Friday, March 11, 2005

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Should Jeffrey Sachs get $150 billion per year?

Time's cover story this week (alas, subscribers only -- Aha! I found a way to access it for free; Sachs also has an excerpt in the March/April issue of Foreign Affairs) is a lengthy excerpt from Jeffrey Sachs' forthcoming book, The End of Poverty: Economic Possibilities for Our Time. Sachs is the director of Columbia University's Earth Earth Institute and for the past two decades has been a macroeconomist to the stars. The quick precis of Sachs' argument is that for roughly $150 billion in aid a year, it would be possible to end extreme poverty (i.e., living on only a dollar a day) across the globe.

For those of you who aren't Time subscribers, check out The End of Poverty web site, which includes a copious collection of Sachs' prior work. Or, you could read this New York Times magazine story on Sachs from a few months ago by Daphne Eviatar. The key graf from that story:

Sachs is nothing if not a big thinker. And in July, the renowned macroeconomist and special adviser to United Nations Secretary General Kofi Annan was in Ethiopia on a world tour advancing his most ambitious project yet: the elimination of global poverty. While others tinker with incremental steps, Sachs has no patience for the small scale. Ethiopia and sub-Saharan Africa have slid deeper into poverty in the last 20 years, and whereas many economists stress the failures of local leadership, Sachs is telling a different story. In his version, Africa, through no fault of its own, is trapped. Held back by geographical impediments like climate, disease and isolation, it cannot lift itself out of poverty. What Africa needs, then, is not more scolding from the West. It needs a ''big push'' -- a flood of foreign aid -- to boost its prospects and carry it into the developed world.

Time's sidebar story profiles Sachs in glowing terms:

In the halls of politics and power, most economists are like wallpaper— full of intricate details but ultimately decoration. Jeffrey Sachs, however, is a brand name. A player. There's Jeff with the Pope. There's Jeff with U.N. chief Kofi Annan. There's Jeff with his save- the- world sidekick, U2's Bono.

Sachs, 50, has been around the planet more times than a space station to promote the U.N.'s Millennium Development Goals, to raise annual aid to 0.7 percent of gnp of the donor countries (starting with an extra $70 billion per year as of 2006), in order to halve poverty by 2015. He's a special adviser to Annan while pursuing a day job as head of Columbia University's Earth Institute, which reflects his philosophy as an economist: that sustainable development can be achieved only through an approach that considers everything from geography to infrastructure to family structure.

I'm curious what readers think about Sachs' proposal, as it's something I'll be mulling over this weekend. My initial response is threefold:

1) I very, very much want Sachs to be correct. If $150 billion in rich country donations a year is all it takes to eradicate global poverty, that's a fantastic rate of return using either an economic or an ethical calcuator;

2) I have a hunch that Sachs is not completely correct. Reading papers like this one makes me wonder just how much of Sachs' proposal is built on wishful thinking.

3) What I'm still undecided about is whether the investment is worth it even if Sachs is only, say, 50% correct. Would there be any other way of spending $150 billion a year that reduced extreme poverty by more than that amount?

Two final metanotes: First, I'm somewhat surprised that Time ran the excerpt, a heartbreaking photo essay, and a glowing sidebar on Sachs himself without any critical take on the meat of Sachs' proposals. I'm not saying Time should have done a hatchet job on him or anything -- but there are critiques out there for why Sachs' proposal might not work, and Time does a disservice to their readers if these aren't mentioned somewhere.

If this is an examplar of Time's "Journalism with a Conscience," count me out.

Second, at the same time, I'm somewhat surprised and mildly appalled that this story hasn't generated a lot of buzz in the blogosphere. Sachs could be mostly or partially wrong, but he's neither is a lightweight nor making vague proposals. He's got some serious proposals about channeling money towards anti-malaria medication, transportation infrastructure, clean water wells and the like. Unfortunately, this lack of attention would seem to be consistent with Ethan Zuckerman's hypothesis that the blogosphere echoes the mediasphere in paying a disproportionate amount of attention to the advanced industrialized world.

UPDATE: Thanks to Glenn Reynolds for the link. And given some of the comments, let's try to head off a few objections at the pass. The following are not valid reasons for rejecting Sachs' plan

1) Sachs ignores the importance of free market capitalism in economic development. No, Sachs is quite adamant about the benefits of free trade and market capitalism. His argument is rather that in some sections of the globe, the abject level of poverty is so low that it's impossible for people to generate any surplus value -- what Sachs refers to as a "poverty trap." In these areas, a boost of aid would permit some initial savings -- after which economic development along market lines can begin to take place.

2) Sachs was responsible for Russia's failed reform effort, so why trust him now? I'm pretty sure the Russians bear the primary responsibility for the failure of Russian reform, but for the moment let's take this critique as fact. Sachs was also responsible for successful reform efforts in Bolivia and Poland. A 2-1 record in development economics ain't too shabby.

3) Sachs just wants to give this money to corrupt governments. No, he's explicit in saying that countries with spectacularly bad governance -- i.e., Zimbabwe -- don't get a dime. The corruption critique still has some validity, but Sachs also has some minimum threshhold conditions on this front.

4) Sachs' plan has no details, just a nice round number. Click on the UN Millennium Project -- and, more specifically, the page containing links to the full text -- to get a sense of the details.

To repeat, there are ways to criticize Sachs' plan -- but these arguments don't hold water.

ANOTHE UPDATE: Tony Blair has stepped into this debate as well with his Commission for Africa report. Reviewing the report, the Economist observes:

Extra aid would probably ease Africa's poverty. Although past aid has largely been wasted, the report gives sound pointers as to how in future it could be made to work. Aid should be “untied”: that is, the recipient should not be obliged to buy goods from the donor. It should be predictable, to help the recipient plan for the long term. It should mostly be in the form of grants, not loans, to avoid future debt traps. It should “support the national priorities of African governments rather than [donors'] special enthusiasms”.

Most important, aid should be lavished on the countries that can use it—ie, poor but fairly well-governed ones—and denied to corrupt and incompetent regimes that will steal or squander it. The trouble is, there are not enough well-governed countries in Africa. “Without progress in governance,” admits the report, “all other reforms will have limited impact.”

....Africa will not prosper until corruption is checked and governance improves. And that task, as the report says, is “first and foremost the responsibility of African countries and people”.

posted by Dan on 03.11.05 at 02:48 PM


The only people that would get to see that money are the keepers of the Swiss banks that the various bureaucrats, dictators and tyrannts keep their money in.

posted by: AlanC on 03.11.05 at 02:48 PM [permalink]

This is exactly the kind of program Bush could embrace in the last two years of his second term. It's on a massive scale, it makes you feel good and it's absent any troubling attention to detail.

If Bush wasn't such a fundamentally unserious person (who coincidentally gave away about $150 billion a year in tax cuts) his legacy could have been a serious Quixote tilt at ending global poverty that would have surely done huge amounts of good.

All this thing big talk is nonsense - 2 million children a year die from diarrhoea that could be saved with hydration salts that cost pennies per child. The world can't stop millions of kids from shitting themselves to death but the World Bank can end poverty? Please.

posted by: joejoejoe on 03.11.05 at 02:48 PM [permalink]

I saw that even if he's wrong (which he probably is), it's worth a shot. That's just not a lot of money. Question though: is there capacity to absorb it?

posted by: praktike on 03.11.05 at 02:48 PM [permalink]

Why are you surprised Time would run this? They are the old, uncritical, unthinking media.

There are 6 billion people in the planet. Say half live in "poverty". You're talking $50 to each of these people. (Stay with me here and try not to focus on the numbers.)

What do you think would happen to the price of a sheaf of bread in an African community suddenly flush with 50 times the normal yearly income? My guess: The price of bread would go up. Why? People would be willing to pay more for it because they would be richer.

The price of a thing is dependent on just ONE FACTOR: how much the market will pay for a thing.

I'm sorry, but the law of supply and demand just has not been repealed, no matter how many dolt economists Time magazine celebrates.

(Just distributing $150 billion a year in aid in a manner that would ensure that only those in true poverty would get any of the money would cost ANOTHER $150 billion a year.)

This is an effort to inject $150 billion a year into the UN. Nothing more.

Move along, nothing to see here.

posted by: slim999 on 03.11.05 at 02:48 PM [permalink]

Forward by Bono?

Is Jeff gonna write the liner notes for U2's next cd?

This is beyond worlds colliding. This is truly bizarro world.

Sadly, like that other once-youthful intellectual star Paul Krugman, Sacks has become increasingly unhinged by his own celebrity echo-chamber. I must be brilliant--I'm advising Kofi Annan AND Bono! Meanwhile, Bono (and I say this as a lifeling fan) thinks to HIMself, "I must be gaining respect, I'm writing forwards for Jeff Sacks." A never ending cycle of mutual adulation, but what does it add up to?

If Sacks wants us to take his grand vision thing seriously, let's see him deliver (anyone remember Russia? hello?). Let Soros give him a pot of gold and Kofi give him a poor benighted country to test his theories on.

Maybe we can build a reality tv franchise around it--"Who want to solve global poverty?" Potential recipients of the ultimate makeover courtesy of the fab-five (Sacks, Soros, Annan, Bono and--let's say Ted Turner for the hell of it) are eliminated, one a week (cheer up! if the experiment works, they'll come back for you). Then home viewers can watch Jeff struggle to pull off his vision as corrupt local officials high-tail it to Geneva for a shopping spree. Hilarity ensues.

I hate myself for being cynical, but this has me running back to "Candide" for a refresher course in hopeless utopianism and its ugly aftermath.

posted by: Kelli on 03.11.05 at 02:48 PM [permalink]

"The price of a thing is dependent on just ONE FACTOR: how much the market will pay for a thing."
Huh? The price of a good depends of a large number of factors which are categorized into "supply" and "demand" in economic analysis.

In your hypothetical example of a 50-fold increase in purchasing power, sure the price of food would go up but by much less than 50 times. Over time the increased demand and price would stimulate increased supply as resources would shift in the agricultural sector and would in the long run push down prices (though not necessarily to the original level). If you have a 50-fold increase in purchasing power but ,say, a 10-fold increase in prices you are still better off.

Besides aid isn't a matter of throwing money at poor people so they have more to spend. In large part it's a matter of improving productivity . For instance programs to improve nutrition, reduce malaria and AIDS (which in particular affects working-age population disproportionately).

posted by: Strategist on 03.11.05 at 02:48 PM [permalink]

As for Sachs I don't know what his specific proposals are but I think his general point that there are vast benefits out there for comparitively small expenditures of aid money is correct.

The Copenhagen Consensus has looked at cost benefit ratios of various anti-poverty programs and found that some of them the benefits vastly exceeded the costs.

For instance they estimate the benefits of AIDS prevention programs to be almost 40 times the costs. The other programs with very high benefit/cost ratio include malaria control and the provision of micronutrients (like vitamin A, zinc etc). Also trade liberalization which doesn't really have a cost since it usually benefits both sides.

posted by: Strategist on 03.11.05 at 02:48 PM [permalink]

Personally, I think Sachs lost most of his credibility in the aftermath of the Cold War. He received all types of glowing publicity for his work then as the millions and billions were going into the pockets of organized crime, former government officials, and crony capitalists. I do not see where he has ever explained that tremendous failure of his applied theories and, barring a convincing explanation, would have a hard time trusting him with taxpayer dollars on a grand scale again.

