Last Updated on May 5, 2015, by eNotes Editorial. Word Count: 1845
William Easterly spent many years working for the World Bank, and his personal experiences and observations enliven and enlighten the text of The White Man’s Burden at many points. He spent considerable time in Africa; his experiences there provide abundant evidence to support his position.
A startling diagram shows that, beginning in 1970, foreign aid to African countries escalated from about 5 percent of gross domestic product (GDP) to more than 15 percent in the mid-1990’s. Growth of per capita real income, which was averaging about 2 percent in the 1970’s, tumbled into negative figures by the mid-1980’s. The World Bank presented 2004 per capita income data for forty-two African countries. Of these, fifteen had annual per capita incomes under one thousand dollars, and these included the ten countries with the lowest incomes worldwide. Twelve African countries were among those countries receiving the most “structural adjustment” loans from international agencies from 1980 to 1999. Seven experienced declining per capita incomes, and only two recorded significant income growth. Easterly’s treatment invites comparison with Robert Calderisi’s The Trouble with Africa (2006), which is somewhat less pessimistic about reforming the aid programs.
Easterly cites several reasons why these types of foreign aid have been ineffective, either for stimulating growth or relieving poverty. Most of the impetus for aid comes from high-income countries, and the donors have had a preference for grandiose plans. The programs must work through host-country governments, many of which are incompetent at best and often brutal and corrupt: “So we had the world’s twenty-five most undemocratic government rulers . . . get a sum of $9 billion in foreign aid in 2002. Similarly, the world’s twenty-five most corrupt countries got $9.4 billion of foreign aid in 2002.” Aid has focused on construction projects such as highways but has included no support for maintenance and repairs to keep them in good shape.
Poor economic theory has been a major contributor to aid failure. For many years, aid programs accepted such false notions as belief that the poorest countries are stuck in a poverty trap from which they cannot emerge without an aid-financed “big push.” Materialist theories of economic growth assumed that a large quantity of capital expenditure would readily translate into output growth.
Easterly contrasts “planners” and “searchers.” Planners are remote from the people they are ostensibly trying to help and often lack accountability. They get paid whether or not their programs really work. Prototype searchers are free-market entrepreneurs who know they must match their offerings with the desires of their customers and make effective use of available resources. Searchers benefit personally when their activities are successful. Planners generate voluminous documents and meetings; their plans abound in grandiose and diverse objectives. Searchers focus on very limited objectives, such as promoting treatments for intestinal worms, training teenage paramedics, promoting microcredit, encouraging use of mosquito nets, paying parents to keep their children in school, introducing stoves that reduce indoor smoke, and persuading people to wash their hands with antibacterial soap.
Easterly is obviously a fan of private enterprise and free markets, but he insists that “you can’t plan a market.” This lesson was learned the hard way in the decommunization of Russia and the other former communist areas. Planners, backed by abundant loans, tried to navigate their clients through such pro-free-market reforms as privatization of former state enterprises, developing stock markets and other financial facilities, and attending to property rights and the legal system. Former Communist officials, however, were often in positions to hijack these measures in ways that lined their pockets but impoverished the economyand, in the process, discredited free markets.
Planners attached to international lending agencies generated extensive revision in legal codes in Eastern Europe with little feedback from the locals. Actual practice was either disrupted or managed to ignore the changes. Easterly concludes that “the West cannot design a comprehensive reform for a poor country that creates benevolent laws and good institutions to make markets work.” It took many centuries for the West to develop the institutions that now enable market economy to work so well.
A major reason for the poverty of poor countries is that they have bad governments. To some planners, this can be addressed by forceinvade Iraq and Afghanistan (or Vietnam) and impose democracy on them. As the U.S. presence in Iraq has demonstrated, this is often nearly impossible. Democracy is especially difficult where there are ethnic and religious divisionsKurds in Turkey and Iraq, Sunnis and Shiites in Iraq. Rich natural resources, such as oil, are very prejudicial to democracy. Oil revenues can easily be captured by a small elite, as in Saudi Arabia or Nigeria. Effective democracy is one way of achieving feedback and accountability. Public officials can be rewarded for meeting the needs of their clients and can be voted out if they fail to do so.
Periodically, Easterly takes aim at the sheer proliferation of bureaucratic agencies and their paper blizzards: “If IBRD, IMF, UNDP, FAO, WTO, EU, WHO, AfDB, DFID, and USAID approve the PRSP and release new funds to the national government, then the government will allocate the money in accordance with the MTEF, PER, CDF, PRGF, PRSC, and PRSP.” Aid programs can easily overwhelm the few competent people in the recipient governments.
Easterly scores the United Nations especially high in vapid incompetence and uses it to illustrate many of the bases of failure: multiple participating members, lack of competent professional staff, and proliferation of vague and nonoperational objectives.
The International Monetary Fund (IMF), in contrast, generates a lot of very good economic analysis. Nonetheless, it warrants a chapter for its encouragement of financial irresponsibility among low-income countries. Easterly might have done more to point out that the IMF has no business claiming to operate in the development field, in which it has no expertise and which is no part of its mandate. Its main focus remains on providing loans to countries experiencing international deficits. Even here, its operations often provoke “moral hazard”: Because bail-outs are available, countries have less reason to follow well-known principles of fiscal restraint. (An example is Argentina after 1999.) At the same time, the IMF has, at times, imposed painful regimes of financial restraint on governments that subsequently disintegrated, including such poignant examples as Somalia and Sudan. IMF loans often contributed to the debt overload which, in turn, provoked the much-publicized program to cancel debts of low-income countries.
