Many people in this country and around the world believe the Iraq war was an unnecessary war led by a government that thought it was its duty to export democracy around the world. Unfortunately, these same people don't see how the exportation of democracy abroad isn't any different than foreign aid. The logic is the same. America is privileged enough to have democracy and it is our duty to share this right with the rest of the world. Foreign aid is no different in its premise that America is so wealthy that it must give the rest of the world aid so that it can share in its prosperity.
However, such a belief presupposes that the rest of the world cannot attain wealth without our help. I find this elitist and racist because it unveils a prejudice that Westerners have. This prejudice is that poor Africans cannot attain prosperity unless the educated, white male from the West comes to save them.
This prejudice, along with the guilt Westerners have about their wealth, is what William Easterly, a professor of economics and author of many books on development, labels the "white man's burden." This burden has created a movement to end global poverty with a "big push" of foreign aid. The biggest promoter of this utopian plan is Jeffrey Sachs, the economist who so brilliantly aided Russia with another bad idea called shock therapy.
However, this "big push," in which we must double foreign aid to the developing world, is not a new idea, nor will it work. There are numerous problems with foreign aid that I will attempt to highlight.
First, the volume of aid needed to end poverty is arbitrary. We constantly hear a desire to double current levels of foreign aid. Interestingly, this call for doubling started not in 2006 by Sachs but in the 1960s by a white man with his own burden: Robert McNamara. Not only is the effort to double aid arbitrary, but it is an affront to the people that the aid is supposed to help. The fixation on doubling highlights the West's desire to relieve itself of its burden by throwing money at the problem. Instead, the desire should be to truly end poverty for altruistic reasons that would require a fixation on results.
Next, the whole premise of why the poor remain poor and how we can change it is misguided. Sachs and his followers believe the poor are stuck in a poverty trap. Furthermore, Sachs believes that the poor countries' financing gap, the difference between the capital they have and the capital that is needed to reach the necessary growth rates, can be filled up with foreign aid.
Easterly debunks this myth by first highlighting that the growth rate of the poorest countries was not statistically distinguishable from other countries' growth rates from 1950 to 2001. Next, Easterly discredits Sachs' belief that foreign aid can fill the financing gap by highlighting the fact that "aid finances consumption, not investment." The only way to fill the gap is by creating an open, capitalistic economy that will attract the capital needed to finance investment.
Finally, big pushes of aid are accountable to no one and wind up hurting, not helping, those who desperately need assistance. George W. Bush (the "conservative" president who increased foreign aid by 300 percent) will never be held accountable when the billions of dollars in aid he delivered are squandered.
A few examples of the unfortunate results of unaccountable foreign aid are the $5 billion spent on a steel mill in Nigeria in 1979, which has yet to produce any steel, and the $25 million spent on a fish-freezing factory in a part of Kenya where they don't even fish. But the most unfortunate result of foreign aid is that the money, due to the lack of oversight and accountability, mostly enriches despots and corrupt politicians. In fact, 75 percent of all foreign aid is lost to corruption.
My case against foreign aid is not meant to say that we shouldn't do anything to help developing countries. Instead, it is meant to point activists in the right direction. Instead of big pushes of aid, we should promote what Easterly calls "searchers," private individuals and agencies that target individual problems in particular areas of the world. Instead of increasing foreign aid, governments should start to question why the $2.3 trillion in aid over the past 50 years produced so little results. And finally, we should stop seeing Africans as inferior individuals who will prosper only with our help. The quicker we realize that the keys to prosperity are in the hands of those living on a dollar a day, the faster we will come to witnessing a world free of poverty.
Jared Kotler is a graduate student in the School of International Service and Kogod School of Business. To read more from Jared, visit econfreedom.blogspot.com.