$150 billion, even if the ideas were sound, would quickly turn into $200, 250, 375, 500 etc. It would be just like the war on poverty in global years - in the end there would be just as many people living in poverty...

posted by: Sean Giovanello on 03.11.05 at 02:48 PM [permalink]

AlanC is the only one who has caught the reality of this issue. Every nation that lives in crippling poverty is rules by tyranical cleptocrats. By the time the UN gets its cut (see Oil for Food), the NGOs get their cut, all the land rovers and palaces get rented for the 'facilitators', the aid still has to get past the guys with the machine guns on their pick up trucks.

I read the Time article. Its the usual boiler plate liberal bunk uncritically taken as gospel. We're only 'x-billion' away from whatever utopian ideal is tantalizingly close but denied us by the cruel reactionaries. Sure. Lets all recall we've probably earmarked what this guy is calling for on Afganistan and Iraq alone, and just how much actually makes it to the guy on the street? The author might be right, 150 billion might be enough to end starvation etc if magically directly applied. Unfortunately it would cost 10 trillion in security, beaurocracy, and graft to apply the 150 (and see some of whatevers stolen invested by some nasty people in surface to air missiles doubtlessly). Thats reality.

posted by: Mark Buehner on 03.11.05 at 02:48 PM [permalink]

Compare South Kore and Egypt.

In June of 1950 they were both peasant economies with about the same per capita GNP.

Then the Korean War happened. South Korea was, to put it shortly, completely destroyed. Millions dead, millions more homeless, the economic infrastructure completely destroyed. By some measures, South Korea suffered greater losses in just three years than Poland did in 5 and a half years of World War Two. In Egypt there were no big wars and no devastaion.

What happened in the next 50 years?

Well, let's see, Eqypt recieved more than $100 billion (current dollar values) of aid from the East and the West [true, much was military and not economic aid]. S. Korea recieved less than a 10th of that.

What do those countries look like now? Eqypt is still an impoverished (urbanized) peasant economy, while S. Korea is a first world nation.

I'm not saying that aid isn't useful, but culture matters much much more.

For a 1 country example - see India. For 40 years after independence India recieved (comparatively) massive aid to no discernable net effect. 15 years of entrepeneurship by the India diaspora and expats has brought about the first real economic improvement since the end of the Raj, lifting millions out of poverty.

Culture matters. Aid that can be diverted by corrupt officials will be, whether its by City governemnt of Chicago or the locals in what ever country you name.

Wanna help Africa this weekend? Hail cab driven by a African emigrant. Odds are that some of your fair will wind up back in Africa in the hands of the driver's extended family, doing something more revolutionary than Sach's programs ever will: not enriching corrupt local officials but starting small scale businesses and educating little girls.

The Copenhagen Concensis is a excellent way for wealthy doners to make conditions tangibly better for the world's poor. Sach's ideas will do more to help first world's private bankers and luxury retailers (where corruption-derived cash usually winds up) than they will do for the poor.

posted by: Jos Bleau on 03.11.05 at 02:48 PM [permalink]

(1) All kinds of other regions that suffer from geographical "impediments" have developed just fine. Hong Kong, Singapore, the American south etc.

(2) Africa is restrained by some of the ill advised environmental advice they recieve from the west regarding DDT.

posted by: sausagegut on 03.11.05 at 02:48 PM [permalink]

The idea that international aid programs and international organizations are some kind of black hole of corruption of inefficiency is false.

Two enormous counter-examples which rank among the greatest achivements of the 20th century: the green revolution and the eradication of smallpox.

The first was pioneered by the Rockefeller foundation along with the Mexican agricultral ministry and spread throughout the developing world particularly the Indian sub-continent and saved the lives of tens or maybe hundreds of millions of people and enabled countries like India and Mexico to become self-sufficient in food.

The eradication of smallpox also saved the lives of tens of millions and was achieved in the 1960's 1970's mainly by the World Health Organization.

Note that many of the proposals of the Copenhagen Consensus are similar to these past programs: eg. improving nutrition, agricultural technology for 3rd world countries, fighting AIDS and malaria etc.

The world has made enormous progress in fighting hunger and disease in the past and there is no reason why we can't do the same in the future given the resources and will.

This isn't to say that we shouldn't attempt to tackle issues like corruption and poor government in the developing world. We should but these aren't an excuse for inaction or a reason for despair.

posted by: Strategist on 03.11.05 at 02:48 PM [permalink]

When I lived in Rome years back, I attended an English-speaking Methodist church full of diplomatic staff from the African embassies. Off the record diplomats were quite candid that government to government aid suffers greatly from corruption (breeding perennial Kofigates in our terms). They recommended church to church aid as being far more effective.

posted by: John on 03.11.05 at 02:48 PM [permalink]

For a 1 country example - see India. For 40 years after independence India recieved (comparatively) massive aid to no discernable net effect. 15 years of entrepeneurship by the India diaspora and expats has brought about the first real economic improvement since the end of the Raj, lifting millions out of poverty.

Nonsense. India not receive massive amounts of aid at all. It did some receive some aid and a lot of it was used well. And the reference to the "first real economic improvement since the end of the Raj" is also incorrect. India did make major improvements even in the pre-liberalization era, ending famines (but not hunger).

And the economic liberalization in India has not necesarily impacted the great bulk of Indians. That was part of the reason the last government was voted out: the rural and urban poor had not benefited much.

I am a great supporter of India's economic liberalization, but it is only a partial substitude at best for well-directed anti-poverty programs.

posted by: erg on 03.11.05 at 02:48 PM [permalink]

Subscriber only = no blog buzz, unless there are enough major bloggers that read the publication, and I mean, who reads Time these days? The only exception to the no subscribers rule I can think of is the Wall Street Journal, which (1) has an impressive level of penetration in its target market and (2) habitually releases some popular stories from behind the paid-only wall.

posted by: Tom on 03.11.05 at 02:48 PM [permalink]

2) Africa is restrained by some of the ill advised environmental advice they recieve from the west regarding DDT.

I'm always amused when right-winger (typically environmentalist bashers) take up the issue of DDT as cause celebre for helping Africa. Anyone really serious about fighting malaria in Africa would suggest aid programs and mechanisms that are known to work against malaria: mosquito netting, draining stagnant water and the like. But these right-wingers aren't interested in fighting malaria, or even more debilitating diseases such as dysentry and AIDS in Africa -- they oppose most forms of foreign aid (as seen in this very message) -- they are interesting in making a political point about foreign aid and environmentalists.

DDT can be an effective part of an anti-malaria (and environmentalists who oppose its use are being foolish), but it is just a part.
Mosquitoes tend to get resistant to DDT -- in India, most species were resistant owing to overspraying and that more than bad advice lead to curtailments in DDT spraying. Emphasizing DDT at the expense of other malarial treatments is unscientific.

posted by: erg on 03.11.05 at 02:48 PM [permalink]

On corruption in foreign aid programs: it does exist, but a lot depends on the type of program and how closely the aid body is monitoring it. Specific targeted projects tend to be generally less corrupt than general funds. Organizations with good long term records and auditors do a better job of monitoring aid closely.

I should point out here though that corruption is endemic in 3rd world countries. In fact, foreign aid programs tend to be among the least corrupt part of a government -- I had a friend in government confide to me that it was hard to get his usual cut when working on a construction project funded by the World Bank because they audited so carefully.

Also, corruption is common in private sector deals in the third world as well. Defence contracts generally excite the most corruption, but large construction contracts do so as well. People who throw up their hands in horror at Oil for Food corruption should also realize that every Oiil Company that operates in the Middle East (and in Nigeria) has its own payoff schemes.

So the bottom line is that corruption is endemic in Third World Countries. But there are good multilateral and private aid agencies: the World Bank, UNICEF (but not UNESCO) etc. The presence of corruption is grounds for auditing carefully, not for eliminating foreign aid entirely.

posted by: erg on 03.11.05 at 02:48 PM [permalink]

About 1 per cent of India's current GNP comes from aid today. At times in the past when the west and east were competing for influence in India the figure was signifigantly higher. In current $$ over 50 years that's 100's of billions of $$$.

If there is a respected source that said that Indian economic growth in the 40 years following indpendence exceeded the rate of population growth I haven't seen it. Would appreciate tips where to find it if possible.

Again, much of the aid was military and much of the civilian aid was in the form of loans for boondogle megaprojects, but that last fact rather prooves my point, deosn't it.

And your right, the majority of Indians have not had their lives improved by the economic progress that has occurred, but hqat doesn't mean that there has been no progress does it? It just means that there hasn't been enough. Would you quit excersizing after a week because you didn't look like a fitness model yet?

As for the results of the last Indian elections, I think it's very hard to discern the motivations of 100's of millions of people from a single act at the ballot box.

But the rural and urban poor of India have not benefitted economically from ANY previous Indian government EVER before. So if throwing out the last bunch was due to increased expectations of what development would bring, then that means the new government should encourage as much development as it can, no?

"well-directed anti-poverty program" that's the very problem. I trust an emigre cab driver to do a better job directing anti-poverty programs on his his own than I would all the public policy elites in the world put together.

Unless you think we're just one more Kyoto treaty or Johannesburg summit away from solving the world's problems, that is.

policy makers have no problem listening to the experts that want to eradicate polio or malaria, and I think they should because those experts are doctors who know what they are doing and they have a pretty good record on the subject.

Policy makers should look to their cab drivers for anti-poverty ideas for excatly the same reasons.

posted by: Jos Bleau on 03.11.05 at 02:48 PM [permalink]

That Mr. Drezdner considers this pathetic Kool-aid to be something to even consider is amazing. What are the governements in Africa that will be responsible for the cash applicaton, when most of them (probably except Botswana are corrupt cleptocracies and when in big part of the continent there isnt governement , but warlords ?

Money doesnt fix anything. The fact that Africa is a rich continent i would think that would be enough to stop ludricous old idea of pouring money on to problems. Africa problem isnt lack of capital.

ERG-, it's other alternatives of DDT that got innefective. It was ambientalists, and kneejerk polititians that wanted to ban DDT.

posted by: lucklucky on 03.11.05 at 02:48 PM [permalink]

"About 1 per cent of India's current GNP comes from aid today. At times in the past when the west and east were competing for influence in India the figure was signifigantly higher. In current $$ over 50 years that's 100's of billions of $$$."
According to USAID the total aid given to India by the US in today's dollars is 52.7 billion dollars. Over a period of 50 years in a huge country that isn't really that much. Much of it was food aid which helped avert famine and saved millions of lives. After the Green Revolution which ,as mentioned earlier, was itself part of a successful international aid effort India became largely self-sufficient in food and required less aid.

According to USAID average aid in the 80's and 90's was 157 million dollars which would be less than 0.1% of India's GDP. It's highly unlikely that other countries in the world give enough aid to raise that to 1%.

posted by: Strategist on 03.11.05 at 02:48 PM [permalink]

At times in the past when the west and east were competing for influence in India the figure was signifigantly higher

Please provide some data indicating that the figure for aid for India was significantly higher in the pre-liberalization era except in special circumstances (i.e. immediatedly after a disaster) or just after independence. It certainly was not the case in the 1970s and the 1980s, and in fact increased when liberalization took place in 1992.

Again, much of the aid was military and much of the civilian aid was in the form of loans for boondogle megaprojects, but that last fact rather prooves my point, deosn't it.

No, it doesn't. Military aid should be considered totally separate from civilian aid. I agree that too much was spent in large boondoggles.

Unless you think we're just one more Kyoto treaty or Johannesburg summit away from solving the world's problems, that is.

