Reinventing Foreign Aid

Top experts in the field discuss how to improve the effectiveness of foreign aid, proposing practical solutions to specific problems rather than a utopian master plan. The urgency of reducing poverty in the developing world has been the subject of a public campaign by such unlikely policy experts as George Clooney, Alicia Keyes, Elton John, Angelina Jolie, and Bono. And yet accompanying the call for more foreign aid is an almost universal discontent with the effectiveness of the existing aid system. In Reinventing Foreign Aid, development expert William Easterly has gathered top scholars in the field to discuss how to improve foreign aid. These authors, Easterly points out, are not claiming that their ideas will (to invoke a current slogan) Make Poverty History. Rather, they take on specific problems and propose some hard-headed solutions. Easterly himself, in an expansive and impassioned introductory chapter, makes a case for the “searchers”—who explore solutions by trial and error and learn from feedback—over the “planners”—who throw an endless supply of resources at a big goal—as the most likely to reduce poverty. Other writers look at scientific evaluation of aid projects (including randomized trials) and describe projects found to be cost-effective, including vaccine delivery and HIV education; consider how to deal with the government of the recipient state (work through it or bypass a possibly dysfunctional government?); examine the roles of the International Monetary Fund (a de-facto aid provider) and the World Bank; and analyze some new and innovative proposals for distributing aid. Contributors Abhijit Banerjee, Nancy Birdsall, Craig Burnside, Esther Duflo, Domenico Fanizza, William Easterly, Ruimin He, Kurt Hoffman, Stephen Knack, Michael Kremer, Mari Kuraishi, Ruth Levine, Bertin Martens, John McMillan, Edward Miguel, Jonathan Morduch, Todd Moss, Gunilla Pettersson, Lant Pritchett, Steven Radelet, Aminur Rahman, Ritva Reinikka, Jakob Svensson, Nicolas van de Walle, James Vreeland, Dennis Whittle, Michael Woolcock

Foreign aid evokes much emotion. Proponents view it as a moral imperative and the instrument of the West for ending global poverty. The opponents see it as a waste of taxpayer funds. Still others see it as a potential tool to ensure security threatened by fragile or failing states. The World Bank, the single most important and influential source of foreign aid, has in the last 50 years made a nearly a trillion dollars in grants and soft loans to nearly every developing country. Has this aid made a difference? Moreover, is it still a relevant institution in the world of today, when many developing countries have successfully moved to the ranks of middle-income or even upper income countries? In Reforming Foreign Aid: Reinvent the World Bank, drawing on his own experiences over 40 years of work in international development, Inder Sud argues that aid has been successful in promoting development only in those few countries that have had the leadership committed to helping their people and who were able to utilize foreign aid to support their own, home-grown, national development agenda. Unfortunately, aid donors are driven increasingly by their own political compulsions, or pressures from their domestic constituencies, and end up pushing initiatives that detract from the country's priorities or are simply wasteful. Sud suggests that the World Bank, as the most significant and influential aid donor, can take a lead in setting a new path for delivering foreign aid effectively. First and foremost, Sud argues, that aid should only be channeled to countries that have the requisite national leadership with a track record of pursuing sound development policies and programs. The World Bank still has a role to play in supporting such countries provided it undertakes major reforms in its governance, modus operandus, instruments, and most importantly moving back to its roots of not being influenced by political imperatives of major donor countries, notably the United States.

What can be done about the poor state of global health? How are global health challenges intimately linked to the global political economy and to issues of social justice? What are our responsibilities and how can we improve global health? Global Health and Global Health Ethics addresses these questions from the perspective of a range of disciplines, including medicine, philosophy and the social sciences. Topics covered range from infectious diseases, climate change and the environment to trade, foreign aid, food security and biotechnology. Each chapter identifies the ways in which we exacerbate poor global health and discusses what we should do to remedy the factors identified. Together, they contribute to a deeper understanding of the challenges we face, and propose new national and global policies. Offering a wealth of empirical data and both practical and theoretical guidance, this is a key resource for bioethicists, public health practitioners and philosophers.

A response to the pressing need to address and clarify the substantial ambiguity within current literature, this edited volume aims to deepen readers’ understanding of the impact of foreign aid on development outcomes based on the latest findings in research over the past decade. Foreign aid has long been seen as one of two extremes: either beneficial or damaging, a blessing or a curse. Consequently, many readers perceive aid’s effectiveness based on the work of scholars who are assessing the impact of aid from one of two antithetical perspectives. This book takes a different approach, shedding light on recent research that can deepen our understanding of the complex relationship between aid and its aftereffects. Drawing from an extensive set of studies that have explored micro and macro impacts of foreign aid for recipient nations, chapter authors highlight more layered and nuanced findings, with a focus on donor characteristics, political motives, and an evaluation of aid projects and their effectiveness, including the differential impact based on type of aid. This volume is the first of its kind to unpack aid as a complex rather than a unitary concept and explore the wide areas of grey that have long enshrouded foreign aid.

This timely work presents cutting-edge analysis of the problems of U.S. foreign assistance programs - why these problems have not been solved in the past, and how they might be solved in the future. The book focuses primarily on U.S. foreign assistance and foreign policy as they apply to nation building, governance, and democratization. The expert contributors examine issues currently in play, and also trace the history and evolution of many of these problems over the years. They address policy concerns as well as management and organizational factors as they affect programs and policies. "Foreign Aid and Foreign Policy" includes several chapter-length case studies (on Iraq, Pakistan, Ghana, Haiti, and various countries in Eastern Europe and Africa), but the bulk of the book presents broad coverage of general topics such as foreign aid and security, NGOs and foreign aid, capacity building, and building democracy abroad. Each chapter offers recommendations on how to improve the U.S. system of aid in the context of foreign policy.

An encouraging account of the potential of foreign aid to reduce poverty and a challenge to all aid organizations to think harder about how they spend their money. With more than a billion people now living on less than a dollar a day, and with eight million dying each year because they are simply too poor to live, most would agree that the problem of global poverty is our greatest moral challenge. The large and pressing practical question is how best to address that challenge. Although millions of dollars flow to poor countries, the results are often disappointing. In Making Aid Work, Abhijit Banerjee—an "aid optimist"—argues that aid has much to contribute, but the lack of analysis about which programs really work causes considerable waste and inefficiency, which in turn fuels unwarranted pessimism about the role of aid in fostering economic development. Banerjee challenges aid donors to do better. Building on the model used to evaluate new drugs before they come on the market, he argues that donors should assess programs with field experiments using randomized trials. In fact, he writes, given the number of such experiments already undertaken, current levels of development assistance could focus entirely on programs with proven records of success in experimental conditions. Responding to his challenge, leaders in the field—including Nicholas Stern, Raymond Offenheiser, Alice Amsden, Ruth Levine, Angus Deaton, and others—question whether randomized trials are the most appropriate way to evaluate success for all programs. They raise broader questions as well, about the importance of aid for economic development and about the kinds of interventions (micro or macro, political or economic) that will lead to real improvements in the lives of poor people around the world. With one in every six people now living in extreme poverty, getting it right is crucial.