Fall 2006, Volume 2
Published: 2006
Publisher: The Penguin Press, New York
William Easterly begins his impassioned and provocative book with a quote from Rudyard Kipling: “Take up the White Man’s Burden – The savage wars of peace – Fill full the mouth of Famine, And bid the sickness cease”. Kipling’s colonial fancies were discredited by the experience of Africa in the 20th century, but Easterly argues that today’s development experts and aid agencies are making a similar mistake. In place of grandiose plans to end poverty, he advocates small-scale, experimental interventions, following the motto: “The right plan is to have no plan”.
Bill Easterly is Professor of Development Economics at New York University and draws on 3 decades of experience with the World Bank. His book is not just about Africa, but its title and many of the cases cited give it a strong African focus. Easterly’s strength is his solid fact base and historical perspective – covering the colonial period as well as the period since World War II when development aid became popular. He uses this command of history to illustrate the parallels between the today’s Millennium Development Goals and previous ‘big pushes’ to end poverty. Easterly argues that these grand schemes are doomed to failure because they share a ‘planning’ mentality that has been discredited in other areas of public life.
Development aid often starts from the idea of a poverty trap from which countries cannot escape on their own. Easterly notes that there is no association between receiving lots of aid and escaping from this poverty trap. If anything, the reverse is true: many of today’s development success stories, including China, Indonesia and Botswana, received less aid than some perennially poor countries: Haiti, the Democratic Republic of the Congo, Zambia are examples. Easterly does not argue that aid leads to poverty, merely that continuous flows of aid to poor countries were not enough to lift them out of poverty. They remain poor because of weak markets and bad government, which are perpetuated by the Western habit of military intervention – from 19th century Haiti to 21st century Iraq.
The main target of the book is the multilateral aid organizations, led by the World Bank, IMF and United Nations as well as bilateral donors. Easterly respects the motives of these organizations and their celebrity supporters, but argues that they are either ineffective or wrong. He is particularly scathing about grand plans to end poverty: the Development Decades of the 1960s and 1970s, structural adjustment plans of the 1980s, nation-building efforts of the 1990s and now the Millennium Development Goals. If there is a lesson from all these efforts, it is that solutions cannot be imposed from the outside: for example, “Free markets work, but free market reforms don’t.”
This is not to refute aid entirely. Easterly identifies some areas in which aid has improved the lot of the poor: for example, public health interventions that led to the eradication of smallpox and guinea worm. However, most of his success stories are about individuals: businessmen and social entrepreneurs who fill the gaps left by the state and donors. He has little to say on how these innovations can be spread and increased in scale, other than through developing a ‘market for donors’. His heroes are the ‘searchers’, though he does not explain how ‘searchers’ can attain scale or universal coverage.
Another omission of the book is the role of the social sector or NGOs, in both developed and developing countries. At one extreme, large agencies like Oxfam or Care share some features that Easterly criticizes in the World Bank or bilateral donors: they try to do everything and rarely specialize. On the other hand, he cites the work of organizations (WaterAid, the Shell Foundation, even the Grameen Bank) that have chosen to specialize in a certain area of development and are getting results. Easterly does not discuss whether these organizations are good for development. They may be ‘searchers’, but are they any more effective or accountable to the poor?
Easterly calls for less vision and more delivery from aid agencies. He does not specify whether they should reduce the scope of their operations, or just adopt a more experimental approach and scale up whatever works. His argument for independent evaluations of aid projects is clearer: Western media and aid agencies remain obsessed with inputs (millions of dollars) over outputs (lives saved, additional years of education, improved health). However, is the solution really to spend more money on economists or statisticians? Or run yet more ‘participatory evaluations’?
Politicians and businesspeople hold focus groups with their stakeholders from time to time, but their best feedback comes from votes and sales. In his conclusion, Easterly ponders whether the poor should be given vouchers to spend on services from competing donors. Now that would be an evaluation worth investigating.