Aid programs have been able to produce measurable health improvements, such as a major decline in infant mortality in sub-Saharan Africa from 1960 to 1990. This and other gains, however, have been undermined by the acquired immunodeficiency syndrome (AIDS) epidemic. Here the Western response has been both slow and misdirected. Easterly may pile too much blame on the aid agencies, however. A major problem was the reluctance of affected countries to acknowledge the AIDS problem (such as China and South Africa). Aid agencies can be faulted, however, for putting so much emphasis on antiretroviral therapy, which is relatively expensive and is quite difficult to administer effectively on African conditions. Far more benefit could be achieved by focusing on preventive actions or on treatment for the opportunistic infections that kill many AIDS victims. Much of the blame for misdirected policy can be directed toward western publicity hype and religious objections to dealing realistically with African sexual mores.
Easterly’s book has another powerful but delayed theme: the disastrous results to be expected from use of massive U.S. military force to “persuade” ill-behaved parts of the world (Vietnam, Iraq, Afghanistan) to shape up. Easterly presents a sweeping review of pre-1940’s Western imperialism, which, in turn, provides a powerful diagnosis for the development problems plaguing so many areas.
Western colonization often created arbitrary national boundaries, enclosing ethnic divisions and hostilities. Colonial administrations did not develop liberal democratic institutions in anticipation of independencethe British did not even do this in Hong Kong in the 1990’s.
A startling historical section helps to illuminate the ethnic divisions that have plagued many low-income countries, notably those in Latin America and the Caribbean region. European-descended elites (from Mexico or Brazil) or light-skinned elites (from Haiti) have dominated the indigenous or dark-skinned poor, provoking violent responses when orderly democratic processes were stalled.
Easterly’s book is a rare combination of expositional modes. On one hand, it is a thoroughly scholarly work, with many references to academic literature and to sophisticated econometric studies. It is also a piece of good polemical journalism in the muck-raking tradition.
The book was widely and enthusiastically reviewed. Nobel Prize-winner Amartya Sen objected to its flippant tone and almost unrelenting fault-finding. Sen complained about the lack of detailed recommendations for improvement. Vance Serchuk pointed out that U.S. military aid and security guarantees contributed to the success of Taiwan, Turkey, South Korea, and Japan.
Because the book can make for depressing reading, one may observe that the news on the development front is not all bad. The World Bank’s World Development Indicators for 2005 lists 1990-2000 growth rates for gross domestic product for 145 countries. Of these, only 21 had negative growth over that decade, 4 of them being African and the other 17 successors to the former Soviet Empire. Even the laggard 21 did well in 2000-2004. The report notes that:The number of people living in extreme poverty on less than $1 a day has fallen by about 400 million in the last 25 years. Many more children, particularly girls, are completing primary school. Illiteracy rates have fallen by half in 30 years. And life expectancy is nearly 15 years longer, on average, than it was 40 years ago.
Admittedly, much of this improvement has occurred in China and India. Easterly downplays the contribution of foreign aid to these countries, but World Bank loans were more valuable than he implies. His main point, however, is that rapid growth here, as in other rapidly growing economies, has been home-grown.
Easterly’s book comes at a time when the roadmap of foreign aid is, in fact, changing for the better. In 2006, Bill Gates and Warren Buffet created a fifty-billion-dollar philanthropic enterprise directed chiefly toward low-income countries. Gates’s decision to assume hands-on management should bring more concern for feedback and accountability. Gates is also in a position to bully or cajole the host governments and diminish their negative influence. To an increasing degree, private organizations, many of them church-related, are carrying the antipoverty fight to the grass roots. Their efforts are being supplemented by business firms, noteworthy in such domains as cell phones and Internet connections. A proposal for combining the efforts of government aid agencies, nonprofit organizations, and business firms is advanced by George Lodge and Craig Wilson in A Corporate Solution to Global Poverty (2006).
Easterly does not dramatize, but his case studies illustrate other ways the West can aid the rest: Immigrants can be welcomed, who can then gain wealth, education, and skills to help those back home. Western nations, working through the World Trade Organization, can reduce import restrictions and buy more goods from the rest. Easterly adds to criticism directed against the imperialistic configuration of American foreign policy. One may expect that feedback and accountability will operate in this domain as well.
Last Updated on May 5, 2015, by eNotes Editorial. Word Count: 58
Booklist 102, no. 11 (February 1, 2006): 11.
Business Week, April 3, 2006, p. 132.
The Economist 378 (April 1, 2006): 68-69.
Foreign Affairs 85, no. 2 (March/April, 2006), 171-177.
Kirkus Reviews 74, no. 2 (January 15, 2006): 69-70.
Los Angeles Times, March 26, 2006, p. R5.
The New York Times Book Review 155 (March 19, 2006): 12.
Publishers Weekly 253, no. 3 (January 16, 2006): 52.
The Washington Post Book World, May 21, 2006. p. T06.
The Washington Times, June 18, 2006, p. B08.
Weekly Standard 11, no. 36 (June 5, 2006): 35-37.
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