TCS Daily

Planners vs. Searchers

By Roger Bate - April 28, 2006 12:00 AM

The White Man's Burden is a rare book. Its author, William Easterly distills all of his considerable knowledge and experience about foreign aid into it, and never pulls punches in a subject noted for star-studded platitudes and uncritical thinking. Given how aid has failed so utterly in so many places to alleviate the suffering of the poorest people, The White Man's Burden could have been a depressing read. But Easterly's natural good humor and humility -- as well as his solid narrative abilities -- make it an inspirational work. Perhaps no one knows better than Easterly that you need a good sense of humor to work in foreign aid to begin with.

The 2005 love-fest with Africa -- G8 summit, Live8 concerts, Angelina, Bono and Brad highlighting the plight of the poor, etc. -- and the ideal of making poverty history has led to an increase in aid funding from private and, especially, state coffers. Easterly's conclusion, however, is that this money will not only be wasted, but it will be counterproductive.

Foreign-aid is driven by "Planners" says Easterly. Perhaps the most famous planner and a determined opponent of Easterly is Jeffrey Sachs of Columbia University and the United Nations. Planners think of development as a technical problem that can be overcome by ambitious, multi-faceted, centrally-controlled campaigns, backed up by oodles of cash. Unfortunately, planning lacks market feedback mechanisms, so cannot measure useful performance indicators. Plus, Planners are rarely held accountable for their myriad failures.

Easterly masterfully destroys the key arguments, or "legends," of the Planners -- one being that we must give money to the poorest to get them out of the poverty trap, another that aid will lead to growth.

Worst of all Planners are in collusion with rich donors who, paradoxically, benefit from perpetuating the existing problems. It's as though aid agencies need to fail in their targets in order to maintain their missions. After all, if their programs succeeded they'd put themselves out of business.

Few are as candid about the real reasons for action as aging and former rock star, Bob Geldof, organizer of the Live8 concerts. Last summer he said: "Something must be done; anything must be done, whether it works or not."

Easterly demonstrates that nearly all aid programs fail to reach individually set targets:

"A UN summit in 1990, for example, set a goal for the year 2000 of universal primary-school enrollment. (That is now planned for 2015). A previous summit, in 1977, set 1990 as the deadline for realizing the goal of universal access to water and sanitation. (Under the Millennium Development Goals, that target is now 2015). Nobody was held accountable for these missed goals."

The point is the goals will never be hit, or at least not by the policies enacted to reach them. "Stop wasting our time with summits and frameworks" he says. And he repeatedly drills home the unnerving conclusion that Planners will always fail:

"The West cannot transform the Rest. It is a fantasy to think that the West can change complex societies with very different histories and cultures into some image of itself. The main hope for the poor is for them to be their own Searchers, borrowing ideas and technology from the West when it suits them to do so....Once the West is willing to aid individuals rather than governments, some conundrums that tie foreign aid up in knots are resolved."

To Planners, Easterly prefers "Searchers" -- those who learn through trial-and-error in the field. They won't achieve the ambitious goals set out by Planners, but they can and do deliver results.

Easterly's recommendation is to experiment based on the results, evaluate based on feedback from intended beneficiaries, reward success, and penalize failure -- a bit like the market does naturally.

Easterly also recommends agencies pool resources to fund independent evaluation of each aid agency's specific performance, rather than hiding failure through their internal reporting mechanisms.

While Easterly is critical of the foreign aid status quo, he cites many examples of ways in which aid has worked, such as food vouchers to poor families -- contingent upon children attending school rather than working in low productivity jobs. Such a scheme was pioneered in Mexico and is working well there and elsewhere.

Fortunately, Easterly doesn't fall into the trap of pronouncing grand solutions to the problem of planning. To do so would, of course, defeat the purpose of his book. There is no big plan that will ever work. In some respects this book is the best defense of the market there is. Even in areas where markets do not exist, the same incentive structures and the punishment of failure (as well as the much more widely trumpeted reward of success) are vital for aid ever to begin to work.

Roger Bate is a visiting fellow at the American Enterprise Institute, and cofounder of Africa Fighting Malaria.



Macro vs micro aid
The one thing all these aid programs have in common is their macro scale. Guys in suits talk to other suits, billions of dollars change hands, high priced academics draw up development proposals... and on the ground, nothing ever changes. That's because not even ten cents of this money ever hits the street.

With microlending programs, not only does every cent hit the street, it all comes back into the pockets of the lenders. All? Well, about 98% gets repaid with interest. Bankers out there will like these figures, which are unheard of with normal, jumbo loans. Poor folks with business plans tend to be honest people.

