Book Report: The White Man's Burden

I finished another of the popular books on international development: The White Man's Burden by William Easterly. The main point of the book is how infrequently the money we spend actually delivers results. Therefore, instead of thinking that we can / need to save the developing world, we need to do what we can to help them help themselves. Before I started reading the book, I expected that I would appreciate its position but still disagree with it. Instead, I strongly agree with his call for humility in our aid efforts.

The more one learns about development assistance, the more obvious the extreme waste becomes. Part of that waste stems from aid that is most often delivered through corrupt governments. But aid is also wasted on programs that are not evaluated and not designed with feedback from, or deep knowledge of, the people we are helping. It is when Easterly highlights these flaws that he is most convincing.

He does not have grand solutions, but what he does propose could work. Particularly, he suggests allowing the IMF and World Bank to support private institutions, particularly in countries with terrible governments. He also recommends supporting smaller proven efforts by local actors. Finally, he proposes fewer conferences and frameworks but more serious evaluations.

Where Easterly is less convincing is when he uses the argument that because a certain policy has not worked it is clear it never will work. This logical statement does not account for the fact that those policies in the past may have been implemented poorly.

A perfect example of this is military intervention. The West has a terrible history of using military intervention. Past US military interventions include supporting authoritarian governments according our own interests (particularly during the Cold War) or ineffective interventions in the face of major crises (post-Cold War). However, I would strongly argue that if done correctly and for the right reasons, military interventions could be very successful. Instability is a major obstacle to development and often creates environments of continued instability (this was a conclusion of Collier's book and Nicholas Kristof argues this point in his review of Easterly's book in the New York Review of Books). Without successful interventions, countries in conflict may end up stuck in conflict with dire consequences for civilians caught in the middle.

Before I conclude, I need to mention that Easterly is not opposed to humanitarian aid such as medical and food aid (although he argues that these programs should also be strictly evaluated and conducted with real feedback). Instead it is the development aid he thinks needs to be reconsidered.

Overall the book is well written (although I did skim through many of his anecdotes and historical examples) and convincing. Unfortunately, I think his views do not play as well politically, since he is essentially calling for more modest goals and local control over Western money. With books like Dead Aid now coming out though, maybe his views will gain traction.

Is China Really the Bad Guy?

This article in the NY Times about China cutting back on deals with developing countries in Africa sparked a question. The point of the article seems to be that countries with poor human rights records found they could ignore Western demands by working with China - trading their natural resources for development assistance. With commodity prices falling and economies crashing, these countries are no longer getting aid from China.

What is interesting is how the article draws a distinction between China's decision to work with countries with poor human rights records without conditions while the US sets conditions. Before we feel good about ourselves, I ask this question: Is there any difference between aid that comes with conditions that are never enforced and therefore never met, or aid that comes without conditions?

I guess it is clear that William Easterly is influencing me. But can we really act righteous when all our loan conditions do nothing to change the countries with poor human rights records?

Democracy - It Ain't Easy

I remember some of the arguments I had with some more liberal friends (you know who you are) back during the early parts of the Iraq War. At the time, I was supporting the continuation of the Iraq War and they were opposing it. (I am not sure whether I supported the invasion - I think at times I did and other times did not. My knowledge of world issues was very limited then.)

I believed, influenced by Thomas Friedman, that we could easily create a democracy in Iraq. If I remember my friends' arguments, they believed that Iraqis were not ready for democracy and that it would not work if it was forced on them instead of them fighting for it themselves. (If I have misrepresented your arguments, please correct me.) I completely rejected that, believing everyone can become democratic.

Looking back, not just after six years in Iraq, but looking at other democracies around the world, I realize that I still believe everyone can have a democracy. What I realize though was that my expectations were extremely naive. Democracies cannot sprout overnight. Democracies need time to grow, to learn from mistakes, and to evolve. They also need stability and a strong middle class.