I certainly don't think so. In fact, I think a lot of aid is wasted, but there have been well-designed, effective aid programs.

Tossing out all aid just to satisfy ideological urges would be as foolish as increasing aid to $150 B. There is a lot of good, well funded aid that can touch people's lives directly. That should be encouraged.

posted by: erg on 03.11.05 at 02:48 PM [permalink], it's other alternatives of DDT that got innefective. It was ambientalists, and kneejerk polititians that wanted to ban DDT.

DDT is a useful part of an anti-malarial program. But it is *NOT* the only part, nor is it necessarily the most important part. Mosquitoes do get resistant to DDT -- it happened in India and Sri Lanka, for instance. Treatment of stagnant water is the best long term method to eradicate malaria.

In any case, a lot of the right-wingers who bring this don't seem to want to send any aid to Africa at all. That tells me that they aren't really interested in combatting malaria -- their point is only to make a political statement about foreign aid and environmentalists. When you have someone saying that Africa is backward because of environmental advice regarding DDT, its clearly someone making a political statement.

FWIW, I suppose use of DDT when it makes sense.

posted by: erg on 03.11.05 at 02:48 PM [permalink]

Now this is amusing. The same group of people who advance humanitarian grounds as an excuse for intervention in Iraq and believe that spending $80 billion in Iraq is worthwhile do not think that spending a somewhat smaller sum (since the US would contribute only half of it) for African aid is not worthwhile.

The same people who tell us the Iraq war was worth it to rescue 24 million people do not think that spending a smaller sum of money to belp 40 times as many people is worthwhile. They talk of corruption in Africa (true enough) as a reason not to supply aid, while claiming they can build a democracy in Iraq despite the corruption and lack of democracy that exists there.

So what this tells me is that those who tell us that Iraq was worth it just on humanitarian grounds, but refuse to send aid to Africa are hypocrites.

posted by: Phil's Gopher on 03.11.05 at 02:48 PM [permalink]

Sorry Gopher, what it means is that you're a fool that can't tell the difference between spending money constructively and pouring it down a rat hole.

Just try and imagine what the situation would be in Iraq currently if we had just given Saddam the money. How many more palaces or gold toilets do you think he'd have? Why would you expect the money to be spent any better than the Oil for Food cash was? The tyrannts that run most all of Africa and the kleptocrats in the UN and other NGOs would "appropriate" that money just the same way that Arafat, Saddam, Kofi, Kojo, etc. did. You don't think Mrs. Fat was on the economy tour of Paris do you?

posted by: AlanC on 03.11.05 at 02:48 PM [permalink]

Jesus said, "The poor you will always have with you."

No amount of "aid" is going to change that, because there will always be those who take/want more than their fair share, thus leaving others to want. It is our duty to help those in need by sharing what we have. If we all shared, none of us would want.

posted by: PT on 03.11.05 at 02:48 PM [permalink]

Sachs may be a big thinker, but this is as good of a reminder as any that economics is not a science. To the extent that his assumptions would be correct, he would right in terms of the big picture as well. However, he fails because he tries to apply simple, linear thinking to complex, dynamic, nonlinear problems.

In reality, it is very difficult to change a large system of any kind from an established equilibrium. Just to give an example as a quick reality check, where is the current foreign aid money going? Where would more go? Much ends up in a black hole, directly or indirectly. So if we can't deliver the current aid, we can't rationally believe that adding more would change that.

Another problem is that throwing money at a problem often has the effect of creating other problems, such as inflation, etc. In other words, the whole is bigger than the parts: emergent behavior, well, emerges creating new (at times even bigger) problems. For example, how many (millions) have been killed in ethic wars that have happened in the last half century because of massive growth of youth populations, caused by aid programs in third world countries aimed at lowering enfant mortality? The means don't justify the ends.

posted by: nonlin on 03.11.05 at 02:48 PM [permalink]

      Unless we get details of the proposed program, there isn't much point in debating it.

      Given how badly his advice worked out in the former Soviet Union, I won't be in favor of this until I see very, VERY good arguments for it.


posted by: Stephen M. St. Onge on 03.11.05 at 02:48 PM [permalink]

People in Africa are poor for the same reason that people in Africa so often starve - because their governments are astonishingly corrupt, incompetent, and malevolent.

Giving these governments control of a billion dollars or so is just about the worst idea in the world.

Think you can build roads and dig wells without giving these governments control of your money? I don't.

posted by: Mike on 03.11.05 at 02:48 PM [permalink]

Second lucklucky's comments, both on the corruption in the poorest African countries of their "government" (which would never actually distribute any aid in the first place, as has been demonstrated time and time again) and DDT (which should be reinstated ASAP).

posted by: John H on 03.11.05 at 02:48 PM [permalink]

Sorry PT, but sharing isn't the answer, trade liberalization is... Aid can help a country, but a dollar spent to give away a loaf of bread is gone when the bread is eaten; a dollar spent to improve infrastructure, health care or education is an investment in that country's future.

African farmers can't prosper because they can't sell to any other market. The EU is shut to them because of high tarriffs. Lower those tarriffs and the farmer benefits -- so do the Europeans who can buy cheaper beans.

posted by: John Bigenwald on 03.11.05 at 02:48 PM [permalink]

Where aid has been "given", it's often stolen by governments to bomb or massacre their own people. A much, much better way to operate is to accept that aid will be stolen, but make the aid-cum-bribes conditional on reforms such as free press, clean justice, lower oppression and clearer property rights, and export development (which would require pro-business reforms). If the $150B were explicitly used as such a bribe to liberate and modernize these countries I'd be for it. Otherwise, it's creating a bigger problem.

Think welfare in the US; it creates a culture of dependence and grows the ghettos, whereas converting it into straight cash grants in return for behavioral changes (such as a negative income tax or cash for school attendance and grades) might actually solve poverty.

posted by: Peter Harwood on 03.11.05 at 02:48 PM [permalink]

150 TRILLION dollars wouldn't raise the IQ of the average third-worlder, and especially African, to the level necessary to change their governments to modern law-driven states. See the works of Hernando de Soto for the possibilities, but he forgets that a certain level of cognitive ability is necessary to produce a modern civilization.

And, of course, the HIV/AIDS scam has wasted at least 150 billion dollars on a nonexistent disease.

posted by: Robert Speirs on 03.11.05 at 02:48 PM [permalink]

I dont like that it HAS to go through the UN.
I also dont like the fact that he ignores private donations and charities.
Also, does anyone really think the UN will stop there?? Sorry, but most experts underestimate the cost, then they say the problem is more money is needed. Then $150Billion turns into $500 billion.
why not just facilitate private foundations and govts.
He is just offering another Utopian viewpoint. The article was extremely biased. Again, he fails to mention how much money other countries give in total dollar amounts. he focuses completely on the % of the country's economy. He compares it to the US military budget. Why not the cost of Social Security? (Because the military is bad, of course.) He ignores the amount of private donations Americans give, and the amount of infrastructure support the US will have to give.

posted by: sean mccray on 03.11.05 at 02:48 PM [permalink]

One thing that has become apparent even in the few weeks since the big Sachs report came out is how optimistic he was about aid absorption capacity. Especially that he had Kenya listed as a country that could handle a big upsurge in aid. Apparently he's given up on this in the last few weeks, faced with plenty of evidence of things getting worse by the day with corruption in the Kenyan government.

posted by: P O'Neill on 03.11.05 at 02:48 PM [permalink]

erg, I woulod take your comments more seriously if you didn't continuously toss around ad hominem digs at "right wingers". I'll compare my tax return donations with yours any day of the week.

For the record, the notorious lefty bleeding heart Jonah Goldberg presented the same sort of rough ideas in 2000:

I happen to agree with him, on principle. I also happoen to believe that, like Bush's AIDS package, you announce a plan, but you implement it as you have a means to manage it effectively. That means you don't toss out the cash to make yourself feel good, you handle every issue rationally, and you use market incentives (and disincentives) and discipline where possible.

That means, the warriors doing the dirty work in the field are NGOs with serious records of integrity and achievement, such as Samaritan's Purse ( or Safe Water for a Thirsty World, even if they are religious. It means you push microcapital ( wherever you can get in and manage the process. It means you don't run a nickel through any corrupt governments (this includes most of the UN, as well) (OBVIOUSLY).

It also means that you recognize that it will take some time, but you stick with it, and don't make the same mistakes we have all made before.

If we care, we will work the problem, not call one another names in comments sections.

posted by: Duane on 03.11.05 at 02:48 PM [permalink]

Sorry Gopher, what it means is that you're a fool that can't tell the difference between spending money constructively and pouring it down a rat hole.

Translation: When we spend half a trillion dollars, I can claim its worth it for humanitarian purposes only -- every red penny of it (even the 9.4 B thats been misplaed). But spending even a few billion, for aid thats totally wasteful because I'm a hypocritical fool.

Why would you expect the money to be spent any better than the Oil for Food cash was?

Ah, the true knowledge of someone who gets all his news from Fox.

The purpose of Oil For Food was to feed the Iraqi people. It succeeded at that. There was definitely corruption in the program: with around 15% or so being skimmed off by Saddam. But it did achieve its main goal -- keeping the Iraqi people fed.

Also, Oil For Food was in some ways an anomaly. The money wasn't really coming from Western donors who were auditing it carefully -- it was really Iraqi money. It was not being run by an established international aid agency (instead, an ad-hoc UN group was running it). Plus, few countries have a dictatorship as complete as Saddam.

There is corruption in international aid programs certainly, and Oil For Food is one of the more inglorious examples of one such. But even this corrupt program did achieve some good for the Iraqi people. We take the risk of collateral damage among innocent civilians when throwing out Saddam, we should be willing to risk some collateral good going to corruption if a far greater good goes to the recipients.

posted by: Phil's Gopher on 03.11.05 at 02:48 PM [permalink]

erg, I woulod take your comments more seriously if you didn't continuously toss around ad hominem digs at "right wingers".

Duane, point taken, however my comments were specifically aimed at some loony who claimed that Africa's plight was because of faulty environmental advice regarding DDT, which borders on the ludicrous. Otherwise I agree with most of your comments.

Think welfare in the US; it creates a culture of dependence

This is a valid point, However, in general the aid to most African countries is not enough to create such a culture. But there are definitely programs that are wasteful and useless, and there are better programs that can actually tackle extreme poverty. Each anti-poverty program should be treated the way you would treat an investment to see what brings returns.

posted by: erg on 03.11.05 at 02:48 PM [permalink]

$150 billion a year, in the right form, reaching the people who can best use it, would make a huge difference.

But you have to also budget the $1.5 trillion a year for military and police action to get the aid through the endemic corruption.

posted by: Pixy Misa on 03.11.05 at 02:48 PM [permalink]

Ever see Sachs on Charlie Rose? He's such a whiney bitch. He seems to think it's the duty of the United States to save Africa from poverty.

posted by: Moonbat_One on 03.11.05 at 02:48 PM [permalink]

The problem isn't that Sachs' approacch would help corrupt governments; it is that it would help governments be more corrupt. This has already happened in Africa, where donors want progress more than governments do, and already use various forms of direct and indirect bribery to get governments to do the right thing. More money in Africa -- the place where there has been the least progress -- would only further reinforce such bad habits.

posted by: pragmatist on 03.11.05 at 02:48 PM [permalink]

He should ask for $1 million and prove the theory works by reforming a village.

