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T H E B L O G 06/24/2009 05:12 am ET | Updated May 25, 2011

Aid Ironies By Jeffrey Sachs

The debate about foreign aid has become farcical. The big opponents of aid today are

Dambisa Moyo, an African-born economist who reportedly received scholarships so that she

could go to Harvard and Oxford but sees nothing wrong with denying $10 in aid to an

African child for an anti-malaria bed net. Her colleague in opposing aid, Bill Easterly,

received large-scale government support from the National Science Foundation for his own

graduate training.

I certainly don’t begrudge any of them the help that they got. Far from it. I believe in this kind

of help. And I’d find Moyo’s views cruel and mistaken even she did not get the scholarships

that have been reported (Easterly mentioned his receipt of NSF support in the same book in

which he denounces aid). I begrudge them trying to pull up the ladder for those still left

behind. Before peddling their simplistic concoction of free markets and self-help, they and

we should think about the realities of life, in which all of us need help at some time or other

and in countless ways, and even more importantly we should think about the life-and-death

consequences for impoverished people who are denied that help.

Nine million children die each year of extreme poverty and disease conditions which are

almost all preventable or treatable or both. Impoverished countries, with impoverished

governments, can’t solve these problems on their own. Yet with help they can. The Global

Fund to Fight AIDS, TB, and Malaria, and the Global Alliance on Vaccines and Immunizations

are both saving lives by the millions, and at remarkably low cost. Goldman Sachs, Ms.

Moyo’s former employer, gives out more in annual bonuses to its workers than the entire rich

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world gives to the Global Fund each year to help save the lives of poor children. And when

Goldman Sachs got into financial trouble it got bailed-out by the US Government. Rich

people have an uncanny ability to oppose aid for everybody but themselves.

Recently Paul Kagame, President of Rwanda, wrote an op-ed for the Financial Times praising

Moyo’s fresh thinking. This is extraordinary. His government has depended on aid for more

than a decade. Nearly half the budget revenues currently come from aid. Rwanda currently

imports around $800 million of merchandise each year, but only earns $250 million or so in

exports. So how does it do it? Aid, of course, helped to pay for around $450 million of the

imports. Without foreign aid, Rwanda’s pathbreaking public health successes and strong

current economic growth would collapse. Kagame’s op-ed did not help FT readers to

understand this.

Americans are predisposed to like the anti-aid message. They believe that the poor have

only themselves (or perhaps their governments) to blame. They overestimate the actual aid

from the US by around thirty times, so they imagine that vast sums are flowing to Africa that

are then squandered. Many believe, typically in private, that by saving African children we

would be creating a population explosion, so better to let the kids die now rather than grow

up hungry. (I’m asked about this constantly, usually in whispers, after lectures). They don’t

understand the most basic point of worldwide experience: when children survive rather than

die in large numbers, households choose to have many fewer children, in fact more than

compensating for the decline in child mortality. Africa’s high child mortality is ironically a core

reason why Africa’s population is continuing to soar rather than stabilize as in other parts of

the world.

Of course, most Americans know little about the many crucially successful aid efforts,

because Moyo, Easterly, and others lump all kinds of programs - the good and the bad - into

one big undifferentiated mass, rather than helping people to understand what is working

and how it can be expanded, and what is not working, and should therefore be cut back.

Nor do Americans hear that many poor countries graduate from the need for aid over time,

precisely because aid programs help to spur economic growth and successfully prepare

countries to tackle future priorities. US aid to India for increased food production in the

1960s paved the way for India’s growth takeoff afterwards. There are countless other

examples in which countries have benefited from aid and then graduated, including Korea,

Malaysia, Taiwan, Israel, and others. Egypt is on that path today, and Rwanda, Tanzania,

Ghana, and others will be as well if both donors and recipients carry forward with a sensible

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Here are some of the most effective kinds of aid efforts: support for peasant farmers to help

them grow more food, childhood vaccines, malaria control with bed nets and medicines, de-

worming, mid-day school meals, training and salaries for community health workers, all-

weather roads, electricity supplies, safe drinking water, treadle pumps for small-scale

irrigation, directly observed therapy for tuberculosis, antiretroviral medicines for AIDS

sufferers, clean low-cost cook stoves to prevent respiratory disease of young children.

Shipment of food from the US is a kind of aid that should be cut back, with more attention on

growing local food in Africa.

Out of every $100 of US national income, our government currently provides the grand sum

of 5 cents in aid to all of Africa. Out of that same $100, we have found around $10 for the

stimulus package and bank bailouts and another $5 for the military. It is not wonderful that

what has caught the public’s eye are proposals to cut today’s 5 cents to 4 or 3 cents or

perhaps zero.

Follow Jeffrey Sachs on Twitter: www.twitter.com/JeffDSachs

Jeffrey Sachs  Director, Center for Sustainable Development and Sustainable Development Solutions Network

M O R E :

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