Wednesday, January 26, 2005

The joy of Sachs 

On your reading list today should be Claudia Rosett connecting Bush's doctrine of spreading freedom and democracy to fighting poverty.

Yet to whatever extent Mr. Bush's agenda plays out in practice, one of the main results would be a richer world for all--with the most dramatic benefits reaching those who are now among the poorest. One of the truths wrested at great cost from the grand social experiments of the 20th century was that the prerequisite for prosperity--if we are speaking of wealth for the many, not just for a ruling few--is freedom. It is not only by smothering free speech or jailing loyal opposition that dictators keep control. It is also by decreeing--in ways that suit the pleasures of the ruler, not the ruled--the rules and conditions under which people may seek work, earn money, own property and buy what they need to feed their families and otherwise pursue happiness. With every reasonable choice that gets cut off by dictatorial rule, with every payoff that must be made to authorities who exist for no other purpose than to please themselves and collect tolls, more human energy and talent and knowledge goes to waste.

To whatever extent Mr. Bush's vision of ending tyranny is realized, it will do more to end poverty than any amount of aid, including the $195 billion the United Nations now proposes to pour into development over the next decade, following the advice of a 3,000-word study put together by 265 experts (which works out to about 11 words, or $730 million in recommended spending, per expert). Donations, state plans and even the best-intentioned aid schemes cannot make up for the ability of individuals, in free societies, to choose most profitably how to wield their own knowledge and energy to support themselves.

That plan I believe is the plan offered by Jeff Sachs, described in this week's Economist, in which the plan is put at 3,000 pages rather than words. It's certainly more than 3000 words. But the Economist makes a good point about the overreach of the article and the conflict between Sachs' and Rosett's visions.

The report challenges this thinking in two ways. First, it insists that some of the world's poorest countries are in fact pretty well-governed: they are poor for other reasons, to do with geography, history, incidence of disease, and so forth. Identify the good governments, the thinking goes, and give them aid �at scale�.

...The report has a second way of dealing with lack of good governance: it argues that aid can be spent on remedying this. But that may be wishful thinking. The problem with aid to bad governments is that it can help to keep them in place. Donors have tried before to invest in improved governance. The record is not good.

The report has recommendations by the dozen on how aid should be patterned and delivered. It argues that the development needs of countries vary a great deal from case to case: strategies need to be carefully tailored, with policies designed and �owned� by the country itself. Well and good. But many would question the very idea of a top-down development strategy.

The difficulty for many aid donors is that the process of democratizing a country removes the "top" from which development dollars flow "down". If they try to invest in a winning candidate they can be seen as trying to control the election of the recipient country. If they invest across the board much of the money is dissipated in electoral campaigns, perhaps in vote-buying.

It would be hasty to toss aside all of Sachs' report. In a separate report, the Economist shows that there are some good ideas like reducing school fees and giving out mosquito nets with insecticides that do not rely on good governance. But Rosett's point is that the rules of how people earn a living is primary to Sachs' suggestions. She's right.

UPDATE: cf. the Diplomad. I confess to not reading the whole 3,000 pages. But there's a 90 page overview at least.