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REGION: Africa
TOPIC: Social Issues
Online NewsHour
TRANSCRIPT
Originally Aired: September 21, 2006
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Authors Analyze, Criticize Foreign Aid Agencies in New Books

The NewsHour's Economics Correspondent Paul Solman reports on the effectiveness of foreign aid in reducing proverty.
A sick baby in Africa
 
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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 and activist Jeffrey Sachs.

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

PAUL SOLMAN: To Sachs, Easterly's white man's burden indictment is provocative and, if true, important. But Sachs speaks for much of the 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, Sachs is 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 organizations trying to achieve modest goals one at a time, like making micro-loans to village entrepreneurs or distributing mosquito nets to eliminate malaria in the African country of Malawi.

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

Now, whereas the planners' approach to malaria would be, you know, "We know the scientific solution to malaria is for everyone to sleep under a bed net, so we just drive trucks around, throwing nets off the back of trucks." 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 reach the poor people.

JEFFREY SACHS: The fact of the matter is that, when you try to sell bed nets to people that have no money, it takes years, and years, and years to achieve what you can achieve in a few weeks by a mass distribution campaign. This idea that somehow you go slowly or on a small scale because that's the right thing to do, while millions of people are dying because they don'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 others maintain. Planners undertake them with the best of intentions...

WILLIAM EASTERLY: And then somehow they just take it for granted that these will all be implemented by human agents. And that completely ignores the economic and political problems that make poor countries poor. Governments in 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 very unmotivated and dysfunctional.

So, you know, when you try to channel the money through governments 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-positive patients in Africa, for example, and to make sure 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 get anti-retroviral medicines. Now, there are hundreds of thousands of people staying alive. And the latest evidence is, "Oh, the skeptics were wrong. The people really do follow through the protocols. The spread of resistance, which was so much feared, no, that hasn't happened specifically."

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

Accountability above all


PAUL SOLMAN: Well, we're at the end of this debate, and you may 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 both these men actually agree as to what works in foreign aid: proven practicality. And that means what's needed is accountability, which has so often been lacking in the past.

WILLIAM EASTERLY: We demand accountability, which means we demand that aid agencies really do get evaluated for whether their dollars reach the poor, for whether the medicines reach dying babies in time to save their 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 babies get 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 successful when it's been most practical, straightforward things that can be done on a large scale, and the world is moving in that direction, fortunately, finally.

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

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