Why doesn't aid work?

This page in:

Not enough feedback and accountability, among other things, according to Bill Easterly in this CATO-hosted excerpt from his new book. Branko Milanovic, Deepak Lal and Steve Radelet offer their (critical) reactions to Easterly's arguments.

Milanovic argues that Easterly misleads:

Easterly stacks the deck by creating a false dichotomy between successful “searchers” for solutions and inept and corrupt bureaucrats who impose (wrong) solutions. This dichotomy is a “no-brainer.” The advantage of the first (searcher) is already contained in the premise. The point is to see whether there is anything that governments can do to make life easier for the “searchers”. Easterly seems to believe that there is nothing. But this cannot be true.

Lal believes such debates are mute – since there is no fix for aid:

The truth is that aid is not only ineffective; it is actually counterproductive… it is best to end the futile attempt to fix "aid" to make it more effective. It is best to just hand the requisite checks to the governments of the poor, in the full knowledge that this will not do much for the world's poor but will make us feel less guilty!

Radelet is more optimistic than all three, and argues that the facts reveal a more accurate picture than Easterly's 'rhetoric':

Claiming that aid has been a miserable failure is popular with journalists, ideologues and naysayers (and it helps sell books). But the accumulated evidence over the past decade suggests a much more nuanced and more positive story whereby aid has done a fair amount of good despite it weaknesses and failures in some countries. Certainly, much can be done to make aid more effective. But those that argue the extreme view that aid doesn’t work are just as wrong as those that argue that it is the magic elixir for growth.

Update 1: more comment via Trade Diversion.

Update 2: Easterly responds. So Radelet and Milanovic do the same.

Join the Conversation

The content of this field is kept private and will not be shown publicly
Remaining characters: 1000