Originally, I thought I could combine Chapters Eight and Nine – they’re less development-focused, shorter, etc. Turns out, they’re both pretty interesting and I found myself writing too many words for one post; so, on to Chapter Eight.
First, the definition of “post-modern imperialism:”
“The complicated mixes of international and domestic governance structures evolving… similar to classical imperialism, these efforts involve a remarkable degree of control over domestic political authority and basic economic functions by foreign countries”
In other words, it’s an offshoot of former Defense Secretary Donald Rumsfeld’s “Pottery Barn” theory of nation-state aggression: “You break it, you buy it.” The most generous explanation for this mindset is that the nascent governments put in place after a war may actually need assistance – without which they may be more likely to collapse and leave the polity in an arguably-worse place than it was before. The more tongue-in-cheek explanation may be that many people believe spreading peace and democracy throughout the world requires suspending peace and democracy for a time – a rather Orwellian explanation.
Easterly has a dim view of post-modern imperialism, which he likens to colonialism and – perhaps more controversially – the mindset and actions of modern-day development agencies:
“Like today’s donors and post-modern imperialists, the colonizers were outside Planners who could never know the reality on the ground. Like their modern-day counterparts, colonizers often unwittingly destabilized the balance of internal power”
I think the argument can be made that this sentence is both essentially true and deeply unconstructive – one that gives off way, way more heat than light. Putting today’s foreign aid donors in the same boat with war-waging post-modern imperialists and colonizers seems like a rather severe comparison, meant to elicit emotion rather than reason. It is true that today’s donors often unwittingly tip the scales in ways that are unpredictable and negative (see: DRC, Angola, Afghanistan, Iraq, etc.); it is not necessary to conclude that, because of this, they are similar in word and deed to the colonizers of old, or the warmongers of new. I don’t think the discussion of aid is helped by direct comparison to slave-traders or armies that kill untold numbers of people.
Next, Easterly concludes that “non-colonies had more rapid increases in secondary education from 1960 to 2001” and “growth per capita from 1950 to 2001 was 1.7 percentage points higher in the non-colonies than the non-settlement colonies.” These are seemingly-damning statistics, capstoned by the claim that “economic miracles are uncommon under any circumstances, but they seem to be more likely among non-colonies than colonies.”
This many very well be true! But the premises don’t lead to the conclusion, in my opinion, because the countries aren’t random; as Easterly writes, “they wound up that way because of factors that influenced their social evolution.” In other words, there are important reasons why countries such as China and Japan weren’t colonized, and they may very well be the same reasons that they became economic miracles.
Let’s assume that Easterly’s contention is basically true; it’s still far from clear that the “economic miracles” argument holds up to further scrutiny. As Easterly readily brings up, the top-line figures mask wide variation between the non-colonies – China has had fantastic growth, Afghanistan and Ethiopia less so. Remove China from the group and it’s not clear that non-colonies would have out-performed the former colonies; China has posted such unprecedented growth over the past 30 years that it tips the scale in any comparison. This isn’t to say that subjecting the continent of Africa to arbitrary borders, slavery, and subjugation was positive – merely that from a growth perspective it’s difficult, if not impossible, to compare them to non-colonies.
Easterly holds that there are three ways that the West caused long-term fractures in myriad African societies:
“First, the West gave territory to one group that a different group already believed it possessed. Second, the West drew boundary lines splitting an ethnic group into two or more parts across nations, frustrating nationalist ambitions of that group and creating ethnic minority problems in two or more resulting nations. Third, the West combined into a single nation two or more groups that were historical enemies”
It’s not hard to think of countries that fit one or more of these: Israel-Palestine, Afghanistan, Pakistan, Rwanda, etc. He then cites studies that corroborate the claim, including an innovative study that looked at a nation’s borders: “…artificially straight borders were statistically associated with less democracy, higher infant mortality, more illiteracy, less childhood immunization, and less access to clean water” – borders which colonial powers created.
