Does Aid Work?

Nicholas Kristof says it does:

Smallpox was a great success but not a fluke. Among other historical foreign aid successes are immunizations, oral rehydration therapy and the green revolution.

More broadly, when we pay a few hundred dollars for fistula surgery so that a teenage girl no longer will leak urine or feces for the rest of her life, that operation may not stimulate economic growth. But no one who sees such a girl’s happiness after surgery can doubt that such aid is effective, for it truly saves a human being.

The "more broadly" here really needs to be emphasized. Economic growth is a crucial thing, especially for desperately poor countries, but it is what it is and there are other things on the table as well. To get growth, you need good policies. India, having adopted better policies, has enjoyed a good deal of economic growth over the past 10-15 in a way that no aid program could possibly deliver. On the other hand, India is still a desperately poor country and it's the kind of place where a lot of kids die of measles for lack of vaccines. Over time, if India keeps growing economically, one imagines the government will get a universal vaccination program (or something close to it) up and running, but the rich world could easily afford to step in here and help out.

The growth impact of something like that is going to get swamped by the much larger issues in play and ultimately India's success is going to be determined by Indian policymakers (and whether or not the country gets into a nuclear war with Pakistan) rather than foreign aid officials, but that doesn't mean that a well-designed program to save some lives can't, in fact, save lives.

Comments

And if the US pays for that surgery, it's unlikely that she's going to encourage her kids to be hostile to the US.

Posted by Ted | August 9, 2007 11:00 AM

It's tricky though. You write, "India's success is going to be determined by Indian policymakers". Often times, the availability of foreign assistance is contingent on the enactment of policies that benefit the donor nation. Look at Latin America and market liberalization during the 1980s. As many disgruntled Bolivians may say, foreign aid can be an obstacle to autonomous solutions to development problems.

Posted by Drew | August 9, 2007 11:05 AM

Over time, if India keeps growing economically, one imagines the government will get a universal vaccination program (or something close to it) up and running, but the rich world could easily afford to step in here and help out.

This is true, but here's something to think about: What if the rich world steps in and helps out in a meaningful way, and this reduces pressure on the Indian government to develop its own public health system?

Isn't it possible that aid could act like a crutch for a country like India, and prevent it from learning to take care of its own people?

Posted by Mr. Noah | August 9, 2007 11:19 AM

Ted hits the real nail on the head here. The reason Hezbullah is so popular in Lebanon and Hamas is in charge in Palestine is because they provide tangible and very visible services and benefits to people on the ground. Not packages that help in a macro sense, but that are larggely handled and seen by the elite, but real, genuine services to the masses. This generates tremendous loyalty. The US just doesn't do this very well.

Posted by Doug-E-Fresh | August 9, 2007 12:03 PM

India and the World at Large really need India to reduce her population by half or two-thirds over the next two to three generations. That would be an enormous aid to the growth of per capita income and wealth in India.

But, such a reduction in populution has never been attempted, let alone accomplished. We are not even supposed to comment on its desirability, let alone its possible necessity in the face of increasing evidence of global warming and the increasing risk of ecological collapse.

Posted by Bruce Wilder | August 9, 2007 12:42 PM

To get growth, you need good policies. India, having adopted better policies, has enjoyed a good deal of economic growth over the past 10-15 in a way that no aid program could possibly deliver.

But economic policy is something that is not memory independent. People like to rag on Nehru's economic policies, but would India have done well to adopted its current economic policies from the get-go? Probably not ... you often need some sort of protectionist/statist/quasi-socialist economy to build up a system where a (quasi-) free market actually makes sense.

Of course, the problem with economic advice is that too many people have every incentive to forget the economic history of even how their own country became successful and only think of the policies that help build upon that success (or even help ossify the status quo of whose successful) and recommend those in cases where they are inappropriate.

Posted by DAS | August 9, 2007 12:50 PM

Bruce: you've got a lot of work to do convincing people that an India with half the number of people is going to be better off. Especially if (I assume) it's to be achieved through a sudden catastrophic drop in birthrate. Bang goes your workforce.

Posted by ajay | August 9, 2007 1:34 PM

In this debate, it seems appropriate to mention Amartya Sen's compelling views of development - that both the ends and the principal means of economic development is to increase people's capacity to make real choices, to be the protagonists of their lives (from his book Development as Freedom). In that view, there actually is incredible economic value that will result from the girl's operation, which an overly narrow cost-benefit look at that one case would miss. From that perspective, aid may not only work, but also be a bargain, really.

Posted by Pete | August 9, 2007 1:43 PM

Haven't we abandoned the green revolution?

I thought that our current solution to the problem of world hunger was the pursuit of open markets.

Posted by FS | August 9, 2007 5:55 PM

Matt, you nailed this one. Perfect.

Posted by David J. Balan | August 9, 2007 8:43 PM

Foreign aid is why there is so much violence and terrorism coming from the third world. A hundred years ago, the Middle East was sparsely populated, and it was pretty quiet. Now, thanks to first world gifts of vaccines, high-yielding crops, sanitation, etc., there are enough backward people alive to lash out in anger against the Mommy and Daddy countries.

Posted by LaKeesha | August 10, 2007 1:46 AM