How to Best Help One Billion Poor People: Do Nothing
Dambisa Moyo, an economist who worked at Goldman Sachs and the World Bank, has joined her voice to [William] Easterly’s with her recent book, Dead Aid. Both argue that aid does more bad than good. It prevents people from searching for their own solutions, while corrupting and undermining local institutions and creating a self-perpetuating lobby of aid agencies. The best bet for poor countries, they argue, is to rely on one simple idea: When markets are free and the incentives are right, people can find ways to solve their problems. They do not need handouts from foreigners or their own governments. In this sense, the aid pessimists are actually quite optimistic about the way the world works. According to Easterly, there is no such thing as a poverty trap.
HT to Greg Mankiw via Tyler Cowen.
We’ve been giving billions in foreign aid to poor countries for decades, with almost no improvement to show for it.
Interesting. Not intuitive. But probably correct.
This is consistent with Easterly’s other work on this subject.
It’s called laissez faire.
FTA: “an economist who worked at Goldman Sachs and the World Bank”
I think this says it all. These people want every country to look like Somalia so they can freely plunder all sovereign treasures through the mechanism of usury.
I had a professor in my graduate program who had performed development work all over the world. He was no conservative but he was a huge proponent of getting the incentives right and letting the locals come up with solutions rather than impose some government aid workers idea of a solution from the top down (which usually was not appropriate to the situation).