Authors Analyze, Criticize Foreign Aid Agencies in New Books

September 21, 2006 at 6:30 PM EDT

PAUL SOLMAN, NewsHour Economics Correspondent: What do all these have in common? The IMF and World Bank; the U.N.; billionaires Bill Gates, Warren Buffett, and George Soros; superstars Bono and Angelina Jolie; many of the world’s highest profile politicians. The link? A public commitment to end world poverty and disease through foreign aid.

BILL CLINTON, Former President of the United States: Regardless of size or scope, our problems will yield to concerted action and innovative partnerships of individuals, NGOs, businesses, and governments.

PAUL SOLMAN: But one skeptic claims that the more than $2 trillion spent on foreign aid over the past 50 years or so has been a tragic waste, failing to deliver even the cheapest of fixes, like rehydration kits for babies dying of diarrhea. Cost: 10 cents.

WILLIAM EASTERLY, Economist, New York University: And yet, still last year, 2 million babies died because they didn’t get these.

PAUL SOLMAN: The skeptic is William Easterly, former self-described left-wing do-gooder. He grew up in Ghana, the son of a missionary. Former World Bank staffer for 16 years, now a hard-nosed economist at New York University. Malaria medicines, he says, can save a life for 12 cents, and yet…

WILLIAM EASTERLY: There were 1 to 3 million deaths from malaria last year. It’s true of so many simple interventions, that aid money could pay for over and over again, the existing aid money, without even increasing aid. And yet, somehow, the aid is not actually reaching the poor people.

The "white man's burden"

PAUL SOLMAN: So much aid, so little attention to where it winds up. That's the nub of Easterly's argument, spelled out in a new book, "White Man's Burden," which blasts foreign aid agencies, the U.N., even sacred cow good-doers like Irish rock star Bono.

WILLIAM EASTERLY: When people like Tony Blair and Bono say, "It's up to us to save Africa," you know, it sounds to me exactly like the white man's burden.

PAUL SOLMAN: That is Englishman Rudyard Kipling's 19th-century colonialist, some would say racist, poem, "White Man's Burden."

WILLIAM EASTERLY: "Take up the white man's burden, the savage wars of peace. Fill full the mouth of famine and bid the sickness cease."

PAUL SOLMAN: And what does he mean?

WILLIAM EASTERLY: He means that it's up to the whites, the white man, to go in and cure the sick in Africa, to feed the hungry in Africa, and that's pretty much the mind-set of aid officials today.

PAUL SOLMAN: Also part of the mindset: a belief that poverty can be solved scientifically by experts, what Easterly calls "the planners."

WILLIAM EASTERLY: The total misconception there is that poverty is a technical scientific problem, that you just need to come up with a lot of scientific interventions, like bed nets, to protect people against getting malaria, and improved fertilizer to improve agriculture, and, you know, about 400 other things like this.

But it doesn't work to have a bunch of experts parachute in, because you're trying to solve in microcosm what's a part of a much larger problem of a society that's not working because free markets and democracy are not working.

Successes in foreign aid

PAUL SOLMAN: Skeptical of Easterly is aid expert andactivist Jeffrey Sachs.

JEFFREY SACHS, Economist, Columbia University:But we see so many successes of foreign aid, we ought to learn from them: thegreen revolution, the health revolution in so many parts of the world, diseasecontrol, eradication of smallpox, near eradication of polio, children inschool, spreading literacy, declining fertility rates. So many successes, thatwe should learn from those successes and apply them to the problems that ourworld faces in the 21st century.

PAUL SOLMAN: To Sachs, Easterly's white man's burdenindictment is provocative and, if true, important. But Sachs speaks for much ofthe foreign aid establishment in treating this as a slander and out of date.

Author of his own book, "The End of Poverty,"friend of, among others, Bono, who wrote the introduction to this book, Sachsis also a target of Easterly's critique because he's an unapologetic planner.

By contrast, Easterly supports what he calls"searchers," social entrepreneurs and nongovernmental organizationstrying to achieve modest goals one at a time, like making micro-loans tovillage entrepreneurs or distributing mosquito nets to eliminate malaria in theAfrican country of Malawi.

WILLIAM EASTERLY: The percentage of children and mothersactually sleeping under bed nets dramatically went up after the searchers inMalawi stumbled upon this solution of giving pregnant mothers subsidized pricefor bed nets in clinics. And they actually sold the net to the pregnantmothers, so you know that the mother placed some value on the net and wouldactually use it.

Now, whereas the planners' approach to malaria would be, youknow, "We know the scientific solution to malaria is for everyone to sleepunder a bed net, so we just drive trucks around, throwing nets off the back oftrucks." And the nets, you know, get wind up being used as fishing nets,or wedding veils, or diverted to the black market, and they don't really reachthe poor people.

JEFFREY SACHS: The fact of the matter is that, when you tryto sell bed nets to people that have no money, it takes years, and years, andyears to achieve what you can achieve in a few weeks by a mass distributioncampaign. This idea that somehow you go slowly or on a small scale becausethat's the right thing to do, while millions of people are dying because theydon't have access to the most basic things that they need, makes no sense.

Bigger isn't better

PAUL SOLMAN: But big projects do fail, Easterly and othersmaintain. Planners undertake them with the best of intentions...

WILLIAM EASTERLY: And then somehow they just take it forgranted that these will all be implemented by human agents. And that completelyignores the economic and political problems that make poor countries poor. Governmentsin poor countries are -- it's sad to say it, but we have to face reality --they're very corrupt. Even when they're not corrupt, the bureaucracies are veryunmotivated and dysfunctional.

So, you know, when you try to channel the money throughgovernments in poor countries, the money just doesn't reach the poor.

PAUL SOLMAN: But Jeffrey Sachs' point is that, these days,some big plans actually work, like the effort to get drugs to HIV-positivepatients in Africa, for example, and to makesure they follow the regimens.

JEFFREY SACHS: Six years ago, there wasn't one person in Africa on an official donor effort that was able to getanti-retroviral medicines. Now, there are hundreds of thousands of peoplestaying alive. And the latest evidence is, "Oh, the skeptics were wrong. Thepeople really do follow through the protocols. The spread of resistance, whichwas so much feared, no, that hasn't happened specifically."

You have the president of the United States and his plan behindthese concepts in a big way now. Now you have a new presidential malariainitiative, because there are proven things that can be done to save millionsof lives. That's what counts.

Accountability above all

PAUL SOLMAN: Well, we're at the end of this debate, and youmay think you've just heard yet another typical dueling books, on-the-one-hand,on-the-other-hand standoff, where you can't possibly know who's right.

So let's finish with a point of commonality, because boththese men actually agree as to what works in foreign aid: proven practicality. Andthat means what's needed is accountability, which has so often been lacking inthe past.

WILLIAM EASTERLY: We demand accountability, which means wedemand that aid agencies really do get evaluated for whether their dollarsreach the poor, for whether the medicines reach dying babies in time to savetheir lives. We demand that these evaluations be totally independent.

And if you know that you're going to be judged in that way,then you are going to be a lot more motivated to make sure that those babiesget 10-cent oral rehydration kits so they don't die from dehydration.

PAUL SOLMAN: To which Jeffrey Sachs says,"Absolutely." And it's now beginning to happen.

JEFFREY SACHS: Foreign aid has always been most successfulwhen it's been most practical, straightforward things that can be done on alarge scale, and the world is moving in that direction, fortunately, finally.

PAUL SOLMAN: The questions remain, of course: Has foreignaid really begun to become accountable? And if it has, will it continue tochange in the right direction?