Then come back for more money.

posted by: John Davies on 03.11.05 at 02:48 PM [permalink]

African farmers can't prosper because they can't sell to any other market. The EU is shut to them because of high tarriffs

This is simply not correct. There are few EU tarrifs on African farm products.

On the other hand, EU subsidies do hurt African farm products. But if all EU subsidies were removed tomorrow, Africa would probably still not benefit much -- the fact is that there are far more efficient producers elsehwere for most crops.

and DDT (which should be reinstated ASAP).

What the devil does that mean ? DDT is still used in Africa, India etc. In fact, its been overused in some places, which leads to resistance.

DDT is still a useful tool for fighting malaria, its one of a whole arsenal of approaches that should be used to combat malaria.

But when people claim simulatenously that they don't want to increase aid to Africa, and simultaneously talk of DDT underuse leading to malaria deaths, they aren't seriously trying to solve the malaria problem -- they just to want to make a political point about how aid is bad and environmentalists are dumb. If one were to follow their philosophy, lots of useful anti-malarial activity funded by the World Bank and others would not exist at all.

And incidentally HIV, TB, dysentry all have devastating impacts on Africa, but for some reason the anti-aid people on this thread aren't mentioning them, because they can't be used to bash aid groups or environmentalists. Not to mention the deadly smallpox, which was eradicated by (gasp) WHO.

posted by: erg on 03.11.05 at 02:48 PM [permalink]

Thanks, Dan, for the additional links especially to the Millenium Project main report. I have only time to glance at it but what I have seen makes interesting reading: particularly the little case-studies in boxes.

Since the issue of corruption and government quality has been raised often here, it is pertinent to note that the report deals with it as some length. For instance the entire Chapter 7 deals with governance. It talks about how international aid itself can be used to reduce corruption and increase transparency. There is a nice little example of how Uganda drastically reduced corruption in its education system by publishing information about grants in newspapers which allowed citizens to find out how much money they were supposed to get.

Nor does the report ignore the role of non-UN and non-government institutions.

Chapter 8 talks about civil society organizations (ie NGO's); for instance how they can help keep aid programs accountable if they are given budget records and audits.

Chapter 9 talks about the role of the private sector not just in producing economic growth but in helping deliver projects funded by aid money (for eg. they describe the role of private companies in Chile in rural electrification projects funded by the government).

Overall it appears to be a well-thought out document and certainly not some pie-in-the-sky fantasy.

posted by: Strategist on 03.11.05 at 02:48 PM [permalink]

Tell me how anyone gets aid through to the hotspots in Africa i.e. Congo 4 million dead in the last decade,Somalia self explanatory,Zimbabwe-Mugabe,Sudan self explanatory. This is a major part of the humanitarian crisis in Africa. These countries don't have humanitarian governments and no lasting good will occur until these governments are replaced.

posted by: John on 03.11.05 at 02:48 PM [permalink]

Clearly a lot of people here haven't even bothered to read Sach's proposal before going off on rants. I don't think his proposal is necessarily realistic, but he has considered many of the issues mentioned here including corruption, accountability, changes t the aid system, removing trade barriers and the like. He also has sections on private sector roles and the like.

Again, he might not be right, but tossing off knee-jerk responses without reading his proposals is .. well .. dumb.

posted by: Pod on 03.11.05 at 02:48 PM [permalink]

Tell me how anyone gets aid through to the hotspots in Africa i.e. Congo 4 million dead in the last decade,Somalia self explanatory,Zimbabwe-Mugabe,Sudan self explanatory

Sachs addresses exactly this issue. Here's an exact quote from him:

With highly visible
examples of profoundly poor governance, as in Zimbabwe, and widespread
war and violence, as in Angola, Democratic Republic of the Congo, Liberia,
Sierra Leone, and Sudan, the impression of a continentwide governance crisis
is understandable.

he goes on to say that many parts of Africa are indeed reasonably well-governed.

Isn't that part of the domino theory ? Improve some parts of Africa and maybe those changes will move slowly to other parts of Africa.

posted by: Pod on 03.11.05 at 02:48 PM [permalink]

Smallpox vaccine isn't fungible. Most other forms of foreign aid are.

Phil's Gopher said: "Now this is amusing. The same group of people who advance humanitarian grounds as an excuse for intervention in Iraq ... do not think that [African aid is worthwhile]"

That's because the former yielded positive results while the latter would almost certainly not.

What the Bush Doctrine has proven is that FOREIGN AID BEGINS WITH SECURITY.

Without security, and by that I mean either a stable local government or direct aid backed by a trusted military (i.e. not the U.N.), there is no "foreign aid", only scams, graft, and corruption.

The only exceptions are those narrowly-focused programs, such as smallpox eradication, where the supplies involved have no or very little marketability (i.e. smallpox vaccine).

Here's an easy "Global Test" for foreign aid: can the King of Swaziland trade in the aid to buy a new jet?

If the answer is "Yes", sending that type of aid to Swaziland is pure stupidity. Not only does it not help, it actually hurts, by enriching and entrenching the very actors which cause poverty in the first place.

But I'm no hypocrite nor atavistic isolationist. In fact, a belief that only American-led military power can truly address root causes of poverty -- witness Darfur versus Iraq -- means I must, to call myself an "internationalist", accept a special responsibility as an American at this point in history.

The ugly but historically undeniable truth is that poverty cannot be solved with bread alone but must also include bullets. Poverty cannot even be addressed until the area of operations is secured, whether from warlords, corrupt kings, or U.N. bureaucrats.

Only American military power and the particular style of diplomacy it promulgates can secure the world from these threats. A coalition led by America is the last best hope for a troubled country, whether in the shooting war in Iraq or the massive aid infrastructure brought to bear on the Indian Ocean tsunami.

Lobbyists for foreign aid hate the military and see it as part of the problem rather than part of the solution. They don't want to believe that aid without security only makes the problem worse, because to admit this would be to invite the military into the tent. This is the real problem with the regime of foreign aid.

posted by: Derrick on 03.11.05 at 02:48 PM [permalink]

Come on Dude, you're smarter than falling for this shit:

"Held back by geographical impediments like climate, disease and isolation, it cannot lift itself out of poverty. What Africa needs, then, is not more scolding from the West. It needs a ''big push'' -- a flood of foreign aid -- to boost its prospects and carry it into the developed world."


posted by: on 03.11.05 at 02:48 PM [permalink]

Mr. Drezner said:

2) Sachs was responsible for Russia's failed reform effort, so why trust him now? I'm pretty sure the Russians bear the primary responsibility for the failure of Russian reform, but for the moment let's take this critique as fact. Sachs was also responsible for successful reform efforts in Bolivia and Poland. A 2-1 record in development economics ain't too shabby.

Well, gee, I think you can't ignore this. In fact, I think it's the major point. Sure--okay, it wasn't Sach's fault that Russia failed. But what countries in extreme poverty in Africa have better governance than even Russia? You can't ignore the fact that poverty exists in large large part because the responsible parties are not accountable for their bad decisions.

Overwhelming poverty exists because there are no property rights backed by rule of law in Africa. If there were, some company would find a way, sooner or later, to invest in it. Kleptocracies don't suddenly go away. You say "he won't give money to zimbabwe"--yeah, but it isn't any better anywhere else in central or southern Africa.

re: his success in bolivia: I'd withhold judgment on bolivia as a success for a few more years. Seen what's been going on there this week?

posted by: Anonymous on 03.11.05 at 02:48 PM [permalink]

Answer to why more blogs don't post:

Prolly a lot of blog writers, like me just now, don't want to spend the time looking at the details of just one issue.

Not dumb responses ... just lazy.
Ah well; time to check out the linked tab.

posted by: Tom Grey - Liberty Dad on 03.11.05 at 02:48 PM [permalink]

Sachs was wrong in bolivia; don't know about poland really, but of course corruption, nepotism and just outright world-class conmanship have a role in ex-colonial countries' poverty loop, arguably equal to, less than, or greater than the role played in this by their colonial status, to speak in circles.

throwing enough (????) money at us/them could, possibly; if all the 'donor' nations agreed to it, and charged low interest or hey, why not? no interest rates on the bulk of the 'donations', elevate enough people to the middle classes and give us similar economies, if always weaker, to the developed countries. but this amount of money is really dependent on so many factors, such as wars being waged on poor nations which create more 'opportunity for investment', and such. i doubt the money could be raised today. how much will it be next year? aren't the poor getting poorer and the rich getting richer?

that being said, i think Sachs has much better ideas than he used to, just give more money to people who need it and not client autocratic governments, although in my opinion the free market economy isn't really a good long term idea

posted by: wiseass on 03.11.05 at 02:48 PM [permalink]

First, I'm somewhat surprised that Time ran the excerpt, a heartbreaking photo essay, and a glowing sidebar on Sachs himself without any critical take on the meat of Sachs' proposals.

Critical analysis isn't what newsmagazines do anymore, now it's a lot of "something must be done!" advocacy. It's part of why I stopped reading them.

Second, at the same time, I'm somewhat surprised and mildly appalled that this story hasn't generated a lot of buzz in the blogosphere. [...] Unfortunately, this lack of attention would seem to be consistent with Ethan Zuckerman's hypothesis that the blogosphere echoes the mediasphere in paying a disproportionate amount of attention to the advanced industrialized world.

You presuppose that there is some kind of reasonable proportion of attention that should be allocated to the non-advanced unindustrialized parts of the world. That is a false premise. Bloggers pay attention to the things that interest them. The media pays attention to what they think will generate revenue. There is nothing inherently wrong about this.

I am uninterested in schemes that basically amount to throwing more government money at the problem of poverty, here or abroad. In many, many cases in the developing world, the big problem is corruption- and it is a cultural issue that is not amenable to quick and easy fixes. We can build them a bridge, water pump, whatever... but the funds to maintain it will be siphoned off, and eventually what was built will stop working, and we will be right back where we started.

IMO, promoting anti-corruption efforts, respect for property rights, and education will have more beneficial long-term results than more handouts.

But if Mr. Sachs is determined to try this, fine- let someone, say, the EU- give him a small grant and let him demonstrate that it works in a small scale pilot program before we give him $150,000,000,000 to play with.

posted by: rosignol on 03.11.05 at 02:48 PM [permalink]

I say let's implement Sach's plan, but only if the $$$ come from cutting down govt expenditures. It's a win-win: we get rid of a bunch of useless govt agencies, the bureaucrats have to get an honest job (thus increasing the country's wealth), and the kids in Africa get to stay alive.

posted by: zywy on 03.11.05 at 02:48 PM [permalink]

What planet does Sachs live on? $150 billion in aid to corrupt kleptocracies will create approximately 150,000 millionaire kleptocrats. That's the BEST possible outcome. And that is only if these are egalitarian kleptocrats. Throw in a few like Arafat, Chavez, Marcos and Mugabe and all you get is a handful of billionaire kleptocrats and a few tens of thousands of millionaire kleptocrats. And Kojo Annan will skim a little off the top to pay for a nice Swiss chalet.

If you want to end third world poverty, then first world academics should top pushing Marxism down third world throats. Every year thousands of young, idealistic, intelligent citizens of third world countries manage to attend universities in the West. And what do they learn? Marxist bullshit. They learn that America is the root of all evil and in our mad imperial quest for oil we consign the rest of the world to poverty so that they can buy copious quantities of Coca-Cola and Intel processors and Bushitler can make his daddy proud and his Carlyle Group cronies rich.

