Policy forums are regular occurrences in Washington, D.C. Forums that draw large crowds are less common. So it is noteworthy when a speaker—an economist no less—draws in hundreds of attendees on a gloomy Friday afternoon.
The host at the Johns Hopkins University SAIS event introduced his guest speaker as the “controversial and always thought-provoking” William Easterly.
Easterly is an economics professor at New York University and a senior fellow at the Center for Global Development who is controversial because he challenges the conventional wisdom about foreign aid programs. Easterly argues that the best foreign aid plan is to have no plan at all. His latest book, White Man’s Burden, is so contentious that it is a taboo object inside the doors of international aid agencies.
One former World Bank employee who shocked her colleagues by bringing the book to work one day likened the experience to bringing Lady Chatterley’s Lover inside a convent.
Easterly finds fault with the entire international aid establishment. He says IMF/World Bank Sourcebook Poverty Reduction Strategy papers are useless; UN Millennium Development Goals are unachievable; Columbia University Economist Jeffery Sachs is misguided; and Microsoft Founder Bill Gates is simply wrong about development.
Easterly’s thesis is that aid programs based on big utopian plans to help the poor consistently fail. For evidence, he points to Africa—the continent that has received the largest portion of foreign aid is still the world's poorest.
So, if foreign aid doesn’t achieve economic development, what does?
Initially, Easterly said he had no answer to that question. But since publishing his book in 2006, he has decided to provide one (mainly, to respond to critics who complain that he offered no solutions to the problems he cited). “I am feeling increasing pressure over time to come up with an answer to development,” Easterly said.
Easterly now concludes that the answer is individual freedom. “What will achieve the end of poverty is freedom,” he asserted.
Just what that means exactly for the developing world is not clear. Does Easterly propose freeing the “Third World” from international aid? No, he suggests that aid can still serve a role in feeding the hungry, healing the sick, and educating the masses. But none of those services will end poverty itself.
So why, I ask, would a free market system succeed in ending poverty? It would produce prosperity and economic growth. But like foreign aid, free markets will never eradicate poverty entirely.
By pretending that they will, Easterly advances neither the goal of free markets nor of foreign aid. What's needed is a discussion of how the developing world can freely participate in a global market system.
Labels: foreign aid, free markets, global trade, IMF, william easterly, World Bank