Date: Sunday, 30th July, 2006
Many people find the idea that more than two billion human beings live in abject poverty ($2 per person per day or less) is not acceptable. Great Britain’s Exchequer, Gordon Brown, Cardinal Oscar Rodriguez of Honduras and former German foreign minister, Hans-Dietrich Genscher are among an increasing number calling for a second Marshall Plan for the world’s poor. There are two European-based groups, www.globalmarshallplan.org and www.clubofbudapest.org that have been advocating such a plan.
Considering that foreign aid, except for the first Marshall Plan, has had an overall mediocre record, it is a good idea to see where foreign aid goes right and where it goes wrong. Aid agencies as a group deliver goods to the poor that they do not want. There is no effective feedback from the target group or independent performance evaluation. Aid employees look at a general big picture with little knowledge of local circumstances. William Easterly, in The White Mans’ Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good, examines the theory that foreign aid has gone wrong because of incompetence. William Easterly is an economics professor who worked in the developing world and was a senior research economist at the World Bank for more than 16 years.
Easterly maintains that there are two types of people in aid agencies, the Planners and the Searchers. Planners are like unimaginative government bureaucrats who handle complex situations in the simplest way, without reference to the underlying circumstances. Think of Gosplan, the planning ministry for the old Soviet Union. They directed almost the entire Soviet economy by setting production requirements for the factory managers. Product quality was frequently miserable. The stores had no right of rejection of substandard products. Searchers are like people in the marketing department who monitor consumers’ desires and makes products accordingly. He gave two examples of each. Treaded bed nets protect people from being bitten by malaria mosquitoes when they sleep. Traditional aid agencies (Planners) are usually not successful in delivering these bed nets to the poor. They wind up in the black market or used as fishing nets or wedding veils. A Searcher type organization, Population Services International, however, was successful at getting bed nets to the poor by selling them for fifty cents to mothers at prenatal clinics in the countryside. A follow up survey showed that almost all nets got used for their intended purpose; evidence that foreign aid can work. In contrast, a study of a program in Zambia, where an agency gave away nets whether the people wanted them or not, showed that 70 percent did not use them.
Another potential obstacle to the effectiveness of foreign aid is the number of agencies with different agendas and different bosses with little specialization on what they do best. Working in Bolivia now are “…the International Monetary Fund, the World Bank, the
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Inter-American Development Bank, USAID [US Agency for International Development], the U.S. Drug Enforcement Agency, the UK Department for International Development (DFID), just about every other rich country’s aid agency, multiple NGOs {non government organizations}, and Bono.” When there is a political and economic crisis as there was in 1999-2005, who can determine which agencies have done a good job? Aid agencies would be more effective by specialization, taking on modest tasks (identifiable projects) and independent review.
A third challenge to foreign aid is that development bureaucrats are too often far removed from the realities of the field and receive little or no feedback from the poor, who get some things they never wanted and usually do not get what they need. For example, one almost unreported feature of poverty in Africa or other regions is indoor smoke from cooking, which increases children’s chances of dying from respiratory diseases. Agencies have attempted to solve this by introducing stoves that reduce smoke without consulting the poor on what kind of stove they wanted and would use. The Shell Foundation, on the other hand, is attempting a market-based approach where hundreds of micro-enterprises produce and distribute stoves, adopting them to local customer preferences.
According to Easterly, the Big Answer is that there is no Big Answer. When development comes, the solutions will be as varied as the countries and their complex histories. Development organizations should give up the “do everything” approach and not expect big changes in the recipient government’s bureaucracies. Easterly believes that aid agencies should help individuals and not attempt to transform societies. He wants to “get the poorest people in the world such obvious goods as the vaccines, the antibiotics, the food supplements, the improved seeds, the fertilizer, the roads, the boreholes, the water pipes, the textbooks and the nurses.”
Rabbi Michael Lerner, in Left Hand of God: Taking Back Our Country From the Religious Right, calls for a Global Marshall Plan directed by an “international body of internationally recognized spiritual leaders, academics, health care workers, educators and community organizers to supervise the expenditures”. This would provide much needed, on-going surveillance that does not exist now.
My recommendation for aid advocates is to start a mini Second Marshall Plan now. Pick out two small countries each from Asia, Africa and Latin America to carry out the Big Push. There should be enough support in the European Union to carry this out. Establish a new agency that would incorporate reforms that Easterly and Rabbi Lerner advocate. Learn from mistakes. Enforce honest performance evaluations. Give up the idea of always dealing with governments. Poor people through their schools, cooperatives and churches may write the equivalent of simple grant applications and make things happen.
An informal definition of insanity is doing the same thing over and over again but expecting different results. Lord Wellington’s statement comes to mind: “ They came on
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in the same old way and we stopped them in the same old way.” The only Big Push foreign aid proposals that I support are reformed ones.
Moreover, foreign aid advocates should address the second Marshall Plan as one of the solutions for the immigration in the European Union and the United States. Give the
Mexicans and other hard working people the chance to be reasonably prosperous and they will not cross the southwestern deserts to earn below US poverty wages and make themselves easy targets of extortionists. What are the victims supposed to do? Going to the police is not an option.
Look for ways rich countries will stop harming poor countries. For example, products that are illegal to sell in the United States because of regulations from the US Environmental Protection Agency should be illegal to sell anywhere in the world.
Rich countries may give up patent and copyright protections allowing poor countries to produce affordable medicine.
Establish an international treaty and enforcement mechanisms to obtain minimum working conditions, environmental protections and union organizing rights. Signatory countries would only import goods that would meet the minimum conditions.
Social justice calls for the elimination of abject poverty everywhere.
Ed O’Rourke is an environmental accountant in Houston, Texas, USA.
Ed O’Rourke
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eorourke@pdq.net
