International development agencies have failed miserably in their campaign to rid the world of widespread poverty, even after distributing billions of dollars in aid over the past half-century or so. Laid out here by William Easterly, a World Bank economist, the facts are horrifying. In Pakistan, 1 in 10 children dies before age 1. In Burundi, Madagascar and Uganda, nearly half the children under the age of 3 are abnormally short because of malnutrition. Three million die annually from bacterial pneumonia, which can be treated with 25 cents' worth of antibiotics.
Easterly's book is a devastating analysis of how his employer and other agencies failed to turn poor countries into rich ones. Providing loans and grants for infrastructure development, he says, is an "investment fetish" that "should be laid to rest." Debt forgiveness to irresponsible governments, he finds, also fails to boost economic growth. Even education has done little to spur growth; he finds an epidemic of underfunded schools and economies with few opportunities for their better-educated workers.
Easterly is illuminating on what went wrong but is sketchier on alternatives. He sees opportunities to tweak old methods. For instance, he talks repeatedly about the need to match aid to incentives. Donors ought to cut off aid to countries where corruption is rampant – not the way the World Bank typically operates. Technology can accelerate growth, but only if political and economic conditions are right.
"Trekking through the tropics trying to make poor nations rich," Easterly says, "has raised more questions than it answers." While that's true, Easterly has made an important step here in asking the hard questions. He rightly sees a need to shake up the creaky international development bureaucracy, and he's aiming to do it from within. Let's hope someone's listening.
