Politicians and pop stars tell us we need to do more to help end global poverty. But what if we doubled the amount of foreign aid we sent to poor countries and nothing happened? William Easterly says we have doubled foreign aid in the past with few apparent benefits. The New York University economist recently discussed global poverty during the fifth annual John W. Pope Lecture at N.C. State University. He also discussed the topic with Mitch Kokai for Carolina Journal Radio. (Click here to find a station near you or to learn about the weekly CJ Radio podcast.)
Kokai: In your book The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good, one of your key ideas is that aid agencies and governments of wealthy countries apply a double standard. What’s the double standard?
Easterly: The double standard is we take individual liberty for granted for rich people, but we don’t respect individual liberty for poor people. We patronize poor people, and by “we” I mean we in the aid agencies, we in rich-country governments that are spending money on aid to poor people. We think we know better than they do what’s in their best interest, and we’re going to impose it by putting lots and lots of conditions on the aid, telling them what to do and, in effect, sort of coercing them using money as leverage to do what we think they should do.
And that leads to a lot of resentment. In many cases, it’s led to a sort of xenophobic backlash in favor of populist economic policies, socialist economic policies, because the Western ideals of free markets and individual enterprise have been discredited as foreign ideas by this hard, heavy-handed imposition of our arrogant assumption that we know what is best for other people. The beginning of liberty is respecting everyone’s right to choose their own destiny, to act in their own interests as they conceive it, and that’s where liberty begins, and we don’t respect that ideal for poor people. We do respect it obviously for rich people, and that’s the double standard. It’s like there’s a new Berlin Wall that still exists in the world, where on one side of that Berlin Wall there are poor people who are receiving aid whose dignity and rights we do not respect.
Kokai: You say foreign aid agencies use some terminology obscures this double standard.
Easterly: They take ringing language like “inalienable rights,” “life, liberty, and the pursuit of happiness,” and instead of that we get bureaucratic buzzwords like “participation of the poor,” “community-driven development,” “locally owned development,” lots and lots of these buzzwords, which are really papering over the reality that we are not in fact giving any power to the poor to choose their own destinies — that all the power lies with the aid agencies who design all the aid programs from headquarters in Washington and impose the same blueprint everywhere they go. They don’t let local people be in charge.
Kokai: These aid agencies have been doing their work for decades. You point to some data that suggest that the system really hasn’t worked all that well.
Easterly: Soviet Communism lasted for 70 years because it was not a self-correcting system. It suppressed dissent. I don’t want to equate aid to Soviet Communism, as that would obviously be going too far. But it does have that one thing in common, that aid is also not a self-correcting system. You get the same bad ideas that failed being forgotten and then reinvented and repeated in every generation. So the ideas of the 1950s, [with] things like “give a lot of aid, a big push,” to countries to get out of the poverty trap … Some time went by, and Jeffrey Sachs came along in 2005 and wrote a book about how you should give a lot of aid to finance a big push to get the poor out of a poverty trap. Same idea, exactly the same idea, and it failed the first time, and it’s failing now the second time.
Kokai: In your recent John W. Pope Lecture at N.C. State, you suggested an alternative to traditional foreign aid. It’s called more freedom. How would that work?
Easterly: We need to rethink how all of us involved in development and aid think about poor people. We need to stop thinking about them as children that are being helped by us, the parents, to do what’s in their own best interests. We need to respect them as adults. I think a lot of aid people find it offensive that I accuse them of treating the poor like children, but this is really in a way kind of embedded in the DNA of development. What do you see on the cover of any aid brochure that has ever been produced? It’s always the picture of a poor, adorable child. That’s the poster for aid, and there is even a kind of satirical line by the writer David Reiff, where he says there are two groups of people who like to be photographed with children: dictators and aid workers.
Even the very idea of development — where did the word “development” come from? It’s a metaphor. It’s about the biological development of an individual from being a child into an adult. That’s where the word “development” came from. So actually our whole way of thinking about development is this paternalistic idea that — and, of course, what is the one exception that we do make for individual liberty in our own society? We don’t give individual liberty to children. We think they need their parents to guide them, to do what’s best until they reach adulthood, and that’s pretty much exactly how we think about poverty.
So the first step is changing our own mindset to no longer thinking of the poor as children, respecting them as equal human beings with fully equal rights, and designing aid in a way that they are in charge, that we make it possible for individuals to have opportunities to realize their own goals, their own dreams. The poor have dreams just like we all have dreams: the American dream, the Martin Luther King “I have a dream.” Well, the poor also have dreams, and with aid what we should be doing is helping the poor realize their own dreams, not imposing our own dream on the poor.
Kokai: With increased freedom you mention the role of a group you call “searchers.”
Easterly: “Searchers” is just my rephrasing of the word “entrepreneur.” All of us who advocate kind of market solutions to poverty have to tiptoe around because there are so many people who have this visceral reaction to any suggestion that markets could be a positive force for human welfare, because they think of markets as being dominated by greedy people. I don’t really know how greedy private entrepreneurs are or not, but when you look at the facts of what they’ve done, they’ve actually done tremendous good for the world, and they create tremendous amounts of wealth, of employment, high-paying jobs that lift people out of poverty by giving people the opportunity to have high-paying jobs, so the entrepreneur I think of as the model for how positive change does happen in society.
First of all, the private entrepreneurs are the most obvious source of progress in poor societies. That’s how we got out of poverty as Americans. That’s how Europeans got out of poverty, and that’s how we got all of the wonderful technology that we have today that’s extended our lifetimes and made possible lots of great things for us. That force is available to poor countries, and the sad thing is that it’s so underutilized.
Kokai: Ending poverty requires an entrepreneurial mindset?
Easterly: What is the mindset of the entrepreneur? It’s totally different from the mindset of the planning bureaucrat, which has dominated aid. The planning bureaucrat just arbitrarily decides what the best magic bullet is to fix poverty and imposes that magic bullet everywhere, whereas the entrepreneur is very opportunistic and flexible. You have to be opportunistic and flexible in order to be a successful entrepreneur. You never know where your opportunity is going to come from.