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Does Foreign Aid Work Very Well?

  1. Jan 3, 2008 #1
    It seems to me that foreign aid actually doesn't do a very good job at accomplishing it's stated objectives. Now I am not saying that we should stop giving foreign aid, but rather that many people think foreign aid can do a lot of good for poor countries, and I am skeptical about that and believe that most prosperity will come from within a country (as opposed to outsiders rushing in and helping). I am not alone in this view, and I'd like to quote some people and provide some links that really made me think about the limitations of foreign aid, at least as it is currently implemented.

    Exhibit 1:

    William Easterly states (http://www.cato-unbound.org/2006/04/03/william-easterly/why-doesnt-aid-work/)

    Exhibit 2:

    Karol Boudreaux and Paul Dragos just published a document titled "Paths to Property" which can be downloaded here http://www.iea.org.uk/record.jsp?type=release&ID=134.

    Exhibit 3:

    Hernando De Soto

    Exhibit 4:

    George Ayittey

    On NPR's morning edition (http://www.npr.org/templates/story/story.php?storyId=4731168) he stated:


    I realize that I usually post some links/resources and that nobody tends to read them because there are too many and they are too long. This is why I decided to only post two this time, with a description about the following videos:


    (William Easterly discusses his new book on foreign aid in this thought provoking presentation. It is one hour long, but only about the first 40 minutes are the presentation, with a follow up Q & A session, so if you only watch the presentation (which is the informative part) it will only take 40 minutes.)


    (George Ayittey speech that is less than 20 minutes long.)
    Last edited: Jan 3, 2008
  2. jcsd
  3. Jan 3, 2008 #2


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    I see here J. Sachs popping up again, as Easterly goes head to head against.

    Sachs and Friedman were out there advising countries migrating to market economies, they must have had a conversation along the way. I hope that turns up somewhere; I can't find it.
  4. Jan 3, 2008 #3


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    I think foreign aid works pretty well to alleviate many specialized/localized problems, but is extremely inefficient at bringing about broad ranging development in the third world.

    Off the top of my head, the following come to mind: Japan (post WWII), Europe (post WWII), eradication (or nearly) of polio and small-pox globally, family planning education and the resulting decline in global fertility rates (and all the benefits that came out of that), several cases of disaster relief.

    As far as broad development of recipient countries go, the effectiveness of the received aid is in direct proportion to the effectiveness of the local government. Pump any amount of aid into countries ruled by corrupt or inept government, and it'll mostly come to naught, as far as overall development is concerned.
  5. Jan 3, 2008 #4
    But bed nets and malaria medication are pretty specific. So why haven't those worked out well?

    Here's one of the quotes I posted above:
  6. Jan 3, 2008 #5
    Africa needs governmental and agricultural reforms, and debt relief. Not free money/food that dictators are just going to use to fuel their regime.
  7. Jan 3, 2008 #6


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    Agreed. From the video and reviews from Easterly's book it appears worse than naught in the case of bad governments as the aid props them up. Edit: The reviews of 'White Man's Burden' (Times/Foreign Affairs) hold it in high regard.

    I think you missed Gokul's point. Some money appears to have had good effects (Marshall plan, etc) and much of if not. The $2.3 trillion is obviously an aggregate aid sum. The relevant question then is how much was spent on nets and meds, and how much was big loan checks to 3rd world finance ministers.
    Last edited: Jan 3, 2008
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