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Blood on their hands

Next time you see a starving African child on the television, remember the culpability of Make Poverty History. MPH’s will cause more poverty and more deaths than would otherwise have occurred.

Socialism is killing the third world and Make Poverty History is going to make it worse. In a report by the Globalization Institute called More Aid, Less Growth, we learn that “for every 1% increase in aid received by a developing country, there is a 3.65% drop in real GDP growth per person. Contrary to the conventional wisdom in the aid industry, the study finds that even where recipients have good governance, the effect is also negative.”

So there you have it. The increase in aid prompted by Make Poverty History is going make things worse, not better.

18 comments to Blood on their hands

  • Yup Will – and I would have fully agreed with you until this morning.
    I took my eight year old son on the Edinburgh march yesterday and have done nothing but field increasingly well educated questions ever since.
    What’s capitalism dad? How will free trade make a difference? Why are African countries poor? How did they get a debt? And on .. and on … and on in the way that only and eight year old with the bit between his teeth can. There were thousands of young children marching yesterday – thousands and thousands of them.
    I was missing the point I think. Of course the G8 won’t change things this week. But the sea change in the way that eight year olds see their world might just result in a very different future. They – our kids – are the ones that really need persuaded.

  • Bernie

    I would so like to agree with that Tom. I’m sure you are right and there will be many an eight year old asking excellent questions. I’m not at all as sure he will get truthful, honest and logical answers. Far more likely he will be told “they are in debt because banks are greedy”, “they don’t have enough to eat because governments haven’t sent enough aid”, “they can’t trade their way to wealth because…. well because they can’t”.

  • The MPH demands are not all counter productive. They do demand a reduction/ending of both subsidies and tariffs in the Western world and the opening of Western markets to third world products/producers.

    In so far as they promote free trade I wholeheartedly support these demands and I also think that if the MPH campaign got their way on these two issues that would in fact help with stated aim of MPH.

    Unfortunately they spoil it by supporting protectionism in third world countries and as you say by demanding an increase in aid, both of which are likely to be counter-productive, the former because protectionism ends up protecting certain interests at the expense of the economy as a whole and the latter because the aid tends to end up shoring up corrupt regimes — if the aid could go directly to the people though it might make a difference.

    One can only hope that they do get their way on the Western tariffs/subsidies issue as that might be enough to make a difference.

  • They have a ridiculously long list of links to blogs on their side bar, and there’s at least some implication that those on that list are all supporters.

    However, it looks like they started with the Technorati Top 100 and went from there. I wrote to them to ask that they remove me from the list; no answer, so far.

  • Dave

    but when they call for the end of Western tariffs/subsidies they are not supporting free trade, they want a system of government controlled (probably in the future UN controlled) ‘fair trade’.

    Lets not pretend these guys have suddenly come over all libertarian. They have not!

  • Jim

    The findings of the Globalization Institute report are in contrast to the findings of just about every other expert on the subject – a recent summary of the evidence found overwhelming support for the argument that aid is good for growth. It is also flawed in that it lumps into the category of ‘aid’ humanitarian assistance, which you would expect to be negatively correlated with growth as it is often given in response to disasters of some kind. When you factor our humanitarian aid, the positive effect of aid on growth is clear.

    It’s interesting that when I’ve made the point that academic research supports aid on this site before, people have basically said that all such research is bogus, or that they don’t care because they just know that government is the problem, etc. But as soon as one bit of research comes out that supports your preconceptions, suddenly it’s gospel truth.

  • John Ellis

    Absolutely, Jim.

    I am no socialist, but I would also argue that “socialism” is not killing Africa – although it would probably give it a heavy cold were it to ever to be implemented. The only states with anything like socialism tend to approximate to national socialism more closely than Western Democratic Socialism.

    The main candidates for killing Africa seem to me to be trade tariffs (and kudos to Bush for saying this and for offering to scrap American ones if the CAP goes), kleptomanic and corrupt African leaders and endemic states of low- to medium-level war.

    The West can address the first, punish the second (open debate as to how, but it really is only to make us feel better) and – if really sanctimonious – intervene to stop the third. But you would not wish to interfere with arms companies business practices, would you?

  • Dave

    John I dont think people are claiming African nations are socialist. The complaint is that socialists in the West are hurting Africa with their crazy ideas.

