'Is Aid a Roadblock to Development?'

Chris Blattman (the original is much longer):

Is aid a roadblock to development? Some thoughts on Angus Deaton’s new book, by Chris Blattman: I was talking with a prominent development economist... He expressed surprise that Angus Deaton’s new book on development wasn’t getting more attention. Deaton is one of the three or four intellectual giants of the field...

You have to be careful what you wish for. The NY Times wrote a positive but skeptical review this weekend, and my Twitter feed has been full since then with some support but a great deal more skepticism for the book. ...

The bulk of Deaton’s book is an overview of half of humanity’s climb from abject poverty to health and wealth. ... It is a marvelous overview for the newcomer and the oldcomer. Where he’s enflamed passions, though, is his last chapter: “How to help those left behind”. It’s a tirade against aid, especially naive aid. Overall one message comes through: Aid is a roadblock to development.

I’m half with Deaton and half not. ... Aid isn’t a uniform mass. Deaton knows this, and my guess is he’s talking about a particular kind of aid. I don’t think he means emergency relief for disaster and conflicts. I don’t think he means the money behind peacekeeping forces and post-war assistance. He might exclude child sponsorship. I’m guessing he’s not talking about money spent on vaccine research in the West. He might even exclude support for elections and party-building and other democratization.

I think Deaton has his sights aimed at dollars sent by the West to local governments to supposedly reduce poverty, improve health, and ignite growth. This is a lot (if not the bulk) of money sent to poor countries, and so it’s a fair target.

This makes it easier to see what he means by aid not working. It probably hasn’t produced growth... And it might not be what’s responsible for falling poverty levels. Frankly we don’t know, but I think we can say that if aid did ignite this growth, it certainly has been coy about it.

But I wouldn’t diminish these other kinds of aid. ... Without a doubt, big chunks of the aid machine are broken. I’d prefer to fix them and not throw them away. In large part, this is what Deaton recommends. He also reminds us there are things that are harder to do than give money, like opening our borders, that could help more.

The polemic will sell more books and get people talking about the world’s problems. That’s exactly what polemic is supposed to do. But I would recommend paying the most attention to the concrete suggestions and solutions in the book. I think the promoters and detractors are all closer to sharing the same opinions than we think. ...