Most loans in places like Bangla Desh or Peru are in the $30-200 range, and the money is used to start businesses. Scrap vendors, for instance, can use it to buy a wheelbarrow and a hand press for smashing soda cans flat. Payments are made weekly until the principal is paid down.

Not very glamorous, huh? Bankers cringe at this kind of work. All it does is give ambitious, destitute people a way to get on their feet and feed their families.

Hell check!
Yup. It's frozen.

I agree with you totally Roy. The money has to hit the street level to ever be effective. Screw the actors/actresses and the billionaires looking to relieve the guilt they feel. Get the banks involve with individuals who have a plan and the desire to create wealth for themselves and their families.

This does not mean that governments have to change as well. For individual loans and businesses to succeed requires that governments honor property rights and the freedom to invest.

What is the definition of insane?
Can anyone demonstrate one instance where aid money has improved conditions that existed prior to independence?

Aid to Africa should exist as a cause for no-nothings. It provides an outlet for their energies and allows governments to mess up other nations rather than focus on innocent civilians at home.

Anyone who goes to Africa can olny conclude the main beneficiaries of aid monies are real estate developers in London and Paris and the bankers in Switzerland.

Let Africa go back to nature.

aid that works
the micro-loans that roy mentions have worked.

The difference is that the money is given to individuals, with the expectation that it will be paid back.

GOvt to Govt aid has never worked, and often makes things worse.

Sounds like Iraq
"The West cannot transform the Rest. It is a fantasy to think that the West can change complex societies with very different histories and cultures into some image of itself. The main hope for the poor is for them to be their own Searchers, borrowing ideas and technology from the West when it suits them to do so....Once the West is willing to aid individuals rather than governments, some conundrums that tie foreign aid up in knots are resolved."

Sounds like Commissar Hampton
Doesn't immitating Baghdad Bob get old?

ah yes, the soft bigotry of low expectations
those brown men actually like being ruled by cruel dictators, so why should we in the west try to change things.

Sarcasm off,

The people of Iraq are showing how much they appreciate democracy. The people of Iran are indicating that they would like democracy as well.

it will
as soon as there is a Democrat in the White House.

How so?
Why is Roger Bate's opinion racist? He's not against aid per se, but against aid directed to foreign governments rather than individuals?

No Subject

the reason planners will always fail....
is because ideas, ideals and good intentions are abundant, but for every human being knowledge is rare, specific and limited. That is we all possess minimal knowledge--just that necessary to guide our decisions which we make throughout a very narrow range. As Will Rogers said: "Everybody is ignorant, only on different subjects." Our individual actions are guided by our limited, specific knowledge. And, as we all know well, it is tough enough to run our own lives much less that of our neighbors and friends.
Planners, who surely fancy themselves as knowledgeable people, suffer the same limitations as the rest of us. The big difference is that they simply don't recognize that reality and in blissful defiance of their inherant ignorance they pretend to run the lives of countless others. They imagine themselves capable of substituting their limited decision making power for the millions of decisions that millions of individuals make governing their very separate and diverse life and circumstances. In this effort they are doomed to failure and always will be. All they produce is agnst, dissapointment and more of what they had hoped to end---poverty or whatever good cause they saw.

and as any astute observer knows: whatever you subsidize you get more of. Whether it is poverty on the dark continent or homlessness and out-of-wedlock babies in America the billions of our hard earned income stolen from our paychecks have only served to aggravate the problems, and, as you have noted, line the pockets of those who filter the funds to those "in need".


White man`s burden
This concept was first born to help black people of U.S., then again this concept used to make civilized to Indian people. Origin of this concept came from chiristianity.Chiristianity is completly base on suffering from sin. First you must killed the people, keep them in as a slave, treat them just like animal make them completely naked.And relive from this guilty feeling, suffering from sin, help them. Same route western people follow when they help poor people of world.I say stop your add, let poor countries try their best to their own improvement.Real factis that helping to poor countries, you are making them more poor, beggers.If poor countries have bit of self respect they must through this white man`s burden form their head.

It wasn't Bates
who made the claim that Arabs can't handle democracy. It was you.

Quoting the author
"The West cannot transform the Rest. It is a fantasy to think that the West can change complex societies with very different histories and cultures into some image of itself."

Oh, so your saying the author was talking about non-Western societies with different cultures and histories EXCEPT Iraq!

And how is it that you came to that conclusion?

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