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Do
Your Aid Projects Hurt the Poor?
By
Lykke E. Andersen, La Paz, 5 June 2006
There are many aid pessimists, like me, who would much rather be
aid optimists. However, the empirical evidence on the
effectiveness of foreign aid is depressing, especially in poor
countries where aid constitutes a significant share of GDP, as
in Bolivia and Nicaragua
(1).
Any particular aid project is unlikely to actually
hurt the poor – at worst it may be ineffective and a waste of
time and money. However, a continuous series of thousands of aid
projects have the capacity to change the behavior of both
individuals and government, and often in unanticipated and
undesirable ways.
A
government artificially inflated by foreign aid have the
resources to hire more skilled people and pay them relatively
attractive salaries, which in itself may be good, since the
country needs good doctors, inspiring teachers, and non-corrupt
public administrators. However, the unintended side effects are
more inequality (because the relatively rich skilled
workers benefit much more than the uneducated poor who are
mostly self-employed) as well as a brain drain from the
private productive sector.
If
the public sector, including the foreign aid sector, pays far
more attractive salaries, provides better benefits, and requires
shorter working hours, then the private productive sector will
be systematically starved for critical skilled workers. Skilled
people will spend their efforts chasing coveted public sector
positions and short term consulting contracts rather than
setting up sustainable, productive enterprises that could help
the country grow
(2).
Once the skilled people have fallen into that trap, it is
difficult to get out of again, as both their education and their
work experience are targeted at managing aid projects and
writing reports, rather than producing actual goods.
The poor are unlikely to fall into the same trap, as they don’t
have the skills to get hired by the public sector/aid community.
However, in areas with a heavy presence of aid projects, the
poor have an incentive to lay back and just participate in
whatever project comes along, instead of actively looking for
ways to improve their lives.
Even the projects designed to empower the poor, often have the
opposite effect. Due to the promise of a free lunch (literally),
the poor attend a lot of workshops where they are told
everything from how to shit to how dangerous it is for the
planet if they fell a few trees to grow crops to feed their
family.
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They are
told a lot about their rights, but little about the
corresponding responsibilities. They get the impression that
they have a right to receive free education, health services,
electricity, water, land titles, roads, and safe jobs without
having to contribute anything in return because there are plenty
of “free” resources available from rich countries and from the
sale of natural gas.
The usual responsibility, creativity, cooperation and mature
behavior generally necessary to live and progress may easily be
suppressed if there is an easier route of a life in a child-like
state, where everything is provided for you and nothing is
expected of you. If people are treated like ignorant children,
they start behaving like ignorant children. If bad,
irresponsible behavior is tolerated, such behavior will
continue. Bolivia, it seems, is full of spoiled children – most
of them adults – who have not overcome the stage of stubborn
demands on their overpampering, overprotective, rich parents
(the aid community as well as mother nature).
Of
course, real children should be treated as children, receiving
adequate nourishment, stimulating education, treatment when
sick, and an ample spectrum of challenges and opportunities to
develop responsibility, creativity, and social behavior. Aid
projects targeted at children generally do not have the same
adverse and distorting effects as aid projects targeted at
adults, since children have the right to a child-like life
without having to work hard to cover basic necessities.
So, back to the title question. Does your aid help the children
in Bolivia grow up to be healthy, responsible, creative,
dynamic, and socially responsible individuals? Or does it
degrade the adults to the state of a spoiled child who only
demands and receives and never contributes to the sustainable
development of the country?
(1)
See, for example, the
aid effectiveness studies of INESAD.
(2) See
“Labor Mobility in Bolivia: On-the-job Search Behavior of
Private and Public Sector Employees.”
Ó
Institute for Advanced Development Studies 2006.
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