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I had a particularly privileged friend during high school—let’s call him Joe. On Joe’s sixteenth birthday, his father bought him a brand new Audi, a truly sweet piece of machinery. After several months of joyrides and speeding tickets, the engine block locked up, and the Audi was finished. Joe had never changed (or even checked) the oil. His father was furious and refused to foot the steep bill of repair.
What did Joe do? He got motivated. He mowed lawns and cleaned gutters every weekend until he could afford a twelve-year-old jalopy. And he cared for that clunker with the proud dedication of a doting mechanic. Was Joe’s sudden maturity unusual, or was it a natural result of his newfound self-reliance?
The bigger questions for our purposes are:
1. Does the weight of liability change human behavior?
and
2. If so, how should this inform the first world’s approach to extreme poverty in the third world?
In the realm of sustainable development and foreign aid (that is, not emergency-relief aid), there are no easy answers. The ongoing debate comprises a plethora of polemics, but I discern three main viewpoints among them:
1. Big money, top-down “planners”
The proposition: Extreme poverty is a big, multi-level problem that requires big, multi-level solutions. We need large-scale plans—ambitious, multi-billion dollar initiatives by resource-rich outfits such as UNICEF and USAID.
Top-down planners advocate a comprehensive strategy due to the interdependency of factors inherent to poverty. That is, economic invulnerability depends on diversity of employment options, which depends on access to quality education, which depends on reliable infrastructure and students’ health, so we must build roads and hospitals and distribute mosquito nets. . . and on and on. Everything relies on everything else.
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The opposition: Ineffective penetration, lack of accountability. Big aid money goes to governments rather than the people, as money gets siphoned off at all levels. This approach enables corruption and encourages irresponsible governance.
Grandiose schemes are poorly implemented due to insufficient understanding of ground conditions. In short, there is too much distance between planners and intended beneficiaries.
Also, such aid smacks of neo-colonialism. Gift money brands recipients as junior partners in the exchange, and thus paternalistically prohibits self-reliance by perpetuating need.
The tone here is negative: “We pity you, so here’s some help. But we won’t invest and trade with you on equal terms, because you’re beneath us.”
2. Small money, bottom-up “searchers”
The proposition: Lasting gains are intrinsically incremental. Establishing improvements that actually benefit the poor requires ground knowledge. Aid workers must go to the bottom rung, learn the environment, and search for ways to improve conditions within quantifiable parameters.
Unlike top-down aid, bottom-up aid focuses on building capacity within target communities to become active participants in the determination and execution of development projects. This approach aims to level the exchange, so beneficiaries are gradually empowered to take up their own cause. Weaning is essential, hence these NGOs have an exit strategy.
The opposition: The process is slow, but hunger and disease don’t wait. And as with top-down aid, the onus of responsibility is lifted from local government. Government officials can sequester resources while remaining nominally responsible for the progress made by NGOs within their jurisdictions.
Though subtler, bottom-up aid is still paternalistic. It feigns home-grown development, but foreign influence is undeniable, especially in cases where community “input” amounts to locals saying yes to whatever is proposed by those holding the checkbook.
3. The “bootstraps” faction
The proposition: Foreign development aid is a self-perpetuating, growing institution and has actually harmed the third world. Aid fosters dependency, encourages corruption, and in turn exacerbates poverty. Top-down aid fails to create jobs or other lasting improvements, and likewise most bottom-up aid functions on the condescending presumption that target communities cannot participate unassisted in the open market.
This position calls for a sea change in the mindset of aid recipients, who have been conditioned to believe that foreign aid is the solution to their plight. They have been systematically incentivized against their own initiative.
Big money, top-down aid is more culpable for increased disenfranchisement in the developing world than the bottom-up variety, because its magnitude of misguided funds has more solidly entrenched corrupt leaders.
Bottom-up aid in which “searchers” prepare locals for full participation in the free market is non-ideal, but not necessarily harmful. The answer lies in pro-market measures: microfinance, foreign direct investment, trade, floating bonds—systems that encourage innovation and foster self-reliance.
The opposition: There is no definitive, causal link between foreign aid and extant poverty. The two are correlated, but there are too many excluded variables—access to water and other resources, quality of soil, geopolitical history, and so forth—to place the blame squarely on aid. Removal (even a phase-out) of aid in highly dependent areas could be disastrous.
A largely libertarian approach may have worked for North America and western Europe, but these same countries arguably caused many of the developing world’s problems through imperialism. And owing to this differing root of poverty, it may be beyond the capacity of today’s third world to elevate itself out of the poverty trap.
So, what’s the solution?
I don’t know. Like most development workers, I am ambivalent about what exactly the developed world should be doing. My views both align with and diverge from certain arguments proffered by each stance. Every approach seems to have some merit, yet they contradict one another.
My intent is to raise the right questions, not offer answers. That’s where you come in. Share your opinions and experiences in the comments section!
Community Connection:
What about aid on a personal level? Check out 10 Ways You Can Help Street Children Without Giving Money.
