Global Policy Forum

Two US Economists Debate the Value of Antipoverty Efforts

By Danna Harman

"Is this really how to save Africa?" asks Tanzanian columnist Ayub Rioba, a day after Bill Clinton has left Africa. "We appreciate generous and humane contributions from people like Bill Clinton," he writes in The Citizen, a respected Tanzanian national daily paper. "But we [Africans] must also show that we are doing something. We cannot sit just like couch potatoes waiting for others to come and give us medicine."

"We have been made permanent recipients of aid, funds, scholarships, food, medicine, from developed countries.... And what exactly do we do with all that aid and assistance and help? Almost nothing. Since we gained independence, almost 50 years ago, we have been receiving aid permanently, and statistics today indicate that we are becoming poorer!" adds the columnist.

Outside attention to the continent has fueled thousands of successful programs ranging from eradicating smallpox and reducing infant mortality rates to helping more children go to school and more farmers get microloans. But, despite the aid, the number of poor people in Africa has almost doubled in the past decade. Burdened as Africa is with government debt, trade barriers, droughts, and sickness, some 46 percent of Africans survive on less than a dollar a day. Nearly half of those make do with less than 50 cents a day, according to the development policy research unit the University of Cape Town in South Africa. According to the United Nations, life expectancy on the continent is falling, averaging just 46 years, in large part because of AIDS.

There are different schools of thought when it comes to explaining Africa's decline – and how to stop it. Mr. Rioba fits squarely in the "governance first" camp, which argues that the onus is on Africans to better their own governments and behavior – not on outsiders. For decades, countries such as Zaire (now the Democratic Republic of Congo) under Mobutu Sese Seko received billions of dollars in aid and loans – much of which was squandered by corrupt and incompetent officials.

Against this first camp sits the so-called "poverty first" camp, often represented by Columbia University economist and UN Millennium Project director Jeffrey Sachs, who says the solution to Africa's problems lies in tackling poverty, and that this can definitely be achieved with sufficient aid. A third group believes in aid, but argues it's not the quantity that is problematic, it's the way it has been administered.

If ending poverty were so simple, argues William Easterly, a professor of economics at New York University, why has the $2.3 trillion spent over the last five decades not done more? "The biggest difference between Sachs and me is that he thinks aid can end poverty and I think it cannot," he says. "The end of poverty comes about for home-grown reasons, as domestic reformers grope their way towards more democracy, cleaner and more accountable government, and free markets," he says. Mr. Easterly says aid can certainly help alleviate the suffering of the poor, but that "the problem with aid is the people implementing the aid projects have weak incentives because they are never held accountable for results." Mr. Sachs, in turn, poses: Is $2.3 trillion really so much? That sum, he says, is "from all donor countries in the world to all developing countries for all purposes," which means, if you work it out, around $16 per person per year in the developing world.

"To say that aid was gargantuan and that it failed is a cruel joke. It was neither gargantuan, nor did it fail when it was applied in good faith for developmental purposes (rather than for the cold war, or to ship US grains or to pay high-priced consultants)," he argues. Sachs points out that the US spends more than $600 billion per year on the Pentagon, and less than one-hundredth of that in help for all of Africa. "One day's Pentagon spending would pay for all the bed nets [to stop malaria] for every sleeping site in Africa for five years," he charges. "People are hungry. People are dying. There are countless proven and effective ways to help, and which can extricate people from poverty in the long run. The drama is whether American politics can rouse itself to take note," he says.

In his quest for spreading this message and increasing aid, Sachs often turns to superstars, and many have embraced his ideas and his can-do attitude. Bono calls him "my professor." Actor Brad Pitt sings his praises. Madonna is a big supporter, and Angelina Jolie filmed a 2005 MTV special, "The Diary of Angelina Jolie & Dr. Jeffrey Sachs in Africa" that promotes his work. Vanity Fair, in its recent Africa issue billed him an "adviser to the UN and movie stars" and a "savior" of developing nations. "Sachs offers very simple, concrete, and measurable solutions to specific developmental problems," says John Prendergast of ENOUGH, a group with a mission to "prevent genocide and mass atrocities" in Africa. "He doesn't necessarily have answers to major crises like Darfur and eastern Congo, but he does have important responses to malaria, dirty water, and bad sanitation. That is an important baseline for further socioeconomic development in the long run."

But Easterly is not impressed, calling Sachs a "messianic crusader who ... skillfully uses celebrity and media for the cause." Celebrities "love" Sachs, explains Easterly, "because he promises a huge payoff to Western aid efforts and describes the problem as easy to solve, if you just have a few celebrity videos and concerts." Easterly suggests aid dividends will almost always be modest. The solution requires donors to help continuously and be accountable for results. But he says, that is just "not as ... appealing to the People magazine crowd."