And instead of learning something of value and going back to their countries and preaching the virtues of free markets and limitied government, they preach wealth destroying Marxism. And then the kleptocrat demagogues rise to power by promising the squawking Marxists that the government will provide their every need from cradle to grave. Instead, these kleptocrats-for-life stomp on the people's faces from cradle to grave.

And whatever you do, never forget that these Marxist academics are higher beings than we the unwashed masses. They are more intelligent and virtuous. They have won the genetic lottery. How DARE they languish in low six-figure tenured jobs while athletes and actors make millions! Heck, even an independent plumbing or electrical contractor probably makes more money than they do! Where is the justice in that? No, they have a divine right to decide economic matters for the rest of us and erase these inequities. Doesn't their lot in life PROVE that the market is a failure?

What a horrible thing these Marxist academics are doing. And then to top it all off, they want to have the government SEIZE my money that I EARNED by making myself a valuable and productive member of society in order to implement a get rich quick scheme for third world bureacrats? No thanks. Keep your STINKING re-disbributionist hands out of my wallet!

End of story. Can't we talk about something interesting like the Jacko trial? I heard he wore pajamas to court! What a maROOOOON!


posted by: HA on 03.11.05 at 02:48 PM [permalink]

One more point. Sachs was NOT responsible for either the success in Poland and Bolivia, or the failure in Russia. The people's of those countries are responsible for their own destinies. These countries would have had exactly the same outcomes WITH or WITHOUT Sachs involvement. The notion that he had any material impact on these outcomes is ludicrous.

posted by: HA on 03.11.05 at 02:48 PM [permalink]

Looking at the graph in the article, extreme poverty looks like it's down by 400 million from 1981 to does that mean we should just keep doing what we've been doing, or investigate just how East Asia managed to pull off a 2/3 drop in extreme poverty?

posted by: James on 03.11.05 at 02:48 PM [permalink]

Sounds good to me. I take it Africa would be the 'control' group?

posted by: rosignol on 03.11.05 at 02:48 PM [permalink]

Sachs may be right, but he is overlooking one absolutely key precondition to the success of his (or any) third-world welfare program:

No amount of aid will make the slightest difference until the Mugabes of the world are put in the ground.

posted by: R C Dean on 03.11.05 at 02:48 PM [permalink]

I'd be willing to grant Dr. Sachs his $$$ experiment only after about 10-20 years of vigorous application of DeSoto's far more cost effective approach. My hunch is that Dr. Sachs's solution would then have been overtaken by events and no longer be necessary.

DeSoto's prescriptions, along with other programs like the Heifer Project, authorizing the correct application of DDT, and a determined focus, a la Lomborg, on clean water will help Africa out of poverty.

Dr. Sachs would still be permitted his media appearances to preen. "I'm saving the world and my mother is so proud of me."

posted by: Billy Hank on 03.11.05 at 02:48 PM [permalink]

You are forgetting the neo-Malthusian argument; assume that this Sachs plan is successful- you cure AIDS and establish new, uncorrupt governments (something of a stretch, or so I'm told- but anyhow). What do you have now? A couple billion 3rd-worlders who are now dependent on foreigners to do everything for them and will keep on increasing in size until they start killing each other again.

That's just my opinion- I may be a little cynical about these things.

posted by: sunguh5307 on 03.11.05 at 02:48 PM [permalink]

An important issue is, how are we doing currently? The World Bank says things aren't getting much better for many people around the world, but Xavier Sala-i-Martin of Columbia says things are getting better rather fast - with substantial reductions over 30 years in $1 a day and $2 a day poor. (Here's an Economist article on this, with very interesting graphics: ) See also Sala-i-Martin's home page:

If we don't resolve the disagreement between Sala-i-Martin vs. the U.N. / World Bank economists, then how are we going to know whether our efforts are working if we do adopt Sachs' plan? And given the track record of the U.N and international agencies in general - feather-bedding is Priority #1 - are we going to able to resolve the disagreement among economists?

In other words, my point is not reflexive UN bashing - it's what measures are we going to use to determine whether we're doing any good if we adopt Sachs' paln, when the situation is so complex?

Finally, I'm surprised to see only one passing reference in the comments to the work of Peruvian economist Hernando de Soto, and the Institute for Liberty and Democracy ( He's been in the trenches on this issue for a long time and lives under guard as a result of threats from terrorists. His book The Mystery of Capital argues that the world's poor as a group have substantial wealth but it is unproductive because there is no security of private property in these countries. That means no-one in those countries can borrow against their assets to become more productive. Changing that could do more to lift people out of poverty than 150 billion a year in aid from the West.

posted by: Patrick Brown on 03.11.05 at 02:48 PM [permalink]

RE "3) Sachs just wants to give this money to corrupt governments."

I wouldn't be surprised if the most corrupt governments are among those with the most poverty.
Now suppose those governments also are impediments to any NGOs that try to pitch in. How then would Sach's plan resolve the problems?

Back in January, Sachs was touting the study backing a 2 decade push against poverty. In some of the news stories was an interesting line that only about 30% of aid for world poverty actually reaches the poor (I am paraphrasing from memory, and even if that is accurate, we would want to know the assumptions behind such terms). I would be most interested in Sachs explaining how he overcomes that problem or why it is not a problem.

If utilization rates are extremely low, increasing that rate would have the same or better effect than larger cash infusions.

posted by: M. Ajay Chandra on 03.11.05 at 02:48 PM [permalink]

$150 billion per year for 3 billion people is $50 per person per year. With World Vision, et al, saying it takes about $25 dollars per MONTH to subsidize one child with food and education, through an aid organization that is fairly efficient (especially compared to any government you can name), what do you do the other 10 months of the year?

I like Jos Bleau's idea. Why not give most of the $150 billion to expats in western countries to send back home, and let the folks on the ground prioritize what they receive? Unless you trust the governments and NGOs more than the citizens. Let's see some "left-winger" support for "bubble-up" economic aid - anti-poverty and anti-Reagan at the same time!

posted by: Waffle King on 03.11.05 at 02:48 PM [permalink]

It is difficult for me to understand some commentators. They suggest that tight control by aid agencies is the best way to keep corruption down to a minimum. While this is probably true it smacks of the same Colonialism they would decry.

Getting around the corruption problem will mean you will never solve the poverty problem. It is the overall corruption (not just on aid) that is the problem. Until you fix the problem of corruption - banking controls in foreign countries as an example, no amount of money will solve poverty.

posted by: davod on 03.11.05 at 02:48 PM [permalink]

I am also skeptical about the ability of the $150 billion to be used properly in countries ruled by corrupt dictators. I haven't and won't read the article - does Sachs adjust for the approximately 1/2 of that amount that will be skimmed off the top by the dictators, other corrupt politicans and the NGOs?

A second thought - this sounds like a good project for the French and Germans and Spaniards and everyone else who isn't involved in the "Remake the Middle East" project we are currently spending our extra $150 billion on. Why doesn't Sachs ask THEM to do this?

Finally, I've been reading quite a bit about Bolivia these days - I'm going vacationing in South America next week, including Bolivia depending on the blockades. Where does Drezner get off writing that Sach's plan for Bolivia was a success??? Seems to me that an awful lot of people there don't think so.

posted by: Al on 03.11.05 at 02:48 PM [permalink]

People who dismiss this idea out of hand on ideological grounds rather disgust me I must admit. One never hears talk about the power of free markets when the powers-that-be want to spend $150 billion of your money to kill people.

posted by: Ron on 03.11.05 at 02:48 PM [permalink]

People who dismiss this idea out of hand on ideological grounds rather disgust me I must admit. One never hears worry about corruption or talk about the laws of economics when the powers-that-be want to spend $150 billion of your money to kill people.

posted by: Ron on 03.11.05 at 02:48 PM [permalink]

PS. Stop talking about poverty - a term that can be defined for each country and is open to misuse. Lets get back to talking about hunger, starvation and famine. These are real.

posted by: Davod on 03.11.05 at 02:48 PM [permalink]

"I'm somewhat surprised and mildly appalled that this story hasn't generated a lot of buzz in the blogosphere. "

I'm doubtful adding my name to that list several more times would help, really. Is there something more I should do to be acknowledged or effective? :-)

posted by: Gary Farber on 03.11.05 at 02:48 PM [permalink]

I hope this isn't repetitive. The preview-post thing is screwed up.
One commenter mentioned giving every African a buck--for example--to buy bread with.
Others talked about the price of bread, the supply, inflation due to demand and so forth.
Nobody wondered about the monopoly of the supply of bread by the guys with guns.
Let's give every Zimbabwean a hundred bucks and see how that fixes the farming situation.
In Somalia, much of the aid went to the guys with guns.
There was a report of a line of civilians going into an aid location, picking up a blanked, exiting, turning the blanket over to the gunmen who were running the enterprise, and getting in line for another.
Nothing the aid folks could do. Didn't want the gunnies murdering some civilians to motivate generosity by the aid group and their security didn't have the ROE allowing them to kill every son of a bitch with a gun.
If every son of a bitching gunman, thief, oppressor, warlord, is killed, the necessary aid won't amount to much.
Until then, forget it.
See P. J. O'Rourke's reports from Somalia.

posted by: Richard Aubrey on 03.11.05 at 02:48 PM [permalink]

Dan, I've scanned, not read yet, the essay and comments. It would have been helpful to have a summary of Sach's proposal early on as an easy into. I'll dig deeper.

posted by: sbw on 03.11.05 at 02:48 PM [permalink]

So tell me how come it is bad to give Americans (avg. IQ = 100) their social security money for self-direction, and it is a good thing to give Africans (avg. IQ = 70) $50 anti-poverty money?

Don't kid yourself. Poor Africans are mentally deficient, and giving them $50 a year will no more raise them from poverty than giving each American their SS money will provide for their retirement.

$150B in the hands of 3 billion retarded people will cause every huckster, con man, fast talker, religious nut, and hoodlum to devour the entire continent.

The tribe comes up with yet another kooky global ideology for saving the gentile world. Gee. Thanks.

Please go be a "light unto your own nation," Jeffrey Sachs, and stop trying to diddle with us.

posted by: big guy on 03.11.05 at 02:48 PM [permalink]

Re. the debate about whether or to what extent foreign aid to India has fed its recent growth. IMO this is an interesting but moot question. Far more relevant is the underlying cultural basis for India's current economic turnaround: an English-speaking elite (thank Lord Macaulay for that) that is also technically proficient (thank four millennia of Brahminical reverence for memorization and study--and while you're at it, an Indian educational system heavily skewed toward higher ed. at the expense of mass literacy).

In other words, while we can debate the ingredients that go into a successful development story, it's easier to see what a country like India has that poor Africa almost entirely lacks.

That's one reason Sachs is so wrong when he claims we can turn Africa around in one or two generations. The foundations for Asian and Euro-American growth were laid for centuries beforehand.

posted by: Kelli on 03.11.05 at 02:48 PM [permalink]

It should be noted that much aid related corruption is on the part of donor nations.

About a year ago I had dinner with a West African UN employee/official who had just returned from working on a development project in West Africa funded by the EU.

He did speak of the funds skimmed off by corrupt local officals but what made him angriest was that the projects seemed to be geared to making Europeans rich. Fuel was purchased from European oil companies at vastly inflated prices, and worked stoped when shippments from Europe were late, even when there was fuel available (much mroe cheaply) from those same companies' local operations.

Gravel was imported at high expense from Europe even though there were adequate local suppliers.

Medical clinics set up for workers were stocked only with drugs and supplies from European companies, and was mostly past expiration date or otherwise out of date. The stuff had almost no market value but was purchased at very high prices.