Eric Lewis
Eric Boehling lives in Siem Reap, Cambodia and volunteers at PEPY, an education-focused NGO. When not writing in third person, he enjoys the three 'R's: reading, rock climbing, and researching issues in development.
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This is an excellent article that raises some important questions in a literate and non-judgmental manner. I chuckled to scroll down to the bottom and see that you’re with PEPY, Eric. Daniela and the team has done a great job learning how to navigate the challenges of running an NGO in Cambodia, and I look forward to a night out with y’all in Siem Reap later this month.
Cambodia is a great place to study development issues – one major problem is the lack of accountability on the part of the government because of the ubiquity of aid organizations. If the government perpetrates a land grab, and moves the displaced people to a barren patch of land, they know that NGOs will descend to drill wells, build schools and take care of the basic needs of the affected population. No wonder land grabbing is such a pervasive issue in Cambodia, and no wonder the Cambodian People’s Part seems oblivious to the problem.
“Dead Aid” is a terrible, terrible book. The claims are unsubstantiated, the information not referenced, and even those who agree with some of the basic premises of the book find it hard to defend some of her wackiest claims (like suggesting that poor countries should reject aid and go borrow money on the world capital markets? WTH?
I wrote this review of the book – perhaps you may find it interesting to read a different take: http://travellerwithin.blogspot.com/2009/05/dead-aid-deadly-arguments.html
If a real debate about aid is what you’re after, then I suggest you pick up Jeffrey Sachs’ The End of Poverty, and Bill Easterly’s White Man’s Burden – diametrically opposed arguments by a pair of brilliant development economists (Dambisa Moyo is not a development economist, she’s an investment banker for heaven’s sake).
Now to the topic of the article. Eric, you’re implying an answer in your very title. Is aid perfect? Surely not. However, we must think how many people would be much worse off without international food and financial aid.
We first need to split aid into various categories:
a) emergency humanitarian interventions. There is generally little disagreement that sending food, blankets, and what have you to crisis situations – an earthquake, a civil war, etc. I believe that’s not what we’re concerned about.
b) Budget support. This is long term assistance going directly to the central budget of governments. It is often discretionary spending and primarily helps pay government salaries. There is indeed a possible question of dependency here.
c) Development aid. Geared towards the establishment of development projects – a very large category – this type of aid often comes with many strings attached, from national purchases (meaning, if USAID gives money to renew a hospital, the machines need to be bought from the US) to the donor selecting what they want to fund regardless of the preferences of the host country (ex: Spain for some reason loves to finance agricultural projects in Palestine, even though the Palestinian government has different spending priorities).
So, is aid imperfect? Totally. But we need to realise that if it weren’t for it, many people would go hungry tonight, government employees would be unpaid (ex: in 2006/2007, Palestinian employees went 7 months without a salary because aid was suspended for political reasons), and someone would not be able to get their dialysis, jeopardising their life.
As for microfinance – yes, a brilliant idea. I celebrated the day Muhammad Yunus won a peace prize. But we need to have realistic expectations. Microfinance cannot pay for a million employees’ salaries, can it? Plus microfinance will only grow this much – after that, a growing micro-enterprise will necessarily rely on commercial banking anyway…
The discussion is far from being over. However, claiming that aid is harmful with nothing but anecdotal evidence is counterproductive.
Perhaps your title implies more judgment than you had intended, Eric, but I think breaking down some of the arguments around aid for those new to the topic is useful. Putting aid ideas into three buckets can help people get a taste for the many ideas out there, so thanks for breaking it down for us! To get an even further understanding, I’m sure you would agree that we can learn more about each of these buckets of development theory by reading Jeffrey Sachs’ “The End of Poverty”, Bill Easterly’s “White Man’s Burden”, and Dambisa Moyo’s “Dead Aid”. Then to get more ideas, we can throw in less polarized views like Paul Collier’s “The Bottom Billion”. There is so much to read on these topics, though of course working in development helps us realize that no one of these people are 100% correct.
Each unique situation requires unique solutions, and understanding a variety of view points will help us all be better prepared to adjust to the challenges we continue to face. No one solution is going to help bring about any of the changes we want to see in the world, and each genre of aid, like micro-finance solutions can have positive or negative impacts depending on how/when/why/where they are implemented.
It’s complicated, at best, but I do very much agree with the comment above stating that education is the key to change. OUR education is part of that key, knowing what questions to ask, and where to give our money and time to best support the work we believe in is a great place to start. Thanks for encouraging us to learn more, Eric!
Believe it or not this is another Eric Boehling (I thought I was the only one) and I served in the Peace Corps from 1997-1999 working with an NGO that was working with/for other NGO’s. To the groups I was involved with, it certainly became more about receiving a handout than creating anything sustainable. I became very disillusioned at that time, but after reviewing our own failure with the war on poverty from the 60′s, I concluded a distant government is not the solution. Your story of “Joe” and his Audi is a great analogy. Now how do we motivate the locals and find the lawns that need mowing and the gutters that need cleaning. Thanks for the post..
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