Will More Foreign Aid End Global Poverty?

I asked Githongo whether we could cure poverty if we just gave more foreign aid.

"No amount of foreign aid is going to make any difference," he said.

He may have a point. In the past 40 years, Western governments have given Africa more than half a trillion dollars. Yet Africa is even poorer than it was before the foreign aid began.

Two studies by World Bank economists say foreign aid is one of the problems because "higher aid levels erode the quality of governance."

Former World Bank economist William Easterly agrees. His new book, "The White Man's Burden," argues that Western efforts to cure poverty in the rest of the world have done more harm than good.

"Aid has the perverse effect that it makes [African] politicians much more oriented toward what will get them more money from the West than it does to making them meet the needs of their own people, which is really a scandal," he said.

Fifty years ago, countries in East Asia were as poor as Africa. Now many are rich, despite much lower levels of aid because their governments created understandable laws so people could trade, borrow and start their own businesses.

In 1999, I went to Hong Kong and in one day, with one form, I got legal permission to open a shop.

The next day "Stossel Enterprises" was open for business, selling ABC trinkets. By contrast, to open a legal business in Kenya you might have to get licenses from 20 ministries and you may have to bribe people. It can take years, and the government can still shut you down.

Foreign aid won't solve that -- especially if it's stolen.

But Jeffrey Sachs argues that this emphasis on bad governance is misleading. "This idea that the poorest of the poor are our enemies, the big lie that we tell all the time," he said. "That all they want to do is shake you down."

"Poor people don't want to shake me down," I replied. "The rich leaders of these countries want to shake me down."

"Our government can find practical ways to ensure that the money that we're actually giving for real things there reaches the real people," Sachs said.

"We can do that in Africa? We can barely do it in America."

"Audit what's happening," he said. "Those systems have been shown repeatedly to work."

Sachs argues that foreign aid would have worked in the past if we had only spent enough. U2's Bono agrees. At his concerts, he asks his fans to use their cell phones to send a message demanding our politicians increase foreign aid … but why petition politicians? Why doesn't he ask his fans to spend their own money?

It's good to help. I'll contribute to a charity like "The Free Africa Foundation," which builds malaria-free villages from individual contributions. Charities are much more likely to keep a close eye on the money. If they don't, donors stop giving.

By contrast, foreign aid often just makes politicians rich -- but leaves their people poor.

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