As he puts it, rich countries must "narrow the target and broaden the instruments."
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Related
More rapid economic development for the less developed areas of the world is something which most of us in the United States want very much. We want it for humanitarian reasons and we want it because we believe it is in our national interest. There is, therefore, great public concern about our programs of assistance to developing areas, and in recent months there has been considerable discussion of the appropriate roles of public assistance and private international investment in contributing to economic development. These are important issues; but it is also important to keep them in perspective. What developing countries do for themselves is more important than what others do for them. In the majority of developing countries the adoption of a framework of law and regulations conducive to the full use by their citizens of productive resources that already exist would probably make a greater contribution toward their development than is now provided by all external assistance from both public and private sources.
Increasing aid and market access for poor countries makes sense but will not do that much good. Wealthy nations should also push other measures that could be far more rewarding, such as giving the poor more control over economic policy, financing new development-friendly technologies, and opening labor markets.
Various socio-economic trends in the under-industrialized southern hemisphere reflect a sense of material and unfair disadvantage in the way the world is run, which spells long-term political trouble, possibly world war, if the wealthier nations fail to take constructive action.
