Zach’s #6 – Development Aid

Chapter 10 of Poor Economics by Banerjee and Duflo has put two great economists, Jeffrey Sachs and William Easterly against one another. There are good and bad things that they both say, but on this argument of developmental aid I side with William Easterly. Jeffrey Sachs has some great points but overall I believe that William Easterly has the best idea for the issue of developmental aid.

I side with William Easterly because he thinks that people from another place in the world do not have the “power” to judge a place on how good or bad they are. William Easterly also believes that people that are in the problem/people living their (NOT people from other countries AKA “the west”) need to sort out their political process, and if the politics are good, good policies will come from it. Easterly “believes that countries can find their own way to success, but they need to be left alone to do so” (241 Banerjee). This can be seen as a “tough love” situation, but this is what needs to happen because the people that live in the country know their problems and need to problem solve for themselves. Easterly also claims that there is no “one size fits all” meaning that there is not just one set answer or way to fix problems in different countries. I like this idea because every country is different and they all have different problems. Easterly says that “big problems require big answers”, these can take time, months to even years. I believe that Easterly is not trying to force anyone in to doing anything, he wants people to had a mind and voice of their own.

“Easterly also argued that aid is not a successful means of promoting development because enormous amounts of aid -$2.3 trillion worth- have already gone to developing countries without successfully eradicating extreme poverty.” (povertyeducation.org) I can see that many people could be upset that there has been this much money spent and they is still extreme poverty.

index_of_economic_freedom_2008

Jeffrey Sachs sees corruption in countries, and claims it as a poverty trap. Sachs wants to come in and tell people what they need to do to make their country “less poor”. He wants Aid to be seen in certain areas that can be monitored. “Sachs believes that poor institutions are a disease of poor countries: we can successfully address poverty perhaps in a limited way and even bad institutional environment by focusing on concrete and measurable programs; and making people richer and more educated and starting a vicious circle where good institutions will emerge” (264 Banerjee). The problem with this is that he is taking a person from another place and putting them in this country to tell them what to do, this person has never lived there, so they do not know how the country works. Every country is unique, and a single person or even a group of people (from another place) do not know what really needs to be done without living a life there. Sachs wants to go in and tell people what to do, where are he should just go in and observe and then give advice on what they should do, not just take over.

“Foreign aid certainly has many problems associated with it; much of it is wasted by corrupt government officials in impoverished nations… But aid has successfully eradicated many serious illnesses in developing countries, including polio and small pox, and has played a critical role in the takeoff of several successful economies, including South Korea, Taiwan, and India.” (povertyeducation.org) There are many other sides to developmental aid, there have been many success stories from people giving to other countries, but there is just as many “bad” government officials that are just keeping the money or other items of aid for themselves.

 

 

References:

Banerjee, Abhijit V., and Esther Duflo. Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty. New York: PublicAffairs, 2011. Print.

http://www.povertyeducation.org/the-foreign-aid-debate.html

 

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