Reflections on Easterly

Full disclosure: I approached "The White Man's Burden" with skepticism about its basic premise that aid does not really work. I think this was largely because I had never actually read Easterly's writing, and had only heard other's descriptions of it. Those descriptions left me with the impression that Easterly believes foreign aid never works and that the West should therefore stop providing aid to the developing world. I began the book expecting to hear that argument, and expecting to disagree.

Easterly never made it. Instead, he advanced a nuanced, sensible argument that foreign aid as it is currently implemented -- in Big Plans from the top-down to solve Big Problems -- does not work; that only homegrown development based on the dynamism of individuals and free markets can end poverty; and that aid can work if it is focused on enacting piecemeal reforms that reduce the sufferings of the poor (368). That, it seemed to me, is a convincing argument. Many of Easterly's points were thought-provoking, but I found two of them particularly interesting.

Bureaucracy and Accountability 
The first was his insight that not all bureaucracies are ineffective, and that what separates the effective ones from the ineffective ones is accountability (pp. 165). Bureaucracy in rich countries works better than the bureaucracy of the aid agencies for the poor, Easterly explains, because the former are held accountable to voters or customers while the latter are not (pp. 166-167). Better public services go along with democracy; better private services go along with markets. But the poorest people in the world are "orphans": they have no money or political power to hold their foreign service providers accountable.

I found this point fascinating and largely agreed with it, but would extend Easterly's reasoning to poor people within free-market democratic societies. In the United States, poor people vote, volunteer, and donate to campaigns at much lower rates than middle-class or rich people. They also have less purchasing power. Could this be part of the reason why welfare and other poverty-reduction programs have been largely unsuccessful? Just like the poor single-mothers receiving foreign aid in Ghana, the poor single-mothers receiving welfare in inner-city L.A. lack political representation. They do not or cannot provide feedback to those who are trying to help them, and cannot hold politicians accountable for the results of the help they provide. In the last chapter (pp. 380-381), Easterly proposes a few ways to get feedback from the poor in developing countries. If we are serious about reducing poverty in  developed countries such as the U.S., we ought to do the same.

Inputs vs. Outputs
The second point that resonated with me was Easterly's criticism of the aid bureaucracy's focus on the inputs to international development -- total aid dollars spent -- rather than the output, i.e. results for developing countries and their people. He rightly criticizes politicians and international leaders for focusing on increasing the volume of foreign aid with a "strange fixation" on doubling it (182). Easterly suggests that aid agencies should stop using aid disbursements as a metric of success. "What matters is results," Easterly says, even though "the rich people who pay for the tickets are not the one who see the movie."

The focus on inputs frustrates me as much as it frustrates Easterly, especially because I notice it any many other areas of American political life. For example, consider the rhetoric of the Obama campaign on education. If you go to the White House's page on education right now, here are some of the headlines you will see on its rotator:

• 34 states. The White House has offered 34 states flexibility from No Child Left Behind to pursue reforms that will prepare all students for success in in college and career.
• 4.2 billion. The Obama administration invested $4.2 billion through Race to the Top to improve teaching and learning in America's schools.
• $10,000. The Obama administration established the American Opportunity Tax Credit to assist families with the costs of college, providing up to $10,000 for four years of college tuition.

The common theme in these "accomplishments'? No mention of results. Did the waiver to 34 states actually help improve education outcomes? Did the $4.2 billion in Race to the Top money lead schools to compete, thereby improving education outcomes? Did the extra money help more student attend college, and were those students able to find jobs after graduation? These are the important questions when assessing the President's record on education. And yet they are conspicuously absent from his self-assessment.  

To use Blinder parlance, Easterly's diagnosis and prescriptions for foreign aid are hard-headed and soft-hearted. He sounds angry sometimes. But "snapshots" and insights such as those above establish his soft-heart just as his economic analysis provides a harsh rebuke of the aid establishment's soft-head. One way to interpret Easterly's thesis is that only soft-hearted motivation for foreign aid coupled with hard-headed implementation offers hope for progress.