The tsunamis that wracked South and Southeast Asia on Dec. 26, as notable for their unexpectedness as the horrific devastation they unleashed, have helped launch an important conversation on the responsibilities of wealthy nations. Jan Egeland, the United Nations undersecretary general for humanitarian affairs, set off a firestorm when he told reporters “It is beyond me why are we (Western nations) so stingy, really.” The ensuing debate over the relative stinginess of the United States when compared to the other industrialized democracies is a false and dishonest discussion. Continuing to donate aid the way the United States has always done it would be worse than counterproductive. What really matters is devising ways for aid to go to those who most need it and where it will produce the most good.
- Zac Peskowitz
In the past, two primary factors have motivated foreign aid donations: political considerations and the ability of a particular crisis to garner media attention. Unsurprisingly, the results of these programs have typically been uninspiring. Corrupt leaders parked much of their foreign aid in Swiss bank accounts. Zaire’s anti-communist strongman Mobutu Sese Seko was the outstanding example of the kleptocrat whose aid receipts had a greater effect on the well being of German luxury car manufacturers and Italian clothiers than starving villagers. This aid simultaneously allowed leaders to consolidate their hold on power, preventing the development of civil society and the reform of the political system in their home countries. Nearly as ineffectual is the pronounced tendency of foreign aid to move among crises du jour in lieu of sustained programs. It takes years for the economic and health benefits of aid to be realized and the migratory pattern of aid flows has prevented legitimate progress.
Some of these shortcomings are inevitable in an imperfect world of power politics and myopic citizens. However, recent changes in the development community offer the possibility of improvement. The World Bank, under the leadership of its current president James Wolfensohn, finally began to take corruption seriously in the mid-1990s. It’s unlikely that excesses on the Mobutu scale could occur today. Jeffrey Sachs, the Columbia economic reform guru who has advised the governments of Peru, Bolivia, Poland and Russia among others, has re-tooled himself as a development expert espousing the need for a major increase in government aid to impoverished nations. Sachs hopes to use this money for cost-effective aid such as malaria vaccines and education improvements. Bjorn Lomborg, a Danish political scientist famous for his contrarian criticism of environmental regulations, has organized an international forum for development experts called the Copenhagen Consensus. The project has brought together leading social scientists to identify which aid programs would have the most significant effect on human welfare.
The Bush administration essentially got it right when it launched the Millennium Challenge Account in 2002. The account aims to link aid with good governance, making foreign assistance a much more stable commodity and will finally sever the connection among the vicissitudes of politics, media attention and aid. But in the absence of serious money, like the $13 billion Florida received after a series of hurricanes hit the state last summer, these efforts are essentially for show. The status quo of sprinkling handfuls of money in far flung nations is simply unacceptable. If these new development mechanisms are successfully implemented, it would finally be appropriate to increase governmental aid dramatically.
If these increases don’t sound especially appealing in a time of staggering government deficits, the United States, Japan and the European Union have one lever to pull that would actually improve their fiscal outlooks: Eliminate all agricultural subsidies. The wholesale destruction of price supports and import restrictions that distort the global agriculture market would have innumerable salubrious effects. Permitting farmers in poor countries to sell their produce and livestock at competitive prices would be an incredible spur to economic growth in the developing world while reducing the price of food in the industrialized nations and absurd government transfers to big agribusinesses. These reforms are a bargain well worth making and keeping with the developing world.
Peskowitz can be reached at zpeskowi@umich.edu