James Surowiecki, writing in the New Yorker last July, about monetary aid to third world countries notes the variability of results. Most of Africa is still trapped in poverty and tyranny, while India and Pakistan have large segments of their populations in better living conditions than previous decades. South Korea and Taiwan enjoy widespread prosperity.
A Farwell to Alms: This checkered record notwithstanding, it’s a myth that aid is doomed to failure. Foreign aid funded the campaign to eradicate smallpox, and in the sixties it brought the Green Revolution in agriculture to countries like India and Pakistan, lifting living standards and life expectancies for hundreds of millions of people. As for the Asian nations that Africa is being told to emulate, they may have pulled themselves up by their bootstraps, but at least they were provided with boots. In the postwar years, South Korea and Taiwan had the good fortune to become, effectively, client states of the U.S. South Korea received huge infusions of aid, with which it rebuilt its economy after the Korean War. Between 1946 and 1978, in fact, South Korea received nearly as much U.S. aid as the whole of Africa. Meanwhile, the billions that Taiwan got allowed it to fund a vast land-reform program and to eradicate malaria. And the U.S. gave the Asian Tigers more than money; it provided technical assistance and some military defense, and it offered preferential access to American markets.What seems to be important is that money is used to fuel a working system. Liquidity alone is not constructive, like how water is necessary for civilization but requires plumbing to sufficiently lift society above agricultural subsistence. In a weird way, the flood in New Orleans is a true metaphor for simply throwing money at a problem.
So money without an effectively structured system is prone to failure, and sometimes the beliefs within affluent countries prevent the proper system for the specific problem from being implemented. Again from Africa, an example of the West failing to use financial resources effectively because of overly broad prohibitionist thinking.
Niger's Famine: Tragedy struck Niger, the former French colony of West Africa, over the summer. Millions were at risk of starvation. Political corruption, drought and poverty were the main causes for the lack of food, but over this past year West Africa has also been ravaged by a plague of locusts. … And that is because they couldn’t use Dieldrin, an insecticide banned by the UN Stockholm Convention on Persistent Organic Pollutants (POPs). Dieldrin was sprayed across the path of the approaching hoppers and its persistence meant that a single spray of a thin barrier strip was enough to wipe out vast swathes of hoppers for weeks. There are alternatives, but none are anywhere near as cost-effective (on a useful life–cost basis alternatives are at least eight times as expensive), and for debt-laden cash-strapped countries of the Sahel lack of Dieldrin meant not stopping the hoppers.The Capital Times has a story today about the Haunting Images of Africa which are soon to be a PBS special. Television will undoubtedly promote solutions requiring lots of money and massive government programs influenced by the desires of the liberals for their own 'dream home' civilization. Personally, I don’t have faith in planning solutions conceived from ideological theory of what should work. Freedom for local trial and error is slower and messier but in time the solutions that actually work emerge.
