Who could have predicted welfare for countries is as harmful as that for corporations and people?Dambisa Moyo, an African economist, has joined her voice to the other African economists [e.g. James Shikwati] calling for a full halt to Western aid. Her book is called Dead Aid and it asserts a direct cause-and-effect relationship between $1 trillion of aid and the rise in African poverty rates from 11% to 66%.
Though it's an easy enough signal to fake, I find it noteworthy that Moyo - in this interview at least - repeatedly pleads for some attention to "logic and evidence":
"I think the whole aid model is couched in pity. I don’t want to cast aspersions as to where that pity comes from. But I do think it’s based on pity because based on logic and evidence, it is very clear that aid does not work. And yet if you speak to some of the biggest supporters of aid, whether they are academics or policy makers or celebrities, their whole rationale for giving more aid to Africa is not couched in logic or evidence; it’s based largely on emotion and pity."
I was just trying to think of when was the last time I heard a Western politician - or even a mainstream Western economist in any public venue - draw an outright battle line between logic and pity. Oh, there are plenty of demagogues who claim the evidence is on their side, but they won't be so outright condemning of emotion - it's not a winning tactic. Even I avoid drawing a battle line so stark.
Moyo says she's gotten a better reception in Africa than in the West. Maybe you need to see your whole continent wrecked by emotion and pity before "logic and evidence" start to sound appealing.
Sigh. Ain't it always the same—by the time people will listen to we stoicly pitiless libertarians and our "logic and evidence", the damage is done.
Update: Excerpts from an interview with Moyo
(earlier: If the world had 100 people)
So the pity problem is a function of a common information processing bias, of overestimating efficacy. In other words, you attribute a problem in the world to a presence or lack of direct human agency instead of to complex causal factors -- blaming executives getting too many bonuses as the cause of our latest economic problems is a good example of the efficacy bias (as if simply being less greedy would make the economy work better). It is a helpful bias, usually, though because it directs human efforts at what can be changed.
ReplyDeleteMilitary intervention is one thing that this fellow Collier, who I'm guessing (based loosely on reviews) wrote a better book than the lady you cite, argues for (see below). It's a bit too simplistic to see the "solution" as our needing to stop giving directly/having pity and focusing exclusively on macro "root" causes all of which are quite controversial(see http://blog.givewell.net/?p=345). In fact, I think that we should continue to give, but to give more strategically. Better than relying on scattershot private charities as we currently do and as a dogmatic libertarian would suggest, (where people end up often as not giving to something disgusting like suburban soccer teams or music programs for elite suburban youth) would be a built in form on your tax return that you have to choose to OPT-OUT on that would contribute to the best reviewed charities in the world. Maybe even better, would simply be more government taxes going directly to defensible aid projects, AND macroeconomic strategies (which are controversial). Free trade as you welcomely suggest, is a no-brainer. However, some protectionism for those in the most poor billion (i.e., Africa) that are getting crushed by the cheap labor in Asia right now just for the time period for their businesses to start up might make good sense.
Here's a snippet of the Collier (who also sees problems with development aid) book review:
"Reflecting on the tendency of postconflict countries to lapse back into civil war, he argues trenchantly for occasional foreign interventions in failed states. What postconflict countries need, he says, is 10 years of peace enforced by an external military force. If that means infringing national sovereignty, so be it.
At a time when the idea of humanitarian intervention is selling at a considerable discount, this is a vital insight. (One recent finding by Collier and his associates, not reproduced here, is that until recently, former French colonies in Africa were less likely than other comparably poor countries to experience civil war. That was because the French effectively gave informal security guarantees to postindependence governments.) Collier concedes that his argument is bound to elicit accusations of neocolonialism from the usual suspects (not least Mugabe). Yet the case he makes for more rather than less intervention in chronically misgoverned poor countries is a powerful one. It is easy to forget, amid the ruins of Operation Iraqi Freedom, that effective intervention ended Sierra Leone’s civil war, while nonintervention condemned Rwanda to genocide." [As Collier says] “If Iraq is allowed to become another Somalia, with the cry ‘Never intervene,’ the consequences will be as bad as Rwanda.”
...he pins more hope on the growth of international law than on global policing. Perhaps the best help we can offer the bottom billion, he suggests, comes in the form of laws and charters: laws requiring Western banks to report deposits by kleptocrats, for example, or charters to regulate the exploitation of natural resources, to uphold media freedom and to prevent fiscal fraud.
...As Collier rightly says, it is time to dispense with the false dichotomies that bedevil the current debate on Africa: “ ‘Globalization will fix it’ versus ‘They need more protection,’ ‘They need more money’ versus ‘Aid feeds corruption,’ ‘They need democracy’ versus ‘They’re locked in ethnic hatreds,’ ‘Go back to empire’ versus ‘Respect their sovereignty,’ ‘Support their armed struggles’ versus ‘Prop up our allies.’ ”
http://select.nytimes.com/preview/2007/07/01/books/1154680128919.html?pagewanted=2&ei=5124&en=d136787d33c96836&ex=1340683200&partner=permalink&exprod=permalink
I think utilitarian justifications (such as you claim in the earlier post) are always better than libertarian ones, even if libertarianism is a useful heuristic for a lot of helpful policies. It's just, it should be treated as a heuristic and not a moral principle otherwise it provides unneeded rationalization for the idea that we should just leave things alone and magic will happen.
Giving aid is good and highly defensible from a utilitarian stand point once you figure out where to give it, I think. See: http://www.givewell.net
Also potentially helpful:
http://www.brookings.edu/events/2008/~/media/Files/events/2008/0529_global_development/2008_banerjee.pdf