Although locals were given managerial jobs, small armies of European nationals were employed for 'oversight' and accounting.

Most of the actual money for the project was spent in Europe or to employ Europeans.

One of the dinner guests asked "sounds as bad as Halliburton in Iraq, no?" After making the requisite phoey-on-Bush gesture he said, "if Halliburton only charegs double the real cost then you are getting a bargian." What about NGO's? "They have to spend money the way the donors want - when donors are governments, their projects are just as corrupt as if no NGO involvement."

I'm sure US & other's aid projects are just as corrupt on the donor end.

What would sachs do about donor corruption? Does he addresses it?

Like I said above, I trust regular people to make better anti-poverty programs than intellectuals.

As the entrepenuers would say "they have skin in the game". Litteraly.

posted by: Jos Bleau on 03.11.05 at 02:48 PM [permalink]

How about this then:

If Sachs is right, why not let the Europeans do it?

They spend NOTHING on their militaries to keep them secure from external threats. The US shoulders the vast majority of that burden.

If the Europeans are so pacifist and renunciatory of violence, they could put their money where their mouth is by taking on this challenge on their own.

But they won't because they are fucking hypocritical cowards.

posted by: Otis Wildflower on 03.11.05 at 02:48 PM [permalink]

I read the article in my Time subscription, and Sach's numbers and plan both seem full of holes.

Sachs points out that the U.S. goverments gives less of its net worth than other countries, but doesn't seem to dwell on the fact that we're contributing more in real dollars to relieving poverty than anyo ther country. Nor does he account for private donations, which I believe are a significant part of the equation when talking about U.S. relief effort.

And Sach's prescription simply dismisses corruption in the U.N. and in poor countries as irrelevant. Sure, some parts of the U.N. work. But I've yet to hear of U.N. relief efforts ever making a country unpoor.

I firmly believe that the persrciption for ening poverty begins with the elimination of kleptocracy. Until you do that, there is no reason on earth to assume that giving money to Uganda will ever make its citizens less desititute. I eagerly await the day when all the Eurpoean countries that are so generous with their citizen's money invade Africa to restor social justice. I reckon it'll come just a few minutes after the Rapture - and I'm an atheist.

posted by: Matt Hooper on 03.11.05 at 02:48 PM [permalink]

Dan can run the numbers on this, but I'm pretty sure the developing world has already given more than $150 billion, if you include the US, West Europe and Japan combined. It might take a decade or two back to reach that figure, but it seems to me we have already done this, and that Sachs at most may have come up with a more effective way of doing it this time.

posted by: Kirk H. Sowell on 03.11.05 at 02:48 PM [permalink]

I'm frustrated already that I can't see a nice clear plan. I even clicked on the free Times link, which I don't like to do, and came away disappointed. Lot's of pictures of poor people, tragic stories, selfish America references, and no plan other than money has to be focused better than before. Do I have to buy his book to get any details or any summary? Are his book profits more important that freeing the world of poverty?

Sachs isn't asking for $150B more. His goal is 0.7% of world GNP, roughly $150B per year as of 2001 I think. He's getting more than half that now. So why hasn't poverty been cut in half, or one-quarter, or one-eighth?

God bless him for the work he's doing, for the work all such people are doing, but if we want to cure poverty, we need to really know what causes it? I suspect it's not just lack of money (or we would be making more progress). I suspect corrupt and incompetent governments (from the national level to the local level) are a major problem. Money poors in, but the crappy governments remain.

posted by: Marlow on 03.11.05 at 02:48 PM [permalink]

Dan put up the link to the Millenium Project report in his update.

There seems to be a lot of venting at the UN and Sachs in this thread but I think it makes sense to keep an open mind and actually look at his proposals before making a judgement. They are a lot more tough-minded and pragmatic than some people seem to think. As mentioned earlier the report deals with some length at the issues of corruption and mis-governance and strategies to reduce them. And it is quite hard-headed in stating that some governments are too corrupt and oppressive for aid to make a significant difference . (Check out Box 13.4 in Chapter 13). But there are other governments where this is not the case.

As for aid efforts in the past, Chapter 13 also identifies many reasons why aid has sometimes been ineffective in the past and what can be done to improve this. For instance aid has frequently been unpredictable and short-run and driven by the geo-political and commercial interests of the donor rather than development needs. Despite this ,as I noted earlier, there have been some remarkable successes like the eradication of small-pox and the Green Revolution.

posted by: Strategist on 03.11.05 at 02:48 PM [permalink]

I pick up Drezner's gauntlet on my blog There's nothing new in Sachs' plan, or in Sachs himself. The problem isn't that he's a liberal or a U.N. flunky, but that he's solving a different problem (the lack of jobs in the NGO community in rich country capitals) than the one he's claiming to be attacking (global poverty).

And if he's right, why just 1.5%? Why not 5%? Why not 10%? Wouldn't you gladly give 10% of your money if it made all poor people in the world into middle class consumers? And if that worked why not 20% that would make everyone in the world fabulously wealthy? Wait, the math doesn't add up. But then again, neither does Sachs'.

If we want to make a real difference for the world's poor, then there's only one way to do it: healthcare and education. And that will cost a lot more than 1.5%.That's why feel-good employment programs for liberal arts majors are more harmful to the world's poor than helpful. Poverty is a real hard problem and the solutions aren't easy.

If interested read more at my post on

posted by: Sam Jaffe on 03.11.05 at 02:48 PM [permalink]

30 years, Sachs´idea would have no chance of working, because the thirld world was full of bizarre dictatorships.

Today, there is a better chance. But even benign regimes face huge difficulties in carrying out the aid efforts. Money is not the issue. Money is just pieces of metal or paper, and has no real significance in itself.

Lack of real resources, like roads, communication, protection from theft etc. are the challenges. Has Sachs factored in those difficulties, or has he just assumed a "perfect" delivery of those 150 billion? I agree with commenters above that the cost of delivery could be multiples of the aid itself. But certainly we should make efforts.

My country (Norway) has spent more than Sachs´ plan (0,9% of GDP) for a number of years, and a lot of it, frankly, has had no effect.

posted by: KH on 03.11.05 at 02:48 PM [permalink]

Rabbits in Australia, remember? One might say that those rabbits lived into 'poverty', ie: they bred themselves into starvation. Would the problem there have been solved by importing MORE food? Without population controls the burgeoning poor will become the ever greater burgeoning poor.
150 billion dollars today becomes 200 tomorrow and 300 the day after.

Feel-good solutions like this one of Sach's fail because they address the symptom, not the problem.

posted by: Thomas Hazlewood on 03.11.05 at 02:48 PM [permalink]

"The same people who tell us the Iraq war was worth it to rescue 24 million people ... "

What a horrible way to begin a sentance, gopher.

posted by: anon on 03.11.05 at 02:48 PM [permalink]

"If we want to make a real difference for the world's poor, then there's only one way to do it: healthcare and education."
Actually a lot of the Millenium Project deals precisely with these issues. Check out Chapter 5 of the report. Some of the proposals include providing free school lunches for poor children (which provide both an incentive to attend school and help them actually learn something), annual deworming for children, mosquito nets, micronutrients etc. And the proposals call for aid of 0.7% of rich country GDP not 1.5%.

Incidentally since malaria has been a topic of discussion here, Box 5.4 might be of interest. It describes how the government of Vietnam managed to successfuly fight malaria in the 90's with a strategy that combined distributing millions of mosquito nets, insecticides and new drugs which were developed with the help of private biomedical firms. Over a five year period mortality was reduced by 98% and morbidity by 60%.

posted by: Strategist on 03.11.05 at 02:48 PM [permalink]

I'm all for his plan, but it should only be implemented AFTER Bush rolls through all those African countries and frees the people from their tyrants.

Only then will the plan actually work.

posted by: Syl on 03.11.05 at 02:48 PM [permalink]

I’ll agree that I’m not the biggest blogger on the planet but I have been writing about these things both at my place and at TCS (yes, I realise that many will therefore immediately reject anything I say for that).
My biggest complaint about Sacks is that the money will be managed by provenly incompetent governments (the corruption is another far as I know there are only three he thinks unworthy of aid, Zimbabwe, Burma and N Korea). There’s a lot of talk about those recipient governments drawing up plans for how to spend the money....yet most of them are not competent to do so.
I’m much more angry with the Oxfam/Bono/Bob Geldof end of this movement, gathered under the banner of "Make Poverty History". They insist that the money should be handed over without any insistence upon change in economic policy in the recipient countries, make great noise about it meaning not insisting upon liberalisations or privatisations. Yet we have people like Nicholas Negroponte pointing out that the digital divide is not just about access to computers, but also to the net....and connections are slow and very expensive because of entrenched monopolies. Then in this weekend’s Economist there is that very interesting paper on the effect of a 10 per 100 people rise in moble phone ownership and the effect on growth....a rise in 10 per 100 adds 0.6 % to GDP in poor countries.
I always come across as a market fundamentalist, to the point of parody (indeed, know that I am often guilty of over emphasis to the extent of being wrong, not just too strong an advocate) but to me there is no problem with aid, no problem with the rich helping the poor, no problem with it all being financed from taxes. I just want it all to be done in the most efficient manner possible...the most wealth for whatever help we provide.
That means, to me, that we have to take the lessons from the rich world, that many (most?) public goods are best provided by private companies (yes, water, sewage, electricity, elec transmission, telecoms, education etc) in a competetive market, and where competition is not possible, as with some in that list, with a light regulatory hand. As the UK experience has shown over the past few decades.
The issue of poor country tariff barriers to rich country goods is, I think, less important than the issue of poor country tariffs to other poor countries....there are huge gains available from trade between these countries, without worrying about the (incorrect) problems ascribed to competition from rich country industires. And yes, we should tear down our own tariff barriers as a matter of course, not least because it makes us richer ourselves.
Some of this is recommended by Sacks, but by being associated with the media crowd, those who still have a hankering for State planning, import substitution and the protection of infant industries, I think he has increased the political liklihood of getting the program through at the expense of reducing, possibly even eliminating, the effect of the money once spent. And that’s what really worries me, that we will spend the money, get nothing, and then write off Africa. I want them rich because it will make my descendants rich, pure enlightened self interest, so I want it done right. Capitalism red in toooth and claw is what is going to provide the fastest growth...and as we are at least stating that’s what we want, that’s the system we should be pushing. NEPAD? The UN? EU? Waste of space in this issue. Some good old fashioned economic exploitation, profit hungry bastards building sewers, flogging mobile phones to people, sweatshops....none of it is pretty but that’s what got our forefathers out of poverty and that’s what will do it again in Africa.
Sorry, rant switch off.
What I really meant to say is that some of us have been talking about it but no one has as yet noticed very much.

posted by: Tim Worstall on 03.11.05 at 02:48 PM [permalink]

I want to embrace the idea but I can't get past those two words: Kofi Annan

posted by: tim belknap on 03.11.05 at 02:48 PM [permalink]

Erg said:
I am a great supporter of India's economic liberalization, but it is only a partial substitude at best for well-directed anti-poverty programs.

I prefer not to go the foolish Jimmy Carter route of giving food and oil to a failed nation (read North Korea) and then 'feeling good' about doing nothing.

Economic liberalization is THE ONLY realistic method of fighting poverty.