A similar story plays out in Israel-Palestine, India, Pakistan, and Sudan – many of which remain today, or recently were, global “hotspots.” All were influenced by Western intervention, culminating in decades of war, untold human losses, and stunted economic growth. Out of these countries, only India has remained relatively peaceful and growth-driven (even so, the spectre of nuclear war with Pakistan over Kashmir in 2005 loomed large); Israel-Palestine is a fractured, apartheid-esque state, and Sudan is now split after decades of ethnic strife and a genocide.
I found this section very persuasive: Western intervention successes (arguably South Korea, though that obviously overlooks North Korea) are much rarer than abject failures. At the same time, I’m drawn to the idea that, as a nation that has done a lot of harm, America should do what it can to support the development of these areas. The premise of “Aid has been ineffective in the past” doesn’t lead to the conclusion of “Stop trying,” in my opinion.
I’ll leave out discussion on a lengthy section of the chapter that focuses on Zaire/Democratic Republic of Congo, only because I don’t yet know enough about the area. If you’re interested in its history, I’d recommend looking into King Leopold’s Ghost and Dancing in the Shadows of Monsters, two supposedly-fantastic books that cover its time as a colonial state through the present day.
This chapter explores one of the central questions development thinkers should continuously ask: “What would aid recipients do with funding if they made the decisions?” Easterly uses the Western response to HIV/AIDS in Africa to make two key points related to this question: top-down Planners can often be woefully out of touch with the realities at the bottom, and the Western world’s fascination with AIDS treatment is economically inefficient and antithetical to doing the most good. He questions whether aid recipients would put so much emphasis on treatment at the expense of prevention or other aims.
Easterly begins with what he calls “The White Man’s Burden Paradox” (modeled off the paradox of evil); he notes that the follow three conditions cannot be all true:
“1) The White Man’s Burden is acting in the interests of the poor in the Rest; 2) The White Man’s Burden is effective at resolving poor people’s problems; and 3) Lots of bad things, whose prevention was affordable, are happening to poor people”
This seems logically inconsistent to me – the word affordable is very open to interpretation, and #1 can hold without meaning that all of the interests of the poor are being acted on – but the general point still feels about right: for areas where the West does focus, #3 still occurs far too often.
As Easterly notes here and elsewhere in the book, Western interventions to improve health are more successful than other Western interventions (for a variety of postulated reasons) – so then why was the response to the African AIDS crisis so poor? It seems that part of the issue was that aid agencies realized the potential scope of the issue but did little to attack it early; the World Bank made a $1 million grant to the World Health Organization to fight AIDS in 1988, a rounding error in its funding.
Another possible reason is that Planners were out of touch at the top “with the tragedy at the bottom;” that they failed to appreciate the scope of the impending crisis because they were too far removed from the countries where it was fomenting. And finally, the lack of response could be due to the “Kitty Genovese Effect” – everyone expected everyone else to do something, but no one did until the crisis was full-blown.
The issue of HIV/AIDS treatment in Africa is next, and Easterly lucidly lays out the contention that “compassion is driving the fight against AIDS in Africa in a direction that may cost more lives than it saves” because money is being spent on treatment of AIDS, not prevention of HIV or other diseases. The specifics of this argument were totally new to me, and it made me question my tacit support for initiatives like the President’s Emergency Plan for AIDS Relief (PEPFAR), President Bush’s $15 billion AIDS relief program passed in 2003.
