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July 03, 2005

Reducing poverty

The Irish Branch of the Make Poverty History campaign has really big goals, like the whole movement. Of course they have a manifesto. The usual stuff is in there: cancelling debts, ensuring that governments in poor countries can keep out imports ("We need to stop the World Bank and International Monetary Fund (IMF) forcing poor countries to open their
markets to trade with rich countries") so that the poor have to depend on local producers, and ensuring that poor countries do not export to wealthier countries ("it means ensuring trade rules do not undermine core labour
standards"). No wonder the trade unionists are part of the campaign.

Meanwhile, William Easterly of NYU, who actually knows something about poverty, makes some suggestions that might reduce poverty, rather than simply enriching western trade unions and giving activists a chance to preen in front of the cameras.

It's great that so many are finally noticing the tragedy of Africa. But sadly, historical evidence says that the solutions offered by big plans are not so easy. From 1960 to 2003, we spent $568 billion (in today's dollars) to end poverty in Africa. Yet these efforts still did not lift Africa from misery and stagnation.

Why don't big plans work? Because they miss the critical elements of feedback and accountability. If consumers like a product, its maker prospers; if they don't, the company goes out of business. If voters complain about public services to their local politician, the politician either fixes the problem or gets voted out of office. It doesn't always work, but it works well enough for rich people to get potato chips and paved roads.

.      .      .

To make it worse, the United Nations agencies, the World Bank, the International Monetary Fund, and national aid agencies like the United States Agency for International Development are jointly responsible for these interventions to reach the Millennium Development Goals (which are various indicators of reduced poverty). Collective responsibility for big goals doesn't hold any one agency accountable if the effort fails; they can always point to others as the ones who are to blame.

Who took responsibility, for example, for missing the goal of universal primary school enrollment by 2000 set by a 1990 United Nations conference? Instead, it is now one of the Millennium Development Goals for 2015.

The sensible alternative is to concentrate on piecemeal solutions to poor people's problems. You can evaluate the results of a specific intervention by comparing them with conditions in another group without the intervention, and you can get feedback from those affected and hold an individual aid agency accountable.

The Dutch aid organization I.C.S. Africa distributed deworming drugs to schoolchildren in the Busia district of Kenya. Ninety-two percent of the children had intestinal worms that cause listlessness, malnutrition and pain. I.C.S. invited economists to evaluate its program, comparing those children who got the drugs with those who did not. The deworming drugs decreased school absenteeism by a quarter. "Pupils who had been miserable now became active and lifeful," said a schoolteacher.

Piecemeal fixers do not promise the miracles that planners do; they just quietly deliver results. Accountability for aid would transfer power from planners to fixers, both African and foreign.

Posted by sjostrom on July 03, 2005 12:40 PM




Comments:

I find the general subject of aid and it's effect fascinating and having been plodding along reading, and occasionaly doing since before Lester Pearson wrote his report in the 70's, I have come round to the idea that real free trade, not some managed variety, is the main answer to getting folk out of poverty. If this swamps the world in Coca Cola then maybe that's because Coke is what people want to drink. Which as someone who firmly believes in the idea of free choice is OK if that is what one wants.

Sound Money, sound goverment and free trade have changed Ireland beyond recognition in the last twenty years. I certainly do not recall a grand programme to make this work but many small steps.

And, yes, worm tablets work very well and are simple and cheap. More power to the guys that do these small but needed programmes.

Posted by: Kevan Barker on July 5, 2005 11:03 AM [Permalink]



I'm working my way through TP Coogan's "Eamon De Valera; nearly finished. One of the signal points of the book is that the measures introduced by De Valera to encourage Irish industry and growth--mainly subsidies and protectionism--had much the opposite effect and led to Ireland being the poor backwater of Europe for many decades.

It's funny how ideology blinds people to history--local history at that--and leads them down the merry path to serfdom.

Posted by: M. G. Stinnett on July 6, 2005 06:38 PM [Permalink]






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