Saturday, January 05, 2008

Book Review: The White Man's Burden

In The White Man's Burden, former World Bank economist William Easterly reviews mountains of anecdotal and statistical evidence to conclude that a lack of accountability and feedback from the poor has rendered most of the world's mega-aid organizations (World Bank, IMF, UN, WHO, USAID, UNICEF, etc.) extremely inefficient if not outright destructive. Easterly argues that the processes which bring true economic growth and opportunity are fundamentally internal to a society, and that external meddling by the big aid organizations has hampered these natural processes.

Far from condemning foreign aid altogether, Easterly offers some advice for the aid industry. Here are paraphrases of some of his key points:

1. Aid organizations should make it easier to evaluate their programs by sticking to narrowly focused goals.

2. Aid organizations should collect at-least-rudimentary statistics to determine the effectiveness of their programs.

3. Donors should be constantly aware of the temptation of aid organizations to waste funds on programs that merely look good on paper, such as HIV treatment programs, which are one of the least cost-effective ways of helping the poor.

The most important paragraph is on page 380 and is quoted here in it's entirety (note the striking similarity with The Freakwenter's proposal in Roasting Fair Trade Coffee):

"One idea that is too quickly dismissed is for foreign aid to just give cash grants targeted to the poorest people. This would be the purest solution to letting the poor choose for themselves what they needed. Although there are many potential pitfalls, it's surprising that aid agencies have not experimented with this approach in any serious way. This would be a promising area in which to do a randomized controlled trial."

Just pages before that, Easterly references a list of aid projects that have been proven to be most cost-effective for helping the poor. Topping the list is deworming drugs and dietary supplements such as those for iron, vitamin A, and iodine. Luckily for donors now turning away from the big aid organizations, some smaller aid organizations are already working on these kinds of projects. For example, the "MAMA Project", a private US aid organization that began as a health-services provider in Honduras in 1987, is now gearing up for a large deworming campaign in Honduras and a vitamin A distribution project in Nigeria, where malnutrition is especially severe (see http://www.mamaproject.org/).

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