Let’s start with the top-line figures. According to the book, the rough costs of various health interventions in Africa are:
- HIV/AIDS: $304 per year per patient for highly active antiretroviral therapy (HAART) – $1,500 if all costs are included
- HIV/AIDS Prevention: $1-20 per year of life saved, $20-400 per HIV infection averted
- Tuberculosis: $10 per case
- Drug-Resistant Malaria: $1
- Vaccinations: “pennies per dose”
The takeaway: treatment of HIV/AIDS is about as expensive as it gets. Easterly attributes the zeal for treatment of HIV/AIDS to guilt (for not preventing the crisis when there was an opportunity to do so) and “SIBD Syndrome” (Something Is Being Done) – it’s easy to see someone improving on HAART and difficult to see someone not dying from malaria. To that end, PEPFAR actually restricted funding for prevention of HIV/AIDS to 20% of the total (with one-third of that going to abstinence-only programs) – showing that Western leaders often fund their own goals, not those of the people they are trying to help. It seems fair to believe that this amount of politicking and imposing culture is well above what could be considered unavoidable; abstinence-only hasn’t been shown to be effective anywhere, so it’s a waste of resources to push it on African countries.
This is an issue worthy of a lot more thought (at least for me); as Easterly puts it,
“The big question is whether poor Africans themselves would have chosen to spend scarce funds on prolonging so lives with AIDS treatment, as opposed to saving many lives with other health interventions.”
That’s a really tough question for someone generally optimistic about the effects of aid (done appropriately, anyway). With the funding for HIV/AIDS, it seems like a relatively straightforward answer: no, the poor Africans probably would not have spent those resources on HAART treatment. At the same time, there are myriad complexities that shouldn’t go unnoticed, too; for example, the fact that “studies in Cameroon, Guinea, Tanzania, and Uganda estimated that 30 to 70% of government drugs disappeared before reaching the patient” should give pause to the notion that the Africans themselves will always make the “best” decision.
The basic worry still stands, though; if the Western world is convinced that there is a place for Western aid, then it should grapple daily with the notion that the strictures it attaches to that aid are problematic, inefficient, and dilutive. Foreign aid is a scarce resource that is increasingly threatened by austerity measures in the United States, the United Kingdom, and elsewhere; making inefficient use of it both devalues the act itself (a dollar doesn’t go as far) and leads to poorer outcomes in areas where it is used.
PEPFAR and the World Health Organizations “3 by 5” campaign (to get three-million HIV-positive people on antiretrovirals by 2005) aren’t inherently bad – but they could be so much better. And – crucially – the path towards better is clear! There are – and always will be – myriad examples where the path is much murkier. If the West didn’t have the power to chart a clear path, how will we handle the less-obvious situations?
In the driest chapter of the book, Easterly discusses everyone’s favorite global money pot – the International Monetary Fund (IMF). It’s one of the Bretton Woods organizations (along with the World Bank and International Trade Organization), which makes it a multilateral aid donor — it receives contributions from member organizations and distributes funds to countries in need.
Which brings up the obvious question: which countries are “in need”? The first group is composed of those countries that need short-term “bailout” money – in the recent past, a few were South Korea, Thailand, and Mexico. More ambitiously, the IMF provides conditional loans to countries for large-scale projects; many, many countries have received this type of development loan (the next is likely Egypt). Often, the loan is a “standby arrangement,” which makes it “conditional on the government’s getting its finances in order so it can pay the loan back quickly.”
Easterly holds that the IMF does a better job with the former group than the latter: “on balance, the IMF has done useful short-term bailouts of poor countries experiencing financial crises, but it has done worse at promoting long-term development.” Which, conceptually, makes sense: the countries that are in financial crisis are probably slightly less likely to be “broken,” so a short-term injection of emergency cash could right them up and set them on their way. Not so much for the poorer, slightly-more-likely-to-be-corrupt countries.
The IMF also plays the heavy for many countries, “often [forcing] the government to do unpopular things, such as cut subsidies for bread or cooking oil.” The main reason is two-fold: 1) subsidies for basic goods are often politically popular but economically inefficient; and 2) this is one of many ways the recipient government cuts expenses as part of the standby agreement. As a consultant, I can empathize with the role of the heavy: it’s often (implicitly) a big reason clients hire us, so I’m used to it. Of course, citizens don’t like it when prices for basic goods double, so a certain amount of rioting often occurs (as it currently the case in Jordan – though that wasn’t part of IMF cost-cutting).
