A Surprising Case Against Foreign Aid

Click here to read this review of Angus Deaton's Book Great Escape: Health, Wealth, and the Origins of Inequality. From the NY Times, 10-13-13. The reviewer was FRED ANDREWS. Excerpts:

"Professor Deaton tells us that a rising tide has lifted almost all the world’s boats — but some far higher than others."

"In his considered judgment, global poverty today is no longer a result of lack of resources or opportunity, but of poor institutions, poor government and toxic politics. Though about $134 billion in official aid still flows from donor governments to recipient governments, there is no mystery, he says, as to why foreign aid fails to erase poverty. That is not its mission, he asserts: typically it serves commercial interests at home or buys political allies abroad, too often unsavory ones.      "

"THE author has found no credible evidence that foreign aid promotes economic growth; indeed, he says, signs show that the relationship is negative. Regretfully, he identifies a “central dilemma”: When the conditions for development are present, aid is not required. When they do not exist, aid is not useful and probably damaging."

"Professor Deaton makes the case that foreign aid is antidemocratic because it frees local leaders from having to obtain the consent of the governed."

"So what should the West do instead of providing aid? Well, it can invest in finding a vaccine for malaria, still a mass killer. It can push drug companies to tackle diseases that threaten poorer countries. It can support the free flow of information about inventions and new management techniques. It can relax trade barriers and provide poor countries with expert advice at the bargaining table. It can ease immigration restraints and accept more newcomers."

And

"...stand aside and let poorer countries find their own paths..."