Why Foreign Aid Doesn’t Seem to Work
March 14th, 2010
The Underlying Tragedy: Interesting op-ed trying to explain why pouring money into third-world countries doesn’t seem to lift them out of poverty at all.
There are no policy levers that consistently correlate to increased growth. There is nearly zero correlation between how a developing economy does one decade and how it does the next. There is no consistently proven way to reduce corruption. Even improving governing institutions doesn’t seem to produce the expected results.
The truth behind it is not pleasant:
[…] Haiti, like most of the world’s poorest nations, suffers from a complex web of progress-resistant cultural influences. There is the influence of the voodoo religion, which spreads the message that life is capricious and planning futile. There are high levels of social mistrust. Responsibility is often not internalized. Child-rearing practices often involve neglect in the early years and harsh retribution when kids hit 9 or 10.
We’re all supposed to politely respect each other’s cultures. But some cultures are more progress-resistant than others, and a horrible tragedy was just exacerbated by one of them.
The blog Kenyan Entrepreneuer agrees:
[…] Africa’s poverty can be attributed to the fact that Africa does not have a culture of production. If something cannot be extracted from the ground (e.g. oil, gold, etc, etc) – we simply will not create or make it and this culture of non-production is the main cause of Africa’s poverty. That’s why foreign aid hasn’t worked. It’s because the do-gooder’s of the world have refused (out of fears of being labeled “racist” – have refused to confront this underlying question of culture).
We’re supposed to respect other cultures, but when can you just call a spade and spade and point out that some things aren’t working and need to change? Say what you want about imperialism and the evils of the white man, but the base productivity and tendency to innovation and progress of the United States is something to be envied.
We talked about this same thing a year ago: The State of Aid in Africa.