Depending on how you look at it, the IMF is either really bad at providing loans (and thus, conditions to reform) to countries that are likely to collapse, or in providing loans to poorer countries, it naturally just accepts some poor outcomes, but the correlation is there either way: “statistically, spending a lot of time under an IMF program is associated with a higher risk of state collapse.” Easterly appears to take the former position, and recommends not getting involved with countries that can’t take it. This seems to be sound advice, though also a tall order, to attempt to provide funds and reform conditions to poor countries without accepting some level of risk.
In a way, the IMF acts as an enabler to poor countries: when they can’t repay their first IMF loan, it’ll often provide another loan – even without adhering to the initial conditions by which the loan was granted. In other words, the IMF is like the parent that keeps paying the kid allowance even when he/she isn’t doing the chores. Poor coordination makes the situation worse, as Western governments and other agencies kick in more debt to pay off old debt; this spiral continues until all parties admit the obvious: the country won’t be able to repay the loans. This led to the creation of a new acronym: HIPC (Heavily Indebted Poor Countries), and in 1996 “the IMF and the World Bank, for the first time in their history, forgave part of their own loan.” Anyone who remembers the 2008 financial meltdown in America will recognize the issue with this: moral hazard – or, in plain human speak, “countries will stop repaying loans because they know they’ll just be forgiven anyway.”
Easterly’s solution is to look back to the 1944 Bretton Woods conference and true-up the mission of the IMF and World Bank: “The World Bank, which is an aid agency, should just give the poorest countries grants, not loans… The IMF, which is not supposed to be an aid agency, should get out of the business of loaning money to the poorest, least creditworthy countries altogether.” This doesn’t strike me as a solution that fixes the problem: treating all poor-country funding as essentially “pre-forgiven” (which is basically what the grant would be, right?) isn’t likely to fix the underlying issue: that the money isn’t being put to productive use.
Off-the-cuff, another solution might be to accept the underlying conditions (i.e., don’t bother with the pre-conditions), then provide grant money for specific infrastructure projects – roads, dams, etc. Money’s fungible – a dollar is a dollar is a dollar – but at least something would come of it. This seems to be what Easterly is getting at but doesn’t explicate.
In Easterly’s view, the IMF is sitting on a giant pile of money that it should be lending to emerging markets (not the too-likely-to-fail countries) and doling out on an emergency basis; its role should be a stabilizer, not a fixer. With its recent funding of the Eurozone bailout, it seems to be heading in that direction. If that’s the case, the question is what the IMF should do with all of the additional contributions: give to the World Bank for development work? Rebate back to member countries?
“Foreign aid donors spent two billion dollars in Tanzania during the past twenty years building roads. The road network did not improve. Roads deteriorated faster than donors built new ones, due to lack of maintenance…The poor need roads; the aid bureaucracy fails to deliver them. We should be tough on a bureaucracy that fails to turn aid money into critical services for the poor.”
The block-quote above is a nice summation of the issue this chapter explores – why do aid bureaucracies fail, and what can be done to improve them? Reasons for aid agency failures are legion, but boil down to three overarching explanations: misdirected incentives, a dearth of accountability, and poor feedback mechanisms.
First up: incentives. We’re back to the classic “principal-agent” problem where “the principal is the rich country politicians and not the real customers, the poor in poor countries” – so aid agencies are incented to appease the rich country politicians rather than the poor aid recipients. If a rich country politician is persuaded that aid funding is a smart use of resources (a big if, admittedly), he/she needs to show that to constituents somehow, and it’s easier to do when appealing to the vision of Saving Poor People From Poverty than incrementally improving the lives of those same people. This causes aid agencies to overpromise on vague, utopian goals, which diverts resources away from small, tangible, ostensibly doable things. If the incentives are in the wrong place, it’s easier for aid bureaucracies to fail their recipients.
