There is no poverty trap. In most cases, bad governance or internal strife (ethnic cleansing, civil wars, racism etc) causes poverty. Poverty cannot be “made history” with a “big push.” Top down solutions created by “planners” have never worked in the Third World. People who understand the culture and social relationships of a community are in a better position to help than bureaucrats are. Easterly calls these people “searchers.” He thinks we need more searchers and fewer planners.
Easterly’s book is filled with anecdotes and stories that illustrate the points he’s trying to make. For example, planners decided that everyone needed a bed net. Good idea but they didn’t ask if the people actually wanted, or would use, bed nets. Many bed nets got used as fishing nets or veils. When searchers gave the bed nets to a nurse in a clinic to sell, they told the nurse she could keep a portion of every net she sold. She made sure the nets were in stock. She made sure that the people knew what they were for and how to use them. Patients were more likely to use them for their intended purpose because they paid for them. Deaths from Malaria declined in the area the nurse was working in.
The other problem with foreign aid is that there is very little accountability. If the bed nets didn’t work the nurse would hear about it right away. The patients would want a new net or their money back. Aid agencies are not accountable to anyone when their programs do not produce results. The only time aid agencies have to justify their existence is when they are trying to get more money from donor countries. Aid agencies must appear to be at least trying to do something in order to keep the aid money flowing in. This leads to an abundance of what Orwell might recognize as DoubleSpeak.
Since Donors understandably don’t want to admit they are dealing with bad governments, diplomatic language in aid agencies becomes an art form. A war is a “conflict-related reallocation of resources.” Aid efforts to deal with homicidal warlords are “difficult partnerships.” Countries whose presidents loot the treasury experience “governance issues.” Miserable performance is “progress [that] has not been as fast and comprehensive as envisioned….” When government officials want to steal while the aid agency wants development, there are “differences in priorities and approaches [that]… need to be reconciled.” If debt-relief dollars disappear before reaching the poor, then “continued progress on the Expenditure Management and Control Program will be needed…”
Diplomatic donors also put a positive spin on awful recipient governments by asserting that while things are bad, they are getting better. The use of gerunds indicating progress is ubiquitous in aid documents such as “developing,” “emerging,” and “improving.” – p. 137-138
The aid agencies are beginning to believe the DoubleSpeak. The Millennium Project 2005 report was a very positive document but…
The report lists sixty-three poor countries that are “potentially well governed,” and thus potentially eligible for a massive increase in foreign aid. The list includes five out of seven countries singled out by Transparency International in October 2004 as the most corrupt in the world: Azerbaijan, Bangladesh, Chad, Nigeria, and Paraguay. The list of “potentially well-governed” countries also includes fifteen governments that Freedom House classifies as “not free.” – p. 154
Reading this book was hard. It was often very depressing. What’s the point of getting AIDS drugs to people if they’re only going to die of malnutrition/starvation? What’s the point of trying to help people rise above poverty if the society they live in does not consider them to be worthwhile people (of the wrong class or race or religion)?
Easterly makes a point of saying that the things the aid agencies want are not always what the governments have an interest in providing. Some governments have no interest in raising the country’s population out of poverty. In some cases it might be politically expedient to keep a part of the population in abject poverty. People who have to spend all their time scraping out a living have no time to join political parties. They have no interest in maintaining the infrastructure needed to help those living in poverty improve their lives (roads, hospitals, schools etc.)
The tragedy of poverty is that the poorest people in the world have no money or political power to motivate Searchers to address their desperate needs, while the rich can use their money and power through well-developed markets and accountable bureaucracies to address theirs. The foreign aid bureaucracy has never quite gotten it – its central problem is that the poor are orphans: they have no money or political voice to communicate their needs or motivates others to meet those needs. (p. 167)
Easterly thinks aid agencies would just stop trying to work with governments and resign themselves to not only providing aid but maintaining the infrastructure needed to put the aid to good use. He talks about one country where an aid agency built a road but then government did not maintain it so in a few years the road was unusable and the people it was meant to help were no better off.
…aid bureaucrats have incentives to satisfy the rich countries doing the funding as well as (or instead of) the poor. One oversight in the quest to help the poor was the failure to study the incentives of its appointed helpers. The bureaucratic managers have the incentive to satisfy rich-country vanity with promises of transforming the Rest rather than simply helping poor individuals. International bureaucratic incentives also favour grand global schemes over getting the little guy what he wants. (p. 167)
Easterly tells the story of a village where the smoke from cook stoves was causing a lot of respiratory disease. An aid agency spent a lot of money to replace all the stoves with safer models. What they did not stop to do is ask if anyone wanted the new stoves, what kind of stoves they needed or if they would use new stoves. Turns out no one wanted the stoves and nobody used them. They went back to the old stoves the moment the aid agency left. Meanwhile the aid agency listed the replacement of “deadly” stoves in its “win” column.
I take getting my needs met for granted. If someone came into my house and said “we’re going to do this and this and give you this,” without asking me what I wanted and needed you know I would have something to say about it. I can write letters and emails and make phone calls until I get my needs met. If all that fails, I can call my local television station and get the media involved. The poor don’t have that ability. They have to take what the aid agencies want give them. The solution is easy: the aid agencies ask the people what they need and then they give it to them. Simple.
I had always thought that aid agencies asked the poor what they wanted and then provided that. Easterly showed me any examples of how that is not so. This has gotten quite long and I didn’t even get around to the IMF or the World Bank.