Tuesday, March 17, 2009

A higher pie-centric calling

William Easterly, the first person I've encountered in the foreign aid community to quote Hayek, edited a fantastic book book. The Introduction, written by Dr. Easterly, suggests that the foreign aid system is broken. Its original intention was, and it is sold today as, a means of giving people a boost out of the "poverty trap". Complicated plans have been developed, the most ambitious being the Millenium Development Goals. Each component in these plans builds on the others, creating a sort of chain used to pull the recipient out of poverty and into prosperity with one big heave. Unfortunately, the chain always seems to break before the trapped people can be pulled free.

Since each link in the chain is necessary, resources must be allocated to strengthen weak ones instead of reinforcing the strong ones. The will to pull is sustained by public personalities who remind us of our obligation to help those in need. And so the aid system sustains itself with the belief that a good plan will someday bear fruit. If only that darn chain wouldn't break and we could convince the pullers to just pull harder, we'd make it.




Dr. Easterly argues for a different model. Rather than thinking of planned aid as the key to ending poverty, think of it as providing a small boost. In other words, instead of a "poverty trap" with steep walls that must be cleared in one go, think of progress as a continuum. It isn't necessary, or even desirable, to try and plan a path to prosperity. Instead, foreign aid should be seen as a collection of ropes, each pulled independently with the modest goal of improving local conditions. The most effective "ropes" can be strengthened, while ones that don't yield results can be cast aside without endangering the whole system.



This approach, however, begs the question of what interventions are most effective. The bulk of the book is devoted to answering that question, and is by no means the final authority on the subject. I wonder if there's room in the debate for pie-based metrics . . .

1 comment:

Anonymous said...

Don't forget the blurring of the line between relief and aid. Almost no actor in the field is currently focused on relief - the provision of temporary support to help people survive an acute crisis (famine, war, disaster).

All of the major NGOs, who primarily used to focus on relief, have devoted resources to development aid and signed up for assisting in the MDGs. Because of this, they get factored into the plans made by larger state or IGO based institutions and are 'forced' into deployments that overextend their resource base and require the shifting of funding away from relief and toward the development side of the organizations.

The consequences are numerous, but one of the more devastating ones is that the humanitarian aid community has no 'surge capacity' to quickly deal with a new crisis. When one of those crises erupts in a developing country, such as drought-induced famine, whatever progress has actually been achieved on the MDG plans in that country is lost, because there is no slack in the chain to accommodate events outside of planned parameters.

In effect, focus in the overall humanitarian community on the MDG plans have effectively eliminated a vital component to the system - a component that the plans don't have any hope of succeeding without (leaving aside for a moment the other challenges to their effectiveness). What the military would call a 'strategic reserve' is practically non-existant.

This is just one of the reasons the ICRC and MSF France are withdrawing from the co-operative 'stampede' culture of the humanitarian community and are trying to reclaim the moral right to say 'no, we won't go there, we have to preserve resources for crises' and choose their interventions on the basis of affordability and effectiveness.

I'm thinking aloud on your blog, and also giving your readers another angle of the problem to consider. Hope you don't mind.