Well, on balance the sad news is that [foreign aid] hasn’t worked. It hasn’t achieved the objectives that we had for the foreign aid program. The number one objective, of course, was to promote economic growth out of poverty for the aid receiving countries, and there we see a clear failure. The most aid-intensive countries have actually stagnated over the last fifty years. They’ve failed to see a rise in their living standards. That includes especially sub-Saharan Africa, some of the poorer Caribbean and Pacific Islands.
It’s been wasted both in actual corruption of aid money being stolen, because a lot of aid does go to very corrupt governments, and it’s also just been wasted bureaucratically by the ineffectual bureaucracies and the aid organizations themselves and in the ineffectual bureaucracies of the governments that receive the aid money.
Most of the success stories did not get a lot of aid, and most of the countries that did get a lot of aid are not success stories. We always have something in statistics we call confirmation bias, that if you strongly believe a given idea like aid works then you select a couple examples that fit the story. But when we look at the whole range of experience of success and failure, I’m afraid there is no reason to believe that aid has contributed to success.
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Religion and Ethics Newsweekly–An Extended Interview with William Easterly on Foreign Aid
Well, on balance the sad news is that [foreign aid] hasn’t worked. It hasn’t achieved the objectives that we had for the foreign aid program. The number one objective, of course, was to promote economic growth out of poverty for the aid receiving countries, and there we see a clear failure. The most aid-intensive countries have actually stagnated over the last fifty years. They’ve failed to see a rise in their living standards. That includes especially sub-Saharan Africa, some of the poorer Caribbean and Pacific Islands.
It’s been wasted both in actual corruption of aid money being stolen, because a lot of aid does go to very corrupt governments, and it’s also just been wasted bureaucratically by the ineffectual bureaucracies and the aid organizations themselves and in the ineffectual bureaucracies of the governments that receive the aid money.
Most of the success stories did not get a lot of aid, and most of the countries that did get a lot of aid are not success stories. We always have something in statistics we call confirmation bias, that if you strongly believe a given idea like aid works then you select a couple examples that fit the story. But when we look at the whole range of experience of success and failure, I’m afraid there is no reason to believe that aid has contributed to success.
Read it all.