When we look around the world, we see democracies that have had far more time than Iraq to settle. In these countries, we still see significant growing pains. Pakistan continues to deal with threatened autocratic rule, disrespect for the rule of law and corruption. None of their leaders are free of one or all of these charges. We saw what can happen with contested elections in a relatively stable country like Kenya. South Africa right now seems to face a choice between an ineffective leader and AIDS denier (Thabo Mbeki) and a corrupt leader who is also facing serious rape charges (Jacob Zuma).

If you look at American history, you see similar growing pains. It took us two tries to chose the right form of government (see Articles of Confederation). We fought a bloody civil war. And we have had our own long fight with corruption, which is a fight we will never fully win, as Rod Blagojevich proves.

So I look back at my support then of the war, and I am embarrassed about my naivete. However, I can partly excuse myself since I was just starting to learn about the international world and form my own theories. What is scary is that we had a president who knew so little about the world that he believed creating a democracy was easy. Worse, he still believes it.

While I no longer think democracy is easy, this does not mean I will give up hope. It does mean that we need to change our expectations and our policies. We need to help foster the growth of democracies without the expectation that they will form overnight. This can mean helping increase stability and growth of a middle class. We also need to avoid grand plans like Iraq in the future. And in a place like Afghanistan, we need to be prepared for the long haul.

Bonus: Must be Nice

I appreciated the Opinion piece in today's NY Times, written by an executive at AIG. In it, the author announces his resignation and his disappointment with AIG CEO's refusal to defend those who received bonuses. The opinion piece was well written and made me think a little deeper about the issue. However, it did not change my mind. I still think the bonuses were outrageous.

Basically, the author of the Opinion piece says that his unit was not responsible for the meltdown at AIG, so therefore the public scorn should not be directed at him. This is true if the only reason people are upset about the bonuses is because they thought the bonuses were going only to people who caused the problem. But the bonuses were outrageous even knowing that they also went to people at the firm who were not involved in mortgage-backed securities.

The company was so close to bankruptcy, and close to bringing the whole economy down with it, that it required a government (taxpayer) bailout. Since the firm is in such a precarious situation, all planned expenses need to be reconsidered to determine whether they are integral to save the firm (or at least mitigate the damage it has caused). Bonuses cannot be considered a necessary expense in light of these circumstances.

Now, some people are arguing that the bonuses were necessary to retain the talent at the firm. This does not make sense; with the number of layoffs at financial firms there is a surplus of labor. This surplus gives the firms bargaining advantage and will drive wages down. So bonuses should not be necessary to keep employees, and if they choose to leave, the firm can find newly unemployed workers to fill those positions.

The government got involved because there were legitimate financial obligations that AIG was likely to have trouble meeting. Bonuses were not one of those obligations.

While I took the opinion piece at face value, there is an obvious contradiction in it. The author mentions that he accepted a $1 salary to stay at AIG in a sense of public duty. However, he still accepted, and felt he needed, a $700,000 bonus, and is now quitting over the outrage it drew. If he recognized the need to accept a $1 salary, then he should have also realized the need to refuse / renegotiate the bonus.

Not Sure What to Think

I cannot decide whether to be a little optimistic about the new Israeli government, or depressed and terrified. And my feelings change depending on the article I read. The fact that this is a right wing government (with Avigdor Lieberman as foreign minister) that does not believe in a two state solution depresses me - especially since I thought Obama's even hand might actually be able to guide the region forward.

But then it seems that the right wing government wants to govern from the middle and does not want to anger the Obama administration (and thereby recognizing that Obama will be more willing to actually criticize). And although they do not believe in a two state solution, they want to see economic growth in the Palestinian territories before talk of a two-state solution.

So I guess I am in the middle - neither optimistic nor depressed. I am glad there is talk of fostering economic growth in the territories. However, I am skeptical since I do not know what kind of growth can be expected given the large scale destruction in Gaza (maybe they only mean the West Bank). We'll just have to wait and see.