Look at what EUnuchstanians suggest and propose then do the opposite.

posted by: aaaaa on 03.11.05 at 02:48 PM [permalink]

I really loathe the Economist. Consider this:

"Foreigners may contribute to corruption in Africa, but they do not cause it. African politicians paint a picture of rich western firms offering irresistible inducements to previously blameless African officials. But more often, it is the officials who abuse their power to extort money from blameless citizens. For every shady multinational slipping a minister a sackful of cash for a contract, there are thousands of African policemen robbing people at roadblocks or African bureaucrats inventing pointless rules so that they can demand bribes not to enforce them.
Africa will not prosper until corruption is checked and governance improves. And that task, as the report says, is “first and foremost the responsibility of African countries and people”. "

NOT EVEN A PATINA (!) of recognition that African governments are so screwed up because, ala Iraq, they are governing ficititious nation-states created by evil imperialists. Including, you know, the Brits, if the Economist's staff failed to show up in the appropriate history classes.

When there is no functioning community, there will be no functioning government.

posted by: Jeff on 03.11.05 at 02:48 PM [permalink]

Sachs and company might take the time to read some of the feedback. The consensus is that people will give and give a substantial amount IF they feel it will help. Most are darn skeptical, based on their experience. Promises that this time it will be different don't carry much weight.

Don't just focus on more money. Convince us how it will be spent efficiently and effectively. Demonstrate that it will be a catalyst for a free society and vibrant economy. Prove that politicians, bureaucrats, crooks, and freeloaders won't end up with most of it.

Don't have enough to save the world right now? Then use your plan to eliminate poverty in just one country. Take just one basket case and turn it around. It should only take a small fraction of the $150B/year.

Don't just tell people it will work. They've heard it many, many times before. Don't just give examples how one problem or another was solved with a little bit of money, and then extrapolate to ending world poverty. End it in one country, and then people will be convinced you are on to something.

I'm not faulting the end-hunger community for their efforts. I compliment them for caring, and trying, and for having some success. I am providing feedback, however, regarding their frustration at raising as much money as they feel they need. They can take it or leave it as they wish.

posted by: Marlowe on 03.11.05 at 02:48 PM [permalink]

Jeffrey Sachs' argument falls apart right where the Time article chose to center it, in that little village in Malawi, if you were there to see it before AIDS arrived. Sachs wasn't there, and neither were you, but I was. I lived just down the road in Lilongwe from 1978-1980.

Sachs' fairytale: "If the village were filled with able-bodied men, who could have built rainwater-collecting units on rooftops and in the fields, the situation would not be so dire. But as we arrive in the fields, we see no able-bodied young men at all. In fact, older women and dozens of children greet us, but there is not a young man or woman in sight. Where, we ask, are the workers? The field worker who has led us the village shakes his head sadly and says no. Nearly all are dead. The village has been devastated by AIDS."

In truth the most remarkable feature of Malawi village society around Lilongwe before AIDS arrived, to a young Westerner with his eyes open, was the way in which the males managed to sit around all day while the women went out into the fields and did all the work, before coming back to the village and doing all the chores.

I could go on at length about the daily incidents which revealed the extent of corruption and the position of women in Malawian society at that time. Like my first day at work when, in the office of the Permanent Secretary of the Ministry of Trade, Industry and Tourism, the female secretary entered after knocking, got down on her knees, shuffled on her knees over to his desk, gave him some papers, shuffled back to the door on her knees, got up and walked out. Like the day a group of us walked into a village near Nthandire and ended up asking the chief for directions, and the chief in order not to lose face insisted on pretending to speak only to me (as the man), ignoring the English woman right next to me who could actually speak his language and had to interpret for us both.

As soon as you see this behavior in place, unless you are determined not to see it, the scales fall from your eyes and you realize that what Sachs and the rest of the 'aid industry' are proposing is no more and no less than "welfare on a global scale", the results of which in terms of dependency and social disintegration would be just as damaging as they have been domestically over the past 40 years. The whole core of his argument is that given a basic income and infrastructure level poor people will become the "able-bodied men" building "rainwater-collecting units on rooftops and in the fields." History, as seen with this observer's own eyes, says it's not so simple and he's using the wrong model for their behavior.

I could also go on about the absurdly wasteful parodies which Western-funded aid projects become when they are fueled by the sort of willfully disingenuous romanticism Sachs is peddling here. The Peace Corps volunteers sent to teach hygiene to the villagers, who had to be shown themselves by those same villagers how to dig pit latrines, and then sat around and smoked dope for the rest of their tour. The 'valiant Peace Corps bureaucrat injured on a trip into the field' who actually never left the capital city, got drunk, reversed his rental car into a large drainage ditch and broke his leg that way. The pinstriped bankers from the IFC (part of the World Bank) who made it very clear to the government that they didn't give a hoot whether a $50 million project was going to work, did they want the money or not? Suffice it to say that the 'aid industry' is far from transparent, and the corruption is by no means confined to the Africans.

Let's face it, Sachs' prescription can't even pass the laugh test: hundreds of billions in aid funding have already been spent over the past half century trying to push this rope uphill. If Sach's simplistic riff had been the answer, somebody would have documented it well before now. It's not as if we weren't looking.

So what do I think? Firstly the Economist has it right, better governance on all levels from civil society to central government is the key. We ought to admit however that we know very little about how to contribute to this, and that what most aid projects amount to on the ground (sending in naive and/or leftist Western do-gooders to ride around in air conditioned Land Cruisers) usually does more harm than good.

The most dramatically positive thing we could and ought to do is something the Time article touches on but doesn't seriously get into: get our own house in order by no longer projecting our ecology panics onto poor countries, killing literally hundreds of millions of adults and children with diseases like malaria, because we condemn the spraying which would save them. This is becoming increasingly well known, but progress is unlikely because the 'aid industry' remains rigidly opposed on ideological grounds.

Finally, you seek to dismiss the objection that "Sachs ignores the importance of free market capitalism in economic development" because he is "quite adamant about the benefits of free trade and market capitalism." In my experience 'aid industry' types like Sachs are often in favor of the sort of capitalism that people in poor countries can't afford, but immediately balk at applications of capitalism relevant to their real circumstances. For instance, giving poor people clear title to their land and houses could in many instances release far more capital in a more productive way than pumping in foreign aid. The results, like all real capitalist processes would produce some winners and losers and some real income inequalities, as well as requiring very few Westerners on hand to help out. This combination is usually enough to get proposals promoting this sort of capitalism dropped down to lip service level or worse pretty fast.

posted by: NF on 03.11.05 at 02:48 PM [permalink]

To everyone worried about corruption please come to Philadelphia. We have a wonderful first class 1st world pay to play scheme here. So the meme of corruption on what ever scale as an impediment to developement in the 3rd world should be put to rest. It takes two to tango anywhere in the world.

The critical issue of poverty is an issue of whether or not the local population can grow a crop or develope a product for sale(like those knitted walk around socks that are ubiquitous every winter season here. For that to happen you need equitable application of law and an infrastructure. I fall on the side of infrastructure: The creation of clean water, eradition of infectous diseases, roads, bridges,etc.

To create an infrastructure that lasts is the most critical part. In order to do it the plan has to have a capitalist intention to it. That is it must be seen as something valueable to the recipient such that the recipient takes responsiblity for its upkeep.

The example I see most often is in Haiti. Deforestation is causing the mass erosion of araable hillside soil. Every plan that has simply planted trees to stop the erosion has failed. Primarily the locals see the tree's being replanted at no cost to them so they chop them down and turn them into charcoal, a cash crop. Tthey don't care that they can't plant because that option disappeared long ago.

The planting of trees that yield a cash crop coconuts, papayas, mangoes,etc are treated differently because the fruit is a cash crop that is valued and the foliage can be harvested in small amounts as a feed source for goats. You chop the tree's down and no more sustainable cash crop or feed source. The tree's in turn act to ameloriate the washing away of soil in which other cash crops can be grown. The trees need for water creates a demand for water management facilities such as culverts, dams, water run off systems
to divert water into storage facilities.
The water is also a cash crop as it is needed for the growing season, personal use, etc. The water can be treated to avoid contamination from fecal matter and diseases born by mosquito's, ameoba and bacillary infection. This in turn help keep labor available to maintain this system.

The NGO system is ofter the best for this. They have the expertise to treat the water, end diseases, teach the proper way to maintain the trees, etc. They can find the tipping points so that the growing of cash crops by the group in a cooperative manner is not undermined by ignoring the food crops that bring sustenance to each individual family. They should charge for this advice by taking a portion of the 1st crop as payment to provide proof of the value of services rendered.

This approach is not perfect. There will be families that live on the wrong side of a mountain such that a gravity fed water system can not supply them with treated fresh water, their soil may be burnt out because of misapplication of nitrogen based fertilizers and the rest is to your imagination

This systematic approach is no different, however, than anything that has been done here in the USA over the course of our development. Just like here the diseases and cause's have to be properly identified and treated for each individual population center. The best crop grown and even more importantly grown in a sustainable manner identified and developed.

posted by: robert m on 03.11.05 at 02:48 PM [permalink]

1.“[Bush[ coincidentally gave away about $150 billion a year in tax cuts”.

Cutting taxes is not “giving, it is TAKING less. Only socialist who think the government owns its citizens cannot see the difference.

2. Over the last 50 years the west has given massive aid. The result has been a complete failure so far, the correlation between aid and living standards has been NEGATIVE.

3. The argument of “poverty trap” is without merit. First of all we know from experience that even very poor countries can have very rapid growth with little or no aid, if they reform their economy. (free markets and the rule of law)

Second many small and medium size countries have already received the massive inflow of Aid Sachs wants, without result. On average Sub-Saharan Aid to GDP was 17% during the 90s, and above 50% in a few countries.

Mozambique, Mali and Haiti are as poor as they ever were. The greatest professional aid receiver in Africa was socialist Tanzania, alone got the equivalent of a Marshal plan in help, with the effect of slipping further in poverty.

If you guys can mention only ONE country where aid billions abolished poverty I promisse to support Sachs.

4 ‘it is hypocritical for people who support the Iraq war to oppose aid’.

This is a valid point, but nevertheless wrong. The invasion was expensive, but it produced workerd). People no longer disappear or get their limbs cut of because of opposition, nor does a third of oil revenue “disappear”. With less than 1% of GDP/year over 3 years you ended tyranny for 50 million people in Iraq and Afghanistan, money well spent. The same money used in aid would most likely has negative marginal effect, if the last 50 years is anything to go by.

The caricature difference between conservatives and liberals is that we tend to be driven by logic and liberals by emotions.

If aid doesn’t seem to cure poverty (and on average to make it worse) conservatives will become skeptic.
Liberals want most of all to feel morally right, so it does not matter to them if aid works or not. You still get moral satisfaction by demanding that other spend their money.

Just look how Sachs is elevated to hero for elevating emotion above logic. Economist like Burnside and Dollar (sic) who actually spend effort to improve aid get nothing of the kind.

Even less credit is given to the unpopular results of Easterly et all, that finds that there is no evidence that aid improves growth even where institutions are good.

I wonder why Time magazine did not devote a number, they seem to care about sicence…


The world bank admitts in their latest report that world poverty has halved since 1981, so I don't think they really disagree with Sala-i-Martin in the facts. They just present them in a biased way to secure their budget.

posted by: Tino on 03.11.05 at 02:48 PM [permalink]

So that's what a link from instapundit means. Scary.

None of the knee-jerk reactions against this here identify anything not already specifically addressed in the full report, which is written in perfectly plain english: much of Africa isn't on the brink of ultimate doom; small pilot projects and analysis have been ongoing for decades; international trade and IMF policy is addressed; the necessity of transparency; most if not all of DeSoto's program for micro-credit, formalizing black economies and land distribution, etc. etc.

