Not getting better: stable vs unstable gains

I haven’t yet had the change to read Charles Kenny’s new book, Getting Better, although it currently sits on my Kindle, taunting me every time I turn it on. I’m looking forward to it though – I like the sense of optimism it has injected into the debate, but forgive me for a little ignorance as I write briefly about it here.

What is particularly interesting is the way that two different camps have seized on Kenny’s thesis: those that consider themselves aid skeptics have pointed out that the NGOs and donors who so often paint a dire picture of the current situation on the ground are wrong, and that economic growth has been a key player in allowing people to escape from poverty. The aid proponents have argued that Kenny’s results show that aid is working – people in poor countries are living longer and getting more education.

To some extent, both parties are correct: for many developing countries, economic growth has seen a major decrease in poverty, bringing with it all sorts of wonderful human development outcomes. For countries that have seen little economic progress in the past few decades, but have seen a large degree of aid and progress on health and e3ducation, it would be hard to argue that aid isn’t propping up these indicators (although, as I believe Kenny argues, technology also plays a part in this story).

The term `propping up’ is key when we consider stories like this one from Foreign Policy:

“We estimate, and I believe these are very conservative estimates, that H.R. 1 would lead to 70,000 kids dying,” USAID Administrator Rajiv Shah testified before the House Appropriations State and Foreign Ops subcommittee.

“Of that 70,000, 30,000 would come from malaria control programs that would have to be scaled back specifically. The other 40,000 is broken out as 24,000 would die because of a lack of support for immunizations and other investments and 16,000 would be because of a lack of skilled attendants at birth,” he said.

When we just look at absolute gains in important outcomes like health and education, we ignore the mechanisms that are generating these gains. As the quote above reveals, welfare outcomes in aid-dependent states are extremely, extremely fragile – a single stroke of a pen in D.C., London, or Brussels can wipe out these gains very quickly. Contrast this with countries who are making these gains on their own, either after transitioning out of aid dependency or remaining independent from the start.

I think we should be more inclined to discount progress which is still actively dependent on aid, given that it is incredibly volatile and doesn’t appear to (yet) be helping countries transition into self-sustainability.

 

3 thoughts on “Not getting better: stable vs unstable gains

  1. Ranil Dissanayake

    April 13, 2011 at 12:01pm

    Totally agreed, though you won’t be surprised at that.

    This is why I always champion the need for economic growth first and foremost in development, and the importance of getting taxation right.

  2. Charles Kenny

    April 13, 2011 at 3:00pm

    Hi Matt!

    First off, thanks for buying the book and posting about it! Reading it is now strictly optional. Second, glad to know that you think two different camps have seized upon the thesis. I’d be happy if just one camp, or even a single tent, was sezing it.

    Meanwhile…. as you’ll see, I’m actually a bit skeptical that income is the driving force behind improvements in the quality of life worldwide –not least because lots of countries that have got poorer over the last 50 years have seen gains in life expectancy, rights and education. I think the big things driving change are technology (as you mention) but also changing norms of behaviour –of *course* girls should be in school, of *course* we ought to wash our hands, of *course* we should get kids vaccinated, of *course* we should get to vote for our political leaders —and so on.

    Aid has played a big role on the technology side and some role on the norms side –I think it could play more. And I don’t think it is always or mainly a case of ‘propping up’ –once the vaccine is developed and rolled out, or norm change is made, it is easier to go on than to go back.

    See, I really am an optimist.

    Thanks again for the buying and the posting!

    –Charles

  3. terence

    April 18, 2011 at 8:56am

    “I think we should be more inclined to discount progress which is still actively dependent on aid, given that it is incredibly volatile and doesn’t appear to (yet) be helping countries transition into self-sustainability.”

    Discount, sure, but don’t dismiss. For the people who benefit from it, it’s still a worthwhile if not optimal improvement. In an ideal world we’d have the tools to promote sustained economic and political change. In a less than ideal world we may just have to be satisfied with having some tools to ameliorate the worst consequences of under-development. That’s better than nothing and still some cause for optimism.

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