Western aid to the Third World does not alleviate poverty

The humanitarian case for aid has been based on an analogy with the Western welfare state. The idea was that many people favour welfare to transfer wealth from the relatively rich to the relatively poor within a country, so they will favour welfare to transfer wealth from relatively rich countries to relatively poor ones.

But many commentators not necessarily hostile to foreign aid, I.M.D. Little and J.M. Clifford for example, disagreed. They emphasised that the humanitarian motive for giving aid may have justified transferring Western taxpayers' money to poor people, but not to poor governments: the latter may have no effects on the former.

With the likes of Ferdinand Marcos of the Philippines, Jean-Bedel Bokassa of the Central African Republic, Sani Abacha of Nigeria, Joseph Mobutu of the Congo, Robert Mugabe of Zimbabwe and a host of other kleptocratic tropical gangsters in power, aid money has simply been stolen. Many African rulers rely on aid to feed their people while they destroy their livelihoods through a neglect of, and even by destroying, infrastructure.

According to New York University professor of economics William Easterly, despite more than $2billion in foreign aid being given to Tanzania for roads, the roads did not improve. What increased was the bureaucracy, with the government producing 2400 reports for the 1000 donor missions that visited each year....

But statistical studies of the effects of foreign aid on growth and poverty alleviation have not been favourable. A recent study found that foreign aid "appears to redistribute from the reasonably well-off in the West to most income groups in the Third World except the very poorest". This is consistent with the evidence from both poor and rich countries that the middle classes tend to capture government transfers. Another study found that, after correcting for the link between aid and income levels and growth, the effect of aid on growth is often negative. A survey of other such studies concludes that "there is now widespread scepticism that concessional assistance does have positive effects on growth, poverty reduction or environmental quality". In badly run developing countries, governments channel aid to small elites. Poor people in villages and shanty towns never see any aid. Infant and child death rates remain high and women still die in unattended childbirth in countries on which aid is focused.

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