It probably even has something on how Jesus "The Poor Will Always Be With Us" Christ nevertheless fed the poor, and advised his disciples in no uncertain terms to distribute their wealth among them.


posted by: buermann on 03.11.05 at 02:48 PM [permalink]

So what do I think? Firstly the Economist has it right, better governance on all levels from civil society to central government is the key. We ought to admit however that we know very little about how to contribute to this

Sure we do- Re-colonize the place.

Of course, that'd be politically unacceptable.

posted by: rosignol on 03.11.05 at 02:48 PM [permalink]

"Even less credit is given to the unpopular results of Easterly et all, that finds that there is no evidence that aid improves growth even where institutions are good."
You are overstating their results. They specifically state their paper doesn't show that aid is ineffective. All they show is that the Burnside-Dollar results don't hold if you apply their methodology to a larger data set. As they mention there have been other papers since B-D using other methods which Easterly et al don't test. Also while economic growth is important it is not the sole measure of the effectiveness of aid. Education and especially health are valuable in themselves even if they don't increase growth.

The repeated references on this thread to Iraq as some kind of development success are odd. Whatever you think of the justification for war, Iraq is far from a success story at this point of time. More than 200 billion dollars have been spent on the war and its aftermath but by some measures, like electricity production, Iraq is worse off than before the invasion. Many parts of the country are not safe. Many facilities including hospitals were destroyed in the looting. Some health indicators (like hepatitis outbreaks) are worse than before the war. Sure some progress has also been made but considering the vast amount of resources put in Iraq, it is hardly a good example of a development success in cost-benefit terms.

posted by: Strategist on 03.11.05 at 02:48 PM [permalink]

The blog post was interesting and thought provoking - it's good to see this subject aired and discussed. I'm not on the same track as Drezner, but I respect it.

He wonders why this subject hasn't a higher profile in the "blogosphere"; the answer, sadly, is hinted at in the overall tone of the comments and responses. Most of those who inhabit the "blogosphere" are locked inside a psychosocial bubble which canot coexist with the question of third world poverty.

Reading the comments, it is clear that well over half of the writers have never been to any of the places they talk about, to see for themselves. They recite existing material from others who not been there either. Many (not all) of the rest /probably/ haven't been there either, though I can't be so definite.

Not having been there is not the end of it, of course. But they are anxiously keen to avoid letting in any outside information either - most of the comments are kneejerk.

Good on you, Drezner ... critical thinking I don't agree with but welcome. Shame about your readers.

posted by: Mannie Green on 03.11.05 at 02:48 PM [permalink]

Unlike my colleague Mannie, above, who was depressed by the majority of the comments, I am encouraged by the level of positive response in some of them. Mannie is right in general, but should have considered the real hopefulness of several comments, especially in such a place as this.

Though I'm not in general Drezner fan, I'll join Mannie in his "Good on you, Drezner".

- and in a higher proportion of those commenting on /Political Animal/.

posted by: Felix Grant on 03.11.05 at 02:48 PM [permalink]

push to save three million babies every year :D

"Three quarters of the four million newborn babies that die every year could be saved with low-cost, low-tech care, scientists and health agencies are urging. It would require initial investment to provide the extra clinics and midwife training needed to achieve these vast improvements, but even simple, cheap measures such as health education and tetanus immunisation could save one million babies each year - 99% of whom live in developing countries."


posted by: carabinieri on 03.11.05 at 02:48 PM [permalink]

While there is a lot of noise and reactionary statements in the comments. There is also a lot of good ideas and links to good information in them.

Erg spirts out political vindictiveness, but he has some good points that are lost in the presentation. DDT alone won't solve the malaria problem, however it would be crucial in dealing with it.

Strategist, has a good perspective on aid, health, and eduction even though he is completely off base on Iraq. Nobody is perfect, but if we focus on our strengths we can achieve a lot.

posted by: aaron on 03.11.05 at 02:48 PM [permalink]

I'd like to see you trade thirdworld experiences with NF one on one. I know I've travelled and studied extensively in "that" part of the world--how about you? Show us yours, Mannie.


Thanks for sharing. Good story.

Bottom line, all: Be afraid, very afraid of anyone who claims to have a plan to solve the massive problems of an entire continent. Unless his name is Ron Popeil. But then Ron's solution would probably run you three easy payments of 9.99 each.

posted by: Kelli on 03.11.05 at 02:48 PM [permalink]

First of all, Kudos to Mr. Drezner for blogging on the issue of poverty eradication, and for astutely debunking in advance (or almost in advance) four nonsense arguments against Jeff Sachs' plan.

Comments have noted that there has been massive foreign aid already, yet many poor countries remain mired in poverty. It's important not to look at foreign aid in isolation, but as part of overall capital flow. Because of unsustainable levels of debt, mainly to the World Bank and the IMF, many poor countries have net capital flow out, not in. They're paying more on interest than they're receiving in aid from donor countries. Add to that is the fact that many of the loans were made for projects of dubious economic value, to corrupt governments. Many observers call such debt as odious and say it should be canceled. In any event, you can't expect foreign aid to turn around an economy when a country is paying out more interest than it's receiving in foreign aid.

Comments say that some countries such as the "Asian Tigers" have succeeded, implying that the poverty of subSaharan Africa is somehow the fault of the people there. Of course, it is important to understand the role of culture, corruption and religion in the continuation of poverty. But just blaming the victim is not the answer either. Africans didn't invent malaria or Guinea worm.

Lucklady says "money doesn't fix anything." Why, then, do we in the United States provide disaster relief to Florida after hurricanes or to New York after terrorist attacks? Of course money fixes things, if it's spent wisely. Ask your car mechanic.

Those who speak of corrupt governments as a big part of the problem, you are correct. Economics Nobel laureate Amartya Sen's research shows that famine is always coupled with a lack of democracy.

When Jesus said "The poor you will always have with you," this was a counter-rebuke to Judas' suggestion that the costly oil of nard could have been sold and the money given to the poor, rather than using the oil as something nice for Jesus. Jesus didn't mean that poverty was forever. He meant that in his time and place, poverty was not about to end, but that time for giving gifts to Jesus was rapidly running out, because he foresaw his own death.

Some past aid has been wasted. That doesn't mean that we have to continue down this path. We can learn from our mistakes and target foreign aid to programs that are working. For example, the Global Fund to Fight AIDS, TB and Malaria reserves a tiny fraction of donations for auditing and oversight, and disburses money in six-month tranches. This enables the Global Fund to assure that programs get continuing support only if they really are working. And because the Global Fund gives mainly to non-profits rather than governments, it has achieved successes in countries with corrupt governments. The Global Fund is easily the most effective funding vehicle for international AIDS control, yet the Bush administration has continually pressured Congress to reduce our paltry funding for it.

Someone suggests that first world academics should stop pushing Marxism. There is not a single major university in the United States whose economics department teaches Marxism as anything but an unscientific system, erroneously not rooted in the theory of supply and demand.

One of the most outrageous comments was by big guy, who alleges that the average IQ of Africans is 70. Most poor people are not stupid.

Thomas Hazlewood frets that "Without population controls the burgeoning poor will become the ever greater burgeoning poor." This is a profound misunderstanding of the problem. Every country on earth has started a demographic transition from high birth rates and high child mortality rates to low birth rates and low mortality rates. Most industrialized countries have completed the transition, and now have fewer than 10 children per 1000 dying before age five, and also have fertility rates below replacement. Other countries are not as far along on the demographic transition, but there is worldwide progress toward lower child mortality and lower fertility. But here's the key: lower child mortality always comes first. If you want to cut the birth rate, first cut the child mortality rate.

Finally, little has been said here about microcredit. Already, Micronterprise loans (microcredit) are reaching about 80 million poor people around the world, enabling them to start and expand small businesses and lift themselves and their families up from poverty with a hand up, not a handout. Development assistance for microcredit is a success story.

posted by: Joel Rubinstein on 03.11.05 at 02:48 PM [permalink]

Has Sachs given away most of his money to save the impoverished, like Ted Kennedy and other spenders of tax dollars? There has been sufficient money spent on hundreds of social and educational programs in the U.S. for decades - yet those problems are yet unsolved.

posted by: John Rieman on 03.11.05 at 02:48 PM [permalink]

Wow-- what an ugly set of comments.

I'm going to add some more bad arguments to Dan's list.

5) "Zimbabwe, Somalia, Congo, Sudan." The thing is that there are one or two or forty-something other countries in Africa alone-- really! You can look it up! Many suffer from bad and corrupt or weak and incapacitated government. But catastrophic cases make for bad generalizations. It would be like taking Bosnia, Kosovo, and Transdinestra to stand in for "Europe" or even "Eastern and Central Europe." One could argue that more aid is likely to empower mediocre rulers to become awful rulers a la Mugabe, because they'll skim off so much. That's something that needs to be argued out, and guarded against. But one can't just argue that Africa as such, or the poorest countries in the world as such, are such complete pits of anarchy or authoritarianism that it's impossible for aid to do any good.

6) "Skimming off the top/ Oil For Food." If Sachs' proposals could work pretty much as stated, but 20% would get skimmed off the top by corrupt rulers everywhere... then Sachs has a damn fine argument for spending $180 billion per year. As stated above, it's possible for the money skimmed off the top to actually interfere with the rest, because it empowers and enriches a bad political class, creates the aid equivalent of a resource curse and a massive competition for control of the center, allows for the purchase of arms to be used against the populace, etc. In other words, the money might make things *worse.* But if the only problem were that a percentage got siphoned off into Swiss bank accounts...? Isn't enriching a few thousand bad guys a worthwhile price to pay for saving millions of lives?

And see the report ch. 7 on governance, with subsections on the rule of law, human rights, accountability and transparency, and targeting aid in ways that strengthen the local private sector.

7) "De Soto De Soto De Soto." I'm a strong supporter of De Soto titling. Is there any reason why that's a strict *alternative* to targeted aid? Titling is ineffective without, e.g., a court system. Is there anything wrong with aid targeted at building up judicial and civil service institutions? As far as I can tell de Soto himself doesn't think so. He advises the World Bank on *how to target* loans so as to make his reforms more possible; he doesn't tell the World Bank to go away.

Moreover, from the report's list of key recommendations:
Security of tenure: Imrpoving the security of tenure through legislation against forced eviction and through legitimized occupancy or formal title.

Enforcement of improved land tenure legislation: Legal protection and enforcement of slum dwellers' rights."

In other words, Sachs incorporates the De Soto agenda as part of his own.

8) "Trade trade trade." Yes, of course. But see comments on De Soto above on alternatives; and see the Milennium report, Chapter 14. "A global breakthrough in trade." Trade first, trade most. Why does that mean trade only?

9) "More of the same." Yes, vast amounts of aid have been wasted and vast amounts have made things worse. Maybe there are inescapable political reasons for this. But if so, one has to argue to that conclusion. Sometimes the fact that something has been done badly is reason never to do it again, but sometimes there's the possibility of, y'know, doing it well.

See ch. 13, "Fixing the aid system," and the subsection on the "ten central problems with the aid system today." Sachs isn't just calling for more money. He's calling for more money spent differently; indeed most of the report is about *how to target and use aid.* When that's what the project is actually about, it takes a bit of thought to explain why "differently" will fail, not just a knee-jerk "We've tried that!"

posted by: Jacob T. Levy on 03.11.05 at 02:48 PM [permalink]

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