Additionally, if no single agency is accountable for the success or failure of a program, it’s hard to say which is successful and which is not, aid agencies can claim successes as their own and explain away failures as the fault of a different agency – no one is accountable. This may lead aid agency workers to slack off; as Easterly puts it, “When nobody can tell whether aid agency efforts make a difference, the aid agency managers have only weak incentives to exert effort.” This strikes me as a little pessimistic, but the general idea makes sense – without accountability, projects that aren’t successful can continue to be funded, which is a waste of resources; better to allocate resources towards projects and NGOs that are proven successes.
A corollary to the issue of accountability is that of feedback – if an agency doesn’t directly hear how it’s doing, it’s difficult to iterate and improve. Easterly argues this is missing from current aid agency efforts, partly because of the first two issues above.
Which begs the question – what can be done to mitigate these issues? Easterly argues that we should look to “have aid agencies specialize more in solving particular problems in particular countries, rather than having each agency responsible for everything.” This is a perfectly legitimate, reasonable thing to do – but the obvious question is: how? Who decides what each organization is going to specialize in, and where? My notebook is full of scribbles of potential models; I don’t think it’s an impossible thing – just really, really difficult to operationalize and coordinate. It would also require a mind-shift on the parts of the World Bank, USAID, DFID, etc. One potential model may point towards an increased role for “expert NGOs” to receive funding from the aid organizations for specific, measurable projects. Another area where I need to do more research.
The next section highlights the successes of aid; in a sentence: “Despite the zero-growth payoff to aid in Africa, there has been a fall in infant mortality and a rise in secondary enrollment in that most aid-intensive continent.” Easterly surmises that it may be easier for health interventions to be successful because the outcomes are clear – populations either get better or they don’t – which can help align incentives and is direct feedback. This points the way towards Easterly’s main contention – utopian goals of economic development and Ending Poverty may be non-starters, but there are discrete, narrow, piecemeal things that aid can do; therefore, we should do those.
In a sentence that really surprised me when I read it, Easterly takes it one step further: “Here is one way to make aid work better: aid donors should just bite the bullet and permanently fund road maintenance, textbooks, drugs for clinics, and other operating costs of development projects.” This sounds pretty gargantuan, but actually isn’t much different than the models for Teach for America, AmeriCorps, the Peace Corps, etc. – permanent injections of resources (in this case, funding from the government for short-term deployments of human capital) to improve on-the-ground efforts while institutions improve achingly slowly. Unfortunately, it also isn’t a sexy model – donors would love to eradicate AIDS in Tanzania more than ensuring roads are properly maintained there. It seems that aid agencies may need to focus on marketing these long-term efforts more effectively.
Another inefficient mechanism preferred by donors is the funneling of aid to purchases from their own country’s exporters (e.g., American-made insecticide-impregnated bed nets) – known as “tied aid.” This “lowers its value to the recipient because it restricts choice on what products can be purchased and from whom,” and can distort local markets. Tied aid seems like a pretty significant issue – one that rich countries should be much better at explaining to their constituents. I need to learn more about this.
Tying up the loose ends, Easterly ends this chapter by discussing the mechanisms that may allow aid agencies to better monitor and evaluate programs; he favors independent evaluation of programs and independent research divisions, with aid agencies putting funds into escrow accounts for both. It’s pretty shocking to think this isn’t already happening, and I’m hoping that in the time since this book was published this has happened.
I have more to research about approaches that emphasize NGO competition and specialization – this strikes me as a gap in current funding models. Where’s the Kickstarter & Kiva for foreign aid? Is it Kiva?
This is a fascinating chapter that investigates the role a bad government plays in a country’s quest for prosperity. Easterly contends that “We don’t do the poor any favors by tenderly respecting the sensitivities of bad rulers who oppress their own people,” but also that “imposing democracy from the outside doesn’t [work].” The unanswered question, then, is: what can we do (if anything)?
