Tuesday, July 13, 2021

Should We Stop Sending Aid to Poor Countries?

Brett Stephens is an iron ass conservative (to use one of Bush I's favorite phrases), but he may have a point about Haiti:

Following the 2010 earthquake, pundits and economists proposed multibillion-dollar aid packages for Haiti. Ultimately, some $9 billion in aid and another $2 billion worth of oil arrived. Billions were embezzled and wasted. Both President Moïse and his predecessor, Michel Martelly, ruled autocratically and were widely suspected of corruption. A recent story by my colleagues Dan Bilefsky and Catherine Porter, reported from a leafy residential area in Montreal, gives a clear picture of where some of this aid may have ended up.

The problems aren’t all on the Haitian side. In 2016, Yamiche Alcindor painted a devastating portrait in The Times of the work Bill and Hillary Clinton had done in the country. “Fewer than half the jobs promised at the industrial park, built after 366 farmers were evicted from their lands, have materialized,” Alcindor wrote of one Clinton-supported project. “Many millions of dollars earmarked for relief efforts have yet to be spent. Mrs. Clinton’s brother Tony Rodham has turned up in business ventures on the island, setting off speculation about insider deals.”

Yet the question of whether the greater share of blame lies with the donor or the recipient misses the larger point: Aid to Haiti fosters dependence, invites embezzlement, enervates the institutions of state and civil society, discourages local initiatives, misdirects capital to donor-favored schemes, enriches the well connected and enrages everyone else.

It’s also degrading. Treating people as helpless has a bad way of making them so.

A few years ago I read an academic analysis of the impact of aid on the economic condition of recipient countries over the 1960 to 2000 period, and it found that the impact is zero. Countries that received billions in aid were no better off than those that got nothing. In fact if you excluded South Korea from their analysis – which got billions in US aid in the 1960s and 1970s – the effect was negative. The more aid a country received, the worse its economy.

It may be, as some left-wing critics say, that the problem is the way the aid is given: countries often insist that construction projects be completed by contractors from the donor nation, for example, or require that a percentage of the aid be spent on their own products. World Bank aid often comes with stipulations that require capitalist economic schemes and limit land reform.

But that is the reality: a world in which aid would be given wisely and nobly, and then not stolen by corrupt autocrats, is probably beyond our reach. Given the actual state of nations like Haiti and Zaire, doing nothing may be better than throwing more aid money at problems aid money has helped to create.

While I'm on the subject, kudos to Biden for refusing to consider sending American troops to prop up Haiti's self-proclaimed new leader. I suspect this is another point on which Trump would have agreed, reminding us again that they both represent different aspects of the same United States.


G. Verloren said...

Given the US Government's literal centuries long sabotage effort of the country of Haiti, I don't particularly feel like our obvious self-interested "aid" is at all a fair point of comparison for basically anything. At no point has sending US money to Haiti ever actually sought to improve conditions - the point has always been to dole out pork, both to our own domestic interests, and to willing Haitian collaborators helping to ensure the status quo and sabotage carry on unabated.

A few years ago I read an academic analysis of the impact of aid on the economic condition of recipient countries over the 1960 to 2000 period, and it found that the impact is zero. Countries that received billions in aid were no better off than those that got nothing.

An "academic analysis"? Which one? By whom? Using what data and methods? Peer reviewed? Fact checked? In any way believably anything more than an opinion piece? Because as it stands, to all appearances your entire argument here might well rest on nothing more substantial than "something I read somewhere once", which I must admit, is not very compelling from the outside.

Also how, exactly, do you meaningfully compare a country which is receiving aid against a totally different country that isn't receiving aid? They are different countries, with different economies, different cultures, different natural resources, different infrastructures, different budgets, different laws, different everything. Also, how do you find a proper "control" to compare against? Doesn't the fact that one country is receiving aid and the other isn't inherently suggest their situations are not comparable?

Oh, and maybe I'm just overly cynical, but I reflexively distrust anything which argues that "the impact is zero". It's exceedingly rare for something to have absolutely no impact whatsoever - so either you've ended up misrepresenting the conclusions of this analysis through hyperbole, or the conclusions are themselves innately suspicious.

You'd need to have some really airtight data and methodology to back up a flat "zero" statement - and frankly I doubt that's the case here, as in my experience the vast majority of the time when someone claims that there's "zero effect", it's because they're cherry picking data and using absurd definitions and measures in order to make the evidence fit the desire argument and conclusion.

Deeply, deeply skeptical here, but if you've got some real citations and data, please point me toward it.

karlG said...

For what it's worth, I've read at least a few articles -- written by former NGO workers and administrators -- that came to the same conclusion (please don't ask for chapter and verse on their names and positions).
And as you are, perhaps rightly, skeptical of that "academic analysis," I must ask if you have anything to cite on behalf of the "this aid is working great!" argument.