Tuesday, October 15, 2013

Foreign Aid does not work

Free-market economists have known this for decades.  The problem is, of course, that the governments of most developing countries are horribly corrupt and provide little or no private property protections or rule of law enforcement.  So the aid comes in and is mostly absorbed by the corrupt governing regimes and their cronies, with very little making its way down to those truly in need.  I bring this topic up because I just read a good book review on a new release by a major developmental economist at Princeton University who concludes that aid has been a disaster for developing countries worldwide.  Here's  the opening to the review:
IN his new book, Angus Deaton, an expert’s expert on global poverty and foreign aid, puts his considerable reputation on the line and declares that foreign aid does more harm than good. It corrupts governments and rarely reaches the poor, he argues, and it is high time for the paternalistic West to step away and allow the developing world to solve its own problems.
 Like all good book reviews, the reader learns about both the topic of the book and about the quality of the book itself.  I recommend the book review for sure, and the book itself sounds very interesting also. [ht: carpediem]