  • Jim

    “The complaint is that socialists in the West are hurting Africa with their crazy ideas.”

    Hurting them by letting them keep more of their own money? Hurting them by giving some of ours which the overhwhelming weight of evidence shows to be good for growth and development? Hurting them by arguing that we should give them more access to our markets and ruining their farm markets by dumping cheap subsidised food?

    Vicious bastards alright.

  • Tony Wilson

    Jim: you’re just talking bollocks. It’s socialism that has cuased the problems faced by Africa. Take Ethiopia. It socialised the land and then we had to have Live Aid mark I.

  • Jim

    “Jim: you’re just talking bollocks. It’s socialism that has cuased the problems faced by Africa. Take Ethiopia. It socialised the land and then we had to have Live Aid mark I.”

    Right, because it was the land of milk and plenty beforehand.

  • Tony Wilson

    Jim: you’re an idiot. I’ve read the report now and it specifically takes into account the overestimation in raw aid figures. Perhaps you should (a) read the report or (b) get a brain. I’m sure one would be of help.

  • Paul Marks

    We should also remember what “good government” means in the modern world.

    Part of it means the “right” of people to health care and education.

    The healthcare idea is a bottomless pit, there will always be more demands for healthcare (and there will always be more healthcare administrators) – the spending will help undermine the countries concerned (and it will, in the end, help undermine standards of health).

    Government education spending has the same economic effect. However, there is also another factor – someone who gets qualifications from a government school if Africa tends to try and get a government job and the last thing African nations tend to need is more government administrators.

    It is also the case that government schools tend to have far higher cost and far low standards than private schools in many African countries – however the government schools will still be very good at handing out the bits of paper (the qualifications).

  • Jim

    “Jim: you’re an idiot”

    No, that’s still you. I’m going to tell you why now, so pay attention and you might learn something.

    “I’ve read the report now and it specifically takes into account the overestimation in raw aid figures.”

    No. The study uses Efficient Development Assistance (which is actually the wrong term – it’s meant to be Effective Development Assistance) as an alternative measure of aid to Official Development Assistance, but EDA is only adjusted for concessionality and not adjusted to discount humanitarian aid, which is what I was talking about. The measures of EDA and ODA used still include humanitarian assistance, which is negatively correlated with growth, and so the study remains seriously flawed (and not just for this reason).

    “Perhaps you should (a) read the report or (b) get a brain. I’m sure one would be of help.”

    And you remain an idiot. We both read the report, but you don’t seem to have understood it. You’re so far out of your depth it’s funny.

  • AndTonyIsGone

    Tony, where did you go? Can you explain how Jim is an idiot for claiming that humanitarian aid was not filtered out of this study’s figures, making them highly questionable? Or is Jim right — you are too far out of your depth?

  • Tony Wilson

    Jim the Control Freak wrote: “You’re so far out of your depth it’s funny.”

    You haven’t understood the report. To quote the publishers, “there is a serious lack of data for the countries that are in a state of crisis (political crisis, war, etc.). Thus, they are automatically excluded from the regressions used.”

  • Jim

    That doesn’t cover all countries that received humanitarian assistance, though. In fact, they don’t know how much aid that each country assisted was humanitarian assistance and how much wasn’t, so they only exclude such cases when there is no data for a country. That is in fact quite rare and usually only happens in cases of extreme political crisis or war, rather than say famine or flood. So no, the study doesn’t exclude humanitarian aid.

    By the way, this is far from the only criticism of the report by the way. In evaluating the impact of growth on aid, it controls for investment and human capital, two of the main channels through which aid promotes growth, thus automatically greatly reducing any positive effect.

    By the way, I don’t see how my pointing out that you’re wrong makes me “Jim the Control Freak”. Maybe if you hadn’t been so rude in the first place I wouldn’t be forced to keep making you look silly like this.

  • Phlinn

    Although I strongly suspect that foreign direct financial aid is counterproductive in most cases (disaster relief excepted), I wonder if there is some selection bias here. Countries that are already in a downward spiral are far more likely to be the ones in need of aid. Said aid isn’t going to stop the spiral, merely slow it, so even if aid is helpful in general it’s going to be correlated with poor economic performance.