Democracy sounds better in theory that it works in practice – something that any 7th grade civics student knows. Theoretically, a democracy should lead to better government (who would keep a bad government around when they could just be voted out?), perfectly-distributed public goods (via feedback from the masses), and positive change when the voices are vociferous enough about it.
In practice? E. None of the Above.
To begin with the obvious: a democracy isn’t a democracy unless everyone has a voice – including the minority (for a counterexample, see America, 1787-1920; arguably, 1787-1964); this rarely happens, and as Easterly notes, is “far from hypothetical in poor-country democracies, which are often polarized along ethnic and class lines and where the winners sometimes abuse the losers.” Terrifyingly, “democracy… does not lower the probability of the most extreme violation of minority rights of all: state-sponsored mass killings (even genocide) of political or ethnic victims.” If the social norms of democracy aren’t in place, then the institution of democracy isn’t really democracy, and likely doesn’t work.
The introduction of democracy tends to be bad for the incumbent rich/powerful – the majority could redistribute their wealth or otherwise enact policies that strip them of their power. As a result, countries transitioning to democracy have a Goldilocks problem: they need to structure their democracy just right so that it protects the rich just enough to mollify them while not going overboard (which may cause the lower classes to revolt and could be inherently undemocratic). Throw in oil reserves, a highly agrarian society, a highly unequal society, or a high incidence of agriculture and it’s even more difficult to establish democracy – rent-seeking, violence, and inequality are not great pre-conditions for a society in which everyone has an equal voice.
Even if democracy – and the social norms accompanying it – accepted, the collective voice of a people can often be swayed by the lesser angels of our nature – “politicians could appeal to voters’ gut instincts of hatred, fear, nationalism, or racism to win elections,” which is decidedly less than ideal. In fact, we see a lot of the negatives of democracy in the United States of America; in the “Land of the Free” it isn’t unusual to see jingoistic paens to a halcyon, white-washed past that never existed; politicians stoking racist fears of a black president; or voting “irregularities.”
Back on the topic of bad governments. Research indicates that “bad government does indeed cause poverty,” which then puts wealthier countries in a bind; as Easterly notes, “It would be good to get aid from the rich of rich countries to the poor of poor countries, but what we see happening is that aid shifts money from being spent by the best governments in the world to being spent by the worst.” This, in turn, leads to the “aid curse” – money funneled towards the government goes to political insiders, who use it to entrench.
The question Easterly poses seems to be something like, “Given all of this information, why do Western countries/aid organizations give money to bad governments?” As in other examples throughout the book though, I feel that’s the wrong question to ask; a better one may be, “Given all of this information, what can the Western countries/aid organizations do to get funding to the worst-off people that should be helped?” In what ways can these organizations bypass these bad actors?
I think it’s fair to say that the United States and other Western Countries don’t have a sterling record of propping up the right leaders (see: Nicaragua, Afghanistan, most of Africa, most of Central America, etc.), so that probably isn’t the best place to start; it appears Easterly would agree with this sentiment: “the principle is nonintervention. Don’t reward bad governments by working with them, but don’t try to boss them around or overthrow them either.” Bad governments are bad; it’s probably best to stay away from them.
One plausible response is to simply bypass bad governments and ditch the thought that aid money can go towards helping bad governments improve – again, something Easterly seems to agree with. If the goal in funding is to improve/save lives, then it should be possible to do so without kowtowing to the government or other bad actors. Bring it right to the source.
I don’t have the answers, and definitely need to do more research to come up with a better way to phrase the question, but it strikes me that Western power can be used to help develop the infrastructure to support improving government accountability (using mobile phones and the internet to coordinate the communication of bad government behavior); “hot-spotting” problem areas (from a health or education standpoint, say) where an intervention is most needed; or simply by directly funding local NGOs (if a bad government won’t let them in, perhaps). Those aren’t permanent solutions, but they may help bridge the gap between a better future and a poor present.